Most Missed
20 NY Real Estate Exam Questions Most Students Get Wrong
These twenty questions — covering agency disclosure, math, fair housing, NY-specific topics, and joint tenancy — are statistically the most commonly missed. Drill these and you’ll outperform most candidates on test day.
Educational use onlyNY Real Estate Prep is an independent study tool — not affiliated with the NY Department of State. Not legal, tax, or financial advice. Verify all exam policies at dos.ny.gov.
Each question is exam-style. Read it carefully, pick your answer in your head, then check the explanation. Notice the patterns — most of these aren’t “hard” questions. They’re trap questions where one wrong detail flips the answer. That’s what the real exam does too.
#1 · Agency / Disclosure Timing
At what point in New York must a real estate licensee provide a written agency disclosure form?
A. At closing
B. After a buyer-rep agreement is signed
C. At the first substantive contact about a specific property
D. Only if the consumer asks for it
Correct: C. NY law requires the agency disclosure form to be presented in writing at the first substantive contact — long before any agreement is signed. Closing is far too late, and the form is required whether or not the consumer asks. This is the single most-tested question on NY agency law.
#2 · Math / Discount Points
A buyer purchases a $500,000 home with a $400,000 mortgage and pays 2 discount points. How much do the points cost?
A. $10,000
B. $8,000
C. $4,000
D. $2,000
Correct: B. Points are calculated on the loan amount, not the purchase price. $400,000 × 2% = $8,000. The $10,000 answer is the trap — that’s the purchase price × 2%. Students who don’t slow down get burned here.
#3 · Math / Cap Rate
A small commercial building generates $80,000 in net operating income and you want a target cap rate of 8%. What’s the maximum you should pay?
A. $640,000
B. $960,000
C. $1,000,000
D. $10,000,000
Correct: C. Value = NOI ÷ Cap Rate = $80,000 ÷ 0.08 = $1,000,000. The $640,000 distractor is NOI × 8 (a misapplication). $10,000,000 is NOI ÷ 0.008 (decimal slip).
#4 · Property Rights / Joint Tenancy
Three siblings own a property as joint tenants. One sibling dies. What happens to that sibling’s interest?
A. It passes to the deceased’s heirs by intestacy
B. It passes by the deceased’s will
C. It passes automatically to the surviving joint tenants by right of survivorship
D. It is sold and the proceeds split among all heirs
Correct: C. Joint tenancy includes the right of survivorship. The deceased’s interest passes automatically to the surviving joint tenants — it does not go through probate, by will or otherwise. This is the key distinction from tenancy in common.
#5 · Fair Housing / Source of Income
A landlord refuses to rent to an applicant because the applicant uses a Section 8 voucher. This action:
A. Is legal because Section 8 isn’t guaranteed long-term
B. Violates NY State source-of-income protections
C. Is permitted if disclosed in the rental application
D. Is allowed if the landlord requires three months’ rent upfront
Correct: B. NY State Human Rights Law prohibits housing discrimination based on lawful source of income, which expressly includes Section 8 vouchers. Requiring extra rent upfront from voucher holders is also illegal — it’s a discriminatory term.
#6 · Contracts / Counter-Offer
A seller responds to an offer in writing accepting the price but changes the closing date. This response is:
A. A valid acceptance
B. A counter-offer that terminates the original offer
C. A binding contract pending the buyer’s signature
D. An option contract
Correct: B. Any modification to an offer is a counter-offer. A counter-offer rejects and terminates the original offer. The original buyer can now accept, reject, or counter-counter.
#7 · License Law / Transfer
A NY salesperson wants to begin working under a new sponsoring broker. What’s required?
A. Pay a transfer fee to the previous broker
B. Submit a transfer application and fee to the NY Department of State
C. Wait 30 days before working for the new broker
D. Retake the salesperson exam
Correct: B. A NY salesperson files a transfer application and fee with the NY DOS. No waiting period, no re-exam, no fee owed to the prior broker.
#8 · Title / Easement Type
Owner A’s land is landlocked. The neighbor allows A to use a driveway across their land. This is most likely:
A. An easement in gross
B. An easement appurtenant
C. A license
D. A profit á prendre
Correct: B. An easement appurtenant benefits the owner of an adjacent parcel (the dominant estate) and runs with the land. An easement in gross benefits a person or entity (like a utility company), not a parcel.
#9 · Math / Prorations
Annual property tax is $4,380. The seller has owned the property 120 days of the tax year at closing. What’s the seller’s proration owed?
A. $1,200
B. $1,440
C. $1,800
D. $2,190
Correct: B. Daily rate = $4,380 ÷ 365 = $12/day. Seller owes 120 × $12 = $1,440. Students who confuse “days owned” with “days remaining” pick the wrong number; check carefully whether the question asks for the seller’s portion or the buyer’s portion.
#10 · Finance / LTV
A buyer purchases a $400,000 home with a $320,000 mortgage. What is the LTV ratio?
