NYS Real Estate Exam Flashcards
Flood Insurance comes from_______________
National Flood Insurance Program
Who do variance requests go to?
zoning board of appeals
When a person dies and leaves no will or qualifies distributees and the property may or may not revert to the state, what is this known as?
escheat
In a sublease situation who is responsible for paying the rest and any repairs to the landlord in most situations?
The original tenant
(YES OR NO) Oil and gas deposits are considered a real property interest.
yes
What do you call a short term loan obtained to meet immediate financing requirements such as down payments for buying a house?
Bridge Loan
Is age a protected class under the federal housing act?
No
The lower the number (electrical wiring) =
The thicker the wire
Duct wood = what kind of furnace?
Forced hot air
Insulation
The higher the R-value = the better the insulation
New home construction warranty
- 1 year - protection against faulty workmanship and defective materials
-2 years - protection against defective installation of electrical plumbing, heating, cooling ventilation systems.
-6 years - protection against major structural defects
Feasibility Studies
Statistical Data
Indirect Costs
Ex. appraisers, financing costs, administrative costs, attorney and surveyor fees etc.
Direct Cost (Hard Cost)
Cost of labor and materials
S I C (3 approaches to value)
Sales, Income, Cost Approach
A lease where the tenant pays a fixed dollar amount each month to the landlord?
gross lease
What type of tenancy has the rights of survivorship?
Joint Tenancy and tenancy by the entirely
Darlene manages a lot of properties for a LOT of owners, she must hold WHAT kind of license?
A NYS license
Variance requests are submitted to?
The zoning board of appeals
If a broker commingles money, he or she is probably guilty of violating what fiduciary duty?
Accounting
(TRUE OR FALSE) Gas and oil deposits are considered a real property interest.
TRUE
Distribution centers, warehouses and manufacturing facilities would be considered what kind of zoning area generally?
Industrial
Agency disclosure forms should be reviewed with your client or customer….
At the first substantive movement
Failure to assert your rights in a timely fashion means you might LOSE your rights to do so refers to?
laches
If a property is commercial (depreciation schedule)
39 years
If the property can be lived in (depreciation schedule)
27.5 years
Tax Free Exchanges
Cash received is known as the BOOT (Basis the starting point for determining the capital gain)
When you hear “like kind” =
Section 1031 Exchange
Basis in its most basic form is the purchase price of the property
Most of the time if you see a question about TDR’s the answer will be =
Conservation easement
Agencies you will deal with if you have WETLANDS
DEC
Army Corps of Engineers
Have to prove hardship to get variance.
Special Use permit for
In law quarter
Binders are done =
Downstate NY
Contracts are done =
Upstate NY
1978
Government Outlawed use of lead based paint in residential homes.
Earnest money deposit
good faith
What type of water rights affect large body of water compared to small ones?
lateral
Increase of land from the movement of water is known as
accretion
Loss of land due to change in the channel in the stream known as
avulsion
Which term embodies the bundle of legal rights?
real property
Which type of estate lasts for an indeterminable period of time?
Freehold Estate
Which of the following have rights to survivorship?
Joint tenancy
Tenants by the Entirenty
An artificial entity created under the laws of the state is known as
Corporation
Which entity has a proprietary lease owned by a corporation and has stock?
Cooperative
With an “in rem” tax foreclosure this is a proceeding against
Property
What do we call the kind of tax on a property that covers improvements made such as lighting, water, (not supposed to be a permanent tax)
Capital improvements?
The main source of law for real estate licensees.
Article 12-A
Mortgage brokers must be licensed with the NYS Banking Department now called _________________.
NYS Department of Financial Services
Licensed real estate salespeople assist______
Their principal real estate brokers
License associate brokers operate in the same capacity as___________
a real estate salesperson
Mandatory written disclosure law = Real Property Law 443 involves the sale or lease of any 1-4 unit property. Properties excluded from this are ________
Vacant land
Buildings with 5 or more units
Brokerage and Agency
Brokerage is the bringing together of buyers and sellers in the market place for a fee.
Caveatemptor
Let the buyer beware
Convertible mortgage
Allows a lender the option to convert the outstanding balance of the mortgage into an agreed upon percentage of ownership in the real property
Brokers cannot commingle money belonging to buyers or sellers with their own funds.
Conversion
Unlawful or application of someone’s property or money for a use that does NOT benefit the rightful owner of that property or money.
fiduciaries
Are considered real estate agents
They are held to the same legal standards of trust, loyalty and confidence as lawyers or anyone hired to work for you on your behalf.
You don’t need agency disclosure form when ….
Vacant land
Buildings with more than 5 units
First moment meeting clients =
= present the agency disclosure form
Type of Agency that is “special”
Real estate
Type of agency that is “general”
Property Manager
Type of agency that is “universal”
Power of attorney
Agency of Relationship Types (3)
Universal
General
Special
Issue with buyers - check which CCLDAO?
Accounting
ALL documents kept for ________year
3 years
Good faith =
earnest money deposit
Exclusive right to sell =
Commission
Rules that pertain when things are in writing
Statute of Frauds
Novation
Substitution of a new contract for an existing agreement
Short term capital gain =
Less than a year
Earnest money deposits
Good faith
Where are binders used?
Downstate New York
Where are contracts or purchase orders used?
Upstate New York
What are the 4 types of Leasehold Estates
Estate for years
Periodic Estate
Tenancy at will
Tenancy at sufferance
Estate for Years
Specific start and ending time
When lease expires tenant can leave
Periodic Estate (Estate from period to period)
Continue for indefinite amount of time.
Tenant has the right to possess with the consent of the landlord
Tenancy at will
How long does a ground lease last?
Long term 50 + years duration
What does T.I.M. stand for?
Taxes
Insurance
Maintenance
Easement Appurtenant
Easements that effect adjacent properties
Transferable deed rights (TDRs)
Conservation easement
Riparian Water Rights
River
Littoral Rights
Large Lakes & Oceans
Eminent domain
Taking of private property for public use
Priority of liens
materials furnishing in improvement of real property shall have priority over a conveyance mortgage judgement of other claim against property not recorded.
