New York State Salesperson Exam

Rhonda is an unrepresented buyer who's purchasing Tony's townhome. Gary represents Tony in the sale of his property. What's Rhonda's relationship to Gary?

A customer

"A party to a transaction and the person for whom the agent acts" is the definition of ________.

A principal

Which of the following is the most serious consequence of treating a customer as a client?

Breaching your duty to your actual client

Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton's Great Aunt Matilda has agreed to pay any portion of Joan's commission the sellers don't cover. Teresa's father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?

Carlton and the Martins are the agents' principals in this transaction.

An unrepresented ______ who's a party to a transaction is known as a principal.

Customer

Javier represents Marcus, who's selling his rental property to Ben. Ben is represented by another real estate licensee, Francis. What is Ben's relationship to Javier?

Customer

Danielle's friend, Joanna, is an agent. Danielle is considering listing her property and shares the details with Joanna. Joanna creates an MLS listing and places a sign in Danielle's yard. Danielle knows that Joanna will do a good job, so even though she hadn't actually agreed to let Joanna list the property, she permits her to start scheduling showings. Which of these is an example of ratification?

Danielle knows Joanna will do a good job, so she permits Joanna to start scheduling showings.

As Tina's agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus?

General

Christy found a property that was For Sale by Owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Licensee Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency exists?

Implied agency

Kevin listed his house with you but isn't offering a cooperating agent's commission. Ji-eun represents the buyer, Marta, and Marta's parents, Jean and Tom, are paying Ji-eun's commission. On which of these factors is your agency relationship based?

Kevin signed a listing agreement with you.

Who may offer "brokerage services"?

Licensees only

Following all of the client's lawful instructions describes which fiduciary duty?

Obedience

The buyer you're working with doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?

Ratify the implied agreement by getting a signed agency agreement.

Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?

Reasonable skill and care and obedience

Which of the following is the definition of a client?

Someone who has agency representation with the real estate salesperson or broker.

When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?

Special

Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?

The agency agreement is terminated if the property is destroyed.

A client terminates a listing agreement before its expiration date. What happens now?

The client may owe a commission anyway.

Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?

The listing expires and is automatically terminated.

You're representing Crystal in the purchase of a house. Crystal has a trust fund and can more than afford the house on which she's made an offer. Which of the following statements is true?

Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.

Which of the following is not an essential element of a lease

a. A formal, legal description of the property

A buyer of a common interest development (CID) is entitled to receive all except copies of:

a. A homeowner warranty

A developer wants to build single family homes, a few groupings of townhomes and a small apartment building along with a small park. This is an example of what type of zoning?

a. Cluster zoning

When the agent and the principal agree that the agent will represent the principal, it is called ________

a. Express agency

In 1988, the federal fair housing act was amended to include the following protected class

a. Familial status and mental and physically disabled

In a real estate transaction, the ______ is the current owner of the property and is conveying his or her property to someone else.

a. Grantor The grantor grants a piece of property to the grantee to complete a transfer of real estate.

When the agent and the principal have not officially agreed that the agent will represent the buyer, but their actions imply this, it is called______.

a. Implied agency

1. Which of the following is not a fiduciary duty that a real estate agent owes to a client?

a. Principal

Value in use is _________

a. added property value based on a specific person using it for a specific purpose

Heavy vehicle traffic will _________

a. affect the value of property based on whether it is residential or commercial

When an agent is invested in a project outside his or her agent status, this is called

a. agency coupled with an interest

Real estate taxes are calculated based on:

a. an assessed value

which of the following statements about cooperatives is not accurate?

a. an owner gets a title transferred by deed

In limited liability companies, the owners:

a. are not personally liable for the obligations of the business

Any suggestion by a licensee that the racial makeup of a neighborhood is changing to induce panic selling is an example of:

a. blockbusting

The location of a piece of property ________

a. can both increase and decrease its value

The uniform commercial code, which pertains to a bulk sale transfer, exists primarily for the protection of:

a. creditors

_______ are annual crops planted on real property but are considered personal property

a. emblements

_____ is the right of the government to acquire property when the owner dies intestate and has no heir eligible to inherit the property

a. escheat

When a homeowner reserves the right to sell his or her own property, but offers the exclusive right for only one agent, this is an

a. exclusive agency listing

Location is _________

a. important in determining property value

Substituting a new obligation for an existing one with the intent to cancel the latter is called

a. novation Novation is when a new contract is used to replace the initial contract

