Real Estate Review Questions
A lot zoned for business use was 105 ft by 125 ft. It sold for $176,000. What was the price per front foot? a. $1,676.19 b. $1,684.25 c. $1,737.04 d. $2,119.84
176,000 divide by 105 = $1676.19 a. 105 ft is the width (first number) 125 ft is the depth
When filing an appeal for property tax reduction, which of the following BEST describes the appeal? a. An Article 78 proceeding b. An Article 9-A proceeding c. An Article 12-A proceeding d. A 421-A proceeding
a. An Article 78 proceeding used to appeal the decision of a New York State or local agency to the New York courts.
What is the equity dividend rate commonly called? a. Cash-on-cash return b. The financing return c. Net operating income (NOI) d. Owner's equity
a. Cash-on-cash return
Which of the following is correct concerning property tax bills? a. Condominium owners receive tax bills directly for their unit. b. Only cooperative owners receive tax bills directly for their unit. c. Only condop owners receive tax bills directly for their unit. d. Cooperatives are not taxed.
a. Condominium owners receive tax bills directly for their unit. (its a separate tax bill because condos are considered to be real property as appose to co-ops that the taxes and maintenance fees are in one package)
Modern bathtubs are usually made of which of the following materials? a. Fiberglass b. Cast iron c. Marble d. Enameled steel
a. Fiberglass
When can the entire property owned by a cooperative be sold? a. If enough owner-occupants cannot promptly pay their monthly assessments b. If one shareholder dies c. If the entire board of directors resigns d. If a tenant-owner places a mortgage on the property
a. If enough owner-occupants cannot promptly pay their monthly assessments
Which of the following is registered by the New York State Banking Department to negotiate, solicit, and process residential mortgage loans? a. Mortgage banker b. Mortgage collector c. Mortgage broker d. Mortgage underwriter
a. Mortgage banker
Which of the following bodies of government issues licenses to and regulates mortgage brokers? a. New York State Banking Department b. Department of State, Division of Licensing Services c. Division of Corporations d. Division of Loans
a. New York State Banking Department
Which of these is considered personal property? a. Shares of stock in an owner-occupied cooperative unit b. An owner-occupied condominium unit c. An owner-occupied single-family house d. A chandelier permanently attached to the ceiling in a house
a. Shares of stock in an owner-occupied cooperative unit
A bank informs a borrower that it will fund a mortgage loan. This is called a. a mortgage commitment. b. a prequalification. c. preapproval. d. a rate lock.
a. a mortgage commitment.
Tax Reform Act of 2018 are a. active, passive, and portfolio. b. passive, portfolio, and current. c. taxable, tax-exempt, and tax-deferred. d. portfolio, taxable, and tax-exempt.
a. active, passive, and portfolio.
The legal form that states the unpaid balance due on a loan to receive monies as of a specified date is in full force and existence while preventing any purchaser of loan from claiming that the payor owes more than the stated amount is a. an estoppel certificate. b. a subordination certificate. c. a certificate of reasonable value. d. an aggregate rental certificate.
a. an estoppel certificate.
A woman recently received her salesperson's license and joined a brokerage. With regard to taxes, she will MOST likely be hired as a. an independent contractor. b. a REALTOR®. c. an associate broker. d. a salaried employee.
a. an independent contractor.
Real estate ownership by a corporation is a. an ownership in severalty or as a tenant in common b. joint tenancy c. tenancy by the entireties d. illegal
a. an ownership in severalty or as a tenant in common
An insurance policy that protects against theft, burglary, vandalism, and machinery damage is called a. casualty. b. multiperil. c. liability. d. contents and personal property.
a. casualty. The principle of or relationship between cause and effect.
