Real Estate License Practice Test Questions

An individual brings a lawsuit against a creditor for alleged violations of ECOA and is successful. What's the maximum amount of punitive damages she can be awarded?

$10,000

Keeping our known information in mind (Buffalo's tax rate is $1.14 per $100; total assessed value is $876,000; Gump's assessed value is $117,000; Gump qualifies for $950 in property tax exemptions) what is the amount of tax owed on Forrest Gump's specific property?

$1322.97 *First subtract exemptions from the assessed value of Forrest's property!!!! Then, to get tax owed, multiply the tax rate by the total assessed value of the property minus exemptions.

How much does it cost to renew a broker's license?

$155

A co-op building is charged $150,000 for annual property tax. There are 150,000 issued shares. Allie holds 2,000 shares. How much does she pay in property taxes per month?

$166.67 **PAY ATTENTION TO PER MONTH.

What is the recovery limit for the New York State Lawyers' Fund for Client Protection?

$400,000

If someone conducting in real estate faces a fine for a second infraction, what is the maximum amount that they can be fined by the department of state in New York?

$500. -In New York, the department of state fines individuals a maximum of $150 for the first violation, a maximum of $500 for the second violation, and a maximum of $1,000 for the third violation.

What is abstract of title? What is the chain or title?

-Abstract of title = abbreviated history of the property including info on any grants, wills, conveyances, liens and encumbrances -Chain of title = the entire chronological record of a property's ownership

Voluntary vs. Involuntary Alienation

-Voluntary: the method by which a property is transferred by the current owner to another party through sale or gift. -Involuntary: transfer of title to property without the owner's consent, usually carried out by operation of law (ex. foreclosure)

New construction experts agree that approximately _____ of the total budget should be allocated for advertising costs.

1%

Buyer's Closing Costs (9)

1) Appraisal and credit report fees 2) Inspections 3) Mortgage recording tax 4) Title insurance 5) Attorney's fees 6) Bank fees 7) Recording 8) Mortgage insurance 9) Special (Co-op and Condo fees)

What are a seller's closing costs? (6)

1) Transfer taxes: state and local (.4% in NY) 2) Broker's commission 3) Attorney's fees 4) Recording documents to clear title 5) Satisfy existing liens 6) Special (co-op and condo fees)

What 3 things must be included in a condominium legal description within the deed?

1) legal description of the land where the condo is located 2) The percentage of the common interest that the owner will acquire along with the unit 3) The designation of the condo being transferred as listed in the declaration (this should be filed as specified by the New York Condominium Act)

What is the withholding rate for real estate sellers subject to FIRPTA?

10% of the purchase price -The IRS requires that an amount equal to 10% of the purchase price be withheld and sent to the IRS within 20 days of closing. This amount is set by the Foreign Investment in Real Property Tax Act of 1980. Of course, like with employee payroll withholding, the investor can file a tax return and get a refund if the amount withheld is less than the actual tax bill.

The new laws in New York, state that estates that are more than _____ of the exemption amount limit for that year will be taxed on the entirety of the estate.

105% (anything greater than 100%)

At what age does a child living with his or her parents no longer qualify for familial status protection under the Fair Housing Act?

18

What are the two minimum set-aside options, according to the federal government?

20 at 50, 40 at 60

How much equity in their property must a borrower have before they can request cancellation of their PMI?

20%

How many hours of continuing education does a salesperson or broker need, every two years?

22.5 hours

Single homeowners are exempt from paying taxes on up to ____ of the capital gains from the sale of their home every ___ years.

250,000 every two years.

A New York real estate broker must maintain all one-to-four family transactions for _____ years.

3 years

New York has also imposed law that takes a look back on all gifts made _____ prior to the death of someone whose property was gifted.

3 years

Lisa wants to lease 3,000 usable square feet of office space at an office building with a loss factor of 33%. How much feet will she be billed for?

3,990 square feet. -To solve for Lisa's total square footage, we need to multiply the USF (3,000 SF) by the building's loss factor (33%) and add that result (990 SF) to the USF (3,000 SF) for the answer of (3,990 SF).

Tyrone just submitted a fully completed credit application for a loan. When must the creditor advise him of its determination?

30 days. -ECOA requires that creditors provide their determination whether to extend credit within 30 days of receipt of a completed application.

A New York real estate agent who wants to obtain a broker's license must work under a broker's supervision for _____ hours per week for 50 weeks a year.

35 hours

In metes and bounds terminology, how many measuring rods add up to a chain?

4

According to some industry experts, how many more seller clients could a license holder service for each buyer client they take on?

4 times more

An ARM has an index rate of 3.5% and the margin is 1.5%. What is the fully-indexed interest rate?

5%

Assuming that the dimensions of 50' + 30' + 30' + 20' + 20' + 50' are written correctly, what is the front footage of Perry's property?

50 front feet

Upon issuing a homeowners' policy in the state of New York, how many days does an insurer have to cancel a policy if they provided an insured with specific reasons for the cancellation? (Assuming that the insurer, property, and policy remain in good standing)

60 days

Glenn was denied credit. How much time does he have to ask the reason why and get an answer?

60 days. -If a credit application is rejected and the applicant asks for the reason for the rejection within 60 days of the notice of the rejection, the creditor must disclose the specific reason for the rejection.

A former employee sued his company for patent infringement. He claimed that they were trying to establish a monopoly and that they cost him his life's savings. The jury ruled in his favor and decided the company needed to pay him $20 million. The court chose to use a provision of the Clayton Act called treble damages, meaning that the company had to pay _____

60 million -The Clayton Antitrust Act allows treble damages for private lawsuits where a private party sues a business for violation of antitrust violations that had personal effects, like loss of money. Treble damages are three times the amount a jury specifies.

How much tax credit does 9% LIHTC actually aim to provide?

70% of the qualified basis

What are the real estate education requirements for a broker and associate broker in New York?

75-hour salesperson course and 45-hour broker course

What is a blind ad?

A blind ad does not identify the advertiser as a real estate broker.

What does a due-on-sale clause do?

A due-on-sale clause gives a lender the option to demand the full payment of the outstanding mortgage balance any time after the house is sold or transferred.

Which of these is an example of securitization?

A group of loans is packaged by a lender to be sold to an investor

Other than acting as a licensed agent for both parties to a single real estate transaction, what other type of dual agency possibility exists in New York?

A real estate license holder who also operates in the state as a registered mortgage broker or licensed mortgage loan originator could conceivably represent both parties in a single real estate transaction, serving in a separate capacity for each party.

To prepare for dual agency in the case that an in-house buyer client is brought to a transaction, what should a brokerage that operates primarily as seller's agents do?

A seller's agency brokerage that will operate as dual agents for in-house buyers should disclose that possibility upfront to seller clients and, if they can, get those clients to sign an advance informed consent to dual agency.

What type of lease spans a certain, specific period of time?

A tenancy for years, also called an estate for years, is a lease that only lasts a designated time period.

Real estate agent Mario owns a rental property. He uses a management company to run the day-to-day operations of the property, though he helps with marketing for new tenants. What kind of income is he making, and why?

Active, because he is a real estate agent. Real estate agents get an exception to the rule about passive income and can consider investment property income to be active.

What is the difference between actual eviction and constructive eviction?

Actual eviction stems from a tenant default. Actual eviction stems from a landlord default.

Which of the following is true regarding the statute of limitations?

All claims must be filed prior to the statutory deadline or the legal right to press a claim is barred.

What is the process of paying off a debt/mortgage in regular installments based on a fixed payment schedule?

Amortization

What is the difference between an independent insurance agent and an insurance broker?

An agent has appointments, meaning predetermined relationships, with insurance companies. Brokers do not, and are a third party getting quotes and submitting applications.

Which of the following is true of the perimeter of a property?

An individual line on the property border can be used as an area calculation

What is a blanket unilateral offer?

An offer of subagency to all members of a MLS

Who is an office manager?

An office manager is a licensed associate real estate broker who has chosen to work as an office manager, working under the supervision of a broker.

Who can be the tester in a fair housing lawsuit?

Anyone, whether or not they are a real estate professional, government employee, member of fair housing association or a friend of the victims

What is the local board that hears appeals of taxes?

Assessment Review Board

All of the following statements about back taxes are true EXCEPT:

Back taxes are often forgiven. -Back taxes are unpaid taxes that accumulate interest and penalties

What is the buyer's initial cost of real estate?

Basis

Why do most brokerages fall within the scope of the ADA, and therefore must be extra careful about accessibility?

Because of their location or because they have 15 or more employees

According to the IRS independent contractor test, _____ is when a brokerage does not control what the agent does.

Behavior *Financial: the broker does not control the elements of the agent's job *Relationship: the broker does not provide the agent with an employment contract or employee benefits

What is a loan for more than one collateral property acting as security?

Blanket Mortgage

Which of these conditions require window guards?

Building with three or more apartments with children 10 years or younger

What is the paying of money upfront to reduce a loan's interest rate and monthly payments?

Buydown

Why isn't income made by a C-corp considered to be pass-through income?

C-corps pay a corporate tax; the money doesn't pass through to investors

What should an agent do if a home was built before 1978?

Check local and state regulations for additional lead-based paint requirements

Lionel has a loan, in New York, with a 20% interest rate. What type, if any, of usury law violation did he receive?