A. 20%
B. 75%
C. 80%
D. 90%
Correct: C. LTV = Loan Amount ÷ Property Value = $320,000 ÷ $400,000 = 80%. At 80% LTV, the borrower typically avoids PMI on a conventional loan — the threshold is critical to remember.
#11 · Fair Housing / Protected Class
Which of the following is protected under NY State Human Rights Law but is NOT a protected class under the federal Fair Housing Act?
A. Race
B. Familial status
C. Marital status
D. National origin
Correct: C. Federal protected classes: race, color, religion, national origin, sex, familial status, disability. NY State adds: age, marital status, military status, sexual orientation, gender identity, source of income, citizenship, and more.
#12 · NY-Specific / Co-op
A buyer is purchasing a NYC co-op. Which is TRUE?
A. The buyer receives fee simple title to the apartment
B. The buyer receives shares in a corporation plus a proprietary lease
C. The buyer receives a recorded deed identical to a condo
D. Co-ops in NY are no different from condos
Correct: B. Co-op buyers receive shares in the corporation that owns the building plus a proprietary lease for the specific unit. They do not receive a deed and do not hold fee simple title to real property. This is fundamentally different from a condo.
#13 · Contracts / Statute of Frauds
Under NY law, which of the following contracts MUST be in writing to be enforceable?
A. A 6-month residential lease
B. A handshake commission agreement
C. A real estate purchase contract
D. A verbal listing agreement
Correct: C. Under the Statute of Frauds, real estate purchase contracts and leases longer than one year must be in writing. A 6-month lease and most commission agreements can technically be oral, though always documented in practice.
#14 · Agency / Fiduciary Duty
A buyer’s agent learns that the buyer is willing to pay up to $500,000 but the buyer offers only $470,000. The agent reveals the $500,000 ceiling to the seller’s agent. Which duty did the agent violate?
A. Loyalty
B. Obedience
C. Confidentiality
D. Reasonable care
Correct: C. Revealing the buyer’s confidential price ceiling to the other side violates confidentiality. The duty of confidentiality survives even after the agency relationship ends.
#15 · Math / Commission Split
A home sells for $600,000 at a 6% commission split 50/50 between brokerages. The agent receives 70% of their brokerage’s share. How much does the agent earn?
A. $36,000
B. $25,200
C. $18,000
D. $12,600
Correct: D. Total commission = $600,000 × 6% = $36,000. Brokerage share = $36,000 × 50% = $18,000. Agent = $18,000 × 70% = $12,600. The other choices are each step in the chain — designed to catch students who stop too early.
#16 · Title / Joint Tenancy vs TIC
Two unmarried partners purchase a home together. They want to ensure that if one dies, the other automatically takes full ownership without probate. They should take title as:
A. Tenants in common
B. Joint tenants with right of survivorship
C. Tenancy by the entirety
D. Severalty
Correct: B. Joint tenancy with right of survivorship provides automatic transfer to the surviving co-owner. Tenancy by the entirety is only for married couples. Severalty is single ownership. Tenants in common has NO right of survivorship — interests pass by will or intestacy.
#17 · Finance / FHA
Which is TRUE of FHA loans?
A. They are made directly by the federal government
B. They are insured by the FHA but originated by approved private lenders
C. They require 20% down payment minimum
D. They cannot be assumed by another buyer
Correct: B. The FHA insures loans; it does not originate them. Loans are made by approved private lenders. Minimum down payment is 3.5%. FHA loans are assumable, which can be valuable when interest rates have risen since the original loan.
#18 · Land Use / Zoning
A property has a non-conforming use that existed before the current zoning was enacted. The owner wants to expand the use. They likely:
A. May expand freely under grandfathering
B. May NOT expand the non-conforming use
C. May expand only with a use variance
D. May expand only with planning board approval
Correct: B. Non-conforming uses are grandfathered — they may continue but generally may NOT be expanded, enlarged, or rebuilt after substantial damage. Expansion typically requires a variance or zoning change.
#19 · Contracts / Earnest Money
If a buyer breaches a real estate contract and forfeits their earnest money deposit, the deposit is typically considered:
A. Specific performance
B. Liquidated damages
C. Punitive damages
D. Restitution
Correct: B. Forfeited earnest money is liquidated damages — an amount agreed in advance to compensate the seller for the buyer’s breach. This avoids having to prove actual damages in court.
#20 · NY-Specific / Mansion Tax
A buyer purchases a $1.2 million home in NY State. What’s the NY State mansion tax?
A. $0 — mansion tax doesn’t apply at this price
B. $12,000 (1%)
C. $1,200 (0.1%)
D. $24,000 (2%)
Correct: B. NY State mansion tax is 1% of the sale price on residential transactions of $1 million or more, paid by the buyer. $1,200,000 × 1% = $12,000. NYC has higher graduated brackets above this, but the NY State component is the flat 1%.
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