FREE NY Real Estate Exam Content Questions and Answers
In a real estate transaction, who typically holds the earnest money deposit until closing?
In most real estate transactions, the earnest money deposit is held by a neutral third party, such as an escrow agent or broker, to ensure the buyer’s good faith and protect the funds until the transaction is complete.
Which of the following is an example of an involuntary lien?
A tax lien and a mechanic's lien are considered involuntary liens, which are placed on property without the owner’s consent, usually due to unpaid taxes or work completed but not paid for. A mortgage lien, by contrast, is voluntary because it is agreed to as part of a loan agreement.
Which of the following is NOT considered a freehold estate?
A leasehold estate refers to a tenant’s interest in property and is not considered a freehold estate. Freehold estates, like fee simple and life estates, grant ownership rights, while leasehold estates are temporary and based on a rental agreement.
What is the primary purpose of the Truth in Lending Act (TILA)?
The Truth in Lending Act (TILA) ensures that lenders provide borrowers with clear and complete information about the cost of credit, including interest rates, fees, and other terms, so that consumers can make informed decisions.
What is the fiduciary duty of loyalty in real estate agency law?
The fiduciary duty of loyalty means that the real estate agent must act in the best interests of their client and place the client’s needs above their own in all dealings related to the transaction.