Civil only (civil is above 16%, criminal is above 25%)

At the federal level, wetlands are protected by a section of which act?

Clean Water Act

In New York, a realtor can be a part of a contract at _____.

Closing -NOT DURING NEGOTIATIONS. The realtor must refer to a lawyer for the drafting and negotiation of the contract and can be involved in the closing of the contract.

Characteristics of joint tenancy?

Co-ownership in which the parties have an equal and undivided interest in the property; includes the right of survivorship rather than inheritance

Which of the following would cause a termination of a real estate contract?

Completion. The termination of a contract occurs if it is completed (i.e. closed). -Fraud makes a contract avoidable by the lied-to party, but it is not necessarily terminated. Acceptance of an offer would commence the contract, not terminate it.

The government sends you a notice stating that the houses on your road will be demolished to build a new landfill. You are paid fairly for your home and move. The act of seizing your home is called:

Condemnation *NOT eminent domain. Eminent domain is the name of the government's right to take land. The government's act of taking the land in this example is called condemnation. Remember, the ACT is condemnation, and the RIGHT TO DO IT is eminent domain.

What type of loans is private mortgage insurance required for?

Conventional loans where the borrower has less than 20% equity in the property

Which of the following is not a holding cost in property flipping strategy?

Cost of repairs -Holding costs = monthly expenses. These are things like insurance, taxes and interest. -Repair costs in a flip have nothing to do with how long a property takes to sell.

What kind of collateral is used to secure a bridge loan?

Currently owned real estate, NOT real estate being purchased

Which of the following is considered in a home's curtilage?

Deck -Curtilage is any property that belongs to the primary home on the land. This property must be attached or located very close to the primary house. Requirements for curtilage are close distance, fencing enclosing the curtilage area and the home, residential use, and privacy from general observation.

A legal document that transfers ownership of property is called a:

Deed -A deed is an actionable legal document, whereas a title is an abstract acknowledgment of ownership.

Establishing liability by alleging certain housing practices had a discriminatory effect even when there was no evidence of a discriminatory intent is known as:

Disparate Impact Theory

If a lender refuses to make Harry a 30-year mortgage just because Harry is 85 years old, they will have violated:

ECOA

What does EPCRA stand for and what is it?

EPCRA stands for Emergency Planning and Community Right-To-Know Act. This helps to ensure that communities are prepared for any potential environmental emergencies and that members of those communities have fair and easy access to information regarding contaminants and other environmental hazards.

Tyler is entering into a lease in a mall for his sporting goods store, and he gets his landlord to agree not to lease any other place in the mall to another sporting goods store. What lease provision was most likely used?

EXCLUSIVE use clause; not just a use clause. -If one tenant has an exclusive use clause, the other tenants will have a use clause that prohibits them from making a use identified in the exclusive use clause.

What is created by operation of law when land is divided and there is a longstanding, apparent use that is reasonably necessary for use of the dominant tenement?

Easement by implication

All of the following are legal factors considered in performing a site analysis EXCEPT:

Encroachment -Legal description, zoning, and restrictive covenants are all considered

True or False: A REIC provides opportunities for investors to purchase a single mortgage.

FALSE - A real estate investment conduit (REIC) provides opportunities for investment via the purchase of securities backed by a pool of multiple mortgages.

True or False: Over the course of an amortized loan's life, the borrower's payments will increasingly be allocated towards interest payments.

FALSE - Amortized loans are front-loaded with higher interest payments, because the amount paid in interest is directly related to the principal balance. As the principal decreases, the amount going towards interest will decrease.

Why should subdivision developers consider FHA loan requirements before building?

FHA lenders won't approve loans on buildings that don't meet their requirements

TRUE OR FALSE: A business loan is covered by TILA.

False: Loans that are to be used primarily for business purposes loans are not covered by TILA. TILA does cover the following if the loan is to be repaid in more than four installments or if a finance charge is made: real estate loans; loans for personal, family, or household purposes; and consumer loans for $25,000 or less.

TRUE OR FALSE: Mutual consent must be written down in an agreement to be valid.

False: Mutual consent can be expressed or implied by actions. Either way, there must be evidence of it.

True or False. The gross rent multiplier (GRM) is a ratio of the price of a real estate investment to its annual rental income, accounting for expenses such as property taxes, insurance, and utilities.

False: The gross rent multiplier (GRM) is the ratio of the price of a real estate investment to its annual rental income BEFORE accounting for expenses such as property taxes, insurance, and utilities.

Voidable contracts can never be valid contracts.

False: Voidable contracts are potentially valid contracts where at least one party has the option to rescind the contract.

The guidelines that determine if a conventional loan is conforming or non-conforming are set by:

Fannie Mae and Freddie Mac

Many consumer rights are protected under the:

Gramm-Leach Bliley Act -The Gramm-Leach Bliley Act was enacted in 1999 to expand and modernize protections for consumer rights. The law provides regulations that financial institutions must adhere to, from providing privacy policies to requiring authorization to view consumer credit reports.

Which of the following is an eligibility requirement for Ron to be able to purchase a home under SONYMA's first-time buyer program?

Have good credit standing with a minimum 620 credit score. -SOMYA requires that an applicant has credit history that doesn't reflect debt. Although it doesn't specify a score, it's best practice to have a score of at least 620.

What happened in the Johns vs. Mayer Supreme Court case?

Held that Congress could regulate the sale of private property to prevent racial discrimination

Home A has a cap rate of 8.3%, a $10,000 NOI, & a listing price of $120,000. Home B has a cap rate of 6.7%, a $5,000 NOI, & a listing price of $75,000. Home C has a cap rate of 7.8%, a $7,000 NOI, & a listing price of $90,000. Based off this info alone, which property is the best investment?

Home A -A higher cap rate signifies that Home A is the best investment opportunity.

If the seller decides to terminate the listing early, what should the broker do?

If the seller decides to terminate the listing early, the broker should immediately pick up signs, stop advertising, remove the property from MLS, etc.

Which of these describes loan flipping?

In loan flipping, a lender refinances the loan with a new long-term, high cost loan. Each time the lender "flips" the existing loan, the borrower must pay points and assorted fees.

Does the New York Zoning Board of Appeals have original jurisdiction?

In some circumstances. -The board does not have original jurisdiction except in the case of issuing special use permits. Special use permits are issued for use of a property that has been approved in the zoning plans but requires other conditions to be met first.

How does an assessor determine market value using the cost approach?

In the cost approach, the property's value is equal to the cost of land, plus total costs of construction, less depreciation

Which of the investors' needs is the internal rate of return most likely to meet?

Ina is looking for a property that will produce a return quickly through its cash flow.

Gary has owned and lived in his home for 20 years. He needs a new roof, and the furnace and hot water heater are near the end of their functional lives. What other requirement must Gary meet to qualify for Value Depreciation Tax Deductions?

Income Activity -To qualify for value depreciation tax deductions, a property owner must prove ownership and have income activity such as rental income. The property also needs repair from normal wear and tear and use.

Ron has decided to purchase a target area home. Under the income price limit, what two other factors does SONYMA consider to place the cap?

Income and number of people in household. -The income price limit is determined based on how many people live in a home, the area, and gross annual income.

It's 2015 and Ben just finished a short sale on his property resulting in the bank forgiving a $50,000 deficiency. What should Ben be worried about?

Income taxes. -The facts indicate that the bank has forgiven the deficiency, which means that Ben will probably have to recognize the $50,000 forgiven as income on his tax return. Since its 2015, the Mortgage Forgiveness Debt Relief Act of 2007 will not help unless Congress extends it.

How are REIT dividends taxed?

Investors pay taxes on dividends at their income tax rate

A pure discount loan occurs when the loan _____.

Issuer repays the face value of the note at maturity. A pure discount loan is one where the issuer sells a bond to an investor at a discount. The issuer repays the face value of the note at maturity. No interest is earned over the term of the bond.

Which of the following is NOT an advantage of a home inspection contingency during real estate negotiations?

It ensures the home is free from defects. -A home inspection doesn't guarantee the home is free of all defects. Some issues may not be apparent without destructive inspections or skill beyond the home inspectors qualifications and experience. The home inspector can identify many major potential problems and educate the buyer about the home construction and equipment.

Why can't a local government ban group homes from residential zones?

It violates the Fair Housing Act

Which of the following is located on page two of the Housing and Urban Development (HUD) Statement?

Items required by the lender to be paid up front. -Page two of the HUD statement, also called the settlement statement, lists the broker fee, items paid related to the loan, items required to be paid upfront by the lender, reserves deposited with the lender, title and transfer charges, and government recording.

Given that degree of control is one of the primary factors in determining whether an worker is an independent contractor or employee, why aren't most real estate agents categorized as employees of their sponsoring broker?

Knowing that state regulations demand a high degree of control and supervision over real estate agents by the sponsoring broker, the IRS carved out a special "control allowance" that permits those real estate agents to be categorized as independent contractors.

The precise measurement process that yields information about a property's size, boundary lines, and surface features is called a:

Land Survey

What is a unique aspect of undeveloped land in comparison to other types of investment properties?

Land cannot be depreciated on income taxes

Which of the following real estate disclosures is not required by state or local laws?

