BILL PLUNKETT
STUDY GUIDE/TEST!!!
|
|
|
|
|
|
|
|
BILL PLUNKETT STUDY GUIDE/TEST!!! |
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|||||
|
|
||||
|
|||||
|
||||
|
|
THIS
IS A BRIEF OVERVIEW OF CHAPTERS THAT MAYBE HELPFUL!!! - Independent Contractor or Employee · Independent contractor must pay his own expenses. · According to IRS code section 3508[A,B], real estate agents are statutory nonemployees
and are therefore independent contractors. The code also states that there must be a written contract between the broker and
the sales associate, also reviewed every 12-15 months · All records must be kept for 3years · If sales associate not deemed independent then they will not be able to file "SCHEDULE
C' of the federal return · The Independent Contractor Relationship Ø Salespersons are free to engage in outside employment Ø Either party may terminate the relationship at any time - License Law & Regulations · The New York Department of State, Division of licensing Services
is the regulatory agency that oversees and administers the licensure process. Most of the law pertaining to salespersons and
brokers is contained in Article 12-A of the real property law.
· A real estate broker is any person, partnership, association or corporation
who, for another, and for compensation of any kind, negotiates any form of real estate transaction. Real estate brokers supervise
and are responsible for the activities of associate brokers and salespersons in their employ. · A salesperson or an associate broker cannot operate independently. · Duties That Require Licensure Ø Selling or purchasing real estate at an auction Ø Negotiating the sale of a business for which the values of the real estate transferred
is not merely incidental to the transaction (RE value is worth more than the business Ø Salespersons must be 18 years of age. Ø Brokers must be 20 years old with 2 years experience Ø Points for Broker License work as salesperson
& 3500 points or 3 years and 5250 points. Ø Licenses are renewed every two{2} years · Exemptions to Licensure Ø Building superintendents or maintenance workers who perform tasks such as rent collecting
for one owner, company or entity. · Classes of Licensure for Brokers Ø Each officer of a corporation or member of a co-partnership must be licensed as
a broker. Ø Salespersons licenses are not issued to officers of corporations or members of co-partnerships. Ø Salespersons and associate brokers may not
be principals in the brokerage firm and may not own voting stock in the licensed brokerage corporation. · License and Pocket Card Ø Pocket Cards must be carried at all times and shown on demand. · Fees, Office Requirements, and Terms of Licensure Ø Brokers must pay $150.00 and Salespersons $50.00 for each term. Ø Additional licenses for each branch office cost $150.00. · An apartment-sharing agent is an individual who, for a fee, arranges and coordinates meetings
between the current owners of real property, including apartment housing who wish to share their housing with others. · A mortgage banker is an individual or entity licensed
by the New York Banking Department to engage in the business of making residential mortgage loans. Licensed and lends.
· Compensation and Fee Splitting Ø Salespersons may not accept compensation except from their sponsoring brokers Ø If brokers improperly pay any part of compensation to anyone who is not licensed or who
is not exempt from the license law, they are in violation of the license law, this payment is called a kickback. · Lawsuits for Commissions Ø An unlicensed person, co-partnership or corporation cannot bring about a lawsuit to collect
compensation for real estate services rendered because only a licensed real estate broker or salesperson is entitled to a
judgment by the courts. · Violations of Real Estate License Law Ø Failing to provide adequate disclosure regarding any or all of the following: a) if licensees
purchase property listed by their firm, they must make their position clear to the seller, the licensee must make clear their
position regarding the party for whom they are acting in a residential real estate transaction-seller, buyer or both. Ø Receiving compensation from more than one party in a real estate transaction without the
knowledge and consent of all parties. Ø Being a party to an exclusive listing contract that contains an automatic continuation
of the listing beyond the specified termination date. Listing contracts are renewed by the signing of a written renewal agreement.
Ø Drawing up legal documents such as deeds or mortgages, giving an opinion as to the legal
validity of any document, performing a title examination. A licensee may not perform any service that is performed by an attorney.
Ø Brokers are prohibited from commingling or mixing the funds of others with their business
or personal funds and are required to maintain adequate records regarding the deposit and disbursement of funds from their
accounts. Ø Entering into a net listing contract. A net
listing contract occurs when a seller authorizes a broker to procure a specified amount for the property and then allows the
broker to keep as a commission any money above the specified amount from the sale. · Discrimination because of race, creed, color, national origin, age, sex, disability, familial
or marital status in the sale rental or advertisement of housing or commercial space covered by law · All ads placed by a broker must indicate that the advertiser is a broker. Ads that do
not contain this are called BLIND ADS. · DOS Hearings and Appeals Ø Article 78 proceeding is the method for appeals against regulatory agencies such as DOS.
Ø DOS may impose a fine not to exceed $1000. · The revocation or suspension of a broker’s license suspends the license of the salespersons
and associate brokers affiliated with the broker. · If license is revoked, must wait ONE YEAR for relicensure - Law of Agency · When one person is hired to act on behalf of another person, an agency relationship is
created. The person hired on the other person’s behalf is the agent. · An agency relationship is consensual. · The person who selects the agent to act on his behalf is the principal
or client. · The Customer of an agent is the party whom the agent brings to the principal
as a seller or buyer of the property. · A General agent represents the principal in a specific range of matters. · E.G. A Property Manager · A special agent is someone who has narrow authorization to act on behalf
of the principal. · EG: Real estate broker who has listing. · The term fiduciary means a position of trust. · Agent’s Responsibilities to Principals Ø Obedience- the agent must act with obedience and obey reasonable and legal instructions
from the principal. Ø Loyalty-An agent must demonstrate loyalty to the principal and must work diligently to
serve the best interests of the principal under the terms of the employment contract Ø Confidentiality-information should not be given to prospective purchasers without the
seller’s permission. · Agent’s Responsibilities to Third Parties · The basis for imposing liability in case of misrepresentation consists of: Ø a false representation of a material fact Ø the fact that the person making the false representation knew or should have known it
to be false Ø the fact that the misrepresentation was made with an intent to induce the party to act
or refrain from acting in reliance upon the misrepresentation Ø the fact that the party relied upon the misrepresentation in acting or failing to act
Ø the fact that there was damage to the party
who relied upon the misrepresentation in acting or not acting · Brokerage refers to the business of bringing buyers and sellers together and assisting
in negotiations for the terms of sale of real estate. · Vicarious Liability means that one person is responsible for the actions of the other.
· With strict disclosure regulations in · Determination of Compensation Ø The fee or rate of commission paid to a real estate broker is strictly negotiable between
the broker and the seller or buyer. Ø It is also illegal for two or more brokers
to agree to charge certain commission rates to listing sellers. This is called price fixing and is an act in restraint of
trade that violates the Sherman Antitrust Act. Percentage of Final
Sales Price Ø Real estate firms generally establish their own individual office policy regarding the
level of commission charged. · Net Listing This type of commission
arrangement is illegal in · Express Agency-an agency relationship created by an oral or written agreement between
the principal and agent. · An agency by estoppel exists when a principal does not stop an individual from representing
his interests, thus creating an agency relationship between the two. · A buyer agent cannot be a subagent of the seller broker. · Broker’s Agent Ø In the case of the subagent, the principal accepts vicarious liability for the acts of
the agents and subagents. Ø In the case of the broker’s agent,
the broker accepts vicarious liability for the acts of the agents working for his principal through him. · A dual agency exists when a real estate firm or agent attempts to represent both the buyer
and seller in the same transaction. · Broker dual agency can occur if agents of the broker represent both the buyer and seller
in the same transaction, as stated above, or if the broker offers services to a buyer, such as finding or negotiating a mortgage
for the buyer, when the broker already represents the seller. · An unintended dual agency occurs if the buyer believes by the agent’s actions and/or
representations that the buyer is being represented by that broker. Illegal. Consensual Dual Agency · The law of agency in · Obtaining Informed Consent of Both Parties Ø When the listing takes place, the licensee should give a full explanation of dual agency
although neither party should sign an acceptance of dual agency at this time. · A buyer’s broker may perform a market analysis and advise the buyer on an offer. · Disclosure and Listing Forms Ø The form must be explained by the agent, and read, acknowledged, and signed by the principal
prior to signing the listing agreement. · Exclusive Right To Sell Agreement Ø Under the exclusive right to sell agreement, the property is listed with only one broker
as the agent. If anyone else sells the property during the term of the listing, the broker is legally entitled to the commission.
