Final Exam # 1 Flashcards by Taylor Zipp

What happens to real estate prices when demand is greater than supply?

Prices will increase
Prices will decrease
Prices will stay the same
Real estate prices are not effected by supply and demand

Prices will increase

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A homeowner recently hired a broker to sell their house. If the property is destroyed by fire, what happens to the agency relationship between the owner and their listing broker?

The agency relationship is terminated.
The agency relationship is suspended for 6 months.
The agent must still serve as a fiduciary to the seller.
The agency relationship will not terminate until the listing agreement expires.

The agency relationship is terminated.

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In which of the following loan types does the seller become the mortgagee?

Blanket mortgage
Graduated payment mortgage
Term loan
Purchase money mortgage

Purchase money mortgage

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Loans created by commercial banks are bought and sold in the ……….. mortgage market.

Primary
Secondary
Institutional
Real estate

Secondary

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A couple owns a property as a tenancy by the entirety. When one of the spouses passes away, the other spouse gains full ownership of the property. When the remaining spouse passes away, the children inherit the property. This is known as what type of interest in real property?

Life estate
Leasehold estate
Joint tenancy
Tenancy in common

Life Estate

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Which of the following is a basic insurance policy what will cover the home and its contents in the event of a fire?

HO-1
HO-4
HO-6
HO-8

HO-1

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Which of the following building systems can provide both heating and cooling through the same ducts?

Steam system
Radiant panels
Electric heating system
Forced warm air system

Forced warm air system

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If a property owner needs to obtain a variance on their property, which of the following should they apply to…?

Zoning Board of Appeals
Department of Buildings
Department of Finance
Architectural Planning Board

Zoning Board of Appeals

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This occurs when a landlord takes matters into their own hands and removes a tenant from the property?

Actual eviction
Constructive eviction
Legal eviction
Abandonment by tenant

Actual eviction

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Which of the following loans is considered interest-only?

Fixed-rate mortgage
Balloon loan
Straight-term loan
Partially amortized loan

Straight-term loan

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Real estate agents must carry what type of insurance?

Liability insurance
Worker’s compensation
Car insurance
Homeowners insurance

Liability insurance

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Disclosures about lead-based paint must be provided for the sale of any home built prior to what year?

1968
1978
1988
1992

1978

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How many hours of continuing education is a real estate salesperson required to complete every two years?

16 hours
20 hours
22.5 hours
26 hours

22.5 hours

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If a real estate salesperson violates Article 12-A of the Real Property Law, they shall be guilty of a/an…?

Misdemeanor
Felony
Criminal crime
Civil crime

Misdemeanor

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The lowest part of a roof, which projects beyond the wall of the structure is known as a/an…?

Soffit
Flashing
Eave
Fascia

Eave

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If a property owner has been using their property as a manufacturing facility for the past 40 years, but the current zoning laws only allow residential use in the neighborhood, the manufacturing facility will be considered as a/an…?

Variance
Non-conforming use
As-of-right use
Special use

Non-conforming use

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What type of income is earned through salaries or in a business in which the taxpayer actively participates?

Active income
Portfolio income
Passive activity income
Capital income

Active income

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Who typically signs the sales contract first?

The seller
The buyer
The listing broker
The buyer’s broker

The buyer

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Which of the following individuals is required to file a Schedule C of the federal income tax Form 1040?

A real estate salesperson working under a sponsoring broker
A real estate assistant who earns a salary
A real estate office manager who earns a salary
Everyone working in a broker’s office must file a Schedule C

A real estate salesperson working under a sponsoring broker

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What type of easement is commonly used by utility companies?

Easement by necessity
Easement by condemnation
Easement in gross
Easement by prescription

Easement in gross

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What should an agent do if a prospective buyer refuses to sign the New York State Disclosure Form for Buyer and Seller at the first substantive contact?

Refuse to show the property.
Sign the disclosure form on behalf of the prospective buyer.
Complete a declaration form that states the facts of the meeting and keep for their records.
Do nothing and ignore the situation.

Complete a declaration form that states the facts of the meeting and keep for their records.

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The Civil Rights Act of 1866 made ……… only a protected class.

Race
Religion
Disability
Nationality

Race

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A percentage lease is most commonly used by which of the following?

Office tenants
Residential tenants
Retail tenants
Real estate developers

Retail tenants

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A building that includes condominium and cooperative ownership in the same structure is known as a/an…?

Condop
Office building
Special-use building
Special-purpose building

Condop

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If a real estate salesperson closes a deal with a client, whom should the salesperson go to receive their commission? The seller The buyer The seller’s attorney Their sponsoring broker

Their sponsoring broker

Which of the following is a budget that forecasts income and expenses as may be reasonably projected over a short term? Operating budget Variable budget Stabilized budget Capital reserve budget

Stabilized budget

Which of the following is an example of a non-homestead property? Single family home Vacant land of 5 acres Farm land Industrial warehouse

Industrial warehouse

Brokers must maintain records of all real estate transactions for at least…? 1 year 2 years 3 years 4 years

3 years

Under which section of a deed will the property’s address be listed? Legal description of the property Habendum clause Granting clause Subject-to clause

Legal description of the property

If the seller’s broker in a transaction also serves as the mortgage broker to the buyer, what form must be signed by both the seller and buyer? Mortgage Broker Disclosure Form HUD-1 GFE Buyer Representation Agreement

Mortgage Broker Disclosure Form

If a broker and seller enter into an Exclusive Agency Agreement, who is entitled to a commission if the seller finds the buyer themselves? A commission is not paid to anyone since the seller found the buyer. The seller’s broker is still entitled to their full commission. The seller’s broker is only entitled to a pre-determined flat fee. Only the buyer’s broker is entitled to a commission.