Referees Cleed
Used in foreclosures and bankruptcies
Change to a will
Codicil
Trust
3rd party
Evidence of Ownership
Title
RESPA stand for?
Real Estate settlement Procedures Act
Closing Costs
Loan fees
Limits the amount of tax and insurance reserves a lender may require
TILA stand for?
Truth in Lending Act
Disclosure Lenders
Mortgage interest is generally paid in appears?
Prorated
30 days before mortgage is due
TP584
Facilities the transmittal of transfer tax to the state
Deficiency judgement
Foreclosure and not enough equity
What is a Promissory note (bond)?
A personal promise to repay a loan
Mortgage
Pledge of real property
FHA and VA loans
Insured loans and guaranteed loans
Cheapest loan
PMI - conventional loan (20% or less down)
PMI =
MIP=
Conventional loans
FHA loans (mortgage insurance premium)
Alienation
“due on sale”
If a mortgage has an alienation clause, it is not assumable
Novation (new)
Substitution of a new contract for an existing agreement
If a buyer has a VA or FAA loan
Are assumable and haven’t lived their long
Notes are considered _____________________
negotiable instrument
Trust
3rd party
Due on sale = clause
not assumable
Blanket Mortgage
Mortgage covering more than 1 property
Debt service
Mortgage payments made on a property
Can not be considered an expense NOI
Earnest money deposit shows
More good faith
Money towards down payment
Loan to value
Ration used by lenders
Ex. 50,000 value of property
5,000 - down payment (10% of value)
100% Whole Down Payment = 90%
Interest is due _______
At the end of each pay period
Uniform Commercial Code
UCC, Rules that govern the financing of loans
P(GI) - E(EGI) = N(NOI)
PEN
Regulation Z
Consumer must be fully informed of all finance charges provides for strict regulation of real estate advertisements
FHA (203) K
Rehab Loan
Certificate of Eligibility
Obtained by writing to the Veteran Affairs
Caveat emptor
Let the buyer beware
Statute of Frauds
Rules that dictate what has to be in writing
Subletting
Transfer of part of the leased area
Index Lease
Lease where rent to be paid is tied to an index
Ground lease
Long term lease of unimproved land
Apportionment
Division expenses between a buyer and a seller
Rule of parole evidence
States that the written agreement takes precedence over any oral agreement.
Latches
Known as the loss of a right by failure to assert such rights.
Article 9-A
Subdivision and development
ad valorem
According to valuation
Condemnation
Right of eminent domain to acquire privately own real estate for a public use.
In rem
Against the property
Mill
One tenth of a cent
1 rod
16.5 feet
1 chain
66 feet
1 acre
43,560 square feet
Special Assessment
Improvements made to your neighborhood (only last for a short time)
S C A R
Small
Claims
Assessment
Review
General Plan
Local government identify development goals through a comprehensive master plan =
long term plans
Article 78
Judicial appeal
Certificate of Occupancy (C of O)
Required for the transfer of dwellings having 3 or more living units
CERCLA
Comprehensive and Environmental Response Cleanup and Liability Act of 1980
SARA
1986 Superfund Amendments and Reauthorization Act
What 2 Environmental Agencies do we deal with for wetlands?
DEC
Army Corps of Engineers
Environmental (Phase 1)
Research
Environmental (Phase 2)
Digging
Taking Samples
Environmental (Phase 3)
Remediation (taking care of the problem)
Environmental (Phase 4)
What is your plan to make sure it doesn’t happen again
Dedication
Refers to voluntary transfer of private property by its owner to the public for some public use such as streets, sidewalks, etc.
Balloon Framing
Lack of fire resistancy
SEQRA
State Environmental Quality Review Act
New York State Rules involving environmentally private land
What government agency reviews septic and wells?
DOH
NYS DOH
Under 1000 gallons and/or 50 more connections or 25 or more people
NYS DEC
Over 1,000 gallons
Transmittal of transfer tax
TP 584
Money or items received
Credits
Mortgage interest is paid _______
In arrears
Regulation Z deals with ______ of credit terms.
Advertisement
When is a living trust created?
During the trustees life
Evidence of Ownership
Title
Chronological history of the title?
Abstract of Title
Restricts development of real property to preserve
Conservation easement (Preserve) TDR’s
Loss Factor
The difference between the useable and rentable areas within a commercial space
Attornment
The consent to transfer a right
Pro Forma
An operating statement adjusted to reflect a potential change
Profit made from the sale of a capital asset?
Capital Gains
Taxpayer does NOT materially participate?
Passive Income
Failure to assert your rights in a timely fashion?
Flashing
Insulation is rate based on this concept? (resistance to heat transfer)
R value
Good Faith Estimate
Within 3 days after ban application you need a good faith estimate
Reverse Annuity mortgage
Loans that senior citizens can get bank is paying you
Convertible mortgage
Allows the lender the option to convert the outstanding balance of the mortgage into agreed upon % of ownership
Feasibility Study
Detailed statistical Analysis
Assemblage
Combining 2 or more adjoining lots into 1 larger tract to increase their total value
Blue Sky Laws
Common name for those state and federal laws
Mortgager
Borrower
SEQRA
Laws that pertain to privately developed land
Percloaton
Refers to the movement of water through the soil (perc test)
BTU (British Thermal Unit)
Measure of Heat Energy
Highest Framing Member
Ridgeboard
Property Manager
General Agency
Real Estate Person
Special Agent
Capital Improvement
Items that add value
Ex. Roof
1988
Includes provisions to prevent discrimination based on individual mental or physical handicap as well as familiar statues.
