New York Real Estate Sales Crammer
Practice Exam #1
1. To become licensed in New York, what is NOT required of prospective salespersons?A. be at least 21 years of age
B. have a sponsoring broker
C. successfully complete 75 hours of approved prelicensing coursework
D. never have been convicted of a felony (exceptions may apply)
2. In New York, when is it necessary to have a special license to sell commercial real estate?
A. When the agent has been selling real estate for less than five years.
B. When the property for sale is listed for more than $500,000.
C. When the transaction will take place in New York City.
D. Never. It is not necessary to have a special license to sell commercial real estate.
3. What type of relationship is created when one party gives another the right to represent him in dealings with third parties?
A. agency
B. constructive
C. power of attorney
D. universal
4. In New York, when it is acceptable to automatically extend or renew a listing agreement?
A. in all circumstances
B. it is never acceptable
C. only for commercial listings
D. only for listings for property valued at more than $250,000
5. A borrower has missed two mortgage loan payments. She receives a notice that her entire loan balance—not just the two missed payments—is now due. The lender can legally do this because the loan documents include what type of clause?
A. alienation
B. assumption
C. acceleration
D. pre-payment penalty / 6. Before a condo owner installs a satellite dish, she should refer to her building’s
A. building plan.
B. CC&Rs.
C. recognition agreement.
D. restrictive covenant.
7. When do standard commission rates apply?
A. When the property sold is part of an estate.
B. When the property sold is within NYC limits.
C. When the brokerage involved is part of a national franchise that mandates standard commission rates for branch offices.
D. Never. Standard commission rates violate Sherman Antitrust laws.
8. The footer is part of a building’s
A. exterior finish work.
B. foundation.
C. framing.
D. roof.
9. Which is NOT included in a property owner’s bundle of rights?
A. right of disposal
B. right of enjoyment
C. right of use
D. right of zoning
10. Without specific consent, an agent cannot
A. accept earnest money deposits.
B. market property by conventional practices.
C. prepare a competitive market analysis.
D. sign documents on behalf of the client.
11. In New York, after 10 years of notorious, hostile, adverse, and exclusive use of another’s land, what may occur?
A. adverse possession
B. condemnation
C. foreclosure
D. tenancy at sufferance
12. Which is NOT one of the three basic types of frame construction?
A. balloon
B. gambrel
C. platform
D. post and beam
13. The Federal Fair Housing Act applies to commercial housing of more than _____ units.
A. 2
B. 4
C. 11
D. 25
14. Which is NOT one of the four unties required to form a joint tenancy?
A. judgment
B. interest
C. possession
D. time
15. What statement about asbestos is true?
A. It is derived from a naturally occurring group of minerals.
B. It is known to deplete the o-zone layer.
C. It is a natural by-product of fuel combustion.
D. Until recently, it was added to paint as a drying agent.
16. A _____ clause in a homeowner’s insurance policy covers the lender’s interest in the preservation and reconstruction of property after a loss.
A. borrower’s
B. fire
C. mortgage
D. protection
17. What is the fullest freehold estate interest that exists in real property?
A. appurtenant easement
B. fee simple
C. life estate
D. possessory interest
18. In real estate, which is an example of a bilateral contract?
A. contingency
B. rider
C. sales agreement
D. option
19. In New York State, real property taxes are based on what?
A. the average sale price for homes within a 10 mile radius
B. the city’s sales tax
C. the property owner’s annual income
D. the value of real property / 20. One method of minimizing taxes for any one reporting year is through a(n) _____ exchange.
A. 10-4
B. 1031
C. W2
D. HO-3
21. The principal with whom an agent has fiduciary obligation is the
A. broker.
B. client.
C. customer.
D. New York Department of State.
22. In a _____ lease, the property owner pays all the expenses associated with the property, including property taxes, insurance, and maintenance.
