New York Real Estate Exam Review

Questions and Answers

A broker legitimately may pay all or part of a real estate commission to a?

Buyer

Friend who provides a listing lead

Seller

Salesperson (correct)

The minimum age for a New York real estate broker's license is?

20 (correct)

Which of the following acts would require a real estate license in New York?

Sale of one's own property

Sale of land by an auctioneer (correct)

Sale by the owner's lawyer

Foreclosure sale by court order

An associate broker may?

Work as a salesperson for a principal broker Signup and view all the answers

Violation of the license law is a misdemeanor, punishable by up to a year in jail and a fine of up to?

$1,000 Signup and view all the answers

When salesperson Tom Jones left ABC Realty and went to work with XYZ REALTORS, Tom's listings?

Remained with ABC Realty Signup and view all the answers

A salesperson's license must be?

Retained by the principal broker Signup and view all the answers

When does offering a client's business for sale require a real estate license?

When the business includes any real estate Signup and view all the answers

An apartment information vendor is licensed by?

Department of State Signup and view all the answers

When a license is revoked, how long must a licensee wait before applying to have the license reinstated?

1 year Signup and view all the answers

The form of listing whereby an owner lists property for sale with a number of brokers is known as a?

Open listing Signup and view all the answers

To avoid possible liability for the actions of cooperating members of a multiple-listing system, the owner who lists property for sale may decline to offer?

Subagency Signup and view all the answers

An agent who has the authority to represent the principal in specific matters is a?

General agent Signup and view all the answers

Jan Lipson gave Sun City Realty an exclusive agency listing on her property. If she sells the property herself without involving Sun City, she will owe Sun City?

No commission Signup and view all the answers

When selling a property in New York, the licensee is required to disclose to a potential buyer that?

The property lies in an agricultural district Signup and view all the answers

The commission to be paid in a written listing agreement is the?

Percentage of the sales price as negotiated and agreed or a flat fee Signup and view all the answers

The relationship between an agent and his or her principal is?

Fiduciary Signup and view all the answers

If you are selling a house in New York, it is necessary to disclose that?

There is a utility surcharge Signup and view all the answers

Seller is legally required to reveal to a buyer anything seller knows about?

Lead paint hazards on the property Signup and view all the answers

To create an agency relationship, it is necessary that?

The parties act as principal and agent Signup and view all the answers

If you are a salesperson working with a buyer, then the buyer is your client?

If you have an agency contract with the buyer Signup and view all the answers

The type of listing illegal in New York State is a(n)?

Net listing Signup and view all the answers

A licensed salesperson or broker associate acting as an independent contractor must?

Both A and B Signup and view all the answers

A salesperson sells another firm's listing of a commercial building for $462,500. The 7 percent commission is split 50/50 between the two companies. The salesperson received 60 percent of her office's share. How much does she receive?

$9,712.50 Signup and view all the answers

A broker may be entitled to a commission in the event that the sale does not close if the problem was caused by the?

Seller Signup and view all the answers

Big Apple Realty is concerned that its commission on a sale will not be paid. Big Apple Realty may?

File an affidavit of entitlement Signup and view all the answers

A real estate salesperson's compensation is set by?

Agreement between broker and salesperson Signup and view all the answers

The Duncan and Hill decision cautioned real estate licensees against?

The unauthorized practice of law Signup and view all the answers

When a buyer/client wants to see property listed by his or her agent's company, the possible conflict of interest can be solved by the use of?

Designated agents Signup and view all the answers

Buyers should be careful NOT to reveal the top price they're willing to pay to a?

Seller's agent Signup and view all the answers

Ads made by real estate brokers that do not indicate that the advertiser is a broker are?

Known as blind ads Signup and view all the answers

If a licensee becomes a partner in a real estate firm, he must have a?

Broker license Signup and view all the answers

Agency relationships in an in-house sale require?

Full discussion and disclosure in writing to all parties Signup and view all the answers

In a buyer/agency relationship, the broker owes the seller?

Fair and honest dealing Signup and view all the answers

If you are a salesperson working with a buyer, then the buyer is your client?

