Exam Cheat Sheet · Quick Reference

National Real Estate Broker Supplemental Exam

National  ·  PSI Services Real Estate

Verified, not estimated. Every figure below is drawn from the official exam structure we maintain — question counts, passing standard and topic weighting. Practice questions are grounded in the source law with statute citations. We omit any figure we can't verify rather than guess at it.
Total questions
80
Passing score
75%
Exam time
150 min
Administered by
PSI Services Real Estate
Format
Closed-book

National State Portion 80 questions

Property Ownership 8 Q · 10%
Real vs personal propertyLand characteristics and legal descriptions (metes & bounds, lot & block, government survey)Measuring structures and land measurementEncumbrances: liens, easements, encroachments, subsurface/air/water rightsTypes of ownership: severalty, tenants in common, joint tenancy, common-interest, trusts, business entities, life estate
Land Use Controls 4 Q · 5%
Government rights in land: taxes, special assessments, eminent domain, escheatGovernment controls on land use: zoning, building codes, environmental regulationsPrivate controls: deed conditions, CC&Rs, HOA/condo bylaws
Valuation and Market Analysis 6 Q · 8%
Appraisals: when required, licensed/certified appraiser requirements, appraisal processEstimating value: economic principles affecting valueSales comparison approachCost approachIncome analysis approach (GRM, cap rate)Comparative Market Analysis (CMA), Broker Price Opinion (BPO), Automated Valuation Models (AVM)
Financing 8 Q · 10%
Loan terminology: points, LTV, PMI, PITI, underwriting criteriaMortgage clauses, promissory notes, deeds of trustLoan types: conventional, amortized, ARM, FHA, VA, USDA, owner financing, reverse mortgage, HELOC, construction, bridgeLending legislation: RESPA, Truth in Lending (Reg Z), TRID, Equal Credit Opportunity ActSecondary mortgage market: Fannie Mae, Freddie Mac, Ginnie Mae
Contracts 15 Q · 19%
General contract law: valid elements, Statute of Frauds, offer and acceptanceContract enforceability: void, voidable, unenforceable contractsBilateral vs unilateral contracts, option contractsElectronic signatures and digital transactionsRights, obligations, and breach remediesPurchase agreements: addenda, amendments, contingenciesLease contracts: types of leases, lease-purchase agreementsMultiple offers and counteroffers
Agency 10 Q · 13%
Agency vs non-agency relationshipsListing contracts: exclusive right-to-sell, exclusive agency, open listing, net listingBuyer brokerage and buyer representation agreementsTransaction brokers and facilitatorsPower of attorney, termination of agencyFiduciary duties: obedience, loyalty, disclosure, confidentiality, accounting, reasonable care (OLD CAR)Duties to customers and non-clientsAgency disclosure requirements and conflict of interest
Property Disclosures 6 Q · 7%
Property condition disclosures: seller disclosure requirements, inspections, surveysRed flags and material defectsEnvironmental disclosures: lead-based paint, asbestos, radon, mold, underground storage tanksGovernment disclosures: flood zones, wetlands, endangered speciesMaterial facts and duty to disclose
Property Management 2 Q · 3%
Tenant procurement and qualificationFair housing compliance in property management and ADAMarket analysis for establishing rentsLandlord/tenant rights and obligations
Transfer of Title 5 Q · 6%
Types of deeds: general warranty, special warranty, quitclaim, bargain and saleTitle insurance: owners vs lenders policies, title searches, title problemsClosing process: recordation, settlement statements, warrantiesSpecial processes: foreclosure, short sale, deed in lieu, probate
Practice of Real Estate 10 Q · 12%
Federal Fair Housing Act: protected classes, prohibited conduct, exemptionsAmericans with Disabilities Act (ADA) requirementsAntitrust laws: price fixing, group boycotts, market allocation, tie-in agreementsDo-Not-Call Registry and telemarketing rulesSocial media and internet advertising regulationsHandling earnest money and trust fundsDue diligence and fiduciary responsibilitiesIndependent contractor vs employee status
Real Estate Calculations 6 Q · 7%
Seller net proceeds calculationsBuyer funds required at closingProrations: taxes, insurance, rent, HOA duesTransfer tax and recording fee calculationsPITI (Principal, Interest, Taxes, Insurance) calculationsCommission calculations and splitsEquity, capitalization rate, and LTV calculationsDiscount points and origination feesArea and volume conversions (sq ft, acres)

