Free New York Real Estate Broker Exam Practice Test

Sample New York Broker practice questions

Try a few representative questions below. Each includes the correct answer and a short explanation — the same style you'll see in the full practice test.

1. Question 1Disclosure Obligations

   A New York licensed real estate broker is representing a seller in a transaction involving a mixed-use property. The property has a commercial storefront on the ground floor and three residential apartments on the upper floors. The broker is aware that the building's Certificate of Occupancy (C of O) classifies the entire structure as 'commercial,' but the seller has been collecting rent from residential tenants for years without issue. What is the broker's primary ethical and legal obligation regarding the C of O discrepancy?

   • A.Disclose the C of O discrepancy to all potential buyers immediately, as it represents a significant legal and safety issue.(Correct)
   • B.Advise the seller to obtain an updated C of O before listing the property, but no disclosure is required if the seller refuses.
   • C.Inform the seller of the non-compliance and advise them to consult with an attorney regarding the C of O, but disclosure to buyers is not required until a contract is signed.
   • D.Assume the seller's long-standing practice implies a de facto acceptance of the residential use by the municipality and proceed with the sale without disclosure.

   Explanation

   The broker has a fiduciary duty to the client and a duty to deal honestly and fairly with all parties. A discrepancy between the C of O and the actual use of a property is a material fact that must be disclosed to potential buyers. Failure to do so could lead to legal ramifications for both the seller and the broker.

2. Question 2Contract Contingencies

   A buyer's agent in New York receives an offer on a property. The offer includes an inspection contingency with a 10-day inspection period. During the 10th day, the buyer's inspector identifies a significant structural issue requiring $30,000 in repairs. The buyer wants to terminate the contract and get their earnest money deposit back. What is the agent's most appropriate action?

   • A.Suggest the buyer attempt to renegotiate the purchase price with the seller to cover the repair costs before formally terminating.
   • B.Advise the buyer to formally notify the seller in writing of the termination within the 10-day period, referencing the inspection contingency.(Correct)
   • C.Wait for the seller to respond to the inspection report before advising the buyer on termination, as the seller might offer to make repairs.
   • D.Immediately inform the seller's agent that the buyer is terminating the contract due to the inspection findings and request the return of the earnest money.

   Explanation

   The buyer must provide formal written notice of termination to the seller (or seller's agent) within the specified 10-day inspection period to exercise their right to terminate based on the contingency. Simply informing the agent verbally is insufficient.

3. Question 3Dual Agency and Disclosure

   A real estate broker in New York is acting as a dual agent for both the buyer and the seller in a transaction. The seller has instructed the broker not to disclose a known foundation issue that requires significant repair. The buyer's agent (from a different brokerage) has not yet discovered the issue. What is the dual agent's obligation regarding this known material defect?

   • A.The dual agent must disclose the foundation issue to the buyer, as it is a material fact, even though it violates the seller's instructions.(Correct)
   • B.The dual agent must maintain confidentiality of the seller's instruction and not disclose the foundation issue to the buyer.
   • C.The dual agent should inform both parties that they cannot disclose the issue due to the conflict of interest and recommend independent representation for the buyer.
   • D.The dual agent should attempt to negotiate a repair or credit with the seller without explicitly disclosing the defect to the buyer, to satisfy both parties.

   Explanation

   In New York, a dual agent owes duties to both parties. While confidentiality is a duty, it does not extend to concealing material defects that could cause harm or financial loss to one of the parties. The agent must disclose known material defects to the buyer.

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