If you have an agency contract with the buyer Signup and view all the answers

In a real estate transaction, a broker had a written representation agreement with the buyer but was paid 6 percent of the selling price at the closing by the seller. Under these circumstances, whose agent was this broker?

The broker was the buyer's agent Signup and view all the answers

A broker signed a listing agreement with the Ghents to market their luxury downtown condominium. If the buyers decide they want to see the Ghent's property, what should the broker do?

Disclose the intended dual agency and obtain both parties written consent Signup and view all the answers

The DOS regulation 175.7 states: 'A real estate broker shall make it clear for which party he is acting...'. This applies to?

All types of transactions, not just residential Signup and view all the answers

A licensee should use the disclosure form with prospective sellers or buyers at the first substantive contact. Which of the following illustrates the first substantive contact?

A prospective purchaser walking into a real estate office, meeting with an agent, and discussing the purchase of a specific property Signup and view all the answers

In which clause in a deed would you find metes and bounds and monuments?

Description Signup and view all the answers

If Mr. Jones owns his home free and clear of encumbrances and has the right to devise it to his daughter, he owns a?

Fee simple Signup and view all the answers

The Goodmans purchased a cottage bounding on a stream. They have rights to the stream known as?

Riparian Signup and view all the answers

Which of the following would NOT be considered chattel?

The barn Signup and view all the answers

The most complete type of ownership in real estate is?

Fee simple Signup and view all the answers

Deed restrictions may be established only by the?

Grantor Signup and view all the answers

One future action that may NOT be limited by a deed restriction is?

The illegal covenant against religion or nationality Signup and view all the answers

Any right to or interest in the land interfering with its use or transfer is called an?

Encumbrance Signup and view all the answers

A deed is valid when it is?

Delivered and accepted Signup and view all the answers

Which type of deed is used to convey title to a parcel of land through a foreclosure proceeding?

Referee's Signup and view all the answers

Title to real property is conveyed by a?

Deed Signup and view all the answers

A lease that provides for the lessee to pay all or part of the expenses of the property in addition to rent is called a(n):

net lease Signup and view all the answers

When a lessee transfers the entire remaining interest of his lease to another party who then must pay the owner, it is called a(n):

assignment Signup and view all the answers

A contract transferring the rights to possession of real property for a specified term is known as a:

lease Signup and view all the answers

Under the New York General Obligations Law, security deposits by a tenant:

are held in escrow by the landlord Signup and view all the answers

A tenant learns her building has been sold to a new landlord. The sale of the property:

has no effect on existing leases, and the tenant must make timely rent payments to the new owner Signup and view all the answers

A legally enforceable agreement between competent parties in which each party acquires a right is called a:

contract Signup and view all the answers

The usual listing agreement between a seller and a real estate agent is a(n):

express contract Signup and view all the answers

When the agreement of the parties is demonstrated by their acts and conduct, this is known as what type of contract?

implied Signup and view all the answers

When a new contract is substituted for an existing agreement, the process is known as:

novation Signup and view all the answers

Except for the amount of mortgage that may be assumed, a sale in New York State is subject to a transfer tax of:

$2 per $500 or fraction thereof of the consideration paid Signup and view all the answers

In the transfer of what type of property may a flip tax be imposed?

cooperative Signup and view all the answers

The Flintstones sold their house to the Simpsons and are to close on July 1. The Flintstones paid their annual town taxes in January. At the closing, the Simpsons will reimburse the Flintstones for:

the tax for the balance of the year Signup and view all the answers

RESPA explicitly prohibits the payment of:

kickbacks Signup and view all the answers

An instrument in writing that is the security for a debt with specific property as a pledge is a:

mortgage Signup and view all the answers

A Department of Veterans Affairs mortgage is:

guaranteed Signup and view all the answers

When a house purchase is financed by a federally related mortgage loan, RESPA requires that loan closing information be prepared on the:

uniform settlement statement Signup and view all the answers

A blanket mortgage usually encumbers:

several parcels of real property Signup and view all the answers

Under a mortgage, the mortgagor is the party who:

is the borrower Signup and view all the answers

Margo and Clarence Stilton have applied for an FHA/insured loan. The mortgage will be:

insured Signup and view all the answers

If a real estate broker earned a commission of $5,600 at a commission rate of 7%, at what price was the property sold?

