Exam Questions and Answers Latest

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PSI Real Estate Salesperson Practice Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

What is the purpose of a property appraisal in a real estate transaction?

• To determine the property’s market value

✔✔B) To assess the property’s market value based on its features and condition

• To verify the property’s legal title
• To estimate the property’s rental income

What is the main characteristic of a "fixed-rate mortgage"?

• The mortgage interest rate can fluctuate over time

✔✔B) The mortgage interest rate remains the same throughout the loan term

• The borrower can skip payments without penalty
• The loan is paid off after a fixed number of years

What does the term “real property” refer to in real estate?

• Personal property on a piece of land

✔✔B) The land and anything permanently attached to it 1 / 4

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• A lease on a piece of land
• Property that can be rented for profit

What is a “contingency” clause in a real estate contract?

• A requirement that must be met for the sale to proceed

✔✔B) A provision that allows the buyer or seller to cancel the deal if certain conditions are not met

• A deadline for completing the transaction
• A clause that requires the buyer to pay closing costs

What is a "deed" in a real estate transaction?

• A document that outlines the terms of a loan agreement

✔✔B) A legal document that transfers ownership of property from one person to another

• A written offer to purchase a property
• A description of the property for tax purposes

What does the term "escrow" refer to in a real estate transaction?

• A type of mortgage where the borrower’s payments are divided into principal and interest 2 / 4

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✔✔B) A third-party account used to hold funds or documents until the conditions of the agreement are met

• A legal document that establishes property rights
• The process of transferring property ownership from the seller to the buyer

What is the role of a real estate agent in a transaction?

• To provide financing to the buyer

✔✔B) To assist the buyer and/or seller in negotiating the sale of a property

• To appraise the property for market value
• To manage the maintenance of the property

What is a "home inspection"?

• An appraisal of the property’s value

✔✔B) An examination of the property to identify potential issues or needed repairs

• A review of the buyer's credit score
• A document outlining the seller’s obligations during the transaction

What does “title insurance” protect against in a real estate transaction? 3 / 4

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• Damage to the property from natural disasters

✔✔B) Loss due to defects or issues with the property's title

• Future increase in property taxes
• Legal disputes over the property’s market value

What is the difference between a "deed of trust" and a "mortgage"?

• A deed of trust is only used for commercial properties

✔✔B) A deed of trust involves a third-party trustee, while a mortgage involves a direct relationship between the borrower and lender

• A mortgage is used for personal loans, while a deed of trust is used for business loans
• A deed of trust gives the buyer immediate ownership of the property

What does the term "home equity" refer to?

• The amount of rent paid by tenants

✔✔B) The difference between the property's market value and the outstanding mortgage balance

• The property’s tax value
• The total amount of insurance on the home
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