PSI Maryland Practice Complete Exam 2025

If an older building cannot be air-conditioned, it is an example of ___________ ? A. Economic obsolescence. B. Functional obsolescence. C. Physical deterioration. D. External deterioration - Correct Answer-B. Functional obsolescence. An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than ___________? A. $100,000. B. $250,000. C. $500,000. D. $1,000,000. - Correct Answer-B. $250,000. The main difference between tenancy in common and joint tenancy is that with tenancy in common, when a co-owner dies, _____________ A. His undivided interest passes to his heirs. B. The last surviving owner holds title in severalty. C. His undivided interest passes to the surviving co-owners. D. The principle of the right to survivorship determines the rights of the surviving co-owners. - Correct Answer-A. His undivided interest passes to his heirs. A buyer wants to purchase a home for $160,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase? A. $2,720 B. $24,000 C. $24,408 D. $26,720 - Correct Answer-D. $26,720 When a home is purchased using an ARM, the monthly loan payment on the mortgage will ____________ ? A. Rise slightly in each adjustment period until the cap is reached. B. Be adjusted automatically to ensure that negative amortization does not occur. C. Be based on a very low interest rate to begin with, but will rise to the market rate at the first adjustment. D. Vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced. - Correct Answer-D. Vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced. An exception to title insurance coverage is ___________? A. Forged documents. B. Defects found in public newspapers. C. Incorrect records of marital status. D. Defects that clearly appear in the title search. - Correct Answer-D. Defects that clearly appear in the title search. Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT _________? A. Loyalty. B. Competence. C. Indemnification. D. Full disclosure. - Correct Answer-C. Indemnification. The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing? A. Credit buyer $110,000; debit seller $110,000. B. Credit seller $110,000; debit buyer $110,000. C. Credit buyer $110,000; no adjustment to seller. D. Credit seller $110,000; no adjustment to buyer. - Correct Answer-A. Credit buyer $110,000; debit seller $110,000. A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so? A. The person must obtain prior written approval by a licensed psychiatrist or psychologist. B. The person must be capable of understanding the transaction. C. The person appointed by the court to act for the disabled person must contract on his or her behalf. D. The person may enter a contract under any conditions, because the law prohibits discrimination against persons with disabilities. - Correct Answer-C. The person appointed by the court to act for the disabled person must contract on his or her behalf. Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income is ___________? A. Alimony. B. Commission sales. C. Pension fund. D. Child support payments. - Correct Answer-B. Commission sales. A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised Loan Estimate and Closing Disclosure forms from the lender, indicating the Annual Percentage Rate on their loan has increased by 0.3%. Based on the TILA-RESPA Integrated Disclosure rule, what action should the broker take in this situation? A. Assist the buyers in calculating the new loan payments and ask them if they want to proceed with the closing as scheduled. B. Advise the buyers to file a legal action against the lender for violation of predatory lending practices under the Real Estate Settlement Procedures Act. C. Call the lender and inform them that they are in violation of the seven-day waiting period and cannot change the terms of the loan this close to the closing. D. Confirm with the seller's broker, the lender and the - Correct Answer-D. Confirm with the seller's broker, the lender and the closing entity that the closing must be delayed to allow for a new seven-day waiting period because of the interest rate revision. A broker represents a group of investors who purchase single family residences when they can be found at very low prices. Their offers are typically made with $500 deposits and cash closings within 7 days of acceptance of the offers. When the last property closed, the investors suggested the broker keep the deposit money to be used for their next purchase, as yet not identified. What must the broker do with these deposit funds? A. Return them to the purchasers. B. Deposit them in his escrow account. C. Deposit them in his rental trust account. D. Hold them in his personal account until needed. - Correct Answer-A. Return them to the purchasers. A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as ___________? A. Steering. B. Blockbusting. C. Redlining. D. Conciliation. - Correct Answer-A. Steering. A deed restriction is applicable to the activities of __________? A. The current owner only. B. All owners, present and future. C. Tenants. D. Mortgagors. - Correct Answer-B. All owners, present and future. In MOST states, foreclosed property is sold through ________? A. Sealed bids. B. Public auction. C. deficiency judgment. D. right of redemption. - Correct Answer-B. Public auction. The Civil Rights Act of 1866 prohibits any type of discrimination based on _________? A. Gender. B. Race. C. Race and gender. D. Religion. - Correct Answer-B. Race. If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION TABLE.) A. $158,100 B. $158,300 C. $175,900 D. $176,100 - Correct Answer-D. $176,100 An example of a contract terminated due to inability to perform would be one in which the __________? A Purchaser had suffered financial reverses so that she could not make payment as required by the contract. B. Seller had died after the contract became binding but before the closing. C. Seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. D. Property had been severely damaged by fire after the contract became binding but before the closing. - Correct Answer-C. Seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called ___________? A. An agency. B. An assessment. C. A contract. D. A fiduciary obligation. - Correct Answer-C. A contract. Which of the following statements best describes the risk taken by NOT recording a deed? A. Easements of record would become void. B. There is no risk as long as the deed has been notarized. C. The delivery of a deed to a grantee could be invalidated. D. A subsequent purchaser's recorded deed could take precedence over any unrecorded instrument. - Correct Answer-D. A subsequent purchaser's recorded deed could take precedence over any unrecorded instrument. Which of the following real estate contracts is a service contract? A. A purchase agreement B. A listing agreement C. An option contract D. A mortgage - Correct Answer-B. A listing agreement Davis, Hernandez, and Moore are vested as tenants in common on a parcel of land. Each received a pro-rata undivided interest in the parcel. The total price was $120,000. Davis put up 40% and Hernandez put up $22,500. What percentage does Moore own (to the nearest tenth of a percent)? A. 33.3% B. 36.0% C. 41.2% D. 45.0% - Correct Answer-C. 41.2% An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000? A. $105,090 B. $110,753 C. $120,910 D. $121,505 - Correct Answer-D. $121,505 On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month. A. $120 B. $160 C. $800 D. $840 - Correct Ans