New York Real Estate Salesperson Exam with Verified questions & answers/latest update 2025, Exams of Real Estate Management

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Article 12A: NYS Real Property Law ✔✔"Real Estate License Law" - violation is a misdemeanor punishable by loss of license, $1000 fine, revoking of license - all salespersons have license suspended - after 1 year broker can apply to get license back Capital Gains Tax Exemption ✔✔-profit from sale that is taxed - single person has first $250,000 tax free - married couple $500,000 tax free Property Condition Disclosure Statement ✔✔- 6 page statement seller must fill out on condition of property BEFORE buyer signs contract - if seller does not provide, has to pay $500 at closing - NOT needed for new construction residential, foreclosure sales, condos and co-ops, or commercial CFC Chloro-fluoro-carbons ✔✔Gases that leak out of air conditioning units and go into air New York Real Estate Salesperson Exam with Verified questions & answers/latest update 2025 [GRADED A+] - regulated by Clean Air Act - Freon - illegal PCBs Poly-chlorinated Biphenyls ✔✔Liquids used to cool power plants - cancer causing and can seep into soil or ground water USTs Underground Storage Tanks ✔✔- Regulated by Department of Environmental CONSERVATION - USTs under 1100 gallons that hold gas or diesel are not regulated Blind Ad ✔✔- ad that is ambiguous or does not give actual geographic location - location is required and must be specific - also must put you have a real estate license Fee Simple Absolute ✔✔- owning is freehold - fee simple is fullest and most common form of freehold interest - gives full Bundle of Rights CERCLA (Comprehensive Response, Compensation and Liability Act ✔✔- superfund - helps pay for clean ups - when uncontrolled or hazardous spill this fun responds for clean up and sees who is responsible Sheathing and Flashing ✔✔- Sheathing is panels that they put outside to keep the rain out- nailed to the wall studs or roof rafters - flashing is a flexible material (aluminum) which covers cracks Survivorship ✔✔- if one owner dies the other owners automatically inherit the real estate - survivorship applies to owner by entirety (married couple) and joint tenants (2 or more married people with equal ownership shares) How to become salesperson ✔✔- 18 years old - 75 hour class - state test and school test - Department of state approves - can only be paid by broker How to become a broker ✔✔-120 hours of class - 2 years experience as salesperson age 20 - need 3500 points (residential sale is 250) Depreciation ` ✔✔- decrease in value: economic or tax - Economic- building losing value Tax- tax break given by IRS based on the idea that buildings have lifespan - apartment buildings 27.5 years - office buildings 39 years Amortized mortgage ✔✔- slowly kill a loan - equal monthly payments until the last payment when loan balance is zero Fixed Rate amortized ✔✔- most common mortgage - interest rate never changes Balloon Payment ✔✔- non amortized loan (not equal monthly payments) - if borrower pays interest at beginning and principal at end in one payment New York State Fair Housing Laws ✔✔- federal law protects Race, national origin, religion, gender (Sex), disability and family status (kids) - states and cities protect age, marriage, sexual orientation Pre-Qualification ✔✔- bank lender looks at income, debt, and assets and tells you how much you can afford (often over the phone) Pre- Approval ✔✔- banker does research on your financial status and give you condition commitment in writing for an exact loan amount Underwriter ✔✔-person at bank who makes the final decision on whether a buyer gets a mortgage loan Equivalent Experience ✔✔- if you have worked in industry as property manager, mortgage broker, or other you can become a broker without being a salesperson because of Equivalent Experience - need 120 hours of class and pass test to be broker (don't need salesperson license) Brown v Board of Education ✔✔- 1954 Supreme court - Linda Brown- all white school- supreme court- - determined not ok to separate black and white Please V Ferguson ✔✔- allowed for separate but equal Pro Forma ✔✔- financial doc that predicts future income of a property for next 10 years - (like an operating statement) but has columns for this year, next year, etc - helps buyers, banks, owners make financial decisions for future Operating Statement ✔✔-shows the buildings actual performance this year Wall Stud ✔✔wall column that is part of house frame - beams are horizontal columns are vertical Rafter ✔✔- roof beam on house normally placed diagonally Pitch ✔✔slope or angle of roof Eave ✔✔- when rafters hang over the edge of a wall Keeping Real Estate Records ✔✔- keep for 3 years in residential - Keep for 7 years in commercial Property Tax Exemptions ✔✔- tax exemptions - religious organizations and governments completely exempt - Partially exempt: - STAR (school tax relief) - Seniors - Veterans - Disabilities - Agricultural props (farms) Lead ✔✔- causes neurological damage if you drink eat or breath - not used since 1978 - Residential Lead Based Paint Hazard Disclosure - Title X (10) Riparian ✔✔- ownership and use of rivers Littoral ✔✔-ownership and use of lakes Agent ✔✔- someone who represents someone else Subagent ✔✔- salesperson is subagent of broker Actual Cash Value ✔✔Replacement cost- Depreciation= Actual Cash Value - replacement cost is how much it would cost to buy a new house or personal property at todays prices - actual cash value is what it would cost to buy new minus depreciation Acknowledgement ✔✔- notary public certifies the signature and date of a document Chain of title ✔✔list of people who have owned a property Title Search Report ✔✔- research chain of title and all documents associated with the property going back 40-60 years Graduated Mortgage/Lease ✔✔- monthly payments increase periodically - common in commercial Step Mortgage ✔✔- the interest gradually increases in first few years of the loan Ground Lease ✔✔- land lease - land is rented - one person owns land, other owns building - owner of building pays rent to owner of the land - 50-100 years net leases because building owner maintains the buildings and pays tax and insurance Special Agent ✔✔- brokers are special agents because they do one thing - mortgage brokers are special agents Proprietary Lease ✔✔- co-op owners - stock certificate shows ownership in the corporation - proprietary lease allows them to live in the apartment associated with their building shares Alteration Agreement ✔✔- the document that gives ok to do construction in a co-op Non-conforming Zone ✔✔- old buildings that were built before zoning regulations can be ""grandfathered in" Guarantor ✔✔- someone who guarantees payment in the case that the principal cannot pay Employee ✔✔- gets salary, withheld tax, and benefits -works for employer Independent Contractors ✔✔- 1099 form - paid on commission based on own productivity - pays own benefits, taxes, and expenses - licensees are "statutory non-employees" Asbestos ✔✔- fire resistant substance that used to be in insulation in building - causes lung disease Municipal engineer ✔✔- in charge of city infrastructure, roads, sewers, electric lines, subways Agency Disclosure Form ✔✔- tells people in a deal who you work for - give in first substantial meeting - keep for 3 years - if someone refuses to sign form, can still show property- put aa date stamped record on file Contingency ✔✔- if a condition is not met, someone can back out of the deal and not lose deposit Escalation Clause ✔✔- in commercial lease allows landlord to raise rent during the term of the lease by passing on certain unexpected expenses - cannot marker a property until the offering plan is approved CPS-1 (co-op policy statement) ✔✔- submitted to state attorney general before units in co-op can be sold SEQRA, State Environmental Quality Review Act ✔✔- state law that says if you want to build in a sensitive area you have to write an environmental impact statement to show how it will effect environment Kickback ✔✔- payment for real estate services to an unlicensed person - very illegal - licensed person cannot receive payment from anyone except the broker they work for Partnership and Corporation ✔✔- partnership has general partners that manage operations - limited partners (silent partners) who invest - corporation is an artificial being- shareholders in a corp can only be liable to the extent of their investment Negative Amortization ✔✔when a mortgagor makes regular monthly payments that are not high enough so the principal amount goes up not down Client/Principal ✔✔who you work for Customer ✔✔who you bring to the deal Fiduciary Duties ✔✔Obedience Loyalty Disclosure Confidentiality Accountability Reasonable care and skill Easement ✔✔when someone can use your real estate Easement in gross ✔✔government or utility can use the land Appurtenant ✔✔easement on private property Dominant tenant ✔✔gets the right to do something - benefits the dominant tenant Servient tenant ✔✔- gives the right to land - someone using their land- disadvantage Adverse Possesstion ✔✔- if someone openly takes over abandoned property for 10 years they can go to court and claim ownership Flip Tax ✔✔move-out paid fee by the seller to cover the buildings cost of his move (processing documents, servicing, possible damage) Non-conforming loan ✔✔- a loan that does not conform to Fannie mae policies - harder for banks to sell to other banks on the secondary market Continuing Education ✔✔- license valid for 2 years Loft lease ✔✔- open space that has not been divided into rooms Seizin ✔✔- ownership Acceleration clause ✔✔- allows the bank to "speed up" the mortgage- making the entire payment due now if borrower doesn't pay (defaults) - NYS General Business Law 36B ✔✔- guarantee on new construction for: - 1 year workmanship - 2 years trade (plumbing, electric) - 6 years material defects Active Income ✔✔Salary Portfolio income ✔✔stocks and bonds Passive ✔✔real estate investments Blanket Mortgage ✔✔mortgage covers more than one property - when mortgage is paid down, owner can release one of the properties from the mortgage security Bride ✔✔using one property to finance purchase of another (swing loan) Package ✔✔mortgage for both real estate and personal property Wraparound ✔✔seller