Free New York Contracts Practice Test — LicenseIQ

Question 1

Which event terminates a listing agreement by operation (force) of law?

Accepted Answer

Agency ends by performance, expiration, mutual agreement, or situationally by force of law (bankruptcy, condemnation), death or incapacity, destruction of the property, or breach.

Question 2

Under an open listing, the seller owes a commission to:

Accepted Answer

Open listings are non-exclusive; only the procuring broker is paid, and the owner owes nothing for a self-sale.

Question 3

Downstate, the buyer's contract deposit is most commonly held in escrow by:

Accepted Answer

In downstate practice, the seller's attorney typically holds the down payment as escrow agent under the contract. Any broker-held funds must go into an escrow account, never an operating account.

Question 4

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 5

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 6

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 7

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 8

A buyer offers $300,000. The seller counters at $315,000. The buyer rejects the counter and then tries to accept the original $300,000 offer terms. Is there a contract?

Accepted Answer

A counteroffer is a rejection and a new offer; the original offer cannot be revived by the buyer.

Question 9

After the buyer and seller sign a sales contract but before closing, the contract is:

Accepted Answer

A contract is executory while obligations remain to be performed; it becomes executed when fully performed (at closing).

Question 10

A tenant of 18 months will not be offered a renewal lease. How much advance written notice must the landlord give?

Accepted Answer

For occupancy of at least one year but less than two, RPL §226-c requires 60 days' notice of non-renewal.

Question 11

A lender financing a co-op purchase typically obtains an agreement in which the co-op corporation acknowledges the lender's lien. This is called a:

Accepted Answer

A recognition agreement among the co-op, lender and shareholder recognizes the lender's security interest and typically requires notice to the lender before the lease is terminated.

Question 12

In an option to purchase, the seller who grants the option is the ____ and the option holder is the ____.

Accepted Answer

The seller (optionor) gives the option; the buyer (optionee) holds it. Only the optionor is bound during the option period, making it unilateral.

Question 13

Under the statute of frauds, a real estate sales contract must be:

Accepted Answer

The statute of frauds requires real estate sales contracts to be in writing and signed to be enforceable.

Question 14

A financing contingency in a purchase agreement protects the:

Accepted Answer

A financing (mortgage) contingency lets the buyer cancel without penalty if unable to secure the specified loan by the deadline.

Question 15

A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

Accepted Answer

Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.

Question 16

In a typical New York City or Long Island residential sale, who usually drafts the contract of sale after the parties agree on terms?

Accepted Answer

Downstate practice is for the broker to circulate a deal sheet and for the seller's attorney to draft the contract, which the buyer's attorney then negotiates.

Question 17

The main purpose of a Consolidation, Extension and Modification Agreement (CEMA) in New York is to:

Accepted Answer

With a CEMA, the existing mortgage is assigned and consolidated with a gap mortgage, so MRT is paid only on the new money.

Question 18

A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

Accepted Answer

At 95% LTV the down payment is 5% of price. Price = $18,000 / 0.05 = $360,000; loan = $342,000.

Question 19

A contract signed by a 17-year-old buyer is generally:

Accepted Answer

Contracts with minors are voidable at the minor's option; the adult party remains bound. A contract with someone adjudged insane is void.

Question 20

Under GOL §5-703, which agreement must be in writing to be enforceable in New York?

Accepted Answer

GOL §5-703 requires contracts for the sale of real property, and leases for longer than one year, to be in writing and signed by the party to be charged.

Question 21

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Question 22

An exclusive listing agreement says it 'shall automatically renew for successive 90-day periods unless canceled by the owner.' This clause:

Accepted Answer

19 NYCRR §175.15 bars a broker from being a party to an exclusive listing that continues automatically past its fixed termination date. Initials or notice do not save it. A new, separately signed extension is required.

Question 23

Before a sponsor may offer new condominium units for sale in New York, the offering plan must be:

Accepted Answer

Under General Business Law §352-e (the Martin Act), cooperative and condominium offering plans must be filed with and accepted for filing by the Attorney General before units are offered.

Question 24

For a sale contracted in 2026, a seller who does not want to complete the Property Condition Disclosure Statement may:

Accepted Answer

Chapter 484 of the Laws of 2023 deleted the $500 credit, effective March 20, 2024. Delivering the statement is now required unless a statutory exemption applies. The agent should never complete the form for the seller.

Question 25

Under New York General Obligations Law §5-701(a)(10), an agreement to pay compensation for negotiating the purchase of real estate must be in writing EXCEPT when the claimant is:

Accepted Answer

GOL §5-701(a)(10) requires a written agreement for finder's or negotiation fees, but it expressly does not apply to licensed real estate brokers and salespersons, attorneys or auctioneers.

New York real estate contracts practice test

1. Which event terminates a listing agreement by operation (force) of law?

2. Under an open listing, the seller owes a commission to:

3. Downstate, the buyer's contract deposit is most commonly held in escrow by:

4. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

5. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

6. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

7. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

8. A buyer offers $300,000. The seller counters at $315,000. The buyer rejects the counter and then tries to accept the original $300,000 offer terms. Is there a contract?

9. After the buyer and seller sign a sales contract but before closing, the contract is:

10. A tenant of 18 months will not be offered a renewal lease. How much advance written notice must the landlord give?

11. A lender financing a co-op purchase typically obtains an agreement in which the co-op corporation acknowledges the lender's lien. This is called a:

12. In an option to purchase, the seller who grants the option is the and the option holder is the .

13. Under the statute of frauds, a real estate sales contract must be:

14. A financing contingency in a purchase agreement protects the:

15. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

16. In a typical New York City or Long Island residential sale, who usually drafts the contract of sale after the parties agree on terms?

17. The main purpose of a Consolidation, Extension and Modification Agreement (CEMA) in New York is to:

18. A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

19. A contract signed by a 17-year-old buyer is generally:

20. Under GOL §5-703, which agreement must be in writing to be enforceable in New York?

21. Under a land contract (contract for deed), during the payment period the buyer holds:

22. An exclusive listing agreement says it 'shall automatically renew for successive 90-day periods unless canceled by the owner.' This clause:

23. Before a sponsor may offer new condominium units for sale in New York, the offering plan must be:

24. For a sale contracted in 2026, a seller who does not want to complete the Property Condition Disclosure Statement may:

25. Under New York General Obligations Law §5-701(a)(10), an agreement to pay compensation for negotiating the purchase of real estate must be in writing EXCEPT when the claimant is:

Sources