Study For RealestateU Flashcards
An employment contract between principal and agent, authorizing the
agent to perform services for the principle involving the latter’s property.
Listing agreement
card issued by the Department of State to each licensee which contains the photo, name and business address of the licensee, and, in the case of a real estate salesperson, the name and business address of the broker with whom he or she is associated and shall certify that the person whose name appears thereon is a licensed real estate broker or salesperson.
- Must be carried by the agent at all times when serving as a salesperson.
Pocket card
Obtained after your register for the New York State Salesperson exam using eAccessNY. You must bring your “Summary of Your Submission” with you when taking the State exam.
Summary of your submission
licensed real estate broker that holds the license of a salesperson.
Sponsor
section of the New York Real Property Law pertaining to real estate salespersons and brokers.
- Primary purpose is to “Protect the Public”
- Requires a salesperson to be at least 18 years of age
- Requires a broker to be at least 20 years of age
Article 12-A of the NYS real property law
person who on behalf of or for the benefit of another transacts business or handles money or property not the person’s own; such relationship implies great confidence and trust.
- OLD CAR
- Obedience
- Loyalty
- Disclosure
- Confidentiality
- Accountability
- Reasonable Care
Fiduciary
A written explanation, to be signed by a prospective buyer or seller of real estate, explaining to the client the role that the broker plays in the transaction.
- First document to be submitted to all prospective clients
Disclosure regarding RealEstate agency relationship form
agreement of employment of a broker to the exclusion of all other brokers; if sale is made by any other broker during term of employment, broker holding exclusive agency is entitled to commissions in addition to the commissions payable to the broker who effected the transaction
- Made between a broker and a seller
Exclusive agency
employer of an agent or broker; the broker’s or agent’s client.
Principal
Conspiring to establish fixed fees or prices for services or products.
Price fixing
agreement between members of a trade to refrain from competition in specific market areas.
Market allocation
person that provides services to another under terms specified in a contract or within a verbal agreement. An independent contractor is not an employee.
- The agent does not have to work in a specific location - The broker cannot control the agent’s work activities
Independent contract relationship
premise that the ownership of real estate consists of the ownership of various rights associated with it. These rights include the right to use and/or occupy, the right to sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the foregoing.
- Includes the right to quiet enjoyment
Bundle of rights
The right of a property owner whose land borders on a body of water, such as a lake, ocean or sea, to reasonable use and enjoyment of the shore and water the property borders on.
Littoral rights
right of a property owner whose land borders a natural water course, such as a river, to reasonable use and enjoyment of the water that flows past the property. Riparian literally means “riverbank”
Riparian rights
lien that only binds to a specific asset or property (Example: mortgage).
Specific lien
contractual or consensual lien that is created by an action taken by the debtor, such as a mortgage loan to buy real estate (Example: mortgage).
Voluntary lien
lien imposed by law upon a property to secure the payment of taxes.
Tax lien
right to cross or otherwise use someone else’s property for a specified purpose.
Easement
Any right to or interest in the land interfering with its use or transfer, or subjecting it to an obligation.
Encumbrance
Parcels without access to a public way may have an easement of access over adjacent land if crossing that land is absolutely necessary to reach the landlocked parcel and there has been some original intent to provide the lot with access.
Affirmative easement appurtentant
type of deed where the grantor guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee. This type of deed contains the strongest guarantee of title.
Full covenant and warranty deed
A deed which conveys simply the grantor’s rights or interest in real estate, without any agreement or covenant as to the nature or extent of that interest, or any other covenants; usually used to remove a cloud from the title.
Quitclaim deed
clause in a deed or lease that defines the type of interest and rights to be enjoyed by the grantee or lessee. Also known as the “to have and to hold clause
Habendum clause
Legal policy mandates that a deed to real property be a matter of public record; therefore, subsequent to delivery and acceptance, a deed must be properly recorded.
Delivery and acceptance
sequence of historical transfers of title to a property. It runs from the
present owner back to the original owner of the property.
Chain of title
- Legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest.
Title
document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership to take place.
Closing statement
1) Consideration
2) Must be in writing
3) Must have competent parties
Essential element of a contract
leasehold estate for any specific period of time. An estate for years is not automatically renewed.
Estate for years
contract in which all elements of a contract are specifically stated (offer, acceptance, consideration).
Express contract
clause found in real estate contracts that may allow buyers to walk away from an agreed upon sale for any reason.
Attorney review clause
clause in a contract that states a mortgage must be obtained in order for the contract to be binding
Mortgage contingency clause
tenant who remains in possession of leased property after the expiration
of the lease term.
Holdover tenant
A lease commonly found in a building with a single, long-term tenant.
Triple net lease
Legal agreement by which a bank lends money in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon payment of the debt.
Mortgage
actual interest rate charged, including loan fees and points.
ARP
market where mortgage loans and servicing rights are bought and sold between mortgage originators, mortgage aggregators (securitizers) and investors.
Secondary mortgage rate
financial term used by lenders to express the ratio of a loan to the value of an asset (property) purchased.
- Determined by using the Purchase Price or the Appraised Value, whichever is less.
Loan to value LTV
document acknowledging the payment of a mortgage debt.
Satisfaction of mortgage
A mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.
Adjustable rate mortgage ARM
Accounts for the majority of mortgages.
Fixed rate mortgage
process by which a loan principal decreases over the life of a loan.
