PSI National Real Estate Exam: Sample
Question and Answers [100% Correct] 2025
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1. A property is listed for $450,000, and the buyer, who is pre-qualified, believes no additional financing
will be needed. However, the buyer learns the property is encumbered with a $30,000 mortgage. The
agent advises the buyer to pay off the mortgage. The sale goes through without mentioning the
mortgage terms, and the closing statement shows the property price as $450,000 with a $30,000 credit
for the mortgage. The deed was exempt, and the loan wasn’t funded. When the mortgage isn't paid, the
property goes into foreclosure. Who is responsible for the foreclosure?
- A. Buyer
- B. Mortgagee
- C. Buyer's Agent
- D. Seller's Agent
**Answer: Buyer**
2. Which characteristic applies to a quitclaim deed?
- A. It does not require a legal description
- B. It must have the grantee's signature
- C. It doesn't transfer title to the property
- D. It is not required to include warranties
**Answer: It is not required to include warranties**
3. A broker lists a property for $225,000. The seller accepts an offer for $210,000, contingent on an
inspection. A second offer of $205,000 is made, and the seller accepts it as a backup offer, contingent on
the first offer being terminated. The first offeror requests $5,000 worth of repairs before proceeding. The
seller may take all of the following actions EXCEPT:
- A. Agree to the repairs and proceed with the first offer
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, - B. Ignore the demand and sell the property to the second offeror
- C. Terminate the first agreement in writing and proceed with the second offer
- D. Reject the repairs and sell the property in its current condition
**Answer: Ignore the demand and sell the property to the second offeror**
4. A buyer deposits $5,000 earnest money with a broker. Before closing, the buyer needs $2,000 to
adjust his debt-to-income ratio for loan approval. The broker writes a check from the trust account for
$2,000. Is this acceptable?
- A. Yes, because the transaction hasn't closed yet, and the buyer can request the funds
- B. Yes, if the seller and buyer provide written permission
- C. No, because the broker cannot withdraw money from the trust account once the funds are
deposited
- D. No, because reducing the deposit below the required amount is not acceptable
**Answer: Yes, if the seller and buyer provide written permission**
5. A buyer decides not to require an inspection to strengthen his offer, but the agent has concerns about
the condition of the property. What is the agent's responsibility?
- A. Insist the buyer order an inspection before making the offer
- B. Proceed as instructed since the buyer is aware of the risks
- C. Trust the seller to disclose any defects and proceed with the buyer's plan
- D. Discuss concerns with the buyer and encourage including an inspection contingency
**Answer: Discuss concerns with the buyer and encourage including an inspection
contingency**
6. An associated licensee decides to disclose latent defects in listed properties only if specifically asked
by a buyer. The broker hasn’t addressed this practice with the licensee. If the licensing board
investigates, what will they likely find about the broker's liability?
- A. The broker has no liability; the licensee is fully responsible for the non-disclosure
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, - B. The broker is only liable if aware of the licensee's practice of nondisclosure
- C. The broker is liable only if they knew about the defects not disclosed by the licensee
- D. The broker shares the liability for the licensee’s actions
**Answer: The broker shares the liability for the licensee’s actions**
7. The local real estate market has been strong for years but shows signs of slowing. The area's job
market is weak, and many people are leaving. A broker is asked whether the homeowner should sell now
or wait. What should the broker recommend?
- A. Sell now, as the market is likely to decline further
- B. Rent the property until the market improves
- C. Hold for another year, as property values may rise
- D. Wait, as market trends suggest further gains
**Answer: Sell now, as the market is likely to decline further**
8. Buyer Jim signs a purchase contract at the seller’s asking price with no contingencies, and the seller
agrees to a 30-day closing date. The seller later changes the closing date to 40 days. What is the status of
the contract?
- A. Valid with the 30-day closing date since Buyer Jim met all the terms
- B. Valid with the 40-day closing date, as a 10-day extension is not material
- C. Invalid, as the signed documents don’t indicate mutually agreed terms
- D. Enforceable due to the seller’s counteroffer
**Answer: Invalid, as the signed documents don’t indicate mutually agreed terms**
9. A real estate broker advertises specifically for a buyer who wishes to use a VA loan. Does this violate
veterans' rights or the Federal Fair Housing Act?
- A. Yes, as it wrongly suggests only veterans can qualify for the purchase
- B. Yes, because it excludes non-veterans from applying for the loan
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, - C. No, brokers are allowed to target specific populations in advertising
- D. No, as veterans from all protected classes can qualify for VA loans
**Answer: No, as veterans from all protected classes can qualify for VA loans**
10. A salesperson tells a potential buyer that a new exit ramp will be built near a property, although the
ramp's location is not yet decided by planners. The ramp is eventually located elsewhere. Can the
salesperson be held liable for this statement?
- A. No, it was just the salesperson's opinion
- B. No, it was simply puffing
- C. Yes, it was puffing
- D. Yes, it was a material misrepresentation
**Answer: Yes, it was a material misrepresentation**
11. The buyer receives a loan estimate and the closing disclosures. During the final walkthrough, the
broker informs the buyer of a change to the loan terms. Which document gives the buyer the right to an
additional 3 days to review?
- A. A mathematical error on tax proration
- B. Missing appliances that were supposed to be included
- C. The loan product changes from fixed to adjustable rate
- D. A new special assessment discovered after the property disclosure
**Answer: The loan product changes from fixed to adjustable rate**
12. Which issue is most likely addressed by building codes?
- A. Deed restrictions
- B. Construction standards
- C. Permissible land use
- D. Restrictive covenants
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