Not ideal at a property
Functional Obsolesce
Reduction in the usefulness of a property
Money money money
Passive income - income earned from rest, royalties, and stakes in limited partnerships
Percolation Test
Test to determine the water absorption rate of soil for homes with specific system
Schedule C
This where you list your income and expenses as a real estate agent
Umbrella Insurance
Refers to type of liability insurance policy that is in Excess of specified other policies in place
Inflation
Upward movement in overall price level of goods and services
Another name for lender
Mortgage
Cap rate
Extract cap rate from sales in the market place
Historical Rent
Rent that we have historically gotten over time
When solving a mah problem
Generally needs to be converted to 12 months (annually)
How to get to EGI (Effective gross income)
Potential Gross Income - $72,000
Minus vacancies (.03x72,000) = $2,160
Minus collection costs =$1,200
$68,640 Effective Gross Income
Cash on cash return
Annual before tax cash flow divided by total cash invested
IRV formula - annual net operating income divided by capitalization rate =
Value
Cap Rate % between
8 - 38%
Active Income Examples
Wages, salary, commissions
Portfolio Income Examples
Earnings from interest, dividends and annuities
Passive Income
Earnings or income derived from any trade or business
Primary Principle Residence
Location of where a taxpayer has lived for at least 2 of the 5 years prior to the sale of the property
Tax Credit
Reduces dollar for dollar and is better (tax deduction is not as favorable)
Loss Factor
Difference between useable and rentable areas within a commercial space
The Higher the risk =
The higher the cap rate
NOI (Net operating income)
Money that is left over after all expenses are paid (does not count personal income tax)
Which property types are EXCLUDED from using the mandatory agency disclosure form?
Vacant land
If you hear the term “target” housing - you should think of WHAT year?
1978
As a follow-up to the previous question, what could we be talking about?
the year lead based paint was outlawed for residential dwellings
What kind of a clause in a mortgage allows it to NOT be assumable?
alienation clause and due on sale clause
A Improvements made by a municipality that benefit portions of a town or city might be funded by..
special assessments
A judgement is good for how long (assuming it is NOT renewed)…
10 years
The open notorious use of another persons property may result in..
An easement by prescription
A short term right given that is easily withdrawn is known as.
license
In NY State, the written agreement between a principal broker and a licensed salesperson or associate broker must have been executed within the last __x__ months:
12
If an oil lease is negotiated with an owner and that property is sold 2 months later - assuming the lease is for 20 yrs. - what will happen?
It will continue on with the next owner
Real estate records must be retained for no less than…
3 years
Lawsuits with regard to items within a real estate contract can be brought for HOW many years thereafter?
6 years
Which of the following tenancies allow individuals to sell, convey, mortgage and even transfer their interest, without the consent of the other co-owners?
tenancy in common
Rights of survivorship belong to which of the following groups:
Joint tenants and tenants by the Entireties
A proprietary lease is most closely associated with…
cooperative
Ownership in resort areas is most closely associated with WHAT term…
timeshares
Which of the following types of entities gets a separate tax bill and may be mortgaged?
condominiums
True or False: Joint ventures are typically for a single project and syndicates are typically for more than one project.
True
How many square feet are there in an acre?
43,560
How many feet are in a rod?
16.5
)If a bank forecloses on your mortgage loan and there is NOT enough money (equity) to pay it off, the lender might have to file…
For a deficiency judgement
When agents contact homeowners and try to induce them into listing with their firm due to a change in the racial make-up or composition of a neighborhood, we refer to this as…
a blockbusting
Which of the following would most likely be an example of a negotiable instrument..
A note
The part of an overhang of a roof that you can easily see looking at it HEAD-ON is called the…
fascia
If part of your driveway extends onto your neighbor’s land, you probably have..
Encroachment
A utility company would probably have…
easement in gross
“In-rem” refers to a foreclosure against the…
the land
If you fail to pay your water bill, what kind of financial lien could be placed against your property?
involuntary
The type of easement two condominium owners who are separated by a common wall might have would most likely be…
an easement appurtenant
True or False: Monuments are fixed objects that are used to establish boundaries.
True
True or False: Benchmarks are points that elevations are measured from.
False
=
Notification that a “lien is forthcoming” is most likely which of the following terms..
lis pendens
The old saying in real estate was… “let the BUYER beware”. This is also known as…
caveat emptor
Foundations poured with a single pouring of concrete is referred to as..
monolithic
If a lender wanted you to pay MIP, they would probably be refering to which of the following types of loans.
FHA
In general, a borrower has to put down more than HOW MUCH in order to NOT need to pay mortgage insurance on their loan?
20%
The rehab arm of the FHA loan program is more specifically referred to as…
203k
What federal legislation prohibits discrimination on the basis of race, color, religion or national origin?
Title VIII of the Civil Rights Act of 1966
When a lender refuses to lend (or shys away from lending) in particular areas based on racial motiviations within a particular neighborhood, this illegal practice is refered to as..
redlining
True or False: Complaints brought under the Civil Rights Act of 1866 must be taken directly to a Federal court.
True
A person who “checks” undercover to see whether agents & brokers are following Federal Fair Housing properly (as well as other laws) are refered to as..
testers
A property owner has ___ years in which to object to violations of any conditions mentioned in the deed and ___ years for neighboring property owners for objections to any violations in the general plan
10/2
True or False: If an agent is being paid a commission by a seller, it would probably be safe to say that the agent has a fiduciary relationship with the seller.
False
Based on the Truth- in-Heating-Law, an owner of a 2 family home would have to show HOW many months of heating & cooling bills to prospective buyers?
24
The main body of laws that pertain to subdivision and development is referred to as…
Article 9A
If a person called themselves a “business broker” and wanted to sell another individual’s business which included some real estate, and the value of the entire transaction was determined to be $100,000 - choose the option that best represents what this “business broker” would be allowed to do without needing to be licensed as a real estate broker..
the value of the realty would need to be less than $50,000
.An associate broker….
works in the exact same capacity as a salesperson
An apartment sharing agent must..
maintain an interest-bearing trust account in the amount of $2,500
Nonresidents of NY State may be licensed as a NY real estate broker (or salesperson) by conforming to all of the provisions of the license law EXCEPT…
maintaining a place of business within the State
Nonresidents of NY State may be licensed as a NY real estate broker (or salesperson) by conforming to all of the provisions of the license law EXCEPT…
maintaining a place of business within the State
Agency disclosure, property condition disclosure and all other forms related to a real estate transaction must be maintained by the broker for..
