TheoryYork Real Estate
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30 free York Real Estate questions
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Agency
In real estate, an 'agent' is best defined as a person who:
Correct — A. An agent is someone authorized to act on behalf of a principal. In real estate, licensees act as agents for buyers or sellers, but the defining characteristic is the authority granted to act for another. -
Agency
The person on whose behalf an agent acts is called the:
Correct — C. The principal is the party who authorizes the agent to act on their behalf. In real estate, the principal is typically the buyer or seller who hires the agent. -
Agency
A 'customer' in a real estate transaction is most accurately described as:
Correct — B. A customer is a third party (not the licensee's client/principal) to whom the licensee may still owe certain duties such as honest dealing but NOT fiduciary duties. -
Agency
Which type of agency authorizes the agent to perform only ONE specific act?
Correct — D. A special (or specific) agency limits the agent to performing a single act or transaction, such as selling one particular property. Most real estate agents operate as special agents. -
Agency
A general agency relationship in real estate typically exists between:
Correct — A. Salespersons are general agents of their employing broker because they are authorized to conduct a wide range of activities on the broker's behalf on an ongoing basis, not just for a single transaction. -
Agency
Universal agency differs from general agency primarily because the universal agent:
Correct — B. Universal agency grants the broadest authority, often via a power of attorney, allowing the agent to act in virtually all matters for the principal. General agency, by contrast, is limited to a specific business or type of activity. -
Agency
The acronym most commonly used to remember all fiduciary duties an agent owes to a client is:
Correct — C. OLDCAR stands for Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable care — the six fiduciary duties owed by an agent to their principal. -
Agency
The fiduciary duty of LOYALTY requires an agent to:
Correct — A. Loyalty means the agent must act solely in the client's best interest and cannot place their own financial gain or another party's interests ahead of the client's. -
Agency
An agent's duty of OBEDIENCE requires them to follow the principal's lawful instructions. Which of the following instructions would an agent be CORRECT to refuse?
Correct — D. Obedience applies only to LAWFUL instructions. Refusing to show property based on a buyer's national origin violates the Fair Housing Act and New York Human Rights Law, so the agent must refuse this instruction. -
Agency
Under the duty of CONFIDENTIALITY, which piece of information must a seller's agent keep confidential even after the transaction closes?
Correct — B. The seller's motivation (such as financial hardship) is personal information that must remain confidential to protect the seller's negotiating position. Known material defects, by contrast, must be disclosed to all parties. -
Agency
The fiduciary duty of ACCOUNTABILITY (also called 'accounting') requires an agent to:
Correct — C. Accountability means the agent must safeguard and properly account for any money or property (such as earnest money deposits) entrusted to them, and must not commingle those funds with personal or business funds. -
Agency
A buyer's agent learns that the seller is willing to accept $30,000 below the listed price. Under fiduciary duty, the buyer's agent should:
Correct — A. The duty of disclosure requires a buyer's agent to reveal to the buyer any information that benefits the buyer — including the seller's willingness to accept a lower price. Confidentiality protects the agent's OWN client's information, not the other party's. -
Agency
Which of the following is the MOST common way an agency relationship is created in New York real estate?
Correct — B. Express agency is intentionally created by a written or oral agreement. In New York, listing agreements and buyer representation agreements are the standard written express agency contracts. -
Agency
Agency by ESTOPPEL (also called apparent or ostensible agency) can arise when:
Correct — D. Agency by estoppel occurs when the principal's words or actions cause a third party to reasonably believe that someone is their agent, even if no formal agreement exists. The principal may be 'estopped' (prevented) from denying the relationship. -
Agency
Agency by RATIFICATION occurs when:
Correct — C. Ratification means the principal, after the fact, accepts the benefit of or affirms an act an agent performed without prior authority. Once ratified, the agent's act is treated as if it had been authorized from the beginning. -
Agency
Under an EXCLUSIVE RIGHT TO SELL listing, the broker earns a commission if the property is sold:
Correct — A. An exclusive right to sell listing entitles the listing broker to a commission regardless of who produces the buyer — even if the seller sells the property to a neighbor without any broker involvement. -
Agency
Under an EXCLUSIVE AGENCY listing, the seller retains the right to:
Correct — B. In an exclusive agency listing, only one broker is authorized, but the seller reserves the right to find their own buyer. If the seller closes that private sale, no commission is owed to the broker. -
Agency
An OPEN LISTING allows a seller to:
Correct — D. An open listing is a non-exclusive agreement where the seller may simultaneously work with many brokers. Only the broker who actually produces the buyer earns a commission, and the seller pays nothing if they sell it themselves. -
Agency
A net listing is considered PROBLEMATIC in New York primarily because it:
Correct — C. In a net listing the broker keeps everything above a seller-specified 'net' amount. This creates a direct conflict with the broker's fiduciary duty of loyalty because the broker may be tempted to push for a higher price to increase their own cut rather than to serve the seller's best interest. New York discourages net listings. -
Agency
A 'safety clause' (also called an extender or tail clause) in a listing agreement protects the broker by:
Correct — A. The safety (extender) clause protects the broker from sellers who wait for the listing to expire and then deal directly with buyers the broker introduced, thereby avoiding the commission. -
Agency
When a salesperson works as a BUYER'S AGENT, their primary fiduciary duty is to the:
Correct — B. A buyer's agent owes full fiduciary duties to the buyer regardless of how the commission is structured. The source of payment does not determine agency. -
Agency
Which of the following is NOT a typical duty owed by a buyer's agent to their client?
