REAL ESTATE LICENSE PRACTICE
TEST QUESTIONS & VERIFIED
ANSWERS NEWEST VERSION
What is Article 12-A? - Correct Answer ✔✔ contains most of the laws that govern real
estate salespersons and brokers in New York
Who does a sponsoring broker supervise? - Correct Answer ✔✔ an associate broker
and/or salespersons
Who is an office manager? - Correct Answer ✔✔ An office manager is a licensed
associate real estate broker who has chosen to work as an office manager, working
under the supervision of a broker.
Samuel has an associate broker's license, and works under the supervision of Mel, his
sponsoring broker. Samuel also has his own broker's license, and performs transactions
under his own name. Is this allowed? - Correct Answer ✔✔ Yes, this is allowed under
dual licensure
In New York, who regulates all real estate activity? - Correct Answer ✔✔ the New York
Department of State (DOS) and the New York Board of Real Estate
How much does it cost to renew a broker's license? - Correct Answer ✔✔ $155
A business address of a brokerage needs to be changed. Who is responsible for
making this change? - Correct Answer ✔✔ The broker is responsible for changing a
business address (and paying the fees).
Who files a termination of association notice? - Correct Answer ✔✔ the sponsoring
broker
Why is the irrevocable consent form important in the practice of real estate? - Correct
Answer ✔✔ The irrevocable consent form ensures that out-of-state licensees can be
tried for license violations by a New York court.
How many hours of continuing education does a salesperson or broker need, every two
years? - Correct Answer ✔✔ 22.5 hours
What is a blind ad? - Correct Answer ✔✔ A blind ad does not identify the advertiser as
a real estate broker.
,A broker who enters into a Listing Agreement with a seller is considered a: - Correct
Answer ✔✔ fiduciary
Which is NOT one of the required components to form an agency relationship? - Correct
Answer ✔✔ earnest intent
-The four components required to form an agency relationship are: an agent, a principal,
mutual agreement, and fiduciary obligation. Earnest intent is not a required component.
Timothy has an agency relationship with Sarah, the purchaser of 4412 Castle Drive.
Sarah has also agreed to a contract with Melissa, a licensed real estate inspector, to
inspect 4412 Castle Drive. What is the relation of Melissa to Timothy? - Correct Answer
✔✔ third party
Which of the roles below BEST describes the following terms: real estate inspector, loan
officer, or the "other principal." - Correct Answer ✔✔ third party
To a client, what is a broker considered to be? - Correct Answer ✔✔ special agent
An agent has obtained a buyer representation agreement with a new client. Who owes
the client fiduciary duties? - Correct Answer ✔✔ the broker and all sponsored agents in
the brokerage.
-Because special agency is created at the broker level, this means that the broker and
all of that broker's sponsored agents owe the client fiduciary duties.
When an agent protects their client's best interests, they are modeling which fiduciary
duty? - Correct Answer ✔✔ loyalty
When is agency by estoppel typically created? - Correct Answer ✔✔ after the actions of
the agent have already occurred
When an agent decides to end an agency relationship, this is called: - Correct Answer
✔✔ renunciation
If Broker Gil signs Seller Audrey to a listing agreement and, then, chooses not to
present her with a comparative market analysis because he has decided to buy her
property for himself, what could Gil be accused of? - Correct Answer ✔✔ failure in his
fiduciary duty of loyalty and engaging in self-dealing
Which of the following contain the basic elements of antitrust violation? - Correct
Answer ✔✔ an agreement / between competitors / that poses a restraint / and the
restraint is unreasonable
By dividing the metropolis of Boomville into evenly sized quadrants, the four big
brokerages in town focused on their assigned areas more intensively than they could
the whole of Boomville. They freely shared their in-depth knowledge with their clients.
,So why would this practice be frowned upon? - Correct Answer ✔✔ competition and
choice are supressed
Section 530 of the Revenue Act of 1978 is known as: - Correct Answer ✔✔ Safe Harbor
- a place of refuge for those industries Congress felt were victims of an overly
aggressive IRS practice of attempting to reclassify independent contractors as
employees.
