School Exam Flashcards
Structures and facilities needed for the operation of a society
Schools, roads, bridges
Infrastructure
In New York, who are zoning powers given to.
Municipal governments (towns)
The purpose of a building permit is to
A. Override deed restriction
B. Maintain municipal control over the volume of building
C. Regulate area and bulk building
D. Provide evidence of compliance with municipal regulations
D
Municipal = ?
Towns
The building inspector who is satisfied that construction is satisfactory may issue
A. a certificate of occupancy
B. Conditional use permit
C. Restrictive covenant
D. Subdivision regulation
A
Use your rights or lose your rights
Doctrine of laches
How many years do you have before the doctrine of laches kicks in?
2 years
What are the powers that the government has over land?
Taxation
Police power
Escheat
Eminent domain
Through a condemnation suit, a government may excessive what in order to acquire privately owned real estate for public use?
(Ex: making a deli for workers)
Eminent domain
The right of the government to take the property of a private incidental
Eminent domain
For a condemnation suit to occur, for eminent domain, what must happen?
The property has to be declared by court as public use
Compensation must be paid to owner
Rights of the owner must be protect by due process of law
When an owner of a property dies and he has no natural heirs, and it reverts back to the state
Escheat
What is the only form of involuntary alienation that can occur after death?
Escheat (owner dies and has no natural heir)
Improvement taxes that are additional taxes that run for a few years to enable certain neighborhoods to pay for improvements like sidewalks
Special assessments
Laws of local government authorities that control the use of land and structures within districts
Zoning ordinances
What zoning law is enforced to obtain before property owners build or take down buildings on their land
Building permits
What is a garage an example of, other than real property?
Accessory building/use
Building permits act as property information to the taxing authorities. When a permit is issued through the buildings department of that town, a fair estimate of the improvement or renovation or demolition will lead to what?
Higher taxes
What law deals with appealing a courts decision?
Article 78
If you’re inconvenienced to the point of hardship due to zoning ordinances, what are the 2 things you can you do?
Special use permit may be granted to use property for the public’s interest, or you can get a variance where you could, for ex, bump out a road 50 feet more
Cities and towns have ordinances that specify construction standards called building codes.
You need a building permit to build or alter existing building.
Officials can verify compliance with building codes and zoning ordinances by examining the plans and inspecting the work.
After the new construction is satisfactory, the inspector issues a “blank” , which is a certificate of compliance.
Issues a certificate of occupancy (C of O)
Responsibility for cleanup of environmental disasters of the original offenders and also current and future owners of the property
CERCLA
comprehensive and environmental response cleanup and liability act of 1980
The law that was intended to cover liability for oil spills that includes the environmental lien amendment where the state can hold any property owner accountable for environmental cleanup
The New York State navigation law
Local governments may enact regulations intended to preserve individual buildings and historic or architectural significance. The regulations may restrict which right of certain old buildings?
The right to alter the exteriors of certain old buildings
Heard complaints about the effects of zoning ordinances on specific parcels of property
Zoning board of appeals
The board that approves new construction and remodeling
Architectural review board
Who enforces the safe and lawful use of properties and buildings via endorsement of the municipality’s building code, electrical code, zoning resolution, variances
Building department
A planned combination of diverse land uses like housing, shopping, recreation that are contained in 1 development or subdivision
PUD
Planned unit development
Who issues the certificate or occupancy?
Buildings department
An individual treatment and disposal system that is usually built underground. A households wastewater.
Septic systems
What is attached to the sole plate?
Studs
Who regulates our drinking water?
The department of health
Where does the electric that comes out of our telephone poles go into?
Circuit breaker box
Slant of the roof
Pitch
What is the order of construction from the bottom up?
Footings
Foundation
Sill plate
Subfloor and joints
Sole plate
Studs
How long do fixed expenses remain constant for?
The year
What are the 2 things that fixed expenses consists of?
Property taxes and property insurance
Do not vary as a result of a properties occupancy rate
Fixed expenses
Percentage of profit that the investor receives only on the cash he or she invested in the property
Equity dividends rate or cash on cash return
Cash on cash return (equity dividend rate)
The cash (equity) you’re getting on the cash (equity) you invested into a property
What is another term for cash in cash return?
Equity dividend rate
What is the Income tax analysis formula or how do you find effective gross income?
( Potential gross income (Pgi) x (100%) )
- ( Vacancy and collection loss)
+ Other income like parking, laundry, etc.
= Effective gross income (EGI)
If I have an apartment next to a college, I want to know what I’m making and when. Think about kids going to college, how does that affect my income in my apartment? What formula would I use for this?
Effective gross income
Blank - vacancy and collection loss + other income = ?
Potential gross income (100%) - vacancy and collection loss + other income = effective gross income (EGI)
Who holds on to security deposits?