Amortization
Taking private property for public use, with fair compensation to the owner;
exercising the right of eminent domain.
Condemation
right of any political body to enact laws and enforce them, for the order, safety, health, morals and general welfare of the public.
Police power
authorization to improve or develop a particular property in a manner not authorized by zoning.
Variance
Regulations established by state or local governments stating fully that structural requirements for building.
- Building codes are enforced by the issuance of permits.
Building code
Rights in real property to use the space above the surface of the land.
Air rights
document issued by a governmental authority that a building is ready and fit for occupancy.
Certificate of occupancy CO
Concrete set in soil
Bond beam
Vertical framing members found in wall construction. Typically placed 12”, 16” or 24” on
center.
Stud
Drawings produced by Architects that describe the quantities of a
building.
Construction drawing
written document produced by an Architect that describes the quality of construction for a building.
Specifications
1) 1 year of workmanship
2) 6 years for material defects
3) 2 years for plumbing, electrical, and HVAC systems
Mandated warranty for new construction according to the NYS General Business Law 36- B:
Federal law that makes real estate licensees liable for the disclosure of lead paint.
TitleX
colorless, odorless gas that is emitted from soils, rocks and water as a result of radioactive decay in certain areas of the country.
Radon
chronic lung disease caused by inhaling asbestos fibers.
Asbestosis
Federal law designed to control air pollution on a national level.
Clean air act CAA
estimate of a property’s value by an appraiser who is usually presumed to be
expert in his work.
Appraisal
method of estimating the value of real property by calculating a current construction cost, subtracting accrued depreciation and adding a land value obtained from the market.
- Used for specialized properties that don’t have many comparables.
Cost approach
Current construction cost-depreciation + land value
appraisal technique whereby the value of an income producing property is estimating by capitalizing its net operating income using an appropriate capitalization rate. Value = Income / Rate.
- Commonly used in commercial properties
Income approach
Valuation method which compares a subject property’s characteristics with those of comparable properties which have recently sold in similar transactions.
Sales comparison approach
refusal to lend money within a specific area for various reasons. This practice
is illegal.
Red - lining
practice of inducing homeowners in a particular neighborhood to sell their homes quickly, often at below market prices, by creating the fear that the entry of a minority group or groups into the neighborhood will cause a precipitous decline in property values.
Block busting
federal prohibition that protects buyer/renter of a dwelling from seller/landlord discrimination with regards to race, color, religion, gender, national origin, familial status, or disability.
Fair housing act of 1968
Determined that separate is NOT equal.
Brown bs board of education
Volunteers from state or private agencies who enforce fair housing by claiming to be
home seekers, thereby finding out if brokers deal fairly with all clients/customers.
Testers
measure of land equaling 43,560 square feet.
Acre
Responsible for developing and controlling a municipality’s comprehensive
strategy for growth and developmen
Planning board
Oversees and upholds the quality and aesthetics of a neighborhood, town, or city.
Architectural review board
Responsible for collecting taxes.
The office of receiver of taxes
own or city agency that oversees and reviews building applications by licensed professionals to ensure compliance with local building code and zoning ordinances.
Building department
amount of expenses that must be paid out of pocket before an insurer will pay
any expenses.
Deductible
Insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. Also called excess insurance.
Umbrella policy
Responsible for determining a municipality’s tax rate.
Tax assessors
assessment of tax.
Levy
valuation placed upon property by a public officer or a board, as a basis for taxation.
Assessed value
Considered a proprietary lease and personal property (NOT real
property).
Share in a cooperative unit
A key document provided during the purchase of a cooperative, which includes information required to be disclosed to the purchaser.
The offering plan
series of documents submitted for the review by a cooperative board.
Board package
owner’s rights and obligations for a condominium.
By-laws
Rules in a cooperative that cover common issues including garbage disposal, maintenance, noise, pets, and conflict resolution.
House rules
Considered real property, which is conveyed by a deed.
Condominium
Monthly payments by a shareholder to a cooperative corporation.
Maintenance
Monthly payment by an owner of a condominium.
Common charges
developer or owner organizing and offering for sale a condominium or cooperative development.
Sponsor
use of borrowed capital (mortgage) to increase the potential return of an
investment.
Leverage
An accounting statement that forecasts income and expenses for a period of time, typically five or more years.
Pro-Foma statement
NOI / Purchase Price
CAP rate
ability to have cash readily available to support the demands of running and
maintaining real property
Liquid
total amount collected from rents and other income producing opportunities.
Gross income
profit that results from the sale of a property where the amount realized from
the sale exceeds the purchase price.
Capital gain
Cash received in a tax-deferred exchange.
Boot
Any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments.
Tax shelter
method of calculating the depreciation of an asset which assumes the asset will lose an equal amount of value each year.
- A residential property is depreciated over a 27.5 year period. - A commercial property is depreciated over a 39 year period.
Straight line depreciation
45 days to identify a new property
- 180 days to close on a new property
1031 exchange
intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages.
Mortgage broker
company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages.
Mortgage banker
Someone authorized to transact every kind of business for the principal
(Example: Property Manager)
General agent
amount of money set aside by the owner for a specific period for the property manager to manage the property effectively.
Operating budget
contract between the owner of a property and someone who agrees to manage it.
Management agreement
accounting report issued periodically by the property manager to the owner outlining all income and expenditures for that accounting period.
Property management report
