NY Real Estate Prep

Category: Study Guides

  • NY real estate exam questions and answers

    The New York salesperson exam is 75 multiple-choice questions in 90 minutes, and you need 70% to pass β€” at least 53 correct. Below are ten exam-style questions with a full explanation on every answer, covering the areas that decide most results: licence law, agency, fair housing, math and NYC-specific topics.

    These are practice questions written to mirror the format and difficulty of the state exam. They are not copies of real exam questions β€” nobody legitimately has those.

    10 exam-style questions with answers

    Licence law

    A salesperson wants to be paid directly by a seller at closing. Is this permitted in New York?

    1. Yes, if the seller agrees in writing
    2. Yes, if the broker is notified
    3. No β€” compensation must flow through the sponsoring broker
    4. No, unless the salesperson holds an associate broker licence
    Show answer

    C. No β€” compensation must flow through the sponsoring broker

    A salesperson may only be compensated by their sponsoring broker. The seller pays the broker, and the broker pays the salesperson. This holds even if every party agrees otherwise.

    Agency

    An agent representing the seller learns the seller will accept far less than asking price. A buyer, who is a customer, asks what the seller will take. What must the agent do?

    1. Disclose it, because agents owe honesty to all parties
    2. Keep it confidential β€” it is owed to the client
    3. Disclose only if the buyer asks in writing
    4. Refer the buyer to the seller directly
    Show answer

    B. Keep it confidential β€” it is owed to the client

    Confidentiality is owed to the client, and it survives even direct questions from a customer. Honesty to a customer means not lying about material facts, not revealing the client's negotiating position.

    Agency disclosure

    When must the NY agency disclosure form be presented?

    1. At the first substantive contact
    2. At the time an offer is written
    3. At closing
    4. Within 5 days of showing a property
    Show answer

    A. At the first substantive contact

    The form is presented at first substantive contact β€” the point where a real discussion about the transaction begins, not at offer or closing.

    Fair housing

    An agent tells a buyer, "You'd probably be happier in a neighbourhood with more families like yours." What is this?

    1. Puffing
    2. Steering
    3. Blockbusting
    4. Permissible if the buyer asked
    Show answer

    B. Steering

    Steering is channelling a buyer toward or away from an area based on a protected class. It is a violation even when the agent believes they are being helpful and even where the buyer raised it.

    Fair housing (NY)

    Which class is protected under New York law but NOT under the federal Fair Housing Act?

    1. Race
    2. Religion
    3. Lawful source of income
    4. National origin
    Show answer

    C. Lawful source of income

    New York protects lawful source of income, which includes housing vouchers. Refusing a tenant because they pay with a voucher is unlawful in New York.

    Math β€” commission

    A home sells for $385,000 at a 5% total commission. Brokerages split 50/50 and the selling agent receives 60% of their brokerage's share. What does the agent earn?

    1. $5,775
    2. $9,625
    3. $11,550
    4. $19,250
    Show answer

    A. $5,775

    Total commission = $385,000 x 0.05 = $19,250. The selling brokerage receives half = $9,625. The agent's 60% = $5,775.

    Math β€” LTV

    A buyer obtains a $340,000 loan on a property appraised at $400,000. What is the LTV?

    1. 75%
    2. 80%
    3. 85%
    4. 90%
    Show answer

    C. 85%

    LTV = loan / value = $340,000 / $400,000 = 85%. Above 80%, a conventional loan generally requires private mortgage insurance.

    Math β€” area

    A rectangular lot measures 130 feet by 180 feet. How many acres is it?

    1. 0.42 acres
    2. 0.54 acres
    3. 0.68 acres
    4. 1.20 acres
    Show answer

    B. 0.54 acres

    Area = 130 x 180 = 23,400 sq ft. One acre is 43,560 sq ft, so 23,400 / 43,560 = 0.54 acres.

    Math β€” property tax

    A home is assessed at $180,000 with a mill rate of 24. What is the annual tax?