Tenant
Seller
Buyer
Landlord
The landlord
If a rental building is sold to a new owner, what happens to the existing tenents? And what happens to the security deposits ?
Nothing happens to the tenants
The security deposits get transferred to the new owner
Is real estate liquidity or illiquidity ?
Illiquidity because we can’t sell it fast
The use of borrowed funds depending on the availability of funds
Leverage
Becomes toxic when microscopic fibers are inhaled
Harmless if it’s not disrupted
Must be removed by a professional
Asbestos
Odorless, radioactive gas, comes from rock
Radon
What is hazardous when it’s trapped or unventilated?
Radon
How does radon enter a house?
Through cracks in the foundation
How do you remove radon from water?
Through filtration or aeration system
How do you remove radon from in-door air?
by a ventilation system or exhaust system
1100 gallons or more regulated by federal environmental protection program
And protects nations ground water by identifying underground tanks and preventing or correcting leakage of hazardous materials
Leaking underground storage tanks
How many gallons or more are regulated by the federal environmental protection legroom?
1,100
What do leaking underground storage tanks do?
Protects nations ground water
How do leaking underground storage tanks protect the nations ground water?
By identifying underground tanks and preventing leakage of hazardous materials
Asbestos has been widely used for
A. Solder
B. Encapsulation
C. Insulation
D. Paint
Insulation
Which one is a hazardous gas?
A. Radon
B. Lead
C. Asbestos
D. Radioactive waste
Radon
Eliminating radon from a house is generally
A. A fairly simple manner
B, hazardous
C. An impossibility
S. Done by an EPA trained specialist
A fairly simple matter
How should asbestos be removed?
A certified professional
The federal government regulates farm and residential fuel storage tanks when capacity reaches
A. 550
B. 1100
C. 1750
D. 2000
1,100
Fixed expenses are expenses that do not vary as a result of a property’s
A. Tax status
B. Location
C. Occupancy rate
D. Leverage
Occupancy rate
Operating expenses associated with income property include fixed expenses, variable expenses, and
A. Losses
B. Taxes
C. Unanticipated expenses
D. Reserves for replacements
Reserves for replacements
Prohibits discrimination against race or color
Civil rights act of 1866
What year was the civil rights act made?
1866
What act prohibits discrimination based on race, religion, or national origin when selling or leasing residential property?
Federal fair housing act of 1968
What year was the federal fair housing act?
1968
What did the amendment in 1974 add to the fair housing act of 1968?
no housing discrimination on the basis of sex
What did the amendment in 1988 add to the fair housing act of 1968?
No housing discrimination against disabled persons and families with children (FAMILIAL STATUS)- this is what it’s called on the test
A federal department that administers federal programs with affordable homes
HUD
housing and urban development
The federal housing assistance program. Low to moderate income tenants pay a fixed portion of their income in rent, with HUD paying the remainder
FHA section 8
Is blockbusting illegal?
Yes
Persuading or scaring homeowners to sell their property by making negative representations regarding the neighborhood
Blockbusting (think blockbusters, horror movies, scaring)
Which one is illegal, steering, redlining, or blockbusting?
All of them
Bringing certain buyers to a particular area for discriminatory ends
Steering
Denying loans in a certain area by lending institutions
Redlining
Is redlining legal or illegal?
illegal
Which one is legal, redlining, blockbusting, or steering?
None of these are legal
When we discriminate against people it’s usually due to what?
Nation origin
The division of licensing services operates under New York
Department of state
Most real estate agents will become..
Independent contractors
A wrongfully accused real estate agent can contest the actions through an
Articles 78 proceeding
What does certificate of occupancy mean?
As construction progresses, agencies will inspect the building. If construction progressed in accordance with the approved plans and specifications, the inspector will give approval. The final approval results in the certificate of occupancy, which means the building is in total compliance with local building code requirements and is fit for human habitation.
Ads made by a real estate broker that do not indicate that the advertiser is a broker are known as what?
Blind ads
The relationship between the owner of a property and a real estate agent
Special agent
A property manager is considered a
General agent
What decision states that agents should not give out legal advice ?
Duncan and hill
The 6 fiduciary responsibilities
OLDCAR
obedience, loyalty, disclosure, confidentiality, accounting or accountability, reasonable care
An example of a listing agreement
Express contract or agency
What kind of contract is based on acts and conduct
Implied agency
What is it called when an agent represents the seller and the buyer in the same transaction
Dual agency
What does an agent do when they see themselves entering into a dual agency
Inform both parties
Get informed consent and have them sign the agency disclosure form
In a dual agency, what does the seller and buyer give up ?
Full disclosure and undivided loyalty
In a dual agency, the buyer and seller must agree in specific terms, what must an agent do if they decline?
Call your broker and he will assign a designated agent to the transaction
When must an agency disclosure form be signed ?
