NYS Real Estate Broker License Exam Review
A seller's willingness to accept a buyer's offer for a lot only if the buyer will purchase homeowners' insurance from the seller's insurance broker is an example of A. a tie-in arrangement. B. a market allocation agreement. C. price-fixing. d. a restraint of trade.
A. a tie-in arrangement.
A seller's broker must disclose to a prospective buyer that the A. heating system does not work well. B. last owner was murdered there. C. seller has AIDS. D. house is haunted.
A. heating system does not work well.
Most home equity loans are really A. long-term leases. B. junior mortgages. C. purchase-money mortgages. D. trust deeds.
B. junior mortgages.
In the future, mortgage origination is likely to become a faster process because of A. relaxed FNMA regulations. B. the Internet. C. Federal Reserve policies. D. increased use of private mortgage insurance (PMI).
B. the Internet.
A real estate broker must keep all documents for the DOS pertaining to a real estate transaction on file for a period of no less than A. two years. B. three years. C. seven years. D. indefinitely.
B. three years.
To preserve independent contractor status, a policy and procedures manual should probably avoid using the word A. "must" B. "discrimination." C. "ethics." D. "termination."
A. "must"
A small multi family property generates $50,000 in rental income with expenses of $45,000 annually, including $35,000 in debt service. The property appreciates about $15,000 a year. The owner realizes another $5,000 through income tax savings. On this property, the cash flow is A. $5,000 B. $15,000 C. $20,000 D. $35,000
A. $5,000
For tax purposes the initial cost of an investment property plus the cost of any subsequent improvements to the property, less depreciation, represent the investment's A. Adjusted basis. B. Capital gain. C. Basis. D. Salvage value.
A. Adjusted basis.
In the office of a broker, which of the following must be displayed? A. All brokers' licenses B. All licenses C. No licenses D. Only salespersons' licenses
A. All brokers' licenses
The real estate office is sometimes visited by inspectors or auditors from the A. EPA. B. NYSAR. C. FTC. D. MLS.
A. EPA.
Two brokers decided each could make more money if one took the east side and the other took the west side of town. which of the following would BEST describe this act? A. Market allocation B. Tie-in arrangement C. Price-fixing D. Group boycotting
A. Market allocation
Not all brokers are A. Realtors. B. licensed. C. older than 20. D. experienced.
A. Realtors.
Which of the following BEST describes the relationship between broker and seller under a listing agreement? A. Special agency B. General agency C. Ostensible agency D. Universal agency
A. Special agency
The concept of depreciation of income property is of MOST value to the taxpayer in A. The top income bracket. B. A marginal income-tax bracket. C. The lowest income-tax bracket. D. Any tax bracket.
A. The top income bracket.
The Department of State has revoked Ted Toller's license for fraud. Which is TRUE? A. Toller has the right to appeal the revocation through an article 78 proceeding. B. His salespersons may continue in business for 90 days because they were not found guilty. C. Toller may continue his business for 90 days if he posts a bond with the DOS. D. Toller may have his license reinstated if he signs an irrevocable consent form.
A. Toller has the right to appeal the revocation through an article 78 proceeding.
Many experts advise that a first real estate investment be A. Within a short drive of the investor's own home. B. In a popular resort area. C. Located only where professional management is available. D. A handyman-special property in need of upgrading.
A. Within a short drive of the investor's own home.
The commercial equivalent of shared-equity home mortgage is A. a participation loan. B. a miniperm mortgage. C. a junior lien. D. cooperative financing.
A. a participation loan.
A real estate license is temporarily suspended or permanently cancelled if a licensee is found to be untrustworthy or A. incompetent. b. malicious. C. irresponsible. D. unproductive.
A. incompetent.
The term commingling pertains to A. mixing the broker's funds with escrow deposits. B. soliciting the services of another broker's salespersons. C. failing to deliver duplicate originals of contracts. D. promoting business at social gatherings.
A. mixing the broker's funds with escrow deposits.
A minimart does a booming business, and the owner would like to expand the store. There's plenty of room to build, but she isn't sure she could finance the construction. One remedy might be to find an investor and negotiate a A. sale-leaseback. B. ground lease. C. SONYMA mortgage. D. gap loan.
A. sale-leaseback.
In an independent contractor agreement with a new salesperson, the broker should include A. that she will be compensated only by commissions directly based on sales. B. the days and hours that she will work. C. that she may not work outside the office. D. that she will be paid both salary and commissions.
A. that she will be compensated only by commissions directly based on sales.
The strongest governmental influence on the coountry's interest rates is A. the Federal Reserve. B. SONYMA. C. GNMA. D. HUD.
