Real Estate U FINAL EXAM PREP 2025/2026 COMPLETE QUESTIONS WITH CORRECT DETAILED ANSWERS || 100% GUARANTEED PASS LATEST VERSION

Real Estate U FINAL EXAM PREP 2025/2026 COMPLETE QUESTIONS WITH CORRECT DETAILED ANSWERS || 100% GUARANTEED PASS LATEST VERSION 1. Article 12-A of the NYS Real Property Law - ANSWER - The section of the New York Real Property Law pertaining to real estate salespersons and brokers. - Primary purpose is to "Protect the Public" - Requires a salesperson to be at least 18 years of age - Requires a broker to be at least 20 years of age 2. Sponsor - ANSWER - A licensed real estate broker that holds the license of a salesperson. 3. "Summary of Your Submission" - ANSWER - Obtained after you register for the New York State Salesperson exam using eAccessNY. You must bring your "Summary of Your Submission" with you when taking the State exam. 4. Misdemeanor - ANSWER - A crime punishable by up to a year in prison and/or a $1,000 fine. 5. Listing Agreement - ANSWER - An employment contract between principal and agent, authorizing the agent to perform services for the principle involving the latter's property 6. Pocket Card - ANSWER - A card issued by the Department of State to each licensee which contains the photo, name and business address of the licensee, and, in the case of a real estate salesperson, the name and business address of the broker with whom he or she is associated and shall certify that the person whose name appears thereon is a licensed real estate broker or salesperson. - Must be carried by the agent at all times when serving as a salesperson. 7. Mortgage Broker - ANSWER An intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages. 8. Mortgage Banker - ANSWER A company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. 9. General Agent - ANSWER Someone authorized to transact every kind of business for the principal. Ex: Property Manager 10. Operating Budget - ANSWER An amount of money set aside by the owner for a specific period for the property manager to manage the property effectively. 11. Management Agreement - ANSWER A contract between the owner of a property and someone who agrees to manage it. 12. Property Management Report - ANSWER An accounting report issued periodically by the property manager to the owner outlining all income and expenditures for that accounting period. 13. Special Agent - ANSWER Ex: Real Estate Agent/Broker - Agent with limited authority to act on behalf of the principal, such as created by a lisiting. 14. Exclusive Right to Sell - ANSWER An agreement of employment by a broker under which the exclusive right to sell for a specified period is granted to the broker; if a sale during the term of the agreement is made by the owner or by any other broker, the broker holding such exclusive right to sell if nevertheless ENTITLED TO COMPENSATION. 15. Property Condition Disclosure Statement - ANSWER The Property Condition Disclosure Statement Act requires the seller to submit to the buyer, a "PCDStatement" prior to signing the contract of sale. If statement is not signed the seller owes the buyers $500 credit against the purchase price of the property. -Most seller attorneys advise clients NOT to sign statement because opens up to vast amount of liability. 16. Sub-agent - ANSWER A person appointed by an agent with permission of the principal (seller) to assist in performing some or all of the tasks of the agency. -Typically occurs when properties listed on MLS. When seller's broker posts a listing on the MLS, he/she are essentially inviting other brokers to join as a subagent. Agent showing the property becomes subagents for the listing broker (and the seller.) 17. Independent Contractor - ANSWER Sales agents can be provided with Office Phones by their sponsoring broker. 18. Ownership in Severalty - ANSWER Title to real estate is in the name of only ONE person or entity, it is an estate ownership in severalty... i.e. single individual owns real estate, therefore is 'severed' from all others. 19. Easement in Gross - ANSWER Ex: Utility Company Right of use in land of another without the requirement that the holder of the right own adjoining land. A.K.A. Commercial Easement in Gross 20. Mechanic's Lien - ANSWER Security interest in the title to property for the benefit of those who have supplied labor or materials to improve the property. 21. Mortgage Lien - ANSWER Example of a specific lien. 22. Fee Simple Estates - ANSWER Absolute ownership of a real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person's life and descending to the person's heirs or distributees. 23. Conveyance - ANSWER The transfer of the title from one to another. The means or medium by which title of real estate is transferred. A deed is a document used to convey title legally to real property. A.K.A. an instrument of conveyance. 24. Legal Description - ANSWER The deed must contain an adequate formal legal description. The legal description describes where the property is located and the size of the lot. There are 3 acceptable types of property descriptions: 1) Metes and bounds 2) Description by reference, lot and bloc 3) Monuments 25. Full Covenant and Warranty Deed - ANSWER Deed contains the broadest form of guarantee of title of any type of deed and provides the greatest protection to the grantee. Covenants: 1) Covenant of Seisin- assures the grantee that the grantor holds the title specified in the deed. 2) Covenant of right to convey- assures the grantee that the grantor has the legal capacity t convey title and has the title to convey. 