Fair Housing and Disclosures Practice Question

Question

An agent notices a possible issue before a contract is signed in a New York real estate transaction involving risk management. What should the licensee understand? (Item 348)

Answer choices

1. A. The broker may mix client funds with business funds if the amount is small and later reconciled.
2. B. The issue can be ignored if both parties want the transaction to close quickly.
3. C. The rule applies only to commercial property and never to residential property.
4. D. Use written disclosures, clear documentation, and timely escalation to reduce transaction risk.

Correct Answer

D. Use written disclosures, clear documentation, and timely escalation to reduce transaction risk.

Explanation

The correct answer is D because risk management requires candidates to use written disclosures, clear documentation, and timely escalation to reduce transaction risk. The other options rely on unsafe assumptions about custom, oral agreement, escrow, client preference, or independent salesperson authority and do not reflect sound New York exam practice.

Question details

• Difficulty: hard
• Domain: Fair Housing and Disclosures
• Objective: risk management

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