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Construction Basics > Questions > Flashcards

Questions Flashcards

1
Q

Sam’s house is worth $300,000. Assessment is 48%. Tax is 5%. What is annual tax?

A

$7200.

$Value x %assessment x percent tax= $annual tax
300k x 48%= 40k
40k x 5%= 7200

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2
Q

What is an assessment?

A

Adjustment to lower tax for high market values

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3
Q

Sam’s house is worth $200,000. Assessment is 50%. Tax is $5 per $100 of value. What is semi annual tax?

A

$2500.

$5 per $100= 5%.

$200k x 50% = $100k
100k x 5%= $5000
semi annual=2500

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4
Q

What is the reason for a 1031 exchange?

A

A tax break or tax shelter

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5
Q

What is another name for a tax break?

A

tax shelter

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6
Q

What is boot?

A

personal property or money

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7
Q

What property is like-kind to a hotel?

A

ALL real estate

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8
Q

What does a qualified intermediary do?

A

Holds money in a RE exchange

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9
Q

Does a RE exchange have to be in the US?

A

Yes

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10
Q

What are the bundle of rights?

A 
Possession
Quiet Enjoyment
Exclusion
Disposition
Control
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11
Q

What rights are freehold?

A 
Possession
Quiet Enjoyment
Exclusion
Control
Dispostion
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12
Q

What rights are leasehold?

A

Possession
Quiet Enjoyment
Exclusion

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13
Q

What right do you have in a leasehold?

a) encroachment
b) escheat
c) easement
d) exclusion

A

d) Exclusion

encroachment= trespass by a thing
escheat= die, no will, no heirs = NYS takes RE
easement= someone can legally use your RE (can't drive or walk on RE)
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14
Q

Unless it is a lesser estate, what kind of freehold is it?

a) Fee Simple Absolute
b) Life Estate
c) Estate for Years
d) Estate at Will

A

A) Fee Simple

life estate= lesser estate
estate for years= leasehold
estate at will= leasehold

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15
Q

What is a primary example of a full estate with full bundle of rights?

A

fee simple absolute

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16
Q

What is an example of a lesser freehold where you only own RE for your lifetime and then it goes on to someone else? And what 2 bundles of rights are lacking?

A

Life Estate: Have Deed but lack Control + Disposition

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17
Q

What are two acronyms for the bundle of rights?

A

Please Quit Eating Candy Daily

DEEPC

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18
Q

Which department licenses mortgage professionals?

A

Department of Financial Services (DFS)

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19
Q

Which department licenses REA?

A

Department of State

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20
Q

What was the former name for the Department of Financial Services and who do they often license?

A

Dept of Banking

Mortgage Brokers

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21
Q

What state dept is in charge of drinking water and sewage?

A

Dept of Health

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22
Q

What fed govt protects wetlands?

A

Army Corps of Engineers

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23
Q

What do the Army Corps of Engineers protect?

A

Wetlands

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24
Q

What are 2 things the dept of health is in charge of?

A

drinking water & sewage

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25
Q

What is it called when you take a number and divide it up into smaller pieces?

A

Proration

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26
Q

Sam sells his house April 30. He already paid this year’s RE tax of $2400 in full. Under proration, who owes what to whom?

A

$1600; debit to buyer

Buyer owes Sam for 8 months
Debit to buyer; Credit to Sam

$2400 / 12 months = $200
$200 x 8 months= $1600

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27
Q

What is the difference between debit and credit?

A 
debit= you owe
credit= get paid
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28
Q

When calculating proration how many days are in a month?

A

30

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29
Q

A seller wants to net $180,000 on sale of his house after 10% commission’s paid. What does sale price have to be?

A

$200,000.

$ Net price / % to seller = $ Sale price

100%-10% commission= 90%

180k/ 90%=$200k

Memorize:
Think 8= 2 o’s= 200k
10% of 18= $2 tip = 200k

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30
Q

How do you calculate sale price?