Lead Paint - this is federal law. -Flood zone, mold, and radon disclosures are local laws.

Which of the following is incorrect about a contract for deed?

Legal title is transferred upon execution. **The legal title is not transferred until all payments have been made. -Payments may be made in installments, interest may be charged, and it may contain a balloon payment.

The New York State Department of Financial Services requires _____

Licensed real estate professionals to register mortgages -All mortgages need to be recorded with the New York State Department of Financial Services

Freehold estates include:

Life Estates -The distinctive characteristic of freehold estates is that they endure for an interminable duration.

When advertising real property online, which of the following information is NOT required?

Listing price is not required. -The location of the property, the name of the firm, and the jurisdiction of licensure MUST be included.

What is a conventional mortgage?

Loan that is not insured or guaranteed by a government entity and usually requires borrower to have private mortgage insurance

Which of the following best describes bridge loans?

Loans are made for shorter periods of time with higher interest payments. -Bridge loans offer short-term financing to borrowers, but come with higher interest rates compared to long-term financing options such as mortgages.

What is the smallest subdivision in a lot and block survey system?

Lots are the smallest subdivision of the lot and block system. The next largest is a block, followed by a plat.

What is the name of the service that exposes a property to a larger audience of buyers and also offers advantages to sellers, brokers, and buyers?

MLS

Mary is interested in buying a property upon which a house has recently been demolished, and the land has been leveled out with a bulldozer. But Mary is afraid that the land plot may have changed due to the leveling. Evaluate Mary's worry.

Mary doesn't need to worry. Land is immovable, meaning its exact geographic location or size will not change, despite dramatic physical improvements. This is because one of land's characteristics is immobility.

Which of the descriptions below is MOST LIKELY an industrial property?

Mitch's tenants are generally low maintenance and their rent per square footage is higher than that of other investment properties

Which of the following is an investment financing cost?

Mortgage Interest. -Financing costs include the costs associated with a mortgage. Capital expenses are a class of long term expenses that improve the value of the home. Property taxes and insurance are operating costs.

To compare mortgage banks to commercial banks, mortgage banks are regulated:

Mortgage banks are regulated less than commercial banks because they are not lending the funds of depositors.

Which of the following establishes a National Register of Historic Places?

National Historic Preservation Act (NHPA)

If a person lives in an area in the state of New York that is deemed to be high-risk, which of the options is a special insurance options can they explore to provide coverage for their home?

New York Property Insurance Underwriting Association (NYPIUA). -Property owners who are unable to purchase insurance through traditional methods in the state of New York are offer special insurance options through the New York Property Insurance Underwriting Association (NYPIUA), National Flood Insurance Program (NFIP), and the Coastal Market Assistance Program (C-Map).

Your property has been reassessed every year for the last ten years. Your friend Dracula who lives in the next town over has not had his property reassessed for 8 years. How is this be possible?

New York does not require routine reassessments.

How does a Property Condition Disclosure Statement differ from a listing agreement or buyer agency agreement?

New York law requires the exact wording to be used on the Property Condition Disclosure Statement as opposed to listing agreements and buyer agency agreements, which are free form.

Alicia received a conveyance of property by special warranty deed from Beth. John shows up at Alicia's new home and claims the mineral rights to her property based upon an inheritance that occurred over twenty years ago. This was before Beth even owned the property. What covenant has been breached?

None. -Alicia received a special warranty deed. John's asserted claim did not come into being because of Beth or while Beth owned the property so no covenants have been breached.

Harold is purchasing an apartment complex but changes his mind. His friend agrees to follow through with the contract, so his friend and the seller agree to enter into a new contract and release Harold of all obligations to the contract. What type of contractual agreement is this?

Novation -Novation is a form of contract assignment. In this type of assignment, a brand new contract replaces an original contract, and a new party replaces one of the old parties in the original contract. In this case, Harold's friend replaces him in the purchase contract, and Harold is removed from all obligations of the original contract

Which of the following is NOT a feature of real estate?

Only an owner has the right to use the property. Someone other than the owner may have the right to use a portion of the property because an easement has been granted OR when a property is leased to a tenant.

Which of the following is the correct formula for the total cash flow statement?

Operating Cash Statement + Investment Cash Statement + Financing Cash Statement -The cash flow statement is composed of three sub component cash statements. Operations cover day-to-day income and expenses associated with the property. Investing covers long term factors such as major improvements on the property. Financing covers higher level business cash flows commonly associated with larger investment businesses that use stock or shares to raise equity for investing. The size and scope of each statement will vary based on the complexity of the investment.

What is the bundle of rights (5)?

Ownership of land with the following legal rights of ownership: 1) possession 2) quiet enjoyment 3) control (alter/fix) 4) disposition (transfer) 5) exclusion (no trespassing)

What happens to the monthly payments for a variable rate mortgage when interest rates go higher?

Payments stay the same. -Variable rate mortgages have monthly payments that are fixed. When interest rates go higher, more of the monthly payment goes towards the interest.

Which of the following statements is true about personal property?

Personal property can be tangible or intangible and can be conveyed by a bill of sale or bequest.

The scope and purpose of a real estate contract includes all of the following except:

Personal property. A bill of sale would be used to sell personal property. -The scope of a real estate contract includes the sale of the land, the fixtures, and the home, which is considered a fixture to the property.

There are ten units in a condo community. Pierre owns one unit. He has undivided interest in the common areas. What does that mean?

Pierre can use all of the common areas.

_____ is the selling or purchase of a home beyond someone's affordability bracket.

Predatory lending -Predatory lending is when a lender sells a mortgage that is above the buyer's financial capabilities.

What do usury laws do?

Prohibit lenders from charging borrowers excessively high rates of interest on loans.

What are two types of taxes required in New York?

Property and franchise tax. -Both franchise and property taxes are required in New York. Any corporation doing any sort of business activity in the state must pay the franchise tax, and all people owning property must pay property tax. Property taxes are billed out four times a year for property under $250,000 and two times a year for property valued over that.

Why are fee structures a concern in property management?

Property managers set their own fee structures. They could agree to increase their prices and monopolize the market; this is why antitrust laws are important.

Which of the following expenses should an investment property seller be able to give accurate figures for?

Property taxes. -Property taxes are based on the assessed value of the home, and should not change with a change in ownership. Insurance and finance costs will vary based on the profile and choices of each party.

What is the name of the federally mandated pamphlet that must be given to renters and buyers of homes built before 1978?

Protect Your Family from Lead in Your Home

What is NOT one of the objectives of the SAFE Act?

Providing the consumers with information on the employment history and disciplinary actions against MLOs for a low fee. -The SAFE Act is meant to provide consumers with information on MLOs for NO FEE, aggregate and improve information flow between regulators, provide accountability and tracking, and enhance consumer protections

The maximum possible VA loan amount is based on what guidance?

Qualification criteria set by the lender. -There is no maximum dollar amount, but the borrower must still meet the lenders criteria for the loan.

Which of the following is a contract implied in law to avoid an injustice?

Quasi-contract

What is insulation measured?

R-value - the capacity of insulation to resist heat flow

All of the following are types of insulation EXCEPT:

R-value insulation *Blanket insulation, sprayed foam insulation, and blow-in insulation are all types of insulation

What is delivery and acceptance and is it required for a deed to be executed?

REQUIRED actions for the proper execution of a deed, involving delivery of the deed by the grantor with the intention of transferring title and acceptance by the grantee receiving the property

What type of timeshare does not give you any ownership interest over the property but just lets you use the property for a specific period of time?

RTU Contract - the right to use contract doesn't convey 'ownership rights' but rather gives the purchaser a contractual right to use the property for a specific term of years.

Which of the following people would benefit most from a variable rate mortgage versus an adjustable rate mortgage?

Rafael who is a hard worker and is on a fixed income, so he can only afford so much per month. -Rafael would benefit most from a variable rate mortgage as his monthly payments will always be the same, so he can plan accordingly.

Which of the following is NOT TRUE about fixed-rate mortgages?

Refinancing is not allowed for fixed-rate mortgages.

When do upstream owners have an advantage over downstream owners concerning water rights?

Regarding natural uses in a riparian system. -In a state with riparian rights, upstream owners have the right to use all the water necessary for their reasonable natural use even if that means downstream owners won't have enough water.

Which of the following is NOT true about rent control?

Rent control is determined by socio-economic standing. **It does put limits on rent raising, cover various types of property, and exists in some cities but not in others.

Which of these acts includes amendments which enabled the EPA to address environmental problems that could result from underground tanks storing petroleum and other hazardous substances?

Resource Conservation and Recovery Act (RCRA)

Once a contract has been rescinded, and each party returns to the other any consideration that has been tendered, what has occurred?

Restitution -Restitution is rescission where the contract is undone, all obligations terminated and all consideration returned. Cancellation is termination without undoing any of the acts that have been performed under the contract.

What are the 3 main characteristics of real estate investment?

Risk, liquidity, leverage

Section 530 of the Revenue Act of 1978 is known as:

Safe Harbor - a place of refuge for those industries Congress felt were victims of an overly aggressive IRS practice of attempting to reclassify independent contractors as employees.

This act is legal for anyone to do in a contract, as long as the person who completed the original contract is authorized to do so:

Scrivening -Scrivening is the act of filling in the blanks, and would not be an issue unless the person who drafted the original isn't allowed to do so.

