PSI NATIONAL REAL ESTATE EXAM 2025 | ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS WITH RATIONALE |
ALREADY GRADED A+
Question 1
A homebuyer is reading through paperwork related to their upcoming home purchase when
they come across the following: "Southwest quarter of Southwest quarter (SW ¼ of SW ¼)
and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven
(11), Township Four (4) North of Range Eight (8) West." What did the homeowner find?
A) Legal description
B) Mortgage clause
C) Quitclaim deed
D) Tax description
E) Property appraisal
Correct Answer: A) Legal description
Rationale: This is an example of a rectangular survey system (or government survey
system) legal description, which precisely defines a property's location and
boundaries using townships, ranges, and sections.
Question 2
Which of these situations represents the illegal practice of blockbusting?
A) Celia, a licensee, distributed a flyer in several neighborhoods, claiming that gentrification of
those neighborhoods will increase property values.
B) Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will
reduce property values.
C) Estelle, a broker, warns potential clients about the upcoming zoning change in a
neighborhood that is currently zoned as residential.
,D) Kian, a mortgage broker, refuses to underwrite mortgage applications from applicants who
are Hispanic or Asian.
E) A landlord charges higher rent to families with children.
Correct Answer: B) Corbin tells homeowners in Five Points that an impending influx
of Asian immigrants will reduce property values.
Rationale: Blockbusting is the illegal practice of inducing panic selling in a
neighborhood by propagating false fears that property values will decrease due to
the influx of minority groups.
Question 3
When Gillian looked at the legal description of the property she was interested in purchasing,
she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north
for 314 feet, then southwest for 193 feet." In this description, what does "Beginning at the
corner of State Route 61 and Hallowell Road" represent?
A) A benchmark
B) Bounds
C) Metes
D) Monuments
E) Point of beginning
Correct Answer: D) Monuments
Rationale: Monuments are fixed objects (natural or artificial) used in the metes and
bounds system to establish property lines. In this case, the intersection of two
roads serves as a fixed reference point.
, Question 4
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid
private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the purchase
price in closing costs. How much money should he bring to closing?
A) $106,250
B) $156,250
C) $31,250
D) $81,250
E)
125,000𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝐴𝑛𝑠𝑤𝑒𝑟: 𝐴) ∗∗
106,250**
Rationale: **To avoid PMI on a conventional loan, Nico needs a 20% down payment.
1. Down payment: 20% of $625,000 = $125,000.
2. Earnest money: 8% of $625,000 = $50,000.
3. Remaining down payment needed at closing: $125,000 - $50,000 = $75,000.
4. Closing costs: 5% of $625,000 = $31,250.
5. Total to bring to closing: $75,000 (remaining down payment) + $31,250 (closing costs) =
$106,250.**
Question 5
If a private individual owner owns fewer than three single-family homes at one time, which
exemption from the Fair Housing Act could apply?
QUESTIONS AND CORRECT ANSWERS WITH RATIONALE |
ALREADY GRADED A+
Question 1
A homebuyer is reading through paperwork related to their upcoming home purchase when
they come across the following: "Southwest quarter of Southwest quarter (SW ¼ of SW ¼)
and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven
(11), Township Four (4) North of Range Eight (8) West." What did the homeowner find?
A) Legal description
B) Mortgage clause
C) Quitclaim deed
D) Tax description
E) Property appraisal
Correct Answer: A) Legal description
Rationale: This is an example of a rectangular survey system (or government survey
system) legal description, which precisely defines a property's location and
boundaries using townships, ranges, and sections.
Question 2
Which of these situations represents the illegal practice of blockbusting?
A) Celia, a licensee, distributed a flyer in several neighborhoods, claiming that gentrification of
those neighborhoods will increase property values.
B) Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will
reduce property values.
C) Estelle, a broker, warns potential clients about the upcoming zoning change in a
neighborhood that is currently zoned as residential.
,D) Kian, a mortgage broker, refuses to underwrite mortgage applications from applicants who
are Hispanic or Asian.
E) A landlord charges higher rent to families with children.
Correct Answer: B) Corbin tells homeowners in Five Points that an impending influx
of Asian immigrants will reduce property values.
Rationale: Blockbusting is the illegal practice of inducing panic selling in a
neighborhood by propagating false fears that property values will decrease due to
the influx of minority groups.
Question 3
When Gillian looked at the legal description of the property she was interested in purchasing,
she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north
for 314 feet, then southwest for 193 feet." In this description, what does "Beginning at the
corner of State Route 61 and Hallowell Road" represent?
A) A benchmark
B) Bounds
C) Metes
D) Monuments
E) Point of beginning
Correct Answer: D) Monuments
Rationale: Monuments are fixed objects (natural or artificial) used in the metes and
bounds system to establish property lines. In this case, the intersection of two
roads serves as a fixed reference point.
, Question 4
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid
private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the purchase
price in closing costs. How much money should he bring to closing?
A) $106,250
B) $156,250
C) $31,250
D) $81,250
E)
125,000𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝐴𝑛𝑠𝑤𝑒𝑟: 𝐴) ∗∗
106,250**
Rationale: **To avoid PMI on a conventional loan, Nico needs a 20% down payment.
1. Down payment: 20% of $625,000 = $125,000.
2. Earnest money: 8% of $625,000 = $50,000.
3. Remaining down payment needed at closing: $125,000 - $50,000 = $75,000.
4. Closing costs: 5% of $625,000 = $31,250.
5. Total to bring to closing: $75,000 (remaining down payment) + $31,250 (closing costs) =
$106,250.**
Question 5
If a private individual owner owns fewer than three single-family homes at one time, which
exemption from the Fair Housing Act could apply?
