Practice test, Real estate 70%

Another closing appointment is approaching. These clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points? $2,400 $2,450 $2,475 $3,200

$2,400

Home buying programs for Long Island borrowers are available through which of the following organizations? - Community of Long Island Citizens for Homeowners United - Economic Opportunity Council of Suffolk Inc. - Long Island Project Award - Manhattan Project Programs include Community Development Corporation, Housing Partnership, Inc., and Economic Opportunity Council of Suffolk Inc.

- Economic Opportunity Council of Suffolk Inc. Programs include Community Development Corporation, Housing Partnership, Inc., and Economic Opportunity Council of Suffolk Inc.

Clay and Myra just bought a home. Based on where they are in the property ownership life cycle, which tax-related item is likely to be of the most interest to them? - Capital gains - Depreciation - Mortgage interest deduction - Points deduction

- Points deduction In the acquisition stage of property ownership, owners are typically more concerned with the deductibility of points they paid.

Independent contractor agreements between licensee and broker must be executed no more than ______ previously. 12 months 15 months 18 months Six months

15 months Independent contractor agreements between licensee and broker must be executed no more than 15 months previously.

Tyrell and Barb bought a commercial investment property in 2009 during the real estate market downturn. Through what year will they be able to depreciate the investment? 2019 2029 2039 2048

2048 Depreciation may be taken for 39 years for commercial non-residential properties.

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax? $336,000 $387,000 $420,000 $432,000

387,000

Your client Joseph has a commercial income-producing property. How long does he depreciate this property? 27.5 years 39 years Indefinitely Zero years (commercial properties cannot be depreciated) Depreciation for non-residential income-producing properties is 39 years.

39 years Depreciation for non-residential income-producing properties is 39 years.

Which of the following is true of a material fact? A material fact is known only to real estate licensees. A material fact is only related to the condition of a property. A material fact need not be disclosed to all parties. A material fact would cause a reasonable person to not take an action that would otherwise be taken, or take an action that would otherwise not be taken.

A material fact would cause a reasonable person to not take an action that would otherwise be taken, or take an action that would otherwise not be taken.

A person performing real estate activities under the judgment or order of a court, such as a trustee in a bankruptcy, is _______. An exception to the real estate licensing requirement Required to have a broker license Required to have at least an associate broker license Required to have at least a salesperson license

An exception to the real estate licensing requirement

Breeja sold her investment property for $330,000. Her adjusted basis in the property was $253,000. The difference between this sale price and the adjusted basis is a(n) ______. After-tax cash flow Capital gain Finance rate Rate of return

Capital Gain

When a condominium building is a conversion, what can the builder do without an amendment after the 90-day tenant's exclusive buying period? - Change the price of all penthouse units - Change the price of all two-bedroom units - Change the price of any particular unit - Change the price of entire complex

Change the price of any particular unit

Broker Zeke is busy and doesn't have time to go to the bank, so he deposits his client's earnest money funds into his personal account. He plans to move the funds to the appropriate account within a week. This violation is an example of ______. Commingling Contractual interference Failure to disclose an agency relationship Performing services that would qualify as practice of law

Commingling Trust fund violations are a serious offense. This is all about where the money went vs. where it should have gone.

Taxpayers who own a first and second home can _______. Deduct all of the interest paid on debt not to exceed $1.1 million for both the first and second homes combined Deduct property taxes on the first home only Deduct property taxes on the second home only Include a home equity loan—up to $500,000—if total debt does not exceed $1.5 million for all debt on both homes combined

Deduct all of the interest paid on debt not to exceed $1.1 million for both the first and second homes combined

Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals? Department of Civil Rights Department of Equal Opportunity Department of Housing and Community Development Department of Housing and Urban Development

Department of Housing and Urban Development The Department of Housing and Urban Development (HUD) enforces Title II when it relates to state and local public housing, housing assistance, and housing referrals.

The property management proposal includes information such as ______. - Details about the property manager's personal interests and hobbies - Details about the property manager's qualifications - Personal information about the property manager's family - The benefits and bonuses the owner will give the property manager in return for services rendered

Details about the property manager's qualifications

What basic property right is NOT available to the holder of a life estate? -Control -Disposition -Ownership -Possession

Disposition

Without this easement—usually involving access to a road—the owner requiring the right of passage would be landlocked. Easement appurtenant Easement by necessity Easement by prescription Easement in gross

Easement by necessity This describes an easement by necessity. One way to remember this type of easement is by thinking of the importance of getting access to a road.