    1. $432
    2. $4,320
    3. $43,200
    4. $7,500
    Show answer

    B. $4,320

    Tax = assessed value x mill rate / 1,000 = $180,000 x 24 / 1,000 = $4,320. One mill is $1 per $1,000 of assessed value.

    NYC-specific

    A buyer purchases shares in a corporation and receives a proprietary lease. What did they buy?

    1. A condominium
    2. A co-op
    3. A townhouse
    4. A condop
    Show answer

    B. A co-op

    A co-op buyer receives shares plus a proprietary lease β€” personal property, not real property. A condominium buyer receives a deed to real property.

    Want these as a PDF?

    Our free download page has printable PDFs β€” a math formula sheet, a 161-term glossary, a New York quick reference, a 4-week study plan and an exam day checklist. No account needed.

    Where to get more practice questions

    Questions students ask

    Are these the actual questions on the NY exam?

    No. The state does not release its question bank, and any site claiming to sell real exam questions is either mistaken or lying. These are exam-style questions built from the same material the exam is drawn from.

    How many questions do I need right to pass?

    70% of 75 is 52.5, so you need at least 53 correct.

    Is there a free NY real estate exam questions PDF?

    Yes β€” see the free PDF downloads. The formula sheet and glossary are the two most students print.

    How much math is on the exam?

    Usually around 8 to 12 questions. Our guide to exam math and the 12-formula cheat sheet cover what is tested.

    Ready for a full-length attempt? The free practice exam is timed and scored by topic, so you can see where you actually stand before exam day.

  • Fair housing and disclosure terms on the NY real estate exam

    Fair housing violations are tested by scenario, and New York protects more classes than federal law does β€” including lawful source of income, which covers housing vouchers. Disclosure terms sit alongside these because both concern what an agent must say and must never say.

    8 terms you need to know

    Blockbusting
    Illegal practice of inducing owners to sell by suggesting that the racial, ethnic, or religious composition of the neighborhood is changing. Prohibited under federal and NY fair housing law .
    Caveat Emptor
    β€œLet the buyer beware.” The buyer is responsible for inspecting property; the seller is generally not required to disclose patent defects, though NY law requires a Property Condition Disclosure Statement for most 1-4 unit residential sales.
    Fair Housing Act
    Federal law (42 U.S.C. Β§3601) prohibiting discrimination in housing based on race, color, religion, sex, national origin, familial status, and disability. NY adds additional protected classes.
    Fraud
    Intentional misrepresentation of a material fact to induce someone to act, causing damage. A serious licensing violation under Article 12-A.
    Property Condition Disclosure Statement (PCDS)
    NY-required disclosure form for most 1-4 unit residential sales. Failure to deliver allows the buyer a $500 credit at closing.
    Puffing
    Exaggerated opinion-based sales statements (β€œThis is the most charming house in town!”). Not actionable misrepresentation unless they cross into false statements of fact.
    Source of Income
    A protected class under NY State Human Rights Law. Landlords cannot discriminate against lawful sources of income including Social Security, disability, child support, or housing vouchers.
    Steering
    Illegally directing prospective buyers or renters toward or away from particular neighborhoods based on protected class. Prohibited under fair housing law.

    Commonly confused

    Steering vs blockbusting

    Steering directs buyers toward or away from neighbourhoods based on a protected class. Blockbusting induces owners to sell by suggesting the character of the neighbourhood is changing. Both are violations even where the client requested it.

    Federal vs New York protected classes

    New York protects more classes than federal law, including lawful source of income, marital status, age, military status and sexual orientation. Answer New York questions using the New York list.

    Puffing vs fraud vs caveat emptor

    Puffing is opinion and is permitted. Fraud is a knowing misstatement of material fact and is not. Caveat emptor has been narrowed in New York by the Property Condition Disclosure Statement requirement.

    How this is tested

    Steering means channelling buyers toward or away from areas based on a protected class. Blockbusting means inducing panic selling by suggesting a neighbourhood is changing. Both are violations even when no one is harmed and even if the client asked for it.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Property ownership terms on the NY real estate exam

    These terms describe what someone actually owns and how co-owners hold it together. The distinctions matter because they decide what happens when an owner dies, and the exam tests that outcome more than the definition itself.