To calculate a tenant's proportionate share of occupancy in a building, a landlord would MOST likely a. divide the tenant rentable area by the building gross rentable area. b. subtract the tenant rentable area from the building gross rentable area. c. divide the building gross rentable area by the tenant rentable area. d. multiply the building gross rentable area by the tenant rentable area.
a. divide the tenant rentable area by the building gross rentable area
A lease where the lessee (tenant) pays the lessor (landlord) basic rent and the rent includes all costs of occupancy is a a. gross lease. b. net lease. c. loft lease. d. percentage lease.
a. gross lease.
A woman purchases a cooperative. She is a tenant of the leased property and also a. holds shares of stock in the cooperative. b. owns the individual unit. c. is a general partner. d. owns income-producing sources.
a. holds shares of stock in the cooperative.
in what type of contract is the agreement of the parties demonstrated by their acts and conduct? a. implied b. unilateral c. express d. voidable
a. implied
A person that enters into a written agreement that provides representation by a single agent a. is owed full fiduciary responsibilities. b. is only owed fair and honest dealing. c. is only owed full disclosure and accountability. d. will likely not receive the agent's full attention because the agent is also representing the opposing party.
a. is owed full fiduciary responsibilities.
A property manager should maintain the value of the property and a. maximize income. b. maximize occupancy. c. minimize turnover. d. minimize capital expenses.
a. maximize income.
The formula used for calculating property taxes is assessed value a. minus any exemptions multiplied by the tax or mill rate b. plus any exemptions multiplied by the tax or mill rate c. minus any exemptions divided by the tax or mill rate d. plus any exemptions divided by the tax or mill rate
a. minus any exemptions multiplied by the tax or mill rate
Certification or licensing of appraisers is a. not required for all appraisal work but is necessary for most appraisals related to mortgage loans b. not required in NY c. not required for federally related mortgage loans d. being able to call an appraisal a CMA
a. not required for all appraisal work but is necessary for most appraisals related to mortgage loans
Base years are used in leases to a. pass through increased costs in property operations. b. compare one rental property to another. c. calculate the new rent on a renewal. d. provide rental discounts to long-time tenants.
a. pass through increased costs in property operations.
Which of the following events would NOT cause a listing to terminate? a. the property's kitchen is damaged in a fire b. the seller dies c. the broker declares bankruptcy d. another broker sells the property
a. the property's kitchen is damaged in a fire
Reversion, as it relates to investment property refers to a. the sale of the property b. the purchase of the property c. the refinancing of the property mortgage d. none of the above
a. the sale of the property
Subtracting the loss factor from the rentable area results in a. usable area b. carpetable area c. passive space d. net rentable area
a. usable area
A lender charged a borrower more than the legal interest rate. In this case, the lender committed a. usury. b. discounting. c. inflation. d. novation.
a. usury
Before any binding contract of sale is signed, a buyer is entitled to receive a property condition disclosure statement from the seller. Which of the following is true? a. whether or not the seller provides the disclosure form has no effect on the seller's liability for undisclosed defects b. the licensee must inform the seller of the seller's legal rights and obligations regarding filling out the form or ignoring it c. any buyer who does not receive a statement is entitled to a $5,000 cashier's check from the seller at the settlement d. the seller's agent has a fiduciary obligation to offer assistance in filling out the statement
a. whether or not the seller provides the disclosure form has no effect on the seller's liability for undisclosed defects
A seller wants to realize a final net amount of $185,000 after paying a broker's commission of 5.5%. What is the minimum sales price (rounded to the nearest dollar)? a. $192,537 b. $195,767 c. $221,765 d. $264,208
b. $195,767 185,000 / (1-.055) = 195,767 or 185,000×.055=10,175 185,000+10,175= 195,175
Which of the following is a contract that transfers the rights of possession to real property for a specified term? a. A lien b. A lease c. A lis pendens d. A deed on condition
b. A lease
A licensee violates New York license law, which is a misdemeanor. The licensee may spend up to a year in jail and may be fined up to a. $250. b. $500. c. $1,000. d. $2,500.
c. $1,000.