First substantive contact
Lead based paint disclosure forms are necessary for houses built prior to
1978
An owners rights to land bordering a river or stream is called
Riparian rights
Anything on a property for sale that is moveable or mobile is considered what?
Personal property or chattels
Anything permanently attached to land is considered
Real estate or real property
What is the most complete type of ownership?
Fee simple
A co-op is considered real or personal property?
Personal property
Market value is when
The buyer and the seller are NOT Under pressure to act
What is it called when one neighbor has the right to go onto the property of another to get to the water behind both of them?
Right of way , easement appurtenant
A program to help low income Americans with rental money
The FHA section 8
Any kind of changing of zoning is the town or the states problem
The town
An agent scares a homeowner into selling their home is called
Blockbusting
An agent brings a buyer to a neighborhood based on the way the buyer looks is
Steering
The civil rights act of blank prohibits discrimination based on race or colors
1866
If I’m selling real estate at an auction do I need a real estate license ?
Yes
Are studs vertical or horizontal?
Vertical
Are sole plates vertical or horizontal?
Horizontal
Name a good insulation
Fiber glass
Name a bad insulation
Asbestos
Which one would not require a professional to have removed?
A. Radon
B. Termites
C. Lead based paint
D. Asbestos
Radon
A mortgage with a final payment that’s larger than the preceding one is called
A balloon payment
Blank is when the borrower makes regularly scheduled payments over the life of the loan to pay off the debt. Each payment consists of part interest and part principal
Amortization
Blank is the gradual building up of a large mortgage debt when payments are not sufficient to cover interest due and reduce the principal
Negative amortization
The equation used to figure out transfer tax
Transfer tax = (sales price/$500) x $2
Blank is the mortgage by which the interest rate is not fixed for the life of the loan. The rate is fixed for a period of time at the beginning, but after that it may changed based on changes in an interest index
Adjustable rate mortgage
What type of easement has a right of way in it
easement appurtenant
Define infrastructure
Bridges, roads, schools, public utilities, etc.
Blank is the right of the government to acquire property for public use through a court action is called blank
Eminent domain
Condemnation
What is the cost recovery period for residential income producing property?
27.5 years
Ownerships of stock in a corporation falls under a
Co op
With a co- op there is a board of
Board of directors
What kind of mortgage will bob get with a co-op?
He doesn’t personally get a mortgage, he gets a Personal loan
There is a mortgage for the whole building which is called underlying mortgage
If Greg is interested in a condo, he can show his interest by sending a
Letter of intent
Does the IRS tax co-ops the same it does condos and single family homes?
Yes
Another name for cost recovery is appreciation. True or false
False, this is depreciation
When is a deed valid ?
When it is delivered and accepted
Who must sign a deed?
The seller (the grantor not the grantee)
Does the buyer receive the deed at the closing ?
No
Who must the deed go to once it is a delivered and accepted?
County clerks office
The legal, physical document that transfers title from one person to another is called and conveys ownership rights to a property
A deed
A man agrees to rent his house to his uncle from June 1,2024 to September 22,2024. What type of tenancy is this?
Tenancy for years
John paid Dan $2000 for the right, if he chooses, to lease a barber shop within. 72 days at a specific annual rental. The agreement is an?
Option agreement
The present worth of future benefits describes
Value
What are considered fixed expenses for an apartment building ?
Property tax and property Insurance
Who brings borrowers and lenders together for a fee?
Who originates loans?
Mortgage brokers (registered)
Mortgage bankers (licensed)
An agreement between 2 competent parties to exchange property for consideration is called
A contract (something of value, consideration, 2 parties)
A tenant who pays rent plus some operating expenses is what kind of lease?
A net lease
Another name for equity dividend rate ?
Cash on cash return
Which loan is insured?
FHA loan
Where will John go to change zoning on his property
Municipal government (the town)
What department regulates drinking water safety
The department of health
Day to day activity is considered what type of income?
Active income
The statement “I hear they’re moving in, there goes the neighborhood! Better sell to me today” is an example of?
Blockbusting
Who dictates commission ?
Both the broker and the seller
Who is required to be licensed to sell real property for a broker?
A real estate agent
What year did the New York property law, article 12A into effect?
1922
If a real estate agent is found at fault, they may be required to pay up to how many times the amount of damages ?
4 times the amount of damages
The legal way of saying you have property ownership. Not a document, but a concept that says you have the rights to use that property is called
Title
Triple net lease
Where the tenant pays everything like taxes, repairs, insurance, EXCEPT for the mortgage
If an appraiser can’t find comps to appraise a property, and used for a unique physical design like a church or school or hospital, he will most likely choose what approach?
Cost approach
An owners rights to land bordering large lakes, bays, and oceans
Littoral rights
A lose run schedule is the history of an insurance policy. True or false?
True
What kind of lease do you get with a co-op?
