NY Real Estate Exam

What are four characteristics of real property?

- Permanence - Scarcity - Illiquidity - Immobility

An adjustable-rate mortgage has an interest rate of 5% and a lifetime cap of 6%. What's the maximum rate that may be charged at any point during the life of the loan? 1) 11% 2) 30% 3) 5% 4) 6%

1) 11% If an ARM has an interest rate of 5% and a lifetime cap of 6%, the maximum that may be charged is 11%. The lifetime cap is usually expressed as a percentage increase from an initial interest rate.

Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don't have the best credit score. They've decided to buy the home using an FHA loan. Which of these is a true statement? 1) A minimum down payment of 3.5% is required. 2) Mortgage insurance is not required. 3) The loan-to-value ratio must be less than 80%. 4) They must have PMI.

1) A minimum down payment of 3.5% is required.

Under New York fair housing law, which of the following protected classes were added to the list of federal protected classes? 1) Age, marital status, sexual orientation, military status 2) Alienage or citizenship status, lawful occupations, lawful source of income, partnership status 3) Lawful occupations, lawful source of income, partnership status 4) Marital status, sexual orientation, alienage or citizenship status, partnership status

1) Age, marital status, sexual orientation, military status These are the ones they added.

A trust involves a special relationship called a fiduciary relationship. Which of the following statements is true regarding trusts? 1) Any asset may be held in a trust. 2) The beneficiary can't be a minor. 3) he trustee conveys title to the trustor. 4) The trustor is the person who carries out the trustee's wishes. Trusts are very flexible and accommodating. Any asset may be held in a trust.

1) Any Asset may be held in a trust

When is an agency disclosure form required? 1) Any time real estate matters are discussed between an agent and a consumer 2) As a matter of practice when obligating a consumer to a contract 3) Prior to entering an agency agreement 4) Whenever there is a material defect with the property

1) Any time real estate matters are discussed between an agent and a consumer Notice is to inform and not obligate.

Closing statements in New York are usually prepared by the ______. 1) Attorney for the lender or attorney for the parties 2) Loan officer 3) Real estate brokers 4) Title representative

1) Attorney for the lender or attorney for the parties In New York, the parties' attorneys or the attorney for the lender traditionally prepare the closing statements.

Under federal fair housing law, what are the protected classes? 1) Color, national origin, religion, sex, familial status, disabilities, race 2) Familial status, disabilities, race, color, sexual orientation, military status, age 3) National origin, religion, sex, familial status, disability, age, marital status 4) Race, color, national origin, sexual orientation, military status, age, alienage or citizenship status

1) Color, national origin, religion, sex, familial status, disabilities, race Federally protected classes are race, color, national origin, religion, sex, familial status, disability.

Which of the following is true about ownership or title to a property? 1) Constructive notice to the public of real property ownership occurs when the deed is recorded. 2) The last to record has priority. 3) The seller is responsible for paying for owner's and lender's title insurance. 4) Title isn't finalized until the deed has been recorded.

1) Constructive notice to the public of real property ownership occurs when the deed is recorded.

Which of the following is a life estate in a property held by a widower? 1) Curtesy 2) Dower 3) Estate at will 4) Remainderman

1) Curtsey A curtesy is a life estate in a property held by a widower.

Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other? 1) Estate at will 2) Estate for years 3) Leasehold estate 4) Life estate

1) Estate at will An estate at will is an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other.

Which of the following statements is a true statement about points paid by a borrower for refinancing? 1) If a portion of the amount refinanced is used to improve the home, points could be deductible 2) Points paid to refinance a mortgage are fully deductible in the year paid 3) Points paid to refinance a mortgage are never deductible in the year paid 4) Points reduce the purchase price of the home

1) If a portion of the amount refinanced is used to improve the home, points could be deductible Points can be deductible in some cases. Points paid to refinance a mortgage are usually not fully deductible in the year paid.

Your buyer purchased a home that previously sold in the last six months. Under what circumstances may the buyer be owed a second appraisal? 1) When the buyer pays 10% more and the property sold in the last 90 days 2) When the buyer pays 10% more if the property sold in the last 180 days 3) When the buyer pays 15% more and the property sold in the last 90 days 4) When the buyer pays 15% more if the property sold in the last 180 days

1) When the buyer pays 10% more and the property sold in the last 90 days The buyer is owed a second appraisal if the property was flipped in the last 90 days and the buyer is paying 10 percent more than the prior sales price.