3) Covenant against encumbrances- assures the grantee that no encumbrances against the title except those set forth in the deed itself exist. 4) Covenant of quiet enjoyment- assures the grantee that they will have quiet enjoyment and possession of the property. 5) Covenant for further assurances 6) Covenant of warranty 26. Abstract of Title - ANSWER A summary of all of the recorded instruments and proceedings which affect the title to a property, arranged in the order in which they were recorded. 27. Contract Requirements NYS - ANSWER -Must be 18 years old, if younger it is voidable. -Must be mentally and emotionally capable to enter. -Purchaser signs the contract first. 28. Proration - ANSWER The division of certain settlement costs between buyer and seller. Items can include real estate taxes, fuel, a survey, water and sewer charges, rent, and security deposits. Ensures fair apportionment of expenses between buyer and seller. 29. Down Payment - ANSWER Anyone who holds down payment must place it in separate escrow account. Following people generally hold it: -Listing agent -Seller's attorney -Selling broker 30. Earnest money deposit - ANSWER Deposit that a buyer makes at the time of submitting an offer to demonstrate the true intent of the purchase, also referred to as a binder, good faith deposit, and escrow deposit. 31. Loft lease - ANSWER Lease for the rental of floor space that is not generally divided into rooms. 32. An appraisal method applied to income producing properties, which involves a three-step process. First, the appraiser must find the net annual income. Second, an appropriate capitalization rate or "present worth" factor must be set. Finally, the appraiser must capitalize the income by dividing the net income by the capitalization rate - ANSWER Income (Capitalization) Approach 33. A straight, non-amortizing loan in which the lender receives only interest during the term of the loan and principal is repaid in a lump sum at maturity - ANSWER Interest Only Loan 34. The transfer of title to real property as a result of a lien foreclosure sale, adverse possession, the filing of a petition in bankruptcy, or condemnation under power of eminent domain or upon the death of the titleholder, to the State when there are no heirs. - ANSWER Involuntary Alienation 35. A lien imposed against property without consent of an owner. - ANSWER Involuntary Lien - Undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship, i.e., the right to share equally with other surviving joint tenants in the interest of a deceased joint tenant - ANSWER Joint Tenancy 36. all adults living on the property and by the property manager or landlord - ANSWER signature(s) on a lease agreement 37. An estate or interest in real property, which is held for the duration of the life of some certain person. It may be limited by the life of the person holding it or by the life of some other person. - ANSWER Life Estate 38. Owner of a life estate - ANSWER Life Tenant 39. An agent's duty to place the client's interest above those of all others, including the agent's own self-interest. - ANSWER Loyalty 40. Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept - ANSWER Marketable Title 41. A term used in describing the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles. Metes (length or measurements) and Bounds (boundaries) description is often used when a great deal of accuracy is required - ANSWER Metes and Bounds 42. The amount paid by a mortgagor for mortgage insurance on an FHA-insured loan. - ANSWER Mortgage Insurance Premium (MIP) - A lease requiring a lessee to pay charges against the property such as taxes, insurance and maintenance costs in addition to rental payments. - ANSWER Net Lease - A listing which provides that the agent may retain as compensation for agent's services all sums received over and above a net price to the owner. - ANSWER Net Listing 43. The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties. - ANSWER Novation - A person who has been given the appearance of being an employee or acting (an agent) for another (principal), which would make anyone dealing with the ostensible agent reasonably believe he/she was an employee or agent. - ANSWER Ostensible Agency - A method of financing in which the loan that finances the purchase of a home also finances the purchase of personal items such as a washer and dryer, refrigerators, stove, and other specified appliances - ANSWER Package Mortgage - Lease on the property, the rental for which is determined by the amount of business done by the lessee; usually a percentage of gross receipts from the business with provisions for a minimum rent - ANSWER Percentage Lease 44. An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year. Also called an estate from period to period. - ANSWER Periodic Estate - The right of the State to enact laws and enforce them for the order, safety, health, morals