What is the minimum size of a fuel storage tank regulated by the Underground Storage Tank Act in New York? a. 500 gallons b. 750 gallons c. 1,100 gallons d. 1,750 gallons
c. 1,100 gallons
What does the lender do in a friendly foreclosure? a. Renegotiates the mortgage so the borrower has lower payments b. Agrees to reduce the borrower's outstanding debt balance c. Accepts the deed and legal possession of the property from the borrower d. Asks the court to auction the property
c. Accepts the deed and legal possession of the property from the borrower
Which of the following requires a real estate license in New York? a. A man selling his own property b. A man's lawyer selling the man's property c. An auctioneer selling land d. A foreclosure sale by court order
c. An auctioneer selling land
What are the four freehold estates recognized in New York? a. Fee simple, periodic estates, fee on condition, and life estates b. Fee simple, qualified (determinable) fee, fee on condition, and estates for years c. Fee simple, qualified (determinable) fee, fee on condition, and life estates d. Life estates, qualified (determinable) fee, fee on condition, and estate at sufferance
c. Fee simple, qualified (determinable) fee, fee on condition, and life estates
Which of the following materials is the MOST commonly used insulation material? a. Urea-formaldehyde foam b. Cellulose fiber c. Fiberglass d. Rock wool
c. Fiberglass
Which of the following is a type of discrimination forbidden by New York State law but NOT by federal law? a. Religion b. Race c. Marital status d. Children in a family
c. Marital status
A comparative market analysis (CMA) is similar to which approach to real estate evaluation? a. Cost b. Income c. Sales comparison d. Guesstimate
c. Sales comparison
A broker had a written representation agreement with the buyer but was paid an undisclosed fee of 5% of the selling price at the closing by the seller. Which of the following is TRUE? a. The broker is a dual agent. b. The broker was the seller's agent. c. The broker was the buyer's agent. d. The broker has violated part 175.7 of New York real estate license law.
c. The broker was the buyer's agent.
Who often requires a certificate of insurance in real estate transactions? a. The seller b. The buyer c. The lender d. The closing company
c. The lender
From whom may a salesperson legitimately receive any or all of a real estate commission? a. A buyer b. A seller c. The salesperson's sponsoring broker d. Someone who provides a listing lead
c. The salesperson's sponsoring broker
An appraiser is appraising a single-use property but finds that sales of comparable properties are unavailable. Which valuation approach to appraisal will provide the appraiser with an accurate estimate of value? a. cap rate approach b. income approach c. cost approach d. anticipation factor
c. cost approach
Using the 365-day method, the monthly charge is a. multiplied by 30. b. added to the actual number of days in the month. c. divided by the actual number of days in the month. d. subtracted from the actual number of days in the month.
c. divided by the actual number of days in the month.
A buyer-client wants to see properties listed by the agent's company. Which of the following could be used to overcome the possible conflict of interest that might arise in this situation? a. excuslive-right-to-sell agreement b. undisclosed dual agency c. dual agency with designated agent relationship d. fiduciary duties
c. dual agency with designated agent relationship
Improvements such as schools, roads, and public utilities are called a community's a. capital. b. master plan. c. infrastructure. d. community property.
c. infrastructure.
A salaried employee of a broker acting as a property manager for a property owner a. is required to have a salesperson license b. is required to have a property management permit c. is not required to have a license d. is not required to collect commissions
c. is not required to have a license
The presence of asbestos is identified in a property. However, the asbestos is NOT yet a problem. How should the asbestos be treated? a. remove chipping paint b. provide proper ventilation for the building c. leave it alone d. install new distribution boxes
c. leave it alone
All of the following contain covenants or warranties EXCEPT a. reconveyance deeds. b. trust deeds. c. quitclaim deeds. d. warranty deeds.
c. quitclaim deeds.