The federal list of protected classes plus the four state added protected classes are covered under New York Fair Housing Law. What is another provision under this law? 1) Age is a protected class with regard to public accommodations 2) Anyone who testifies for the person filing the complaint or assists in their discrimination complaint is also protected from retaliation 3) Offering different terms or conditions in the sale, lease or rental of housing, land or commercial space is exempt 4) Refusing to sell, rent, lease or otherwise deny any person or group of persons is exempt

2) Anyone who testifies for the person filing the complaint or assists in their discrimination complaint is also protected from retaliation Under New York's Human Rights Law, anyone who testifies for complainants or assists in their discrimination complaint is also protected from retaliation.

What basic property right is NOT available to the holder of a life estate? 1) Control 2) Disposition 3) Ownership 4) Possession

2) Disposition The holder of a life estate has the rights of ownership, possession, and control. When a life estate terminates, ownership reverts to the grantor of the life estate.

Which of the following is a general, involuntary lien against property created by filing a certificate of lien in the county where the property is located? 1) Easement 2) Income tax 3) Mechanic's 4) Mortgage

2) Income Tax As a general lien, this is applied to all property owned by a person, not simply a piece of real property.

As part of his job, Mitchell determines a loan's rate and terms. What is Mitchell's job? 1) Credit analyst 2) Mortgage banker 3) Mortgage broker 4) Underwriter

2) Mortgage banker

Which of the following is a mortgage where the consumer cannot later claim that the lender did not comply with the ability to repay requirements? 1) Qualified mortgage with ability to repay 2) Qualified mortgage with a safe harbor status 3) Qualified mortgage with cash payment option 4) Qualified mortgage with the rebuttable presumption

2) Qualified mortgage with a safe harbor status The safe harbor is the lender's ability to prove compliance.

When a lease contains an automatic renewal clause, the landlord must remind the tenant of the right to terminate the lease. Section 5-905 of the General Obligations Law governs leases with automatic renewal clauses and states that a _______. 1) Reminder to the tenant must be given no more than 15 days nor fewer than five days before the period for furnishing the notice of termination begins 2) Reminder to the tenant must be given no more than 30 days nor fewer than 15 days before the period for furnishing the notice of termination begins 3) Reminder to the tenant must be given no more than 60 days nor fewer than 30 days before the period for furnishing the notice of termination begins 4) Reminder to the tenant must be given no more than 90 days nor fewer than 60 days before the period for furnishing the notice of termination begins

2) Reminder to the tenant must be given no more than 30 days nor fewer than 15 days before the period for furnishing the notice of termination begins Section 5-905 of the General Obligations Law states that landlords must remind tenants of their right to terminate a lease no more than 30 days nor fewer than 15 days before the period for furnishing the notice of termination begins.

Which of the following represents the protected classes in housing for a citizen of New York City in addition to those covered under federal Fair Housing law? 1) Age, marital status, sexual orientation, military status 2) Alienage or citizenship status, lawful occupations, lawful source of income, partnership status 3) Alienage or citizenship status, lawful occupations, lawful source of income, partnership status, age, marital status, sexual orientation, military status 4) Race, color, national origin, religion, sex, familial status, disabilities

3) Alienage or citizenship status, lawful occupations, lawful source of income, partnership status, age, marital status, sexual orientation, military status

New York City's Commission on Human Rights prohibits discrimination in housing for additional protected classes not included under federal or New York fair housing laws. What are these additional protected classes? 1) Alienage or citizenship status, lawful occupation, lawful source of income, partnership status 2) Alienage or citizenship status, lawful occupations, lawful source of income 3) Alienage or citizenship status, lawful occupations, partnership status 4) Alienage or citizenship status, lawful source of income, partnership status

3) Alienage or citizenship status, lawful occupations, partnership status New York City's Commission on Human Rights adds these four protected classes in housing that applies to citizens of NYC's five boroughs: alienage or citizenship status, lawful occupation, lawful source of income, and partnership status.

What type of notice results from publicly recording a title transfer? 1) Actual notice 2) Attorney notice 3) Constructive notice 4) Proper notice

3) Constructive notice The purpose of recording is to give the public constructive notice of a transfer of ownership. Recording doesn't transfer title; it informs the public that a transfer of title has occurred.

Which of the following is true regarding express agreements? 1) Express agreements are implied. 2) Express agreements are invalid. 3) Express agreements may be written or verbal. 4) Express agreements must be lengthy.

