NY Real Estate Exam Content 3 — Questions and Answers
Question 1: Which type of listing gives the broker the right to a commission regardless of who sells the property, including the owner?
- Open listing
- Exclusive agency listing
- Exclusive right-to-sell listing (Correct answer)
- Net listing
Correct answer: Exclusive right-to-sell listing
An exclusive right-to-sell listing guarantees the broker a commission if the property is sold by anyone — including the seller — during the listing period.
Question 2: A New York homeowner sells their principal residence. Under federal tax law, how much gain can a married couple filing jointly exclude?
- $125,000
- $250,000
- $500,000 (Correct answer)
- $750,000
Correct answer: $500,000
Under IRC §121, married couples filing jointly may exclude up to $500,000 of capital gains from the sale of their principal residence if ownership and use tests are met.
Question 3: Which document is used in New York to convey title from a deceased person's estate to a buyer?
- Warranty deed
- Quitclaim deed
- Executor's deed (Correct answer)
- Referee's deed
Correct answer: Executor's deed
An executor's deed is used by the estate's executor to transfer real property owned by a deceased person to the new owner.
Question 4: In New York, who is responsible for paying the transfer tax on the sale of a one-to-three family residence?
- The buyer
- The seller (Correct answer)
- Both buyer and seller equally
- The listing broker
Correct answer: The seller
New York State transfer tax (currently $4 per $1,000) is typically the seller's obligation unless otherwise negotiated in the contract.
Question 5: A lender requires a borrower to maintain a reserve account to cover future property taxes and insurance premiums. This account is called a/an:
- Escrow impound account (Correct answer)
- Sinking fund
- Reserve fund
- Operating account
Correct answer: Escrow impound account
An escrow impound account (also called an escrow account) holds funds collected monthly by the lender to pay property taxes and insurance when due.
Question 6: Which federal act prohibits discriminatory lending practices based on race, color, religion, national origin, sex, marital status, or age?
- Fair Housing Act
- Equal Credit Opportunity Act (Correct answer)
- Community Reinvestment Act
- Home Mortgage Disclosure Act
Correct answer: Equal Credit Opportunity Act
The Equal Credit Opportunity Act (ECOA) prohibits creditors from discriminating against applicants on the basis of protected characteristics in any aspect of a credit transaction.
Question 7: A property valued at $450,000 is assessed at 60% of value. If the tax rate is $30 per $1,000 of assessed value, what is the annual property tax?
- $5,400
- $7,200
- $8,100 (Correct answer)
- $13,500
Correct answer: $8,100
$450,000 × 0.60 = $270,000 assessed value; $270,000 ÷ $1,000 × $30 = $8,100 annual tax.
NY Real Estate Exam Content 3
Which type of listing gives the broker the right to a commission regardless of who sells the property, including the owner?