Free New York Real Estate Practice Exam Questions (October 2025) 75+

Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. In our instance since the washer and dryer were included in the contract, the buyer may sue the seller for specific performance.

The Purchase Agreement is a contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller. So in plain terms, a Purchase Agreement is the document buyers and sellers sign with all the terms and conditions of their transaction on it.

Each square, six miles by six miles, is called a township. Since each township is six miles by six miles, townships contain 36 square miles, each one forming a section.

A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual. Lenders are required to disclose prepayment penalties at closing in the form of a prepayment penalty clause.

A bit of a trick question. Voidable contracts MAY be valid, often they appear valid but are not. Remember, voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects. Since the question says “may be” valid it is voidable.

The five most popular types of businesses are Sole Proprietorship, General Partnership, Limited Partnership, Corporation, and Limited Liability Company (LLC). From the question above; "Corporation, Sole Proprietorship, Limited Liability Company" are all real business structures. Here are the definitions: Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A Sole Proprietorship is one individual or married couple in business alone. Lastly, an (LLC) is a hybrid legal entity that has certain characteristics of both a corporation and a partnership or sole proprietorship.

Depreciation is any loss in the value of a property over time from any cause. There are three main forms of depreciation: Economic Obsolescence, Functional Obsolescence, and Physical Deterioration.

According to the 28/36 rule, she would need to spend less than $1260 in housing costs a month to qualify for most loans. All you do is multiply .28 to her monthly income. This is useful for agents to work with clients to determine what loans they can qualify. The 28/36 Rule states: a household should spend a maximum of 28% of its gross monthly income on total housing expenses, and no more than 36% on total debt service. Lenders typically want no more than 28% of your gross monthly income to go toward your housing expenses including your mortgage payment, property taxes, and insurance. Once you add in monthly payments on other debt, the total shouldn't exceed 36% of your gross income.

A balloon loan is a mortgage which does not fully amortize over the term. Amortization is when payments divide into equal amounts for the duration of the loan. A balloon loan is different as not all payments are the equally divided and the most substantial payments are called Balloon payments.

A conventional loan is a type of loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower. Yes, typically they are the most popular but the best definition by far is the following: A type of loan that is not insured or guaranteed by the government, but backed by private lenders.

The answer is a single parent with a foster child aged 11and a son aged 19. Familial status is defined as one or more individuals younger than 18 living with a parent or guardian. It also includes pregnant women and anyone who is in the process of assuming custody of a child younger than 18.

Remember DUST and your essential elements of value. Demand: This means the desire to buy and an ability to pay. Utility: The item satisfies a human need or desire; such as shelter, income, or recreation. Scarcity: Limited in supply, as supply diminishes, value increases. Transferability: Able to transfer from one owner to another.

The principal is always the one whom you have an agency relationship with and therefore is the person whom you owe fiduciary responsibility.

Usually, the lender or financing organization will hire the appraiser. Technically the seller pays for the appraiser since it comes out of the final sales price, however the hiring aspect is almost always done by the lender.

The term is used very often in real estate. Equity is the difference between the market value of your home and the amount you owe the lender who holds the mortgage. Your equity is the money you'd receive after paying off the mortgage if you were to sell the home.

The U.S. Department of Housing and Urban Development's Office (or HUD) administers and enforces federal laws and establishes policies that make sure all Americans have equal access to the housing of their choice.

A bit of a trick question. Crossing out part of a printed contract is actually allowed and legally enforceable as long as both parties and the original text is still readable.

The term of office is two years. A member may be appointed for successive terms, but no member may serve more than ten years in his or her lifetime. A member may be removed by the member's appointing authority.

It generally has to do with performance. Time is of the essence clause in real estate contracts refers to a clause that requires one party in a real estate contract to fulfill their obligations within a specific time frame.

Dual agency is when one real estate agent represents both the buyer and seller in a transaction. A single agency has a relationship with the buyer or the seller, but not both.