What do you call the process undertaken pursuant to the National Historic Preservation Act concerning assessment of a proposed project involving a property listed on the National Register of Historic Places?

Section 106 Review

Which of the following is NOT true regarding Megan's Law in New York?

Sellers and listing brokers have the duty to research or disclose information from the state's sex offender database.

Square footage is most commonly used in real estate as way to measure the:

Size of a building

What does SCAR stand for?

Small Claims Assessment Review

What is one reason some listing agreements contain language that addresses how to handle subsequent purchase offers?

Some listing agreements contain language that addresses how to handle subsequent purchase offers because that practice, while permissible, can create additional liability exposure for the seller.

What type of policy is generally accepted by lenders when a single-family property is mortgaged in New York?

Special-Form Policy (HO-3) **HO-1 and HO-2 not accepted.

What is the difference between a general and specific lien?

Specific liens apply to specific property only, whereas a general lien applies to real property and personal property that may be sold to satisfy a debt (everything the person owns).

What is SONYMA?

State of New York Mortgage Association - NY State organization that offers loan programs designed to make housing affordable for lower-income households

Changes that went into effect regarding New York real estate law beginning January 1st, 2011 include adding salesperson to the definition of agent and which of the following?

Taking unimproved property out of the definition of residential real property. -Changes in the New York real estate law went into effect on January 1st, 2011. Specific changes include adding a salesperson to the definition of an agent as well as taking out unimproved property in the definition of residential real property. Residential real property means one to four-family dwellings including condos used for residences. The disclosures above are meant for residential real properties.

An area that the federal government has deemed 'economically stressed' is called a _____

Target area. -A target area is an area that has faced economic hardship and that the state and federal government is trying to revitalize with job creation and improving the housing market.

Whose name will NOT appear on a management agreement?

Tenants currently occupying the property

Why should an investor buying unimproved land consider the land's "highest and best use," even if they don't plan to develop it?

The "highest and best" use will determine the land's value to future buyers.

Which of the following statements is true of the annual percentage rate?

The APR takes into account the cost of financing closing costs. -The APR is calculated according to guidelines set forth in Regulation Z and express the annual cost of financing. Therefore, it is always calculated the same way by lenders. This calculation includes the costs of including additional costs at closing into the final mortgage. Adding closing costs will increase the APR above the base rate offered by the lender.

The Supreme Court case of Jones vs. Alfred H. Mayer Company involved the interpretation of which of the following laws?

The Civil Rights Act of 1866. The court held that the law applied to both public and private actions.

What is the New York fair housing law called?

The Executive Law (Human Rights Law) -New York enacted the Executive Law (Human Rights Law) to add additional protected classes in addition to the federal fair housing law protected classes.

Which is NOT one of the four initiatives under the FHIP?

The Federal Testing and Protective Initiative is NOT one. The four main initiatives that fall under the Fair Housing Initiative Program (FHIP) are: 1) the Fair Housing Organizations Initiative (FHOI), 2) the Education and Outreach Initiative (EOI), 3) the Administrative Enforcement Initiative (AEI) 4) Private Enforcement Initiative (PEI).

One year ago, the Knitty Gritty's assessed value was the same at $243,000, but it's full market value was only $220,000. What is the problem with this scenario?

The LOA exceeds 100%. LOA can never be greater than 100%.

What is the purpose of the assessment review board?

The assessment review board hears complaints from taxpayers and holds the power to change assessments.

A business address of a brokerage needs to be changed. Who is responsible for making this change?

The broker is responsible for changing a business address (and paying the fees).

Which of the following is the BEST example of a legally valid contract?

The buyer and seller are both of sound mind and over the age of 18. -The five essential elements are legally competent parties, mutual consent, lawful objective, consideration, and adherence to the statute of frauds. The buyer and seller being of sound mind and over the age of 18 illustrate legally competent parties.

How is homeowner's insurance typically paid at closing?

The buyer pays the first year's premium at closing. -Typically the buyer pays the first year's insurance costs at closing. While this is the default position, everything is negotiable. The seller may assist with funding the buyer's insurance policy. However, the seller will have a separate insurance policy that has already been paid for the year. They will instead receive a rebate from their insurance company for the unused portion rather than transfer the insurance to the new owner.

Which ratio looks at your total liabilities or total debts?

The debt to equity ratio takes a look at your total liabilities compared to your equity.

Which of these is NOT a way that a deed restriction can be terminated?

The deed restriction is dissolved when the house is sold. *Deed restrictions stay with a property until they are ended.

Which of the following is TRUE about the New York State Disclosure Form?

The form covers the sale and lease of all residential real estate property

Why is the irrevocable consent form important in the practice of real estate?

The irrevocable consent form ensures that out-of-state licensees can be tried for license violations by a New York court.

Which of the following is a source for a currently rented property's rent income?

The lease.

Which of the following is a disadvantage of a life estate?

The life estate interest is difficult to sell to third parties. -It is very hard to sell a life estate because the purchaser only owns the property for the life of the original life tenant.

Agents can run criminal background searches on potential clients. The online search typically includes:

The online search typically includes a criminal background search, sexual offender search, and a search of past judgments, bankruptcies, and court records.

In the event of a listing agreement expiration with the owner obtaining a subsequent broker, how is the commission broken down with the original and subsequent broker?

The owner gives the subsequent broker their share of the commission, and then if the original broker's stated commission is greater than that of the subsequent broker, the difference will go to the original broker.

What is a pure discount loan?

The principal amount is repaid at some future date, without any periodic interest payments -borrower promising to pay a certain sum of money in the future in exchange for borrowing money today. The investor, or note-holder, doesn't receive any interest payments until the bond is redeemed at maturity. -ex. Jayesh is issuing a pure discount note by borrowing $100 today and promising to repay $150 in five years.

How can a utility company use a railway right-of-way to service a railroad on private property?

The railroad company grants the utility company an easement in gross.

Which of the following statements is TRUE about forced-air systems?

They are capable of distributing both hot and cold air using the same ducts

What is TRUE about capital gains taxes?

They are taxes on the profit a person makes when they sell their primary residence.

What can happen to a development that falls out of compliance during the compliance period?

They lose their tax credits including retroactively

If a property has a conditional deed restriction, what happens if the property owner violates the deed restriction?

They lose title to the property. Conditional deed restrictions revert the title to the previous owner if they're violated.

How are real estate agents paid for their services?

They receive an amount set by agreement with their broker after the broker is paid at closing (not necessarily a split).

Which of the following reasons explains why umbrella insurance policies can be competitively priced?

They require all underlying policies to have higher coverage limits than the minimum requirements and aren't paid out as often as other insurance products.

Jeff manages rental duplexes in Poughkeepsie that have just been renovated to include new amenities. Jeff is in a hurry to get the duplexes on the market, so he prices each duplex without looking into Poughkeepsie's rental market. Analyze if this was a smart move, and why or why not.

This was NOT a smart move; Jeff should have researched his rental market rate so he could effectively market and attract profitable tenants.

How does a bank typically end up with REO property?

Through an unsuccessful foreclosure sale -A bank will usually only acquire the property at foreclosure by placing a credit bid when no one will bid high enough to pay off the loan and related expenses.

What is the relationship between the Civil Rights Act of 1968 and the Fair Housing Act?

Title VIII of the Civil Rights Act of 1968 is also known as the Fair Housing Act.

In real estate sales transactions, what services do title agents provide in addition to managing the closing?

Title research and insurance services. -Title agents research the title to ensure it is free of defects that would hinder the sale of the property as well as offer insurance in case a future claim against the title comes up.

What was the purpose of the Volckler Act?

To limit the bank's ability to get involved in risky trading. -Prohibits banks from using their own accounts (customer funds) for short-term proprietary trading of securities, derivatives, and commodity futures, as well as options on any of these instruments -Prohibits banks from risky trading to their own gain instead of the gain of their customers.

How is an amendment used in a real estate contract?

To make changes to the terms of an original contract. -An amendment is used if something needs to be changed or revised in the original contract, such as extensions or change in terms. -It does NOT just add support or documents to the original contract.

Which of the following is the BEST description of a contract for deed?

Upon completion of sale, the seller keeps the title. The buyer gets the title after a certain amount of payments over a period of years.

Referee's Deed

Used to convey real property sold pursuant to a judicial order in an action for the foreclosure of a mortgage or for partition. It is a deed that contains no covenants or warranties, though ownership is implied.

What is the difference between a bargain and sale deed with covenants and one without covenants?

WITH COVENANTS: deed in which the grantor warrants or guarantees the title against defects arising during the period of his or her tenure and ownership of the property but not against defects existing before that time. WITHOUT COVENANTS: a deed without any warranty against encumbrances; only implies that the grantor holds the right to convey title

With forced-air systems, furnaces typically use any of the following as heating sources EXCEPT:

Water -Gas, electricity, and oil are all used.

When must the lender provide the borrower with an Initial Escrow Statement?

Within 45 days of loan closing (settlement) -RESPA and Regulation X require lenders to provide an Initial Escrow Statement within 45 days of settlement.

Do apartment sharing agents and apartment information vendors need a license?

YES

Can an attorney act as an escrow agent?

