RE Online Final Exam

Question 1

What do a majority of real estate firms treat their sales associates as?

Answer 1

Independent contractors

Question 2

Why do real estate firms treat their sales associates as independent contractors?

Answer 2

To avoid bookkeeping problems of withholding taxes, SS payments and unemployment insurance.

Question 3

What does a salesperson who represents one party in a transaction owe them?

Answer 3

Full fiduciary responsibility

Question 4

What is full fiduciary responsibility?

Answer 4

What a salesperson owes the party they are representing which is reasonable care, confidentiality, loyalty, obedience, accountability, and disclosure.

Question 5

What is an easement appurtenant?

Answer 5

The perm right to use another’s land for the benefit of a neighboring parcel. Also called a right-of-way

Question 6

An appraisal always requires a license or certification. True or False

Answer 6

False

Question 7

How to calculate a property price per front foot?

Answer 7

Selling price/Length of Frontage (street facing width of the property)

Question 8

Why do real estate transactions involve liquidity risk?

Answer 8

Real property can’t be sold immediately , unlike stocks or bonds.

Question 9

When is a vacation home viewed as income producing property?

Answer 9

When the home is leased for a period greater then 14 days.

Question 10

What is the equity dividend rate?

Answer 10

% of profit the investor receives only on the cash invested in the property. Also called cash on cash return.

Question 11

What is a primary residence?

Answer 11

Location where a taxpayer has resided for at least 2 out of the last 5 years before the sale of the property

Question 12

What does Real Property Law Allow?

Answer 12

Allows a broker to file an affidavit of entitlement to commission for negotiation a contract for purchase or lease of any real property

Question 13

True or false: An agency coupled with an interest can be revoked by the principle and it can be terminated on the principal’s death.

Answer 13

False

Question 14

What did the Duncan and Hill Decision Recommend?

Answer 14

That NY brokers and sales persons who prepare purchases and sales contracts protect themselves against charges of unauthorized practice of law by making the contracts subject to approval by attorneys.

Question 15

What are public works such as roads, schools and public utilities called?

Answer 15

Community’s Infrastructure

Question 16

What is a dual agent?

Answer 16

Represents the buyer and seller in the same transaction.

Question 17

Who can brokers only share their commissions with?

Answer 17

With their own salespersons and associate brokers.

Question 18

What is a letter of intent

Answer 18

For a person who wants to purchase a unit in a condominium project.

Question 19

What govt. program helps low and moderate income people pay part of their rent?

Answer 19

FHA Section 8 Program

Question 20

What is a buyer of a 1-4 family dwelling entitled to receive before a contract of sale is signed?

Answer 20

A property condition disclosure statement.

Question 21

True or false: The purchaser of a cooperative is the tenant of leased property and also the holder of shares of stock.

Answer 21

True

Question 22

What did the Tax Reform Act of 2018 do?

Answer 22

Categorized income as either active, passive, or portfolio.

Question 23

What are the two fixed expenses for income property?

Answer 23

Property taxes and insurance premiums.

Question 24

How to calculate transfer tax?

Answer 24

Divide sales price /500 round up and then x 2

Question 25

What happens in an implied contract?

Answer 25

The agreement of the parties is demonstrated by their acts and conduct

Question 26

True or False: A licensee doesn't have to make relationships clear to all parties in a transaction

Answer 26

False

Question 27

What are the 2 private agreements that affect the use of land?

Answer 27

Deed restrictions and covenants.

Question 28

How do you determine a property's effective gross income?

Answer 28

Other income is added to the difference between potential gross income and the vacancy and collection loss.

Question 29

In an open listing with multiple brokers who gets paid the commission?

Answer 29

The broker who successfully produces a ready, willing, and able buyer.

Question 30

In New York how can land be legally described?

Answer 30

Using metes and bounds, and monuments or ref to a plat map

Question 31

How do you prove insurance coverage in commercial and residential real property closings?

Answer 31

By issuing certificates of insurance

Question 32

What is a lease?

Answer 32

A contract between an owner of real estate and a tenant that transfers right of possession and use of the owners property for a specified time

Question 33

Trues or False: Shares of stock are considered personal property

Answer 33

True

Question 34

What is an encroachment?

Answer 34

Physical intrusion of some improvement on another's land

Question 35

What is an estate in fee simple?

Answer 35

Complete type of ownership in real estate , where owner has all rights

Question 36

How long must a section 1032 exchange take place after relinquished property is sold?

Answer 36

No later then the earlier of either 180 days from sale or the tax return date

Question 37

How is ad-valorem tax determined ?

Answer 37

Value of the property being taxed.

Question 38

True or false: A real estate license is required to sell a lot or parcel of land by auction?

Answer 38

True

Question 39

Whats included in casualty insurance policy?

Answer 39

Coverage against theft, burgulary, vandalism, and machiny damage as well as health and accident insurance

Question 40

What is the first step in determining a real estate tax rate?

Answer 40

Adopting a budget