    9 terms you need to know

    Bundle of Rights
    The legal rights of ownership: possess, use, enjoy, exclude others, dispose of, and encumber. Real property ownership conveys this bundle subject to government powers and private restrictions.
    Curtesy / Dower
    Historical common-law spousal rights in real property. Abolished in NY and replaced by elective share rights under EPTL.
    Fee Simple Absolute
    The highest form of property ownership β€” full rights, no time limit, inheritable. The default in NY unless restricted.
    Joint Tenancy
    Co-ownership with the four unities (time, title, interest, possession) and the right of survivorship β€” the deceased owner’s share passes automatically to surviving joint tenants.
    Reversion
    The right of a grantor to regain ownership after a life estate or other limited estate ends.
    Severalty
    Ownership by a single person or entity β€” not co-owned.
    Tenancy by the Entirety
    A form of co-ownership available only to married couples in NY, with right of survivorship and protection from individual creditors of one spouse.
    Tenancy in Common
    Co-ownership where each owner has a separately conveyable and inheritable undivided interest. No right of survivorship β€” interest passes by will or intestacy.
    Will
    A legal instrument disposing of property at death. Real property passing by will goes through probate.

    Commonly confused

    Joint tenancy vs tenancy in common

    Joint tenancy carries the right of survivorship, so a deceased owner's share passes automatically to the survivors. Under tenancy in common there is no survivorship β€” the share passes to the deceased owner's heirs.

    Tenancy by the entirety

    Available only to married couples and the standard form for married owners in New York. It carries survivorship and neither spouse can convey their interest alone.

    Fee simple vs life estate

    Fee simple absolute is the largest ownership interest, of unlimited duration. A life estate lasts only for the measuring life, after which the property passes to the remainderman or reverts to the grantor.

    How this is tested

    Joint tenancy carries the right of survivorship, so the surviving owner takes the whole. Tenancy in common does not β€” the deceased owner’s share passes to their heirs. Tenancy by the entirety is reserved for married couples and is the standard form in New York.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Landlord and tenant terms on the NY real estate exam

    Leasehold questions test the tenant’s interest in the property and how a lease ends. The exam distinguishes the four leasehold estates by how they terminate, and separates a sublease from an assignment by how much interest the original tenant keeps.

    10 terms you need to know

    Estate at Will
    A tenancy that continues for an indefinite period and can be terminated by either party with proper notice.
    Estate for Years
    A tenancy with a defined start and end date β€” the most common commercial lease form.
    Gross Lease
    A lease where the landlord pays all operating expenses (taxes, insurance, maintenance). Common in residential.
    Lease
    A contract granting use and possession of property for a specified term in exchange for rent.
    Leasehold Estate
    The tenant’s interest in leased property. Includes estates for years, periodic tenancies, tenancies at will, and tenancies at sufferance.
    Net Lease
    A lease where the tenant pays some or all of the operating expenses in addition to base rent (single, double, or triple net).
    Quiet Enjoyment
    The tenant’s right to undisturbed use of leased premises β€” implied in every lease.
    Security Deposit
    Money held by a landlord to cover unpaid rent or damages. NY caps residential security deposits at one month’s rent under General Obligations Law Β§7-108.
    Sublease
    A lease by a tenant of part or all of leased premises to a new tenant (the sublessee), while the original tenant remains liable to the landlord.
    Tenant
    A person who occupies and uses property under a lease β€” the lessee.

    Commonly confused

    Sublease vs assignment

    A sublease transfers part of the remaining term and the original tenant stays liable to the landlord. An assignment transfers the entire remaining interest.

    Estate for years vs periodic estate

    An estate for years runs to a fixed end date and terminates automatically with no notice. A periodic estate renews itself period to period until one side gives proper notice.

    Gross lease vs net lease

    Under a gross lease the landlord pays the operating expenses out of the rent. Under a net lease the tenant pays some or all of the taxes, insurance and maintenance on top of base rent.

