NY Real Estate State Practice Study Guide Exam Questions and Answers 2026

REAL ESTATE NY Real Estate State Practice Study Guide Exam Questions and Answers 2026 Which two documents are necessary to establish a legally binding mortgage loan? Promissory note and deed of trust If a buyer defaults on a sales contract after providing $10,000 as earnest money for $200,000 property, what can the seller do with the $10,000? Keep the entire amount as compensation Surface Rights, Air Rights, and Subsurface Rights are all rights that can be sold by a property owner while still retaining the property itself. These rights are known as: Severable Rights When an easement allows the use of a neighboring property which automatically transfers upon sale of other dominant or servant property, it is called what type of easement? Easement Appurtenant In real estate, what is the closest meaning to the term "quieting a title"? Clearing any liens or encumbrances on a property What is the highest form of land ownership which includes the full and complete bundle of property rights? Fee Simple Absolute If your broker sells a triangular parcel of land for $750 an acre, and your commission rate 8%, what will be your commission is the land has a base length of 1,200 feet and a height of 700 feet? $578.51 Tom is constructing a new house valued at $100,000. given that the average property value of his surrounding neighbors is $225,000, which principle suggests that Tom will experience a positive effect on his property value? Principle of Progression CLASSICS 2902 REAL ESTATE Bob Jones, who lacks a real estate license, hires Sally Salesperson to sell his property. During Sally's absence, Bob shows the property, provides price quotations, and accepts deposits. What are the implications of Bob's actions? Bob's actions are illegal and can lead to legal consequences. What is the general purpose for cities to require building permits? To require a minimum level of construction standards What is a true statement regarding the recording of a deed? Recording a deed establishes ownership rights The city of Brentwood plans to build a new water treatment facility but the land that is required is privately owned. Eminent domain allows city to: Take possessions of the land against the owners wishes, yet the owner must be compensated When the appraised value of a property is given, it is based on: Comparable sales Agent Brook is preparing for a listing appointment and has gathered information to prepare a report of recent market data for the seller to review. The report agnates reconcile to obtain a reasonable list price for a property based on current listings, recent sales, and expired would be called: Comparative Markets Analysis (CMA) What does the term "merchantable title" (or "marketable title") refer to? A title free from defects and legal encumbrances Jon's Tire Store is being built across the street from Big Bob's Tires. What appraisal principle describes this situation? Competition If a landlord receives rent at the start of the month and sells the property ten days later, how should the rent be ported at settlement? The rent is divided based on the number of days owned by the seller and the buyer Which statement indicates that any verbal discussions made prior to a written contract are invalidated and cannot be considered? Parol Evidence Rule CLASSICS 2902 REAL ESTATE Which of the following formulas is used to determine value through the income approach in real estate? Value = Gross Rent Multiplier x Monthly Rent The beautiful town of Big Bear is experiencing a fast influx of new residents. There are few homes on the market and no new construction developments in the works. What will this do to the price of the existing homes in the area? The prices will increase Homeowner Paul is selling his home without a real estate agent. He places an advertisement stating "Owner Financing 3% down payment" is Paul's advertisement in violation of the Truth in Lending Act? No, property owners are. not regulated by TRIL advertising requirements At what point does legal title to real property transfer from the seller to the buyer? Closing or settlement The Civil Rights Acts 1866 prohibits: Racial Discrimination in the sale or lease of residential or commercial property Tom and Jerry enter into a contract where Tom agrees to build a house and sell it to Jerry in 120 days. Jerry agrees to pay Tom's price within 60 days of completion. What type of contract is this before the house is completed? Executory contract Mr. Brown grants his neighbor, Mr. White, a written servitude to cross his property, which is properly recorded. Later, Mr. Brown sells the property to Mr. Green without disclosing the existence of the servitude. What happens to this servitude? The servitude remains valid and continues to be enforceable against Mr. Green Mike and Ike orally agree to a two-year lease. If Ike breaches the agreement, can Mike bring a court action to enforce the lease? Explain why or why not. No, because oral leases are unenforceable Mark is not able to make his entire mortgage payment on time each month and has fallen behind on payments. Because of his