Proprietary lease
What is the cost recovery period for commercial property
39 years
Transfer tax is
$2 per $500
if John is building a garage in his backyard what will he need first? Then what will he need after?
Building permit first
Then a certificate of occupancy
When a building, fence, or driveway extends illegally onto the property of another
Encroachment
Who is Registered with the New York banking department, and who is licensed with the New York department?
A mortgage broker is registered and
A mortgage banker is licensed
What is a mortgage broker or a mortgage banker regulated by the New York state department?
Both of them
The difference between a real estate broker, salesperson, and associate broker
 broker assist sellers, buyers, landlords and tenants with satisfying their real estate needs for a fee
A sales person assists them under the direct supervision of a broker
An associate broker has the same qualifications as a broker, but she uses to work as a sales person under the name and supervision of another broker
When you get your license, does it go directly to you as the agent or does it go to your broker of choice?
The broker
Issued to each licensed sales person from the department of state. Must be carried by the sales person at all times. What is this?
Pocket card
How long is your real estate license in New York good for?
2 years
How many hours of continuing education do you need every two years?
22.5 hours under section 441 with at least 3 hours on fair housing, discrimination, or both
Mixing other peoples money with your own
Commingling
Who do real estate agents obtain their license through?
Department of state
Can the DOS fine, suspend, or revoke an agent /brokers license?
Yes
Main source of real estate law
Article 12 A
Hey wrongfully accused real estate agent can contest the actions through what proceeding?
Article 78
Does an associate broker have to follow the rules of a broker or a salesperson?
A salesperson
What is dual licensure?
When an associate broker words under a broker but also has his own brokers license in his name
Who does not need to take the pre license course or state exam to be a broker or salesperson?
Attorneys and public officers
Caveat emptor means?
Let the buyer beware
Who has vicarious liability and what is vicarious liability?
A broker has vicarious liability over a salesperson and it means being held responsible for the wrongful acts of another
Any person, legal person, partnership, entity, or corporation that for a fee, performs for another the selling of a lot or parcel of land by auction
A broker
Can a salesperson ever accept compensation of any kind from anyone other than their sponsoring broker?
No
What does disclosure mean?
Disclosing any material facts or defect that affect the value of property that the licensee knows about
How long is a salesperson license good for?
2 years
What must a salesperson carry around at all times?
Pocket card
Does a broker have to display both their license and the salesperson agents license on the wall of the office?
No, just the brokers license has to go on the wall
What happens to agents if a brokers license gets suspended?
The salespersons license will be suspended until they associate with a new broker
True or false: listing, customers, and clients are always the property of a broker.
True
A secret profit that is illegal
Kickback
If a salesperson acts as the principal in the sale of his own property, he has to include the brokerages name or the broker in all advertising for his property on sale. If he doesn’t, this is called
Blind advertising
Any internet we must contain a link to what?
The firms website
When a seller authorizes a broker to procure a specific amount of money for the property and allows the broker to keep any money above the specified amount obtained from the sale
Net listing contract
A permanently cancelled license
Revocation
If you get compensation through violating a license law, you may have to pay damages of up to 4 times the amount, which is called
Restitution
If a license is revoked, how many years must you wait before you can reapply?
1 year
The distribution panel for the many electrical circuits in the house. In case of a power overload, the heat generated by the additional flow of electricity will cause the circuit to open, reducing the possibility of fires.
Fuse box or circuit breaker box
The skeleton members of a building are called
Framing
The walls of a frame are formed by VERTICAL members called
Studs
What is SARA from 1986 and what does it stand for?
Superfund amendments and reauthorization act
Stronger cleanup standards for contaminated sites
The cause of the depletion if the ozone layer
Chlorofluorocarbons
Both sellers and landlords are responsible to disclose information regarding lead-based paint to buyers from 1978. How many days do buyers and tendons has to have the home tested for lead-based paint?
10 days
The 2 main sources of lead poisoning
Flaking or peeling paint and the plumbing system
In a co-op, each apartment purchase receives
A. Stock in a corporation
B. Fee simple ownership
C. Undivided ownership
D. Tenancy in common ownership of entire building
Stock in a corporation
Is this a condo or a co-op?
- Proprietary lease
- underlying mortgage (everyone pays together- single mortgage)
- board of directors
- share or stock of a corporation
- maintenance fees (instead of rent)
- instead of a mortgage, pays personal property
A co-op
What is this, condo or co-op?
- board of managers
- fee simple
- letter of intent
- deed
- pays a mortgage
- reserves (money set aside for future expense)
- common charges instead of maintenance fees
Condo
What relationship is in a co-op corporation?
Landlord and tenant
The agreement that gives the shareholder the right to occupy a particular unit
Proprietary lease
Who pays a monthly maintenance fee rather than pay rent which includes a share of real property taxes for that unit?
