National Real Estate Exam (PSI) practice questions
205 free questions with answers and explanations.
- 101.An agent represents both the buyer and the seller in the same transaction, and both parties have been informed and have consented in writing. This arrangement is best described as:General Principles of Agency
- 102.A 90-day listing agreement expires with no sale and no renewal signed by either party. What is the status of the agency relationship?General Principles of Agency
- 103.A one-year residential lease expires, but the tenant remains in possession and continues paying rent, which the landlord accepts without objection. Under common law, what type of tenancy is now created?Contracts
- 104.A buyer and seller shake hands on a deal and orally agree that the seller will sign over the deed the following week. Before the deed is signed, the seller changes her mind and refuses to convey. Under general legal principles governing deeds, why is the oral agreement unenforceable to force the transfer?Transfer of Title
- 105.A broker receives an earnest money deposit on Monday but does not deposit it into the trust account until the following Friday, four business days later, with no written agreement authorizing delayed deposit. Assuming standard state requirements of depositing within a reasonable, specified timeframe, this delay would most likely be considered:Practice of Real Estate
- 106.A seller enters into a net listing agreement, telling the broker to sell the home and the seller will accept $180,000 net proceeds. The home sells for $198,000. What is the broker's commission, and what percentage of the sale price does it represent?Contracts
- 107.A broker's trust account ledger shows more money than the total of all clients' individual balances combined. This discrepancy most likely indicates:Practice of Real Estate
- 108.A property owner sells a home subject to an existing mortgage without notifying the lender. The mortgage contains a clause allowing the lender to demand full repayment upon transfer of title. This clause is known as a:Financing
- 109.Which of the following is NOT one of the essential elements required for a contract to be legally valid?Contracts
- 110.Which of the following best describes 'consideration' as an essential element of a valid real estate contract?Contracts
- 111.A buyer is purchasing a commercial building constructed in 1975 and plans to renovate, which will involve removing old ceiling tiles and pipe insulation. What environmental concern should this trigger before renovation begins?Property Disclosures
- 112.A title examiner is preparing a chronological, written summary of every recorded document affecting a parcel's ownership history, going back to the original government patent, to identify gaps or defects in ownership. What is this document called?Transfer of Title
- 113.A contractor begins framing work on a house on March 1. The homeowner takes out a construction loan and the lender records its mortgage on April 1. The contractor is never paid and files a mechanic's lien on June 15, after the work is complete. In most states, what priority date is assigned to the mechanic's lien relative to the lender's mortgage?Transfer of Title
- 114.A listing agent writes in an advertisement, 'This is the most beautiful home you will ever see!' The home is in average condition with no unique features. This type of exaggerated statement is best classified as:Practice of Real Estate
- 115.A property being sold once had a leaking underground storage tank (UST) that contaminated the soil, though it was removed and remediated 15 years ago by a prior owner. Under CERCLA principles, who can potentially be held liable for cleanup costs today?Property Disclosures
- 116.A seller becomes frustrated with the listing broker's marketing efforts and, without any legal justification and mid-term of an exclusive listing agreement, sends written notice unilaterally firing the broker. Although the agency relationship legally ends immediately, what is the seller likely exposed to?General Principles of Agency
- 117.A listing agent learns from the seller that the home's foundation has a known crack that was patched over with new drywall, hiding the issue. What is the agent's best course of action?Property Disclosures
- 118.A landlord and tenant orally agree to an 18-month lease for a commercial space. No written document is ever signed. If the tenant later disputes the terms, how will a court most likely treat this lease?Contracts
- 119.After completing construction of a new home, a builder must obtain a document from the local building department before the owner can legally occupy it. What is this document called?Land Use Controls and Regulations
- 120.A broker enters into a listing agreement stating that regardless of who finds the buyer — the broker, another broker, or the seller — the listing broker will earn a commission. This type of listing is called:Contracts
- 121.Two competing brokers agree that Broker A will only work in the north side of town and Broker B will only work in the south side, so they no longer compete for the same listings. This is an antitrust violation known as:Practice of Real Estate
- 122.A borrower obtains a $180,000 loan and the lender charges 2 discount points to lower the interest rate. How much will the borrower pay in points at closing?Financing
- 123.Two parties sign a written agreement in which one party agrees to pay the other to store illegal narcotics in a rental property. Both parties have capacity, there is mutual consent, and consideration is exchanged. Why is this agreement not a valid, enforceable contract?Contracts
- 124.A buyer's agent discovers through police records that a house for sale was once used as an illegal methamphetamine manufacturing site. The property was later professionally remediated and certified as meeting the state's decontamination standard before being relisted for sale. What should the buyer's agent do regarding this information?Property Disclosures