failure to pay, his lender, ABC home loans, sent him notice that they are calling for the remaining mortgage balance to be paid in full in one lump sum immediately. This is an example of a(n)? Acceleration Clause CLASSICS 2902 REAL ESTATE On a 90' x 90' lot with building setbacks of 30' from the front, 10' from the sides, and 20' from the rear, what is the net building area in square feet? 2,800 square feet Which statement accurately describes a real estate mortgage? It is a security instrument that pledges the property as collateral for a loan How are the numbers typically assigned on a range? From west to east How do you determine the property taxes for a property? Multiply the assessed value by the tax rate A lot with dimensions of 85 x 190 and 55'9 x 120 has sold at $2 per square foot. What is the broker's commission at an 8% rate? $3,654.40 In which type of financing can negative amortization occur? Adjustable-rate Mortgage What is the primary characteristic of a variable rate mortgage? Interest rate fluctuates based on the market conditions What is the term for the right of a water company to lay and maintain water mains along the rear of a lot? Water easement What does the covenant of seizin entail? Guarantee of clear title If a right is not asserted within a reasonable timeframe, what consequence might a court determine? Abandonment A landlord selling his property collected June rent from five tenants: two at $345 and three at $425. What is the total rent collected? $1,965 Which of the following is NOT a function of FNMA (Fannie Mae)? Regulating mortgage interest rates Which of the following best describes the economic characteristics of land? CLASSICS 2902 REAL ESTATE Demand, Utility, Scarcity, Transferability, Situs Kevin is leasing a storefront to open a Pizza Parlor. Any items he attaches to the property which he will use to conduct his business would be: Trade Fixtures What does it indicate when a borrower makes monthly loan payments of $612 on an amortized loan? Fully Amortized loan Which of the following is NOT a characteristic of an independent contractor relationship with a broker? Employee benefits provided If the monthly payment on a mortgage loan is 1412 and the interest is 11.5%, what's the principle sum? $147,399.13 What type of covenants are typically included in general warranty deeds? Covenant of seisin, quiet enjoyment, and further assurance An additional individual who is both obligated on the loan and is on the title to the property is called: A co-borrower Leslie is showing her listing to some prospective buyer customers. Leslie grew up just down the road and knows this property was once used as a dumpsite many years ago. Does Leslie have to make the prospective buyers aware of this information since they are customers and not clients? Yes, the agent must disclose What are the practical essentials required for a valid contract in real estate? Offer and acceptance, consideration, and legal purpose Which statement is true regarding real estate sales contracts? They must be signed by both parties to be valid A listing agreement in writing creates which form of agency? Express Agency In compliance with fair housing regulations any deed restriction or covenant that would prohibit the conveyance of the property to a member of a protected class is: CLASSICS 2902 REAL ESTATE Is not legal, considered void, and unenforceable The three-day right of rescission, as per Regulation Z, applies to which situation? Refinancing a mortgage The provision that states all prospective buyers are to be given the same opportunity to select available houses in their price range without restrictions because of race, color, religion, or national origin is found in which law? The Federal fair Housing Law In a township, what does Section 11 represent? A unit of land measuring one square mile If an appraiser calculates the total land value and then adds the value of the improvements, this method is referred to as what? Cost approach A fiduciary relationship exists between the listing broker and the seller. The fiduciary ends, however, if the seller does which of the following? Withdraws the property from the market A Real Estate Company listed a piece of property at $4.50 per square foot. The lot was 50 feet x 137 feet. The commission was 7.25%. What amount would the seller pay the Real Estate Company? $2,234.83 All of the following are defined and protected under familial status according to the 1988 amendment of the federal Fair Housing Law of 1968 EXCEPT for which one? Married couples without children What does the term "escheat" mean in the context of real estate? The process of a property being taken over by a government entity If the market value of real estate is $72,000 and the property is assessed at 67% of value, what would be the monthly taxes if the tax rate for the area is $6.50 per $100 of assessed value? $261.30 Betty Smith took title to property in the name Elizabeth Smith. When she sold the property, she signed Betty Smith as grantor. The buyer has which of the following? Uncertain ownership rights CLASSICS 2902 REAL ESTATE All of the following are involved in the secondary