A. gross
B. index
C. net
D. percentage
23. Which is NOT one of the methods appraisers use to determine market value?
A. competitive market approach
B. cost approach
C. income approach
D. sales comparison approach
24. Agency disclosure law does not pertain to
A. agent-owned properties.
B. commercial property.
C. one- to four-unit residential properties.
D. vacant land.
25. According to New York State law, a CMA may never be referred to as a(n)
A. appraisal.
B. listing agreement.
C. sales contract.
D. valuation report.
26. Tenancy by _____describes possession of property by a tenant who came into possession of the property under a valid lease, but stays on after the lease expires without the landlord’s permission.
A. condemnation
B. express grant
C. necessity
D. sufferance
27. What agency is responsible for setting rules and regulations that impact brokers and salespeople and administering and enforcing Article 12-A?
A. Association of Real Estate License Law Officials
B. National Association of REALTORS®
C. New York Division of Licensing Services
D. New York State Real Estate Board
28. Who sets the listing price for a home?
A. appraiser
B. real estate agent
C. seller
D. tax assessor
29. One example of voluntary alienation is
A. accretion.
B. dedication.
C. eminent domain.
D. foreclosure.
30. Which is NOT an advantage of owning land?
A. control of the property
B. initial capital outlay
C. potential income
D. tax savings
31. Which cost is NOT one a seller can expect to pay at closing?
A. appraisal fee
B. broker’s commission
C. recording fee
D. transfer taxes
32. Underwriting is the
A. continued maintenance of a loan.
B. process of evaluating and deciding whether to make a new loan.
C. process of making or initiating a new loan.
D. Selling of a loan to a government entity like Fannie Mae or Freddie Mac.
33. When both the buyer and the seller are clients of the same salesperson, it is known as
A. bilateral agency.
B. dual agency.
C. open agency.
D. subagency.
34. What type of mortgage covers more than one parcel of land?
A. blanket mortgage
B. bridge mortgage
C. package mortgage
D. wraparound mortgage / 35. What type of relationship occurs when a licensee works for a particular party?
A. executive
B. fiduciary
C. managerial
D. transitional
36. Which is NOT considered a durable form of income?
A. consistent bonuses
B. permanent Social Security payments
C. retirement benefits
D. welfare
37. Jenny advertises one of her listings in three local papers. Which description is acceptable according to fair housing advertising rules?
A. “Close to St. Matthew Catholic Church”
B. “Exceptional golf course community”
C. “Fully equipped mother-in-law suite”
D. “Perfect community for empty nesters”
38. _____ income is the income a borrower has left after subtracting taxes, housing expenses, and recurring debts and obligations.
A. Adjustable
B. Gross
C. Qualified
D. Residual
39. Who assesses property taxes?
A. the federal government
B. local municipalities
C. governors
D. voters
40. The holder of unsold shares is a(n)
A. condo developer who has not sold all of the units in the building.
B. condo or co-op owner who sublets his unit for a profit.
C. investor in a co-op who is not using it as a primary residence.
D. sponsor who ignores an offering plan and refuses to sell his shares in a building.
41. In a typical agency relationship the broker is the agent and the salesperson is the
A. assistant agent.
B. prime agent.
C. subagent.
D. secondary agent.
42. Hospitals, courthouses, schools, and correctional facilities are all typically zoned as what classification?
A. agricultural
B. commercial
C. industrial
D. institutional
43. Which is NOT an essential element for a valid deed in New York?
A. act of conveyance
B. competent grantor
C. covenant of seizin
D. habendum clause
44. Vents, valves, and clean outs are all part of a building’s _____ system.
A. electrical
B. heating
C. plumbing
D. ventilation
45. What nuisance and/or hazard does NOT require disclosure?
A. drug use on the property
B. previous carpenter ant infestation
C. previous mold problem
D. water damage
46. What New York statute requires all real estate contracts be in writing?
A. Statute of Assignment
B. Statute of Composition
C. Statute of Frauds
D. Statute of Parole Evidence
47. Rosa was working with an African-American family. Because she assumed they would want to live in a predominantly black neighborhood, she showed them homes only in certain areas. Even though she has good intentions, Rosa is guilty of
A. blockbusting.
B. redlining.
C. steering.
D. None of these. Rosa has done nothing wrong.
48. Which lien is superior to all other liens and is paid first in the event of foreclosure?
A. estate tax lien
B. judgment lien
C. primary mortgage
D. property taxes / 49. A point is what percentage of the loan amount?
A. 1
B. 3
C. 5
D. 10
50. Tony is confined to a wheelchair. He has found an apartment to rent although it is necessary that a ramp be installed in order for him to enter the premises. What is the property owner required to do in this situation?