    How this is tested

    An estate for years ends automatically on a fixed date with no notice required. A sublease transfers part of the tenant’s interest and keeps them liable; an assignment transfers the whole remaining term.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • NYC real estate terms on the NY exam

    New York City operates under rules that do not apply elsewhere in the state, and the salesperson exam tests them. The co-op versus condominium distinction is the highest-value concept here: a co-op owner holds shares in a corporation and a proprietary lease, while a condo owner holds real property outright.

    7 terms you need to know

    Abatement
    A reduction in something owed, such as a property tax abatement granted by a municipality. In NYC, the 421-a tax abatement reduces property taxes for new construction for a set period.
    Co-op (Cooperative)
    A form of multi-unit residential ownership common in NYC where the building is owned by a corporation and residents own shares plus a proprietary lease for their unit.
    Common Elements
    Areas of a condominium or co-op shared by all owners β€” hallways, roof, lobby, mechanicals. Maintenance is funded by common charges.
    Condominium
    A form of ownership where the owner holds fee simple title to a unit plus an undivided interest in the common elements.
    HOA (Homeowners Association)
    An organization that manages shared community amenities and enforces covenants in planned communities and condominiums.
    Multiple Dwelling Law
    NY statute (Multiple Dwelling Law Β§1 et seq.) regulating safety, sanitation, and habitability in residential buildings with three or more units.
    Rent Stabilization
    A NY system primarily affecting NYC and certain other localities, regulating rent increases and lease renewals for many older multi-unit buildings. Different from rent control, which is even more restrictive and rarer.

    Commonly confused

    Co-op vs condominium

    A co-op buyer receives shares in a corporation plus a proprietary lease, which is personal property. A condominium buyer receives a deed to real property. This changes financing, board approval rights and how the interest is taxed and transferred.

    Rent control vs rent stabilization

    Rent control is the older, much smaller programme with strict tenancy-continuity requirements. Rent stabilization covers far more units and sets increases through the Rent Guidelines Board.

    Common elements vs limited common elements

    Common elements are shared by all unit owners, such as the lobby. Limited common elements serve one unit exclusively while remaining common property, such as a balcony or assigned parking space.

    How this is tested

    If a question mentions shares, a board interview, or a proprietary lease, you are in co-op territory and the interest is personal property, not real property. Rent stabilization and rent control are separate systems with different eligibility rules.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Zoning and land use terms on the NY real estate exam

    This cluster covers the limits government places on private ownership, plus the systems used to describe land legally. New York uses metes and bounds descriptions rather than the rectangular survey system common in western states, but the exam tests both.

    10 terms you need to know

    Acre
    A unit of land area equal to 43,560 square feet. A square one-acre lot measures roughly 209 feet on each side.
    Buffer Zone
    An area of land separating two different land uses, often residential from commercial or industrial.
    Condemnation
    Government taking of private property for public use under eminent domain, with required just compensation.
    Eminent Domain
    The constitutional power of government to take private property for public use upon paying just compensation.
    Escheat
    Reversion of property to the state when an owner dies without heirs and without a will.
    Metes and Bounds
    A legal land description that traces the property’s perimeter using distances and directions from a starting point.
    Non-Conforming Use
    A property use that was lawful when established but no longer complies with current zoning. Typically grandfathered.
    Rectangular Survey System
    A federal land description method using townships, sections, and ranges. Not used in NY β€” NY uses metes and bounds and lot-and-block.
    Variance
    Permission to deviate from a zoning rule. Use variances and area variances have different standards under NY zoning law.
    Zoning
    Local government regulation of land use through districts and rules. Adopted under the state’s police power.

    Commonly confused

    Variance vs non-conforming use

    A variance is permission granted to depart from current zoning. A non-conforming use was lawful before the zoning changed and is allowed to continue β€” it was not granted, it was grandfathered.

    Eminent domain vs condemnation

    Eminent domain is the government's power to take private property for public use with just compensation. Condemnation is the legal process by which that power is exercised.

    Metes and bounds vs rectangular survey

    New York describes land by metes and bounds, using distances, directions and monuments from a point of beginning. The rectangular survey system of townships and sections is used in western states.