and general welfare of the public. - ANSWER Police Power 45. A step above pre-qualification, an evaluation of a potential borrower by a lender that determines whether the borrower qualifies for a loan from the lender, or the maximum amount that the lender would be willing to lend. - ANSWER Pre-Approval 46. A process whereby a loan officer takes information from a borrower and makes a tentative assessment of how much the lending institution is willing to lend them. - ANSWER Pre-Qualification 47. Conspiring to establish fixed fees or prices for services or products. - ANSWER Price Fixing - Affirms that value is created by anticipated benefits to be derived in the future. - ANSWER Principle of Anticipation 48. Holds that it is the future, not the past, which is of prime importance in estimating value. Change is largely the result of cause and effect. - ANSWER Principle of Change 49. Holds that the maximum of value is realized when a reasonable degree of homogeneity of improvements is present. Use conformity is desirable, creating and maintaining higher values - ANSWER Principle of Conformity - A component part of a property is valued in proportion to its contribution to the value of the whole. Holds that maximum values are achieved when the improvements on a site produce the highest (net) return, commensurate with the investment. - ANSWER Principle of Contribution - The worth of a lesser valued residence tends to be enhanced by association with higher valued residences in the same area. - ANSWER Principle of Progression - Affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution - ANSWER Principle of Substitution 50. Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan. - ANSWER Private Mortgage Insurance (PMI) 51. Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its payment. The evidence of the debt - ANSWER Promissory Note - A federal law requiring the disclosure to borrowers of settlement (closing) procedures and costs by means of a pamphlet and forms prescribed by the United States Department of Housing and Urban Development - ANSWER Real Estate Settlement Procedures Act (RESPA) - An illegal lending policy of denying real estate loans on properties in older, changing urban areas, usually with large minority populations, because of alleged higher lending risks without due consideration being given by the lending institution to the credit worthiness of the individual loan applicant. - ANSWER Redlining 52. A person who inherits or is entitled to inherit property upon the termination of the estate of the former owner. - ANSWER Remainderman 53. Federal legislation including imposition of civil and punitive damages for antitrust activities - ANSWER Sherman Anti-Trust Act 54. An agent who works only for the buyer or the seller. - ANSWER Single Agent - The practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race. Steering is highly illegal. - ANSWER Steering - A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agent's principal. - ANSWER Subagent 55. Because the agency agreement is between the principal and the brokerage firm, all affiliated brokers at the firm are automatically sub-agents of both principals. 56. Affiliated broker Karen expects to receive a split and a bonus from her BIC after closing a difficult transaction. When her BIC declines to pay the bonus, what can Karen do? - ANSWER She can file a claim against her BIC in court to attempt to force payment of the bonus she expected to receive. 57. What is TRUE about a time share buyer's right to cancel the purchase contract? - ANSWER The buyer may waive this right in writing. The buyer's right to cancel may not be waived. 58. What is the lien priority of a special assessment tax? - ANSWER It is inferior to a lien for county property tax, but superior to a mortgage lien. 59. Which of these transfers of real estate is exempt from excise tax? - ANSWER After April died, her sister Beryl inherited the home where April had lived alone with her cats for 40 years. 60. Which of these provisions is required by commission rules to appear in a preprinted purchase and sale contract? - ANSWER A provision stating the identity of each real estate agent and firm involved in the transaction and disclosing the party each agent and firm represents. 61. What method will brokers in a real estate transaction use to provide the settlement agent with information related to the closing statement? - ANSWER They will complete a real estate closing form. 62. Tenant Rob has been having a disagreement with landlord Cora. Rob feels that Cora doesn't maintain the rental property in a habitable manner, and he's complained to her several times. Now he's joined a renter's rights organization. Cora tells him to leave at the end of the month. Can Cora do this legally? - ANSWER No. Cora may not terminate Rob's lease for at least 12 months after he complains or joins a tenants' rights organization. 63. Which of these is NOT a required supervisory responsibility for a firm's BIC under commission rules? - ANSWER Ensure that all transactions are concluded successfully for compensation. 64. Subdivision streets identified as "public" may be maintained by: - ANSWER Either a governmental or a private entity 65. What is true about insulation with an R-30 rating? - ANSWER This is a more effective insulation than one with an R-15 rating. 