Co-op tenant
Do co-ops or condos elect their members?
The board of directors in a co-op are elected positions
Which one is better to own during the great depression, a condo or a co-op?
A condo because in a co-op, everyone has to do their part to pay the monthly maintenance fees and the single mortgage and they would have foreclosure
Can the board of directors deny people from a co-op with no obligation to explain why?
Yes
The buyer of a blank receives a deed conveying fee simple ownership of the unit and an undivided interest
Condo
Are you allowed to sell, lease, give away, or leave a condo to heirs?
Yes, because fee simple
Common charges is to condos, as house rules are to?
Co-op
What are reserves when dealing with condos?
Funds set aside to accumulate for future large expenses
A lot was zoned 90’ x 120’. It sold for $155,000. What was the price per front foot?
1,722.22 per front foot
(school test)
(155,000 / 90)
A broker earns a commission of $4000 in the sale of a property for $80,000. What was his commission rate?
5%
$80,000 x (?%) = $4,000
? = 4,000 / 80,000 = .05 x 100= 5
Who is responsible for transfer tax?
The seller
What is the tax on transferring a deed from the homeowner to the buyer?
Transfer tax
A couple listed their home for $200,000 and excepted an offer for $198,600. The buyer obtained a mortgage loan for $160,000. How much did the sellers pay in transfer tax?
$794.40
$198,600 divided by $500 = $397.20
$397.20 times two dollars = $794.40
Agent who represents principal in all matters concerning all transactions
Universal agent
Agent who represents principal in all matters concerning one transaction
General agent
Agent represents the principal in one specific action under detailed instruction
Special agent
The most common agency
Express agency
What is an agency disclosure form?
Describes role of agent to customers and potential clients
To educate the public as to who or who not to share confidential information to
An oral and written contract
Express agency
As long as the agency relationship is clear and explicit, does it legally matter who pays the fee whether it’s the buyer or seller?
No it doesn’t matter
Who pays commission, clients or customers?
Clients pay agents commissions
Power of attorney is what type of agency?
Universal agent
Does an agent owe a fiduciary duty to a customer?
No, only fair and honest dealing
Power of attorney also means? (Not the universal agent answer)
Attorney in fact
Relationship between broker and seller under a listing agreement
A special agent
True or false, a dual agency can only be created by a buyers agent
True
Describe the duty of obedience.
The fiduciary relationship obligates the broker to obey the legal and reasonable instructions of the principles.
What does the duty of reasonable care mean?
An agent must be competent and not act in a negligent manner. Otherwise the agent could be liable.
Acting in good faith at all times is which duty?
Obedience
What does disclosure mean in fiduciary duty?
Communicating with client and presenting all offers. Have to disclose all information even if it prevents you from closing on the sale.
What is the easiest way to break fiduciary responsibility?
To play with money (accountability)
What does accountability/accounting in fiduciary responsibilities mean?
Brokers must immediately deposit all funds entrusted to them in special accounts with titles that must include the word trust or escrow. It is illegal for brokers to commingle.
Your client is looking for a penthouse with a dog park on the rooftop and you are the agent looking for the same thing. You find the property, so you are obligated to choose your clients best interest and tell them about the property. Which fiduciary duty does this fall under?
Loyalty
Coverage against theft, burglary, vandalism and machinery damage needs what kind of insurance?
Casualty insurance
Covers the risk an owner assumes when the public enters their building
Liability insurance
If you get robbed in your apartment, which insurance helps you?
Casualty insurance
The history of claims made against a commercial insurance policy
Loss run schedule
What allows insurers to assess how risky their business will be to insure, similar to a credit report
Loss run schedule
A report that includes dates, times, description of the event, and usually goes back 5 years.
Loss run schedule
Casualty insurance is usually written
A. On specific risks
B. For braid, inclusive coverage
C. To cover employee negligence
D. As multiperil policies
On specific risks
Proof to a lender that a property is covered by insurance is provided through
A. Insurance certificate
B. Insurance reserve
C. A claim escrow
D. An affidavit of coverage
An insurance certificate
A loss run schedule shows the history of a subjects
A. Previous claims
B. Credit activity
B. Premium payments
D. Property ownership
It’s similar to a credit report but it’s not credit, it’s CLAIMS
Is a loss run schedule for commercial or residential?
Commercial
Is a loss run schedule for commercial or residential?
Commercial
Where mortgage financing is involved, who must bring proof of insurance when closing on a property?
The buyer
Fire insurance is equal to at least “blank” % of the replacement cost of the dwelling
80%
A woman sells her six unit apartment building in Queens to a buyer. What does she need to do now?
Turn over the security deposits of the tenants to the new buyer
At least provision giving the tenant the right to extend the lease for an additional period of time on set terms is called what?
An option to renew
Under the New York general obligation slaw, which of the following is correct?