Probate is the analysis and transfer administration of estate assets previously owned by a deceased person. When a property owner dies, his or her assets are commonly reviewed in a probate court if they do not have a will.

The comprehensive plan, aka, master plan is a document that is prepared by local government to guide growth and development. It is generally a plan looking 10 to 20 years into the future for the area. These plans can be found at many levels, from neighborhoods, to cities and counties on up to the state level, all across the US.

Real estate police power is the constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals, and general welfare. The most common example of real estate police power is zoning.

Under riparian rights, all landowners whose properties adjoin a river or stream, have the right to make reasonable use of it as it flows through or over their properties. The only limitation owners have is they cannot stop or prevent the flow of water. Riparian rights vary from state to state but most grant unrestricted use. Unrestricted use means owners have the right to access it for swimming, boating, and fishing, build docs, etc. Read More Here

Remember DUST and your essential elements of value. Demand: This means the desire to buy and an ability to pay. Utility: The item satisfies a human need or desire; such as shelter, income, or recreation. Scarcity: Limited in supply, as supply diminishes, value increases. Transferability: Able to transfer from one owner to another.

The New York Department of Health oversees the delivery of drinking water to ensure that it is suitable for people to drink.

Real Property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line. There are some exceptions of items that can be moved but are still real property, like for businesses. Business-related items like mineral rights, or if you own a farming business it would include crops, barns, and stables. Those are all considered real property because it is part of the business.

The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The EPA was established in December 1970 by an executive order of United States President Richard Nixon. The agency enforces all federal environmental rules and regulations.

The contract was established under duress, fraud, deception, or coercion making it voidable. A voidable contract is a legal agreement between two parties that may be unenforceable for any number of reasons. Voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects.

The subordination clause in real estate establishes order of priorities of financial claims (liens). The subordination clause effectively makes the current claim number 1 to any existing claims that have already been recorded.

A balloon loan is a mortgage which does not fully amortize over the term. Amortization is when payments divide into equal amounts for the duration of the loan. A balloon loan is different as not all payments are equally divided and the most substantial payments are called Balloon payments. A common example of a balloon loan is the seven-year Fannie Mae Balloon, which features monthly payments based on a 30-year mortgage. Making the rate of payments much lower. At the end of seven years, the rest of the loan is due. This last payment is called a balloon payment because of its large size. At that point, the borrower may sell the home to cover the balloon payment or take out a new loan to cover the payment, effectively refinancing the mortgage.

By definition, a servient estate is a parcel of land that is subject to an easement.

It's the seller that must make the disclosure. It's real estate professionals' job to make sure all parties are in compliance with the law, but ultimately it's the sellers obligation.

Duress is the unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against his or her will. A contract entered into under duress is voidable.

No it is not. Commingling is a breach of trust in which a fiduciary mixes funds held in care for a client with their own funds. “A real estate broker shall not commingle the money or other property of his principal with his own and shall at all times maintain a separate, special bank account to be used exclusively for the deposit of said monies” Per 175.1 Commingling money of principal.

Most real estate agents make money through commission. A commission is a fee paid to an agent for performing a transaction. A commission is usually a percentage of the property's selling price, although sometimes it can be a flat fee.

Acceleration is a term associated with mortgages. The acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if payments are not being made or there is a breach of contract. Usually, if a borrower isn’t making any payments on the property the acceleration clause will come into effect. Which demands immediate payment for the said property. It’s more of a legal clause that they add for protection to make sure borrowers aren’t taking advantage of them.

A borrower is a mortgagor while the lender is the mortgagee. A mortgagee is an entity that lends money to a borrower (also known as a mortgagor) for the purpose of purchasing real estate.

The term retroactive liability is used in connection with CERCLA and the Superfund. It means that all previous owners also can be held accountable for the hazardous waste site.

After smoking, this is the second leading cause of lung cancer in the United States. Radon is a naturally occurring gas that forms in rocks, soil, and water.

New York is NOT a Community Property state. The states that have community property laws are: Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. Community property is property acquired that is considered to be obtained by mutual effort.