A. add a wheelchair ramp, at her own expense
B. allow Tony to make the necessary alterations to the apartment
C. notify the ADA that a someone with a disability is moving into the building
D. nothing, it is up to the property owner whether to rent to Tony or not based on his disability
51. An operating budget is created to project income and expenses for the property for what length of time?
A. 30 days
B. 6 months
C. 1 year
D. 5 years
52. What municipal agency is responsible for issuing building permits?
A. building department
B. planning department
C. village trustees
D. zoning board
53. The covenant of warranty forever is the most important of all covenants because it is the
A. best form of warranty for protecting the grantee.
B. best form of warranty for protecting the grantor.
C. only form of warranty guaranteed by title companies.
D. only form of warranty that is recorded.
54. The DP-1 Basic Form is a named peril homeowner’s insurance policy and typically does NOT cover damage caused by
A. falling objects.
B. lightening.
C. volcanic action.
D. wind.
55. Which is NOT an assessable improvement?
A. addition of central air conditioning
B. change in electrical service
C. construction of a tool shed
D. conversion of a porch into a finished room
56. The two types of review proceedings for taxpayers with grievances concerning their property taxes are
A. administrative and judicial.
B. administrative and governmental.
C. judicial and supervisory.
D. judicial and bureaucratic.
57. An office building categorized as Class D means that it is
A. functionally obsolete in need of extensive renovation.
B. in good condition and is in a good location, but it is not considered top market, primarily because of age.
C. new and has superior construction, amenities, and features.
D. still functionally viable, but not favorably located.
58. According to the IRS, wages, commissions, and other payments for services rendered are examples of what type of income?
A. active
B. passive
C. portfolio
D. reflexive
59. Which is NOT a major responsibility of many municipal planning departments?
A. capital improvements development
B. grant implementation
C. long-range economic development
D. d. taking specific zoning actions
60. In New York, who is responsible for granting
variances and interpreting zoning ordinances?
A. HUD
B. New York Office of Parks, Recreation and Historic Preservation
C. planning board
D. zoning board of appeals
61. Any method used to reduce taxable income, thereby reducing the amount of tax paid to the government is a tax
A. abatement.
B. discount.
C. diversion
D. d. shelter. / 62. New York requires all rental properties to have a(n) _____ detector.
A. CFC
B. CO
C. H2O
D. EMF
63. Which is NOT a federally protected class, but is protected in New York?
A. disability
B. familial status
C. gender
D. marital status
64. Which is NOT typically an expense the IRS allows as a deduction?
A. alimony
B. moving expenses
C. student loan interest
D. utility expenses
65. A typical closing cost NOT paid by someone selling a condo is/are
A. appraisal fees.
B. managing agent fees.
C. New York State transfer taxes.
D. title fees.
66. A purchaser who values property based on its ability to fulfill a specific business need best describes a(n)
A. amenity purchaser.
B. investor.
C. landlord.
D. owner/user.
67. What is NOT a fiduciary duty a broker owes a client?
A. disclosure
B. loyalty
C. personal liability
D. reasonable care
68. When a lease contains a(n) _____ clause, rent may be adjusted during the lease term.
A. acceleration
B. escalation
C. estoppel
D. d. subordination
69. According to the IRS, what is the useful life for residential properties?
A. 25 years
B. 27.5 years
C. 39 years
D. d. 47.5 years
70. A _____ is a third party who is brought to a principal by the principal’s agent or a party that an agent works with, but not for.
A. broker
B. client
C. customer
D. licensee
71. Ownership in severalty means property ownership is held by
A. a co-op board of trustees.
B. a corporation.
C. only one person.