    How this is tested

    Memorise the four government powers by the acronym PETE β€” Police power, Eminent domain, Taxation, Escheat. A variance permits a use that zoning would otherwise forbid; a non-conforming use predates the zoning and is allowed to continue.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Appraisal and valuation terms on the NY real estate exam

    Valuation vocabulary sits directly on top of the math section. The exam wants you to know which approach applies to which property type, and to keep an appraisal distinct from a comparative market analysis β€” a salesperson prepares a CMA, a licensed appraiser prepares an appraisal.

    13 terms you need to know

    Appraisal
    An estimate of a property’s market value, prepared by a licensed appraiser using approaches like sales comparison, cost, and income capitalization.
    Assessed Value
    The value placed on property by a municipal tax assessor for the purpose of calculating property tax. Not necessarily market value.
    CMA (Comparative Market Analysis)
    A broker’s estimate of a property’s likely sale price based on recently sold comparable properties. Not a formal appraisal.
    Capitalization Rate
    Net operating income divided by property value. Used to estimate value of income property.
    Comparables (Comps)
    Recently sold similar properties used to estimate the value of a subject property in a CMA or appraisal.
    Conformity
    An appraisal principle holding that property reaches maximum value when surrounded by similar properties.
    Depreciation
    Loss in property value from physical wear, functional obsolescence, or external factors. Also a tax deduction for income property owners.
    Gross Rent Multiplier (GRM)
    Sale price divided by monthly gross rent. A quick valuation tool for small income properties.
    Highest and Best Use
    The legally permissible, physically possible, financially feasible, and most productive use of a property.
    Income Approach
    An appraisal method that values property based on the income it generates β€” most appropriate for commercial and investment property.
    Mill
    One mill = $1 of tax per $1,000 of assessed value. A 25-mill rate on a $100,000 assessed value = $2,500 annual tax.
    Net Operating Income (NOI)
    Property’s gross income minus operating expenses (before debt service and income tax). Used in cap rate calculations.
    Sales Comparison Approach
    An appraisal method that estimates value based on recent sales of similar properties, adjusted for differences.

    Commonly confused

    Appraisal vs CMA

    A licensed appraiser produces an appraisal, which is a formal opinion of value. A salesperson produces a comparative market analysis to help price a listing. Calling a CMA an appraisal is a licence-law problem.

    Market value vs assessed value

    Market value is what a property should sell for in an arm's-length sale. Assessed value is set by the municipality for tax purposes and is often a fraction of market value.

    Cap rate vs GRM

    Cap rate uses net operating income, after operating expenses. GRM uses gross rent and ignores expenses entirely, which makes it a quick screening tool rather than a valuation method.

    How this is tested

    The three approaches map to property types: sales comparison for residential, income for investment property, cost for new or special-purpose buildings. Cap rate and NOI questions cross straight into the math section.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Title and deed terms on the NY real estate exam

    Title questions test how ownership is proven, transferred and clouded. The exam distinguishes sharply between the types of deed and the level of protection each gives the grantee, and between encumbrances that affect use versus those that affect ownership.

