Real Estate Exam Prep

A buyer makes an offer, contingent on selling his house first. What clause can be included in the sales contract that would allow the seller to pursue other buyers in the meantime? A. mortgage contingency clause B. as is clause C. time is of the essence clause D. escape clause

Escape clause

The tenant signs a two-month lease on an apartment ending September 1. What type of leasehold estate does this represent? A. estate at will B. periodic estate C. estate for years D. tenancy at sufferance

Estate for years

ABC Mortgage Company loaned Judy $180,000 to buy a house. A week later, they sold her mortgage on the secondary market. Who most likely bought Judy's mortgage? A. the State of New York Mortgage Agency B. the Federal Housing Administration C. the Department of Housing and Urban Development D. the Federal National Mortgage Association

The Federal Housing Administration

Revocation of a license means a license is withdrawn and A. can be reinstated at any time the DOS deems appropriate. B. can only be reinstated after one year. C. it's permanent; the license can never be reinstated. D. it becomes permanent after the third offense ("three strikes and you're out" rule).

can only be reinstated after one year.

What is another word for principal? A. customer B. fiduciary C. agent D. client

client

Which is an example of a limited common area at a condominium with garden apartments? A. swimming pool that everyone uses B. community clubhouse that can be reserved by residents C. basement in a particular unit D. driveway for a particular unit

driveway for a particular unit

ABC Utility Company has the right to enter a homeowner's property to repair electric lines. What kind of easement does this represent? A. easement appurtenant B. easement in gross C. easement servient D. easement by prescription

easement in gross

When someone dies without a will and without heirs or creditors, his properly reverts to the state through the process of A. eminent domain. B. devise. C. testate descent. D. escheat.

escheat.

Which type of listing agreement provides the greatest opportunity for a listing broker to earn a commission? A. net listing B. exclusive right to sell agreement C. exclusive agency agreement D. open listing

exclusive right to sell agreement

What is the preferred method of creating an agency relationship? A. gratuitous agency B. agency by ratification C. expressed agency D. implied agency

expressed agency

The fullest interest in property is known as what kind of estate? A. leasehold estate B. life estate C. fee simple estate D. qualified fee estate

fee simple estate

An advantage for businesses to do a sale-and-leaseback is to a. qualify for more government assistance. b. leverage the financing of the equipment. c. free up liquid assets to invest in other product or resources. d. increase the number and the variety of assets tied into real estate.

free up liquid assets to invest in other product or resources.

A salesperson who is an independent contractor A. has no responsibility to the firm she works for. B. never pays taxes on her earnings. C. is not subject to withholding requirements. D. has taxes withheld from her paycheck.

is not subject to withholding requirements

Which protected class is NOT covered by New York State law but may be covered by a specific municipality? A. marital status B. lawful source of income C. age D. sexual orientation

lawful source of income

A mortgage loan originator can perform each of these activities EXCEPT A. lend money. B. solicit a loan. C. process a loan. D. negotiate a loan.

lend money

Which is a characteristic of a pro forma statement that is NOT a characteristic of an operating statement? A. looks for net operating income B. documents a property's performance C. illustrates total income and expenses D. provides hypothetical data to assist in making decisions

provides hypothetical data to assist in making decisions

Condominium units are considered _____ property and are conveyed by _____. A. real / proprietary lease B. personal / deed C. personal / proprietary lease D. real / deed

real / deed

In New York, which cost at closing is most typically paid by the seller? A. home inspection fees B. flood certification fee C. real property transfer tax D. title insurance

real property transfer tax

In his first week on the job, property manager Tim checks the insurance coverage for the building he manages and indicates potential needs for more coverage. This is an example of Tim's obligation to A. risk management. B. building maintenance. C. building security. D. account management.

risk management

The STAR program provides a partial exemption to NYS homeowners for: A. school district taxes B. special assessment taxes C. county property taxes D. capital gains taxes

school district taxes

Each of these is a type of construction framing EXCEPT A. slab on grade construction. B. platform construction. C. balloon construction. D. post and beam construction.

slab on grade construction

Who pays the property taxes in a triple net lease? A. tenant B. broker C. landlord D. property manager

tenant

A husband and wife purchase a home. Unless specified otherwise, it is assumed that they will take ownership as A. joint tenants. B. tenants by the entirety. C. tenants in common. D. tenants in severalty.

tenants by the entirety.