A

Net price** / percent to seller* = sale price

*usually given percent to REA and need to determine percent to seller

**sometimes need to add closing costs + mortgage before dividing percent to seller

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31
Q

Sam wants to end up with $140,000 when he sells his house, but he has to pay $12,600 closing costs and $44,500 mortgage. Commission is 6%. What does sale price have to be?

A

$209,681

140k + 12,6k closing + 44,5k mortg = 197,100 net

197,100 / 94%= 209,680.85

Memorize:
Sam turns 140 into 209681. 140. 209681. 140-2096 ext 81

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32
Q 
What is the slope of a roof called?
a- angle
b- pitch
c- variance
d- rise & run
A

pitch

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33
Q 
What is a measurement of heat energy?
a- joules
b- r-factor
c- BTU
d- pascals
A

C- BTU: British Thermal Units. 1 lb H2O by 1 degree temperature

a- electricity
b- determines insulation
d- air pressure

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34
Q 
What is a vertical piece that is part of a house frame?
a- rafter
b- wall stud
c- joist
d- girder
A

B- Wall Stud

a- roof beams (diagonal)
c- floor beams (horizontal)
d- beam that carries other beams

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35
Q

What system delivers hot & cold air through the same ducts?

A

forced warm air

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36
Q

What does the the forced warm air system do?

A

delivers hot & cold air through the same ducts

37
Q

What do you call a piece of wood that connects wooden house frame to concrete foundation?

A

sill plate

38
Q

What is a sill plate?

A

A piece of wood that connects wooden house frame to concrete foundation?

39
Q

What is minimum electric service for a house?

A

100 amps; 110 volts

40
Q

What is the difference between amps + volts and what is their minimum service req. for a house?

A 
amps= elec charge
volts = elec pressur
amps= 100
volts= 110
41
Q 
What construction doc is not a drawing?
a- specifications
b- plan
c- rendering
d- elevation
A

A- Specifications

b- another word for blueprint
c- drawing
d- drawing of front of building

42
Q

What do you call plywood sheets nailed to wall studs or rafters?

A

Sheathing

43
Q

What is a piece of metal bent over a crack to block rain?

A

Flashing

44
Q

What is slab on grade?

A

Concrete on ground

45
Q

What is the most common foundation?

A

basement

46
Q 
What is the most common house frame?
a- western
b- balloon
c-trabeated
d- platform
A

D. Platform

47
Q

What test should you do when selling land in a place that doesn’t have sewer lines?

A

Percolation test

48
Q

What is the percolation test?

A

A test you should do when selling land in a place that doesn’t have sewer lines

49
Q 
What is NOT covered by NYS General Business Law 36B?
a- 1 year workmanship
b- 2 years trade
c- 3 years build out
d- 6 years material defects
A

C- 3 years building out

36B = B 3 & 6. 1+2 & 6.

50
Q

What do you do if you give an agency disclosure form and they don’t sign it?

A

Keep record (Time, Date, Names & Reason).

51
Q

Happy RE sells a house for $178,000 and gets $11,570 commission. Happy must pay 3% to co broker & then pay half the remainder to their sales person. How much does Happy keep?

A

$3115

co-brkr gets 3% of sale price.

178k x 3%= 5340 co-brkr

11570 gross - 5340 co-brkr= $6230 remainder

$6230/ 2= $3115

Memorize
3% & $115(70) commission = $3115

52
Q

What is the difference between:
agency
client
customer

A 
agent= represents someone
client= who you work for
customer= who you bring to deal
53
Q

If you represent the tenant, who is the customer?

A

landlord

54
Q

How is your client determined?

A

via agency agreement

55
Q

What is the agency disclosure form express?

A

tells who you work for/ represent

56
Q

If you work for Bond, and KB calls to say she wants to sell your house, what is the current law of agency?

A 
KB= seller
You= sales person
Bond= broker
57
Q

What 2 forms do you bring when someone wants to sell their house?