A. Security deposits must always be held in trust or escrow accounts
B. Interest earned on security deposits belongs to the landlord
C. Security deposit can be commingled only under certain circumstances
A
A woman manufactures Knit ware in a small rented building. In addition to monthly rent she pays heat, electric, and property taxes on the building. What does she probably have?
Net lease
The concept of legal ownership that the deed grants you
Title
The retrieval of any unsatisfied judgements and against the property
Title search
Where mortgage is involved, what must the buyer bring to the closing?
Proof of insurance and occasionally fire insurance
Where mortgage is involved, what must the buyer bring to the closing?
Proof of insurance and occasionally fire insurance
How many days do mortgage companies have to send out RESPA?
Within 3 days
The act that ensures that the buyer in a residential real estate transaction has knowledge of all settlement cost
RESPA
What is the service charge in a loan fee known as and how much does one point represent?
It’s called points or origination fee and 1=1% of the borrowed amount of the loan, not the sales price
A seller sold a home for $200,000 and agrees to pay three points to the buyers lending institution. The buyer is putting 20% down on the property. How much will the points cost the seller? (remember 1%=1 point)
200,000 (sales price) x .20% = 40,000 (loan amount)
$200,000 - $40,000 (subtracting these because the formula is for the loan, NOT the sales price) = 160,000
3 points = 3%, because 1% =1 point
160,000 x .03%= $4800
If I paid my taxes in January for the whole of the year, and I sold my house in June, you have to pay me my taxes back. What is this called?
Prorations
If a sales person is an independent contractor, what is he entitled to.
A. Unemployment insurance
B. Supervision and guidance
C. Worker’s Compensation
D. Federal and state withholding
Supervision and guidance
An independent contractor is generally
A. Paid commission on sales
B. Given two weeks of paid vacation
C. Paid a regular salary
D. Reimbursed for all business expenses
A
Prohibits licensee from the unauthorized practice of law?
Duncan and hill
If a man drives into a gas station and tops office gas tank is obligated to pay for the fuel through what kind of contract?
A. Express
B. Implied
C. Oral
D. Voidable
Implied
An option to purchase binds
A. The buyer only
B. The seller only
C. Neither
D. Both
The seller
Define consideration
Something of value (a voluntary)
Earnest money = ?
Cash deposit = ?
Earnest money = deposit money
Cash deposit = earnest money deposit
A contract needs
A. Writing
B. Offer and acceptance
C. Consideration
D. B and c
D
What can a contract be?
Implied, expressed
Void, voidable, valid, unenforceable
Unilateral or bilateral
Executors or executed
What is the name for the cash deposit offered when making an offer to purchase real estate?
Earnest money deposit
A broker must place earnest money in his account no later than how many business days following receipt of the funds?
3
Which tax issue is each of these:
1. passive income =
2. Active income =
3.Portfolio income=
- sitting back passively while you make money, not directly involved in the day to day activity of the income producing vehicle. All rental income from investments.
- day to day activity, working and collecting money, actively working. Direct activity of employment.
Salaries, commissions, consulting fees, gratuities. - stocks. Any income derived from dividends received through ownership of stock. Interest received from any source.
How many years can you write on the depreciation on a residential income producing property?
27.5 years
What is the time period of depreciation for commercial investment property that you can write off?
39 years
What is an example of depreciation?
Cost recovery
What is an example of cost recovery ?
Depreciation
When a principal RESIDENCE is sold, a taxpayer filing a tax return as a single filer, may exclude up to how much from the total gain realized at sale? What if you’re married?
Single is $250,000
Married is $500,000
The 200/500 rule
Which form of income on an investment property is considered passive income?
A. Rents paid by commercial tenants
B. Salary paid to the managing partner
C. Commission paid to the rental agent
D. Fees paid to the landscaping consultant
A
What is the cost recovery period for commercial investment property?
A. A. 27.5 years
B. 29 years
C. 39 years
D. 39.5 years
C, 39 years
A property managers job is to:
Maximize income, while maintaining the value of the property
An agent who is authorized by principal to represent principal in a specific range of matters
General agent
Generating income, budgeting, advertising, negotiating leases, market analysis. Who does this describe?
Property manager
Highest form of confidence and trust is placed
Fiduciary
what is FHA
Government insured loan under HUD
FHA section 8
Low income or moderate income residential rentals, managers, and owners may want to participate in this. Qualified tenants pay no more than. 30% of their income in rent, with HUD covering the rest
Not gov. Insured, I think, only FHA Is
Who holds onto security deposits in a rental?
Landlord ,who has to keep it in a separate escrow account
If someone comes into my apartment building and gets hurt, what insurance covers this?
Liability insurance (lying down lol)
Your employee stealing from you is covered through what?