Susan, an interested buyer, has presented Byron, the seller, with a letter of intent to purchase his property. The parties have both signed the letter of intent. Which of the following statements about this situation is true? - Either party may choose not to pursue the transaction with no penalties. - Susan and Byron have a legally binding agreement. - With a signed letter of intent, Byron is legally obligated to sell the property to Susan. - With a signed letter of intent, Susan is legally obligated to purchase the property.

Either party may choose not to pursue the transaction with no penalties

In an air conditioning system, what takes heat from the air and brings it to the refrigerant? Compressor Condenser Evaporator Recycler

Evaporator In an air conditioning system, the evaporator takes heat from the air and transports it to the refrigerant, resulting in cooler air.

Under what listing agreement is an agent owed a commission no matter who secures the buyer for the transaction? - Dual or designated - Exclusive agency - Exclusive right-to-sell - Open

Exclusive right to sell The exclusive right-to-sell agreement allows the listing agent to earn a commission no matter who secures the buyer for the transaction.

To set the stage for successful negotiation, define the goal, identify several ________ positions that will still get the client's needs met, identify weaknesses in the other party's position, and identify benefits of your proposal to the other party. competing conflicting fallback lesser

Fallback Fallback positions are important to guide negotiations to a successful conclusion.

Which of the following is a claim against a person and all of his property? General lien Mortgage lien Specific lien Universal lien

General Lien There are two major categories of liens. A specific lien goes against a specific piece of property. A general lien goes against the person and all of his property.

Which of the following is a benefit of unimproved land? All of the plumbing and electrical are already there. Existing structures are usually ready to be torn down. Existing structures usually don't require improvement. If land is scarce, it can be valuable.

If land is scarce, it can be valuable.

In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers? - Investors always pay cash. - Investors are less of a risk. - Investors can use rental income to qualify. - Investors maintain their property better.

Investors can use rental income to qualify

Melissa just purchased a condop unit. What does this mean for her? - It will be easier for her to sublet if she wants to. - Selling the property will be next to impossible. - She is prohibited from selling her unit. - She is prohibited from subletting her unit.

It will be easier for her to sublet if she wants to Condops are a sort of hybrid between a co-op and a condominium. They allow flexibility in selling and subletting, similar to that enjoyed by condominium owners.

What type of insurance will cover damage to someone else's property? - Catastrophic - Flood - Liability - Universal

Liability

Property owners who live on or next to water have certain rights. An example of one of these rights includes ______. - Contamination - Hazardous waste - Littoral - Reversionary

Littoral

What's a practical reason many cooperative boards don't allow subletting? - It makes it difficult to qualify for loans or refinance. - It's illegal in many counties. - The insurance rates are higher. - There are no practical reasons to prohibit subletting.

Makes it difficult to qualify for loans or refinance Cooperatives with a high percentage of sublets may not qualify for loans or for favorable rates on loans.

Homeownership Assistance programs in New York include which of the following? - New York City homebuying resources - New York State Housing Finance/Mortgage Agencies (HFA/SONYMA) - New York State resources on housing -NYC homebuying resources, New York State resources on housing, and SONYMA.

NYC homebuying resources, New York State resources on housing, and SONYMA. Resources available to New York home buyers include NYC home buying resources, NYS Housing Finance/Mortgage Agencies (HFA/SONYMA) and New York State resources on housing.

A qualified mortgage is ______. One in which the borrower has a credit score of 780 or higher One that meets stringent CFPB guidelines Only offered by a credit union Only offered by a savings and loan institution

One that meets stringent CFPB guidelines

What is the purchase agreement phrase that wholesalers rely on for their investment strategy? "Ad valorem" "Deal or no deal" "Or assigns" "Quit claim" The wholesaler doesn't own investment properties, but finds deals and resells them (assigns them) to other investors for a fee.

Or Assigns The wholesaler doesn't own investment properties, but finds deals and resells them (assigns them) to other investors for a fee.