A. the Federal Reserve.
Vicarious liability means being responsible for A. the acts of another. B. your previous activities. C. unintended consequences. D. undisclosed relationships.
A. the acts of another.
In a dual agency relationship, the parties give up their right to A. undivided loyalty. B. obedience. C. care. D. accounting.
A. undivided loyalty.
Which of the following cash deposits must a real estate broker report to the IRS? A. $5,000 B. $15,000 C. $10,000 D. $7,500
B. $15,000
Which person needs a license to sell someone else's real estate and collect a fee for the service? A. The executor of an estate B. An auctioneer C. An attorney D. A subdivision's in-house salesperson.
B. An auctioneer
A salesperson agreed to meet a buyer at a home listed by the salesperson's broker. When must the salesperson provide the buyer with an agency disclosure? A. In advance of the first in-person meeting B. Before entering the property C. After showing the property D. When the buyer expresses interest in making an offer
B. Before entering the property
Leverage involves the extensive use of A. Cost recovery. B. Borrowed money. C. Government subsidies. D. Alternative taxes.
B. Borrowed money.
An acronym to help remember the fiduciary duties of a broker is A. CC-MOAP. B. CC-LOAD. C. CL-DOAL. D. PP-COLA.
B. CC-LOAD.
In which listing agreement would sellers have the ability to reserve the right to conduct their own sale without compensating the exclusive agent? A. Exclusive right-to-sell listing B. Exclusive-agency listing C. Multiple listing D. Net listing
B. Exclusive-agency listing
The acronym GRI stands for A. General Real estate Instructor. B. Graduate, Realtors Institute. C. General Realty Insurance. D. Guaranteed Realty Information.
B. Graduate, Realtors Institute.
Jim's property has a gross rental income of $12,000 a year and total expenses, including debt service, of $13,000. Jim is experiencing A. Leverage. B. Negative cash flow. C. Recapture. D. Deflation.
B. Negative cash flow.
Among the disadvantages of real estate investment is A. Leverage. B. The need for physical and mental effort. C. Tax shelter. D. Equity buildup.
B. The need for physical and mental effort
A realty offered new condominiums for sale. buyers were told they must make their selections for appliances from the realty's catalog. No other appliances would be permitted. The buyers would be responsible for the purchase of of these appliances. Appliances were furnished through a distributor owned by the same realty. Which of the following would BEST describe this act? A. Market allocation B. Tie-in arrangement C. Price-fixing D. Group boycotting
B. Tie-in arrangement
When a broker take a listing, all salespeople who work for the broker are considered A. subagents for the broker and the seller. B. agents for the broker and subagents for the seller. C. dual agents for the seller and the buyer. D. not designated until they enter into an agreement.
B. agents for the broker and subagents for the seller.
A homeowner lists his house with broker A. The homeowner offers a bonus commission of $500 to the agent who brings a good buyer before December. A salesperson who is associated with the cooperating firm of broker B, effects the sale on November 1. The salesperson may collect that bonus from A. the homeowner and from no other. B. broker B and from no other. C. broker A and from no other. D. no one.
B. broker B and from no other.
Salesperson Jackson told the telephone company to print the following ad under "Real Estate" in the Yellow Pages: Alissia Jackson, Licensed Salesperson, Residential Property a Specialty, 473-4973. In order to have placed an appropriate ad, she should have included hetr A. area code. B. broker's name. C. office address. d. home phone number.
B. broker's name.
A listing may be terminated when either the broker or principal A. gets married. B. goes bankrupt. C. overfinances other property. D. becomes terminally ill.
B. goes bankrupt.
A buyer's broker is told by the buyer that he had filed for bankruptcy the year before. The buyer's broker A. should discuss with the buyer her duty to reveal the bankruptcy to the MLS. B. is required to disclosed this material fact to the seller. C. may politely refuse to provide any information to the seller that would violate her duty of confidentiality to the buyer. D. has no responsibility to the seller because she is the buyer's agent.
B. is required to disclosed this material fact to the seller.
The broker candidate who has previously been licensed as a salesperson in another state A. cannot become a broker at all. B. must show the same real estate experience as that required of a licensed salesperson in New York. C. takes a different and more difficult state examination. D. must file an irrevocable consent form.
B. must show the same real estate experience as that required of a licensed salesperson in New York.
With commercial loans that involve interest accrual. borrowers face the possibility of A. underwriting. B. negative amortization. C. assignment. D. alienation.
B. negative amortization.
The contract setting up an associate's independent contractor status with the broker should be A. either oral or written. B. renewed or ratified every 15 months. C. specified as to number of hours to be worked. D. forwarded to the Department of State.