Which agency issues real estate licenses in the State of New York? A. the Department of State B. the Attorney General's office C. the New York State Legislature D. the New York State Board of Real Estate

the Department of State

Someone walks into an open house. The listing agent must present an agency disclosure before A. any confidential information is exchanged. B. the agent signs a listing agreement with that person. C. the agent answers any questions about the house. D. the person enters the house.

the agent answers any questions about the house.

Homeowner Frank is challenging the assessment of his property. Each of these would be a valid reason to file a grievance EXCEPT A. his house is assessed at 60% while his neighbor's house is assessed at 50%. B. the amount of the tax bill is too high. C. his house is classified as retail property. D. his house is actually in a different assessing unit.

the amount of the tax bill is too high.

Sally is interested in renting the other half of an owner-occupied duplex. She calls the listing broker about it who tells her that the owner, his client, does not allow children. Who, if anyone, is violating fair housing laws in this situation? A. the broker B. the owner C. both the broker and the owner D. neither the broker nor the owner

the broker

Title to a specific cooperative apartment is held by A. all residents in the building. B. the corporation. C. the cooperative board. D. the individual resident.

the corporation.

As a measure of the force that pushes electricity through a wire, residential circuits operate at a minimum of: A. 110 volts. B. 220 volts. C. 100 amps. D. 200 amps.

110 volts

What are the age and experience requirements to apply for a salesperson license? A. 21 years old and at least two years of experience B. 18 years old and at least one year of experience C. 18 years old and no experience necessary D. 21 years old and no experience necessary

18 years old and no experience necessary

Lyle bought a duplex for $200,000 and leases each apartment for $580 a month. The land on which the duplex sits is valued at $30,000. How much can Lyle deduct from his income tax each year for straight line depreciation (rounded to the nearest dollar)? A. $5,128 B. $7,273 C. $6,182 D. $5,676

$200,000/27.5= $7,273

A homeowner wants to net $140,000 on the sale of his house. If his closing costs will be $12,600, he owes $44,500 on his current mortgage, and he is paying a 6% commission, what is the minimum offer he will accept (rounded up to the nearest dollar)? A. $205,313 B. $209,149 C. $208,926 D. $209,681

$209,681

An agent lists a 1.8 acre property for sale. The owner wants $3.25 per square foot. What is the asking price of the property? A. $248,976.00 B. $255,352.50 C. $254,826.00 D. $266,935.50

$254,826.00

The owner of Oliver's Bakery leases space in a recently renovated building in an up-and-coming neighborhood. His lease calls for a base rent of $3,500 per month plus a 6% overage percentage. What is Oliver's base rent for the year? a. $42,000 b. $44,520 c. $43,200 d. $35,000

$42,000

Wilma sells her house for $600,000 two months after her husband passed away. They had purchased the house in 1952 for $58,000. Assuming they met the requirement for filing jointly, on what amount will Wilma have to pay income tax? A. $542,000 B. $42,000 C. $500,000 D. $292,000

$542,000

After examining a property, an appraiser made the following notes: Replacement cost= $465,000; Depreciation= $18,000; Site Value= $85,000. Determine the final estimate of value using the cost approach. A. $550,000 B. $532,000 C. $568,000 D. $447,000

($465,000 - $18,000 )= $447,000 + $85,000 = $532,000

A building has 28,000 rentable square feet, 22,160 square feet of which are considered useable. What is this building's loss factor? a. 12.6% b. 20.9% c. 31.5% d. 7.9%

(28000-22160)/28000= 20.9%

Taylor has $80,000 to invest and considers buying a strip mall with an asking price of $480,000. The estimated NOI, based on the current owner's operating statement, is $36,000. What would be his expected capitalization rate? A. 13.3% B. 17.3% C. 9% D. 7.5%

7.5%

A buyer is considering a house with asbestos insulation coating the water pipes. What should the buyer be most concerned about? A. Asbestos can contaminate the house if removed improperly since airborne particles are dangerous. B. Asbestos is dangerous when wet and therefore should be encapsulated in waterproof material. C. The pipes should be replaced to prevent the asbestos from leaching into the drinking water. D. The bank will likely refuse to approve a mortgage until the asbestos insulation is removed.

