NY Real Estate Exam NY Real Estate Contracts & Closings

Question 1

What is the role of an attorney in a NY real estate transaction?

Accepted Answer

NY strongly recommends and customarily requires attorneys for both buyer and seller to review contracts, conduct closings, and protect client interests

Answer

Attorneys are optional in NY real estate

Answer

Only the seller needs an attorney

Answer

Attorneys are prohibited from real estate closings

Question 2

What is a 'binder' or 'offer to purchase' in NY real estate?

Accepted Answer

An informal agreement showing intent to purchase, which is generally NOT legally binding in NY until a formal contract is signed by both parties

Answer

A legally binding purchase contract

Answer

A mortgage commitment letter

Answer

A title insurance policy

Question 3

What is the standard contract contingency period in NY residential transactions?

Accepted Answer

There is no standardized contingency period; terms are negotiated between attorneys, but mortgage contingencies typically allow 30-60 days

Answer

7 days for all contingencies

Answer

No contingencies are allowed in NY

Answer

90 days minimum for all contingencies

Question 4

What is the standard down payment at contract signing in NY?

Accepted Answer

Typically 10% of the purchase price, held in the seller's attorney's escrow account

Answer

1% of the purchase price

Answer

No down payment is required at contract signing

Answer

50% of the purchase price

Question 5

What is a 'time of the essence' clause in a NY real estate contract?

Accepted Answer

A provision making the closing date a firm deadline, where failure to close by that date constitutes a material breach

Answer

A clause requiring quick responses to offers

Answer

A provision about business hours

Answer

A clause about inspection scheduling

Question 6

What transfer taxes apply to real estate sales in New York?

Accepted Answer

NY State transfer tax (0.4%), plus NYC transfer tax (1-1.425% in NYC), plus mansion tax (1%+ on sales over $1 million)

Answer

No transfer taxes exist in NY

Answer

Only federal transfer taxes apply

Answer

A flat $500 fee per transaction