$80,000 Signup and view all the answers

What type of mortgage loan has an interest rate that may become higher or lower at specified intervals, keyed to an economic indicator?

ARM Signup and view all the answers

Charging more than the legal interest rate is known as:

usury Signup and view all the answers

Deed restrictions are provisions that apply to current property owners and:

follow the chain of title in future transfers Signup and view all the answers

Variances and special use permits are issued by a(n):

zoning board of appeals Signup and view all the answers

When the present usage of land is in legal conflict with an enacted zoning ordinance, the usage is called:

nonconforming Signup and view all the answers

The owner of a five-unit apartment building that would not be allowed by a new zoning law may be entitled to a(n):

nonconforming use Signup and view all the answers

Among other methods, land use is controlled or regulated by:

subdivision regulations Signup and view all the answers

Examples of private land use controls would NOT include:

eminent domain Signup and view all the answers

Even though a building permit is issued, new construction will still need:

a certificate of occupancy Signup and view all the answers

A detailed architectural rendering of a structure is known as a(n):

blueprint Signup and view all the answers

Electrical systems are routed through a:

circuit box Signup and view all the answers

A lakefront home sold for $385,000. The broker received $27,912.50. What rate of commission did this broker charge?

7 ¼ % Signup and view all the answers

The most commonly used insulation material is:

fiberglass Signup and view all the answers

The amount a particular purchaser agrees to pay and a seller agrees to accept is known as:

price Signup and view all the answers

A comparative market analysis resembles which approach to real estate evaluation?

direct sales comparison Signup and view all the answers

The definition of market value includes:

neither buyer nor seller under undue pressure Signup and view all the answers

It can be dangerous for a real estate broker to:

discuss commission rates with another broker Signup and view all the answers

A protected class under New York City law and not under state or federal law is which of the following?

lawful occupation Signup and view all the answers

The Civil Rights Act of 1866:

prohibits any type of discrimination based on race Signup and view all the answers

Redlining is defined as:

denying or restricting loans in a certain area by a lending institution Signup and view all the answers

New York State law goes beyond federal human rights law when it forbids discrimination based on:

marital status Signup and view all the answers

PDQ Realty advertises that it specializes in areas suitable for European immigrants. This is a fair housing violation called:

steering Signup and view all the answers

Using 'scare tactics' regarding the possible change in the demographics of a neighborhood when soliciting listings is a violation called:

blockbusting Signup and view all the answers

Although a property owner may be exempted sometimes from discrimination laws, a real estate licensee:

may not participate in the transaction in any way Signup and view all the answers

The Sherman Antitrust Law is intended to promote:

free competition in the open market Signup and view all the answers

The Underground Storage Tank Act in New York regulates underground fuel storage tanks that are:

1,100 gallons or larger Signup and view all the answers

Underground storage tanks are utilized by business and industry for all of the following reasons EXCEPT they are:

out of sight Signup and view all the answers

A salesperson who is an independent contractor:

is paid commission based on sales results Signup and view all the answers

An asbestos problem is sometimes best treated by:

leaving it alone Signup and view all the answers

The New York regulatory agency that oversees the safety of drinking water in New York is the Department of:

Health Signup and view all the answers

Study Notes

Broker Compensation

Salespersons can only receive compensation from their sponsoring broker.
Brokers may pay all or part of the real estate commission to a salesperson but not to buyers or unrelated friends.

Licensing Requirements

Minimum age for a New York real estate broker's license is 20 years.
Selling one’s own property does not require a real estate license; however, auctioneers selling land do need a license.

Broker and Associate Broker Roles

An associate broker works under the supervision of another broker and cannot collect their own real estate fees.
If a salesperson changes brokers, listings remain with the original broker.

License Violations and Penalties

Violating license law is a misdemeanor with fines up to $1,000 and possible jail time up to one year.

Listing Types

Open listings allow owners to sell their property with multiple brokers, while exclusive agency listings mean the seller pays no commission if they sell without a broker's assistance.
Net listings are illegal in New York; compensation must be per the agreed upon percentage or flat fee.