3 years
When a salesperson or broker uses earnest money funds in an unlawful manner - such as purchasing office supplies INSTEAD of depositing it into a NY escrow account, we say that a(n) unlawful…
conversion has taken place
Read the following ad placed by a real estate agent and choose the best option: “Great 3BR home on the west-side of town, only $99,000 - call 444-4444”
there was no broker’s name mentioned
Duncan & Hill refers to…
illegal practice of law by a real estate licensee
What refers to a judicial type of appeal most often associated with property tax assessments?
Article 78
Let’s say for example that a broker at a one-person firm collects a commission of $4,000 but it is later found that he or she was involved with a license law violation in connection with the transaction that earned that firm the $4,000 commission - what would the likely penalty be based on your understanding of the material…
a fine of up to $16,000
What division or department within New York State deals primarily with mortgage brokers…
the Department of Banking
Real estate agents and brokers (unless specifically exempted), must complete…
22.5 hrs of education every 2 yrs
Real estate licenses are good for…
2 years
You show proof of your licensed status by way of…
your pocket card
A mortgage banker’s license is good for a term of…
1 year
An apartment information vendor’s license is valid for…
1 year
Which of the Dept. of State “terms” (from the list that follows) represents a more PERMANENT way of losing your right to sell real estate…
revocation
If the principal real estate broker’s license is revoked by the Dept. of State, the licenses of all the individuals associated with that broker licensee is…
suspension
Your results from the NYS Dept of State exam you complete are good for a period of….
2 years
Your results from the NYS Dept of State exam you complete are good for a period of….
2 years
The Sherman Anti-Trust Act is enforced by…
the Department of Justice
Another way of saying that a defect is “latent” is to say that it is…
hidden
Which of the following property types are EXCLUDED from the mandatory written agency disclosure law…
Vacant land
A property manager would be a good example of WHICH type of agency relationship that could be delegated by a client…
general agent
True or False: A universal agent has authority to represent the principal in ALL matters that can be delegated by a client or principal.
True
True or False: A dual agency cannot occur if the selling agent works for one firm and the listing agent works for a different firm.
True
True or False: If a property owner files for bankruptcy (or is involved with a bankruptcy) after his or her property is listed, this would be a legitimate way of terminating an agency relationship.
True
What situation would it be difficult to avoid a dual agency…
if a licensee wanted to buy a home representing him or herself
What term refers to being potentially liable for the actions of another person…
vicarious liability
The mandatory agency disclosure form is broken down into HOW many horizontal sections overall?
3
The acknowledgement of the parties to the contract in an agency disclosure form is located…
on the bottom of the form opposite the descriptions
Which type of listing agreement requires that the seller pay a commission regardless of who sells the property - EVEN the homeowner?
exclusive right to sell agreement
If an individual is found guilty of violating the Sherman Anti Trust Act, he or she may be fined up to…
$100,000
Written independent contractor agreements must be executed in NY every…
15 months
True or False: The truth-in-heating law applies to all 1-4 family properties.
False
True or False: Open listing agreements would most likely be used for properties that are non-residential in nature overall.
True
True or False: Agency disclosure forms are only used in the sale of 1-4 family homes.
False
In a fiduciary relationship, WHO is the fiduciary…
the agent or licensee
A life estate would fall under the category of a(n)…
freehold estate because it lasts an indeterminable period of time and ends with the death of the person on whose life it is based
In how many different ways may a fee simple estate be held?
3
What do we call ownership by ONE in real estate in terms of tenancies that may exist (that is, where title is held by one owner)?
severalty
Which tenancy have the rights of survivorship but NO rights to partition?
tenancy by the entirety
Which of the following tenancies allow one co-owner to sell, mortgage or transfer their interest without the consent of the other co-owners in New York State?
tenants in common
Elevations are measured using reference lines, points and surfaces that are officially designated, especially by large cities throughout the United States. The term most closely aligned with this is…
datum
This phrase follows the granting clause and is found in a deed and always includes the words “to have and to hold”…
habendum clause
NY has a statute of limitations on how far back parties to a contract may bring legal suit to enforce their rights. Choose the best option to answer what this is…
6 years
What term refers to the substitution of a new contract for an existing agreement?
novation
Land owner rights on larger bodies of water like oceans, lakes & bays where property owners may enjoy unrestricted access and use of the water but own only up to the mean high water mark refers to…
littoral rights
Assume that a tenant owned a McDonald’s restaurant franchise and rented the real estate based on a long-term lease, what would we consider the booths that the tenant would add that were originally not there and will likely be taken upon the expiration of the lease?
trade fixtures
Which of the following terms refers to the gradual loss of land due to the change in the channel of a stream or waterway?
avulsion
True or False: Landowner rights to various size waterways regardless of the type or size of such waterway may be sold separately from the real estate if both buyer and seller agree.
False
Which of the following is an example of a special purpose property…
a hospital
Which of the following is an example of an industrial category of property…
warehouse
Which of the following is NOT an emblement…
bushes
The most complete type of estate a person can have in real estate is known as a…
fee state
The most complete type of estate a person can have in real estate is known as a…
a cooperative
True or False: A joint venture is an organization of two or more people or firms to carry out one or more business projects.
False
What term refers to a right or interest that may be held by a party that is NOT the owner of the property?
an encumbrance
An in rem foreclosure is a proceeding initiated against the…
real estate as distinguished from the person
When you hear the phrase “change in the priority of a lien”, you should think of the term…
subordination
When you hear the phrase “change in the priority of a lien”, you should think of the term…
20 years
Utility companies often have these kinds of easements…
easement in gross
Condominium owners that share a common wall would most definitely have this kind of easement…
easement appurtenant
Which of the following laws limits the amount of tax and insurance reserves that a lender may require?
RESPA
What refers to the term that includes the percentage that takes into consideration ALL of the costs of borrowing including the application fee, appraisal, service fees, prepaid interest and anything else the lender might require to ultimately get the loan?