1 broker-commission no matter who sells · Exclusive Agency Agreement Ø In an exclusive agency listing, the property is listed with only one broker as the agent,
if the broker affects the sale of the property or the listing is on MLS and any other broker sells it the broker is legally
entitled to the commission agreed upon, but if the owner sells the property, the broker earns no commission. Ø 1 broker, commission only if broker sells · · Agency Disclosure Section 443 requires that licensees present a written agency disclosure
form that details consumer choices about representation at the first substantive contact with a prospective seller or buyer.
The law does not cover vacant land or condominium and cooperative apartments in buildings containing more than 4 units. · "A real estate broker shall make it clear for which party he is acting and he shall not
receive compensation from more than one party except with the full knowledge and consent of all parties." · When the agency disclosure form should be used Ø At the first substantive contact and the buyer must sign and acknowledge the form. Ø The agent must provide a copy of the disclosure form to the buyer or seller and maintain
a copy for a minimum of 3 years. · When disclosure should take place Ø Walk-ins-a prospective buyer or seller may walk into a real estate office and want to
discuss listing or purchasing a property, at this point, disclosure must be made. · Refusal to sign disclosure form Ø The agent should make notes in an appointment book of the names of the prospective buyers,
the time, the date and the reason for refusal. At this point, the property may be shown. · Elements of an antitrust violation Ø Any business activity in which there is a monopoly, a contract, a conspiracy or a combination
that negatively impacts an individual or company’s ability to do business. This is called restraint of trade. · The Federal Trade Commission-The FTC has the authority to enforce compliance with the
Sherman Act and certain sections of the Clayton Act. · The antitrust division of the Department of Justice enforces the Sherman and Clayton Antitrust
Acts. · Price Fixing-occurs when competitors in a group conspire to charge a same or similar price
for services rendered. · - Liens and Easements · An encumbrance is anything that lessens the bundle of rights in real property. · At execution and foreclosure of liens, priority is based upon the time [day and hour]
were recorded in office of county clerk. · In · Taxes levied by a local government constitute a specific lien against the real estate.
· Mechanic’s lien is a specific lien filed by a person who provides labor to a property.
· Materialmen’s lien is a specific lien filed by a supplier of products required in
the construction. · · Lis pendens means pending litigation. This filing is a legal notice that a lawsuit has
been filed concerning the specific property. · If one has a possessory interest in property, that individual cannot own an easement.
The common terminology for easement is right-of-way.[legal trespass] · Easements in gross are also called commercial easements in gross. The category is usually
owned by the government, an agency of the government, or a public utility. · Easement appurtenant category includes all easements that are no in gross. The land that
benefits from easement appurtenant is called the dominant tenement. The land that must suffer and allows the use is called
the servient tenement. · A license is defined as permission to do a particular act or series of acts on another’s
land without possessing any estate or interest in the land. A license is not assignable, not inheritable, and is a temporary
privilege. · PROFIT legal term the right to take products of the soil from someone else’s land.
- Deeds · Transfer of title to real property in law is called alienation. · A deed is the document used to convey title legality to real property, also known as a
conveyance. · The deed must contain an adequate formal legal description of the property. · Habendum Clause “to have and to hold” · A full covenant and warranty deed is the strongest and broadest form of title guarantee. · The quitclaim deed contains no warranties whatsoever; it is simply a deed of release.
· Execution of a judicial deed results from a court order; examples are guardian’s
deed, referee’s deed, tax deed, and administrator or executor’s deed. · Metes are the distances from point to point; · Bounds are the directions from one point to another. · Intestate Descent Ø When a person dies and leaves no valid will, the laws of intestacy determine the order
in which the property is distributed to the heirs. . Title Closing and Costs · Title is the evidence of the right to possess property. · Deed is the instrument used to convey title. · The final survey document is a type of blueprint showing measurements, boundaries and
area of property. · Chain of title involves tracing the successive conveyances of title, starting with the
current deed and going back an appropriate time. · An abstract of title is a condensed history of the title, setting forth a summary of all
the links in the chain. · Real Estate Settlement Procedures Act (RESPA) Ø It regulates lending activities of lending institutions in making mortgage loans for housing.
· Regulation Z, which covers all residential mortgages, addresses all advertisement of credit terms. · Co-op and Condo Fees Ø Cooperatives may have a flip tax imposed upon transfer, paid by the seller. · A closing usually involves proration, the division of expenses and income between buyer and seller.
– Contracts · A contract is an agreement between competent legal parties to do or refrain from doing
some legal act in exchange for consideration. · Types of Agreements Ø Express Contract-the parties to the contract have definitely agreed on all the terms in
the contract Ø Bilateral Contract-two parties have made promises of some kind to each other. The offer
to purchase a home is bilateral because it is based on the exchange of promises in which the seller will sell and the buyer
will buy. Ø Executory Contract-a contract that is not fully performed or completed · Competent Parties Ø Contracts entered into by parties lacking legal capacity are voidable by the party lacking
capacity. Individuals giving a person power of authority allow that person to act for them in legal transactions such as real
estate contracts. · The Statute of Frauds, which in · Oral testimony is not sufficient to create a contract involving the transfer of title
to real property. · A form of agreement that terminates contracts is novation-the substitution of a new contract
for a prior contract or the substitution of a new party for an old party. · Assignment is when a new party to the contract agrees to satisfy the former party’s
obligation. · Statute of Limitations Ø If a party to a contract fails to bring a lawsuit against a defaulting party within a
time period set by statute, the injured party loses the right of remedy. In · Specific performance means that the contract will be completed as originally agreed. · Liquidated damages are an amount of money to be paid upon certain breaches of the contract.
· The time is of the essence rule means that the closing must take place on or before the
exact date stipulated in the contract. · Installment Sales Contract The buyer contracts to obtain legal title to the property by
paying the purchase price in installments, and the seller agrees to transfer the legal title to the buyer by delivering a
deed upon the buyer’s full payment of the purchase price. · Lease With Option To Buy An option is an express unilateral contract. - Leases · A lease is a contract, in which, for a consideration, an owner of property transfers a
property interest to the tenant for a prescribed period of time. · The owner of the property is called the lessor, the tenant is the lessee. · Security deposit: The security deposit must be held in an escrow account. · Dwellings with 6 or more units, security deposit must be place in an interest-bearing
account. Interest belongs to the tenant. · The assignment of the lease involves the transfer of the lease contract from the present
tenant to the assignee. · In a sublease, the original tenant is still responsible to the owner for the lease payments
under the lease contract. · Actual eviction is the removal of the tenant from the premises without the aid or control
of the court system. · Lease agreement does not terminate when an owner sells, new owner is bound by terms of
lease · A gross lease provides for the owner to pay all expenses, such as real property taxes,
owner’s insurance, liability insurance, and maintenance. · In a net lease, the tenant pays some or all of the expenses. · A percentage lease has a base rent plus an additional rent that is a percentage of the
lessee’s gross sales. Commercial · A graduated lease is one in which the rent changes from period to period over the term
{escalates} Human Rights and Fair Housing · The Civil Rights Act of 1866-first significant statute affecting equal housing · Has no exemptions · 1968 case Jones v. Alfred H. Mayer Company-prohibited racial discrimination · Brown v. Board of Education-landmark decision-separate facilities were unequal Federal
Fair Housing Act of 1968-prohibits discrimination in housing on the basis of race, color, religion or national origin · 1988-provision added to prevent discrimination based on mental or physical handicap or
familial status · Owners must allow tenants with disabilities to make reasonable modifications to apartment
AT THE TENANTS EXPENSE · The exception to FAMILIAL STAUS is SENIOR HOUSING!!! · Blockbusting-illegal [scare tactic] · Steering-direct prospective purchasers from diverse backgrounds to presently integrated areas to avoid integration
of nonintegrated areas. · Redlining-refusing to make loans to purchase, construct or repair a dwelling by discriminating · The Sexual Orientation Non-Discrimination Act (SONDA) (2002) added sexual orientation
as a protected class under the Human Rights Law. · In housing discrimination only, punitive damages not exceeding $10,000 may be awarded
to the complainant. · LAWFUL OCCUPATION is protected class only in · Testers, either volunteers, employees
of federal programs, or civil rights groups visit real estate offices posing as prospective homebuyers to see if race influences
the information – Estates and Interests · Another name for "PERSONAL PROPERTY" is "CHATTEL" · Riparian rights belong to the owner of property bordering a flowing body of water (R-river)
· Littoral rights apply to property bordering a stationary body of water (L-lake) · The real estate term for improvements both on and to the land is FIXTURE. · Trade fixtures-items of personal property that a business owner installs in rented building
space. · Fee Simple Absolute-provides the most complete form of ownership and bundle of rights in real property.