When a property owner wishes to use multiple agents to sell a property, this is an

a. open listing

How does an ARM mortgage differ from a fixed rate mortgage?

b. ARM stands for adjustable rate mortgage, whose rate may vary with changes in interest rates. Fixed rate mortgages are locked in at the same rate for the life of the loan, while ARM mortgages have a rate that can "float" or "ride" market rates

The _______ prohibits an employer from discriminating against a person with a disability seeking employment on their disability

b. Americans with Disabilities Act (ADA)

Active income, as defined by the IRS, includes:

b. Commissions

Biff is hired by owner Gilligan to oversee a residential property complex, including supervising complex employees and maintenance, but he has limited authority. Biff is the:

b. Property manager

A real estate broker takes listing on a residential property. The broker likes the property and chooses to buy it in the name of a separate investment company he owns. Which of the following statements is most correct?

b. The broker may offer to purchase the property, but must first disclose to the seller that they are the buyer

When an agreement is formed between an agent and principal after a sale is confirmed, this is called ________

b. agency by ratification

In which type of insurance policy does the insurer bear the burden to prove that a cause of loss is excluded from coverage?

b. an all-risk or open perils policy

Gradual liquidation through periodic payments of principal and interest is called

b. an amortized loan amortized loans are the norm in most residential Real Estate and gradually lower the owed amount through monthly payments to principal and interest

___________ were put in place to make sure that property buyers' rights are protected

b. buyer agency agreements

What is a right to use another's land called

b. easement

_______ is the right to acquire ownership of private real estate for public use.

b. eminent domain

When a broker is given the right to collect the commission, no matter who sells a property this is an

b. exclusive right to sell listing

An estate that is of indefinite duration is called a ______ estate

b. freehold

which of the following is not true regarding a contract of sale

b. it must be notarized signatures on a contract of sale do not have to be notarized.

John, Matt and Laura have decided to start their own dog walking business. John will have the bulk of the day-to-day responsibilities; Laura will be in charge of appointments and keeping the books while Matt will contribute money to get the business up and running. They decide to rent a space in an unused plaza to use as their business location. What type of business organization have John, Matt and Laura formed?

b. partnership

The purpose of a planning board is to:

b. plan for a region's future by considering he available natural and supplied resources

what is the most desirable deed that provides the greatest amount of protection for the grantee?

b. warranty deed what a warranty deed is given, the grantee is protected from any person who claims it and any liens against the property by the grantor

If a lender charges $2,775 loan origination fee and the mortgage amount of the property is $370,000, what is the loan origination percent payable at closing?

c. .75%

Which of the following statements on leasehold estates are true?

c. A leasehold estate is for a limited time and a leasehold estate grants possession but not title

All of the following are components of a property management proposal except:

c. Equity debt limit

Most real estate loans deal with simple interest, the formula for which is ____.

c. Rate x Loan Balance = Annual Interest

To calculated realized gain, you must:

c. Subtract the adjusted basis from the sale price, less selling expenses

A prohibition against a "for sale" sign in a residential neighborhood

c. Violates the first amendment

Paula enters into a contract for the purchase of Jordan's home. Paula applies for a mortgage. The contract requires her to get a document from her mortgage lender stating that the lender will be loaning her the necessary funds. What is the document called?

c. a commitment

A latino real estate agent working in a Hispanic neighborhood informed current owners they should move out because another ethnic group is moving into the area. This conduct is an example of all of the following except:

c. a legal practice, but unethical

A special agent is authorized to do the following

c. act on behalf of the principal in specific transactions

A good example of an implied contract is ____

c. after a written lease expires, rent is paid and the check cashed

A public walkway within a condominium community

c. exists in a common area.