The APR
Real estate advertisements that include mortgage financing terms must conform to rules as stated in…
Reg Z
Choose the option that is 100% correct in terms of it’s statement… a) FHA loans are insured and have PMI b) Conventional loans have MIP and are lower in cost than FHA generally
Conventional loans have PMI and FHA loans are insured - MIP
A bond is sometimes called a…
promissory note
What is the “pledge” of real property which is given by the purchaser who is borrowing the money which provides for the security of the loan?
the mortgage
What do we typically refer to as being the FIRST step in the foreclosure process…
an estoppel certificate
When a first lien holder agrees to give up their position and become a second lien holder in terms of the priority of liens, we refer to this as…
subordination
What item is signed by the borrower and verifies the amount of money owed and the interest rate on the loan?
an estoppel certificate
A mortgage that covers more than one property and is typically used in the financing of a subdivision is known as…
A blanket mortgage
True or False: If a mortgage has an alienation clause, the mortgage is NOT assumable.
True
The difference between the value or sale price of a property and the amount to be borrowed is known as the…
down payment
Which type of loan shifts the risk or reward if interest rates change to the borrower from the lender?
an ARM
Which type of loan is considered GUARANTEED?
a VA loan
Which type of loan is considered the “rehab” loan based on what we covered in class?
an FHA 203(k) loan
On most mortgages, interest is usually paid…
in arrears and at the end of each payment period
Mortgage brokers and bankers are licensed by…
the NYS Dept. of Financial Services
If a person who owns real property dies and leaves no valid will or qualified heirs (or distributees), the property could …
escheat to the State
Subdivision and development laws for New York State are part of Real Property Law, Article….
9A
True or False: A deed restriction cannot forbid owners from selling a piece of property at some point into the future.
True
Failure to assert your rights in a timely fashion because you waited too long could result in or would likely be an example of… (choose the BEST answer):
laches
How long do land owners have to object to violations of any conditions mentioned in their deed?
10 years
The government’s right to take private property for public use (after just compensation) is based on the right of…
eminent domain
True or False: If a zoning provision and deed restriction cover the same subject, the less limiting of the two restrictions will prevail.
False
One rod is equal to…
16.5 feet
One acre is equal to…
43,560 square feet
One link is equal to…
7.92 inches
One mile is equal to…
5,280 feet
Which of the following environmental audits would include actual collection of soil samples from a particular area?
Phase 2
If the hot water tank was faulty, a new homeowner would likely be covered for…
two years
If the central air conditioning system failed on a new home, this would most likely be covered for at least…
two years
What item keeps water out of the interior of a roof area where there are protrusions such as vent stacks and the chimney?
flashing
In what type of foundations are the footings and slab poured separately?
floating
If you were looking at a closed window that had a handle in the middle of it that was used to open and close that window - the technical name for this window component is the…
rail
What roof style most typically resembles a “barn” found in many rural areas?
gambrel
To show your understanding of construction, which item from the options that follow is located at the HIGHEST part of a typical residential dwelling….
The ridge pole
What valuation concept refers to the fact that there’s only so much land available and because of this fixed supply, it is a factor that influences the value of real estate?
scarcity
What do we call a sale that is offered on the open competitive marketplace for a reasonable period of time with no unusual circumstances and buyer/seller are relative strangers?
arms-length
Which term deals with constructing an EXACT duplicate of a property including any inherent deficiencies that would have been part of the building of that property at the time?
reproduction cost
If a home was built near a busy expressway entrance, this would be an example of…
external depreciation
The use of a property that will result in the most profitable, legally and physically permitted use whether vacant or improved as of today and applies to all types of property whether residential or commercial is known as…
highest and best use
The use of a property that will result in the most profitable, legally and physically permitted use whether vacant or improved as of today and applies to all types of property whether residential or commercial is known as…
highest and best use
What do you get when you subtract vacancies and collection costs from the total income derived from rental real estate?
effective gross income
Which of the following formulas results in NOI?
Capitalization rate multiplied by the property value or sale price
What type of New York appraisal license would allow an individual to appraise ANY type of property without regard to value?
a general appraiser
All real estate agents who are members of NAR (the National Association of Realtors) are…
Realtors
What statement is MOST accurate regarding the use of the income approach to valuation…
it works well when used for any income producing properties along with the sales approach
What term refers to depreciation that has occurred at a property since the date the property was built?
accrued
Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage.
Alteration agreements are documents that can vary from one property to the next, but they are designed to make sure that the building-wide services and structures that serve all residents are not affected by construction in one co-op. Cooperative owners will be expected to sign it before beginning construction, and must also submit renovation plans to building management for approval.
CPS-1 form… (Cooperative Policy Statement) applies to cooperatives, condominiums, and HOA’s and is used to test the market, explore the venture, and determine theneeds to meet a variety of conditions.
The Level of Assessment (LOA) is simply the percentage of full value at which properties are assessed within a community. For instance, an LOA of 50% would indicate that assessments are at half of the market value; an LOA of 100% represents a community that is assessing at full value.
Loft Space
a habitable room or floor in a building that is open to the room or floor directly below, which may or may not qualify as a mezzanine.
A loft is a living space made inside a former industrial building (usually with very few if any walls)
Tax liens
______ always have the highest priority of ALL liens in terms of real estate.
An appraiser
is an individual who typically only evaluates one property at a time. An assessor, however, often estimates the value of an entire neighborhood of homes, buildings, complexes, etc. at once. An assessor is able to examine multiple properties at one time by using mass appraisal techniques. Assessors represent municipalities (government).
Condop
_____a hybrid building that contains both condo and co-op units. In many cases, it is a mixed-use condo building with retail spaces that are individual condo units and residential apartments that are co-ops.
Who holds the earnest money deposit
‘
typically the sellers real estate company OR the sellers attorney.
VOCs [Volatile Organic Compounds]
found in paints and manufacturing of household products (some people are allergic to these).
EMF [Electromagnetic Fields]
emitted by electronic gadgets, appliances and high voltage power lines.
The general purpose of the Planning Board is to _____
provide for and guide the orderly growth and development of the community.
Who hold the earnest money deposit?
Sellers attorney
A quitclaim deed has NO warranty.
A full covenant and warranty deed is the BEST type of deed.
Types of Deeds in New York State
Real estate deeds are legal instruments that are used to transfer ownership of real property including the land and its improvements (such as a house or buildings) and attachments. Words used to effectuate the conveyance of property may be grant, assign, convey or warrant, but they basically all do the same thing, they transfer the interest of the person or entity selling the property to the person or entity buying the property.