· The life estate is ownership, possession and control for someone lifetime. · With a life estate, two outcomes are possible upon death, Ø an estate in remainder, Ø An estate in reversion. · Remainder interest is a fee simple present interest. · An estate at sufferance describes a tenant who is originally in lawful possession of another’s
property but refuses to leave after his right to possession terminates. · A tenant who does not leave upon expiration of the lease is termed a holdover tenant.
· When title to real property is held in the name of only one person or entity, it is called
ownership in severalty. · Right of survivorship means that if one or more of the co-owners die, the surviving co-owners
automatically receive the interest of the deceased co-owner. · A special characteristic of joint tenancy is the right of survivorship. · Join Tenancy must have 4 unities= time, title ,interest, possession. · By acquiring as a joint tenancy, each joint tenant gives up the right of inheritance.
· Ownership as tenants by the entirety is limited to husband and wife. · A corporation is an artificial being-invisible, intangible, and existing only pursuant
to law. · Syndicates denote multiple joint participation in a real estate investment. · A joint venture is an organization formed by 2 or more parties for the purpose of investing
in real estate or any other type of investment. · The greatest form of ownership in real property is fee simple absolute. Land Use Regulations · Individual owners have the right to place private controls on their own real estate. · Deed restrictions are in the form of covenants or conditions. These restrictions run with
the land. · The environmental impact statement (EIS) is the process that describes and analyzes a
proposed action that may significantly affect the environment. The EIS is available to the public for review and comment.
· Eminent domain is the power of the government or its agencies to acquire private property
for public use. · A "taking" occurs when private property is regulated by a government authority to the
economic detriment of the owner, without compensation. · POWER OF ESCHEAT: if an owner dies intestate no valid will decedents property is distributed
to heirs. If there are no heirs or creditors the state uses the power of ESCHEAT the property goes to the state · The Zoning Board of Appeals It is a local administrative appeal agency and an interpreter
of the zoning ordinance. If the request is denied by the zoning board of appeals, the property owner may petition the New
York Supreme Court through an · Article 78 proceeding- an appeal brought forth because of a ruling by a government agency.
· Certificate of Occupancy document issued by gov’t agency after satisfactory inspection of structure · A variance is a permitted deviation from specific requirements of the zoning ordinance. · Zoning Classifications [eg: residential, commercial, etc.] · Spot zoning-spot zoning is illegal in Real Estate Finance (Mortgages) · A mortgage is a loan that constitutes a lien against the real property. The mortgage is
a two-party instrument between the lender and borrower. · The borrower who gives the mortgage is called the mortgagor. · The lender who receives the mortgage is called the mortgagee. · Acceleration clause - enables the lender to declare the entire balance remaining immediately
due and payable if the borrower is in default. · Alienation clause-entitles the lender to declare the principal balance immediately due
and payable if the borrower sells the property during the mortgage term and makes the mortgage unassumable. · In making a mortgage, the lender requires the borrower to sign promissory note-providing
evidence that a valid debt exists. · Equity of Redemption After default,
and up to the time a foreclosure sale is held, the borrower has an equitable right to redeem his property by paying the principal
amount of the debt, accrued interest, and lender costs incurred in initiating the foreclosure. · A JUNIOR MORTGAGE REFERS TO ANY MORTGAGE THAT IS SUBORDINATE TO ANOTHER MORTGAGE. · Negative amortization-when a loan payment amount is not sufficient to cover interest due,
the shortfall added back into the principal, causing the principal to grow larger after payment is made. · Graduated payment mortgage-the monthly payments are lower in the early years of the mortgage
term and increase at specified intervals until the payment amount is sufficient to amortize the loan over the remaining term.
· Blanket mortgage-two or more parcels of real estate are pledged as security for payment of
the mortgage debt. The blanket mortgage usually contains a release clause that allows certain parcels of property to be removed
from the mortgage lien if the loan balance is reduced by a specified amount. · Purchase Money Mortgage-another type of seller financing, is a mortgage given by a buyer
to a seller to cover part of the purchase price. Here the seller becomes the mortgagee and the buyer becomes the mortgagor.
· Conventional loans Ø In the uninsured conventional loan, the borrower’s equity in the property, the difference
between the value of the property and its liabilities, provides sufficient security for the lender to make the loan. Therefore,
insurance to protect the lender in case of the borrower’s default is not necessary. · The Federal Housing Administration (FHA) does not make mortgage loans, instead, FHA-insured
loans protect lenders against financial loss. · VA Guaranteed Loan Program -offers a loan that guarantees repayment of the top portion
of the loan to the lender in the event the borrower defaults. · Secondary Mortgage Market-buys and sells mortgages created in the primary mortgage market.
· Truth-in-Lending Act (TILA) – Requires 4 chief disclosures: annual percentage rate,
finance charge, amount financed, and total amount of money to be paid toward the mortgage in both principal and interest payments.
· Regulation Z does not regulate interest rates, but instead provides specific consumer
protections in mortgage loans for residential real estate, and advertises credit terms available. The only specific thing
that may be stated is the annual percentage rate, and it must be spelled out in full. · USURY LAWS are used by · BUY DOWN is an choice given to the borrower to volunteer to pay discount points · Construction loan The Valuation Process · An appraisal is an unbiased estimate of the nature, quality, value or utility based on
factual data, of an interest in or aspect of identified real estate and related personality as of a certain date. (ESTIMATE
OR OPINION OF VALUE) · Valuation is the process of estimating the market value of an identified interest in a
specific property as of a given date. · Insured value is the cost of
replacing or reproducing the structure in the event of a total loss because of an insured hazard. · Value in use is the value of
the property based on its usefulness to an owner or investor. · Mortgage value is whatever the lender believes the property will bring at a foreclosure
sale or subsequent resale. · Plottage value of land is the increase in value and utility when small plots of land are
combined to form a larger plot. · Market value-the most probable price, as of a specific date, in cash or in other terms,
for which the property should be sold after reasonable exposure in a competitive market, under conditions requisite to a fair
sale, with the buyer and seller acting prudently, knowledgeably, and for self-interest, and assuming that neither is under
undue duress. · Price is the amount a particular purchaser agrees to pay and a seller agrees to accept
under the circumstances surrounding the transaction. · Direct costs include the cost of labor and materials
[called HARD COST] · Indirect costs are costs that create and support the project. Surveyors, attorneys, Real Estate Math Where to start?
You really don’t remember anything, huh? Well, I’ll give you the benefit of the doubt with adding, subtracting,
multiplying and dividing, at least with a calculator. One of the first things
you should do is get to know your calculator. Not all calculators are identical. I will try to give you the most
common order the functions should be entered, but make sure that’s how your calculator works. Let’s start
with a couple of tests on the calculator to make sure. Do these functions in the EXACT order given here. 7 x 10 = You should have 70
on your calculator. Leave that in there and hit the divided by button and then 5. Now, you should have 14.