    28 terms you need to know

    Abstract of Title
    A condensed history of recorded documents affecting title to a parcel β€” deeds, mortgages, liens, judgments. Used to evaluate marketable title.
    Accretion
    Gradual addition to land through natural deposit of soil along a water boundary. The opposite of erosion.
    Acknowledgment
    A formal declaration before a notary that the signer executed a document voluntarily. Required for recording most deeds and mortgages in NY.
    Adverse Possession
    Acquisition of title to real property by occupying it openly, continuously, and exclusively for the statutory period β€” 10 years in NY for adverse possession against private owners.
    Affidavit of Title
    A sworn statement by the seller confirming no undisclosed liens, judgments, or other title defects exist since the title search was completed.
    Appurtenant Easement
    An easement that benefits a specific neighboring parcel (the dominant estate) and runs with the land. Compare with easement in gross.
    Closing
    The final step in a real estate transaction where ownership transfers, funds disburse, and the deed is delivered.
    Cloud on Title
    Any encumbrance or claim that may impair the marketability of title β€” an unpaid lien, an unresolved court order, an old recorded interest.
    Color of Title
    An apparent but invalid claim to title, such as a deed that is defective. Relevant in adverse possession claims.
    Covenant
    A binding agreement, especially a promise in a deed or lease. Restrictive covenants limit how the property may be used.
    Deed
    A written legal instrument that transfers title to real property from the grantor to the grantee. Must be delivered and accepted to be effective.
    Easement
    A right to use another’s land for a specific purpose β€” a utility right-of-way, an access path. Runs with the land if appurtenant.
    Easement Appurtenant
    An easement that benefits the owner of an adjacent parcel (the dominant estate) and burdens the servient estate. Transfers with property ownership.
    Easement in Gross
    An easement that benefits a person or entity rather than a parcel β€” typical of utility easements.
    Encroachment
    An unauthorized intrusion of one property onto another β€” a fence over the line, a roof overhang.
    Encumbrance
    Anything that affects or limits title to property: a lien, easement, deed restriction, or encroachment.
    Grant
    The act of conveying title from grantor to grantee, usually through a deed.
    License (Property)
    A revocable personal permission to use another’s land β€” narrower than an easement and not assignable.
    Marketable Title
    Title free of significant defects, allowing a reasonable buyer to accept without fear of future legal challenge.
    Notice
    Actual notice = known directly. Constructive notice = knowledge imputed by public recording. Recording a deed in NY gives constructive notice to the world.
    Quitclaim Deed
    A deed that transfers whatever interest the grantor has, with no warranties. Often used between family or to clear clouds on title.
    Recording
    Filing a document (deed, mortgage, lien) in the county clerk’s office to give constructive notice to the public.
    Restrictive Covenant
    A private deed restriction limiting how property may be used. Enforceable as long as it doesn’t violate fair housing or public policy.
    Riparian Rights
    Rights of an owner of land bordering a non-navigable waterway to reasonable use of the water.
    Title Insurance
    Insurance protecting against losses from undiscovered title defects. NY rates are regulated by the NY Department of Financial Services.
    Title Search
    Examination of public records to confirm ownership and identify encumbrances.
    Trustee
    A person or entity holding legal title to property for the benefit of another (the beneficiary).
    Warranty Deed
    A deed in which the grantor warrants title against defects. The strongest form of deed protection for the buyer.

    Commonly confused

    Warranty deed vs quitclaim deed

    A full covenant and warranty deed gives the grantee the strongest protection, warranting title back through all prior owners. A quitclaim conveys only whatever interest the grantor has, with no warranty at all β€” it may convey nothing.

    Easement vs encroachment

    An easement is a legal right to use another's land. An encroachment is an unauthorised physical intrusion onto it, such as a fence built over the boundary line. One is permitted, the other is a defect.

    Easement appurtenant vs easement in gross

    An appurtenant easement benefits an adjoining parcel and transfers with the land. An easement in gross benefits a person or company, such as a utility, and does not run with the land in the same way.

    How this is tested

    Know your deeds by warranty level: a full covenant and warranty deed offers the most protection, a quitclaim the least. Easements appear in nearly every exam β€” be able to separate an easement appurtenant from an easement in gross, and an easement from an encroachment.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Financing terms on the NY real estate exam

    Financing is the largest vocabulary cluster on the exam and overlaps directly with the math section. You are not expected to underwrite a loan, but you are expected to know who holds what interest, what happens on default, and the order in which liens are paid.