- 125.A grantor conveys a life estate 'to Maria for the life of her mother, Elena.' Maria dies before Elena. What happens to the property interest?Property Ownership
- 126.A broker deposits client earnest money into the same account used for daily office operating expenses. This violation is called:Practice of Real Estate
- 127.A home sells for $250,000. The total commission rate is 6%, split 50/50 between the listing and selling brokerages. The listing agent receives 60% of the listing brokerage's share. How much does the listing agent earn?Real Estate Calculations
- 128.A general warranty deed includes the covenant of seisin. What does this specific covenant guarantee to the grantee?Transfer of Title
- 129.A city's zoning ordinance sets a maximum Floor Area Ratio (FAR) of 1.5 for a commercial lot that is 8,000 square feet. A developer proposes a 4-story building with a footprint of 4,000 square feet on each floor. Does the proposed building comply with the FAR limit, and by how much does it exceed or fall under the maximum?Land Use Controls and Regulations
- 130.A buyer sends a seller a written offer to purchase a home for $300,000. The seller signs the offer but crosses out the closing date and writes in a new date before returning it. Under contract law, what is the legal effect of the seller's change?Contracts
- 131.A buyer's new loan is $150,000 at 6% annual interest, and the lender calculates interest using a 360-day year. Closing occurs on September 21, and the first mortgage payment (covering October's interest) is due November 1. How much prepaid interest must the buyer pay at closing for September 21 through September 30 (10 days)?Transfer of Title
- 132.A home's annual property taxes are $3,650, paid in arrears (not yet paid for the current year). Closing takes place on March 21, and the seller is responsible for taxes through the day of closing. Using a 365-day year, how much should be credited to the buyer at closing for tax proration?Transfer of Title
- 133.A subdivision's recorded deed restrictions limit lots to single-family homes only. The local zoning ordinance, however, permits duplexes in that same area. A buyer wants to build a duplex. Which restriction controls?Land Use Controls and Regulations
- 134.A seller instructs the listing agent to conceal a known material defect in the roof from potential buyers. According to fiduciary duties, what should the agent do?General Principles of Agency
- 135.A signed purchase agreement contains a clause stating that the written document represents the entire agreement between the parties and supersedes all prior negotiations, discussions, or promises. What is this clause called?Contracts
- 136.A homeowner has a conventional loan with private mortgage insurance (PMI). Under the Homeowners Protection Act, assuming the borrower is current on payments, the lender must automatically terminate PMI once the loan balance reaches what percentage of the original property value?Financing
- 137.A seller lists a home with three different brokers under separate agreements, agreeing to pay a commission only to whichever broker actually procures a buyer. If the seller finds the buyer without help, the seller owes no commission. This is an example of:Contracts
- 138.A buyer and seller have a signed purchase contract. The buyer later wants to withdraw entirely and have a new buyer take their place, with the seller's full agreement releasing the original buyer from all obligations. What is this legal process called?Contracts
- 139.A listing broker collects an earnest money deposit from a buyer and places it into the firm's trust account, later providing the seller with a detailed statement of all funds received and disbursed at closing. This behavior best demonstrates which fiduciary duty?General Principles of Agency
- 140.A rectangular lot measures 120 feet by 175 feet. If the land sells for $6.50 per square foot, what is the total sale price?Real Estate Calculations
- 141.A seller is preparing to sell a house built in 1962. Under federal law, which disclosure is the seller required to provide to the buyer before the contract is signed?Property Disclosures
- 142.A home is appraised at $320,000. The buyer applies for a loan of $272,000. What is the loan-to-value (LTV) ratio?Real Estate Calculations
- 143.Several competing brokerages in a city secretly agree to all charge a standard 6% commission rate on residential listings. This agreement is an example of illegal:Practice of Real Estate
- 144.A cooperating broker from a different firm shows a listed home to a buyer and acts as a subagent of the seller through the MLS offer of subagency. If this subagent breaches a fiduciary duty owed to the seller, who may be held liable to the seller?General Principles of Agency
- 145.An unlicensed office assistant, without any authorization, verbally agrees with a buyer to a $5,000 price reduction on behalf of the seller. The seller later learns of the agreement and signs paperwork formally accepting the reduced price. What has legally occurred?General Principles of Agency
- 146.A borrower takes out a 5-year loan with monthly payments based on a 30-year amortization schedule, but the remaining balance becomes due in full at the end of year 5. This type of loan is called a:Financing
- 147.A loan officer refers all title insurance business to a particular title company in exchange for a monthly cash payment from that company. This arrangement most likely violates which federal law?Financing
- 148.A title search reveals an old, unreleased mortgage lien from a prior owner who claims it was paid off decades ago but never obtained a release. This is best described as:Transfer of Title
- 149.A lender denies a mortgage application, citing in part that the applicant's income includes public assistance benefits. Which federal law makes this basis for denial illegal?Financing
- 150.A seller has already paid the full year's property taxes of $3,600. Closing occurs on July 1, with the buyer taking ownership that day. Using a 12-month proration method, how much does the buyer owe the seller at closing for taxes?Real Estate Calculations