Next hit clear at least twice, and then: 50 x 70 % DO NOT HIT THE EQUALS
BUTTON! That will calculate the percentage AGAIN, and throw your answer way off! You should have 35
on your calculator. If you don’t, your calculator may function differently than most (or you may function differently
than most). If so, you should determine how to come up with these answers. ************************************************************************ Now we can move on
to everyone’s favorite type of math – calculating commissions! The Commission is normally
based on the sale price, so that’s how we will learn to calculate commissions. Just multiply the sale price by
the rate of commission. If a house sells for $100,000 and the commission
rate is 7%, just multiply 100,000 X 7%. Remember our lesson on how to use your calculator. You can also multiply
100,000 X .07 to get the answer, which is $7,000 either way. We can also work problems
backwards again. If we know the seller is paying a 7% commission and we know the total amount is $7,000, we can find
the sale price by dividing 7,000 by 7%. Notice going forward
the formula is: 100,000 X 7% = 7,000 Going backwards we
start at the answer of 7,000 and work backwards step-by-step and number-by-number. Going forward we multiplied by 7%,
so going backward we divide by 7%. Dividing is the opposite
of multiplying. So 7,000 divided by 7% = 100,000. Notice it’s the same number that you started with. ************************************************************************ 1. A seller wants to net 70,000 dollars, after paying off
a $93,000 mortgage, a 10% commission and $4000 in miscellaneous closing costs. What must the house sell for in order
to do this? a) $183,700.00. b) $185,555.55. c) $174,000.00. d) None of the above. If you did this in
the order that things really happen, you would start at the sale price. The commission gets
paid first (that’s the way it should be); THEN you subtract the closing costs and the mortgage, which will net the seller
$70,000. Also, the commission percentage will tell us what the BROKER is getting (10% of the sale price). That
means the seller is getting 90% of the sale price before the other things are taken out (100% - 10% = 90%). In a formula it would
appear as the following: (We’ll call the
sale price “SP”) SP x 90% - 4000 – 93,000 = 70,000. When you go in reverse, you have to keep
the same order and numbers, but do the opposite function. The LAST thing we did was SUBTRACT 93,000 to get 70,000, so
in reverse we need to start at 70,000, and ADD the 93,000 back in FIRST. The full formula would be: 70,000 + 93,000 + 4000
divided by 90% = SP (Which is $185,555.55 1. A tract of land measures 300 feet by 5280 feet. How many acres is this equivalent
to? a) 36.36. b) 300. c) 792. d) 1,584,000. 300 x 5280 =
1,584,000. 1,584,000 divided by 43,560 is 36.36 acres. ************************************************************************
2. What are the taxes on a $180,000.00 house if properties are assessed at 40% of market
value, and the tax rate is $2.80 per hundred dollars of assessed value? a) $257.14. a) $2016.00. b) $5040.00. c) None of the above. $180,000 x 40% gives
us an assessed value of $72,000. Since the rate is in dollars per hundred, we have to divide that by 100, to get 720.
720 times the rate of $2.80 gives us a tax of $2016.
The interest payment
on a loan this month is $420.00. The interest rate on the loan is 8%. 3. What is the current balance of the loan? a) $5250.00. b) $40,320.00. c) $52,500.00. d) $63,000.00. Interest rates are
based on 1 year, so we first need to multiply our monthly interest by 12 to get 1 year’s worth of interest, or $5040.
5040 divided by our rate of 8% will give us our loan amount of $63,000. ************************************************************************ 4. A woman sells her property for $88,000.00, which was a
22% loss from her original purchase price. What was the original purchase price? a) $68,640.00. b) $100,000.00. c) $112,820.51. d) $107,360.00. If you knew the original
purchase price, you could multiply that times 22%, and subtract that amount from the purchase price, OR you could look at
the FULL original purchase price as being 100% of that amount, of which you lost 22% when you resold it. You now have
78% of the original amount, so you could multiply the original price by 78% and get the new amount, which is $88,000.
If you are STARTING at the 88,000, you have to do the OPPOSITE to get backto the original amount, meaning you need to DIVIDE
by 78%, which will give you $112,820.51 MATH ALWAYS GIVES TWO NUMBERS. THE
ONE YOU NEED TO FIND IS THE “ANSWER”. THE CALCULATION IS TO MULTIPLY.
IF YOU ARE GIVEN A “NUMBER” AND THE “ANSWER” THE CALCULATION IS DIVIDE THE ANSWER BY THE NUMBER 100,000X6%=6000
? X6%=6000 DIVIDE 6000/6%=100,000 OTHER CASES OF SOME MATH PROBLEMS BASIC MORTGAGE QUALFYING: JOHN HAS A YEARLY INCOME OF $30,000. THE LENDER
REQUIRES THE DEBT TO INCOME 28:36 FOR HOUSING AND TOTAL ESPENSES. WHAT IS THE MAXIMUM HOUSE PAYMENT HE WILL QUALIFY FOR ? $30,000/12=2500X28%=$700.00 CAP RATE OR {IRV} FOR
EXAMPLE, NET MONTHLY INCOME OF THE CAP RATE THE LENDER USES IS 7%, WHAT IS THE
VALUE? USING “IRV” FORMULA $2,250.X12= $27,000. YOU MUST BRING IT TO A YEARLY
FIGURE! $27,000./7%=$385714.00 A SMALL STORE APPRAISERS THE ANNUAL NET INCOME OF $97,500. THE CAP RATE DETERMINED IS 13%. WHAT IS MARKET VALUE? MARKET VALUE X RATE = NET INCOME
?
13% =
$97,500. NUMBER MISSING DIVIDE $97,500. /13% = $750.000 Introduction to Construction · The building plan, also known as the blueprint, is a detailed architectural rendering
of the structure that usually includes the plans for the mechanical systems. · The New York State Department of Health (NYSDOH) has regulations for sanitary and safe
water that act as the guideline for well water. · Percolation is movement of water through soil. · The footing is the concrete base below the frost line that supports the foundation of the structure.
· Of the 3 types of foundations built in · Slab-on-grade construction-concrete slab is poured directly on the ground and therefore
eliminates the crawl space or basement. · Floating slab-pouring the footing first and then pouring the slab. · Framing refers to the wooden skeleton of the house. · Studs-used vertically for the wall. · Joists-for floor and ceiling. · Rafters-roof framing system · The sill plate is the first wooden member of the house and is used as the nailing surface
for the floor system. · The girder is the main carrying beam, either a steel beam or several wooden members fastened
together. · The bearing walls support the ceiling and/or the roof and include the outside wall frame.
· Platform framing is the most common type of framing used in residential construction.
· The pitch is the slope of the roof. · Eaves are the overhangs, which are part of the sloped roof. · Flashing is a metallic material that is used in certain areas of the roof and walls to
prevent water seepage into the structure. · Sheathing is a plywood covering placed over the exterior framing members. · R-factor means the degree of resistance to heat transfer of the walls, the larger the
R-factor,
the greater the degree of insulation · HEATING: Ø HOT WATER SYSTEM Ø FORCED WARM AIR SYSTEM. When hot air is blown through the same ducts as air conditioning. · "BTU" is BRITISH THERMAL UNIT · A fuse is a device that will melt and open the circuit, causing electrical power to stop
when overheating occurs. · Circuit breakers will trip, or switch the electrical power for a given circuit off if
the current increases beyond the capacity of the system. Environmental Issues · The Federal Safe Drinking Water Act of 1974 is the guideline for · One of the biggest concerns about the safety of water is that highly corrosive water may
contain dangerous amounts of lead. · The installation and approval of individual residential on-site wastewater treatment systems
of less than 1,000 gallons per day in NY are regulated by NYSDOH. · 1,000 gallons or more overseen by NYSDEC · Only an individual licensed by NYSDEC may apply pesticides. · NYSDEC oversees wetlands, and must be larger than 12.4 acres to be protected. · Asbestos is a fibrous material found in rocks and soil is a carcinogen · Friable refers to the crumbly or flaky texture of asbestos when hand pressure is applied.
