Real Estate Class Review Flashcards
1
Q
What regulates the type of building that can be built?
A
Zoning laws
2
Q
What entity gives exceptions to zoning laws?
A
ZBA Zoning Board of Appeals
3
Q
What are exceptions to Zoning Laws called?
A
Variances
4
Q
Which Agency regulates Water/Sewer
A
Dept of Health (DOH)
5
Q
What is high limits of life insurance?
A
Umbrella insurance
6
Q
What is the lender’s interest in property insurance/title insurance?
A
To protect the mortgage
7
Q
What are ad volurum taxes?
A
Taxes based on assessed value (not market)
8
Q
What is the sequence of challenging assessments?
A
— Burden of proof on homeowner
— meet the assessor
— assessment review board
— sue in court
9
Q
What is STAR?
A
School tax relief program
10
Q
What is a 1031 Exhange?
A
It is a like kind tax deferred exchange for investment property only
11
Q
Over how many years can residential investment property be depreciated?
A
27.5
12
Q
Over how many years can commercial investment property be depreciated?
A
39 years
13
Q
Depreciation Math:
Market Value $1M; Land Value $300k. What is the per year depreciation value for both a residential and commercial property?
A
Figure this out
14
Q
How many years must a owner occupy primary residence?
A
2 out of the last 5.
15
Q
How much does an individual/married couple get in capital gain tax free?
A
$250k/$500k
16
Q
What is the definition of a limited common area no and examples?
A
Areas owned by all, but used by one person. Balcony, parking spot
17
Q
What kind of estate is a Condo?
A
Freehold, conveyed by deed
18
Q
What kind of estate is a Coop?
A
leasehold, conveyed by proprietary lease/stock certificate
19
Q
Who holds the title of a Coop?
A
The corporation
20
Q
What is the minimum kind of license to sell real estate in NY?
A
Real Estate Agent License
21
Q
How old must one be to sell commercial real estate?
A
18
22
Q
What does a sale lease back do?
A
Frees up liquid assets
23
Q
What is an escalation clause in a lease?
A
It allows the landlord to raise rent at pre-determined times
24
Q
What is a pass-thru clause in a lease?
A
Allows landlord to raise the rents immediately when expenses go up
25
Who pays taxes in a triple net lease?
The tenant
26
What kind of leases are most residential leases?
Gross leases.
27
What kind of leases are most commercial leases?
Net leases
28
What is the gross square footage on a commercial lease?
Total rentable sf.
29
What is the usable sf in commercial called?
Usable sf.
30
What is a commercial lease price for sf cost based on?
Gross sf
31
What makes up an Operating Statement?
Current rent, expenses, and profit
32
What is a pro-forma?
Projection of FUTURE rent, expenses, profit
33
What is the CAP rate formula?
Net Op Income / Market Value
34
What is the market value formula?
Net Operating Income/Cap Rate
35
What does RSF mean?
Rentable Square Footage
36
What does USF mean?
Usable square footage
37
What is the formula for building efficiency?
USF/RSF
38
What is the formula for finding out Loss Factor?
RSF - USB / RSF
39
What do property managers owe property owners?
Fiduciary
40
On 1st week on job, Property manager needs to increase property taxes. What component is he handling?
Risk Management
41
How old must one be to be a broker in NY? What are other requirements?
20/ 2 yrs experience + 3500 points OR 3 yrs experience + alternative credits
42
What is it called when a broker puts business money into their own accounts?
Co mingling
43
What it is called when funds are put in a special account, such as down payment?
Escrow
44
Name the Fiduciary elements.
OLDCAR
45
What article is the NY Real Estate Law?
Article 12A
46
What is the penalty for violating the NY Real Estate Article 12A?
Misdemeanor, $1k fine/1 year in jail
47
Who negotiates commissions?
Broker and Client
48
How long does fiduciary last?
Forever.
49
When is a broker’s commissioned earned?
Meeting of the minds
50
When is a broker’s commission paid?
Closing
51
What is the first document an agent should give anyone?
Agency Disclosure.
52
When does an agent give disclosure?
First substantial contact
53
What is considered first substantial contact?
First face-to-face meeting discussing real estate.
54
What must happen if someone refuses to sign disclosure?
Agent must fill out an affidavit/declaration. Agent signs and must be notarized and kept on file.
55
What does Exclusive Agency Agreement mean?
The seller retains right to sell their property on their own.
56
What is an open listing?
Whomever brings the buyer gets the commission.
57
Who are listing agreements between?