mortgage market EXCEPT for which one? Homebuyers What is the method of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization as the principal's agent? Ratified agency A buyer wishes to give a post-dated check with an offer. What should the broker do? Advise the buyer to provide a certified check instead Sharon made an offer on her dream home and to show the seller she was a serious buyer she offered a sum of money to be held in escrow that she will forfeit if she does not fulfill her end of the deal. What is the sum of money to be held in escrow as a good faith deposit called? Earnest Money Once all terms of a contract have been fulfilled and the transaction has closed the contract status is said to be fully: Executed John signs a six-month lease on an apartment beginning January 1st and ending June 30th. His lease does not automatically renew and no notice is required on his part to vacate on the expiration date. What type of lease did John sign? Estate for years What duty does an agent acting as a property manager owe a property owner? Fiduciary Duties A property management contract should include all of the following EXCEPT: Signature of the tenant Which statement below is true concerning mutual recognition? It simplifies the process of obtaining a real estate license in multiple states The seller has chosen to list his house with ABC Brokerage and is organizing a lottery where participants purchase $1,000 tickets. The winner drawn at the end of the month will become the new owner of the home. Which statement below applies? Participants purchase tickets, and the winner becomes the new owner CLASSICS 2902 REAL ESTATE Which of the following statements is true regarding registration with the Department of Business and Professional Regulations? Registration is required for real estate professionals Sabrina and Logan have formed a partnership for real estate transactions, each investing a 50% interest and agreeing to split the profits equally. Which statement below is true about their arrangement? They will split profits equally, regardless of their investments percentages Donnie's neighbor Paul has an easement to cross Donnie's property to get to his own. The easement is recorded and transfers with the land if either Donnie or Paul sell their property. When an easement is on a title it is an example of an Encumbrance Sales Associate Jimmy, a top producer at Highland Homes, has been asked by the owner to work at a new Highland Homes location in addition to his current location. What is true about Jimmy's situation? Jimmy will split his time between the new location and his current location Among real estate relationship disclosure forms, which is the only form that requires a signature or initials? Dual Agency Disclosure Form Which statements below is true concerning agency in real estate? Agents are always required ti disclose their agency relationships to all parties involved in a relationship estate transaction When agents get together and have a discussion on regarding setting a fixed commission rate so that they are all charging the same rate, this conversation violates what act? Sherman AntiTrust Act What duty requires an agent to place the clients best interest above all others? Loyalty Which of the following actions would terminate a single agency relationship with the principal who hired a broker to list his house? The principal decides to withdraw the property from the market Which of the following statements accurately describes agency? CLASSICS 2902 REAL ESTATE Agency refers to the legal relationship between a real estate agent and their client Which of the following statements is false regarding brokerage offices? Brokerage offices are not involved in the process of property transactions Which of the following advertisements would be considered a blind ad? "Affordable fixer-upper with great investment potential. Contact for address and showing" In Janice's situation, what can be inferred based on her concern about her name not being included on the brokerage sign? Janice believes her name on the sign would be positively impact her professional image Broker Willie, aware that 4520 Central Street in St Petersburg was recently rented through a competing brokerage, decides to advertise the property for rent. What best describes Willie's action? Willie is trying to attract potential renters and buyers to his brokerage by advertising a recently rented property Toya, a sales associate, plans to sell her house to capitalize on her real estate expertise. What accurately describes Toya's situation? Toya's professional background may enable her to maximize profit from selling her house When an escrow deposit is placed with a title company or attorney, what procedures must be followed? The escrow deposit is held until the closing date, then disbursed according to the terms of the contract Landry owns a duplex and personally occupies one of the units. He has one unit for rent and refuses to rent it to anyone with small children because kids are loud. If he refuses applicants with children has he committed a violation or any discriminatory acts? No, he is exempt from Fair Housing Regulations