Deed restrictions say lots in a subdivision must measure at least two acres, but the town allows half-acre lots. Which of the following is TRUE? a. subdividers must comply with the rules of the town, but developers do not have to comply. b. individual homeowners can use the rules of the town only if they own fewer than four properties c. the two-acre restriction can be enforced by neighbors d. developers may build on half-acre lots
c. the two-acre restriction can be enforced by neighbors
A homeowner sold his house and will close on April 20. He paid his full annual town taxes in January. Which of the following will happen at closing? a. Nothing will happen. b. The seller will owe the buyer the tax due. c. The seller will owe the buyer half of the tax due. d. The buyer will owe the seller the unused tax for the balance of the year.
d. The buyer will owe the seller the unused tax for the balance of the year.
Who is responsible for regulating zoning? a. The environmental conservation board b. The environmental protection agency c. The state government d. The local municipality
d. The local municipality
Through, which of the following is an electrical system routed? a. a stringer b. a muntin c. a pier and beam d. a circuit box
d. a circuit box
Which of the following is the general tax determined by the value of the property ? a. excise tax b. assessment tax c. value-added tax d. ad valorem tax
d. ad valorem tax
Prior to 2008, the Internal Revenue Service (IRS) 80/20 rule limited the a. reserves that could be held by cooperatives. b. money condominiums could spend on common areas. c. number of condominium units that must be owner-occupied. d. amount of nonshareholder passive income earned by cooperatives.
d. amount of nonshareholder passive income earned by cooperatives.
Another term for a right-of-way is a. a servant estate. b. a dominant estate. c. a gross appurtenance. d. an easement appurtenant.
d. an easement appurtenant
A man's fence extends illegally beyond the man's land. This is called a. a prescriptive easement. b. a lis pendens. c. a lien. d. an encroachment.
d. an encroachment.
A homeowner lists her property for sale with five brokers. This is called a. a net listing. b. an exclusive agency. c. an exclusive right to sell. d. an open listing.
d. an open listing.
A landlord received $4,000 from a prospective tenant for the right to lease a store within 30 days at a specified annual rental. This is called a. an implied contract agreement. b. a rejection agreement. c. an open-lease agreement. d. an option agreement.
d. an option agreement.
A cooperating broker who is an agent of the listing broker but NOT strictly a subagent of the seller is a a. single agent. b. universal agent. c. subagent. d. broker's agent.
d. broker's agent.
Proportionate share is calculated by a. subtracting building gross rentable area from tenant rentable area. b. dividing gross rentable area by tenant rentable area. c. multiplying tenant rentable area by building gross rentable area. d. dividing tenant rentable area by building gross rentable area.
d. dividing tenant rentable area by building gross rentable area.
Which of the following is the MOST complete type of ownership in real estate? a. qualified fee b. fee on condition c. life estate d. fee simple
d. fee simple
A woman applied for an FHA-insured loan. The mortgage will be a. paid for by private mortgage insurance (PMI) premiums. b. guaranteed by the federal government at no cost to the borrower. c. backed by the full faith and credit of the U.S. government. d. insured by FHA through the Department of Housing and Urban Development (HUD).
d. insured by FHA through the Department of Housing and Urban Development (HUD).
A veteran's property tax exemption a. is a one-time exemption of $5,000. b. is a yearly exemption of up to $10,000. c. may not total more than $2,500. d. is a yearly exemption which may not total more than $5,000.
d. is a yearly exemption which may not total more than $5,000.
What did the Duncan and Hill vs. Department of State decision restrict real estate licenses from doing? a. defrauding consumers b. misrepresenting property c. not disclosing dual agency d. practicing law without authorization
d. practicing law without authorization
Denying applications for mortgage loans in specific areas without regard to economic qualifications of the applicant is known as.... a. discrimination b. blockbusting c. steering d. redlining
d. redlining
A couple purchased a house next to a stream. The rights the couple has in relation to the stream are a. laches. b. reversionary. c. littoral. d. riparian.
d. riparian.
