PSI NJ REAL ESTATE EXAM, PSI PRACTICE TEST EXAM STUDY
MATERIALS QUESTION AND ANSWERS (VERIFIED ANSWERS)
1. **The terms "littoral," "riparian," and "appropriative" refer to:**
- a) Types of property deeds
- b) Methods of calculating property value
- c) Water rights
- d) Types of real estate contracts
- **Answer:** c) Water rights
2. **A salesperson lists a property with a contract that allows for subagency and dual agency. The
salesperson is:**
- a) An agent to the seller and a subagent to the buyer
- b) An agent to the buyer and a subagent to the seller
- c) An agent to the broker and a subagent to the principal
- d) A subagent to the broker and a principal to the buyer
- **Answer:** c) An agent to the broker and a subagent to the principal
3. **Depreciation is calculated based on the:**
- a) Cost of the land
- b) Market value of the property
- c) Cost of the building only
- d) Total cost of the property including land and building
- **Answer:** c) Cost of the building only
4. **When a property owner uses his home as collateral for a loan and creates a lien in favor of the
lender, title is held by the:**
,ESTUDY
- a) Lender
- b) Mortgagor
- c) Mortgagee
- d) Trustee
- **Answer:** b) Mortgagor
5. **A competitive market analysis is MOST often used for:**
- a) Determining rental rates
- b) Setting a listing price
- c) Valuing commercial properties
- d) Estimating depreciation
- **Answer:** b) Setting a listing price
6. **A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no
termites now. Before listing the property, the agent should:**
- a) Disclose the information to potential buyers
- b) Ignore the information as it is outdated
- c) Tell the seller not to disclose, because the statute of limitations has run out
- d) Request a new termite inspection
- **Answer:** c) Tell the seller not to disclose, because the statute of limitations has run out
7. **All of the following are methods to calculate the reproduction or replacement cost of a building
EXCEPT the:**
- a) Comparative method
- b) Cost approach
- c) Quantity survey method
, ESTUDY
- d) Straight-line method
- **Answer:** d) Straight-line method
8. **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) Debit buyer $110,000; credit seller $110,000
- c) Credit seller $110,000; debit buyer $110,000
- d) Debit seller $110,000; credit buyer $110,000
- **Answer:** a) Credit buyer $110,000; debit seller $110,000
9. **If conditions for purchase are included in a deed and these conditions are violated, what is the
penalty?**
- a) Fines imposed on the owner
- b) Return of the property to the original owner
- c) Forfeiture of the sale proceeds
- d) Modification of the deed
- **Answer:** b) Return of the property to the original owner
10. **The purpose of requiring an earnest money deposit in a real estate sales contract is to:**
- a) Secure financing for the buyer
- b) Provide evidence of the buyer's intention to carry out the contract
- c) Cover the cost of inspections
- d) Ensure the seller pays for repairs
- **Answer:** b) Provide evidence of the buyer's intention to carry out the contract
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