Before you read
Test yourself first: 5 questions
Question 1 of 5
In many residential transactions in downstate New York, the role of preparing and negotiating the formal contract of sale is customarily handled by:
Answer: B. New York commonly uses an 'attorney state' practice in which the buyer's and seller's attorneys prepare, review, and negotiate the contract of sale.
Question 2 of 5
In New York real estate transactions, who customarily prepares the contract of sale and handles the closing, distinguishing New York from many other states?
Answer: B. New York is an attorney-state for residential closings. Buyers and sellers each retain an attorney who prepares or reviews the contract of sale and represents the client at closing. Real estate salespersons facilitate the deal but do not draft the binding contract terms.
Question 3 of 5
A New York salesperson is convicted of a felony unrelated to real estate after obtaining her license. With respect to her license, this conviction:
Answer: C. A felony conviction can be grounds for disciplinary action, including suspension or revocation, because it bears on the licensee's trustworthiness even if unrelated to a real estate transaction.
Question 4 of 5
Which entity may NOT directly receive or hold escrow deposits for a real estate transaction in their own escrow account under New York practice?
Answer: D. A salesperson is not authorized to maintain their own escrow account; all funds a salesperson receives must be promptly turned over to their sponsoring broker, who holds them in the brokerage escrow account. Brokers, attorneys, and title companies are recognized escrow holders.
Question 5 of 5
How long must a New York broker generally retain records of real estate transactions, including escrow and trust account records?
Answer: A. New York requires brokers to keep records of each transaction—including agency disclosures, deposits, and escrow account activity—for at least 3 years and to make them available to the Department of State upon request.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
New York is not a community property state, so marital property is divided under equitable distribution rather than community property rules. Client and customer funds must be held in a separate escrow account and disbursed only as authorized, with proper accounting throughout the transaction.
New York Contract & Transaction Specifics: FAQs
Is New York Contract & Transaction Specifics on the real estate exam?
Yes. State License Law is a scored domain on the New York real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does New York test this differently?
New York applies its own license law on top of the national portion. This page covers the New York rules specifically, which is what the state section of your exam tests.