3) Express agreements may be written or verbal.

What is NOT a recommended way to improve drainage around a building? 1) Grading away from the foundation 2) Grading crawl spaces 3) Grading toward the foundation 4) Using footing drain tiles

3) Grading toward the foundation Drainage can be improved by grading away from the foundation, grading crawl spaces to improve drainage, and installing footing drain tiles around concrete or masonry foundations.

When the lender executes a "hard pull," what did the lender do? 1) Approved the buyer's loan 2) Asked the buyer for their loan application 3) Ordered a full-blown credit inquiry 4) Ordered the appraisal

3) Ordered a full-blown credit inquiry

Which of the following is true regarding real estate licensee responsibilities when preparing contract riders? 1) Real estate licensees cannot legally add riders to contracts; if the pre-printed contracts do not cover the clients' needs, the licensee must ask an attorney to write a customized contract for the specific situation. 2) Real estate licensees have the option of using pre-printed riders, which are faster and easier, or writing their own riders, which can be more time consuming. 3) Real estate licensees may add riders to contracts as long as they are not handwritten and as long as the buyer initials each clause within the rider in ink. 4) Real estate licensees must use pre-printed riders and refrain from using their own language or they can be found guilty of practicing law without a license.

3) Real estate licensees may add riders to contracts as long as they are not handwritten and as long as the buyer initials each clause within the rider in ink.

Limited liability companies and limited liability partnerships are favorable forms of business because ______. 1) Owners of the LLC or LLP are personally liable for LLC/LLP obligations. 2) They aren't taxed as partnerships. 3) They don't require a general partner.

3) They do not require a general partner

What's the difference between reversionary interest and remainder interest in a property? 1) Remainder interest applies only to heirs. 2) Reversionary interest only applies to spouses. 3) With remainder interest, the property remains with the owner, even when a life tenant possesses the property. 4) With reversionary interest, the property reverts to the owner after the death of the life tenant. With remainder interest, the title to the property goes to a named third party following the death of the life tenant.

3) With remainder interest, the property remains with the owner, even when a life tenant possesses the property. With reversionary interest, the property reverts to the owner after a life tenancy, and with remainder interest, the title goes to the person remaining after the death of the life tenant. Note the similarity of words "reversionary" and "revert."

In what year was the Americans with Disabilities Act made law? 1) 1950 2) 1978 3) 1988 4) 1990

4) 1990 Although some protection for citizens with disabilities was in place prior to this time, the ADA became law in 1990.

from landlords and sellers when they attempted to obtain housing. 1) Civil Rights Act of 1866 2) Fair Housing Amendments Act of 1988 3) Federal Fair Housing Act of 1968 4) Housing and Community Development Act of 1974

4) Housing and Community Development Act of 1974

What is a wrap-around mortgage? 1) One that involves more than one property 2) One that involves personal property in addition to real property 3) One that involves unqualified borrowers 4) One that may involve seller financing

4) One that may involve seller financing A wrap-around mortgage is one where the buyer's new loan wraps around the seller's existing financing. The seller uses a portion of the buyer's payments to the seller to pay on the original loan.

In some cases, a lienholder with priority position will agree to modify the order of priority. This is called a ______. 1) Modification agreement 2) Ordering agreement 3) Priority agreement 4) Subordination agreement

4) Subordination agreement The lienholder is agreeing to allow a lienholder who would otherwise follow in priority the opportunity to collect first.

Besides the geographical area, on what are FHA lending limits based? 1) Anticipated income 2) Borrower protected class status 3) Square footage 4) Type of dwelling

4) Type of dwelling

Which of the following persons can perform real estate services without a license? A) Carolee, an attorney who sometimes acts as a broker but who does not employ salespeople to work under her supervision B) Mabel, who charges a flat fee to assist individuals in buying properties C) Paul, who has three years' prior real estate experience and charges a flat fee to assist individuals in selling properties D) Zeke, an attorney who acts as a broker and who employs two salespeople to work under his supervision

A)

Which of the following can do the transaction without having a real estate license? A) A non-profit corporation negotiating rent for a branch office B) An office tenant negotiating rent on behalf of another tenant C) An executor selling property as part of the instructions left in a will D) A building superintendent collecting rent E) A salesperson who let her license expire and is selling property for a neighbor for a fee

A) C) D)

Which of the following is true about positive misrepresentation? A) A principal was harmed by the misstatement. B) The misstatement ended in a positive outcome. C) The misstatement wasn't relied upon. D) The person making the misstatement did not know it was false.