While discrimination of race, gender, and religion are all illegal today, back then the specific law that extended equal rights in real property to members of all races was the Civil Rights Act of 1866.

The assessed value is a property's determined valuation to calculate the appropriate tax rates.

Fannie Mae's primary responsibility is to maintain an active secondary market for mortgages. Ginnie Mae is a government agency that guarantees securities backed by loans issued under other government agency programs, such as the VA and FHA. Fannie Mae, is a private corporation that buys loans from private lenders, assembles them into mortgage-backed securities to maintain an active secondary market.

Radon is a GAS not a liquid.

In real estate, commingling refers to the act of mixing the client’s funds with the broker’s own funds. Commingling can be both legal and illegal depending on the state and circumstance. Typically, from an agent’s perspective, commingling should be avoided at all costs. Commingling can be legal in some circumstances, but in most cases, as an agent or a broker, it’s best to avoid it.

Water rights are appurtenant, meaning they run with the land and not with the original owner. In other words, if an oceanfront property is sold, the new owner gains the littoral rights and the seller relinquishes his or her rights. Read More Here

Eminent domain is the government’s constitutional right to take over privately-owned real for public use (usually despite the owners’ wishes). Eminent domain for the federal government is protected under the Fifth Amendment of the Constitution, while for state governments, it is protected under the Fourteenth Amendment. Mr Jay’s example is an example of eminent domain. Read More Here

Codicil (pronounced kaa-duh-sl) is a written supplement or amendment to an existing will such as one affecting the transfer of real estate upon death. In plain terms it's an addendum of any kind to a will.

Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A corporation has certain rights, privileges, and liabilities beyond those of partnerships. Doing business as a corporation has its advantages and disadvantages. Because a corporation is a legal entity, it can purchase property. One large disadvantage especially when it comes to corporations is when owning income producing property they experience double taxation. Since its a legal entity they must pay taxes on profits. Dividends from the remaining corporate profits are then distributed to the shareholders and then taxed again as part of the shareholder's income.

When a property owner dies and leaves no proper documented inheritance plan, the property ownership reverts to the government. Escheat ensures that property always has ownership. Escheat is part of the reason it's critical to have a will or when you are purchasing property you establish a clear right to survivorship. Read More Here

Forgery refers to the false making or material alteration of a legal instrument with the specific intent to defraud anyone. It is illegal and real estate agents must be aware of the action.

The Federal Fair Housing Act is a law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more. You cannot have a listing that states looking for white people only. Or looking for married couples without children only. The interesting thing is though you can put language referring to sex. For example “Seeking female roommate.” However, it's only in cases of finding someone to share living spaces with. The “Mrs. Murphy” exemption provides that if a dwelling has four or fewer rental units and the owner lives in one of those units, that home is exempt from the FHA. “Mrs. Murphy” is the hypothetical elderly widow who has converted a portion of her home into a rental apartment to supplement her limited income.

The seller is usually entitled to keep the earnest money, because this is considered forfeiture of the contract. The only way the buyer can back out and get their earnest money back is if something happens with the inspection, appraisal, or they have a contract clause offering that protection.

If Aaron can't get to his property from a public road without crossing over his neighbor Ron's property he is landlocked. He needs an easement for ingress and egress over Ron's property to be able to enter and exit the property. Read More Here

The person who hires or appoints an agent is called the principal. In plain terms, the principals in a real estate sales transaction would be the buyer and the seller.

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

​If your NY real estate license is revoked, you are not eligible to be re-licensed for at least one year. After a year, you must retake the NY real estate exam, submit a new license application, and pay the respective application fee.

A creditor can consider age, if it's used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you’re about to retire. A creditor cannot consider age in any of the other situations listed.

The statute of frauds requires certain types of contracts to be executed in writing. The statute covers contracts for the sale of land, agreements involving goods worth over $500, and contracts lasting one year or more.