Surety binds cover an owner against financial loss from your employee
A delivery person slips on a defective stair in an apartment building and is hospitalized. A claim against the building owner for medical expenses will be made under which of the following policies held by the owner
A. Workers compensation
B. Casualty
C. Liability
D. Fire and hazard
Liability
If I have a house on the market and the house burns down to the ground, do you think I would still have a listing?
What if one a bedroom set on fire!
No, the listing would be terminated
Yes, you would still have a listing if only a room set on fire
How often would you sit with your broker as a salesperson to discuss your commission and stuff
Annually
Would you as a salesperson be independent contractor or employee
Independent contractor
If I say we have an agreement to transfer the property, possession of the property, control over the property call SPECIFIC AMOUNT OF TIME 
A lease agreement
Market value will lost likely lead to what kind of transaction?
Arms length transaction
(Buyer wants to pay the least amount, seller wants to get the most amount and no one is related to one another]
Arms length transaction
transaction between strangers, which gives you market value because no one is doing anyone any favors because they’re not related
What program is an FHA, government insured loan?
HUD
What’s the appraiser property they have three approaches what is the most approaches? 
Sales comparison
Cost approach
Income capitalizing approach
The most common appraisal approach?
Sales approach
DoinG paperwork ahead of time to give our client an estimate of what their property could sell for
CMA
What is in a CMA package?
3 Houses recently sold
3 properties that expired or failed to sell
3 on the market currently
Added to federal fair housing of 1968
1988 disabilities amendment
1974 sex amendment (think women) 
How do we get rid of radon? 
It’s easy, don’t need a professional, mitigation
How do you get rid of asbestos?
EPA get a professional
the idea that line workers can just come on to our property and work on those telephone poles what is that called (ew gross)
Easement in gross
You have to go on your neighbors property to get on the road
Easement by necessity
An easement upon another’s property acquired by continued use without permission of the owner for a legally defined period of 10 years
Prescriptive easement (allows tacking)
If you have been using a piece of your neighbors property for 10 years, open and notoriously and they didn’t say anything, which grants you a title of that portion of land that you’ve been using.
“it would be nice if I could just take title”
“Taking possession”
Adverse possession (no tacking with this one)
Tractor in my backyard is considered
Personal property
Barn
Real property
If you are paying a principle interest and at the end of a mortgage, you have a 0 balance
Amortization
If you have negative amortization happening in a loan, then you have payment larger than the others that you’ve been paying all along
Balloon payment
Connected to negative amortization and balloon payment
Arm (adjustable rate mortgage)
Charging more than the legal interest rate and designed to protect borrowers from excessive interest rates is called?
Usury
I’m looking for commercial insurance. I’m gonna walk into an insurance company and say I’m looking for commercial insurance we’re going to run the water on me to check me out
Loss run schedule
If I say cost recovery, do you think appreciation or depreciation
Depreciation
If I’m up zoning from residential to commercial to change zoning on my property, where do I go? The state or the town
The town, municipal
Oh yes I’m paying you and I’m also pay some of something and some of another
Net lease
Triple net lease
Paying rent and that’s it, then the landlord pays all other expenses or property charges. Just residential.
A gross lease
Percentage lease
tenant pays a fixed rent plus a certain share of their income
If I’m leasing in a building and I find out that the owner sold the apartment, what do I have to do ?
Nothing
Who is going to ask the buyer to bring a certificate of insurance to the closing?
The mortgage lender
Unlike a mortgage broker, a mortgage banker
A. Originates loans
B. Negotiates loans
C. Guarantees loans
D. Insures loans
A
originates loans
Dual agency is
A. Broker agent
B. Single agency
C. When a client and customer agree to negotiate without the agent
D. When the same office represents the buyer and the seller in the same transaction
When the same office represents the buyer and the seller in the same transaction
The most complete type of ownership in real estate is
Fee simple
Co-op ownership does not include
A. A deed
B. Proprietary lease
C. Monthly maintenance costs
D. Ownership of shares
A deed
The permanent right to use another’s land for the benefit of a neighboring parcel is
A. License
B. Easement apourtenent
C. Cloud in title
S. Gross easement
Easement appurtenant
Every contract must have an
Offer and acceptance
In a frame or wooden skeletons, studs rest on
A. Plates
B. Balloons
C. Ridges
C. Joists
Plates (sole plates)
An agent scaring a homeowner into putting their house on the market
Block busting
Meeting someone for the first time
First substantive contact
What do you take out at first substantive contact?
Agency disclosure form
Safest place to meet a client
The office
When we’re discriminating against each other, it’s usually based on what ?
The country of origin
An agents fiduciary responsibilities does not include
A. Care
B. Accounting
C. Loyalty
D. Indemnification
indemnification (compensation for damages)
Who is the mortgagor?
The borrower
Who is the mortgagee?
The lender
Is usury legal?