· Asbestos has been identified as a carcinogen, and is dangerous when inhaled. · Lead is a metallic element found worldwide in rocks and soils. It can be present in drinking
water, interior and exterior paint and in soil. · The Residential Lead Based Paint Hazard Reduction Act of 1992 sets forth procedures disclosing
the presence of lead based pint for sales of properties built prior to 1978. Penalties for noncompliance up to $10,000. · Many homes built prior to 1988 contain plumbing systems that use lead-based solder in
pipe connections. · Radon is a colorless, odorless, tasteless, radioactive gas found worldwide as a by-product
of the natural decay of uranium present in the earth. Radon from surrounding soil enters a home through small spaces such
as cracks in basements · Under the State Environmental Quality Review Act (SEQRA) the state environmental quality
review is a process that requires government to assess the environmental significance of actions for which they have discretion
to review, approve, fund, or undertake. · The environmental impact statement is a report that describes and analyzes a proposed
action that may have a significant effect on the environment. · The Superfund Amendments and Reauthorization Act (SARA) (1986) an amendment to "CERCLA" expanded
the definition of persons liable for cleanup costs. · Underground storage tanks are utilized by business and industry because the tanks are
out of sight and are also protected against vandalism and fire. · Chlorofluorocarbons (CFCs) are manmade chemical substances that were used in refrigerators,
air conditioners, Styrofoam, aerosol, and cleaning agents. · Hydro chlorofluorocarbons (HCFCs) also known
as freon are used in home air conditioners and are nontoxic. · Federal law mandates that in the sale or lease of pre-1978 residential properties, sellers
or their agents must distribute a lead hazard pamphlet and disclose any known information concerning lead paint. The parties
must agree to a 10-day period for a lead paint assessment. THESE ARE SOME POINTS ON THE NEW TOPICS MUNICIPAL
AGENCIES & PROPERTY INSURANCE EVERYTHING
IS DONE AT THE LOCAL LEVEL REAL PROPERTY
TAX BASED ON ASSED VALUE ZONING BOARD
OF APPEALS HEARS REQUEST FOR VARIANCE AND SPECIAL PERMITS TAX ASSESOR DETERMINES the ASSESED VALUE DOES NOT DETERMINE TAX PROPERTY
INSURANCE LIABILTY
INSURANCE COVERS FOR FINANCIAL LOSSES TWO MOST
COMMON POLICIES DWELLING AND HOMEOWNERS DWELLING POLICY COVERS
LOSS TO PROPERTY AS WELL INDIRECT FLOOD INSURANCE
IS PURCHASED FROM “NATIONAL FLOOD INSURANCE PROGRAM” DEDUCTIBLE
HELPS CONTROL COST OF INSURANCE UMBRELLA
POLICY PROVIDE HIGH LIMITS OF LIABILITY MORTGAGE CLAUSE COVERS
THE LENDER TAXES & ASSESMENTS PROPERTY
TAX LIENS HAVE HIGHEST PRIORITY “MILLS”=1/1000 NON-ASSESABLE
IMPROVEMEMTS E.G. LANDSCAPING, STORM WINDOWS EXEMPTIONS:
SCHOOLS, FEDERAL GOV’T, HOSPITALS RELIGIOUS GROUPS SPECIAL
ASSESMENTS DISTRICT [TAX] AREAS DESIGNATED FOR INFRASTRUCTURE COST FOR SPECIFIC PROJECTS E.G. SIDEWALKS, CURBS. INCOME TAX SECOND HOMES
HAVE DEDUCTIONS, PROPERTY TAX AND MORTGAGE INTEREST GAINS &
LOSSES: SHORT TERM HOLDING LESS THAN A YEAR EXCLUSION COUPLE FILING
JOINT RETURNS $500,000 TYPES OF
INCOME: ACTIVE: JOB PORFOLIO: STOCKS PASSIVE: RENT PROGRESSIVE TAX IS FEDERAL
INCOME TAX DEPRECIATION CLASSES RESIDENTIAL
27.5 YEARS NON-RESIDENTIAL 39 YEARS CONDO & COOPS SPONSOR IS DEVELOPER OFFERING
PLAN PROVIDED BY SPONSOR OFFERS DETAILED INFO ON CONDO OR CO-OP CPS1 IS POLICY STATEMENT SIGNED BY ATTORNEY TO TEST THE MARKET SHARE LOAN
CO-OP LOAN BUYER IS PURCHASING SHARES IN A CORP. HOUSE RULES ADDRESS COMMON
AREA NOISE PETS ETC. ALTERATION
AGREEMENT BEFORE ANY RENOVATIONS ARE DONE. BOARD PACKAGE
ALL INFO ON BUYERS INTERVIEW
BOARD SEES ALL EVEN CHILDREN COMMERCIAL
NO SPECIAL
LICENSE NEEDED!!!!!!!! COMMISSIONS:
GRADUATED PERCENTAGE, FIXED PERCENTAGE, FIXED FEE, OR RETAINER CASH FLOW MEASURE OF CASH
INFLOW AND OUTFLOW FROM INVESTMENT MARKET VALUE
IS WHAT A READY, WILLING AND ABLE BUYER WILL PAY. REMEMBER MARKET PRICE
IS WHAT THEY PAY. THIS MAY BE IN OTHER CHAPTERS AMENITY PURCHASER VALUES
PROPERTY ON ABILITY FOR HIS SPECIFIC NEEDS LIQUIDITY: ABILITY TO CONVERT
ASSET INTO CASH QUICKLY WITHOUT LOSS LEVERAGE: USE OF BORROWED
FUNDS TO FINANCE PORTION OF PURCHASE PRICE. FINANCIAL RISK: RESULTS
WHEN DEBT IS USED TO FINANCE AN INVESTMENT LEGISLATIVE RISK: RISK
THAT CHANGES IN LAW WILL AFFECT E.G.: TAX LAWS, LAND USE, ZONING. NEGATIVE LEVERAGE OCCURS
WHEN BORROWED FUNDS ARE INVESTED AT RATE OF RETURN “LOWER” THAN COST OF FUNDS TO THE BORROWER. FOUR CLASSES OF OFFICE
BUILDINGS GENERALLY ARE: A, B, C, D. GROUND LEASES
ALSO LAND LEASES TENANTS LEASE ONLY “LAND” NO IMPROVEMENTS E.G. NO BUILDINGS OR STRUCTURES NET OPERATING INCOME: INCOME
FROM PROPERTY THAT REMAINS AFTER ANNUAL OPERATING COSTS ARE PAID. OPERATING STATEMENT USED
BY CURRENT OWNER SHOWS TOTAL REVENUES FOR A GIVEN PERIOD “CASH FLOW COMPONENTS” “DEPRECIATION”
INCENTIVE FOR INVESTORS TO BUY REAL ESTATE INSTEAD OF STOCKS FOR TAX SHELTERS. DEPRECIATION IS USED IN MANY CHAPTERS “BE
CAREFUL” LOSS FACTOR
OR “LOAD FACTOR” DIFFERENCE BETWEEN RENTABLE SQUARE FOOTAGE AND USABLE FOOTAGE. PROPERTY MANAGEMENT PROPERTY MANAGER IS A “GENERAL
AGENT” MANAGEMENT AGREEMENT WRITTEN
AGREEMENT GOVERNS THE RELATIONSHIP BETWEEN OWNER AND MANAGER. MANAGEMENT PROPOSAL PLAN
TO OVERSEE THE PROPERTY OPERATING BUDGET CREATED
TO PROJECT INCOME OVER “ONE-YEAR PERIOD” STABILIZED BUDGET IS CREATED
FOR “FIVE-YEAR PERIOD” ANCHOR TENANT
MAJOR CHAIN OR DEPARTMENT STORE IN SHOPPING CENTER TO GIVE EXPOSURE TO SMALLER STORES. REVIEW
EXAM #1 1-A broker legitimately may
pay all or part of Real estate commission to a a.
seller b.
salesperson c.
buyer d.
friend who provides a listing lead 2-The minimum age for a a.
19. b.
18. c.
20. d.
21. 3-Which of the following
acts would require a real estate license in a.
b.
c.
d.
Foreclosure sale by court order 4-An associate
broker may a.
sponsor a person for a salesperson’s license. b.
collect his or her own real estate fees. c.
act as a principal broker for another broker. d.
Work as a salesperson for a principal broker 5-Violation of the license
law is a misdemeanor, Punishable by up to a year in jail and a fine of Up to a.
$500. b.
$2,000. c.
$1,000. d.
$1,500. 6-When salesperson Tom Jones
left ABC Realty And went to work with XYZ REALTORS, Tom’s listings a.
became null and void. b.
Remained with ABC Realty. c.
Went with him to XYZ REALTORS. d.
Required the sellers’ signatures to remain in the local MLS. 7-A salesperson’s
license must be a.
displayed on the firm’s wall. b.
kept in the salesperson’s wallet c.
retained by the principal broker. d.
d. sent to the local REALTORS association. 8-When does offering a client’s
business for sale Require a real estate license? a.
Never b.
Always c.
When the business includes any real estate d.
When more then half the value is real estate 9- An apartment information vendor is licensed
by: a.
Department of Law b.
New York Attorney General’s office
c.
Department of State d. Division
of Housing and Community Rental 10-When a license
is revoked, how long must a licensee wait before applying to have the license reinstated? a.
18 months b.
1 year c.
6 months d.
2 years 11-The form of listing whereby
an owner lists property for sale with a number of brokers is known as a(n) a.
Exclusive agency. b.
Open listing. c.
Exclusive right to sell. d.
Net listing. 12-To
avoid possible liability for the actions of c cooperating members of a multiple-listing system, the owner who lists property
for sale may decline to offer a.
commission to the selling agent. b.
Subagency. c.
Cooperation with buyer brokers. d.
A written disclosure of property condition. 13-. An agent who has the authority to represent the principal in
specific matters is a(n): a. specific agent b. general agent c. unlimited agent d. special agent 14-Jan Lipson gave Sun City
Realty an exclusive agency listing on her property. If she sells the Property herself without
involving Sun City, She will owe a.
Half of the commission. b.
All of the commission. c.
No commission. d.
Only reimbursement for 15-When selling a property
in Buyer that a.
There is a group home 1 ½ miles away. b.