sells the building but keep mortgage and doesn't pay it off - buyer pays seller each month for existing mortgage Straight Term ✔✔(interest only) instead of paying a combination of interest and principal, borrower pays off interest only until the interest is completely paid off, then pays principal Adjustable Mortgage Rate (ARIM) ✔✔interest rate goes up and does with the market Participation (shared equity) mortgage ✔✔the bank does not give a mortgage for the real estate but shares in projects income and profits when sold Purchase money mortgage ✔✔seller financing -instead of getting mortgage, the buyer pays principal and interest to the seller every month 1988 Amendment Fair Housing ✔✔protects status of kids and disabled - disabled can make reasonable modification to apartment at their own expense- must change it back when moving out Inflation ✔✔prices go up- hot market Deflation ✔✔Prices go down, cool market (few sales) Stagflation ✔✔prices go up, cool market (combo of non moving and prices going up) Judicial deed ✔✔any deed written by a court Defeasance clause ✔✔can end a mortgage by paying the total amount of principal and interest due FEMA Federal Emergency Management Agency ✔✔offers people in flood zones insurance Forced warm air, radiator, heat pump BTUs ✔✔BTUs are a measure of heat (british thermal unit) - used to measure air conditioner and heat capacity Building permit ✔✔before any construction must get permit from department of buildings Certificate of occupancy ✔✔cannot sell, rent, buy and real estate without C or O (commercial and residential) Functional obsolescence/ functionally obsolete ✔✔ Landmarks Preservation Commission ✔✔- 1965 to protect historic buildings Eminent domain ✔✔gives government right to condemn private real estate and take ownership for public use Police Power ✔✔governments right to protect public Exclusive agency ✔✔listing is exclusive with broker, gets commission, but if seller sells without brokers help, gets nothing Exclusive right to sell ✔✔if owner sells himself, broker still gets paid Real Estate Tax Calculations ✔✔- based on property assessed value - deductible on income tax - charged by the city $ levy/ $value of real estate in city =% tax rate Ad valorem ✔✔by value, as per value Assessment rate ✔✔- determined by tax assessor - lists tax information for every property in the assessing unit (municipality or county) - all real estate is assessed even if not taxed - receive letter every Jan with assessment in dollar value *For Tax Math Questions ✔✔$ value x % assessment x % tax= $ annual tax or $ value x % assessment = $ assessed value $ assessed value x % tax= $ annual tax Mechanics Lien ✔✔- debt attached to real estate - person who repairs or improves property - if not paid, can place lien on real estate - residential- 4 months to place the lien - commercial- 8 months to place lien Steering ✔✔showing real estate in areas based on discrimination Wells and Septic Tanks ✔✔- septic tanks release wastewater into ground - should be at least 50 feet from well and 100 feet from absorption field (where water is released - before installing septic must do percolation test Essential elements of contract ✔✔- meeting of minds - lawful objective - consideration - competent parties - leases for over 1 year must be written Mobile Homes ✔✔- not considered real estate unless permanently attached to concrete foundation - if it can move it is personal property Interest only Mortgage (straight term) ✔✔borrower pays interest at beginning of loan - you get lower monthly payments - principal paid at end Net listing ✔✔- illegal - ex: i want 1 million for my real estate and you can keep anything over that Net Price ✔✔$ net price/ % to seller= $ sale price cash on Cash return ✔✔$ income / $ cash down payment= % cash on cash return (income is always annual so if it gives monthly income, multiply by 12) Accession Rights ✔✔- right to all that ones property produces Types of natural accession ✔✔- erosion- gradual loss of land - accretion- gradual increase of land - avulsion- loss of land through a sudden event - repletion- gradual increase in land because water decreases Earnest Money deposit ✔✔- small deposit given by buyer with the offer to show that the buyer is sincere and won't disappear - held in escrow account by sellers attorney Contract deposit ✔✔- more common in NYC - the contract deposit is a part of the down payment Sale contract ✔✔- sellers lawyer holds contract deposit for buyer in escrow account and then sellers lawyer writes contract - buyers lawyer makes changes and then both buyer and seller sign - rest of down payment due at closing Down payment ✔✔amount of the purchase price that the buyer pays - rest is mortgage Loan to Value Ratio ✔✔$ mortgage / $ value= LTV ratio % $ value- $ mortgage= $ owners equity Survey ✔✔legal description of property with dimensions and boundaries is included in deed Intestate ✔✔- person without a will Fixtures ✔✔attached to the land - fixtures stay Trade Fixtures ✔✔- personal property- things that go when you sell Appraisal ✔✔- opinion of value based on data - only licensed appraiser can do 3 approaches: - sales comparables - income (use IRV to