No, it’s illegal
A mortgage broker generally
A. Brings borrower and lender together
B. Makes mortgage loans using investors funds
C. Forecloses defaulted mortgages
D. Places packages of loans in the secondary market
Brings borrower and lender together
New York’s usury limits do not apply to interest on mortgage loans made by
A. Sellers
B. Employee to employee
C. Private community members
D. The rural economic and community development administration
Sellers
A mortgage payment larger than the preceding ones
Balloon payment
The borrower makes regularly scheduled payments, over the life of the loan to pay off the debt. Each payment consist of part interest and part principles
Amortization
The gradual building up of a large mortgage debt when payments are not sufficient to cover interest due and reduce the principal
Negative amortization
When a young man buys his house, the seller allows affordable monthly mortgage payments if interest only over 10 years basis so that the new homeowner can handle the payments. At the end of the 19th, but the seller wants the whole remaining debt paid off in a
A balloon payment
A mortgage by which the interest rate is not fixed for the life of the loan. The date is fixed for a period of time at the beginning, but after that it may change based on changes in an interest index.
Adjustable rate mortgage
A federal department that administers federal programs with affordable homes
HUD
housing and urban development
The fair housing amendment adding which one of the following classes
A. Occupation and source of income
B. Political affiliation
C. Families and disabilities
D. Prison record and marital status
Families and disabilities
A lending institution may not refuse to make a residential real estate loan simply because of
A. The location of the property
B. The questionable financial situation of the applicant
C. The appraisal below purchase price
D. The deteriorated condition of the building
The location of the property (steering)
The fly by night mortgage company makes it a practice not to lend money on any inner city property. This practice is known as?
Redlining
In what year was an amendment made adding sex or gender another one of the protected classes under federal law?
1974
Debt service = ?
Paying off your debt
Who gives you your pocket card?
The department of state
What does CMA stand for?
Comparative market analysis
A study by a real estate broker intended to assist an owner in establishing a listing price
CMA
An estimate of a property’s valuation is done by
An appraiser
An approach done by an appraiser that study’s properties that recently sold
Comps - sales comparison approach
The only appraisal approach for insurance
Cost approach
Estimates the value of a property based on the income it generates
Income capitalization approach
The income approach to appraisal is most appropriate for (which one makes income?)
A. A library
B. A tract ranch house
C. A vacant lot
D. An apartment house
An apartment house
The sales comparison approach to appraisal utilizes
A. Building costs in the area
B. Analysis of function obsolescence
C. Recent sales prices of similar parcels
D. Asking prices for property on the market
Recent sales prices of similar parcels (think CMA)
The most likely price that would be paid by an informed buyer when property is widely exposed on the market is known as
A. The cost
B. The listing price
C. Sales price
D. The market value
The market value (widely exposed)
The federal housing administration
FHA
Who is insured by the government in FHA?
The lender (mortgagee)
The HUD insures mortgage loans made through
A. Freddie Mac
B. Fannie Mae
C. The va
D. FHA
FHA
A salesperson agrees to meet a buyer at a home listed by a salespersons broker. When must the salesperson provide the buyer with an agency disclosure form?
A. Before entering the property
B. When the buyer expresses interest
C. After showing the property
Before entering the property
Both the seller and landlord must disclosure any known hazard of lead based paint. Failure to do so results in what fine?
$11,000
What happens to your taxes when you get a building permit and build a garage on the land?
Your taxes go up
Do deed restrictions trump zoning or vice verse?
Deed restrictions trump zoning
A point is 1% of the loan amount NOT the sales price. True or false ?
True
What is liquidity
The ability to get money quickly
Is real estate an example of liquid or illiquidity?
Illiquidity, can’t get money quickly
Stocks are liquid
Land or anything attached
Real estate
Net lease
The tenant pays not only rent, but some or ALL property charges
It is essential that every deed be signed by
A. The grantee
B. The grantor
C. The devisee
D. The grantor and the grantee
The grantor (seller)
The 6 basic categories of real property are residential, commercial, industrial, agricultural, special purpose, and ?
Mixed is
Are liens attached to property or the owner ?
The property
Are liens attached to property or the owner ?
The property
True or false. Taxes always have the first recorded claim against the property. Taxes supersedes all other liens.
True. Mortgage and tax would get paid before a lien, even if it’s the oldest recorded lien
A right given to a person or certain creditors to secure a debt by a defaulting debtors
A lien
Is tacking for adverse possession or prescriptive easement ?
Prescriptive easement
The right given to a person to enter another persons property, a non possessory right
Easement
The anticipation of putting your house on the market then waiting for a buyer to buy the home
Value (present worth of future benefits)
What expenses remain constant irrespective of the occupancy status of a building
Property tax and property insurance (fixed expenses)
Which one is harmless if it’s not disrupted ? Radon or asbestos?
Asbestos
Who is insured by the government ?
The lender
