Real Estate U Pass the NY State Exam
Questions with Correct Verified Answers
latest version 2025
Abstract of Title --- correct precise answer ---A summary of all of the
recorded instruments and proceedings which affect the title to
property, arranged in the order in which they were recorded
Contracts --- correct precise answer ---- In New York State, an
individual must be at least 18 years of age to enter into a contract.
- Minors (less than 18 years old) CANNOT enter into a contract. The
contract is voidable if signed by a minor.
- In New York State, an individual must be mentally and emotionally
capable to enter into a contract.
- The purchaser signs the contract first
Proration --- correct precise answer ---- The division of certain
settlement costs between buyer and seller.
- These items can include real estate taxes, fuel, a survey, water and
sewer charges, rent, and security deposits.
,- Proration ensures fair apportionment of expenses between buyer
and seller.
Down payment --- correct precise answer ---- Anyone who holds a
down payment must place it in a separate escrow account.
- The following people generally hold the down payment:
- Listing agent
- Seller's attorney
- Selling broker
Earnest money deposit --- correct precise answer ---A 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.
Loft lease --- correct precise answer ---A lease for the rental of floor
space that is not generally divided into rooms.
Percentage lease --- correct precise answer ---A lease of property in
which the rental is based upon the percentage of the volume of sales
made upon the leased premises, usually provides for minimal rental.
,Sublease --- correct precise answer ---In a sublease, the original
tenant is still responsible to the landlord for the lease payments under
the lease contract.
In a sublease arrangement, the sub-lessee pays the rent to the tenant
(lessee) and the tenant pays the landlord.
Escalation clause --- correct precise answer ---- A clause that allows
landlords to raise rents during the term of the lease.
- Lease escalation clauses call for the increased costs to the tenant for
different reasons at specified times during the lease term. These
clauses protect the property owner against increases during the lease
term.
Ground lease --- correct precise answer ---- An agreement in which a
tenant is permitted to develop a piece of property during the lease
period, after which the land and all improvements are turned over to
the property owner.
- This long-term lease (also referred to as a land lease) is commonly
used for commercial property.
Bridge loan (Swing loan) --- correct precise answer ---- A type of
short-term loan, typically taken out for a period of 2 weeks to 3 years.
, - A bridge loan is a type of gap mortgage in which funds are provided
over and above an already existing loan until more permanent
financing is in place.
- A bridge loan allow a buyer to obtain a new property without having
to sell his/her current property.
Mortgagor --- correct precise answer ---Is the borrower (typically the
person buying the house)
Mortgagee --- correct precise answer ---Is the lender or bank who
provides a loan to the borrower or homeowner
Real Estate Settlement Procedures Act (RESPA) --- correct precise
answer ---- A consumer protection statute, first passed in 1974. The
purpose of RESPA are
1) To help consumers become better shoppers for settlement services
and
2) To eliminate kickbacks and referral fees that unnecessarily
increase the costs of certain settlement services.
RESPA requires:
1) A Good Faith Estimate (GFE)
2) HUD Booklet
Questions with Correct Verified Answers
latest version 2025
Abstract of Title --- correct precise answer ---A summary of all of the
recorded instruments and proceedings which affect the title to
property, arranged in the order in which they were recorded
Contracts --- correct precise answer ---- In New York State, an
individual must be at least 18 years of age to enter into a contract.
- Minors (less than 18 years old) CANNOT enter into a contract. The
contract is voidable if signed by a minor.
- In New York State, an individual must be mentally and emotionally
capable to enter into a contract.
- The purchaser signs the contract first
Proration --- correct precise answer ---- The division of certain
settlement costs between buyer and seller.
- These items can include real estate taxes, fuel, a survey, water and
sewer charges, rent, and security deposits.
,- Proration ensures fair apportionment of expenses between buyer
and seller.
Down payment --- correct precise answer ---- Anyone who holds a
down payment must place it in a separate escrow account.
- The following people generally hold the down payment:
- Listing agent
- Seller's attorney
- Selling broker
Earnest money deposit --- correct precise answer ---A 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.
Loft lease --- correct precise answer ---A lease for the rental of floor
space that is not generally divided into rooms.
Percentage lease --- correct precise answer ---A lease of property in
which the rental is based upon the percentage of the volume of sales
made upon the leased premises, usually provides for minimal rental.
,Sublease --- correct precise answer ---In a sublease, the original
tenant is still responsible to the landlord for the lease payments under
the lease contract.
In a sublease arrangement, the sub-lessee pays the rent to the tenant
(lessee) and the tenant pays the landlord.
Escalation clause --- correct precise answer ---- A clause that allows
landlords to raise rents during the term of the lease.
- Lease escalation clauses call for the increased costs to the tenant for
different reasons at specified times during the lease term. These
clauses protect the property owner against increases during the lease
term.
Ground lease --- correct precise answer ---- An agreement in which a
tenant is permitted to develop a piece of property during the lease
period, after which the land and all improvements are turned over to
the property owner.
- This long-term lease (also referred to as a land lease) is commonly
used for commercial property.
Bridge loan (Swing loan) --- correct precise answer ---- A type of
short-term loan, typically taken out for a period of 2 weeks to 3 years.
, - A bridge loan is a type of gap mortgage in which funds are provided
over and above an already existing loan until more permanent
financing is in place.
- A bridge loan allow a buyer to obtain a new property without having
to sell his/her current property.
Mortgagor --- correct precise answer ---Is the borrower (typically the
person buying the house)
Mortgagee --- correct precise answer ---Is the lender or bank who
provides a loan to the borrower or homeowner
Real Estate Settlement Procedures Act (RESPA) --- correct precise
answer ---- A consumer protection statute, first passed in 1974. The
purpose of RESPA are
1) To help consumers become better shoppers for settlement services
and
2) To eliminate kickbacks and referral fees that unnecessarily
increase the costs of certain settlement services.
RESPA requires:
1) A Good Faith Estimate (GFE)
2) HUD Booklet
