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PSI Maryland Practice Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What is meant by the term "market value" in real estate?
- The price the buyer is willing to pay
- The seller’s asking price
- The price a property could sell for in an open market
- The cost of repairs needed for the property
✔✔ C) The price a property could sell for in an open market
What does "capital gain" mean when selling real estate?
- The initial cost of the property
- The profit from selling a property for more than the purchase price
- The cost of the mortgage
- The amount paid to the real estate agent
✔✔ B) The profit from selling a property for more than the purchase price
What is a "contingency" in a real estate contract? 1 / 4
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- A clause that allows the seller to back out of the deal
- A condition that must be met for the contract to remain valid
- A requirement for the buyer to pay a higher deposit
- A period when the property is not available for sale
✔✔ B) A condition that must be met for the contract to remain valid
In Maryland, what type of insurance is required for homebuyers?
- Health insurance
- Homeowners insurance
- Auto insurance
- Life insurance
✔✔ B) Homeowners insurance
What is a "short sale" in real estate?
- A sale that is completed faster than a typical sale
- A sale where the property is sold for less than the amount owed on the mortgage
- A sale where the buyer makes a down payment in full
- A sale that requires less paperwork than a standard transaction 2 / 4
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✔✔ B) A sale where the property is sold for less than the amount owed on the mortgage
What is a "broker" in the context of Maryland real estate?
- A person who inspects properties for buyers
- A licensed individual who facilitates real estate transactions
- A person who appraises the value of properties
- A lender who provides loans to homebuyers
✔✔ B) A licensed individual who facilitates real estate transactions
What does "title insurance" protect against in Maryland real estate transactions?
- Damage to the property
- Disputes over ownership or title defects
- Incorrect property tax assessments
- The buyer’s credit score
✔✔ B) Disputes over ownership or title defects
What is the purpose of a "home inspection" in real estate transactions?
- To determine the property's market value 3 / 4
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- To inspect the buyer’s financial status
- To assess the condition of the property
- To secure financing for the buyer
✔✔ C) To assess the condition of the property
What is the significance of a "deed of trust" in Maryland real estate transactions?
- It acts as a warranty that the title is clear
- It secures the loan on the property
- It allows the buyer to take possession without a title
- It eliminates the need for a mortgage
✔✔ B) It secures the loan on the property
What does the term "zoning" refer to in real estate?
- The process of inspecting a property
- A tax on the value of the land
- Regulations governing land use and development
- A type of mortgage used for residential homes
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✔✔ C) Regulations governing land use and development