A

agency disclosure

listing contract

58
Q

Once the listing contract + agency disclosure forms are signed, what is the new law of agency?

A 
kb= client
you= subagent
bond= agent
59
Q

Who are sales contracts always between?

A

Broker + Client

60
Q

If a broker wants to enlist other brokers to help, this is called what?

A

co-broker invitation

61
Q

If a brokerage signs a co-broker invitation they become what?

A

a subagent of the seller (even if they bring in a buyer)

62
Q

When is a co-broker considered a subagent of the seller?

A

when they sign the cobroke invitation

63
Q

What does it mean to be a co-broker?

A

When 2 RE firms do a deal together & share commission (usually 50/50- but on state test they are unequal).

Most (90%) of deals are cobroke.

64
Q

On the test, do co-brokers work for buyer or seller?

A

seller

65
Q 
A co-broker represents everyone except:
a- client
b- seller
c- broker
d- buyer
A

D- Buyer

a- who you work for
b- who they work for
c- who they work with

66
Q

What is vicarious liability?

A

Responsibility for someone else. In RE brokers have specific responsibility to supervise according to 12A.

67
Q

What is it called when in RE, brokers have specific responsibility to supervise and take responsibility for their sales people (according to 12A)?

A

Vicarious Liability

68
Q

If you break license law, what are you breaking?

A

art 12 a

69
Q

When is dual agency okay?

A

when both sides agree in writing; informed consent

70
Q

What is it called when the broker- not the seller- takes vicarious liability for all subagents?

A

Broker’s agent

71
Q

What is broker’s agent?

A

when the broker- not the seller- takes vicarious liability for all subagents

72
Q 
Who usually takes vicarious liability in a RE sale?
a- buyer
b- seller
c- subagent
d- broker
A

B. Seller

A hired dog walker would not take responsibility for someone else’s dog’s actions if the dog bit someone.

73
Q

How would a lawyer try to sneak in broker’s agent?

A

by changing one word: seller’s agent is now broker’s agent who now possesses vicarious liability (very rare)

74
Q

If someone wants to fight RE tax, who do they go to?

A

Board of Assessment Review

assessment= tax

75
Q

What is another name for tax?

A

assessment

76
Q 
Who signs contract first?
a- seller
b- buyer
c- broker
d- subagent
A

B. Buyer

77
Q 
If a loan to value ratio is high, does that mean the owner's equity is:
a- doesn't change
b- high
c- low
d- unrelated
A

C. Low

The higher LTV, the lower the equity.

78
Q 
If a loan to value ratio is low, does that mean the owner's equity is:
a- doesn't change
b- high
c- low
d- unrelated
A

B. High

The lower LTV, the higher the equity

79
Q

If someone buys a house and a boat on the same mortgage, this is called what?

A

A package mortgage

80
Q 
If money supply goes up, what do interest rates do?
a- increase
b- depends
c- stay the same
d- decrease
A

D. Decrease

Money supply UP
Interest DOWN

81
Q

What is money supply?

A

Amount avail for ppl to borrow

82
Q

How do you determine efficiency factor?

A

useable sq ft / rentable sq ft

83
Q

What does the following equation determine:

(useable sq ft / rentable sq ft)?

A

efficiency factor

84
Q

If 2 competing brokers discuss commission rates, this violates which law and why?

A

Sherman Anti-trust as Price Fixing

85
Q

What is the rule of reason state?

A

That 2+ brokers discussing the RE Market are only violation Sherman act if there’s a “Restraint of Trade”

86
Q

What is restraint of trade?

A

When consumers don’t have a choice

87
Q

What is it called when 2+ brokers discussing the RE Market are only violation Sherman act if there’s a “Restraint of Trade”?

A

Rule of Reason

88
Q

What is it called when consumers don’t have a choice?

A

restraint of trade

89
Q

Is encroachment legal?

A

No

Construction Basics (8 decks)

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