B. renewed or ratified every 15 months.
In a single agency agreement in which a broker represents a seller, the A. buyer is the client. B. seller is the client. C. seller is the customer. D. buyer is a subagent.
B. seller is the client.
Even if a proposed transaction does not go through, the broker sometimes may collect a commission if the A. buyer turns out to be financially unable. B. seller refuses to do repairs required by the lender. C. seller commits willful default and backs out. D. lender does not appraise the house for the sale price.
B. seller refuses to do repairs required by the lender.
If a principal broker loses her license, her associated salespersons must immediately A. appoint one of their number to serve as supervisor. B. stop listing and selling until they have associated with another broker. C. obtain brokers' licenses. D. request that the DOS reassign them.
B. stop listing and selling until they have associated with another broker.
A blind ad is one in which there is no indication A. of the address of the property. B. the ad has been placed by a real estate broker. C. of the asking price. D. of the salesperson's home phone number.
B. the ad has been placed by a real estate broker.
A broker hired by an owner to sell a parcel of real estate MUST comply with A. all instructions of the owner. B. the law of agency. C. the principle of estoppel. d. all instructions of the buyer.
B. the law of agency.
Commissions usually are earned when A. the buyer makes a purchase offer. B. the seller accepts the buyer's offer without conditions. C. a new mortgage has been promised by the lender. D. the title to the property is searched.
B. the seller accepts the buyer's offer without conditions.
11. Real estate licenses in New York State are good for A. one year. B. two years. C. three years. D. four years.
B. two years.
Which of the following phrases might violate Regulation Z advertising guidelines? A. "No down payment" B. "Assume low-interest mortgage" C. "Only 5% down" D. "Less than you're paying for rent"
C. "Only 5% down"
In question 5, the owner's total return is A. $5,000 B. $15,000 C. $25,000 D. $35,000
C. $25,000
To obtain a broker's license, you must reach the age of A. 18. B. 19. C. 20. D. 21.
C. 20.
In order to satisfy the education requirements for a real estate salesperson's license, how many hours of education must an applicant take? A. 45 hours B. 60 hours C. 75 hours D. 90 hours
C. 75 hours
Which of the following acts require that a New York resident hold a valid real estate license? A. Giving a cousin advice about pricing her home for the market B. Writing a lease for a tenant in a building he owns C. Accepting a TV from a grateful neighbor for whom she arranged a home equity loan D. Selling the house of his dead aunt while settling her estate
C. Accepting a TV from a grateful neighbor for whom she arranged a home equity loan
The beginning investor should first consult an accountant when A. Preparing the present year's income tax return. B. Establishing cost basis for depreciation. C. Analyzing a prospective purchase. D. Researching fair market rentals.
C. Analyzing a prospective purchase
A fully qualified broker who chooses to act as a salesperson under the employ of another broker's sponsorship is licensed as a(n) A. Adjunct salesperson. B. Sales associate. C. Associate broker. D. Principal broker.
C. Associate broker
The money left in an investor's pocket after expenses, including debt service, have been paid is known as A. Net operating income. B. Gross income. C. Cash flow. D. Internal rate of return.
C. Cash flow.
10. Which of the following is required for an applicant to show in order to be eligible for a broker's license in New York State? A. Completion of 50 hours in real estate courses B. Age of at least 18 C. Completion of two years' experience as a licensed salesperson D. Membership in the new York State Association of Realtors
C. Completion of two years' experience as a licensed salesperson
In New York, real estate licenses are issued by the A. Real Estate Commission. B. Board of Realtors C. Department of State D. Department of Education
C. Department of State
The primary source of tax shelter in real estate investments comes from the accounting concept known as A. Recapture. B. Boot. C. Depreciation. D. Net operating income.
C. Depreciation.
Which of the following BEST describes a license representing both parties in the same transaction? A. Fraud B. Puffing C. Dual agency d. General agency
C. Dual agency
George signed a 120-day listing with Bay realty. After 60 days, George decided not to sell. He told Bay Realty he no longer wanted the agency to market his house. When is the agency of Bay Realty terminated? A. On the 121st day B. After a reasonable time C. On the 61st day d. When the listing expires
C. On the 61st day
Which of the following BEST describes a residential transaction? A. Sale or lease of a property containing ten units or more B. Located in a residential zone C. Transaction involving the sale or lease of four or fewer units intended for dwelling D. Involving a sales price of $1 million or less
C. Transaction involving the sale or lease of four or fewer units intended for dwelling
Joan, who has no real estate license, canvases homeowners by phone to determine whether they are interested in selling their homes. Shanice, who is licensed, give Joan $25 for every lead she turns up. Does this violate license law? A. No, because the gift is not more than $25. B. No, because Joan does not actually list or sell property. C. Yes, because Shanice is paying compensation for services that require licensure. D. Yes, because Joan is using a home telephone with no broker's sign outside her house.