A) A principal was harmed by the misstatement. There are four elements to positive misrepresentation: a false statement must have been made, the person stating it (e.g., the agent) must have known the statement to be false, and another person (e.g., a principal) must have relied on and been harmed by the misstatement.

A Real Estate Broker must meet which of the following criteria? A) Age B) Course Hour C) How long have they hold the license

A) At least 20 years old B) Completed 120-hour course and passed the broker exam C) She held a real estate license for two years

In which of these situations is Ronna's fiduciary duty of reasonable skill and care at odds with her duty of obedience? A) Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer. B) Ronna's buyer client asked her to keep his financial situation confidential. C) Ted, Ronna's broker, insisted that she teach a contracts class, even though she's a new agent. D) Though her customer was adamant, Ronna turned down a commercial listing because it was outside her area of expertise.

A) Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer.

Chip represents Ginger, the buyer. Raphael represents Tom, the seller. If Chip and Raphael are from the same brokerage, what is their agency relationship with their clients? A) They're designated agents; their broker is a dual agent. B) They're designated agents; their broker is also a designated agent. C) They're dual agents; their broker is also a designated agent. D) They're dual agents; their broker is also a dual agent.

A) They're designated agents; their broker is a dual agent.

Radification

After the fact. Leaving a play structure fir the new tenant after the fact that the contract was signed.

Fiduciary Duties: Disclosure

Agents must disclose all facts pertinent to the transaction.

Fiduciary Duties: Confidentiality

Agents must keep any confidential information their clients share confidential. Confidentiality is a duty that survives the termination of the agency relationship—it lasts forever.

Fiduciary Duties: Obedience

Agents must obey all of their client's lawful instructions.

Fiduciary Duties: Accounting

Agents must promptly account for all money, property, and paperwork entrusted to them by their clients. Accounting also survives the termination of an agency relationship.

Fiduciary Duties: Reasonable Skill and Care

Agents must provide clients with quality, knowledgeable, and prudent service, and live up to the trust their clients have placed in them.

Fiduciary Duties: Loyalty

Agents must put their clients' interests ahead of all others, including their own.

When is a real estate license required? A) When performing maintenance work for one property owner B) When performing real estate activities for others, for compensation of any kind C) When performing real estate activities for others, without compensation D) When performing real estate activities for yourself

B)

Which of these define a real estate broker? A) A licensed broker who chooses to work under the supervision and name of another licensed broker B) A person associated with a licensed broker who performs real estate activities under the licensed broker's supervision C) Any person, firm, company, or corporation that performs real estate activities for a fee or compensation of any kind

C) Any person, firm, company, or corporation that performs real estate activities for a fee or compensation of any kind

When renewing your real estate license, how many continuing education hours are required to cover the topic of fair housing or discrimination? A) None B) One C) Three D) Two

C) Three

Cam is a broker. His licensees, Jane and John, represent two sides in a single transaction. Jane represents the seller; John represents the buyer. What relationship does Cam have to the buyer and the seller? A) Cam is a designated agent to both the buyer and seller. B) Cam is a designated agent to the buyer and a dual agent to the seller. C) Cam is a designated agent to the seller and a dual agent to the buyer. D) Cam is a dual agent to both the buyer and seller.

D) Cam is a dual agent to both the buyer and seller.

Bailey, a salesperson, renewed his real estate license right on time 18 months ago. He will need to renew his license again _________. A) Immediately B) In 24 months C) In one month D) In six months

D) In six months

Which of these is an example of a sub-agency relationship? A) Aldrich accepts a designated agency appointment from his broker so his firm can represent both the buyer and the seller. B) Blaine represents the buyer in a transaction with an unrepresented seller. C) Greta refers a buyer client to a more experienced colleague, asking for a referral fee from the colleague. D) Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.

D) Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.

Which of the following describes sub-agency? A) A listing agent accepts an offer from a buyer written by Cali, who does not represent the buyer. Cali and the listing agent work for the same firm. B) Chico is a listing agent and is helping Tuti write an offer on her listing, but Tuti does not want representation. C) Lance listed Max's house. Brenda, who is under a buyer agency agreement with Tim, helps Tim buy Max's house. D) Norm is a listing agent. He allows Stu, an agent from another firm, to present an offer from an unrepresented buyer.