Agency and Client Relationships

Agency relationships require a written agreement and clear communication of the broker’s role to all parties.
Dual agency must be disclosed, and both parties must consent in writing.

Seller Disclosures

Sellers must disclose known lead paint hazards and property conditions, including agricultural districts.
Selling businesses that include real estate always requires a real estate license.

Compensation and Commissions

The broker's fee is negotiable and specified in the listing agreement.
If a sale does not close due to the seller's actions, the broker may still be entitled to a commission.

Legal Documents and Rights

Deed restrictions are established by the grantor and run with the land.
Property transfer is executed through a deed, while leases are contracts that grant possession for a specified period.

Types of Leases

In a net lease, the tenant pays additional expenses beyond rent.
Assigning a lease involves transferring the lease agreement to another party.

Tenant Rights and Security Deposits

Security deposits must be held in escrow by landlords, and the sale of property does not terminate existing leases; tenants continue to pay rent to the new owner.

Real Estate Transactions

Full disclosure of who the broker represents is required in all transactions, not just residential.
Brokers must use disclosure forms at the first substantial contact with prospective buyers or sellers.

Key Property Rights

Fee Simple Absolute grants the most complete form of ownership rights.
Riparian rights allow property owners access to flowing bodies of water but do not extend to adjacent land.

Advertising and Regulations

Real estate advertisements must identify the broker to avoid being categorized as 'blind ads.'
Licensees must always act in their client's best interest and ensure compliance with all real estate laws.### Lease and Contracts
Lease agreements remain valid even if the property is sold; new owners must honor existing leases.
A contract is a legally binding agreement between competent parties that requires consideration.
Express contracts clearly state the terms agreed upon by both parties.

Types of Contracts

Implied contracts arise from actions and conduct rather than written terms.
Novation is the process of replacing an existing contract with a new one or substituting parties.

Tax Implications and Transactions

New York State imposes a transfer tax of $4.00 per $1,000 of the sale price, except for mortgage assumptions.
Flip taxes are typically imposed on transfers of cooperative properties, paid by the seller.
Buyers reimburse sellers for property taxes when closing occurs after the taxes have been paid in advance.

Real Estate Regulations

The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks and unearned fees associated with real estate transactions.
Mortgages serve as security instruments, whereby specific property pledges are made to lenders.

Government-Backed Loans

Department of Veterans Affairs (VA) loans are guaranteed, providing security to lenders in cases of borrower default.
FHA-insured loans protect lenders from financial loss by covering defaults against the loan.

Mortgage Types and Calculations

Adjustable Rate Mortgages (ARMs) have interest rates that can fluctuate based on economic indicators.
The calculation for property sale price can be determined by commission earned divided by the commission rate.
The common insulation material used in homes is fiberglass, which has a significant R-factor for energy efficiency.

Market Value and Analysis

Market value represents the most probable selling price under normal conditions where neither party is under pressure.
Comparative Market Analysis (CMA) is similar to the direct sales comparison approach used in appraisals.

Fair Housing Laws

The Civil Rights Act of 1866 prohibits discrimination based on race, with no exemptions.
New York City law includes legal protections based on lawful occupation, which isn’t covered by federal law.
Steering is the practice of directing home seekers towards particular neighborhoods based on ethnicity or background.

Land Use Controls and Zoning

Variances and special use permits are issued by the Zoning Board of Appeals for exceptions to zoning laws.
Nonconforming uses refer to land that doesn’t comply with current zoning laws but was legally established prior to these laws.

Construction and Occupancy

A Certificate of Occupancy is required following inspections for new construction before it can be occupied.
Blueprints serve as detailed architectural renderings outlining construction specifics, including mechanical systems.

Environmental Regulations

The Underground Storage Tank Act regulates tanks larger than 1,100 gallons in New York.
Asbestos should be left undisturbed if contained and not posing a direct hazard.

Licensing and Employment

Independent contractors in real estate are compensated based on sales outcomes, not hourly work.
Real estate licensees are not exempt from fair housing laws, even if property owners may have certain exemptions.

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Test your knowledge with these flashcards designed for the New York real estate exam. Each question focuses on essential broker and salesperson regulations. Perfect for those preparing for their licensing exam.