Real Estate Question Answers

Agent Jim is trying to determine the type of services his new investor client may want from him. Which of the following questions would help Jim get a big picture of the types of services his client is going to need?

"What's your end goal?"

Administrative discipline by the Department of State (DOS) may include a reprimand, license denial, revocation, or suspension for a period as long as it deems proper. The DOS may also impose a separate fine of up to ________.

$1,000

Your buyer purchases a property for $120,000. It has an assessed value of $130,000. The annual rate for property taxes is $2.10 per $100 of the property's tax value paid on a semi-annual basis. On the next tax bill, what amount is due?

$1,365

Yanni is an investor who has just purchased a building for $300,000. Similar buildings are returning a rate of 7%. What can Yanni anticipate his annual net operating income to be?

$21,000

A property has 10 units and is 90% occupied. Rent is $500 per month. Total vacancy and collection loss equals 10%. What's the potential gross income?

$60,000

Loan interest rates can only be locked in for a specified number of days, which varies by lender from _____.

30-60 days

Rhonda is an unrepresented buyer who's purchasing Tony's townhome. Gary represents Tony in the sale of his property. What's Rhonda's relationship to Gary?

A customer

What is the best description of a deed?

A document to transfer ownership/interest in real estate

Which of these policies is an example of discrimination based on familial status?

A landlord charges an extra $100 security deposit for each child living in a property.

Ella is gathering information to fill out the deed on her client's new property. Which of the following piece(s) of data does she NOT need?

A list of the buyer's financial assets

If boundaries between neighboring properties are unclear or in dispute, what may be required prior to closing?

A new survey

Developing which skill involves training your eyes and mind to be more observant?

Acuity

What's market allocation?

Agreeing with a competing firm on how to split a market

FAR, or floor-to-area ratio, includes ______.

All of the habitable structures on a lot

Dava, your landlord, is ready to be your client and wants you to find some tenants. Which form(s) should you both sign?

An agency disclosure form and the exclusive right-to-rent form

When your clients improve their credit score, they _____________.

Are likely to get better rates

Samuel, a newly licensed salesperson, just received his pocket card. When is Samuel required to carry the pocket card with him?

At all times when conducting business

When considering loan risk, which two items will lenders consider in equal measure?

Borrower and property

Termites are the most ___________ type of wood eating pest.

Common

Which category of worker is classified by the common understanding of the profession? A food server is an example.

Common law employee

When a government authority takes private property under the power of eminent domain, what must the property owner receive in exchange?

Compensation

You might tell a new client, "This means that I, as the agent, have to keep certain private information you tell me, or that I find out otherwise in our relationship, to myself," when describing your duty of______ to the client.

Confidentiality

A deed states, "For love and affection, the receipt and sufficiency of which is hereby acknowledged." What does this statement represent in the deed?

Consideration

A calculation for replacement costs would include ______.

Construction materials

An installment sales contract is also known as a _______.

Contract for deed

What deed warranty guarantees that the seller is the actual owner of the property being conveyed?

Covenant of seisin

Which part of a policy identifies the basic terms of the insurance contract?

Declaration

When a real estate professional goes beyond a broad brushstroke approach to a CMA and takes the time to research not only recent sales, but competition and expired listings, what trait are they exhibiting?

Diligence

In addition to providing a disclosure of any lead-based paint hazards in homes built before 1978, what must sellers provide to prospective buyers?

EPA lead safety pamphlet

How many floors could a mid-rise office building have?

Eight

Taxpayers who use a portion of their home for their business can take a home office deduction for which reason?

Employer's request

Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?

Estate at will

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

Exclusive agency

Terry purchases a property. The deed includes a description of an easement given to the neighboring property. This is an easement created by ______.

Express grant

Which protected class is protected against discriminatory practices, such as against placing limitations on the number or age of children in the residence?

Familial status

Which of the following might involve old wiring or plumbing?

Functional obsolescence

Because property managers do a lot of number crunching and prepare monthly and yearly financial reports, they must have a command of _______.

Generally accepted accounting principles

You need to perform a sales comparison for your clients. Comparable A's adjusted sales price is $277,000. Comparable B's adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients' home?

Give more weight to the list price on the comparable that's most similar to the property.

Why might you opt out of working with a buyer unless you're working under an agency agreement?

Having an agency agreement allows you to represent the buyer's interests.

Kramer is a buyer who just signed a buyer agency agreement. He likely did this so that ______.

He would receive a higher level of service

Sometimes a contract specifies that the attorney has deposited money, such as earnest money or deposit money, in the attorney's IOLA account. What is an IOLA account?

IOLA is a state agency that uses interest on attorney trust accounts to fund nonprofit agencies and to reimburse wronged parties for attorney misconduct.

The appraisal can be a sticky wicket on the way to closing. Which of the following is a true statement about appraisals and closings?

If the appraisal comes in lower than the sales price, the buyer may be able to negotiate a lower price.

Once taxes are delinquent, what action might be taken?

If the property is in a city or village, the municipality will enforce its tax lien through a tax sale.

The government has the authority to exercise police power to ensure the health, safety, and welfare of its citizens at all of the following levels EXCEPT ________.

International

From an agent's perspective, what's one benefit of a buyer representation agreement?

It defines how and how much the agent will be paid.

From a buyer's perspective, what's the primary benefit of signing a buyer agency agreement?

It ensures a higher level of service.

What's a practical reason many cooperative boards don't allow subletting?

It makes it difficult to qualify for loans or refinance.