YES - An escrow agent can also be an attorney or closing agent. Title services are offered by title agents, who may or may not also be attorneys. An escrow agent may provide services separately from an agent performing title services.

Kelly is in the process of buying a house. The seller has performed some of the required duties by the required date, but not all of them. Can Kelly discharge the contract?

Yes, partial performance is a valid reason for a party to discharge a contract

Your sister just got a new job and she doesn't have time to lease out her rental property. You decide to help her out, even though you won't receive any compensation, because you're a good sibling. Apply your knowledge to determine which of the following is TRUE.

You are NOT a property manager because you are neither receiving compensation nor entering into a property management employee contract. You ARE being a nice sibling.

To qualify for a New York real estate salesperson license, you will need to meet the following requirements EXCEPT:

You must be a resident in the state of New York. -The New York real estate licensing law requires that all applicants for salesperson and broker licenses provide legal presence within the United States. Living in the state of New York is not a requirement for licensing.

When determining a listing price, you may have to remind your client that:

Your client's emotional attachment to their home could skew their vision of the property's value. Remind them that their original purchase price is irrelevant, that costs of improvements do not always correlate with an increase in value, and that you only get the "new listing" interest factor once.

All of the following are physical factors considered in performing a site analysis EXCEPT:

Zoning - Zoning is a legal factor. -Size, shape and encroachments are all physical factors that are considered in a site analysis.

An REO property is a:

a bank-owned property seized through the foreclosure process.

Ben is obtaining FHA financing. Which of the following may be his lender?

a bank. -The FHA insures loans provided by its approved lenders, but does not loan the money itself.

What is the capital reserve budget?

a budget for variable expenses

What is a due-on-sale clause?

a clause in a mortgage that makes the entire loan balance due when a property is sold; also known as the alienation clause

What is a broker's agent and do they act as subagents of the client?

a cooperating agent from a brokerage firm not affiliated with the listing or buyer broker but who is assisting that broker by finding a buyer or a property for that broker's client; has fiduciary obligations to the client but does not operate as a subagent of the client

What is a deficiency judgment?

a court ruling against a debtor who defaulted on a loan and whose secured property was insufficient to repay the full debt.

Which is likely the remedy for an immaterial breach?

a credit or repayment to the wronged party -An immaterial breach is a partial breach of contract. Usually, when this occurs, the courts will require the party of wrongdoing to repay the wronged party for the partial breach of contract.

In Rem means...

a legal action directed at a property; as opposed to a person

What is a condominium declaration?

a legal document for creating a condominium that includes descriptions of the property, common areas, ownership units and terms and conditions, as well as acceptable uses of the residence; also known as a master deed

Gary has a home built on a half-acre lot, which was appropriate for his zone when he bought the home. A few years later, zoning regulations changed and now the smallest buildable lot is his neighborhood is one acre. Gary was allowed to keep his home as it is. What is this an example of?

a legal, nonconforming use

What is a purchase-money mortgage?

a mortgage issued to the borrower by the seller of a home as part of the purchase transaction. Also known as a seller or owner financing, this is usually done in situations where the buyer cannot qualify for a mortgage through traditional lending channels. ***wrap-around mortgage

What is a package mortgage?

a mortgage where personal property is financed with real property as a package

What is an existing home warranty in real estate?

a one-year protection on homes that are not newly built. -An existing home warranty is the coverage a buyer can purchase when buying an existing home from a seller that covers major systems and appliances.

In loan fraud, flipping involves buying a property and then quickly reselling it for a lot more money with a loan, using

a phony appraisal and a straw buyer

What is the management proposal?

a plan that the property manager creates for managing the property including an analysis of the market and the financial standing and operating budget of the property

Another name for a site plan is:

a plot plan

What conditions must be met to be eligible for the mortgage income tax deduction?

a primary residence owned by the taxpayer, with the loan secured by the home

Which of the following home sellers is most likely to request their property not be listed on the MLS and why?

a professional athlete for reasons of security and privacy

A property manager who specializes in making sure that a property performs well financially is:

a property asset manager -A property asset manager, also referred to as a real estate asset manager, works in a distinct area of the property management field. Their duty is to evaluate that a property is performing well financially. They view the property as an investment determining if expenses can be lowered and rents increased, therefore providing the owner with a return on their investment.

What is LTV?

a ratio of debt to value of property

Which of the following is an example of an executory contract with a set end date?

a rent-to-rent lease where the tenant executes an option to buy the property

What is the mortgage contingency clause?

a section of the sales contract that makes the sale contingent on the buyer obtaining an adequate mortgage loan

What is an option in a contract?

a term that gives one party the right to perform a non-obligatory action within a time period (e.g. terminating a contract or the right of first refusal)

What is a marketable title?

a title that is free from significant encumbrances or defects that might otherwise prevent the purchaser from enjoying or selling the property in the future

What is an Alteration Agreement?

a written agreement that is signed by co-op shareholder tenants prior to any renovations, modifications, repairs or alterations

Which of the following factors helps determine the amount of the VA funding fee?

active duty service -The VA funding fee is determined based on duty status, disability status, down payment, and number of VA loans.

Prior to January 1, 2011, which of the following was NOT permitted under New York State law...?

advanced consent to dual agency

When can a taxpayer start a tax certiorari?

after exhausting all forms of administrative review -Taxpayers can initiate a tax certiorari if they are still unsatisfied after both speaking with the assessor and filing an official complaint with the assessment review board.

When is agency by estoppel typically created?

after the actions of the agent have already occurred

Which of these players in the secondary market creates mortgage-backed securities?

aggregator

Under the new regulation, when a seller gives permission to the broker to submit the property on MLS, the seller is authorizing the broker to make a blanket unilateral offer of/or ______ to all other members.

agree to accept or reject subagency

What is a recognition agreement?

agreement between the lender, the co-op, and the shareholder that recognizes the rights of the lender who finance the shareholders

A provision in the mortgage contract that triggers the payment in full of the loan upon the sale or conveyance of the property is known as a(n):

alienation clause

Joe wants to finance the sale of his personal home to Nancy. Which of the following parts of Joe's mortgage agreement would prevent him from doing this?

alienation clause *An alienation clause would trigger the full balance to be due when the property is sold, removing seller financing as an option for this transaction.

During a real estate transaction, to whom is the appraisal important?

all parties involved - buyer, lender, and seller

What area of the contract will inform the property manager about the amount of costs they may incur without consulting the owner?

allocation of costs

Jami is looking to purchase a warehouse that is close to her business' headquarters. Which term best defines Jami?

amenity purchaser

What document does SEQRA require some proposed properties to create before the development can go forward?

an Environmental Impact Statement

Which of the following contain the basic elements of antitrust violation?

an agreement / between competitors / that poses a restraint / and the restraint is unreasonable

What is a land lease?

an agreement where the owners of a condo, co-op, or commercial building do not own the land their building sits on. Instead, they rent it from the landowner.

Which of these is an example of a rider?

an amendment that states that the contract is contingent on the sale of the buyer's current property. *A rider is an amendment to a contract. It could change some terms of the contract, or it could make the contract contingent on an appraisal price or some other situation.

Who does a sponsoring broker supervise?

an associate broker and/or salespersons

What gives the mineral estate the right to make reasonable use of the surface?

an easement

Which of the following things CANNOT be depreciated?

an engineer's primary residence. -Personal property, like primary residences, cannot be depreciated. Tangible property used for business purposes can.

What is a land patent?

an instrument that conveys public land to an individual

What is a pre-application and fee agreement?

an optional form used by mortgage brokers to communicate fees and make required disclosures to loan applicants

Which of the following is NOT an example of a boot?

an undeveloped property that is exchanged for a developed property

Price per square foot reflects the:

annual rental rate of the property

Which of the following is the BEST definition of a latent defect?

any defect that is visually undetectable in the course of a reasonably diligent inspection.

What is a qualified fee estate, and what are the two types?

any estate conveyed by a grantor with a condition attached to it (also known as a fee simple defeasible state). Two types are fee simple determinable and fee on condition.

What is the act of setting aside an amount of money to be used for a specific purpose?

appropriation (taxes)

When it comes to property management requirements in New York, many companies _____.

are unaware of the laws and do not maintain a license.

The United States Department of Agriculture defines rural areas as _____.

areas with populations less than 35,000

Which of the following ISN'T a responsibility of the office of the receiver of taxes?

assessing properties for taxable value. -Their responsibilities only include doing collections for a municipality, sending out tax bills, and some accounting functions

The United State Department of Agriculture Single-Family Housing Guaranteed Loan Program provides _____.

assistance to lenders by guaranteeing 90% of the loan.

Which of these is subject to change in a variable lease?

base rent

All persons with an ownership interest in the property must:

be named in the listing agreement and sign the document

Why does the Uniform Commercial Code regulate loans for cooperative shares?

because cooperative shares are considered personal property -Because the buyer of a cooperative apartment isn't buying real property, they won't use a mortgage for financing. Instead they will take out a loan regulated by the Uniform Commercial Code, which regulates the sale and transfer of personal property.

Why is as-of right zoning sometimes controversial in big cities?

because neighborhood stake holders don't get a say in big developments in their area. -As-of right zoning denies neighborhood stakeholders, including community boards, an opportunity to give input to even out-of-scale developments so long as they are within the size regulations of the zone. Neighbors can lose light and air, and the character of the neighborhood can be changed.