The property lies in an agricultural district. c.
There is a fundamentalist church three blocks away. d.
The former owners were divorced 16-The commission to be paid
in a written listing Agreement is the a.
rate set by law b.
amount of money over the net listing amount. c.
Customary rate in the area. d.
Percentage of the sales price as negotiated and agreed or a flat fee. 17-The
relationship between an agent and his or her Principal is a.
Fiduciary. b.
Alluvial. c.
Allodial. d.
Executory 18-If
you are selling a house in a.
There is a utility surcharge. b.
The former owner committed suicide. c.
The train station is eight miles away. d.
A shopping center is the nearby town is closing. 19-Seller is legally
required to reveal to a buyer anything seller knows about a.
Crimes committed on the property in the past three years b.
How much seller paid for the house. c.
Repairs that have been made to a roof leak. d.
Lead paint hazards on the property. 20-To create an
agency relationship, it is necessary that a.
A listing contract be registered with the DOS. b.
The principal and agent sign a written agreement. c.
The principal pay the agent’s fees. d.
The parties act as principal and agent. 21- If you are a salesperson
working with a buyer, then the buyer is your client: a. if you are servicing the
buyer b. if the buyer has shared
financial information with you c. if you have an agency
contract with the buyer d. none of the above . 22-The type of listing illegal
in a.
Net listing. b.
Exclusive agency. c.
Exclusive right to sell. d.
Open listing. 23- . A licensed salesperson or broker associate acting as an independent contractor must: a. be paid based upon sales
and output b. execute a written independent
contractor agreement yearly with the broker c. receive half of her health
care premium paid by the broker d. both a and b 24-A salesperson
sells another firm’s listing of a commercial building for $462,500. The 7 percent commission is split 50/50
between the two companies. The salesperson received 60 percent of her office’s share.
How much does she receive? a.
$1,619.75 b.
$3,237.50 c.
$9,712.50 d.
$10,850.00 25-A broker may
be entitled to a commission in the event that the sale does not close if the problem was caused by the a.
Seller. b.
Buyer. c.
Bank. d.
Title Company. 26-Big Apple Realty is concerned that itsCommission on a sale will not be paid. a.
file a lis pendens, b.
Request a de minimis gift. c.
File an affidavit of entitlement. d.
File a mechanic’s lien. 27-A real estate
salesperson’s compensation is set by a.
The local realty association. b.
The Department of State, Division of Licensing Services. c.
Agreement between broker and salesperson. d.
The cooperating broker in a transaction. 28-The Duncan and Hill decision
cautioned real estate licensees against a.
Misrepresentation. b.
Consumer fraud. c.
The unauthorized practice of law. d.
Undisclosed dual agency. 29-When a buyer/client wants
to see property listed by his or her agent’s company, the possible conflict of interest can be solved by the use of
a.
Undisclosed dual agency. b.
Designated agents. c.
Exclusive/right/to/sell d.
Fiduciary duties. 30-Buyers
should be careful NOT to reveal the top price they’re willing to pay to a (n) a.
Buyer’s agent. b.
Principal broker c.
Sellers’s agent d.
Associatebroker 31 Ads made by
real estate brokers that do not indicate that the advertiser is a broker are: a. legal in b. known as blind ads c. acceptable as long as
the phone number of the broker appears in the ad d. acceptable if the broker
is doing business as an individual broker in his own name 32- If a licensee becomes a partner in a real estate firm, he must
have a(n): a. salesperson license b. broker license c. associate broker license d. minimum of two year’s
experience as a broker . 33-Agency relationship in an in-house sale require a.
No notice to the principle broker. b.
Full discussion and disclosure in writing to all parties. c.
Notice to the title company. d.
Notice to the MLS. 34-In a buyer/agency relationship the broker owes the seller a.
Care. b.
Accounting c.
Obedience d.
Fair and honest dealing 35-. If you are a salesperson working with a buyer, then the buyer
is your client: a. if you are servicing the
buyer b. if the buyer shared financial
information with you c. if you have an agency
contract with the buyer d. none of the above 36-In a real estate transaction,
a broker had a written representation agreement
with the buyer but was paid 6 percent
of the selling price at the closing by the seller.
Under these facts, whose agent was this broker? a.
The broker was the seller’s agent. b.
The broker was the buyer’s agent. c.
The broker is a dual agent. d.
The broker has violated Estate license laws and
may have his or her License suspended or revoked. 37-A broker signed a
listing agreement with the condominium. A few days
later, the broker Signed a buyer representation
agreement with The Smiths, who were looking
for a modest suburban single-family home.
If the buyers decide they’re in
the market for a luxury downtown condominium instead,
and want to see the do? a.
Say nothing and collect a commission from the sellers
and a fee from the buyers b.
Disclose the intended dual agency and obtain both
parties written consent c.
Withdraw from representing one of the Parties to
avoid any appearance of self-dealing d.
Nothing, but accept compensation from Only one
of the parties 38-The DOS regulation
175.7: “A real estate broker Shall make it clear
for which party he is acting.. a.
The sale or lease of one/to four/unit residential properties. b.
Only condominiums and cooperatives c.
The sale or lease of commercial space only. d.
All types of transactions, not just residential. 39- A licensee should use the disclosure form with prospective sellers
or buyers at the first substantive contact.
Which of the following illustrates the first substantive contact? a. individuals walking
through an open house who do not speak to an agent b. individuals who call
the real estate office asking about the location of a property for a drive-by on their
own c. a prospective purchaser
walking into a real estate office, meeting with an agent, and discussing the purchase of a specific property d. an agent giving a
seminar on home buying to a group of prospective purchasers 40-In which clause in
a deed would you find metes and bounds and
monuments? a.
Demising b.
Defeasance c.
Description d.
Habendum 41-If Mr. Jones owns
his home free and clear of encumbrances and has the
right to devise it to his daughter, he owns a
(n) a.
Life estate. b.
Fee simple. c.
Estate at will. d.
Leasehold. 42-The Goodman’s
purchased a cottage bounding on a stream. They have rights
to the stream known as a.
Reversionary. b.
Littoral. c.
Laches. d.
Riparian. 43-Which of the following
would NOT be Considered chattel? a.
A tractor b.
The barn c.
The draperies d.
A trade fixture 44-The most complete
type of ownership in real estate is a.
Fee on condition. b.
Life estate. c.
Qualified fee. d.
Fee simple 45-Deed restrictions
may be established only by the a.
Grantor. b.
Local government. c.
Zoning board of appeals. d.
Grantee. 46-One future action
that may NOT be limited by a deed restriction
is a.
The free transfer of the property. b.
The illegal covenant against religion. or Nationality. c.
Further subdivision. d.
The total number of lots in a subdivision. 47-Any right to or interest
in the land interfering a.
Encumbrance. b.
Encroachment. c.
Easement. d.
Appurtenance. 48-A deed is valid when
it is a.
delivered and accepted. b.
Recorded. c.
Signed. d.
Notarized 49-Which type of deed
is used to convey title to a Parcel of land
through a foreclosure proceeding? a.
trust b.
quitclaim c.
referee’s d.
warranty 50-Title to real property
is conveyed by a a.
contract. b.
Lien. c.
Lease. d.
Deed. 51-. A lease that provides for the lessee to pay all or part of the
expenses of the property in addition to rent is called a(n): a. estate at sufferance b. net lease c. sale and leaseback d. gross lease 52- When a lessee transfers
the entire remaining interest of his lease to another party who then must pay the owner, is called a(n): a. novation b. sublease c. assignment d. lis pendens 53-A contract transferring
the rights to possession of real property for a specified
term is known as a a.
lis pendens. b.
Lien. c.
Lease. d.
Deed on condition. 54-Under the New York
General Obligations Law, a.
Become the property of the landlord. b.
Are held in escrow by the landlord. c.
May be commingled with the landlord’s funds. d.
Can be retained by the landlord after he or she sells the property. 55-A tenant learns her
building has been sold to a new landlord. The
sale of the property a.
Automatically terminates all preexisting leases. b.
Automatically renews the lease for an additional term, although the tenant has the option of declining
the renewal. c.
has no effect on existing leases, and the tenant must make timely
rent payments to the new owner. d.
terminates the lease, but the tenant is entitled to a legal
holdover tenancy for the remainder of the lease term. 56-A legally enforceable
agreement between competent parties in which
each party acquires a right is called
a a.
Certiorari. b.
Consideration. c.
Contract. d.
Clause. 57-The usual listing
agreement between a seller and a real estate
agent is a (n) a.
