State Exam Review Flashcards
How long is a real estate licensed issued for?
2 years, then must renew.
What kind of property requires a Property Condition Disclosure?
A resale. Not required on new construction or if the property is going through the courts.
If a broker’s license is suspended, how long is an agent’s license suspended?
Until you find another broker.
What should an agent do if a Broker’s license is revoked?
Find another broker.
Who negotiates and determines a broker’s commission?
Broker and Seller-Client
What fiduciary is broken if there is a financial loss?
Reasonable care and skill
What agreement guarantees a broker gets paid commission?
Exclusive right to sale
What agreement says a buyer doesn’t have to pay commission if they sale their own house?
Exclusive Agency Agreement
If an agent is running an open house, what are the buyers considered to the agent?
Customers
What explains to customers who an agent/broker represents?
Agency Disclosure document
What is first substantial contact?
First face-to-face talking real estate
What type of real estate agent represents client or customers in one area?
Special Agents (most all real estate agents)
What kind of agents are Property managers?
General Agents
What kind of agent has power of attorney?
Universal Agent
What is another name for a client?
Principle
What is another name for a principle?
Client
What is it called when you own a property by a river/stream?
Riparian Water Rights
What is it called if you own property by an ocean?
Littoral Water Rights
What kind of deed does a married couple have?
Deed by entirety. (Has survivorship)
What kind of deed do unmarried individuals have for survivorship rights?
Joint Deed
What kind of deed do unmarried individuals have with no survivorship rights?
Tenants in common
What is the term for one owner of property?
Severalty
What is the fullest ownership estate?
Fee Simple Estate
What type of deed would prohibit installing a pool?
Restrictive Control
Which lien always has priority to be paid?
Property Taxes
Who has to sign a deed?
All grantors
What protects against defects or gaps in a title chain?
Title Insurance
What legal description is used to make a survey?
metes and bounds
What kind of survey has a point of beginning?
metes and bounds
What commercial lease is based on the volume of tenant’s business?
Percentage Lease
Who signs Purchase Agreement first?
Buyer
What requires a lender to give borrowers a loan estimate within 3 days of application?
TILA RESPA or “Trid”
What dictates how financial terms are advertised?
TILA Reg Z
What kind of mortgage allows a buyer to get special help from a bank (lower interest rates, etc), then share profit with lender down the road?
Shared Equity Mortgage
What is the term for mortgages paid in equal monthly payments to pay off mortgage in full?
Fully amortizing
What is amortization?
Repayment of principal
What is the name for the bank in a mortgage transaction?
Mortgagee
What is the name for the borrower in a mortgage transaction?
Mortgagors
What document regulates construction standards?
Building permit and inspection
What document states it is safe to move into a building?
Certificate of Occupancy
What are the outside walls attached to framing called?
Sheathing
What measures the efficiency of insulation’s resistance to heat flow?
R-Factor
What is the R-Factor?
Measures the efficiency of insulation to heat flow resistance
What is a Title X?
Lead paint disclosure
What regulation concerns Lead Paint disclosure?
Title X
Buildings built before what year must have notification on lead paint?
1978
Does the seller have to test for lead paint?
No, but must allow the buyer to do so at buyer’s expense.
What insulation material is dangerous in powdered form?
Asbestos
What is the chemical used in freezing units?
Freon/CFC
What is an opinion of value called?
Appraisal
What is the term when an building is of an “old style” or outdated and is losing value?
Obselescence
What three pieces of data make up a comparative market analysis?
Recently sold properties, current listings, expired listings
What is the purpose of a CMA?
Purpose - recommended terms and value range
When was familial status and disability added to Fair Housing Act?
1988
What was added to the Fair Housing Act in 1988?
Familial status and disability
What is the term for an agent claiming property values will go down because minorities are moving in the area?
Blockbustering or panic selling
What protects against negligence?
Liability insurance
What kind of insurance policy do Condo owners get?
HO6
What kind of insurance policy do renters get?
H04
What do property taxes create against property?
Liens
What is a lien?
Evidence of debt
What properties must always pay full property taxes?