Why do most sellers find buyers with pre-approvals more appealing than buyers with pre-qualification?

because pre-approval is a more rigorous process, indicating more about a buyer's ability to get a loan

Why is it in a mortgage broker's best interest to present clients with appealing, low-interest loan options?

because they are paid on commissions based on loan approval

When should a seller complete and sign a Property Condition Disclosure Statement?

before any offers come in

What size is the average census tract?

between 2500 and 8000 people

A ____ gives a deed in lieu of foreclosure, and a ____ receives it.

borrower, lender -A deed in lieu of foreclosure is a deed given by a defaulting borrower to the lender, which the lender accepts in place of pursing foreclosure.

What MUST you have to be a property manager in New York State?

broker or real estate salesperson license

Which of these is NOT something zoning regulates?

building code. They DO regulate lot size, density and height. -Building code and zoning regulations are two separate, but complementary, parts of land-use regulations.

In a triple-net lease, the expenses that a tenant must pay:

can be fixed (taxes/insurance) and variable (maintenance)

BTU is the measurement unit of:

capacity of heating and cooling units

The cash that an investment generates after accounting for the operating expenses, debt service, and taxes associated with the enterprise is called:

cash flow - technically ATCF

The elements of DUST (demand, utility, scarcity, and transferability) describe the:

characteristics that make real estate valuable

Which of these is a reason the seller might not receive the entire purchase price when it's all said and done?

commission payments are taken from the sale

By dividing the metropolis of Boomville into evenly sized quadrants, the four big brokerages in town focused on their assigned areas more intensively than they could the whole of Boomville. They freely shared their in-depth knowledge with their clients. So why would this practice be frowned upon?

competition and choice are supressed

Which of these advertisements violates the Truth in Lending Act?

condo for sale: 2 bedroom, 1 bath $1200/mortgage *A lender may not advertise terms that are not actually available to the consumer. A mortgage payment varies depending on many factors, such as down payment and interest rate.

A $200,000 conventional loan can be a _______.

conforming loan

Which type of agency relationships do most New York real estate firms practice?

consensual dual agency

Which of the following are NOT a part of a market analysis?

construction costs. -Market analysis should take into account bus schedules, zoning rules, vacancy rates.

What is Article 12-A?

contains most of the laws that govern real estate salespersons and brokers in New York

A property manager is called by a resident complaining their AC unit has stopped working. What type of property maintenance is this an example of?

corrective maintenance - takes place after something is broken or is need of prepare for proper use.

What is a home warranty program?

coverage to protect homes from damage or repairs. -A home warranty is an agreement to cover a newly purchased home in the event there is damage or system problems with the house in the first year of ownership.

What is an easement by implication?

created when land is divided and there is a longstanding, apparent use that is reasonably necessary. It's created by operation of law (not express grant or reservation). Some people also call this an implied easement.

Asbestos is a friable material, meaning that it:

crumbles easily or becomes powdery when touched

Krystyna bought an older home and is putting her DIY skills to use while replacing the door that connects her garage to her kitchen because it doesn't meet the fire-rate door requirement of current safety standards. What type of depreciation is Krystyna addressing?

curable functional obsolescence (i.e., it's out of date, but can be fixed). Another example would be electrical wiring that can easily meet current safety standards if updated.

If a property has an underground storage tank, New York State requires that sellers:

disclose the presence of an underground storage tank on the property disclosure form

Which of the following is an example of a constructive eviction?

disconnecting a tenant's cable service. constructive eviction occurs when the landlord attempts to get the tenant to leave a rental unit by cutting off services, harassing the tenant, or going outside the legal process to convince tenants to leave. -IT IS A DEFAULT BY THE LANDLORD to act in a way that is required by the lease.

Which of these is an easement that exists when two different parties own adjacent parcels of land and one owner has the ability to cross the other's land?

easement appurtenant

What is the term for the length of time for which an improvement on a property is expected to remain functional and useful?

economic life

All of the following are radon entry points EXCEPT:

electrical appliances are NOT. -Radon entry points include cracks in the foundation, gaps around service pipes, construction joints between floor and the wall

Polychlorinated biphenyls (PCBs) could be contained in which of the following?

electrical transformers and capacitors -Polychlorinated biphenyls (PCBs) are NOT commonly found concrete foundations, air conditioning units, or gas furnaces.

What is a demising clause in a lease?

establishes the precise square footage or the premises' physical extent the tenant will lease from the landlord and the lease's duration.

What is a lead agency responsible for?

evaluating the environmental impact of a proposed project or activity; a lead agency is chosen when multiple stage agencies are involved in the approval process

Who is the person identified in a will to carry out its provisions, including disbursement of the property?

executor

What is the architectural review board primarily concerned with?

exteriors

What is loss of property value caused by negative forces outside the property which are beyond the control of the owner

external or economic obsolescence

If Broker Gil signs Seller Audrey to a listing agreement and, then, chooses not to present her with a comparative market analysis because he has decided to buy her property for himself, what could Gil be accused of?

failure in his fiduciary duty of loyalty and engaging in self-dealing

True or false? 1. All IOUs contain repayment terms, just like a promissory note. 2. IOUs are synonymous to promissory notes and loan contracts.

false; false -Promissory notes typically contain repayment terms, whereas IOUs do not. Further, promissory notes are typically less detailed than a loan contract.

A broker who enters into a Listing Agreement with a seller is considered a:

fiduciary

Some of the 20 factors provided by the IRS can be placed into which of the following categories or buckets?

financial control

The factors of significant investment, unreimbursed expenses, and opportunity for profit or loss are all part of what's known as:

financial control

Which term refers to the permanence of land?

fixity -Fixity refers to the permanence of land while durability refers to the indestructible characteristic of land.

What is one purpose of covenants:

for a borrower to agree not to do anything that would jeopardize the lender's rights to the property. -Covenants are promises made by the borrower to the lender. Although the lender has rights to the property there are many things that can affect those rights. Property damage, outstanding debts and liens can all affect the lender's rights. Borrowers promise to keep the property in a good state of repair, pay outstanding debts that may be levied against the property and maintain homeowners insurance to name a few. When a covenant is not adhered to it may be grounds for the lender to take legal action against the borrower.

What is the act of refraining from exercising a legal right?

forebearance

How many categories can behavioral control factors fall into?

four: degree of instruction, training, evaluation systems, and type of instructions given.

What should an agent ask a new buyer client to do?

get pre-approved for a loan

Which of these is NOT something planning boards do?

grant zoning variances

To qualify for a United States Department of Agriculture rural housing loan the applicant must _____.

have dependable income

Which of the following is NOT government land-use control based in police power?

historical preservation -The police powers are zoning, application of rules, building codes, and private controls on land.

Which is NOT one of the four exemptions of the Fair Housing Act?

housing for people restricted by a set age bracket -The ONLY exemption based on age is housing for older persons. Housing for older persons must still meet a set of criteria in order to be fully exempt from the Fair Housing Act.

What must a seller let a potential buyer know about the property's septic system?

how the system is serviced, NOT how old it is. -A seller must inform a potential buyer about a property's septic system and let them know if it is publicly- or privately-serviced.

To describe a contract as "executory" is to:

identify its stage of existence

When it comes to environmental liability, real estate license holders could be held liable for:

improper disclosure of hazards

What two things are added to a property's basis to get the adjusted basis?

improvements and closing costs

When a buyer compensates a buyer's agent using an hourly rate they are:

in essence, paying a consulting fee

You bring 1,000,000 cigars back from Cuba. That is too many cigars, and they are confiscated. The court decides what to do with said cigars through what kind of proceeding?

in rem proceeding

According to 1986 additions to New York State Labor and Worker's Compensation laws, as long as real estate salespersons meet certain criteria, they are to be considered:

independent contractors

What is the basic, foundational systems that support a community, such as schools, waste management, and water?

infrastructure

Which of these property types have fully tax deductible mortgage interest for loans at any amount?

investment properties. -Only income-producing properties have fully tax-deductible mortgage interest. Primary residences are limited to the first $750,000 of the loan, and vacation properties and second homes are ineligible.

The difference between a percentage fee and a flat fee in property management is that a percentage fee:

is based on a property's income whereas a flat fee does not vary.

Which of the following concurrent estates gives the right of survivorship?

joint tenancy and tenancy by the entirety

What is a long beam of wood or steel arranged horizontally and parallel to support a floor or ceiling?

joist

Which of the following is NOT a reason why the real estate industry can be especially litigious?

lack of technology -Money, details, and boundaries all are reasons.

With a thorough evaluation of the buyer's credit, the lender's risk would be:

limited

The agreed upon price between the seller and seller's agent, for which the property will be sold, is also known as what...?

listing price *Listed in agency listing agreement

Which of the following would motivate builders to build new houses right away?

low prices of raw land -A decrease in the cost of construction and price of raw land would motivate builders to build new houses right away.

What is the main health concern from radon gas?

lung cancer

An appraiser using the sales comparison approach will be most focused on:

market demand

A _____ cooperative does not restrict the price of its shares, while a _____ does.

market rate, limited equity

Which of the following is not included in the "Property Location and Class" section of the assessment roll?

market value of the property **Area of the property, geographic coordinates, and school district code are all included.