Asbestos can contaminate the house if removed improperly since airborne particles are dangerous.

A licensee attempts to get listings by telling homeowners in a neighborhood that their property values will decline when a group of immigrants move in. The licensee could be found guilty of A. Blockbusting B. Steering C. Boycotting D. Redlining

Blockbusting

A seller client has vicarious liability for each of these EXCEPT a A. Subagent B. Broker's agent C. Listing agent D. Dual agent

Broker's agent

Which federal environmental law, known as the Superfund, creates requirements for closed and abandoned waste sites? A. Clean Water Act B. Resource Conservation and Recovery Act C. Comprehensive Environmental Response, Compensation, and Liability Act D. Safe Drinking Water Act

Comprehensive Environmental Response, Compensation, and Liability Act

An agent owes all of these duties to a customer EXCEPT A. Fair dealing. B. Loyalty. C. Disclosure of material facts. D. Honesty.

Fair dealing.

A listing broker must maintain a signed agency disclosure form Select one: a. for at least one year after the transaction closes. b. until the transaction closes. c. as long as the listing agreement is active. d. for at least three years after the transaction closes.

For at least three years after the transaction closes.

Tony owns the barbershop he built 25 years ago on the same street as his family home. The area was zoned residential 10 years ago. Why is the barbershop allowed to remain open? A. He receives incentive zoning. B. The doctrine of laches applies since no one has complained about it. C. He has an area variance. D. It is a nonconforming use.

It is a nonconforming use.

Which is an example of a general involuntary lien? A. property tax lien B. mechanic's lien C. mortgage D. judgment lien

Judgment lien

The Truth In Lending Act encompasses all of the following EXCEPT A. limits the number of points a lender may charge to close a commercial mortgage. B. requires lenders to provide borrowers with a Loan Estimate of closing costs. C. requires the use of the Closing Disclosure for all federally related, one to four family residential loans. D. gives buyers the right to inspect the Closing Disclosure at least three days prior to closing.

Limits the number of points a lender may charge to close a commercial mortgage

Opal lives in an apartment that is going cooperative. The current residents are given the first option to buy in, and Opal decides to take advantage of the opportunity. Which statement about Opal's new co-op is FALSE? A. She will be responsible for paying a proportional share of the building's expenses. B. She will have an undivided interest in common areas. C. She can finance the purchase of her co-op with a share loan. D. She will own the airspace inside her co-op fee simple.

She will own the airspace inside her co-op fee simple

Which type of legal description uses a survey map of a subdivision? A. block and lot B. rectangular survey system C. metes and bounds D. monuments and pins

Metes and Bounds

Who is responsible for approving septic and other sanitation systems in New York State? A. NYS Department of Environmental Conservation B. county health department C. NYS Department of Health D. municipal planning board

NYS Department of Health

An agent who discusses the commission rates charged by his broker with someone from another agency could be accused of which antitrust violation? A. allocation B. tying in C. group boycotting D. price fixing

Price fixing

A licensed salesperson acting as a subagent can receive commission payments A. directly from the client. B. only from his or her employing broker. C. from the listing broker. D. from the buyer's broker.

Only from his or her employing broker.

Which pair could be used in a tax-deferred like-kind exchange? A. retail strip mall for an office building B. single family home for a stable of race horses C. shares of stock for a cooperative apartment D. condominium in Hilton Head for a condominium in Costa Rica

Shares of stock for a cooperative apartment

Which type of deed would most likely be used to remove a cloud on a title? A. full warranty deed B. judicial deed C. quitclaim deed D. bargain and sale deed

Quitclaim deed

A zoning board of appeals A. rules on requests for variances. B. inspects property for compliance with code. C. issues building permits. D. sets the zoning laws for a community.

Rules on requests for variances.