How many categories can behavioral control factors fall into? - Correct Answer ✔✔ four:
degree of instruction, training, evaluation systems, and type of instructions given.
The factors of significant investment, unreimbursed expenses, and opportunity for profit
or loss are all part of what's known as: - Correct Answer ✔✔ financial control
Some of the 20 factors provided by the IRS can be placed into which of the following
categories or buckets? - Correct Answer ✔✔ financial control
When considering if a worker is an employee or an independent contractor, it's
important to: - Correct Answer ✔✔ look at the entire relationship
Given that degree of control is one of the primary factors in determining whether an
worker is an independent contractor or employee, why aren't most real estate agents
categorized as employees of their sponsoring broker? - Correct Answer ✔✔ Knowing
that state regulations demand a high degree of control and supervision over real estate
agents by the sponsoring broker, the IRS carved out a special "control allowance" that
permits those real estate agents to be categorized as independent contractors.
According to 1986 additions to New York State Labor and Worker's Compensation laws,
as long as real estate salespersons meet certain criteria, they are to be considered: -
Correct Answer ✔✔ independent contractors
Which of the following statements is NOT true regarding compensation and disclosure
in New York - Correct Answer ✔✔ There is no specific law requiring disclosure of a
broker's multiple sources of income, but it is highly encouraged.
-New York State law makes clear that a component of full disclosure of agency
representation includes making all parties aware of a broker's multiple sources of
compensation, if any.
Which of the following is TRUE about the New York State Disclosure Form? - Correct
Answer ✔✔ The form covers the sale and lease of all residential real estate property
According to the Seller's Agent paragraph in the New York State Disclosure Form,
which party's interests are not being represented by the seller's agent? - Correct
Answer ✔✔ the buyer's interests
, Which of the following is NOT a reason a brokerage might choose to specialize in a
certain type of agency relationship? - Correct Answer ✔✔ to comply with state law
regarding brokerage specialization - NOT required by law.
-A brokerage might feel there are marketing advantages for specialists in a particular
type of agency representation. Or a brokerage might want to limit what they need to
know and what kinds of activities they'll engage in while mitigating brokerage risk and
ensuring competency of the sales force.
To prepare for dual agency in the case that an in-house buyer client is brought to a
transaction, what should a brokerage that operates primarily as seller's agents do? -
Correct Answer ✔✔ A seller's agency brokerage that will operate as dual agents for in-
house buyers should disclose that possibility upfront to seller clients and, if they can, get
those clients to sign an advance informed consent to dual agency.
Who makes the decision as to what types, if any, of cooperative sales will be allowed? -
Correct Answer ✔✔ the seller
With what can a license holder first obtain advance consent to dual agency? - Correct
Answer ✔✔ with the New York State Disclosure Form
Other than acting as a licensed agent for both parties to a single real estate transaction,
what other type of dual agency possibility exists in New York? - Correct Answer ✔✔ A
real estate license holder who also operates in the state as a registered mortgage
broker or licensed mortgage loan originator could conceivably represent both parties in
a single real estate transaction, serving in a separate capacity for each party.
According to some industry experts, how many more seller clients could a license
holder service for each buyer client they take on? - Correct Answer ✔✔ 4 times more
Which of the following is NOT one of the three legal forms of listing agreements in New
York? - Correct Answer ✔✔ net listing agreement
What is the name of the service that exposes a property to a larger audience of buyers
and also offers advantages to sellers, brokers, and buyers? - Correct Answer ✔✔ MLS
Which of the following home sellers is most likely to request their property not be listed
on the MLS and why? - Correct Answer ✔✔ a professional athlete for reasons of
security and privacy
All persons with an ownership interest in the property must: - Correct Answer ✔✔ be
named in the listing agreement and sign the document
If the seller decides to terminate the listing early, what should the broker do? - Correct
Answer ✔✔ If the seller decides to terminate the listing early, the broker should
immediately pick up signs, stop advertising, remove the property from MLS, etc.