because he owns a dwelling with 4 or less units and personally occupies one the units The Fair Housing act pertains to certain groups as protected classes. Which of the following is not a protected class under Fair Housing? Felons CLASSICS 2902 REAL ESTATE Broker Ben has E&O Insurance and is selling an investment property that he owns. He has made a few false statements and misrepresentations, but he really needs to sell the property fast. What would happen if someone were to sue him for his false statement? E&O Insurance will not cover negligence of a Broker telling property he owns Karen recently sold a home for 6% commission. If her commission was $20,700, how much did the property sell for? $345,000 If two property owners live as neighbors and one of them makes improvements to their property that accidentally crosses the legal property line of the other property owner, this would be termed as an: Encroachment Which statement concerning partnerships is incorrect? Partnerships provide limited liability protection to all partners involved If an unlicensed individual is found guilty of acting like a broker and collecting commissions, what penalty could be imposed? Fines and monetary penalties When a claim against a licensee is filed, and the Real Estate Recovery Fund is used to compensate, what applies? The licensee's license may be suspended or revoked, and they may face disciplinary action Stacie recently moved out of her rented property and was told by the landlord that she would receive her security deposit within 15 days. What statement is true regarding Stacie's security deposit? The landlord is legally required to return the security deposit within the specified timeframe The Federal Fair Housing Act, also known as the Civil Rights Act of 1968, prohibits discrimination in the showing, negotiation, sale, rental, or financing of a dwelling based on what? Race CLASSICS 2902 REAL ESTATE Tally, a sales associate at Madera Brokerage Firm, is instructed by her broker to exclusively show Asian-speaking prospects a new subdivision called Orient on the Express. What is this an example of? Steering In 1988, Congress amended the Fair Housing Act of 1968 to include two additional protected classes. Which two classes were added? Disability and familial Status Which estate requires the presence of all four unities? Tenancy by the entirety When a deed does Not specify the estate being conveyed, it is presumed to transfer which of the following? Free simple absolute Possesion, control and enjoyment are included in which of the following? Bundle of rights If Alycia deeds property to Bernice and her heirs, with the stipulation that if Bernice leaves no heirs, the property will then go to Cynthia, the Cynthia now holds which type of estate? Remainder estate In a deed that states "to Jonathan for his life", what type of interest does the grantor have? Reversionary interest A life estate may be granted for which of the following purposes? All of the above 3 multiple choice options Which of the following is NOT a type of freehold estate? Leasehold estate Fee simple ownership includes all of the following rights EXCEPT? Right to transfer ownership after death In a scenario where an elderly couple grants a hospital a gift of real property while reserving a life estate for themselves, the hospital is considered the: Grantee CLASSICS 2902 REAL ESTATE Which of the following activities is NOT permitted for the owner of a life estate? Selling the life estate interest A widow who is given the right to use the family home for her lifetime, with ownership passing to the children upon her death, holds which type of interest? Life estate Which of the following statements is TRUE regarding a life estate? The life tenant is responsible for paying property taxes and maintenance What term is used to describe the degree, quantity, or nature of a person's interest in real property? Interest in land The return of land to the grantor or grantors heirs when the grant is over is BEST described as: Reversion How should an estate in land vested in a grantee "until she marries" be properly classified? Fee simple determinable Which of the following is an example of a less-than-freehold estate? Leasehold estate With respect to real property, how is the term "estate" BEST described? The legal interest or rights a person has in real property Which statement provides the strongest assurance of fee simple ownership? "To have and to hold forever" In the administration of an estate, who typically selects the administrator? The court Which of the following characteristics does NOT describe a fee simple estate? Transferred upon the death if the owner When a man dies without leaving a valid will, his death is referred to as what? Intestate A woman possesses a fee simple estate. Which of the following actions can she NOT do to the property? Modify or alter the property CLASSICS 2902 REAL ESTATE A farmer sold a portion of his farm to a railroad company with the condition "as long as it remains a rail line." If the rail line is abandoned, the property reverts back to the farmer or the farmer's heirs. What type of estate is described in this