Under what circumstance is a deed restriction most likely to be removed? A. The statute of limitations expires. B. The deed restriction prohibits minorities from owning the property. C. The current deed owner sells the property to another buyer. D. No one comes forward to enforce the deed restriction.

The deed restriction prohibits minorities from owning the property.

The lender's interest in property insurance relates to making sure A. the loan amount is increased to cover the cost of required insurance. B. the property owner has enough coverage for a liability lawsuit. C. there is enough coverage to cover the value of the loan. D. the buyer has enough coverage for contents of property.

There is enough coverage to cover the value of the loan.

When a licensee is the client's designated agent, the client gives up the agent's duty A. Obedience B. Undivided loyalty C. Reasonable care D. Advocacy in negotiating

Undivided Loyalty

Net square footage refers to A. common space. B. rentable space. C. usable space. D. shared space.

Usable Space

Ad valorem taxes are based on a property's a. appraised value b. assessed value c. sale price d. market price

assessed value

In an advertisement for a four-bedroom home, which statement might be considered discriminatory? a. large, four-bedroom on a quiet cul-de-sac lot b. comfortable home near community recreation center c. excellent location; walk to bus stop d. beautiful home in an exclusive neighborhood

beautiful home in an exclusive neighborhood

Craig owns a warehouse and his property taxes were recently raised. In turn, Craig charged the tenant currently occupying the building additional operating expenses. This is an example of A. a pass-through. B. the loss factor. C. the Porter's wage escalation formula. D. Eminent Domain

a pass- through

What is the minimum licensing requirement to sell commercial real estate in New York? A. a real estate broker's license B. a real estate salesperson's license plus one year of experience assisting in commercial sales C. a commercial real estate salesperson's license D. a real estate salesperson's license

a real estate salesperson's license

Fred has missed two mortgage payments. What clause would allow his lender to demand that he pay the entire balance now? A. acceleration clause B. foreclosure clause C. escalation clause D. alienation clause

acceleration clause

A valid deed must contain whose signatures? A. at least one grantee B. a notary public or judge C. one granter and one grantee D. all granters

all granters

A property owner who needs a high limit of liability coverage would likely consider . a dwelling policy. b. a blanket policy. c. an umbrella policy. d. a package policy

an umbrella policy.

The theoretical price real estate should bring in a typical transaction is known as the A. indirect cost. B. appraised value. C. market value. D. asking price.

market value

An amenity purchaser A. occupies or uses the purchased property. B. purchases multiple parcels and assembles them for subdivision development. C. purchases property, makes minor improvements, then resells it quickly for a profit. D. uses government grants to purchase low-income housing.

occupies or uses the purchased property

When finding comparable properties for a comparative market analysis, a real estate agent will consider A. all homes currently listed, recently sold, or removed from the market. B. any home that is currently listed or recently sold. C. only homes that have recently sold. D. only homes that are currently listed for sale.

only homes that have recently sold

What is it called when a lender evaluates a prospective buyer and documents, in writing, that he is willing to loan this buyer up to a certain amount of money? A. pre-qualification B. credit scoring C. loan closing D. pre-approval

pre-approval

Sue faces possible foreclosure, and contacts a mortgage lender whose ad promises to save her home for her. At closing, Sue sees that the lender changed the terms of the loan that they had agreed to, but she felt she had no choice but to go ahead with the loan or lose her house. This is an example of A. loan flipping. B. affinity marketing. C. predatory lending. D. negative amortization

predatory lending.

A _____ has a fiduciary obligation to a _____. A. property manager / tenant B. tenant / property owner C. property manager / property owner D. property owner / property manager

property manager / property owner

A homeowner facing foreclosure has a number of liens: The original mortgage, a mechanic's lien from six months ago, a judgment lien from two years ago, and a property tax lien that was just filed. When the property is sold, which lien will be paid first from the proceeds? A. property tax lien B. mortgage C. mechanic's lien D. judgment lien

property tax lien

A contract between a minor and an adult is A. voidable by the minor. B. voidable by either party. C. void. D. valid.

voidable by the minor.

An example of chattel is A. a chandelier attached to a ceiling. B. a tree growing on the land. C. a building attached to the land. D. wheat that has been harvested.

wheat that has been harvested.