A real estate brokerage negotiated a sale at $168,000. The buyers need a mortgage of $154,000. The lender will approve only an 80% loan-to-value (LTV) mortgage. The real estate brokerage prepares a fake second sales contract with purchase price of $192,500 has the sellers and the buyers sign it, and presents that to the lender. Which statements is TRUE? a. The buyers and the sellers have no liability because they followed their broker's guidance. b. Both the real estate brokerage and the buyers and the sellers are committing fraud. c. The real estate brokerage is properly putting the buyer's interests first d. The real estate brokerage is entitled to a commission based on $192,500
b. Both the real estate brokerage and the buyers and the sellers are committing fraud.
A contractor completes building a new apartment complex. Although he had a building permit, which of the following is still needed? a. Environmental survey b. Certificate of occupancy c. Variance from the zoning board of appeals d. Approval by an architectural review board
b. Certificate of occupancy
Which of the following is forbidden to be used as discriminatory advertising by federal civil rights legislation? a. Source of income b. Country of origin c. Political affiliation d. Prison record
b. Country of origin
Metes and bounds and monuments would be found in which clause in a deed? a. Habendum b. Description c. Demising d. Defeasance
b. Description
Which of the following is TRUE about a Department of Veterans Affairs (VA) mortgage? a. It is prepaid. b. It is guaranteed. c. It is conventional. d. It is always a recourse loan.
b. It is guaranteed.
Which of the following does the Federal Housing Administration's (FHA) Section 8 program do to help low- and moderate-income people? a. Pay down payments b. Pay part of the rent c. Insure mortgage loans d. Guarantee mortgage loans
b. Pay part of the rent
Which of the following is a fixed expense for a residential apartment building? a. Utilities b. Property tax c. Landscaping d. Management fees
b. Property tax
Which of the following does NOT require a certified professional for its removal? a. Lead b. Radon c. Asbestos d. Termites
b. Radon
Why do real estate transactions involve liquidity risk? a. Real property is financed with borrowed funds. b. Real property cannot be sold immediately. c. Real property is subject to taxation. d. The government can take real property.
b. Real property cannot be sold immediately.
A woman wants to purchase a condominium in a newly planned development. She can reserve a unit by using a. a sponsor contract. b. a letter of intent. c. an offering plan. d. a reservation agreement.
b. a letter of intent.
What is the mortgage provision allowing a lender to prevent a future purchaser of a property to assume the mortgage? a. satisfaction of mortgage b. alienation/ due on sale clause c. prepayment penalty d. reduction certificate
b. alienation/ due on sale clause
An agency coupled with an interest can do any of the following EXCEPT a. involve a real estate broker. b. be revoked by the principal. c. continue after the principal's death. d. be created in New York.
b. be revoked by the principal.
To be considered fully executed, a deed must be a. for a property with a value of at least $25,000. b. delivered and accepted. c. recorded. d. notarized.
b. delivered and accepted.
Privately-owned land can be obtained by the government for public use through a. master planning. b. eminent domain. c. condemnation. d. development rights.
b. eminent domain.
The contract between a broker and an independent contractor should be renewed every a. 6 months. b. every year but no later than 15 months from the previous one. c. 18 months. d. 2 years.
b. every year but no later than 15 months from the previous one.
What is a loss run schedule used to determine? a. rent levels b. issuance of insurance c. mortgage interest rates d. property tax
b. issuance of insurance
The instrument used to pledge property as security for the repayment of a debt is a... a. bond b. mortgage c. deed d. lease
b. mortgage
If a broker represents a seller whose property abuts a gas station, the broker a. is not responsible to disclose this because the gas station is clearly visible to any buyer. b. must be aware of the possibility of a leak and make the appropriate disclosures. c. is personally responsible for any environmental issue. d. must conduct an environmental screening of the property.
b. must be aware of the possibility of a leak and make the appropriate disclosures.
The provisions of the Civil Rights Act of 1866 a. prohibit any type of racial discrimination with no exceptions. b. prohibit discrimination only in federally funded housing. c. allow exceptions for owner-occupied, two-family houses. d. do not apply to nonlicensed persons.
b. prohibit discrimination only in federally funded housing.