A _____ is a law that extinguishes a person's title interest if the person fails to assert it within a certain time period.

marketable title act. -Marketable title acts cut off the rights of people that fail to act on their real estate claim within a certain time period, much like a statute of limitations stops someone from filing a lawsuit after a certain time has elapsed.

Actual damages are..

monetary compensation given to an injured party for losses that were a result of the actions or omissions of another party which can be shown by evidence. These damages are not intended to compensate a party for "inconvenience" and cannot be speculative.

Insurance companies not willing to deal directly with borrowers usually pay a loan servicing and preparation fee, and make real estate mortgage loans to purchase indirectly through:

mortgage companies

Which of the following expenses are NOT included in calculating net operating expenses?

mortgage interest. -The expenses used in net operating income calculations are the essential costs of owning a property. Amounts like taxes, insurance, and utilities are relatively standard, where financing is not essential and will in fact vary wildly from investor to investor.

Appraisals can be used in which of the following processes:

mortgage lending, government acquisitions, tax assessments and assessment appeals, and buyer and seller negotiations.

The SAFE Act regulates the licensure of which type of real estate professionals?

mortgage loan originators

What does the acronym NPI stand for?

non-public information. -NPI is an acronym for non-public information. Information that is considered non-public includes social security numbers, banking and credit account details, account balances, and payment histories. A consumer must grant a business access to their non-public information before it can be used.

What must NYC property owners in historic districts or landmark buildings do before undergoing repairs on the exterior of the building?

obtain a permit from the Landmarks Preservation Committee

How long does someone who believes that they have been injured by the discriminatory practices of a real estate license holder have to file a complaint with HUD?

one year

A title searcher is most likely to include which of the following in a full title search report?

outstanding child support debt of a current property owner. -Many states throughout the US have legislation that automatically lien all property belonging to anyone that owes court ordered child support obligations. Therefore, a search of public records may reveal an outstanding child support balance.

Kyle owns a home on a lake, and the water level has dropped significantly due to drought. His neighbors who own homes or rental properties on the lake are selling them at record speed and at reduced prices to get rid of their property due to worries about decreased rental income and enjoyment based on advice from local real estate agents. What is this an example of?

panic peddling

Blockbusting may also be referred to as:

panic selling

An alienation clause would require a borrower to:

pay the mortgage debt in its entirety upon the property being sold

Which one of the following is not a property management revenue model?

percentage of real estate sales commission. -Percentage of rents, fixed fees, and guaranteed rent may all be used as property management revenue sources. **Although many property managers are licensed real estate salespersons and brokers, commissions for the sale of property is not included as a property management revenue model.

The process of obtaining __________ requires that the borrower submit a mortgage application, credit report, and supporting financial documentation.

pre-approval

Licensed geologists may be able to recognize sinkhole activity by performing an inspection; however, it is not always possible to _____

predict if or when a sinkhole might occur. -Although professional geologists can determine if a sinkhole currently exists on a property, it is not always possible to predict if or when a sinkhole might occur.

Various neighbors have been concerned about one home owner always drag racing down the street and working on cars late at night. The noise is impeding on the neighbors' sleep, especially with all the garage work at night. The neighbors should file a/an:

private nuissance claim. -A private nuisance claim can be submitted against a private property owner if the property is being used in a way that causes a nuisance to surrounding home or property owners.

A ____ is a type of encumbrance that allows someone to go on property and take some natural resource from it.

profit

Which of the following is the best practice for helping a conservative investor minimize risk with their real estate investment?

projecting a higher amount for vacancy cost

In seller financing, what is the name of the document that the buyer and seller write that outlines the terms of the loan?

promissory note

What is an assumable mortgage?

provides a buyer the opportunity to purchase a home by taking over the seller's mortgage loan.

Which of the following is an example of a physical inclusion provided by a landlord?

providing a washing machine in a unit for tenant use. -Freestanding appliances such as washing machines are types of physical inclusions landlords may provide for tenant use. Appliances that are built-in, such as dishwashers, are presumed to be part of the lease. The landlord paying bills out of the proceeds of the rent are examples of financial inclusions.

A city is renovating its public library. Who or what is indirectly paying for the renovations?

real estate tax

Which of the following is a disadvantage of seller financing for the buyer?

reduced length of loan term. -Because seller financing usually involves shorter length loan terms, buyers face a couple of challenges. A higher down payment may be necessary, or they may face a balloon payment in a few years. Another possibility is that the shorter length term results in very high monthly payments.

The third phase in a CERCLA Environmental Site Assessment is:

remediation

When an agent decides to end an agency relationship, this is called:

renunciation

A ____ is enforced under principles of law, while a ____ is enforced only under principles of equity.

restrictive covenant, equitable servitude. -While a restrictive covenant can be enforceable in much the same way as a contract between two parties, an equitable servitude involves restrictions on land use that are enforceable against a party only through application of the doctrine of equity, which is applied by the courts to avoid an injustice.

the structural wood panel material used to cover wall, floor, and roof assemblies of buildings

sheathing

Which of these is the horizontal piece located directly above the foundation to which vertical members are attached?

sill plate

In property 'flipping,' obtaining low cost financing is generally most difficult for _____ properties.

single family homes

To a client, what is a broker considered to be?

special agent

What is a legal remedy that requires the party that has breached a contract to perform in accordance with the terms of the contract; as opposed to paying damages to the other party

specific performance

Which of the following is part of the very first part of the appraisal process?

stating the full legal description of the property

a loan that is fully due on a specific date; whose periodic payments often are not sufficient to pay off the loan in time, creating in a large lump sum payment

straight mortgage

The sales comparison approach uses two value principles. They are respectively known as the principles of:

substitution and contribution

Water is delivered to water heating systems via:

supply lines from the water source

One of the the primary incentives for investing in commercial real estate is the:

tax benefit

To make home ownership and home rehabilitation affordable in rural America the United States Department of Agriculture offers housing loan programs with _____.

terms up to 38 years

The second phase in a CERCLA Environmental Site Assessment is:

testing

Why is a 20.385% residential tax rate not burdensome for New York City class one properties?

that tax rate is only applied to 6% of a home's market value

When a small building sells their air rights to a neighboring building, what are they actually selling?

the FAR they are zoned for but will not use. *FAR is the ratio of the total building floor area to the area of its zoning lot

In New York, who regulates all real estate activity?

the New York Department of State (DOS) and the New York Board of Real Estate

What is "taking as defined by the courts"?

the ability of the government to seize private land for public use. Also known as eminent domain which is carried out through condemnation, must pay the owner just payment

What information is specified by the note?

the amount of debt, the interest rate, and the terms of repayment

A property owner with flood insurance submits a claim for flooding that occurred as the result of heavy rains. The owner claims damage to the basement of the home, the unattached shed, and the attached deck. The insurance company will provide coverage for:

the basement of the home. -Structures outside of the dwelling are not covered in flood insurance, and this includes unattached sheds and attached decks. Thus, the insurance company will only cover the damage in the basement of the dwelling.

Adjusted Basis Formula?

the basis plus the cost of any improvements, minus the amount of depreciation

What is an interest only loan?

the borrower only makes interest payments for a predefined time frame, after which the payments consist of both interest and principle

Listing brokers are usually the escrow holders in upstate contracts but who usually writes the contracts?

the broker -Typically, the broker fills out the contract in upstate areas and the listing broker is the escrow holder. An escrow holder is the person or entity that holds any money, documents, or things of the value connected with the real estate transaction.

An agent has obtained a buyer representation agreement with a new client. Who owes the client fiduciary duties?

the broker and all sponsored agents in the brokerage. -Because special agency is created at the broker level, this means that the broker and all of that broker's sponsored agents owe the client fiduciary duties.

According to the Seller's Agent paragraph in the New York State Disclosure Form, which party's interests are not being represented by the seller's agent?

the buyer's interests

R-value measures:

the capacity of an insulating material to resist heat flow

What determines how a city's government is structured?

the city's charter

What is reformation?

the court permits the parties to rewrite a piece of the contract to reflect the parties' original intentions more closely -Novation is an example. Novation is when an existing contract or legal obligation is replaced with a new one of equal or proximate value

In an Article 78 proceeding, who makes the determination about the zoning issue in question?

the court, NOT the Zoning Board of Appeals or city council.

What is value-in-use?

the current worth of the future benefits of ownership

When do tenants have the option of purchasing a property under a lease purchase agreement?

the date of sale of property is agreed upon in the lease contract

Assessment

the determination of the market value of a property

Who will determine the building standards and street widths in a PUD?

the developer, NOT the local government. -The developer will get permission from the local government to create a PUD. Once permission is granted, the developer will determine things like building standards and street width.

What is the margin?

the difference between the interest rate of an ARM loan and the index value

How will the escrow agent typically know when he can release the property he is holding?

the escrow agreement will tell them -The escrow agreement should tell the agent the conditions that need to be met before property is released from escrow.

What is investment value?

the highest price investor is willing to pay for property based on how it serves their investment goals

What is plottage?

the increase in value realized by combining adjacent parcels of land into one larger parcel.

Lead poses a hazard in homes in all of the following ways EXCEPT:

the inhalation of poisonous gas created from lead erosion. -Lead poses a hazard in homes from children ingesting lead paint chips, lead dust being tracked into the home from contaminated soil, and the corrosion of lead pipes contaminating drinking water.