Vacation/2nd homes, no exceptions
What is the formula for Assessed Value?
Market value x level of assessment
Ex: $1M x 30% = $300k
Name an exception to the Fair Housing rules?
Renting a room in your own house/apartment - for example, a widow could say “no children or only women.”
What is discrimination in mortgage lending called?
Redlining
What is the formula for square feet?
Length x width
What creates a comprehensive plan for building?
Planning Board
Who is responsible for drinking water and sewage?
NYS Dept of Health
When must a seller provide the buyer a Property Condition Disclosure Form?
Before signing sales contract or seller gives $500 credit to buyer at closing
What kind of employee is a real estate agent?
Statutory non-employee (independent contractor)
Name the requirements for being an independent contractor.
Must have written contract with brokerage
Hours cannot be set
Gross check, no deductions
Files a schedule C
What fiduciary is broken if a broker commingles funds?
Accountability
What is it called when a broker mixes various monies into their account?
Commingling
Where is the seller agency disclosed?
Agency Disclosure Form
What is the one expense a broker can cover for an agent?
Errors and Omissions insurance
Who does a trade fixture belong to in commercial real estate?
The tenant
What is an example of trade fixtures in commercial real estate?
Display cabinets, fridges, etc.
What easement is used by utility companies?
Easement in gross
What easement is used by property owners?
Easement in appurtenances
Define the Dominant in easements.
The person who uses another property for their needs
Define the serviant in easements.
The person who’s property gets used
Who is the grantor?
The Seller
Who is the grantee?
The buyer
What kind of deed removes a cloud on a title?
Quitclaim deed
What kind of deed has no warranties?
Quitclaim deed
What is a cloud on a title?
Gaps in chain of ownership
What is it called when one records a deed with the county clerk?
Constructive notice
What happens to the tenant if leased real estate is sold?
They stay until the end of the lease.
When is a contract of sale completed?
At closing
What is the purpose of earnest money?
Shows good faith, serves as a down payment
What is a wrap-around mortgage?
A new second mortgage that combines with an existing mortgage to create a new mortgage
What is the right of government to take private real estate for good of community, paying owner fair market value?
Eminent Domain
What is the term for exercising Eminent Domain?
Condemnation
What is the term when an individual dies without will or heirs and property goes to government?
Escheat
What regulates the use of land?
Zoning Code
What is an exception to a zoning code?
Variance
Who issues variances?
Zoning Board of Appeals ZBA
What is the law nicknamed the Superfund?
CERCLA
What is responsible for the clean up of waste site and finding the person(s) responsible?
CERCLA - Superfund
What keeps water out of construction/property?
Flashing
What overhangs walls on the external part of a building?
Eaves
What measures the speed that the ground aborts water/underground water?
Percolation rate
What are 3 Appraisal approaches to Value?
Sales Comparison
Income Approach
Coast Approach
What is included in the Sales Comparison appraisal approach?
3 similar recent sales
What makes up the income appraisal approach?
office building/investors
What is the cost appraisal approach used for?
Unique/unusual properties or new construction comps
When was the first civil rights act?
1866
What was the first protected class in the Civil Rights Act of 1866?
Race
Are there any exceptions to the Civil Rights Act of 1866?
None.
What is the formula for annual interest and monthly interest amounts?
Loan Amount x interest rate = annual interest
Annual interest / 12 = monthly interest
$100k x 6% = $6000 annual interest
$6000/12 = $500 monthly interest
If there is an old structure that residents don’t want torn down, who do they appeal to?
Landmark Preservation
What percentage does a property need to be insured for?
80% of building’s value
What policy offers extra liability protection or large sums of insurance?
Umbrella
What are ad volurum taxes based on?
Assessed Value?
What is the term for taxes based on assessed value?
Ad Valorum taxes
What kind of property is exempt from real estate assessment?
None.
What kind of property is divided into a condo and coop?
Condop
What clause allows a renter to purchase condo when it first comes up for sale?
Right of first refusal
Who manages coop cooperation?
The Coop Board
What is the lease clause that allows landlord to raise rents at specific times/intervals?
Escalation clause
What lease clause allows landlords to raise rents immediately based on expenses?
