Free New York Real Estate Practice Exam Questions (April 2026) 75+

In order to qualify for the Fair Housing Act’s "Housing for Older Persons" Exemption, at least 80 percent of the units must have at least one occupant who is 55 years of age or older OR all units are occupied by residents over the age of 62.

In this situation, the new offer cannot be accepted unless the seller's counteroffer is withdrawn or hypothetically rejected. Remember, if a new offer is accepted two valid contracts could exist, so the first step must be to withdraw the counteroffer.

According to the law of supply and demand, the first property sold would have sold for the lowest price. Remember generally speaking, when the supply of houses goes down, the price goes up, and vice versa.

In order for a contract to be valid a few things must occur:

-The party must be at least 18 years old and of sound mind.

-A contract must be legal. For example, there cannot be a contract to kill, steal or anything illegal.

-The contract must hold a clear and definite consideration.

-There must be mutual consent of the contract.

Any offer to purchase real estate MUST be signed by both the buyer and seller in order to be valid. Both parties must follow these guidelines. It becomes a legal contract as soon as both parties sign.

Demand is an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service (holding all other factors constant).

A special agent is an agent hired to perform a specific duty. The real estate agent’s power and authority is limited to that specific task. Example: If you list a house on behalf of a seller, you are hired for one specific job – listing the house. Once that job is complete, then the agency relationship is over.

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.

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

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.

The term “ad valorem” is Latin for “according to value,” which means that it is flexible and depends on the assessed value of an asset, product, or service. An ad valorem tax is charged by state and municipal governments and is based on the assessed value of a product or property. The most common ad valorem tax is the property tax, which is charged on real estate and personal property.

The rescission of a contract occurs when there is an agreement between the contracting parties to waive all the remaining duties and to terminate the contract. Basically, it would be returning the parties to the same legal position they were in before entering into the contract.

The buyer doesn't need to know the sellers getting a divorce. Lead paint, and flooding, however, both must be disclosed (nationally). State laws differ on whether a buyer is entitled to know about deaths. In Texas, deaths from natural causes, suicides, or accidents unrelated to the property do not have to be disclosed. However, deaths related to the condition of the property or violent crime on the property must be disclosed. Other states impose a duty on a stigmatized property in which there has been a suicide or murder.

It is permissible to attach legal descriptions to the contract rather than writing them into the contract itself, but they must be attached. This is common with sales contracts with extensive and detailed legal descriptions.

By definition, a dominant estate is a parcel of real property that has an easement over another piece of property.

A property owner or homeowner can sue to obtain the required just compensation through the process of inverse condemnation. Inverse condemnation is the event in which the government takes private property but fails to pay compensation or just compensation. Read More Here

An agent must reveal all property facts and defects known at the point of sale. A failure to disclose this information may allow the buyer to rescind the contract.

Closing is known by many names. Some areas of the country may call it settlement and transfer some may call it passing papers. The textbook name is for closing is closing.

The 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. Changing terms of a sale because someone is Chinese is clearly illegal and a violation of The Fair Housing Act.

The buyer can withdraw their offer as long as the seller did not accept the offer and the buyer can obtain the $3,000 deposit. This is all because the seller has to accept the offer. Remember an offer isn’t legally binding until it becomes a contract through acceptance.

A mechanic’s lien also called a construction lien is a lien placed on your property for nonpayment for work you had done on the property. It is a claim made against a property by a contractor or other professional who has supplied labor or materials for work on that property. They are designed to protect professionals from the risk of not being paid for services. A mechanic’s lien is involuntary and specific.

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.

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 agent is not entitled to any compensation. With exclusive agency listings agents only get paid if they sell the property. No fee is earned if the owner alone sells the property. Also if it was open listing, the agent would still NOT be entitled to any compensation. This scenario only works because it is an exclusive agency listing.

Agents or brokers function under certain legally mandated duties called fiduciary duties. Fiduciary duties include: Loyalty, confidentiality, disclosure, obedience, reasonable care and diligence, accounting and more. Honesty and fairness must be given to an unrepresented buyer.

All of the following. Rescission or rescinding a contract is when a contract is rendered null and void and is no longer recognized as legally binding. Rescinding a contract is an option if there is proof that there was evidence of fraud, errors or mistakes, lack of legal capacity, fraud, and more.