Implied contract. b.
Breach of contract. c.
Express contract. d.
Discharge of contract. 58-When the agreement
of the parties is demonstrated by their acts
and conduct, this is known as what type
of contract? a.
express b.
voidable c.
implied d.
unilateral 59-When a new contract
is substituted for an existing agreement,
the process is known as a.
Novation. b.
Innovation. c.
Assignment. d.
Default. 60-Except for the amount
of mortgage that may be assumed, as sale in a transfer tax of a.
$0.55 per $500 or fraction thereof of the consideration
paid. b.
1 percent on a sale of less than $500,000 c.
10 percent where the consideration is more than $1 million. d.
$2 per $500 or fraction thereof of the Consideration
paid. 61-. In the transfer of what type of property may a flip tax be imposed? a. condominium b. cooperative c. any fee simple interest d. on all properties sold
in a.
62-The Flintstones sold
their house to the Simpsons and are to close
on July 1. The Flintstones paid their annual
town taxes in January. At the closing,
the Simpsons will Reimburse the Flintstones
for a.
the tax for the balance of the year. b.
The tax due n November. c.
Nothing. d.
The tax paid last January. 63-RESPA explicitly prohibits
the payment of a.
Referral fee from an insurance agent. b.
Kickbacks. c.
Brokerage referral fee. d.
Fee to a moving company. 64-An instrument in writing
that is the security for a.
bond. b.
Mortgage c.
Deed d.
Lease 65-A Department of Veterans
Affairs mortgage is a.
Insured b.
Guaranteed c.
Conventional d.
Prepaid 66-When a house purchase
is financed by a Federally related mortgage
loan. RESPA Requires that loan closing
information be Prepared on the a.
uniform settlement statement. b.
Fannie Mae form. c.
Mortgage Reduction Certificate. d.
Affidavit of title. 67-. A blanket mortgage usually encumbers: a. several mortgages b. an underlying wraparound
mortgage c. several parcels of real
property d. household goods such as
bedding, appliances, and other chattel belongings a.
68-. Under a mortgage, the mortgagor is the party who: a. lends the money b. receives the payments
on the note c. holds the mortgage d. is the borrower 69-Margo and Clarence
Stilton have applied for An FHA/insured
loan. The mortgage will be a.
backed by the full faith and credit of the b. insured c. guaranteed by the federal government at no cost to the
borrower. a.
paid for by PMI premiums. 70-. If a real estate broker earned a commission of $5,600 at a commission
rate of 7%, at what price was the property sold? a. $39,200 b. $68,000 c. $80,000 d. $125,000 71-What type of mortgage
loan has an interest rate That may become higher or
lower at specified Intervals, keyed to an economic
indicator? a.
pledged account b.
shared equity c.
growing equity d.
ARM 72-Charging more than
the legal interest rate is a.
points b.
usury c.
discounting d.
novation 73 Deed restrictions
are provisions that apply to current property owners and a.
are regulated by a local jurisdiction. b.
can be altered by the owner at any time. c.
extinguish upon transfer. d follow the
chain of title in future transfers 74- Variances and special use permits are issued by a(n) a.
architectural review board. b.
building department. c.
planning department. d.
zoning board of appeals. 75- When the present usage of land is in legal conflict with an enacted
zoning ordinance the usage is called: a. void b. a variance c. spot zoning d. nonconforming 76-The owner whose five/unit
apartment Building would not be allowed
by a new zoning Law may be entitled to a
(n) a.
nonconforming use b.
variance c.
accessory use d.
special/use permit 77-Among other methods,
land use is controlled a.
the local assessor. b.
Subdivision regulations. c.
Demographics d.
The economic cycle. 78- Examples of private land use controls would NOT include: a. restrictive covenants b. restrictions placed in
deed or wills c. conditions in a deed d. eminent domain 79-Even though a building
permit is issued, new a.
A certificate of occupancy. b.
A variance from the zoning board of appeals. c.
Approval by an architectural review board. d.
An environmental survey. 80- A detailed architectural rendering of a structure is known as
a(n): a. site plan b. blueprint c. feasibility study d. plat 81-Electrical systems
are routed through a a.
Pier and beam. b.
Circuit box. c.
Stringer. d.
Muntin. 82-A lakefront home sold
for $385,000. The Broker received $27,912.50.
What rate of Commission did this broker
charge? a.
7 ¼ % b.
8.5% c.
10% d.
14% 83-The most commonly
used insulation material is a.
rock wool. b.
Cellulose fiber. c.
Urea formaldehyde foam. d.
Fiberglass. 84- The amount a particular purchaser agrees to pay and a seller agrees
to accept is known as: a. cost b. price c. market value d. evaluation value . 85-A comparative market
analysis resembles Which approach
to real estate evaluation? a.
income approach. b.
Direct sales comparison. c.
Cost approach. d.
Guesstimate. 86-The definition of
market value includes a.
Most recent sale price. b.
Amount of owner’s equity in the building. c.
Potential income tax consequences of a sale. d.
Neither buyer nor seller under undue pressure. 87-It can be dangerous
for a real estate broker to a.
discount the firm’s usual commission rates for a particular
client. b.
discuss commission rates with another broker c.
pay one salesperson 50 percent of earned commissions
and another salesperson 60 percent d.
charge more for selling vacant land than for selling single/family
houses 88- A protected class under a. age b. marital status c. lawful occupation d. familial status a.
. 89-The civil rights act
of 1866 a.
prohibits any type of discrimination based on race. b.
Prohibits discrimination only in federally Funded housing. c.
allows an exception for an owner/occupied two/family
house. d.
does not apply to nonlicensed persons. 90-Redlining is defined
as a.
Steering home seekers to a particular neighborhood. b.
Drawing red lines on a local map indicating what areas
to look in for listings. c.
Denying or restricting loans in a certain area by a lending
institution. d.
A zoning procedure. 91- Rights law when it forbids
discrimination based On a.
race. b.
Marital status. c.
Religion. d.
Children in a family. 92-PDQ Realty advertises
that it specializes in Areas suitable for European
immigrants. This is A fair housing violation
called a.
redlining. b.
Steering. c.
Blockbusting. d.
Sexual bias. 93-Using “scare
tactics” regarding the possible Change in the demographics
of a neighborhood When soliciting listings
in a violation called a.
redlining. b.
Steering. c.
Blockbusting. d.
Harassment. 94-Altough a property
owner may be exempted sometimes from discrimination
laws, a real estate licensee a.
Is exempt as an owner. b.
May list the property for sale noting the Exemption. c.
may advertise the noted exemption d.
may not participate in the transaction in any way. 95-The a.
a uniform commission rate schedule in any given area. b.
cooperation among brokers for the benefit of consumers. c.
free competition in the open market d.
Protection for small independent firms. 96-The Underground Storage
Tank Act in New That are a.
2,000 gallons or larger. b.
550 gallons or larger. c.
1,100 gallons or larger. d.
750 gallons or larger. 97-. Underground storage tanks are utilized by business and industry
for all of the following reasons EXCEPT they are: a. out of sight b. protected against vandalism c. protected against leakage d. protected against fire 98- A salesperson who is an independent contractor a. cannot be charged for office space or supplies provided by
the broker. b. is not subject to any direction or control by the broker. c. is paid commission based on sales results. d. is paid for the number of hours worked. 99-An asbestos problem
is sometimes best treated a.
installing new distribution boxes. b.
Proper ventilation of the building. c.
Removal of chipping paint. d.