Deeds are recorded at the county or city recorder’s office and become a matter of public record putting the world on notice of the ownership of any particular parcel of real property. Anyone can go to the local recorder’s office and view a copy of the most current deed for a property as well as all of the prior deeds for a particular property.
In New York, the instrument conveying title, the deed, can take a number of different forms, but the following describes the most common deed forms in New York State.
Bargain and Sale Deed. This form of deed is most commonly used in downstate real estate transactions (i.e. New York City, surrounding suburbs, and Long Island). The recipient of a bargain and sale deed is acquiring real property without knowing if there are any encumbrances on it unless stated in the deed. The grantor of the deed only guarantees that the grantor has a title, and does not guarantee that the title is free of defects. This form of deed implies that the grantor holds title to the property, but the deed does not warrant against any encumbrances. Since a bargain and sale deed does not warrant good title from the grantor, the grantee could be in trouble if title defects appear at a later date. For this reason, the use of a bargain and sale deed is most often coupled with the buyers’ separate purchase of a title insurance policy which does warrant good title. The combination of a bargain and sale deed and owner’s policy of title insurance usually is sufficient to give a buyer reasonable comfort that it is acquiring good title to a property, and it serves to shifts some of the risks of delivering good title from the seller to the title insurer. Bargain and sale deeds can include covenants against grantor’s acts which is a promise within the deed instrument by the seller that it has not done any act which would encumber the title it seeks to convey. In other instances, the bargain and sale deed might not contain such a covenant which transfers more of the risk of the delivery of good title to the title insurer.
Warranty Deeds. Warranty deeds are customarily used in upstate New York real estate transactions but can be used anywhere in New York State. Warranty deeds contain three main guarantees that: (1) the grantor has not sold the property to anyone else; (2) the property is not burdened by any encumbrances apart from those the seller has already told the buyer about; and (3) the grantor will warrant and defend title against the claims of all persons. This means the seller is guaranteeing the grantee that title is free of any defects that may affect the title to the real property being transferred, even if the defect was caused by a prior owner.
Quitclaim Deeds. Quitclaim are used to convey any interest that the grantor might possess in the property. The grantor might be the legal owner or the grantor might never have formally been identified on a deed describing the property. Through a quitclaim deed, the grantor is essentially disclaiming and turning over its interest (without necessarily defining what that interest, if any might be) to a grantee. Quitclaim deeds are often used during a divorce or estate administration, to deed the property from one spouse or beneficiary to another. If a married person or beneficiary of an estate holds title to a property as sole and separate or perhaps he or she acquired the property before marriage or death of a decedent, the spouse or beneficiary not in title might be asked to sign a quitclaim deed when the property is sold to a third party, just to make sure the spouse or beneficiary who was not on the deed does not later come back and lay claim to the property.
Other Types of Deeds…
Tax Deed. When property taxes are unpaid (the numbers of delinquent years vary from state to state), and the property is sold for the payment of back taxes, typically a tax deed is used to convey title to the buyer.
Deed-in-lieu of Foreclosure. Sellers who are behind in payments to the lender will sometimes negotiate with a lender to accept a Deed-in-Lieu of Foreclosure, which means the seller has deeded the property to the lender to avoid foreclosure.
A graduated lease
is an agreement under which a tenant and landlord agree to a periodic adjustment of monthly payments. For example, the agreement may reflect an increase in the tenant’s payments due to market conditions or an increase in the value of the leased property.
Errors and omissions (E&O)
is a type of professional liability insurance that protects companies and their workers or individuals against claims made by clients for inadequate work or negligent actions.
Real Estate Agents are
“special agents”. Know that general agents goes along with Property Managers.
Know specifics of civil rights act BY year: 1866, 1974 and 1988.
Pro-Forma statements
predict future income & expenses of a properly- these statements help an investor to decide whether to invest in it or not.
The insurance policy code for contents and is most popular is
HO-3.
In real estate, an arm’s length transaction refers to
situations in which there is a transfer of property and the buyer and seller act independently of one another. Both parties don’t know one another, no unusual circumstances, and property offered for a typical period of time.
Title search is
the background check on the property. It’s the process of investigating a property’s history. Title insurance protects the lender and buyer from title disputes and guarantees, in a way, the results of the search for the lender in most cases.
Proration
is the allocation or dividing of certain money items at the closing. The key to remember about prorations is that the person who uses it generally needs to pay for it.
Gross Lease
(a fixed amount paid by the tenant where no landlord expenses are paid by the tenant) vs. net lease (net lease means you’re paying some of the owners expenses).
Flashing (kickout flashing)
keeps water out of the inside of the roof and sidewalls.
Industrial property owners generally pay
NON homestead taxes.
Apartment information vendors can show apartments for rent and collect advance fees unlike real estate licensees that can only be paid after providing the service.
You may see a waterproofing question about roofs…Bitumen is a good waterproofing material due to its nature. Bitumen-based liquid membrane and bitumen-based roll membrane materials are the most well-known, most economical, and high-performance materials used. Waterproofing materials are typically made from polyurethane, asphalt or rubber.
A nonconforming mortgage
is a home loan that does not adhere to government-sponsored enterprises (GSE) guidelines and, therefore, cannot be resold to agencies such as Fannie Mae or Freddie Mac. These loans often carry higher interest rates than conforming mortgages.
The party gaining the benefit of the easement is
the dominant estate (or dominant tenement), while the party granting the benefit or suffering the burden is the servient estate (or servient tenement).
Asbestos is found in some vinyl floor tiles and the backing on vinyl sheet flooring and adhesives. Hot water and steam pipes in older houses may be coated with an asbestos material or covered with an asbestos blanket or tape. Oil and coal furnaces and door gaskets may have asbestos insulation.
Mental disabilities & familial status (presence of children) was added as a protected class in 1988 to the federal fair housing act.
If John is given an easement to cross an ADJACENT property he probably has an easement appurtenant. If the word “adjacent” doesn’t show up it’s considered an affirmative easement which gives the easement holder the right to do something on the grantor of the easement’s land, such as travel on a road through the grantor’s land.
