Real Estate U: Pass the NY State Exam

section 175.25 of Article 12-A of the NY Real Property Law say abt advertisments

- All advertisements placed by a broker must indicate that the advertiser is a broker or give the name of the broker and his telephone number. - All advertisements placed by a broker which state that property is in the vicinity of a geographical area or territorial subdivision must indicate as part of such advertisement the name of the geographical area or territorial subdivision in which such property is actually located."

NYS Department of Health

- Drinking water safety, including standards for private and community well construction and well water safety and regulation. - Septic tank approval. - Certain wastewater treatment approval.

Municipal Engineer's Office

- Estimates the costs of paving ,sewers and sidewalks, and other public works projects. - Supervises streets and other public works activities - Issues permits to private contractors for street openings and curb and gutter construction. - Assumes responsibility for sewage, water supply, distribution systems.

Elements of an Independent Contractor

- Pay their own taxes on commissions - Responsible for paying social security taxes and self-employment taxes. - Have no set work house - Have no specific job location - Can be employed with another company or employer - Covers his/her own expenses (transportation, cell phone, clothing) - Either party can terminate the relationship at time

section 175.25 of Article 12-A of the NY Real Property Law

- must indicate that the advertiser is a broker or give the name of the broker and his telephone number. - All advertisements must indicate the geographical area where the property is actually located

Escalation clause

-A clause that allows landlords to raise rents during the term of the lease. -Calls for the increased costs to a tenant for different reasons at specified times during the lease term. These clauses protect the property owner against increases during the lease term.

Fuse

-A device used in electrical systems to protect against excessive current. It Melts open the circut, causing electric power to stop when overheating occurs. -Circuit breakers perform a similar function but are more convenient and safer

Sub Agent

-A person appointed by an agent with permission of the principal (seller) to assist in performing some or all of the tasks of the agency. -typically occurs with properties listed on the MLS. When the seller's broker posts a listing on the MLS, he/she are essentially inviting other brokers to join as a subagent. Agent showing the property become subagents for the listing broker (and the seller).

Undisclosed Dual Agency

-A relationship in which the real estate agent is found to be the agent of both the buyer and seller in a transaction, but without the knowledge and informed consent of both parties. -is illegal in New York State.

Easement in Gross

-A right of use in the land of another without the requirement that the holder of the right own adjoining land. -utility company uses/owns this

Easement

-A right to cross or otherwise use someone else's property for a specified purpose. -a nonpossessory interest in land owned by another.

Mechanic's Lien

-A security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.

Bridge loan/Swing loan

-A type of short-term loan, typically taken out for a period of 2 weeks to 3 years. -type of gap mortgage in which funds are provided over and above an already existing loan until more permanent financing is in place. -allows a buyer to obtain a new property without having to sell his/her current property

Property Condition Disclosure Statement

-Failure to provide this document results in a credit of $500 to the buyer at closing. -Most seller attorneys advise their clients NOT to sign the statement, as it opens them up to a vast amount of liability.

Agency Disclosure Form

-Signed at the first substantive contact. - Outlines the agent's duties to the client - Explains that an agent owes a fiduciary duty to the client - Allows for advance consent to dual agency

Proration

-The division of certain settlement costs between buyer and seller. -These items can include real estate taxes, fuel, a survey, water and sewer charges, rent, and security deposits. -Ensures fair apportionment of expenses between buyer and seller.

Accountability

-The obligation to accept responsibility for the outcomes of assigned tasks. -ability to answer for one's own actions - One of the more serious fiduciary responsibilities. - the agent must account for and promptly remit all money or property entrusted to the agent.

Commissions

-are paid by the client (buyer or seller depending on the transaction) to the brokers involved in the transaction. - Calculated as a % of the sales price -are always negotiable, and are determined by both the client and broker.

Zoning

-determines the usage allowed for a building or subdivision. -also determines the 'bulk' of a house or building, meaning the maximum size of the structure (height, square footage, size of floor plate).

Civil Rights Act of 1866

-has no exemptions and contains the blanket statement that 'citizens have the same rights to inherit, buy, sell, or lease real and personal property. -is primarily interpreted to prohibit racial discrimination.