Pass-thru
What category is a warehouse distribution center in?
Manufacturing
What is another name for a land lease?
Ground lease
What is the formula for cash on cash?
Cash flow / down payment = cash on cash percentage
10k / 100k = 10%
What lease clause dictates what tenant can and cannot do with the property?
Use Clause
What is the difference between grows and net income?
Net is AFTER operating expenses
What is the principal that states money today is more valuable than money in the future?
Time Value of Money, because you can use the money today to make more money
What is salary bonus and commission considered?
Active Income
What is rental income considered?
Passive income
What are stocks and bonds income considered?
Portfolio income
What can homeowners deduct from taxes?
Real Estate taxes and mortgage interest
For the sale of a primary residence, what tax break does a seller get for capital gains tax?
Singles: $250k
Married couple: $500k
How many years must a person live at primary residence to quality for capital gains tax break?
2 out of the last 5 years
What is it called when a broker agent also acts as a mortgage broker?
Dual Agency
What makes up an operating budget?
CURRENT income, profit, expenses
What makes up a proforma?
FUTURE income, profit, expenses
What license must one have to mange more than 1 owner’s property?
Broker license
What are tax advantages on profits called?
Tax Shelters
What is a 1031 Exchange?
Like kind tax deferred exchange of property that allows investors to defer payment of capital gains tax
Who lends money?
Mortgage bankers only
Who can NOT lend money?
Mortgage brokers, Mortgage loan originators
Who approves new Condos/Coops and with what?
Attorney General with a CPS1
What must an owner submit to make changes on a Coop
Alteration agreement
What kind of estate is a Condo?
Freehold, conveyed by a deed
What kind of estate is a Coop?
Leasehold, conveyed by proprietary lease and stock certificate
What is put under foundation to prevent sinking?
Footings
What states a deal must close by a specific date or there is a penalty?
Time of the essence Contract
What measure heating/cooling?
BTUs
What real estate law governs real estate?
12-A
What is the term for representing both parties in a real estate transaction without consent?
Undisclosed dual agency
What kind of lease requires tentant to pay most or all of operating expenses?
Net Lease
What is the first deposit money paid in a sell?
earnest money
Who holds the deposit money in NYS?
Seller’s attorney
What kind of mortgage covers more than one property?
Blanket mortgage
What does the 2nd mortgage market purchase?
Buys CLOSED loans from primary mortgage market
What is it called when monthly mortgage payments do not cover interest due?
negative amortization
What must occur before construction begins?
A building permit and inspection
If an existing building was built to code at the time, but now zoning changes but it is allowed to continue doing business - what it is called?
Non-conforming use
What document describes materials to be used in building?
Construction Building Specifications
What does replacement cost cover?
Full loss of belongings
Who has the burden of proof to challenge taxes?
Owner
What is inflation?
Increase of money in circulation without increase in goods/services
What is used to determine rent of commercial space?
Rentable Square footage (aka Gross Square Footage)
What is another name for usable square footage?
Net square footage
What is another name of rentable square footage?
Gross square footage
What is the formula for Debt ratio?
Loan amount / asset value
Ex: $500k / $1M = 50%
What is it called when you rent your rented space?
A sublease
What is the landlord called?
Lessor
What is the tenant called?
Lessee
If tenant rents their space, what is it called and who is responsible?
Sublease/sublet and the tenant is responsible for the rent
What is a dangerous radio active gas?
Radon
What are architectural drawings called?
Blueprints
What are studs?
Vertical support beams
What are joists?
Horizontal support beams
What system uses ducts and blower motor?
Forced Warm Air
In the mortgage market, what happens when there is plenty of money flowing?
Rates go down
In the mortgage market, what happens when there is tightened money flow?
Rates go up
What does an agent do if a Broker doesn’t pay commission?
Sue them in court
What is a violation of 12-A?
Misdemeasnor; penalty $1000 fine and/or 1 year in jail
What is a record of ownership of property called?
Chain of title
What are considered homestead properties?
1-4 family homes including condos
What are properties that are not 1-4 family homes called?
Non-homestead