Variance requests go to who?
(Zoning board of appeals)
In a sublease situation -
the original tenant is responsible for paying rent and repairs to the landlord (in most cases).
The market rate,
also known as the going rate, is the usual price charged for a good or service in a free market, rather than one fixed by a state authority.
Escheat
when a person dies and leaves no will - or qualified distributees… the property reverts to the state.
If a broker commingles money
he/she has violated the fiduciary duty of ACCOUNTING.
Joists
are horizontal structural members used to support floors and ceilings.
Wraparound mortgage,
the seller keeps the existing mortgage on the home, offers seller financing to the buyer and wraps the buyer’s loan into (with) the existing mortgage.
Generally, floor or ceiling joists run parallel to the rafters. You would be able to check if this is the case in a home by going up into the attic.
LOA (level of assessment) -
For instance, an LOA of 50% would indicate that assessments are at half of the market value. An LOA of 100% represents a community that is assessing at full market value.
An important thing to know about joists is that they usually run in the same direction throughout a house. If the visible joists in a basement or attic run east to west, for example, you can be fairly certain that hard to see joists under the bedroom floor also run east to west.
Oil and gas deposits ARE considered a real property interest.
Calculating capital gain on your personal residence and whether or not you are subject to paying …
First you determine what you realized in the sale. This is the sale price minus any commissions or fees paid. Subtract your basis (what you originally paid) from the realized amount (how much you sold it for) to determine the difference. If you sold your assets for more than you paid, you have a capital gain. Taxpayers who lived in the property two of the last 5 years can deduct from the capital gain as follows: $250,000 of single or $500,000 if married filing jointly.
To be able to convert from a co-op to a condominium association, a co-op board first needs approval from a supermajority – generally 80 percent – of its shareholders. If a supermajority approves, all shareholders must pay off any existing share-backed loans for their units, or convert to a regular mortgage loan.
Distribution centers, research & development (R & D), warehouses along with manufacturing facilities fall under the
category of “industrial” zoned areas.
If someone refuses to sign an agency disclosure form use the “refusal to sign” form we covered in class to document that you discussed agency at the first substantive moment.
Mortgage brokers
represent a number of lenders versus mortgage bankers that represent their own products only.
Who is exempt from the education requirements to earn a real estate license?.
(NYS attorneys) and individuals who receive exemptions from the DOS
A bridge loan
is a short-term loan obtained to meet an immediate financing requirement. It is often used to fill in an immediate cash need such as down payment for buying a house.
A mechanics lien includes
not only services provided on a home or for a business but also for any SUPPLIES expense incurred but not paid for by the owner who the mechanic’s lien is placed against.
Functional obsolescence refers to
a reduction in the usefulness of a property due to factors within it, except those due to physical deterioration. Agents and appraisers need to know what’s typical for a neighborhood as well as what’s expected from buyers in the current marketplace. Walking through a bedroom to get to another bedroom is an undesirable feature and usually results in a downward value adjustment. Economic obsolescence occurs outside the property and is beyond the control of the property owner. A residential home next to a factory would be an example.
If a buyer refuses to be represented by a real estate agent they are considered a customer and are owed FAIR & HONEST dealings.
Tenancy by the Entirety
husband and wife (with rights of survivorship).
Fee simple describes a landowner’s complete and total ownership of a piece of land and all properties on it.
Fee simple defeasible
is a legal term and type of property ownership, where the ownership is dependent on specific conditions. If the conditions of ownership are violated, the property may be returned to the grantor or to a specified third party.
Real estate commission rates are decided upon by the seller (most of the time) and the listing broker UNLESS a buyer is paying the commission based on the terms of an exclusive buyer representation agreement.
Percolation
refers to the test to determine the capability of the soil to absorb liquid for the construction of new and existing septic systems. Required upon sale/transfer of properties and done by the local (county) DEPARTMENT OF HEALTH.
AGE is not a protected class under the federal fair housing act.
A voidable contract
is a formal agreement between two parties that may be rendered unenforceable for a number of legal reasons. … Failure by one or both parties to disclose a material fact. A mistake, misrepresentation or fraud. Undue influence or duress.
renters insurance policy code
h04
Assemblage vs plottage
assemblage is the combining of two lots to result in a higher sale price than each lot would sell for alone vs plottage which is the actual INCREASE in VALUE resulting from having done so.
If you’re already licensed as an associate broker, you simply file another application with the state to change to any other category of broker (no additional coursework or experience is needed).
Title insurance protects the bank when
required by the lender and the borrower is obtaining a new mortgage loan.
Most home owner policies require
that you insure your home to at least 80% of the amount of rebuilding cost in order to get a replacement cost settlement.
Mortgage loans that violate NY’s
Homeownership and Equity Protection Act (“HOEPA”) or are deemed PREDATORY in any way are considered ILLEGAL in NY.
Trees, perennial vegetation, oil, gas and air space are all part of
your real property interest.
In 1988,
mental and physical disabilities was added to the federal fair housing act.
Please note- where race or color is involved - there is NEVER an exception to any fair housing laws.
Please know that air rights IS a real property interest.
While plat maps and property surveys are very similar, they aren’t exactly the same thing.
Plat maps show the legal property lines that belong to the owner, but they offer more of a big-picture view of an entire neighborhood or subdivision, whereas a survey is a more in-depth look of a single property.
A metes and bounds survey is the type of survey system we use in NY and most of New England. The rectangular survey system is used south and west of Pennsylvania (NOT IN NY) read the question carefully if you get it.
Pro-forma statement is
an operating stmt adjusted to reflect a POTENTIAL change in income & expenses based on the investors knowledge of the real estate market.
HO-3 policies are
are the most common because of their broad range of coverage. Sometimes called an extended or special homeowners insurance policy form, the HO-3 covers almost any peril except those specifically excluded (such as earthquake, flood, landslide or mudslide, nuclear accident and sinkholes).
Mortgagee
lender
Mortgagor
borrower
“Drip loop” refers to the
downward-facing, half-moon loop formed by the incoming feeder wires of the electrical service, just before they enter the weather head that sits atop the service mast. This looping of the service wire keeps water OUT from entering the electrical panel.