In this example the answer is 18 months. Established business relationship means a relationship between a seller and a consumer based on….. “ the consumer's purchase, rental, or lease of the seller's goods or services or a financial transaction between the consumer and seller, within the eighteen (18) months.” Per 16 CFR 310.2

An amendment typically changes terms of a contract. An addendum “adds” terms to a contract. For example, let's say a buyer and seller have agreed to an April 10th closing date but later both agreed to change the closing date to April 25th. They would use an amendment. Addendums are used to add or delete terms or conditions NOT previously agreed to. That's the difference.

Functional obsolescence refers to the loss of property value due to an obsolete design feature. Outdated plumbing would be considered functionally obsolete because it is outdated. Who determines what is obsolete or not? Usually the buyer or homeowners. If a neighborhood is filled houses with new bathrooms and/or new plumbing, and your's isn't, It would be considered functionally obsolete. Read More Here

The Market Data Approach is also commonly called the sales comparison approach. The Cost Approach is also referred to as summation. And lastly, the Income Approach, is also known as capitalization. Each method has its own set of benefits. The answer is the Market Data Approach or Sales Comparison Approach because it's a single family residence.

Percolation is the process of a liquid slowly passing through a filter. It's how coffee is usually made. For real estate, a percolation test is a test to determine the water absorption rate of soil in preparation for the building of a septic drain field or infiltration basin. The results of a percolation test are required to properly design a septic system.

Remember. A Dominant Estate is a parcel of real property that has an easement over another piece of property. A Servient Estate is a parcel of land that is subject to an easement.

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.

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.

As a general rule of thumb all written offers must be presented to the seller. It is a serious breach of a real estate agent's fiduciary duty to the seller not to present all purchase offers.

A unilateral contract is a contract in which only one party makes a promise to perform an action. An insurance contract or a reward contract are both examples of unilateral contracts. Unilateral contracts appear more often than you may think; one of the most common instances is a reward contract. Imagine you’ve lost your cat, Coco. You place an advertisement online offering a $250 reward to the person who returns Coco. By providing a reward, you’re offering a unilateral contract.

No replacement cost, is the cost of replacing an asset or property. Reproduction cost estimates how much it would cost to exactly reproduce an asset or property to exact specifications. Reproduction cost looks at the cost of creating an exact replica, and should not be confused with replacement cost, which looks at the cost of replacing an insured property with one of similar functionality. Reproduction cost is more specific.

Since the offer includes all the personal property as well, Mrs Thompson is required to do a package loan. A package loan is a real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a fully furnished condominium.

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

A testate estate means that the decedent or deceased person left a will. An intestate estate means that the decedent did not leave a will. If this occurs then a probate court will determine the distribution of his or her property to the appropriate parties.

In this example the answer is indefinitely, since they are a past client. If their business was terminated or expired it would be 18 months. Since they are a past client, and there's no mention of expiration, or termination they can reach out indefinitely. Per 16 CFR 310.2

Personal property is all things removable like clothes, lawn mowers, couches, TV's, and furniture. 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. In this case the only item that would qualify as real property is garage.

In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $350,000 and then multiply it by the assessment rate which is 15%. So $350,000 x .15 = $52,500. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $52,500 x .02750 = $1,433.75. So the annual property taxes on the property is $1,443.75.

Typically the party who usually pays the loan origination fee on a Federal Housing Administration loan is the borrower. The origination fee covers the borrowers right to obtain FHA-backed financing, so it is traditionally a paid by the borrower. FHA Loans are mortgage issued by an FHA-approved lender and insured by the FHA which is the Federal Housing Administration. FHA loans are sought after because they require lower minimum down payments and credit scores than many conventional loans.

Warehousing has to deal with loans and the secondary market. The term refers to the process where a bank or lender packages mortgage loans to consumers for the purpose of quickly selling those loans on the secondary market.

Mechanic's liens are legal documents that essentially reserve the rights of the filer to seek unpaid compensation. They are usually filed by contractors, subcontractors, or suppliers that never received payment for work that they performed or materials that they provided on the property.

Commissions paid to real estate agents are negotiable, while many people believe that commission is always 6% it varies. That percentage is a percentage of the sale price of the home, also known as the selling price.

“Estate-at-will” is another name for a tenancy-at-will. A tenancy at will is generally beneficial to both tenants and owners, who may wish to have the flexibility to change rental situations easily and without breaking a contract. This type of tenancy does not specify its duration or the exchange of payment and can be terminated at any time. These tenancies are sometimes called “month-to-month,” as there is no formal contract specifying the length of time during which the tenancy will take place.