What type of IRS deduction can be taken for a vacation home? - Home improvement costs - Loan servicing fees - Points - Property tax

Property tax Property taxes can be deducted for a primary residence, vacation home, or rental property.

When a lease contains an automatic renewal clause, the landlord must remind the tenant of the right to terminate the lease. Section 5-905 of the General Obligations Law governs leases with automatic renewal clauses and states that a _______. - Reminder to the tenant must be given no more than 15 days nor fewer than five days before the period for furnishing the notice of termination begins - Reminder to the tenant must be given no more than 30 days nor fewer than 15 days before the period for furnishing the notice of termination begins - Reminder to the tenant must be given no more than 60 days nor fewer than 30 days before the period for furnishing the notice of termination begins - Reminder to the tenant must be given no more than 90 days nor fewer than 60 days before the period for furnishing the notice of termination begins

Reminder to the tenant must be given no more than 30 days nor fewer than 15 days before the period for furnishing the notice of termination begins Section 5-905 of the General Obligations Law states that landlords must remind tenants of their right to terminate a lease no more than 30 days nor fewer than 15 days before the period for furnishing the notice of termination begins.

What type of investment strategy is most similar to a 1031 tax-deferred exchange? Buy and hold Fix and flip Rolling over funds from one IRA into another Wholesaling

Rolling over funds from one IRA into another The 1031 exchange is similar to rolling over retirement funds the investor rolls over the capital gains from the sale of one property into the purchase price of the next property, deferring (but not avoiding) taxes on that gain.

Bailey, a salesperson, renewed his real estate license right on time 18 months ago. He will need to renew his license again _________. - Immediately - In 24 months - In one month - In six months

Six months

If the seller of a new condominium building wants to change the price of all the units, or all the two-bedroom units, what must the seller do? - No action is needed. - Submit an amendment to the county land office for any price changes. - Submit an amendment to the county land office for any price changes greater than 2%. - Submit an amendment to the county land office if the change is 10% more than the original range.

Submit an amendment to the county land office if the change is 10% more than the original range. The seller can change the prices on any specific unit with no need for an amendment. For instance, one might be sold for $1.5 million and the next for $1.7 million. A seller wanting to change the price of all of the units, or all the two-bedrooms, for instance, must to submit an amendment to the offering plan with the AG.

To claim that an assessment was unlawful, what would the taxpayer need to prove? - That the property had been misclassified for assessment purposes - That the property's assessed value was greater than the property's full value - That the property was assessed at a higher percentage of value than the average of all other properties on the assessment roll - That the property was located outside the boundaries of the town indicated on the assessment role

That the property was located outside the boundaries of the town indicated on the assessment role For a claim of unlawful assessment to prevail, the taxpayer would have to prove that the assessor was working outside of the correct assessment district.

Who will pay the required fees for recording the deed? The buyer The lender The seller The title representative

The buyer The buyer, who benefits most from the recording of the deed, pays recording fees.

Closing issues do occur. Which is a common closing issue? -Either the buyer or seller fails to appear. -The buyer doesn't bring a cashier's check to closing and fails to wire funds. -The seller leaves valuable artwork behind. -The seller refuses to move out.

The buyer doesn't bring a cashier's check to closing and fails to wire funds.

Why is it so important to properly price a property when it first enters the market? -If a property is overpriced from the beginning, the chances of the property selling are not impacted significantly. - Overpricing a property will drive up the price of other properties as well, causing a false inflation. - The first several months are crucial because they're the best chance for the property to sell. - The first several weeks are crucial because they're the best chance for the property to sell.

The first several weeks are crucial because they're the best chance for the property to sell. If this crucial initial time is missed, in effect, the property has missed the market.

Why should you ask potential buyer clients if they need to sell their home before purchasing a new one? If they don't, they're probably wasting your time. Selling their home before purchasing a new one is more work for you and might not be worth your time. Their current home might be a potential listing for you. You won't need to check their credit if they've qualified for a home in the past.

Their current home might be a potential listing for you.

The idea that money gains or loses value over time describes which concept? Inflation Interest Time is money Time value of money

Time value of money Time impacts money in two ways. Money that just sits there loses value over time. Money that earns interest grows over time.