TEST QUESTIONS & VERIFIED
ANSWERS NEWEST VERSION
What is Article 12-A? - Correct Answer ✔✔ contains most of the laws that govern real
estate salespersons and brokers in New York
Who does a sponsoring broker supervise? - Correct Answer ✔✔ an associate broker
and/or salespersons
Who is an office manager? - Correct Answer ✔✔ An office manager is a licensed
associate real estate broker who has chosen to work as an office manager, working
under the supervision of a broker.
Samuel has an associate broker's license, and works under the supervision of Mel, his
sponsoring broker. Samuel also has his own broker's license, and performs transactions
under his own name. Is this allowed? - Correct Answer ✔✔ Yes, this is allowed under
dual licensure
In New York, who regulates all real estate activity? - Correct Answer ✔✔ the New York
Department of State (DOS) and the New York Board of Real Estate
How much does it cost to renew a broker's license? - Correct Answer ✔✔ $155
A business address of a brokerage needs to be changed. Who is responsible for
making this change? - Correct Answer ✔✔ The broker is responsible for changing a
business address (and paying the fees).
Who files a termination of association notice? - Correct Answer ✔✔ the sponsoring
broker
Why is the irrevocable consent form important in the practice of real estate? - Correct
Answer ✔✔ The irrevocable consent form ensures that out-of-state licensees can be
tried for license violations by a New York court.
How many hours of continuing education does a salesperson or broker need, every two
years? - Correct Answer ✔✔ 22.5 hours
What is a blind ad? - Correct Answer ✔✔ A blind ad does not identify the advertiser as
a real estate broker.
,A broker who enters into a Listing Agreement with a seller is considered a: - Correct
Answer ✔✔ fiduciary
Which is NOT one of the required components to form an agency relationship? - Correct
Answer ✔✔ earnest intent
-The four components required to form an agency relationship are: an agent, a principal,
mutual agreement, and fiduciary obligation. Earnest intent is not a required component.
Timothy has an agency relationship with Sarah, the purchaser of 4412 Castle Drive.
Sarah has also agreed to a contract with Melissa, a licensed real estate inspector, to
inspect 4412 Castle Drive. What is the relation of Melissa to Timothy? - Correct Answer
✔✔ third party
Which of the roles below BEST describes the following terms: real estate inspector, loan
officer, or the "other principal." - Correct Answer ✔✔ third party
To a client, what is a broker considered to be? - Correct Answer ✔✔ special agent
An agent has obtained a buyer representation agreement with a new client. Who owes
the client fiduciary duties? - Correct Answer ✔✔ the broker and all sponsored agents in
the brokerage.
-Because special agency is created at the broker level, this means that the broker and
all of that broker's sponsored agents owe the client fiduciary duties.
When an agent protects their client's best interests, they are modeling which fiduciary
duty? - Correct Answer ✔✔ loyalty
When is agency by estoppel typically created? - Correct Answer ✔✔ after the actions of
the agent have already occurred
When an agent decides to end an agency relationship, this is called: - Correct Answer
✔✔ renunciation
If Broker Gil signs Seller Audrey to a listing agreement and, then, chooses not to
present her with a comparative market analysis because he has decided to buy her
property for himself, what could Gil be accused of? - Correct Answer ✔✔ failure in his
fiduciary duty of loyalty and engaging in self-dealing
Which of the following contain the basic elements of antitrust violation? - Correct
Answer ✔✔ an agreement / between competitors / that poses a restraint / and the
restraint is unreasonable
By dividing the metropolis of Boomville into evenly sized quadrants, the four big
brokerages in town focused on their assigned areas more intensively than they could
the whole of Boomville. They freely shared their in-depth knowledge with their clients.
,So why would this practice be frowned upon? - Correct Answer ✔✔ competition and
choice are supressed
Section 530 of the Revenue Act of 1978 is known as: - Correct Answer ✔✔ Safe Harbor
- a place of refuge for those industries Congress felt were victims of an overly
aggressive IRS practice of attempting to reclassify independent contractors as
employees.