If demand increases more than supply does, we get an increase in price. If supply rises more than demand, we get a decrease in price. If they rise or decrease the same amount, the price remains the same.

A contingent property means an offer for the property has been accepted but there is a condition or “contingency” that is written into the contract and it must be met before the sale can go through. In order for the contract to be legally binding, the contingency must be met.

A month-to-month tenancy is a periodic tenancy that does not have an expiration date and thus runs indefinitely. Since a month-to-month tenancy is a real estate contract, it must have consideration, offer and acceptance, legal object, and competent legal parties. If it's for less than one year, it can be oral with some exceptions.

This is an example of a balloon loan. 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.

New York is a lien theory state which means banks or mortgage lenders never retain title to the property. Instead, the mortgage lender holds a lien against the property. In these states, the deed stays with the borrower, and the lender places a lien on the property using a mortgage. The lien ends when the loan is paid in full.

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

Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.

Economic obsolescence refers to the loss of property value due to external factors, meaning things off the property affecting the properties value. A new noisy highway would be considered economic obsolescence because it is an external factor. Usually, in these circumstances, homeowners cannot do anything to prevent it. Read More Here

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.

Remember, community property and tenants by the entirety is through marriage. You can't have that form of ownership with two unmarried individuals. Tenancy in common would be the best answer. TIC is when a parcel of real estate is owned by two or more tenants. Upon the death of a tenant in common, that share is transferred to the estate or heir of the deceased tenant. Unlike with a joint tenancy, tenants in common have no rights of survivorship. So knowing that Tina and Tom do not have a right to survivorship and are unmarried, we can assume they have a tenancy in common. The amount of interest really doesn't matter in this case.

Fixtures are personal property attached to the land to count as real property. Window blinds are screwed into the house, therefore they are considered a fixture in this example.

A lender's refusal to lend money to potential homeowners attempting to purchase property located in predominantly minority neighborhoods is redlining. Steering is the illegal practice of channeling home seekers to particular areas, either to maintain the homogeneity of an area or to change the character of an area, which limits their choices of where they can live. It is a form of redlining. Its worth mentioning that, because people often get these two things confused. Steering is a FORM of redlining, and they are not exactly the same things.

A universal agent in real estate is an agent who can act on behalf of a principal. This form of agency has unlimited power.

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.

Economic Obsolescence refers to the loss of property value due to external factors, meaning things off the property affecting the properties value. Examples of causes of economic obsolescence can include: flight patterns, a busy highway, and rise in local crime. Read More Here

The habendum clause is the statement in a contract that describes the rights and interests being given. It almost always begins with the words "to have and to hold."

Void contracts are not contracts because they lack an essential element of a contract and are thus unenforceable. 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.

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.

There are three different main approaches that appraisers use while they make an appraisal. They are the Market Data Approach, Cost Approach, and Income Approach. The Market Data Approach is also commonly called the sales comparison approach. The Cost Approach is also referred to as summation. And lastly, the Income Approach, is also known as capitalization. Each method has its own set of benefits. When applied together, the various valuation methods provide the best estimate of the value of the income-producing real estate under evaluation.

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 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.

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.

A mortgagee is an entity that lends the mortgagor money. This entity is typically referred to as the lender.

Steve should advise the other agents this could constitute a violation of Sherman Antitrust Act. The Sherman Antitrust Act prohibits price-fixing. Real estate agents and brokers should understand that any discussion about commission could constitute a violation of the laws even if only implied.

Property tax is an ad valorem tax assessed on real estate by a local government and paid by the property owner. Public services for real estate owners are paid by real property tax.

“With the exception of matters delegated specifically to the Secretary of State, the Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law.” Per NYS Board of Real Estate.

Leo should use Contribution. Contribution is most commonly applied to determine how renovation and property changes may affect the property’s overall cost. In this case, since the owner wants a feasibility study, contribution would need to be used. Swimming pools are a common contribution example. It's worth noting the cost doesn't always equal the value to the home. For example, a pool could add $5000 to the value of a home but cost $10,000 to build.

The formula for finding commission is pretty simple. Just times whatever percentage you have by the total price of the house. In this case, they give us the rate and what the broker received so we have to adjust the steps. In order to find the commission, you can take $11,000 and divide it by the percentage which is .055 making your total $200,000. Alternatively, you can take the answers below and multiply each one by .055 and whichever matches the broker's commission is the correct answer.