    33 terms you need to know

    Acceleration Clause
    A mortgage provision that allows the lender to demand the entire balance immediately upon default.
    Amortization
    The gradual repayment of a loan through scheduled payments of principal and interest over time.
    Balloon Mortgage
    A loan with regular payments that don’t fully amortize, leaving a large lump-sum payment due at maturity.
    Conventional Loan
    A mortgage not insured or guaranteed by a government agency (not FHA, VA, or USDA). Usually requires PMI if LTV exceeds 80%.
    Deed in Lieu of Foreclosure
    An agreement where the borrower deeds the property to the lender to avoid foreclosure.
    Deficiency Judgment
    A court judgment for the difference between the foreclosure sale price and the outstanding loan balance. NY restricts deficiency judgments on most residential mortgages.
    Equity
    The owner’s interest in property β€” market value minus liens and other encumbrances.
    Escrow
    Funds or documents held by a neutral third party until contract conditions are met. NY license law requires brokers to maintain client escrow funds in segregated accounts.
    Estoppel Certificate
    A signed statement by a tenant or lender confirming the current status of a lease or loan β€” used to give certainty to a buyer or new lender.
    FHA Loan
    A mortgage insured by the Federal Housing Administration. Allows lower down payments (3.5%) for qualifying borrowers.
    Foreclosure
    The legal process by which a lender seizes and sells mortgaged property after default. NY uses judicial foreclosure β€” requires court action.
    General Lien
    A lien attaching to all of a debtor’s property, not just one parcel β€” judgment liens and tax liens are general.
    Grantor / Grantee
    Grantor = the party transferring an interest. Grantee = the party receiving it.
    Lien
    A monetary encumbrance against property β€” mortgages, mechanic’s liens, tax liens, judgment liens.
    Loan-to-Value (LTV)
    Loan amount divided by property value. Lenders use LTV to assess risk.
    Mechanic’s Lien
    A statutory lien filed by a contractor or supplier who has provided labor or materials and has not been paid.
    Mortgage
    A loan secured by real property. The borrower (mortgagor) grants a security interest to the lender (mortgagee).
    Mortgage Broker
    A licensed intermediary who connects borrowers with lenders. Separately licensed from real estate brokers in NY.
    Mortgagor / Mortgagee
    Mortgagor = the borrower granting the mortgage. Mortgagee = the lender holding it.
    PITI
    Principal, Interest, Taxes, Insurance β€” the four components of a typical residential mortgage payment.
    PMI (Private Mortgage Insurance)
    Insurance required on most conventional loans with LTV above 80%, protecting the lender against borrower default.
    Prepayment Penalty
    A fee charged for paying off a mortgage early. Many residential mortgages prohibit them; NY restricts them on certain consumer loans.
    Proration
    Allocating expenses between buyer and seller as of closing β€” typically taxes, fuel, insurance, rent.
    RESPA (Real Estate Settlement Procedures Act)
    Federal law requiring disclosures and prohibiting kickbacks in residential mortgage transactions.
    Redemption
    The right of a defaulting borrower to recover the property by paying the debt β€” equitable redemption (before foreclosure sale) is recognized in NY.
    Subordination
    Voluntary acceptance of a junior priority position by a lienholder β€” common in refinancing where a second mortgage subordinates to a new first.
    Survey
    A measurement of property boundaries and improvements. Often required by lenders before closing.
    Trust Deed (Deed of Trust)
    An alternative to a mortgage used in some states β€” not commonly used in NY, which uses mortgages.
    Truth in Lending Act (TILA)
    Federal law requiring clear disclosure of loan terms and APR to consumers.
    Underwriting
    The lender’s process of evaluating a borrower’s creditworthiness and the property as collateral.
    Usury
    Charging interest above the legal limit. NY’s civil usury cap is generally 16% for loans to individuals.
    VA Loan
    A mortgage guaranteed by the U.S. Department of Veterans Affairs. Often allows no down payment for qualifying veterans.
    Writ of Execution
    A court order directing the sheriff to enforce a judgment, often by selling the debtor’s property.

    Commonly confused

    Acceleration vs alienation clause

    An acceleration clause lets the lender demand the full balance after a default. An alienation (due-on-sale) clause is triggered by the borrower selling or transferring the property, not by a missed payment.

    Mortgage vs deed of trust

    A mortgage involves two parties, borrower and lender, and is foreclosed judicially. A deed of trust adds a neutral trustee. New York is a mortgage state, so judicial foreclosure is the norm here.

    Lien priority

    Recording date usually decides priority, but property tax liens jump ahead of everything regardless of when they attached. This exception is tested constantly.