Broker and Seller.
58
What is a Net Listing in NYS?
Illegal.
59
When can a broker accept both buyer and seller commissions?
When they have written permission
60
What is dual agency?
When 1 brokerage reps both seller and buyer. Legal in NY with written informed consent.
61
What is it called when a broker represents buyer and seller without written permission?
Undisclosed Dual Agency — suspension.
62
If a real estate agent has a Mortgage Loan Officer license and both reps the seller and helps buyer get a mortgage, what is this called and is it legal?
Dual Agency and yes.
63
What is it called with a number of brokers get together and decide not to use a certain business?
Group Boycotting. Federally illegal.
64
What kind of deed do 2 unmarried people use for survivorship?
Joint Deed.
65
What deed is used by people who don’t want survivorship?
Tenants in common
66
What is the term for only one person on the deed?
Severalty.
67
What kind of deed is used for a married couple, both on deed?
Survivor Entirety.
68
What is it called when one property gets right to use a portion of another property for their use?
Easement appurtenement
69
What is it called when a gov’t or utility company uses a portion of one’s land for their purposes?
Easement in Gross
70
In an easement, the property using the other property is called?
Dominant
71
In an easement, what is the property called that gets used?
Service to
72
How many years does someone have to use another person’s property to claim a right to it?
10 years
73
What elements make a valid contract?
All signers 18, it is for a legal purpose, and of sound mind
74
When does a deed go into affect?
When it is recorded with the county clerk
75
What is it called when a deed is recorded?
Constructive Notice
76
What guarantees to a buyer that you own the property?
Covenant of Season
77
What protects lender and buyer against flaws/defects in ownership?
Title insurance
78
What is an opinion of value of a property called?
Appraisal
79
What is the purpose of a CMA?
To provide a range of market values
80
What approach does investment property use to arrive at value?
Income Approach
81
What is a promissory note?
Evidence of debt and promise to pay
82
What is a mortgage?
A security instrument
83
What is APR?
Annual Percentage Rate = Note Rate + Finance Charges
84
What kind of mortgage combines real and person property?
A package mortgage
85
What is it called when a mortgage lender requires borrowers to buy life insurance?
Predatory lending. Illegal.
86
What is an intermediary that brings buyers and lenders together?
Mortgage Broker
87
What is the the right of Fed/State to take private property for publish use, paid at fair market value?
Eminent Domain
88
What is the action of using eminent domain called?
Condemnation
89
What kind of zoning do PUDs use?
Planned Unit Developments = Cluster Zoning
90
How are building codes enforced?
By permits and inspections
91
What are vertical support beams?
Studs
92
What are horizontal support beams?
Joists (girders)
93
What is Title X?
Lead paint disclosure
94
What year is the building cut off where lead paint requires a disclosure?
1978
95
Do sellers have to test for lead paint?
No, but must allow buyers to do so at their own expense.
96
What is lender discrimination called?
Red Lining
97
If a disabled tenant asks for a modification, what must landlord do?
Allow the tenant to make a reasonable modifications at tenant’s expense
98
When was the first Civil Rights Act?
1866
99
What was the first protected class of people?
Race.
100
Who collects taxes?
Office of Receiver of Taxes
101
Who creates a comprehensive plan for a town?
Planning Board
102
What is a deductible?
Out of pocket loss from an insurance claim
103
What is ACV formula?
Actual Cash Value = replacement cost - depreciation
104
What do real estate taxes start by?
A tax levy.
105
What two elements can homeowners deduct from their income taxes?
Mortgage interest and property taxes
106
How long must an owner occupy a home before it changes tax categories?
14 days
107
What is a condop?
A building divided into 2 parts - condo and coop
108
What clause in a lease tells tenant how the property can/can’t be used?
USE clause
109
What is unoccupied space/vacant space calculated into?
Loss Factor
110
What must every apartment unit legally include?
Smoke detector and carbon monoxide detector
111
What is it called when a landlord turns off an essential service to remove tenant?
Constructive Eviction.
112
What is the only legal method of eviction?
Through the courts
113
What is the formula for Gross Potential Income on a residential property?
Monthly Rent Roll x 12 without any adjustments
114
What is the formula for Net Operating Income (NOI)?
Gross potential income - operating expenses
115
What is the formula to find the value of a building?
NOI / Cap Rate
116
What is the formula to find Cash on Cash value?
Cash flow before taxes / down payment
Example, cash flow = $10k, down payment = $100k; 10k/100k = 10% cash flow
117
An investor is calculating what if he is using cash flow and down payment?