Which of the following will be issued only if title is acceptable and an attorney provides a certificate of title opinion? Chain of title Deed Survey Title insurance policy

Title insurance policy The title commitment comes before closing; the title insurance policy is issued after closing. The commitment says that a title company is willing to issue title insurance under certain conditions. The policy provides coverage for the property.

If you're representing a seller in NYC, where does the binder, which is prepared by the buyer's agent, get sent? To the buyer's attorney to prepare the contract To the escrow officer to prepare the contract To the listing agent to prepare the contract To the seller's attorney to prepare the contract

To the seller's attorney to prepare the contract Outside of upstate New York, the buyer's agent usually prepares a binder, which is forwarded to the seller's attorney, who prepares the actual contract.

Without notice, Carla moved out of her apartment for five months, leaving her belongings behind. She didn't pay rent during her absence, and when she returned for her belongings, her landlord, Petra, who knew Carla was gone but didn't know where, asked her to pay up. Which of the following is a true statement? - Because Petra didn't remove all of Carla's belongings and change the lock on the apartment door, she can't force Carla to pay the back rent. - Petra can pursue a constructive eviction, whereby she presses charges for breach of contract and requires Carla to pay both the five months of back rent and all rents for the remaining months on the lease term. - Petra can sue Carla for abandonment and force Carla to pay not only the five months of rent but damages as well. - Unless Petra tried to find a new tenant to occupy the apartment during Carla's absence, she can't force Carla to pay the back rent.

Unless Petra tried to find a new tenant to occupy the apartment during Carla's absence, she can't force Carla to pay the back rent. In a case of abandonment, the landlord must make an effort to find a new tenant to occupy the property. A landlord who doesn't look for a new tenant forfeits the right to pursue remuneration for unpaid rent.

When must Jed, the sponsor of a new condo project, relinquish control of the board of managers? When 25% of the units are sold When 33% of the units are sold When 50% of the units are sold When 75% of the units are sold

When 50% of the units are sold

What type of pest can be found in new construction and lay their larvae in unsealed wood? Carpenter ants Fire ants Termites Wood boring beetles

Wood boring beetles Wood boring beetles lay their larvae in unsealed wood and can be found in new construction.

Binders create the framework for a contract but may lack specifics, such as ______. Agreement Contingencies Paragraphs Sections

contingencies

Which agency form gives the seller the right to sell without paying the listing agent? Exclusive agency Exclusive right to rent Exclusive right to represent Exclusive right to sell

exclusive agency

Katy's home that was listed for sale was destroyed by fire. Under which of these methods will her listing agreement terminate? Completion Expiration Force of law Mutual agreement

force of law The listing agreement in this situation will terminate based on force of law (destruction of property).

A discount point equals 1% of the _______. Appraised value List price Loan amount Sales price

loan amount

The New York town of Greenville makes development decisions according to its master plan. As time passes, the town occasionally makes amendments to the master plan, a responsibility belonging to the ______. Development board Land use board Planning board Zoning board

planning board The preparation of a master plan is the responsibility of the town's planning board. Any amendments made to the master plan are also the planning board's responsibility.

What's a typical prepaid item that will go into a seller's credit column and a buyer's debit column on a closing statement? - Broker fees - Loan fees - Property taxes - Recording fees

property taxes Prepaid items—such as prepaid taxes—would be a seller credit and buyer debit. Taxes owed but not yet paid wouldn't be prepaid items.

When a buyer is financing the purchase of a cooperative unit, which agreement acknowledges the lender's lien interest in the shares being purchased through the loan? - Alteration agreement - Board agreement - Lease agreement - Recognition agreement

recognition agreement This must be signed by the co-op, the prospective member, and the lender to acknowledge the lender's lien interest in the shares being purchased through the loan. The coop may agree to notify the lender if the shareholder defaults on maintenance fees.

Commercial lease escalation clauses typically do not take effect until after this period of time. Five years One week Six months The "base year," or first year

the base year or first year

What happens when your client asks you to do something that's against the law? - According to the duty of obedience, you must obey, but document the request. - You must break your duty of obedience. - You must obey, but ask your client to sign a disclaimer for your actions. - You must report your client to the authorities.

you must break your duty of obedience Remember that obedience does not mean acting outside the law. Depending on the situation, reporting your client to the authorities might be unnecessary and ill-advised.