A man is considering purchasing a unit in a condominium. He inquires about the funds that the condominium association has set aside for present or future capital improvements. These funds are called a. shares b. reserves c. assessments d. supplements
b. reserves
The deadline for a 1031 exchange after a relinquished property is sold is a. 120 days. b. the earlier of the tax return due date with extension or 180 days. c. the later of the tax return due date with extension or 180 days. d. the tax return due date.
b. the earlier of the tax return due date with extension or 180 days.
A broker signed a listing agreement with the sellers to market their condominium. A few days later, the broker signed a buyer-broker representation agreement with a prospective buyer who was looking for a single-family home. The buyers then decide they're actually in the market for a condominium and want to see the sellers' property. Before proceeding with the initial inspection by the buyers of the sellers' property, the broker should a. accept compensation from only one of the parties. b. say nothing and collect a commission from the sellers and a fee from the buyers. c. when no advance consent to dual agency exists, disclose to the interested parties the creation of a dual agency and obtain both parties' written consent. d. always withdraw from representing one of the parties to avoid any appearance of self-dealing.
c. when no advance consent to dual agency exists, disclose to the interested parties the creation of a dual agency and obtain both parties' written consent.
What is the amount of New York State transfer tax to be paid on the sale of a property for $184,375? a. $405.57 b. $625.00 c. $634.75 d. $738.00
d. $738.00 Any New York Stateconveyance is taxed at a rate of $2 per $500 or fraction thereof of the consideration paid minus the amount of any mortgage being assumed. $184,375 ÷ $500 = 368.75 units of $500 each Round 368.75 up to 369, the next whole $500 amount, because even a fraction is taxed as a full $500 369 × $2 = $738
A municipality wants to determine a real estate tax rate. What is the first step? a. Issue homestead exemptions b. Review rates of neighboring communities c. Identify exemptions d. Adopt a budget
d. Adopt a budget
Which of the following defines redlining? a. A zoning procedure b. Steering home seekers to a particular neighborhood c. Drawing lines on a local map indicating the areas in which to search for listings d. Denying or restricting loans in a certain area by a lending institution
d. Denying or restricting loans in a certain area by a lending institution
A brokerage is concerned that its commission on a residential sale will NOT be paid. What may the brokerage do to protect its rights? a. File a vendee's lien b. File a lis pendens c. Request a de minimis gift d. File an affidavit of entitlement
d. File an affidavit of entitlement
What does a pro forma statement analyze? a. The purchaser's leverage b. The property's tax status c. The previous tax year's expense and income d. How much net operating income will be available in the future
d. How much net operating income will be available in the future
For how long must an owner lease a vacation home for it to qualify as an income-producing property? a. More than 5 days b. More than 7 days c. More than 10 days d. More than 14 days
d. More than 14 days
Which of the following is included in the definition of market value? a. Potential income tax consequences of a sale b. Most recent sales price c. Amount of owner's equity in the building d. Neither the buyer nor the seller being under undue pressure
d. Neither the buyer nor the seller being under undue pressure
What is added to the difference between the potential gross income and the vacancy and collection loss to determine a property's effective gross income? a. Reserves b. Appreciation c. Depreciation d. Other income
d. Other income ( Potential gross income minus vacancy equals gross income )
How is the capitalization of income attributable to real property BEST defined? a. Price b. Cost c. Attractiveness and location d. Present value of a property based upon its future income
d. Present value of a property based upon its future income
What determines a real estate salesperson's compensation? a. The transaction's cooperating broker b. The local association of REALTORS® c. The Department of State, Division of Licensing Services d. The agreement between the sponsoring broker and the salesperson
d. The agreement between the sponsoring broker and the salesperson
A woman wants to claim her home as a primary place of residence for tax purposes. To do this, how long must she live in the home prior to its sale?
two to the last 5 years