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National PSI Broker Exam Prep Questions and Complete Solutions Graded A+
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National PSI Broker Exam Prep Questions and Complete Solutions Graded A+
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National PSI Broker Exam PrepQuestions and Complete Solutions
Graded A+
A broker is completing a CMA to determine the potential listing price of a seller's home. Which of the
following is NOT part of the final CMA given to the seller?
A)
Highest and best use evaluation
B)
Comparable sales analysis
C)
Adjustments to past sales
D)
Pictures of comparables - Answer: A)
The answer is highest and best use evaluation. An appraiser does a highest and best use evaluation,
which does not appear in a CMA.
Houses in the local area have had an increase in sales price and a decrease in days on the market. A
broker who is attempting to determine the current market value for a residential listing would get the
BEST estimate of value by using
A)
a GRM as the primary consideration to determine value.
B)
the cost approach with reproduction estimates.
C)
comparables that are no more than six months old.
,D)
comparables that are no more than 12 months old. - Answer: C)
The answer is comparables that are no more than six months old. In a changing market, the more recent
the comparables, the more likely they are to reflect upward or downward price changes.
Rental rates have increased by 2% in the last six months. Which appraisal principle BEST explains this
rate increase?
A)
Principle of substitution
B)
Principle of supply and demand
C)
Principle of contribution
D)
Principle of highest and best use - Answer: B)
The answer is principle of supply and demand. The principle of supply and demand states that as fewer
properties become available for rent or sale, the price owners can charge will increase.
The current monthly GRM in a neighborhood is 200, and the annual income is $24,000. What is the
estimated value of a property in this neighborhood?
A)
$200,000
B)
$240,000
C)
$400,000
,D)
$4,800,000 - Answer: C)
The answer is $400,000. Monthly GRM × monthly income = value. 200 × 2,000 ($24,000 ÷ 12) =
$400,000.
The subject property has two baths and one fireplace. The property across the street sold for $181,000
and has two baths and two fireplaces. The property behind the subject sold for $175,000 and has two
baths and no fireplace. In the area, baths are worth $5,000 and fireplaces are worth $3,000. What is the
subject property worth?
A)
$175,000
B)
$177,000
C)
$178,000
D)
$180,000 - Answer: The answer is $178,000
Subject Property Comp 1 $181,000 Comp 2 $175,000
2 baths 2 baths no adjustment 2 baths no adjustment
1 fireplace 2 fireplaces - $3,000 No fireplace + $3,000
Adjusted price $178,000 Adjusted price $178,000
According to federal government lending regulations, a buyer purchasing a home must have an appraisal
for all the following types of financing EXCEPT
A)
FHA.
, B)
VA.
C)
loan sold to FNMA.
D)
seller carry. - Answer: D)
The answer is seller carry. All government loans and any sold on the secondary market require an
appraisal. A seller-carry loan, or seller financing, may or may not require an appraisal.
A buyer chooses a loan with an LTV ratio of 90%, which requires the purchase of PMI, instead of a loan
with an 80% LTV, which would not require the insurance. The buyer MOST likely made this choice
because
A)
if the buyer defaults, PMI will protect the buyer by paying off the full loan.
B)
the buyer will make a larger down payment but have smaller monthly payments, including PMI.
C)
paying PMI will mean that all mortgage payments and homeowners association fees are deferred in case
of default.
D)
the buyer wants a smaller down payment, even though the buyer will have to pay PMI. - Answer: D)
The answer is the buyer wants a smaller down payment, even though the buyer will have to pay PMI.
Buyers are willing to pay PMI (private mortgage insurance) in order to bring a smaller down payment to
closing, which will mean a higher monthly payment. PMI protects lenders in case of default.
A buyer is getting a new mortgage with a 95% loan-to-value ratio. The final loan amount the lender will
lend the buyer is determined by the
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