Key Distinctions

DeedvsBill of sale

Real property is transferred by deed (which must be executed, delivered, and accepted), while personal property is transferred by a bill of sale.

Special assessmentvsAd valorem property tax

A special assessment is a lien only against the specific properties that directly benefit from a public improvement (sidewalks, streetlights, sewers), whereas general ad valorem taxes are levied on all properties in the taxing jurisdiction based on assessed value regardless of benefit.

Gross rent multiplier (GRM)vsGross income multiplier (GIM)

GRM uses monthly gross rent and applies to one- to four-unit residential properties with no other income, while GIM uses annual gross income and applies to properties of five or more units and commercial properties; both use gross income rather than NOI, unlike the capitalization rate method.

Modern Real Estate Practice (22nd ed.), Chapter 16 — Real Estate Appraisal, Gross rent or gross income multipliers
Void contractvsVoidable contract

A void contract has no legal effect from the beginning (e.g., illegal purpose, forged signature, party adjudicated mentally incompetent, missing essential elements), while a voidable contract (e.g., entered under duress, or a deed signed by a 17-year-old minor, which may be ratified or disaffirmed upon reaching majority) has legal effect and is treated by courts as valid and enforceable unless the party entitled to disaffirm does so within the allowed time.

Modern Real Estate Practice (22nd ed.), Unit 11, Validity of a contract
Exclusive right-to-sell listingvsExclusive agency listing

Under an exclusive right-to-sell listing the broker earns the full commission no matter who sells the property, including the seller personally; under an exclusive agency listing the seller retains the right to sell independently without owing the broker a commission.

Modern Real Estate Practice (22nd ed.), Client Representation Agreements chapter, Types of Listing Agreements section
Purchase money mortgagevsLand contract

With a purchase money mortgage the buyer receives the deed and legal title at closing and grants the seller a security interest for the unpaid balance; under a land contract the seller retains legal title (buyer holds equitable title) until all installment payments are made.

Modern Real Estate Practice (22nd ed.), Unit 11, Owner financing contracts section
Deed in lieu of foreclosurevsFormal (judicial) foreclosure

A deed in lieu does not eliminate junior liens and typically causes the lender to lose FHA, VA, or private mortgage insurance rights, whereas formal foreclosure of the senior lien sells the property free of the foreclosing mortgage and extinguishes all junior liens.

Modern Real Estate Practice (22nd ed.), Chapter 12 (Real Estate Financing), Deed in lieu of foreclosure section, p.231
Independent contractor sales associatevsEmployee sales associate

Independent contractors pay their own income and Social Security taxes, while employers must withhold Social Security and income taxes and pay unemployment compensation tax on employees' wages; however, under state license law the broker is vicariously liable for a sales associate's real estate acts regardless of tax classification.

Modern Real Estate Practice (22nd ed.), Real Estate Brokerage chapter, Independent Contractor vs Employee section
General agentvsSpecial agent

A general agent (e.g., a property manager for an income property, or a sales associate for the employing broker) represents the principal in a broad range of matters and can bind the principal within the scope of authority, while a special agent is limited to one specific act — a sales associate is a special (sub)agent of the seller, and a universal agent has virtually unlimited authority.

Modern Real Estate Practice (22nd ed.), Chapter 9 — Types of agency relationships
SubleasevsAssignment of lease

A sublease transfers possession for only part of the remaining lease term with the tenant retaining a reversionary interest; an assignment transfers the entire remaining interest with nothing retained.