A commission is not paid to anyone since the seller found the buyer.

Which of the following construction elements sits on top of the foundation of a wood-framed house? Sill plate Base plate Header plate Column

Sill plate

In a sub-lease, who is responsible for paying rent to the landlord? The new tenant The original tenant Both tenants Neither tenants

The original tenant

Which of the following allows a borrower to obtain a lower interest rate by paying additional points upfront to the lender? Buydown Prepayment Accelerated payment Interest payment

Buydown

This type of insurance protects against claims alleging that one’s negligence or inappropriate action resulted in bodily injury or property damage? Worker’s compensation Liability insurance Life insurance Health insurance

Liability insurance

This type of agency is created when a principal does not stop an individual from representing his or her interests? Agency by estoppel General agency Universal agency Express agency

Agency by estoppel

Which of the following is performed by an agent to determine how to market a residential listing within a given marketplace? Appraisal Highest and best use analysis Pro forma analysis Residential market analysis

Residential market analysis

Which of the following describes the rights and obligations of owners for a condominium? By-laws House rules CPS-1 Declaration

By-laws

Which of the following does not qualify as like-kind property for a tax-deferred exchange? An office building for a shopping mall An apartment house for a tract of land An office building for an apartment building A residence for a residence

A residence for a residence

Someone in a position of great trust serves as a/an…? Customer Fiduciary Cooperating agent Sub-agent

Fiduciary

Which of the following insurance policies may be purchased by landlords for their rental properties? Commercial general liability HO-4 Worker’s compensation HO-6

Commercial general liability

The Fair Housing Act was enacted as part of what federal legislation? Civil Rights Act of 1866 Civil Rights Act of 1964 Civil Rights Act of 1968 Housing and Community Development Act of 1974

Civil Rights Act of 1968

Which of the following interests in real property offer the most complete form of ownership? Life estates Leasehold estates Fee simple absolute estates Cooperative estates

Fee simple absolute estates

Which of the following individuals is NOT required to have a real estate license? A real estate salesperson A real estate broker An associate real estate broker An attorney admitted to the NY State Bar

An attorney admitted to the NY State Bar

Upon selling their home, married couples are exempt from paying taxes on capital gains up to…? 250,000 Dollars ($) 300,000 Dollars ($) 500,000 Dollars ($) 1,000,000 Dollars ($)

500,000 Dollars ($)

Which of the following federal agencies helps homeowners obtain flood insurance? FEMA FDIC HUD FNMA

FEMA

Which of the following types of leases will most likely be used when leasing an unoccupied office building? Gross lease Net lease Ground lease Percentage lease

Net lease

If a property owner builds a fence that partially crosses the neighbor’s property line, what has been created? Easement Encroachment Lien Party wall

Encroachment

This form of co-ownership does NOT include the ‘right of survivorship’? Joint tenancy Life estate Tenancy in common Estate for years

Tenancy in common

What type of lease is typically used for an open, unfinished commercial space? Gross lease Net lease Land lease Loft lease

Loft lease

Which of the following leasehold estates automatically renews for another fixed period of time? Estate at will Estate for years Periodic estate Estate at sufferance

Periodic estate

According to this fiduciary duty, the agent must put the interests of the client above their own interests? Confidentiality Obedience Accountability Loyalty

Loyalty

The cash flow from a commercial property (before paying any debt service) is known as…? Effective gross income Gross income Net operating income After tax cash flow

Net operating income

A licensee is guilty of what if they conceal a material fact from the prospective buyer? Misrepresentation Material misstatement Commingling Misappropriation

Misrepresentation

Which of the following fiduciary duties is most at risk when a broker operates as a dual agent? Confidentiality Loyalty Reasonable skill Obedience

Loyalty

Residential properties are appraised using which method? Income approach Cost approach Sales comparison approach Comparative market approach

Sales comparison approach

Which of the following municipal agencies is responsible for enforcing the Building Code? Department of Buildings Landmark Commission Architectural Review Board Planning Board

Department of Buildings

Sheathing on the exterior of a building is typically what material? Gypsum board Plywood Aluminum Vinyl

Plywood

For tax purposes, commercial properties depreciate over how many years using the straight-line depreciation method? 22 years 27.5 years 32 years 39 years

39 years

The division of expenses and income between a buyer and seller at closing is known as…? Accrual Debit Dedication Proration

Proration

The difference between the rentable and usable area in a commercial space is known as the…? Net usable area Loss factor Common areas Gross area

Loss factor

Who is responsible for prosecuting criminal actions for violations of the Real Property Law? Attorney General State Governor Real Estate Commission NAR

Attorney General

Which of the following documents shows the list of owners to a property, from the original owner to the present owner? Certificate of Occupancy Title insurance Deed Chain of title

Chain of title

The slope of a roof is also referred to as the…? Eave Soffit Pitch Fascia

Pitch

The person appointed by a court to distribute the intestate decedent’s property is known as a/an…? Administrator Executor Dower Curtsey

Administrator

Which of the following loans has a monthly payment that is lower in the early years but increases over the term of the loan? Term loan Fixed-rate mortgage Swing loan Graduated payment mortgage

Graduated payment mortgage