Cash on Cash
118
How old must one be to be a real estate agent in NYS?
18
119
How much experience is required for a real estate agent license?
None.
120
If your license is revoked, how long before you can reapply?
1 year to reapply
121
What agency issues real estate licenses?
Dept of State
122
What does a broker/agent owe customers?
Fair dealing and honesty
123
What does a broker/agent owe client?
Fiduciary
124
What is the preferred message of establishing agency?
Express
125
Who pays an agent?
Broker only.
126
During an open house, when must you provide a disclosure?
Before you start talking real estate.
127
How long must an agent/broker keep paperwork/disclosures, etc.
3 years.
128
What is the best listing agreement for a broker to ensure they make money?
Exclusive right to sell, where broker gets paid no matter what.
129
What is price fixing?
When brokers discuss and fix their commissions together
130
As a sales person, are you an employee?
No. You are an independent contractor.
131
As an independent contractor, what are some elements?
```
Must have a contract
Get paid with a gross check
No set working hours
Pay your own expenses
File scheduled C
```
132
What is personal property called?
Chattel
133
What is the fullest interest in real property called?
Fee simple deed
134
What kind of deed is used most by married couples?
By Entirety
135
If Big City Electric uses your property to fix power lines, what is this called and what is Big City Electric considered?
Easement in gross/Dominant
136
What kind of lien is a mortgage?
Voluntary Specific
137
What kind of lien is a Judgement?
Involuntary general
138
What kind of lien is a property tax?
Involuntary Specific
139
What kind of lien is a mechanics?
Involuntary specific
140
Which lien gets paid first at a closing?
Property Tax
141
How is a contract between a minor and adult voided?
By minor only
142
What clause in a contract allows steers to pursue other buyers until a contract is signed?
Escape clause
143
What kind of lease is a 2-month lease?
Estate for years
144
What must an Estate for Years lease have?
Start and End date
145
What must a periodic estate lease have?
A start date only, no end date. (Example is an on-going month-to-month lease)
146
What kind of a lease is a month-to-month lease?
A periodic estate lease
147
Who must sign a deed?
All grantors
148
Who is a grantee?
Buyer
149
Who is a grantor?
The seller; or the mortgage loaner
150
What kind of deed removes a cloud on a title?
Quitclaim deed
151
What must a survey include?
A legal description
152
What kind of survey description has a point of beginning?
Mete and Bounds
153
Who pays transfer tax at closing?
Seller
154
What is TILA?
Truth in lending Act, Reg Z (does not cover commercial lending)
155
What is the theoretical price real estate should sale for based on a buyer’s opinion?
Market Value
156
What three elements does a CMA use?
Recently Sold
Currently on Market
Expired Listing
157
What is it called when a lender does a look and tells buyer how much they can borrow?
Pre-approval
158
What allows a bank to foreclose on missing mortgage payments?
Acceleration clause
159
What agency on the secondary mortgage market buys the most mortgages?
FANIEMAE
160
When lenders take advantage of distressed buyers by changing terms at the closing, it is called what?
Predatory lending
161
Can mortgage loan originators loan money?
No
162
Can mortgage brokers lend money?
No.
163
Can mortgage bankers lend money?
Yes.
164
How many sq is an acre?
43,560
165
How do you figure out this equation: A homeowner wants to clear $100k. They owe $50k on their mortgage, and transfer taxes will be $10k. The commission is 5%. What should the sales price be?
You subtract 5% from 100%, then divide the total costs + mortgage amount + amount wanting to clear by the commission amount. So:
100k + 50k + 10K = $160k
100% - 5% = 95%
$160k/95% = $168,421
166
If a person dies without a will or heirs, what process does the property go through?
Escheat
167
How long do deed restrictions last?
Forever unless they violate Fair Housing Laws
168
What is it called if a commercial building is built to code, but 10 years later the zoning codes change to residential only, but the building is allowed to continue its original purpose?
Non Conforming Use
169
What are the three types of construction framing?
Post and Beam
Balloon
Platform
170
What is the force that pushes electricity through wires?
Voltage
171
What is the standard US voltage?
100 Volts
172
When is asbestos dangerous?
When it is in powder and breathable
173
What agency cleans up toxic waste sites?
Superfund CERCLA
174
What is another name for Panic Selling?
Blockbustering
175
Can you advertise Exclusive Neighborhood?
No
176
Can you advertise “Short walk to subway”
No, not everyone can walk
