New York Real Estate Salesperson Exam –
Verified Practice Questions & Answers with
Detailed Rationales (2026 Edition)
1. Which statement best describes the legal effect of a buyer
agency agreement in New York?
A. It automatically creates a fiduciary relationship with the
seller
B. It must be oral to be enforceable
C. It establishes an exclusive fiduciary duty between broker
and buyer when properly executed
D. It eliminates the need for disclosure forms
Correct Answer: C
Rationale: In New York, a properly executed buyer agency
agreement creates an exclusive fiduciary relationship where
the broker owes duties such as loyalty, obedience, and
confidentiality to the buyer. It does not involve the seller or
remove disclosure obligations.
2. Under New York law, which disclosure is required in ALL
real estate transactions involving residential property?
A. Property condition disclosure statement
B. Lead-based paint disclosure only
C. Mortgage contingency disclosure
D. Zoning compliance certificate
,Correct Answer: B
Rationale: Federal law requires lead-based paint disclosure
for residential properties built before 1978. New York does
not mandate completion of the Property Condition Disclosure
Statement if the seller opts to give a $500 credit instead.
3. Which act governs fair housing enforcement at the
federal level?
A. RESPA
B. Fair Housing Act of 1968
C. Truth in Lending Act
D. Equal Credit Opportunity Act
Correct Answer: B
Rationale: The Fair Housing Act prohibits discrimination in
housing based on protected classes. Other acts regulate
lending and settlement procedures, not discrimination.
4. In New York, which entity primarily enforces licensing
regulations for real estate salespersons?
A. NY Department of Labor
B. NY Department of State, Division of Licensing Services
C. Federal Housing Administration
D. Local county clerk offices
Correct Answer: B
Rationale: The New York Department of State oversees real
estate licensing and enforces compliance through the Division
of Licensing Services.
,5. Which clause would MOST likely make a contract void in
New York?
A. Financing contingency
B. Illegal purpose clause
C. Escalation clause
D. Inspection contingency
Correct Answer: B
Rationale: Contracts involving illegal purposes are void ab
initio (from the beginning) and unenforceable under New York
contract law.
6. Which type of ownership allows two or more parties to
hold unequal shares with rights of survivorship?
A. Tenancy in common
B. Joint tenancy
C. Tenancy by the entirety
D. Cooperative ownership
Correct Answer: B
Rationale: Joint tenancy includes right of survivorship but can
have equal or unequal shares depending on jurisdictional
interpretation; however, NY traditionally requires equal
shares. The key distinction is survivorship rights.
7. What is the primary purpose of the statute of frauds in
real estate?
A. To regulate brokerage commissions
, B. To require notarization of deeds
C. To require certain contracts be in writing
D. To enforce zoning compliance
Correct Answer: C
Rationale: The statute of frauds requires real estate contracts,
including sale agreements, to be in writing to be enforceable.
8. A broker receives an earnest money deposit in New York.
Where must it be held?
A. Broker’s personal account
B. Escrow or trust account
C. Seller’s operating account
D. Attorney’s general fund
Correct Answer: B
Rationale: Earnest money must be held in a designated
escrow or trust account separate from personal or business
funds to prevent commingling.
9. Which document gives a broker authority to represent a
seller?
A. Purchase agreement
B. Listing agreement
C. Option contract
D. Deed of trust
Correct Answer: B
Rationale: A listing agreement establishes the agency
Verified Practice Questions & Answers with
Detailed Rationales (2026 Edition)
1. Which statement best describes the legal effect of a buyer
agency agreement in New York?
A. It automatically creates a fiduciary relationship with the
seller
B. It must be oral to be enforceable
C. It establishes an exclusive fiduciary duty between broker
and buyer when properly executed
D. It eliminates the need for disclosure forms
Correct Answer: C
Rationale: In New York, a properly executed buyer agency
agreement creates an exclusive fiduciary relationship where
the broker owes duties such as loyalty, obedience, and
confidentiality to the buyer. It does not involve the seller or
remove disclosure obligations.
2. Under New York law, which disclosure is required in ALL
real estate transactions involving residential property?
A. Property condition disclosure statement
B. Lead-based paint disclosure only
C. Mortgage contingency disclosure
D. Zoning compliance certificate
,Correct Answer: B
Rationale: Federal law requires lead-based paint disclosure
for residential properties built before 1978. New York does
not mandate completion of the Property Condition Disclosure
Statement if the seller opts to give a $500 credit instead.
3. Which act governs fair housing enforcement at the
federal level?
A. RESPA
B. Fair Housing Act of 1968
C. Truth in Lending Act
D. Equal Credit Opportunity Act
Correct Answer: B
Rationale: The Fair Housing Act prohibits discrimination in
housing based on protected classes. Other acts regulate
lending and settlement procedures, not discrimination.
4. In New York, which entity primarily enforces licensing
regulations for real estate salespersons?
A. NY Department of Labor
B. NY Department of State, Division of Licensing Services
C. Federal Housing Administration
D. Local county clerk offices
Correct Answer: B
Rationale: The New York Department of State oversees real
estate licensing and enforces compliance through the Division
of Licensing Services.
,5. Which clause would MOST likely make a contract void in
New York?
A. Financing contingency
B. Illegal purpose clause
C. Escalation clause
D. Inspection contingency
Correct Answer: B
Rationale: Contracts involving illegal purposes are void ab
initio (from the beginning) and unenforceable under New York
contract law.
6. Which type of ownership allows two or more parties to
hold unequal shares with rights of survivorship?
A. Tenancy in common
B. Joint tenancy
C. Tenancy by the entirety
D. Cooperative ownership
Correct Answer: B
Rationale: Joint tenancy includes right of survivorship but can
have equal or unequal shares depending on jurisdictional
interpretation; however, NY traditionally requires equal
shares. The key distinction is survivorship rights.
7. What is the primary purpose of the statute of frauds in
real estate?
A. To regulate brokerage commissions
, B. To require notarization of deeds
C. To require certain contracts be in writing
D. To enforce zoning compliance
Correct Answer: C
Rationale: The statute of frauds requires real estate contracts,
including sale agreements, to be in writing to be enforceable.
8. A broker receives an earnest money deposit in New York.
Where must it be held?
A. Broker’s personal account
B. Escrow or trust account
C. Seller’s operating account
D. Attorney’s general fund
Correct Answer: B
Rationale: Earnest money must be held in a designated
escrow or trust account separate from personal or business
funds to prevent commingling.
9. Which document gives a broker authority to represent a
seller?
A. Purchase agreement
B. Listing agreement
C. Option contract
D. Deed of trust
Correct Answer: B
Rationale: A listing agreement establishes the agency