How does a New York zoning board of appeals act to preserve a community's basic character?

It reviews requests to use property in a way that's not consistent with the current zoning ordinance, and may issue a variance or special use permit.

Which of the following is an example of sub-agency?

Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller.

The doctrine of "use it or lose it" is known as the doctrine of ______.

Laches

What substance is often found in highly corrosive water or hard water?

Lead

To whom does the subprime market cater?

Less creditworthy borrowers

A discount point equals 1% of the _______.

Loan amount

The New York Department of Environmental Conservation oversees wetlands in the state. Which of the following statements is FALSE regarding municipal agency involvement in wetlands regulation?

Local regulations have to be less protective of wetlands than the current state regulations.

What's one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?

Loyalty

In which commercial category are raw materials converted into useful objects?

Manufacturing

A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there's an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What's this an example of?

Market allocation

Which of the following is a modified version of HO-1 that provides actual cash value coverage in place of replacement cost coverage?

Market value policy

Which type of insurance policy offers one type of coverage?

Monoline

Who generally will service the loan?

Mortgage banker

Jim would like to sell his own home. What is the minimum real estate license he must possess?

None

Cooperative corporations own all of the following EXCEPT ______.

None of these; the corporation owns all of these things.

Real estate licensees are seldom guilty of blatant discrimination, but unintentional discrimination does exist. What's one example of unintentional discrimination?

Not showing homes in neighborhoods where the client may become a victim of racial bias

Broker Betsy has five salespersons working under her supervision. Whose license must be displayed in the brokerage office?

Only Betsy's license is required to be displayed.

Randa is trying to lower the vacancy rates for the commercial property she manages because her revenue targets will increase by 8% over the next year. What type of budget contains this revenue detail?

Operating budget

For what environmental issue are CFCs blamed?

Ozone depletion

Your seller clients are angry because the buyer's financing fell through. "The buyer was pre-qualified! How can this happen?" they ask. How do you answer?

Pre-qualification does not equal pre-approval.

Ellen has only been licensed for two weeks, but she's already toured the home of potential clients, the Birds. What should she do to next to secure the listing?

Prepare a CMA.

What often comprises the sum total of a buyer's mortgage payment?

Principal, interest, taxes, and insurance

Tammy and Reginald bought a house with a gas line easement on the property. An easement like this one placed by the utility company is an example of a ______.

Private land control

If your property's taxes are paid through the bank or mortgage company, how often will you be mailed a tax bill?

Property tax bills are not mailed if your property taxes are paid through a bank/mortgage company

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

Recognition agreement

The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on _______.

Religion

For farmers and others who live in rural communities, a ______ loan may be available. One benefit of these loans is the option for a longer payback period.

Rural development

Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?

Rural development loan

Homeowners who wish to protest their assessments can do so using which of the following?

SCAR, BAR, and RAR

All of these are components of the flooring system EXCEPT _______.

Soffits

A bargain and sale deed may come with or without covenants of warranty. In most states, if it contains covenants, it is known as a __________.

Special warranty deed

As a New York resident, a seller, will be responsible for certain expenses. These include which of the following?

State and local transfer taxes

What's the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members?

Steering

To claim that an assessment was unlawful, what would the taxpayer need to prove?

That the property was located outside the boundaries of the town indicated on the assessment role

Which of the following is TRUE regarding septic tanks in New York?

The Department of Environmental Conservation must approve septic plans for buildings that process more than 1,000 gallons a day.

You represent a buyer. What information may you share with the seller without breaching the duty of confidentiality?

The buyer's inability to obtain financing

Who should display the Equal Housing Opportunity Logo in all advertising and marketing materials?

The licensee and the broker

Which of the following must be included in a buyer agency agreement?

The licensee's duties and responsibilities to the buyer

When considering your personal marketing, what should one of your primary concerns be?

The overall intention of your marketing

Which term refers to the tenant's right to live in a rental property without harassment or trespass by the landlord?

The right of quiet enjoyment

If a property owner dies intestate and no heirs or creditors can be found, what becomes of the property?

The state claims the property through escheat.

If a taxpayer rents his second home for more than 14 days in a calendar year, what happens?

The taxpayer has to report all of his rental income.

Which of the following actions would result in the legal termination of an agency agreement?

The term specified in the agency agreement expired.

Leonard and his wife, Carrie, were unable to obtain the loan they needed to buy the home they wanted and have had to terminate their contract with the seller. Which of the following statements about Leonard and Carrie is true?

Their earnest money can be refunded.

What type of credentials do mortgage brokers need to possess?

They must be registered or licensed.

Some condominium reserves are inadequate to meet unexpected expenses. What's a good rule of thumb for reserves?

They should equal 20% of association dues.

Why might a licensee working with an investor attend tax, foreclosure and builder auctions?

To get leads on properties

This Municipal Agency enacts ordinances for the government of the town and the management of its business.

Town Council

A qualified mortgage may not include interest-only payments and balloon payments, or lender fees and points that total more than 3% of the loan because these are considered ______ in relation to the qualified mortgage.

Toxic loan features

In a real estate transaction in which you represent the seller, your duty to other parties is to ______.

Treat them honestly and fairly

Karen meets the experience requirements related to credit analysis and underwriting to qualify as a mortgage broker. At a minimum, how many years' experience does she have?

Two

Besides the geographical area, on what are FHA lending limits based?

Type of dwelling

Lending institutions who lend directly to consumers operate in the __________ market.

primary