find buildings value based on its income) - Cost- how much money it would be to rebuild Use Clause ✔✔- in a lease tells tenant what they can or cannot do in a space Anchor store ✔✔- store in shopping center that attracts customers who might also buy from other stores - usually large department stores or super markets Disputing Property Tax ✔✔- unlawful, excessive assessment, unequal, misclassified - file written complaint on grievance day with board - go to state supreme court or small claims - file article 78 proceeding Fee simple absolute ✔✔- MOST common - full bundle of rights Life Estate ✔✔- owner does not have the full bundle of rights (lesser estate) - only owns real estate for lifetime, after person dies the real estate does not go to family- goes to someone else - does not have right of control or right of disposition Life estate "pur autre vie" ✔✔- life estate for someone else lifetime CO detector ✔✔- carbon monoxide detectors must be in place whenever a home is offered for sale or rent Void ✔✔- void contract has no force of law- would not be a legal contract in court Voidable ✔✔- may be void but may not be Unenforceable ✔✔- has elements of valid contract but a court will not enforce it Predatory lending ✔✔- when people give mortgages that are unfair, deceptive or exploitative RESPA ✔✔Real Estate Settlement Procedures Act - regulation X - for residential not consumer - requires good faith estimate of closing costs within 3 days - give buyer a booklet examining closing costs - standard HUD1 balance sheet for closing Joists ✔✔floor or ceiling beams - girder is big beam that carries other beams Deed Restriction/ Restrictive covenant ✔✔- limitation written in the deed about what the owner can or cannot do with the property - restrictions stay when the property is sold CC&Rs Covenants conditions and restrictions ✔✔- house rules in a condo or neighborhood association Installment sale ✔✔- buyer pays for the real estate in monthly installments License and pocket card ✔✔- when you get license- broker holds paper license and you hold pocket card- should always carry with you Express and implied agency ✔✔- express can be oral or written, definitive agreement - implied is always oral- when someone suggests you are their agent Area of a Trapezoid ✔✔divide the shape into a triangle and a square Area of a rectangle ✔✔width x length Area of a triangle ✔✔width x 1/2 length or (b x h)/2 PITI ✔✔principal, interest, tax, insurance - costs of owning a home HQR House Qualifying Ratio ✔✔- percent of a families gross annual income that banks use to determine how much PITI a family can afford * $ annual household income x % House qualifying ration= max annual PITI * ALWAYS convert to annual 1890 Sherman Anti trust act ✔✔- stops the restraint of trade - illegal to - price fix, group boycott, market allocation, tie in Encroachment ✔✔- trespass by an object - like a fence or a tree crossing on to your land Pro-ration ✔✔- dividing expenses -debit you pay credit you get paid - if seller has paid real estate tax for full year but sells in middle of year, it is debit to the buyer for number of months buyer owns house - divide the years tax by 12 months and multiply by number of months buyer owns= debit amount mortgage banker ✔✔originates loans from the bank - direct lender mortgage broker ✔✔offers loans from many banks - middle man between you and lender Lis Pendens ✔✔- pending lawsuit Calculating interest ✔✔current mortgage balance x the interest rate / 12 months Residential ✔✔- if a building has fewer than 4 apartments Multi Family commercial ✔✔5+ apartments Severalty ✔✔one owner Entirety ✔✔ownership by husband and wife- have survivorship Operating Statement ✔✔- financial document showing the income and expenses of a commercial income producing building - updated monthly to track buildings performance Potential Gross Income ✔✔- amount of income the building would generate if all units were rented eat full market value Effective gross income ✔✔potential gross income - vacancy and collection loss + other income (like vending machine)= Effective gross income Net Operating income ✔✔effective gross income (potential gross income - vacancy and collection loss + other income) - expenses Slab on grade ✔✔- no basement- concrete foundation is on top of the ground Footing ✔✔underground concrete base that supports foundation Sill Plate ✔✔bottom piece of frame that sits on top of the foundation and provides the house frame to the foundation Estoppel ✔✔verifies the previously agreed balance, interest rate, maturity date - to "Stop" someone from contradicting a previous agreement Property management ✔✔-signs management agreement - creates financial reports and budget projections - manage capital reserve budget - preventative maintenance vs corrective maintenance Gross lease ✔✔what you have in an apartment Net lease ✔✔the tenant pays for some of the landlords expenses in return for lower rent Tax Shelter ✔✔- legal way to minimize your tax owed to the IRS Tax Deduction ✔✔cost you can subtract from your taxable income Tax credit ✔✔flat amount subtracted from the tax you owe- dollar for dollar (better than tax deduction) Statutes ✔✔written law