Correct — C. Marketing the property is the seller's agent's responsibility. A buyer's agent searches for properties and negotiates on behalf of the buyer, not the seller. -
Agency
A buyer's agent who is compensated through the listing broker's commission split is BEST described as receiving:
Correct — D. The payment mechanism does not change agency obligations. A buyer's agent can receive compensation from the seller's proceeds (via commission split) and still owe full fiduciary duties to the buyer. -
Agency
Dual agency occurs when a licensee represents:
Correct — A. Dual agency arises when the same agent (or brokerage) represents both the buyer and the seller in a single transaction, creating a potential conflict of interest. -
Agency
In New York State, dual agency is legal ONLY when:
Correct — B. New York law (Real Property Law § 443) requires that both parties give their informed written consent before a licensee may act as a dual agent. Without this consent, dual agency is illegal. -
Agency
In a disclosed dual agency, which duty is SIGNIFICANTLY REDUCED for the agent?
Correct — D. A dual agent cannot vigorously negotiate for one party against the other since both are clients. Active negotiation in one party's best interest is reduced; however, duties of honesty, accounting, and disclosure of material defects remain. -
Agency
Designated agency in New York is designed to address the conflict of dual agency by:
Correct — C. Designated agency allows the broker to assign different salespersons — one to represent the buyer and one to represent the seller — within the same firm, so each party has their own advocate and full fiduciary duties are maintained. -
Agency
Under New York's designated agency rules, the BROKER in a designated agency transaction owes the parties:
Correct — A. Even when designated agents represent each side, the supervising broker technically occupies a dual agency position and owes limited (dual agent) duties to both parties, while each designated salesperson owes full fiduciary duties to their respective client. -
Agency
New York Real Property Law § 443 requires licensees to provide an agency disclosure form to prospective clients:
Correct — B. RPL § 443 mandates that the NY Agency Disclosure form be presented to buyers and sellers at the first substantive (meaningful) contact — not at contract signing or closing. -
Agency
If a buyer REFUSES to sign the NY Agency Disclosure form, the licensee should:
Correct — D. Under RPL § 443, if the buyer or seller refuses to sign the disclosure form, the agent must note the refusal, sign the form themselves, and retain a copy. The agent may still proceed with the transaction.
York Real Estate sample questions
Tap any question below to reveal the answer and a plain-English explanation.
Agency The NY Agency Disclosure form is designed primarily to inform consumers about:
A. Who the licensee represents and what duties are owed ✓
B. The commission rate the broker will charge
C. The terms and conditions of the listing agreement
D. The buyer's mortgage financing options
Correct — A. The disclosure form explains the different agency relationships available (seller's agent, buyer's agent, dual agent, etc.) so consumers understand who represents them and what fiduciary duties they can expect.
Contracts Which element is NOT required for a valid real estate contract in New York?
A. A notarized signature from both parties ✓
B. Offer and acceptance
C. Consideration
D. Lawful purpose
Correct — A. Notarization is not a requirement for a valid real estate contract in NY; contracts need offer and acceptance, consideration, parties with legal capacity, and a lawful purpose. A deed requires acknowledgment, but not a sales contract.
Fair Housing The federal Fair Housing Act of 1968 originally prohibited discrimination based on which protected classes?
A. Race, color, religion, and national origin ✓
B. Race, color, sex, and disability
C. Race, familial status, religion, and sex
D. Race, color, national origin, and age
Correct — A. The original Fair Housing Act of 1968 covered four classes: race, color, religion, and national origin. Sex was added in 1974, and disability and familial status were added in 1988.
Financing In a mortgage, the borrower is called the:
A. Mortgagor ✓
B. Mortgagee
C. Beneficiary
D. Trustee
Correct — A. The mortgagor is the borrower who pledges the property as collateral. The mortgagee is the lender who receives the mortgage.
NY License Law In New York, a real estate salesperson must be sponsored by whom to activate their license?
A. A licensed real estate broker ✓
B. The Department of State
C. A real estate attorney
D. A mortgage lender
Correct — A. NY law requires every licensed salesperson to be associated with and sponsored by a licensed real estate broker. The salesperson cannot practice independently without an active broker sponsor.
Practice Under New York Real Property Law, which state agency is responsible for licensing real estate salespersons and brokers?
A. Department of State ✓
B. Department of Finance
C. Department of Commerce
D. Division of Housing and Community Renewal
Correct — A. The New York Department of State (DOS), through its Division of Licensing Services, issues and regulates real estate licenses in New York. The other agencies handle different governmental functions.
Property Management A property manager's primary fiduciary duty is owed to whom?
A. The property owner (principal) ✓
B. The tenants
C. The local municipality
D. The property manager's brokerage firm
Correct — A. The property manager acts as an agent of the owner and owes fiduciary duties—loyalty, care, and obedience—to the owner as the principal. Tenants are third parties, not principals.
Valuation Which principle of value states that the worth of a property is determined by the cost to acquire an equally desirable substitute?
A. Principle of contribution
B. Principle of conformity
C. Principle of substitution ✓
D. Principle of anticipation
Correct — C. The principle of substitution holds that a rational buyer will pay no more for a property than the cost of obtaining an equally satisfactory substitute. This principle underpins the sales comparison approach to value.
About the York Real Estate test
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NY License Law, Agency, Contracts, Financing, Fair Housing, Property Management — and more.
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You will be tested on
- Property ownership, agency and disclosure
- Contracts, financing and escrow
- Real estate law and fair-housing rules
- Valuation, math and transaction practice
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Topics in this question bank
Property ownership, agency and disclosure
Contracts, financing and escrow
Real estate law and fair-housing rules
Valuation, math and transaction practice
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