Sublease

-the original tenant is still responsible to the landlord for the lease payments under the lease contract. -the sub-lessee pays the rent to the tenant (lessee) and the tenant pays the landlord.

Commissions Are paid to...

-the salesperson's broker, who in turn, pays the salesperson his portion of the commission. -This also applies to any referral fees paid from another broker / salesperson / mortgage broker.

RESPA Requirements

1) A Good Faith Estimate (GFE) 2) HUD Booklet 3) HUD Form No.1

1 Hectare

2.47 Acres

Acre

43,560

Eminent Domain

A RIGHT of the government to acquire property for necessary public use by condemnation; the owner must be fairly compensated.

Earnest money deposit

A deposit that a buyer makes at the time of submitting an offer to demonstrate the true intent of the purchase; also referred to as a binder, good faith deposit, and escrow deposit.

Specifications

A document provided by Architects that describes the quality of construction.

Wraparound mortgage

A form of secondary financing for the purchase of real property. The seller extends to the buyer a junior mortgage which wraps around the existing in addition to any superior mortgages already secured by the property.

Loft Lease

A lease for the rental of floor space that is not generally divided into rooms.

Percentage lease

A lease of property in which the rental is based upon the percentage of the volume of sales made upon the leased premises, usually provides for minimal rental.

Zoning Board of Appeals

A local appointed board that has the power to review administrative rulings made by the planning board or another legislative body. -One of its main duties is to maintain the essential character of the neighborhoods. -It is the interpreter of the zoning ordinance. -Also responsible for granting variances

Planning Board

A local elected or appointed government board charged with recommending to the local town or city council the boundaries of the various zoning districts and appropriate regulations to be enforced therein.

Comparative Market Analysis (CMA)

A property evaluation that determines property value by comparing other properties currently on the market, properties that have recently sold, and expired listings. -is an analysis of the competition in the marketplace that a property will face upon sale attempts. -NOT an appraisal. Instead, it is an opinion of value.

Abstract of Title

A summary of all of the recorded instruments and proceedings which affect the title to property, arranged in the order in which they were recorded.

Agency Disclosure Form

A written explanation, to be signed by a prospective buyer or seller of real estate, explaining to the client the role that the broker plays in the transaction.

Fee Simple (Absolute) Estates

Absolute ownership of real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person's life and descending to the person's heirs or distributees. Most properties in New York has this type of deed, unless specified otherwise!

1988 Amendment to the Civil Rights Act

Added two new protected classes: - Persons with mental or physical disabilities - Familial status

Reasonable Care and Duty to Account

Agent may be liable for costly mistakes.

Obedience

Agent must act in accordance to clients demands/instructions

Disclosure of Information

Agent must communicate with client / must present all offers

Loyalty

Agent must work in the best interest of his client

Confidentiality

All confidential information as described by client must remain so unless given permission in writing

Roof pitch

Also known as the slope.

Blind Ad

An ad that remains anonymous as to who is advertising. They are Illegal in NYS.

Special Agent

An agent with limited authority to act on behalf of the principal, such as created by a listing. Example: Real Estate Agent / Real Estate Broker

Ground lease

An agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner. This long-term lease (also referred to as a land lease) is commonly used for commercial property.

Blueprints

Architectural drawings that describe the layout and construction of a house. These drawings describe the quantities used in construction

Real Estate Salespersons/Agents

DO NOT collect money or commissions. Are Sub Agents of their broker

Legal description

Describes where the property is located and the size of the lot. There are 3 acceptable types of property descriptions: 1) Metes and bounds 2) Description by reference, lot and block 3) Monuments

Historic Preservation / Landmark Commissions

Established to review proposed projects within historic districts for compliance with standards established for new development or alteration or improvement of historic buildings and landmarks.

1) Covenant of seisin - assures the grantee that the grantor holds the title specified in the deed. 2) Covenant of right to convey - assures the grantee that the grantor has the legal capacity to convey the title and has the title to convey. 3) Covenant against encumbrances - assures the grantee that no encumbrances against the title except those set forth in the deed itself exist. 4) Covenant of quiet enjoyment - assures the grantee that they will have quiet enjoyment and possession of the property. 5) Covenant for further assurances 6) Covenant of warranty

Full Covenant and Warranty Deed includes the following covenants (6)

18

In New York State, an individual must be at least how old to enter a contract?