66. Which of these homeowners (if any) will pay a capital gains tax on the sale of their primary residence? - ANSWER Joe sells his home for $550,000, which is $300,000 more than he paid for it. He files as a single taxpayer. 67. When the seller is filing as a single taxpayer, capital gains is owed if the gain on the sale is more than $250,000. 68. lice is performing a CMA. She identifies three comps, and after adjustments has prices of $379,000 for comp A, $385,000 for Comp B, and $388,000 for Comp C. The comparable property that required the fewest adjustments was comp C. What is the most likely price Alice should find for her subject property based on this information? - ANSWER The most likely value for the subject property would be $385,500. 69. Alice should weight comp C a bit more heavily, making the most likely value slightly higher than the average of the three adjusted comps at $385,500. 70. Excise Tax Rate - ANSWER $1 for every $500 or fraction thereof of the sale price 71. Mud SIl - ANSWER The mudsill, also called a "sill plate", is the first layer of wood to be installed on top of the foundation wall. 72. Gross Rent Multiplier - ANSWER The gross rent multiplier (GRM) is a screening metric used by investors to compare rental property opportunities in a given market. The GRM functions as the ratio of the property's market value over its annual gross rental income. (Price/Rent) 73. Gross Income Multiplier - ANSWER A gross income multiplier (GIM) is a rough measure of the value of an investment property. It is calculated by dividing the property's sale price by its gross annual rental income. 74. Houses prior to this date must be inspected for lead based paint - ANSWER 1978 75. A loft style home is considered - ANSWER Multi story 76. What You Should Understand About the NC Septic System Permitting Process - ANSWER Improvement Permit (IP) Construction Authorization (CA) Operations Permit (OP) 77. Security deposit max for MTM lease - ANSWER 1.5 Months 78. Exclusive Agency Listing Agreement - ANSWER An exclusive agency listing agreement gives a broker the right to market and sell a property for a specified time period, while the owner retains the right to find a buyer and sell the property without owing the broker a commission. The seller must pay a commission only if the home is sold by the broker or an authorized agent or subagent of the broker. 79. Exclusive Right to Sell Listing Agreement - ANSWER An exclusive right to sell listing is the most widely-used listing agreement. Under this agreement, the broker has the exclusive right to market the property for a specified period of time. If the property sells while the broker has the listing, the seller must pay the agreed-upon commission regardless of who actually procured the buyer. 80. Open Listing Agreement - ANSWER An open listing is a non-exclusive contract. This type of listing gives the seller or buyer the right to engage any number of brokers as agents. With an open listing, all contracted brokers can market the property or search for property at the same time, but only the broker who brings the ready, willing and able buyer to the seller, or who find the desired property for a buyer, will receive a commission. However, if the client ends up buying or selling property by him or herself, they don't have to pay any commission to the broker. 81. Joint Tenancy - ANSWER A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. A joint tenancy creates a right of survivorship, which means that if one party dies, their interest is automatically transferred to the surviving tenant(s). 82. Tenancy in Common - ANSWER Co-ownership of property in which each party owns an undivided interest that passes to his or her heirs at death. 83. Platform framing - ANSWER A method of framing where the floor joists form a platform on which the walls rest. Most common framing. 84. Hip Roof - ANSWER A roof with four sloped sides 85. Balloon Framing - ANSWER An older framing method whereby studs are continuous from the foundation sill to the bottom of the top plate of a one or two story building.The Problem With a Balloon FrameBalloon framing exacerbated the problem of house fires because without any firebreaks between floors due to full length studs. 86. What forms of ownership is limited to married couples - ANSWER Tenancy by the entirety 87. A tenant's right to occupy real estate during the term of a lease, generally considered to be a personal property interest. Does not include title. - ANSWER Leasehold Estate 88. Which lien takes priority over all other liens? - ANSWER Tax lien 89. Sales contracts and listings are examples of bilateral contracts - ANSWER In a listing contract, the seller promises to pay if the agent promises to procure a purchaser. A unilateral contract is a one-sided agreement-that is, only one party makes a promise to perform. 90. Gross leases are most common for commercial properties such as offices and retail space. - ANSWER The tenant pays a single, flat amount that includes rent, taxes, utilities, and insurance. The landlord is responsible for paying taxes, utilities, and insurance fr