What does the insured value typically not include?

the land value. -It is typically equal to the replacement cost of a structue.

What is probate?

the legal process following a homeowner's death, where the property either transfers ownership to someone or is sold. -It is the court process where, after your death, the terms of your will are approved by a judge, and your assets, property and possessions are given out to your beneficiaries after your debts are paid off.

What is a lifetime cap or ceiling?

the limits to which adjustable or variable rate mortgages may increase in payment over the life of the loan

What is voltage?

the measure of the force that pushes electricity through a wire

What is an advantage of an assumable mortgage?

the mortgage interest rate might be below current market values. -An assumable mortgage might be cheaper for a buyer than current market interest rates. The borrower does NOT automatically qualify for the mortgage. The buyer will still have to meet regular underwriting requirements as well as the rules for the assumption program. -Assumption rules often have catches that limit a buyer's opportunities to use the property for investment purposes.

What is the LOA?

the overall percentage of market value at which properties are assessed

What is luxury decontrol of a stabilized unit?

the process of deregulating a rent regulated apartment. A landlord can apply with the DHCR to have his/her apartment deregulated if the rent is over $2,500 and the annual household income is in excess of $200,000 for each of the two preceding calendar years.

What is accression?

the process that results in the gradual increase in land area through deposits of soil by natural forces

What is loan-to-value ratio in real estate?

the ratio that determines a bank's risk in making a mortgage, NOT the buyer's creditworthiness.

In an amortized loan, the monthly interest payment is always based on:

the remaining principal

What is active cash value?

the replacement cost less any depreciation; used to determine the reimbursement amount in a property loss claim for many insurance policies

What is negative amortization?

the result of making loan payments that are not sufficient to cover the interest due, causing the unpaid interest to be added to the principal balance, creating a larger balloon payment

In the sale of a co-op, who typically pays the flip tax?

the seller

Who makes the decision as to what types, if any, of cooperative sales will be allowed?

the seller

Which of the following would NOT be considered when determining the cost of a homeowner's insurance premium?

the size of the mortgage. -The age of the home, the condition of the roof, and the deductible amount would all be considered

Who files a termination of association notice?

the sponsoring broker

When you see that an appliance requires 60 amps, you know that what's being measured is:

the strength of the electric current

Simon is working with Alvin, a licensed real estate salesperson. Simon is displeased with Alvin and wants to file a complaint with Alvin's firm. Who will handle Simon's complaint at the brokerage?

the supervising broker

What is moratorium?

the temporary banning of an activity, such as a planning board imposing a moratorium on property owners obtaining approval for new development or zoning permits; can also refer to a lender temporarily allowing a borrower to not make mortgage payments with significant reasoning

A farmer leasing land has the right to emblements as long as:

they were cultivated on the land via the farmer during the tenure of his lease. -Emblements are crops grown annually, and a farmer leasing farmland will be able to remove these once the lease is up as long as the farmer cultivated the crops.

Timothy has an agency relationship with Sarah, the purchaser of 4412 Castle Drive. Sarah has also agreed to a contract with Melissa, a licensed real estate inspector, to inspect 4412 Castle Drive. What is the relation of Melissa to Timothy?

third party

Which of the roles below BEST describes the following terms: real estate inspector, loan officer, or the "other principal."

third party

A restrictive covenant puts restrictions on a property's:

title

Which of the following is NOT a reason a brokerage might choose to specialize in a certain type of agency relationship?

to comply with state law regarding brokerage specialization - NOT required by law. -A brokerage might feel there are marketing advantages for specialists in a particular type of agency representation. Or a brokerage might want to limit what they need to know and what kinds of activities they'll engage in while mitigating brokerage risk and ensuring competency of the sales force.

What is the purpose of underwriting?

to determine the level of risk that a lender will be taking on by providing a mortgage, after evaluating the creditworthiness of the buyer and the value of the property

Why is it important to do a co-op lien search?

to find and clear any existing liens

Kerry bought a gorgeous old farmhouse upstate. When she was researching the property's history, she found out that it was once owned by Fiorello LaGuardia. She's planning to apply for the house to be on the State Register of Historic Places. Why might she want to do that?

to get a tax credit to help with rehabilitation efforts

What is the purpose of a state Qualified Action Plan (QAP) for low-income housing tax credits?

to outline the state's additional restriction plans and priorities

Why is it important that a seller disclose the location of a well on his or her property?

to prevent potential water contamination -Contaminants from the ground's surface can be carried away by groundwater and impact nearby wells that could be used for drinking water. Disclosing these location is critical for safeguarding the new homeowners' health.

Which of the following titles describes a real estate agent who works under a dual agency agreement?

transaction broker

On closing day, earnest money is:

transferred to the seller

Which is NOT one of the four main areas of responsibility for property managers?

trash and sanitation services. -Financial & Marketing -Tenant & Occupancy -Administration & Risk Mitigation -Facility Management

How many years do New York property owners have to enforce deed restrictions before the Doctrine of Laches comes into play?

two years

What is severalty?

undivided ownership in an estate, with an interest that is exclusive from other owners; often referred to as ownership in severalty or tenancy in severalty

Grayson is an assessor in Yonkers. What is a value he MUST know if he wishes to perform correct assessments for his municipality?

uniform percentage

What is the amount of cash flow a property produces before meeting its debt obligations?

unlevered cash flow

For years, the R2 zone in the city of Schenectady required homes to have 15-foot side yards and a building height under 40 feet. It was rezoned to allow attached buildings with heights up to 80 feet. What is this an example of?

upzoning

Real estate brokers in New York are prohibited from adding legal terms to a contract. To avoid doing this, a broker is encouraged to do which of the following?

use a fill-in-the-blank contract. -Real estate brokers in New York are prohibited from writing legal provisions in a contract. Brokers should only insert a property description, the price, and the mortgage to be given. Court rulings allow attorneys for any party to review a contract that a broker has written and disapprove for any reason. Brokers are encouraged to use fill in the blank contracts to limit liability

What survey method is used for expressing condominium ownership boundaries?

vertical land description

A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company, and is called:

warehousing

When are variable and adjustable rate mortgages more popular than fixed rate mortgages?

when interest rates are high. -Variable and adjustable rate mortgages are more popular when interest rates are high, as interest rates are likely to drop in the years to come. Fixed rate mortgages will keep the high interest rate

When may a broker accept a referral fee for a party he or she does not represent?

when the broker obtains the agreement of all parties

With what can a license holder first obtain advance consent to dual agency?

with the New York State Disclosure Form

In the case of Jones v. Mayer, the court ruled that:

In Jones v. Mayer, the court said that all citizens, "Shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property."

Equitable redemption occurs before the auction of property and allows:

a defaulting debtor to pay the defaulted portion of the debt and prevent foreclosure.

When considering if a worker is an employee or an independent contractor, it's important to:

look at the entire relationship

When an agent protects their client's best interests, they are modeling which fiduciary duty?

loyalty

Which of the following is NOT one of the three legal forms of listing agreements in New York?

net listing agreement

What is the most common way a buyer's agent is compensated?

By the seller (via the cooperating broker commission split)

Sally and Fred are two single people buying a home together. The lender is threatening to deny them a loan because he does not like their lifestyle. If the lender does that, it will be a violation of the:

ECOA is Title VII of the Consumer Protection Act. It prohibits lenders from discriminating against credit applicants on the basis of their race, color, religion, national origin, sex, marital status, age, or use of public assistance. This example shows discrimination based on marital status.

Which is NOT one of the things HUD will do after it has a received a fair housing complaint?

HUD is not responsible for contacting any type of local legislative body on the complainant's behalf. HUD will notify both the complainant and the alleged violator.

In which scenario would a lender MOST likely want a mortgage subordination agreement signed?

If a homeowner had two mortgages and wanted to refinance the first mortgage, the lender of the first mortgage would want the secondary mortgage holder to sign a mortgage subordination agreement to protect their place in line.

In Buchanan v. Warley, the court ruled that William Warley:

In Buchanan v. Warley, the court ruled that William Warley could purchase a house in a predominantly white neighborhood, since the zoning ordinance prohibiting Black people from living on the block was unconstitutional.

Which of the following statements is NOT true regarding compensation and disclosure in New York

There is no specific law requiring disclosure of a broker's multiple sources of income, but it is highly encouraged. -New York State law makes clear that a component of full disclosure of agency representation includes making all parties aware of a broker's multiple sources of compensation, if any.

Samuel has an associate broker's license, and works under the supervision of Mel, his sponsoring broker. Samuel also has his own broker's license, and performs transactions under his own name. Is this allowed?

Yes, this is allowed under dual licensure

Which is NOT one of the required components to form an agency relationship?

earnest intent -The four components required to form an agency relationship are: an agent, a principal, mutual agreement, and fiduciary obligation. Earnest intent is not a required component.

Which could NOT cause a borrower to default?

failure to maintain the original landscaping - Changing the landscaping would not be a possible reason for the bank to foreclose. A borrower may only default if they fail to make mortgage payments, pay property taxes, or maintain the property to good standard.

What federal act was passed to help eliminate redlining?

the Community Reinvestment Act