    How this is tested

    Lien priority comes up constantly β€” property tax liens generally take precedence over mortgage liens regardless of recording date. Know the difference between an acceleration clause and an alienation (due-on-sale) clause, and which mortgage clauses protect the borrower versus the lender.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.

  • Contract terms on the NY real estate exam

    Contract questions test whether you understand when an agreement becomes binding and what happens when it fails. New York requires real estate contracts to be in writing under the Statute of Frauds, and the exam leans on the difference between a valid, void, voidable and unenforceable contract.

    21 terms you need to know

    Acceptance
    Unqualified agreement to the terms of an offer. Any change creates a counter-offer instead and terminates the original offer.
    Accord and Satisfaction
    Settlement of a debt or dispute by agreeing to accept something different from what was originally owed.
    Assignment
    Transfer of contract rights or interests from one party to another. Compare with novation.
    Bilateral Contract
    A contract in which both parties exchange mutual promises. A real estate purchase contract is bilateral.
    Consideration
    Something of legal value exchanged between parties β€” money, services, a promise. Required for a valid contract.
    Contingency
    A condition that must be satisfied for a contract to remain binding. Common contingencies include financing, inspection, and appraisal.
    Counter-Offer
    A response that changes any term of an offer. It rejects the original offer and creates a new offer the original party can accept, reject, or counter.
    Default
    Failure to perform a contractual obligation β€” typically failure to make mortgage payments.
    Implied Contract
    A contract created by conduct rather than express words.
    Independent Contractor
    Most NY real estate salespersons work as independent contractors of their sponsoring broker rather than as employees, though the broker still supervises licensed activity.
    Land Contract
    An installment sale where the buyer takes possession but the seller retains legal title until the purchase price is paid in full.
    Liquidated Damages
    An amount agreed in advance to be paid by the breaching party β€” typically the buyer’s deposit is the seller’s liquidated damages if the buyer wrongfully defaults.
    Meeting of the Minds
    Mutual assent on all essential terms β€” a requirement for a valid contract.
    Novation
    Substitution of a new contract or new party for an old one, releasing the original obligor β€” different from assignment, which transfers rights but keeps the original obligor liable.
    Option Contract
    A contract giving the optionee the right (but not the obligation) to buy property within a set period for a set price, in exchange for consideration.
    Specific Performance
    A court remedy requiring a breaching party to perform the contract (deliver the deed) rather than just pay damages. Available when the property is unique.
    Statute of Frauds
    A rule requiring certain contracts (including most real estate contracts and leases over one year) to be in writing to be enforceable.
    Time Is of the Essence
    A contract clause making timely performance a strict condition. Without it, courts allow reasonable time.
    Unilateral Contract
    A contract where one party promises performance only if the other completes a specific act β€” e.g., an open listing or a reward.
    Vendor / Vendee
    Vendor = seller. Vendee = buyer (in a contract of sale).
    Voidable Contract
    A contract that one party may either enforce or rescind β€” typical for contracts involving minors or those induced by fraud.

    Commonly confused

    Void vs voidable

    A void contract never existed in law β€” it cannot be enforced by anyone. A voidable contract is valid until the injured party chooses to cancel it, which is why contracts signed by a minor are voidable and not void.

    Offer vs counter-offer

    Any change to a term, however small, rejects the original offer and replaces it with a counter-offer. The original cannot then be accepted unless it is re-offered.

    Assignment vs novation

    An assignment transfers rights but keeps the original party liable. A novation substitutes a new party and releases the original one entirely.

    How this is tested

    The classic trap is the counter-offer: any change to the terms rejects the original offer and creates a new one. Also expect questions on which contingencies protect the buyer, and what remedies exist when a party defaults.

    Keep studying

    Test yourself. The free timed practice exam uses this vocabulary in exam-style questions, and the 484 free flashcards drill the definitions.
NY Real Estate Prep is an independent study tool for educational use only. Not affiliated with, endorsed by, or sponsored by the New York Department of State or any government or licensing authority. Practice questions are original and exam-style — not actual exam questions. Verify all licensing exam requirements at dos.ny.gov.