Joint tenancyvsTenancy in common

Joint tenancy carries the right of survivorship, so title passes automatically to the surviving co-owner without probate (record the death certificate) and supersedes any will; a tenant in common's interest passes to heirs or devisees through probate.

Modern Real Estate Practice (22nd ed.), Chapter 6 (Transfer of Title), Conveyance of a Decedent's Property section, p.96-97
Civil Rights Act of 1866vsFederal Fair Housing Act

The 1866 Act bars all racial discrimination in property transactions with absolutely no exemptions, goes directly to federal court (not HUD), and is limited only by the state's tort statute of limitations; the Fair Housing Act allows exemptions such as the 'Mrs. Murphy' exemption for owner-occupied buildings of four or fewer units where no broker or discriminatory advertising is used.

Civil Rights Act of 1866; Federal Fair Housing Act

Key Terms

Novation Modern Real Estate Practice (22nd ed.), Unit 11, Novation section
The substitution of a new contract for an existing one, discharging the old obligation entirely (unlike an amendment, which only modifies existing terms).
Purchase money mortgage Modern Real Estate Practice (22nd ed.), Unit 11, Owner financing contracts section
Seller financing in which the buyer takes the deed and legal title at closing but grants the seller a mortgage/security interest for the unpaid balance.
Equitable right of redemption Modern Real Estate Practice (22nd ed.), Chapter 12 (Real Estate Financing), Redemption section, p.231
The defaulting borrower's right, after default but before the foreclosure sale, to redeem the property by paying the amount in default plus costs; the statutory right of redemption exists in some states after the sale, for a period that may extend up to one year.
Special warranty deed Modern Real Estate Practice (22nd ed.), Chapter 6 (Transfer of Title), Special warranty deed section, p.91
The deed appropriate for fiduciaries such as trustees, executors, and corporations because they lack authority to warrant against the acts of predecessors in title, unlike a general warranty deed.
Agency coupled with an interest Modern Real Estate Practice (22nd ed.), Chapter 9 — Termination of agency
An agency in which the agent holds an ownership interest in the property; it cannot be revoked by the principal acting alone and is not terminated by the principal's death.
Latent defect Modern Real Estate Practice (22nd ed.), Unit 9, Property conditions section — latent defect definition
A structural or property defect that is hidden and would not be visible or discoverable by ordinary inspection; sellers and brokers must disclose known latent defects, and buyers may cancel the contract or recover damages if a known latent defect is concealed.
Negligent misrepresentation Modern Real Estate Practice (22nd ed.), Unit 9, Customer-level services / Disclosures — negligent misrepresentation
Occurs when a real estate professional should have known that a statement about a material fact was false — carelessness rather than the intent required for fraud.
Broker protection clause Modern Real Estate Practice (22nd ed.), Chapter 10 — Broker protection clause / Expiration of listing period
A listing provision requiring the owner to pay the listing broker a commission if, within a specified number of days after the listing expires, the owner transfers the property to someone the broker introduced during the listing period.
Blockbusting Modern Real Estate Practice (22nd ed.), Fair Housing chapter, Blockbusting section
A Fair Housing Act violation whose critical element (per HUD) is the profit motive: an owner is intimidated into selling at a depressed price to the blockbuster, who resells higher — also called panic selling.
Joint and several liability (CERCLA) Modern Real Estate Practice (22nd ed.), Unit 21, CERCLA/Superfund section
Under CERCLA, each potentially responsible party may be held liable for the entire cleanup cost rather than a proportional share; CERCLA liability is also strict and retroactive.
Equal Credit Opportunity Act (ECOA) ECOA, 15 USC §1691 et seq.
Federal law whose purpose is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age — e.g., denying a loan based on family-planning answers is sex discrimination.
Housing for Older Persons Act (HOPA) exemption Modern Real Estate Practice (22nd ed.), Fair Housing chapter, Housing for Older Persons section
Familial-status exemption available when at least 80% of occupied units have one resident age 55 or older; communities restricted exclusively to persons 62 or older are fully exempt without the percentage requirement.
Qualified real estate agent / statutory nonemployee (26 U.S.C. 3508) Modern Real Estate Practice (22nd ed.), Real Estate Brokerage chapter, Independent Contractor vs Employee section
For federal tax purposes the associate must (1) hold a current real estate license, (2) have a written contract stating they will not be treated as an employee for federal tax purposes, and (3) receive a substantial portion of income based on sales production or output rather than hours worked — a fixed monthly salary defeats requirement (3).
Color of title
A claim to title based on a document that appears valid and effective on its face but is actually defective or invalid (e.g., a deed from a grantor previously declared legally incompetent); distinct from equitable, marketable, and insurable title.
Redlining
The illegal practice of denying or restricting loans, insurance, or other financial services based on the geographic location of the property rather than the applicant's qualifications.
Earned commissions in a trust account Commissioner's Regulation 2835; B&P Code §10176(e)
Commissions, fees, and other income earned by a broker may be withdrawn once actually earned (not only after closing, e.g., monthly property management fees) but must be removed within 25 days of being earned, or it is commingling.