How many categories can behavioral control factors fall into? - Correct Answer ✔✔ four:
degree of instruction, training, evaluation systems, and type of instructions given.
The factors of significant investment, unreimbursed expenses, and opportunity for profit
or loss are all part of what's known as: - Correct Answer ✔✔ financial control
Some of the 20 factors provided by the IRS can be placed into which of the following
categories or buckets? - Correct Answer ✔✔ financial control
When considering if a worker is an employee or an independent contractor, it's
important to: - Correct Answer ✔✔ look at the entire relationship
Given that degree of control is one of the primary factors in determining whether an
worker is an independent contractor or employee, why aren't most real estate agents
categorized as employees of their sponsoring broker? - Correct Answer ✔✔ Knowing
that state regulations demand a high degree of control and supervision over real estate
agents by the sponsoring broker, the IRS carved out a special "control allowance" that
permits those real estate agents to be categorized as independent contractors.
According to 1986 additions to New York State Labor and Worker's Compensation laws,
as long as real estate salespersons meet certain criteria, they are to be considered: -
Correct Answer ✔✔ independent contractors
Which of the following statements is NOT true regarding compensation and disclosure
in New York - Correct Answer ✔✔ There is no specific law requiring disclosure of a
broker's multiple sources of income, but it is highly encouraged.
-New York State law makes clear that a component of full disclosure of agency
representation includes making all parties aware of a broker's multiple sources of
compensation, if any.
Which of the following is TRUE about the New York State Disclosure Form? - Correct
Answer ✔✔ The form covers the sale and lease of all residential real estate property
According to the Seller's Agent paragraph in the New York State Disclosure Form,
which party's interests are not being represented by the seller's agent? - Correct
Answer ✔✔ the buyer's interests
, Which of the following is NOT a reason a brokerage might choose to specialize in a
certain type of agency relationship? - Correct Answer ✔✔ to comply with state law
regarding brokerage specialization - NOT required by law.
-A brokerage might feel there are marketing advantages for specialists in a particular
type of agency representation. Or a brokerage might want to limit what they need to
know and what kinds of activities they'll engage in while mitigating brokerage risk and
ensuring competency of the sales force.
To prepare for dual agency in the case that an in-house buyer client is brought to a
transaction, what should a brokerage that operates primarily as seller's agents do? -
Correct Answer ✔✔ A seller's agency brokerage that will operate as dual agents for in-
house buyers should disclose that possibility upfront to seller clients and, if they can, get
those clients to sign an advance informed consent to dual agency.
Who makes the decision as to what types, if any, of cooperative sales will be allowed? -
Correct Answer ✔✔ the seller
With what can a license holder first obtain advance consent to dual agency? - Correct
Answer ✔✔ with the New York State Disclosure Form
Other than acting as a licensed agent for both parties to a single real estate transaction,
what other type of dual agency possibility exists in New York? - Correct Answer ✔✔ A
real estate license holder who also operates in the state as a registered mortgage
broker or licensed mortgage loan originator could conceivably represent both parties in
a single real estate transaction, serving in a separate capacity for each party.
According to some industry experts, how many more seller clients could a license
holder service for each buyer client they take on? - Correct Answer ✔✔ 4 times more
Which of the following is NOT one of the three legal forms of listing agreements in New
York? - Correct Answer ✔✔ net listing agreement
What is the name of the service that exposes a property to a larger audience of buyers
and also offers advantages to sellers, brokers, and buyers? - Correct Answer ✔✔ MLS
Which of the following home sellers is most likely to request their property not be listed
on the MLS and why? - Correct Answer ✔✔ a professional athlete for reasons of
security and privacy
All persons with an ownership interest in the property must: - Correct Answer ✔✔ be
named in the listing agreement and sign the document
If the seller decides to terminate the listing early, what should the broker do? - Correct
Answer ✔✔ If the seller decides to terminate the listing early, the broker should
immediately pick up signs, stop advertising, remove the property from MLS, etc.