An appraisal will not help you with______

c. fair market interest

Most appraisers work_______

c. independently, on a fee-for service basis

Salesperson Sally advertised in a newspaper that anyone who bought a home through her services would receive a free home appliance valued up to $500. Such an advertisement is:

c. legal provided full disclosure is made to all interested parties.

The impact of borrowed funds to purchase property when capital is not available is called?

c. leverage

Which deed is used to release to property in an effort to obtain clear title

c. quitclaim deed

NYSDOS regulations require New York real estate licensees to complete __________ hours of approved continuing education in fair housing

d. 3 hours; every 2 years

In an appraisal of commercial property, which of the following criteria is used to determine the properties highest and best use?

d. All of the above (physically possible, financially feasible, maximally productive)

Under no circumstances may a real estate broker misrepresent a material fact to a buyer. If they do, the broker faces

d. Any of the above (disciplinary action by he Department of Real Estate (DRE), criminal action, civil action)

It is least likely to be a violation of the Real Estate Law for a broker to pay a portion of the commission to a

d. Buyer or seller in the transaction

In eminent domain, what value is the owner entitled to as compensation for the taking of real property?

d. Fair market value

The person who receives mortgage payments from a borrower including amounts for escrow is a:

d. Mortgage Loan Servicer

what is the difference between assessed value and appraised value

d. One is used to compute property taxes and the other is used to determine what a bank is willing to lend for the property

Roland, a broker, arranges a sale and opens escrow. Before escrow closes, his license is revoked by the department of real estate (DRE). What happens to Roland's commission.

d. Roland gets his commission.

When purchasing a business, the buyer needs to be certain a certificate of clearance has been issued by the:

d. State Board of Equalization (SBOE)

A sellers broker sold a property to a buyer. Four months later, when the first rains of the season began, the buyer discovered significant roof leakers. The buyer sued both the seller and they broker for the cost of repairs. The seller sued the broker in the same action since the seller had informed the broker numerous times that the building needed a new roof. The broker's testimony in court revealed the broker was aware of the leaky roof but had not mentioned it to the buyer since the issue of the leaking roof was not mentioned by the buyer. What is the most likely result of the court action?

d. The buyer may recover from both the seller and the broker. Further, the seller would recover in the suit against the broker.

When a principal doesn't stop an agent from going beyond his or her normal line of duties, this is called ______.

d. agency by estoppel agency by estoppel is created when agents perform duties outside of what they would normally do, though related to what their initial task was.

When being compensated, the duties that require a real estate license include:

d. all the above (listing the real property, negotiation terms of a real estate contract, and leasing or renting for more than one person)

Fair market value cannot be established unless a transaction is considered _____

d. arm's length

upon sale, the instrument that conveys ownership rights to personal property is a ______ and that dealing with real property is a ______

d. bill of sale, deed A bill of sale transfers title to personal property and a deed transfers title to real property

Deed restrictions and easements on a property are considered ______ when written onto the deed

d. exceptions and reservations

A newspaper advertisement is considered "blind" when it:

d. fails to state the face the advertiser is a broker or agent and does not include their Department of Real Estate (DRE) license number

in residential construction, a framing member that supports the structure over door and window openings:

d. header

As is the case with most homes, what is the term for pledging something as security for a loan without the necessity of giving it up?

d. hypothecation Hypothecation allows a property owner to use the property as security for the loan while still being able to occupy it

When a broker is hired to sell a property for a minimum price, then keep anything over that price is an

d. net listing

The change in value of a piece of property based on its location is not affected by __________

d. past performance

Subprime loans are usually an option for ______

d. people with subpar credit and come with a higher interest rate Subprime loans carry a higher interest rate because the bank/lender feels they carry greater risk of full repayment

The property being appraised is called_______

d. the subject property

Why are net listings generally frowned upon in the real estate industry

d. they can lead to brokers taking advantage of property owners In a net listing, the seller names a price they want for their property, and any amount above that sale price goes to the broker.

If a group of brokers agreed to divide a market area or set commission rates, it would:

d. violate anti-trust law