scenario? Defeasible estate Which term refers to the largest estate or ownership in real property? Fee simple estate The holder of which of the following would be considered a "non freeholder"? Leasehold estate Which of the following actions is NOT permitted for the grantor of a life estate? Revoke or terminate the life estate at any time Where would a licensee be advised to go to clarify any questions about an encroachment concerning a property she is selling? Surveyor's office In a scenario where the owner sold a property with a restriction on selling alcohol, but the subsequent buyer violated the restriction, what would be the basis for the owner or owner's heirs to claim a right of re-entry? Breach of contract Which of the following items is an example of personal property? Car Which of the following is typically categorized as personal property? Furniture What is the BEST definition of real property? Land and everything permanently attached to it What category do temporary or easily movable things or objects typically fall under in real estate? Chattels In a real property sale contract that includes removable items like paintings and furniture, what should the seller deliver along with the deed? Removable items mentioned in the contract Among the following options, which one is NOT considered a fixture in real estate? Freestanding microwave CLASSICS 2902 REAL ESTATE When determining whether something is a fixture, what is the most significant factor to consider? Method of attachment When is an adjustable rate mortgage that allows the borrower to change the ARM to a fixed rate mortgage within a specific time? A convertible ARM Which term MOST accurately describes personal property? Chattels Littoral property is situated on which type of location? Coastline In the context of real estate, the term "improvements" is most closely associated with what? Building upgrades What is the term used to describe the rights of ownership that include that right to use, possess, enjoy, and dispose of a property, while excluding others without rights from interfering? Bundle of rights What is the tern for appropriation of land by the owner for the public use, which is accepted on behalf of the public, such as streets in a platted subdivision? Dedication When an owner of real property is uncertain about the inclusion of riparian rights, the BEST way to determine it is by reviewing the: Deed How is the boundary of a property altered? Land survey Who is considered a riparian owner? Someone who owns land adjacent to a river or stream In a physical sense, what does real estate encompass, excluding what? Personal belongings and chattels Which of the following represents the minimum time period for an 'exclusive right to sell' listing on real property? CLASSICS 2902 REAL ESTATE The time period agreed to by the seller and the listing agent What is the term for removal of land where a stream suddenly changes its channel? Avulsion What must a landowner who sells a one-acre farm do? Provide a valid legal description When a woman receives a gift of real property through a will, she is referred to as: Devisee What term is used to describe the loss of one's real estate due to the gradual wearing away of soil caused by natural factors? Erosion An important characteristic of land is its potential for modification and improvement, which typically increases its value. Which of the following options is NOT considered an improvement? Growing natural vegetation Which of the following types of property is typically NOT considered real property? Vehicles Which of the following best describes the purpose of the new National Fair Housing Expansion Act? To expand protected classes under federal fair housing laws What is the term used to describe a right, privilege, or improvement that is inherent to a property and transfers with its ownership? Appurtenance In the context of real property, what does the term "fee" signify? Ownership interest How would you BEST describe the rights to the space above the ground within vertical planes? Air rights What is the term for crops that require annual planting and cultivation on land? Annual crops How would you BEST describe the rights in the land that automatically transfer with the conveyance of the land? CLASSICS 2902 REAL ESTATE Appurtenant rights Among these items which one is not considered real property when affixed as an appurtenance to Land Vehicle A man dies testate, leaving a wife and minor son. He bequeaths all of his property to his son, but the wife claims her elective share under the Uniform Probate Code. How will the man's property be distributed? Partially to the son and partially to the wife What is the term used to describe a man who makes a will? Testator In a building, what are ceiling tiles that drop into a metal frame considered? Fixtures What is the closest meaning of the term "intestate"? To die without a will When real property is conveyed by a codicil to a will, how is it conveyed? By testamentary disposition What does the term "probate" refer to in a legal context? Distribution of assets after death What is a devise in the context of real estate? The act of leaving