Leaving it alone. 100-The New York regulatory
agency that oversees the safety of drinking water in 101- A property manager
or property management firm is usually a _____ agent. d.
general e.
principal f.
special g.
universal
ANSWER KEY TO EXAM #1 1-B: Salesperson
can accept compensation only from their sponsoring broker. 2-C: As of July
1,2008 to become a broker you must be 20 years old. 3-C: selling land
at an auction. 4-D: Associate
broker is a licensed broker but chooses to work under the supervision of another broker. 5-C: DOS may impose
a fine not to exceed $1000. 6-B: When a licensee
terminates with a broker they must turn over all information. 7-C: Kept by the
broker in a safe place. 8-D: selling a
business where the real estate is greater than the business. 9-C: Department
of State licenses apartment information vendors. 10-B: If a license
is revoked licensee must wait one year before reapplying. 11-B: In an Open
listing the seller allows the property to be shown by many Brokers. 12-B: By accepting
subagency the owner will have no vicarious liability for the Acts of cooperating
agents 13-B: A general
agent has specific authority in representing owners. 14-C: With the
Exclusive Agency the owner owes no commission. 15-B: If property
is in an agricultural district buyer must be informed. 16-D: The broker’s fee is specified in the listing agreement,
management agreement, or rental agreement with the principal and is always subject
to negotiation. 17-A: The agency
relationship is always consensual, meaning both parties enter
into it willingly. It is also a fiduciary 18-A: If a Utility surcharge is assessed shall provide written notice to the prospective
purchaser 19-D: Sellers and Landlords shall disclose any lead paint they have knowledge of 20-D: The person who selects the agent to act on his behalf is the principal or
client. 21-C: The
obligations of a buyer’s agent are also subject to any specific Provisions set forth in an agreement between
the agent and the buyer 22-A:
Net Listing This type of commission arrangement is illegal
in 23- D: Compensation
is paid only for output. Law also requires a written agreement,
executed by both parties 24-
C: $462500 x 7%=$32375. divided by 2 =$16187.50x60%agent=$9712.50 25-A: The commission is usually considered earned
when a broker brings a ready, willing, and able buyer to the seller, or the seller
should accept an offer from the buyer 26-C: If a broker feels the commission will not be paid,
they must file an affidavit of entitlement for completed brokerage services. 27-C: The fee or rate of commission paid to a real estate
broker is strictly negotiable between the broker and the seller or buyer. 28-C:
In Duncan & Hill, the court upheld the Department of State’s
determination that a real estate broker who was not a licensed attorney demonstrated untrustworthiness and incompetence in
violation of Real Property Law sect;441-c, finding
that, when he prepared documents that included detailed mortgage terms he had devised, he engaged in the unauthorized practice of law 29-B: If the buyer and the seller or tenant and the
landlord provide their informed consent in writing, the principals and the real estate broker who represents both parties
as a dual agent may designate a sales agent to represent the buyer and another sales agent to represent the seller 30-C: The agent because if the fiduciary must tell the seller. 31-B: All ads placed by a broker must indicate that the
advertiser is a broker. Ads that do not contain this are called BLIND ADS. 32-B: Each officer of a corporation or member of a
co-partnership must be licensed as a broker. 33-B:
Broker dual agency can occur if agents of the broker represent both the buyer and seller in the same transaction, Full discussion and disclosure in writing to all parties
must be made 34-D: a buyer’s agent should deal honestly, fairly and in good faith. 35-C: This is done through a buyer brokerage agreement 36-B: Other means of payment can be through multiple listing services when the listing broker offers cooperating compensation
to the buyer broker. The buyer broker will then be paid by the seller 37-B: In 38-D: Regulation 175.7 is not limited to residential transactions, but applies to all real estate transactions. 39-C:
When a prospective buyer or seller may walk into a real estate office and want to discuss listing or purchasing a property,
at this point, disclosure must be made. 40-C:
The types of legal descriptions are metes&bounds, block&lot, and monuments 41-B:
Fee Simple Absolute-provides the most complete form of ownership and bundle of rights in real property 42-D:
Riparian rights belong to the owner of property bordering a flowing body of water 43- B: Barn is real property. 45-A:
Deed restrictions are in the form of covenants or conditions. These restrictions run with the land, they are put by the “grantor” 46-B:
An illegal covenant cannot be enforced [e.g. excluding people of certain religion, or color. 47-A:
An encumbrance is anything that lessens the bundle of rights in real property. 48-
A: The deed is always signed by the grantor [seller] and must be delivered to the grantee [buyer] to be valid. 49-C:
Execution of a judicial deed results from a court order; examples are guardian’s deed, referee’s deed, tax deed,
and administrator or executor’s deed. They can used for a foreclosure 50-
D: A deed is the document used to convey title legally to real property, also known as a conveyance. 51-
B: In a net lease, the tenant pays some or all of the expenses. 52-C:
The assignment of the lease involves the transfer of the lease contract from the present tenant to the assignee. 53-
C: A lease is a contract, in which, for a consideration, an owner of property transfers a property interest to the tenant
for a prescribed period of time. 54-
B: The security deposit must be held in an escrow account. 55-
C: Lease agreement does not terminate when an owner sells, new owner is bound by terms of lease 56-
C: A contract is an agreement between competent legal parties to do or refrain from doing some legal act in exchange for consideration.
57-
C: Express Contract-the parties to the contract have definitely agreed on all the terms in the contract 58-
C: Implied Contract has not been put into words but is implied by the action and conduct of parties 59-
A: A form of agreement that terminates contracts is novation the substitution of a new contract for a prior contract or the
substitution of a new party for an old party. 60-
D: 61-
B: Cooperatives may have a flip tax imposed upon transfer, paid by the seller. 62-
A: Property taxes are paid in advance so the buyer will pay the seller for the balance of the year. 63-B:
(RESPA) Prohibits kickbacks for services not performed 64-
B: A mortgage is a type of security instrument pledging property to a lender. 65-
B: Guaranteed Loan Program -offers a loan that guarantees repayment of the top portion of the loan to the lender in the event
the borrower defaults. 66-
A: RESPA requires a standard HUD-1 settlement statement for all federal-related loans 67-
C: Blanket mortgage-two or more parcels of real estate are pledged as security for payment of the mortgage debt. 68-
D: The borrower who gives the mortgage is called the mortgagor. 69-
B: FHA-insured loans protect lenders against financial loss. 70-
C: $5600 IS COMMISSION DIVIDED BY 7% IS $80,000 71-
D: An adjustable rate mortgage permits a lender to adjust the interest rate periodically so it reflects the economy. 72-
B: USURY LAWS are used by 73-
D: Deed restrictions are in the form of covenants or conditions. These restrictions run with the land, they are put by the
“grantor” 74- D: The Zoning Board of Appeals It is a local administrative
appeal agency and an interpreter of the zoning ordinance. They also issue Variances and special use permits 75- D:
Nonconforming uses occur when land does not conform to current
zoning laws, but is legally allowed because it was there before new zoning. 76-
A: Nonconforming uses occur when land does not conform to current zoning laws, but is legally allowed because it was there
before new zoning 77-
B: Individual owners have the right to place private controls on their own real estate. Which may effect a home or subdivision 78-
D: Eminent domain is the power of the government or its agencies to acquire private property for public use. 79-
A: Permit issued to builder after all inspections are made and property is deemed fit is a Certificate of Occupancy 80-
B: The building plan, also known as the blueprint, is a detailed architectural rendering of the structure that usually includes
the plans for the mechanical systems. 81-
B: Circuit breakers will trip, or switch the electrical power for a given circuit off if the current increases beyond the
capacity of the system 82-
A: COMMISSION IS DIVIDED BY $27,912.50
DIVIDEDBY $385,000= 7.25% 83-
D:R-factor, the greater the degree of insulation. Most common is fiberglass 84- B: Price is the
amount a particular purchaser agrees to pay and a seller agrees to accept under the circumstances surrounding the transaction. 85-B: The “cma”
is closely related to the sales approach used by appraisers. 86-
D: Market value-the most probable price, for which the property should be sold
with the buyer and seller acting prudently, neither is under undue duress. 87-B:
Price Fixing-occurs when competitors in a group conspire to charge a same or similar price for services rendered. 88- C: LAWFUL OCCUPATION
is protected class only in 89-A: The Civil Rights
Act of 1866-first significant statute affecting equal housing Has no exemptions BASED ON RACE 90-C:
Redlining-refusing to make loans to purchase, construct or repair a dwelling by discriminating 91-B: Marital Status 92- B: Steering-direct
prospective purchasers from diverse backgrounds to presently integrated areas to avoid integration of nonintegrated areas.
93-C: Blockbusting-illegal [scare tactic 94- D:
Fair Housing Exemptions no transaction involving a real estate licensee is exempt 95- C: Congress
passed the first antitrust law, the Sherman Act, in 1890 as a "comprehensive charter of economic liberty aimed at preserving
free and unfettered competition as the rule of trade 96- C: Some types of tanks that are exempt Tanks on farms
and residential store less than 1100 gallons 97- A: Underground storage
tanks are utilized by business and industry because the tanks are out of sight and are also protected against vandalism and
fire. 98- C: Compensation is paid only
for output without regard for the number of hours worked 99-
D- If the asbestos is in an area and is not disturbed it is
best to leave it alone. 100-B: New York
State Department of Health (NYSDOH) is the regulatory agent that oversees the safety of drinking water. | ||