Formulas to Know

Income capitalization (value, cap rate, NOI)Value = NOI ÷ Cap Rate; Cap Rate = NOI ÷ Value (or sale price); NOI = Value × Cap Rate. Example: $96,000 ÷ 0.08 = $1,200,000 vs. $96,000 ÷ 0.10 = $960,000, a $240,000 difference.
Effective gross income and NOI from potential gross incomeEGI = PGI × (1 − vacancy/collection loss rate); NOI = EGI − annual operating expenses; then Value = NOI ÷ cap rate (do not skip the vacancy deduction).
Gross rent multiplier valuationGRM = Comparable sale price ÷ comparable gross (monthly) rent; Subject value = GRM × subject monthly rent. For multi-unit comps, use total monthly rent (units × per-unit rent); keep monthly rent with a monthly GRM.
Cost approach with straight-line (age-life) depreciationAnnual depreciation = replacement/reproduction cost ÷ total economic life; Total depreciation = annual depreciation × effective age (or % per year × effective age applied to cost); Property value = (cost − total depreciation) + land value.
Seller's minimum sale price to net a target amountSale Price = (Desired net + closing costs) ÷ (1 − commission rate). Example: ($285,000 + $4,200) ÷ 0.945 = $306,032.
Seller's net proceedsNet proceeds = Sale price − (mortgage payoff + commission (price × rate) + closing costs + prorated taxes owed).
Simple interest (360-day year)Interest = Principal × Annual Rate × (Days ÷ 360). Example: $6,500 × 0.08 × (90 ÷ 360) = $130.
Loan calculations: LTV, maximum loan, down payment, points, monthly P&ILTV is applied to the LOWER of sale price or appraised value; Max loan = lower value × LTV%; Down payment = sale price − max loan; LTV = loan ÷ price; each discount point or origination point = 1% of loan amount; Monthly P&I = (loan ÷ $1,000) × amortization factor.
Prorations (taxes and rent)Daily rate = annual amount ÷ 365 (or monthly ÷ 30). Taxes paid in advance: credit to buyer = days buyer owns (closing day through Dec 31) × daily rate. Taxes paid in arrears: seller's share = Jan 1 through day before closing × daily rate. Prepaid rent: buyer's credit = days from closing through month end × daily rent.
Land area, acreage, and survey acreage1 acre = 43,560 sq ft; rectangle area = length × width; triangle area = ½ × base × height; acres = sq ft ÷ 43,560; value = acres × price per acre. A section = 640 acres, so the NW ¼ of the SE ¼ = 640 ÷ 4 ÷ 4 = 40 acres.
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