Carbon monoxide is an odorless, colorless, gas created from burning fuels. If the system is used correctly and with proper ventilation, gas is controlled. However, if not there can be immediate and serious health risks. If inhaled, causes red blood cells to deprive the body of oxygen. Extreme exposure cuts off oxygen and cause death within 30 mins or less. It's a good rule of thumb to use a CO Detector on every floor, especially with floors with an open flame.

They can’t. Their license is expired. In other words, there is no grace period for expired licenses.

Special use properties are properties that are there to "benefit the public," such as: Schools, Hospitals and Police Stations. These properties are described as different, because they are usually designed in a way that cannot fit in a typical zone. More examples include of religious facilities, nursing homes, assisted living facilities, hotels, truck terminals, meat processing plants, seed plants, and more. Think multiple buildings, large areas, etc.

When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners. For example, if three joint tenants own a house and one of them dies, the two remaining tenants each obtain a one-half share of the property. This is called the right of survivorship.

Puffing is an extravagant claim made by sellers in order to attract buyers. Puffing is usually common for a lot of sales people. Real estate agents included. It’s one of those things that occur often. It happens in ads, stores, and pretty much everywhere sales happen. Puffing is legal as long as the statements are not fraudulent. Read More Here

The Superfund Amendments and Re-authorization Act of 1986 (SARA) was passed when the original act, CERCLA, expired in 1985. It amended the comprehensive environmental response, compensation, and liability act. The big change had to do with liability. When a property owner has been innocent of all involvement with a hazardous waste site, under certain circumstances, he may claim immunity from responsibility. In plain terms it allows truly innocent landowners to have immunity from legal liability. SARA also required EPA to revise the Hazard Ranking System to ensure that it accurately assessed the relative degree of risk to human health and the environment posed.

The process of valuing real estate is a challenging one. There are many different techniques and sources that can be used to arrive at an estimate of the cost. It requires extensive experience to achieve accurate results with all relevant factors present. Reconciliation is the final step in a real estate appraisal where the appraiser weighs each appraisal approach and determines which one is most relevant and should be used.

Consideration is anything of legal value that is offered in exchange by one party for something of value from another party. Common forms of consideration include money, property in exchange, work or a promise to perform. Without consideration, a contract is not valid.

Most real estate sales contracts include contingency clauses, making them voidable. A voidable contract is a legal agreement between two parties that may be unenforceable for any number of reasons. If a contract has a contingency it's voidable. It still can be considered valid but only after the contingencies are met or no longer exist.

The fiduciary duty of confidentiality lasts forever. Confidentiality requires that you do not disclose any information learned about your clients, their business, financial or personal affairs or motivations. Again, this duty lasts forever.

The three main forms of depreciation are : Economic Obsolescence, Functional Obsolescence, and Physical Deterioration.

An easement in gross is basically selling rights to the land to another person, but without giving them legal ownership. An example of an easement in gross is an easement to a utility company to run a power line across a burdened piece of property.

Deed restrictions are limitations to the use of the property imposed by a past or current owner and are usually legally binded forever. Some common examples of deed restrictions are: Type and number of trees you can remove from the property, house color, window size, overall style, color, and construction materials used in a renovation.

A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorship's are the most common form of business structure. This type of business is simple to form and operate and may enjoy greater flexibility of management, fewer legal controls, and fewer taxes. However, the business owner is personally liable for all debts incurred by the business. A sole proprietor may purchase property for both personal and business use through his own name or through the name of his business. However, only personal property used in direct relation to business operations is viewed as a tax-deductible business expense.

The keywords here are lender and payment. Some of these provisions protect the borrower, lender, or both. The Acceleration Clause and Prepayment Penalty Clause is the best answer here. The acceleration clause is a contract provision that requires a borrower to repay all of an outstanding loan if upon a breach of the contract - which definitely protects the lenders and their interests by asking for repayment. A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual - This definitely protects the lenders, their interests, and results in repayment as well. Within the other answers the clauses may, or may not protect lenders, or do not require some form of payment or insurance.