property to someone in a will How does the property of a person who dies intestate pass? It is determined by the court based on intestate succession laws What significant change did the National Association of Realtors (NAR) implement regarding Multiple Listing Service (MLS) listings in August MLS listings can no longer display offers of compensation to buyer's agents What happens to real property when a person dies testate? it is transferred to the beneficiaries specified in the person's will Which of the following items is NOT considered personal property when bestowed in a will? Real estate How can the title to an owner's real estate be transferred upon their death? CLASSICS 2902 REAL ESTATE Will What is the significance of the new Uniform Electronic Transactions Act (UETA) in real estate transactions? It grants legal recognition to electronic signatures and records In the probate process of an estate, who is the last to receive payment, if any? Beneficiaries Which of the following words does NOT belong to the same group as the others? Insurance 3 multiple choice options If a buyer defaults on a loan and the lender declares the note to become due and payable immediately, this would best be described as: An acceleration clause Which of the following documents does NOT transfer an interest in real property? Lease agreement 2 multiple choice options A man executed a will. However, the probate court declared it invalid due to not meeting the state law requirements. Who will receive title to the man's real estate? The state-appointed administrator of the estate Who typically selects the executor of an estate? The deceased person in their will A man died without a will and with no surviving relatives. What will happen to his four acre farm? It will escheat to the state government as unclaimed property What is the primary objective of the new National Green Building Standards introduced by the Department of Energy? To standardize energy efficiency ratings across states how do the 2024 commission changes affect the negotiation of buyer's agent fees? Buyer's agent fees are now negotiable and must be agreed upon in writing Which statement is NOT true about a party wall built on the property line between two lots? Either owner can modify pr remove the wall without the other's permission CLASSICS 2902 REAL ESTATE What is the primary purpose of the Uniform Commercial Code? Standardizing commercial transactions and business practices Which option BEST describes the difference between an administrator and an executor? An administrator is appointed by the court, while an executor is named in the will A business owner discovered a location for a donut shop that had a drive-through option and was situated on a highway just north of town, leading to a large employment city. What economic concept did the owner utilize in selecting this location for the donut shop? Location advantage In which of the following would you typically find the four unities of title, time, interest, and possession? Joint tenancy In 1994, Fred constructed a building with six stories. Later, a zoning ordinance was enacted, prohibiting buildings six stories or taller in the area. This scenario exemplifies what? Downzoning A provision in a mortgage that allows the lender to demand repayment in full from you if you sell your mortgaged property is called a: Due-On-Sale provision A table or chart that shows how much of each mortgage payment that is applied to interest and how much is applied to the principal is called: An amortization schedule Under the new rules effective August 17, 2024, what must a buyer do before touring homes with a real estate agent? Sign a written agreement with their real estate agent Which of the following is not a common reason for a property appraisal in the United States? Determining property tax assessments In order for a deed to be valid, it must be: CLASSICS 2902 REAL ESTATE (All of these) Adequately describe the property Signed by the grantor In writing If you charter a corporation and acquire an apartment building, then sell stock to specific individuals who are granted a proprietary lease enabling them to occupy different units, what type of ownership have you established? Cooperative ownership Which of the following statements is true about a mortgage? It represents the borrower's promise to repay the loan Under the new revised RESPA guidelines, which of the following fees must now be disclosed tot he borrower within three business of loan application? Title insurance premiums A buyer pays a $25,000 down payment and agrees to pay the remaining $150,000 at 12% interest over 10 years. The seller has a $100,000 first mortgage at 10% interest. What type of financing device is most likely involved if the seller provides a deed? Land contract For a $25,000 loan with a 30-year term and a 9% interest rate, if the monthly payments are $201.16, what would be the first month's interest payment? $187.50 If a grantor signs a deed on Saturday but does not deliver it to the grantee until Sunday, which of the following statements is true? The grantee has equitable title but not legal title until the deed is delivered