Construction beams are
horizontal, weight-bearing supports that bridge an area of the residential construction. Along with posts and columns, which are the beams’ vertical counterparts, they support the structural integrity of all sorts of buildings. In homes, you’ll find beams in walls, floors, ceilings, roofs, decks and garages.
In banking and finance, an amortizing loan
is a loan where the principal of the loan is paid down over the life of the loan according to an amortization schedule, typically through EQUAL payments.
Slope
is the incline of the roof expressed as a ratio of the vertical rise of the horizontal run, where the run is some portion of the span. This ratio is always expressed as inches per foot.
Ex. A roof that rises 4 inches for every 1 foot or 12 inches of run is said to have a “4 in 12” slope.
Review: roof construction (joist & rafter and truss framed), roof styles, r factor/value, laches, use clause, loss factor, riparian rights, fixed rate mortgage has equal payments over the life of the loan, exemption to when you need the prop condition disclosure form (divorce, foreclosure, estates etc), blanket mortgage, how to calculate sq. Footage (length x width), co-op managed by board of directors, mortgagee and mortgagor, what is a certificate of occupancy, encumbrance, purpose of the planning board, calculating NOI, purpose of and where flashing is used, do condos have deeds (yes!), order of liens (property taxes, spec assmt then 1st and 2nd mtg), conforming and nonconforming use, operating stmt, easement by prescription, commingle, what’s the difference between plans & specifications.
If your active license expires
you have two years to still do your 22.5 hours of education to reactivate it - after two years you’ll need to retake the state exam. You only need to repeat your 75 hour course IF it’s LATER than 8 years since you completed it.
Know “dominant tenement”..
A dominant estate (or dominant premises or dominant tenement) is the parcel of real property that has an easement over another piece of property (the servient estate).
Know how to calculate cash-on-cash return [pg 187] (here’s an example):
Suppose an investor purchases a $1,200,000 apartment complex with a $300,000 down payment. Each month, the cash flow from rentals, less expenses, is $5,000. Over the course of a year, the before-tax income would be $5,000 × 12 = $60,000, so the NOI (Net Operating Income)-on-cash return would be:
An escalation clause
is language inserted into a purchase offer for a home that’s intended to make sure a buyer is the highest bidder. It’s typically used when a buyer and their real estate agent strongly believe a house will receive multiple offers.
Similar concept holds true for leases (long term leases) where
the tenant agrees to pay an increased amount for the landlords increased costs at specified periods of time.
A percentage lease is a type of
commercial lease where the tenant pays a base rent plus a percentage of any revenue earned while doing business on the rental premises.
A short sale in real estate is
is when a financially distressed homeowner sells their property for less than the amount due on the mortgage.
Laches
failure to assert your rights in a timely fashion means you might lose those rights.
NYS real estate brokers are exempt from the two year experience requirement to be a mortgage broker. Everyone must generally complete the NMLS course to qualify as a mortgage originator/broker.
BTU (British Thermal Unit)
the amount of heat needed to raise the temperature of one pound of water by one degree Fahrenheit. Used as a measure of furnace or air conditioner capacity.
Anyone living in a co-op knows that if they want to renovate their apartment, they will need to sign an alteration agreement.
Portfolio income
is money received from investments, dividends, interest, and capital gains.
Portfolio income
is money received from investments, dividends, interest, and capital gains.
Passive Income
is income earned from RENTS, royalties & stakes in limited partnerships.
Active Income
is the hard-earned money that one earns in exchange for performing a service (W2 income and commissions).
Fee simple absolute, executory contract, understand offering plan and red herring, leverage, $500 credit for prop disclosure if NOT provided, SARA/CERCLA, violation of the license law (article 12a) can result in what?, when does a life estate end, tenancy by the entirety, joint tenancy, vicarious liability, remainder interest, acceleration clause, 22.5 hours of education to renew any type of real estate license every 2 years, exclusive agency (seller can sell and owes no commission) vs. exclusive right to sell (anyone who sells the property the listing broker is paid), special assessment.
Each assessment represents a percentage of market value, whether it is 100 percent or otherwise. The overall percentage of market value at which properties are assessed within each community is the LOA. ie.., an LOA of 100% would indicate that assessments are at full market value.
Other items to be familiar with:
Appraisers estimate value, how long are real estate licenses or brokers licenses good for? (2 years), graduated lease, and highest and lowest wood framing member in residential construction. Fascia & soffit. The Truth in Lending Act (TILA) is a federal law that helps protect consumers in their dealings with lenders and creditors.
sheathing
is often the final layer used in residential construction (floor sheathing, wall sheathing, roof sheathing, etc. In terms of roof sheathing: It’s the strong layer of wood boards that are attached to the roof’s trusses and joists. Before shingles are attached to this “roof decking” a layer of “roofing felt” (also known as roofing tar paper) is attached.
To assure the safety of drinking water in New York, the Department of Health (DOH) in cooperation with its partners, the county health departments.
The broadest use clause for a shopping center lease permits the tenant to use the space “for any lawful use.” This gives the tenant the right to use the premises for any use that does not violate the law.
RESPA has two main purposes:
(1) to mandate certain disclosures in connection with the real estate settlement process so home purchasers can make informed decisions regarding their real estate transactions; and (2) to prohibit certain unlawful practices by real estate settlement providers, such as kickbacks.
Umbrella insurance refers to a liability insurance policy that is in EXCESS of specified other policies in place.
Assessors determine the market value of properties for a municipality.
The role of the appraiser
is to provide objective, impartial, and unbiased opinions about the value of real property.
The term collateral refers to
an asset that a lender accepts as security for a loan. Collateral for our sake is usually the real estate.
Total Annual Cash flow - annual operating expenses =
NOI
“what if your license expires”
. you can take a 22.5 hour approved course to reactivate it IF it’s under 2 years from the last active date.
Pipes encased in walls, ceilings and floors
radiant heating
If you see ductwork
=forced air
An HO-1 home insurance policy does not
provide coverage for liability, personal belongings, or additional living expenses — only the dwelling itself.