D) Norm is a listing agent. He allows Stu, an agent from another firm, to present an offer from an unrepresented buyer.

Kim is a sub-agent in a transaction involving a buyer customer, a seller, and a listing agent. Who is Kim a sub-agent for? A) Both buyer and seller B) The buyer C) The listing agent D) The listing agent and seller

D) The listing agent and seller

To whom do sub-agents working with buyer customers owe their duties? A) No one B) The buyers C) The buyers and sellers equally D) The sellers and the seller's agents

D) The sellers and the seller's agents

The earliest that a real estate license can be renewed is ________ before its expiration date. A) 10 days B) One year C) Six months D) Three months

D) Three Months

Theresa let her real estate license lapse a few months ago, but she's thinking about reactivating it. If she meets all the requirements for renewal within ________ of the expiration of her license, she won't have to retake the state licensing exam. A) 12 months B) 30 days C) 90 days D) Two years

D) Tw0 Years

T/F Your sponsoring broker must display your salesperson's license at the branch where you work

False

What is OLD CAR & What does it describe

Financial Duties: Obedience Loyalty Disclosure Confidentially Accounting Reasonable Skill and Care

Estoppel

Refusing after the fact. The buyers sold a house with a painting- they decide they want the payment but the new buyer wont let them have it and they can refuse it because of estoppel.

A brokerage and agency are synonymous. T/F

True

In accordance with New York law, a real property tax lien has priority over all other liens. True/False

True

T/F You must carry your Pocket Card on you at all times

True

If this annual tax isn't paid, foreclosure can occur. 1) Corporate franchise tax 2) Luxury tax 3) Sales tax 4) Special use tax

1) Corporate Franchise Tax

What is the best-case scenario with a debt-to-income ratio? 1) 100% debt-to-income 2) 20% debt-to-income 3) 60% debt-to-income 4) 80% debt-to-income

2) 20% debt-to-income

Shemar owns a starter home a few miles outside of the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Shemar had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second missed property tax payment, ownership would revert to Shemar. What did Shemar place on the deed? 1) CC&Rs 2) Deed condition 3) Deed covenant 4) Deed limitation

2) Deed condition

What's a subordination agreement? 1) An agreement by a borrower to lien the property 2) An agreement by a debtor to not be paid 3) An agreement by a lien holder with priority to allow another creditor to have priority 4) An agreement by a title company to process paperwork without a fee

3) An agreement by a lien holder with priority to allow another creditor to have priority

The Internal Revenue (IRS) can lien based on all of the following. 1) Sales and use tax and property tax 2) Self-employment tax and lis pendens tax 3) Self-employment tax and withholding 4) Withholding tax and property tax

3) Self-employment tax and withholding

As Tina's agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus? A) Dual B) General C) Limited D) Specific or special

B) General A general agent is responsible for handling all details of a specific transaction. A special or specific agent has limited scope of authority. Most real estate transactions are special agency; property managers, however, often serve as general agents.

Which type of agent is an escrow officer? A) General agent B) Limited agent C) Single agent D) Universal agent

B) Limited Agent

What does DOS Regulation 175.23 state? A) That the supervision of a real estate salesperson by a licensed real estate broker must consist of regular, frequent and consistent personal guidance, instruction, oversight, and superintendence. B) A broker must not relocate his principal office or any branch office without prior approval of the department. C) All licensed brokers must keep and maintain for three years records of each transaction carried out through the broker's office regarding real property that's sold to be used or occupied as the home/residence for one or more people if that property includes specific improvements. D) A real estate salesperson must, upon the termination of his association with a real estate broker, immediately turn over to such broker any and all listing information obtained during the salesperson's association with that broker.

C) DOS Regulation 175.23 requires that a broker maintain records of transactions for three years.

It's important to look at how the courts view independent contractor relationships nationally. In Connecticut, the state supreme court ruled that licensees in one case were employees. Consequences of this ruling for the brokerage involved which of the following? A) Licensees had to file Schedule C of the federal income tax Form 1040 or deduct expenses incurred during the year. B) The brokerage could no longer hire independent contractors. C)The brokerage lost its license. D) The lump-sum compensation the licensees received became subject to withholding taxes

D) The consequences included, but were not limited to, the lump-sum compensation the licensees received became subject to withholding taxes, and the licensee could no longer file Schedule C or deduct expenses.

If the activity is "for another, for a fee", then it requires a ________

Real estate license