C. Yes, because Shanice is paying compensation for services that require licensure.
The agency disclosure form must be presented, explained and signed A. when the customer makes an offer. B. when the seller accepts an offer. C. at the first substantive contact. D. when the seller and buyer first meet.
C. at the first substantive contact.
A broker is able to collect a commission from both the seller and the buyer only when A. the broker holds a state license. B. the buyer and the seller are related. C. both parties have been provided with full disclosure and have given the broker their informed consent. D. both parties have attorneys.
C. both parties have been provided with full disclosure and have given the broker their informed consent.
A meeting of the minds occurs when the A. seller signs a listing agreement. B. buyer is introduced to the seller. C. buyer and seller agree on the price and terms of the sale. D. final closing (settlement) of the transaction takes place.
C. buyer and seller agree on the price and terms of the sale.
In-house sales where the buyer wants individual representation after agreeing to dual agency can be handled by the use of A. referral sales. B. cooperative brokerage. C. designated agents. D. supplement A.
C. designated agents.
When retained by the buyer, the broker owes a prospective seller A. obedience to lawful instructions. B. confidentiality about the seller's financial situation. C. fair and honest dealing. D. undivided loyalty.
C. fair and honest dealing.
A farmer wouldn't mind a small shopping mall on the far end of his land, but he hates to see those acres go out of the family. He can solve the problem by negotiating a A. sale-leaseback. B. miniperm loan. C. ground lease. D. release deed.
C. ground lease.
The partial protection from legal liability afforded by a corporation can be combined with the tax advantages of a partnership in a A. sole proprietorship B. general partnership. C. limited liability company. D. limited partnership.
C. limited liability company.
A seller who wishes to cancel a listing agreement in New York A. must cite a legally acceptable reason. B. may not cancel without the agent's consent C. may be held liable for damages by the broker. D. may not sell the property for six months afterward.
C. may be held liable for damages by the broker.
A licensed salesperson's business card may NOT A. use the licensee's nickname. B. list a home telephone under any circumstances. C. print the salesperson's name in larger type than the broker's D. carry the fair housing logo.
C. print the salesperson's name in larger type than the broker's
After December 2008, the continuing education requirement for license renewal of home inspectors in New York will A. disappear. B. require fewer hours. C. require more hours. D. become identical to the requirement for brokers.
C. require more hours.
An MLS may A. regulate a broker's office hours. B. prohibit membership in another MLS. C. set reasonable and nondiscriminatory membership fees. D. restrict membership in the MLS unless the individual is first a member of the local board of Realtors.
C. set reasonable and nondiscriminatory membership fees.
A broker represents a homebuyer as a buyer's agent. The broker wants to show the buyer a property that a seller has listed with him. If the broker shows the buyer the property, he A. will have done nothing wrong. B. is violating license law. C. should first get the informed, written consent of both buyer and seller to act as a dual agent. D. must notify the secretary of state that he intends to represent both buyer and seller.
C. should first get the informed, written consent of both buyer and seller to act as a dual agent.
To successfully sue a broker for misrepresentation, the buyer must be able to prove that A. the buyer asked the broker to verify the misstatement. B. the misstatement is in writing. C. the buyer was damaged from relying on the truth of the statement. D. the seller knew of the statement.
C. the buyer was damaged from relying on the truth of the statement.
All of the following would be required of a real estate salesperson EXCEPT A. to be licensed by the state. B. to be at least 18 years old. C. to already have experience in real estate. D. to be supervised by a sponsoring broker.
C. to already have experience in real estate.
Property that has a net operating income of $28,000 with annual depreciation of $10,000 and debt service of $18,000, which includes $17,000 interest, has taxable income of A. $38,000. B. $28,000. C. $10,000. D. $1,000.
D. $1,000.
In order to satisfy the education requirements for a broker license, an applicant must have first completed a total of how many hours of prescribed study? A. 45 B. 75 C. 90 D. 120
D. 120
Which listing agreement provides the broker with the greatest incentive to successfully market the property? A. Open listing B. Exclusive-agency listing C. Net listing D. Exclusive-right-to-sell listing
D. Exclusive-right-to-sell listing
Ginnie Mae and Fannie Mae were created to warehouse A. land for development by the government. B. assigned leases. C. home equity loans. D. FHA and VA mortgages.
D. FHA and VA mortgages.
Two agencies decide that they will not cooperate with the new broker in town. Which of the following would BEST describe this act? A. Market allocation B. Tie-in arrangement C. Price-fixing D. Group boycotting
D. Group boycotting
A duly licensed salesperson may accept bonus compensation from A. A grateful seller B. A grateful buyer C. Another salesperson. D. None of these.
D. None of these
Real estate license laws were instituted to A. Raise revenue through license fees. B. Limit the number of brokers and salespersons. C. Match the federal government's requirements. D. Protect the public while maintaining high standards for those issued a license.
D. Protect the public while maintaining high standards for those issued a license.
A broker for one realty tells a broker from another realty that a house has been listed "at a 7 percent commission. we will be glad to cooperate with you and give you half, if your company sells it." Which of the following BEST describes this act? A. The offer to cooperate in marketing the property B. The promise of a 50/50 split C. The phrase "7 percent commission" D. This act is permitted
D. This act is permitted
A broker who lists a property on the broker's Web site should remove the listing from the for sale section of the site A. when the listing appears on an MLS. B. 90 days after it appears. C. when an offer is made. D. after a sale occurs.
D. after a sale occurs.
A new salesperson wants to be able to claim self-employment expense deductions on IRA Form 1040 Schedule C. She should A. have an independent contractor agreement with her broker in writing. B. keep a detailed record of her expenses. C. pay her own state and federal taxes and Social Security. D. all of these.
D. all of these.
Construction loans are A. insured by the Fed. B. considered subordinate. C. subject to disintermediation. D. disbursed in installments.
D. disbursed in installments.
Upon first contact, cooperating brokers must inform the listing agent whether they are acting as agents or subagents of other parties. this would be due to the fact that these relationships impact the listing agent's A. motivation in presenting the property. B. responsibilities to the seller. C. potential commission. D. disclosure of information.
D. disclosure of information.
Nonresident brokers seeking a New York license must A. post a bond of $5,000. B. be a citizen of the United States. C. find a New York attorney or another broker to act as a sponsor. D. file an irrevocable consent to service from allowing them to be sued in New York.
D. file an irrevocable consent to service from allowing them to be sued in New York.
In the spirit of cooperation, a broker approached two other community brokers and recommended that they set standard fee schedules and commission rates. This recommendation is A. legal if other community brokers are allowed to participate in the agreement. B. legal if the agreement is in writing. C. illegal if salespersons working for the brokers are not consulted. D. illegal under any circumstances.
D. illegal under any circumstances.
A broker does not think the seller will seriously consider an offer he received for 20 percent less than the listing price. The broker A. should discourage the potential buyer from making the offer. B. should encourage the potential buyer to increase the offer. C. should wait until he receives more realistic offers and present all offers together. D. is required to submit the offer to the seller.
D. is required to submit the offer to the seller.
An apartment information vendor's license is is available to individuals who are able to A. pass the licensing exam. B. file a $10,000 survey bond. C. obtain a sponsoring broker. D. maintain a $5,000 interest-bearing escrow account.
D. maintain a $5,000 interest-bearing escrow account.
An example of a latent defect would be a A. large crack in the dining room ceiling. B. roof with warped shingles. C. used-car lot next door. D. malfunctioning septic tank.
D. malfunctioning septic tank.
The term vicarious liability refers to A. failure to disclose type of agency. B. broker's duty to supervise. C. independent contractor guidelines. D. principal's responsibility for agent's acts.
D. principal's responsibility for agent's acts.
A listing contract will terminate as the result of performance of the object. This means that the A. property has been destroyed. B. seller and broker agree to cancel. C. owner has decided not to sell. D. property has been sold.
D. property has been sold.
When a developer sells one home in a new sub-division, the blanket mortgage on that lot is A. secured. B. refinanced. C. accrued. D. released.
D. released.
A house was purchased in 1950 for $4,500. The seller knows properties have appreciated and asks the broker to try to sell it for $100,000. The broker knows the value could be more than $200,000. The broker should A. take the listing as offered and sell it quickly. B. purchase the house himself for the full $100,000, including in the contract that is a licensed broker. C. buy the house through his aunt, who has a different last name. D. tell the seller that the house is worth much more.
D. tell the seller that the house is worth much more.
When communicating the present property tax information on a listed property, the listing broker should disclose A. the current seller's three-year payment history. B. the procedure that can be followed to protest property valuation. C. how the assessed valuation and tax rate are determined. D. that the tax amount is valid only for the year of the sale.
D. that the tax amount is valid only for the year of the sale.