Umbrella Policy

Insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. Also called excess insurance.

HO-6

Insure against damage to the contents of an apartment, cooperative, or condominium.

Down payment

Is the portion of a property's purchase price that is paid in cash and is not part of the mortgage loan.

The contract is voidable

Minors (less than 18 years old) CANNOT enter into a contract, if so...

Non Conforming Use

Occurs when a preexisting use of property in a zoned area is different from that specified by the zoning. The existing use is not as-of-right.

Buyer Agency / Buyer Brokerage

Occurs when a purchaser hires a broker to represent them. The purchaser employs a broker to locate a property. In this relationship, the buyer is the principal and the broker is the agent.

Negative amortization

Occurs when the monthly payment is less than full interest and does not pay any principal. The interest that is unpaid accrues and the principal balance owed increases.

Obsolescence

One of the causes of depreciation. It is the loss of desirability and usefulness caused by new inventions, changes in design, and improved processes for production, or from the influence of external factors. -may be either economic or functional.

Architectural Review Board

Oversees and upholds the quality and aesthetics of a neighborhood, town, or city. - promotes the orderly and harmonious development of the municipality. - protects a municipality's cultural heritage.

Sheathing

Placed over the roof rafters, used to enclose the roof and stiffen the roofing system. It iss typically made of plywood or exterior grade gypsum board.

A consumer protection statute, first passed in 1974. The purpose of RESPA are 1) To help consumers become better shoppers for settlement services and 2) To eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.

Real Estate Settlement Procedures Act (RESPA)

General Agent

Someone authorized to transact every kind of business for the principal. Example: Property Manager

Prepayment penalty clause

States that the borrower cannot pay off the loan at any time before expiration of the full mortgage term without a financial penalty for early payoff.

Agent.

The Salesperson or Broker

Truth in Lending Act (TILA) / Regulation Z

The Truth in Lending Act of 1968 is United States federal law designated to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

Fascia

The area of material facing the outer edge of the soffit.

Soffit

The area under the roof extension.

Principal or Client

The buyer and/or seller

Exclusive Right to Sell

The listing contract that offers the most security to the broker. The seller must work exclusively with the broker to sell their property. The Broker is entitled to a commission even if the seller finds a buyer themselves

Market value

The most probable price in a arms length transaction that a property should bring if exposed for sale in the open market for a reasonable period of time, with both the buyer and seller aware of current market conditions, neither being under duress. -is driven by supply and demand in the competitive marketplace. Known as Fair Market Value

Debt-to-Income Ratio

The percentage of a consumer's monthly gross income that goes towards paying debts. Formula: Recurring monthly debt / Gross Monthly Income

Blockbusting

The practice of inducing homeowners in a particular neighborhood to sell their homes quickly, often at below market prices, by creating the fear that the entry of a minority group or groups into the neighborhood will cause a precipitous decline in property values.

Redlining

The refusal to lend money within a specific area for various reasons. This practice is illegal. Before the Fair Housing Act, some lenders circled certain local areas with a red line on the map, refusing to make loans within the circled areas based on some characteristic of property owners in the area.

Conveyance

The transfer of the title of land from one to another. The means or medium by which title of real estate is transferred.

1) Annual percentage rate 2) Finance charge 3) Amount financed 4) Total amount of money to be paid toward the mortgage in principal and interest payments

Tila Main Disclosures

Pitch

Typically used in describing the slope of a roof, driveway, sidewalk, etc

- Must be in-writing (according to the Statute of Frauds). - Include a grantor (the person conveying title to the property) . - Include a grantee (the person receiving title). - Contain a granting clause, which includes words of conveyance. - Provide evidence of consideration (something of value). - Include a legal description of the property. - - Include an habendum clause (this clause begins with the words "to have and to hold") . - Include limitations and subject -to clause (any deed restrictions or easements must be noted). - The signature of the grantor (the grantee is not required to sign the deed). - Acknowledgement/recording (the deed must be notarized and recorded). - Delivery and acceptance (a valid deed must be delivered to the grantee).

What are the Essential Elements of a deed? 11

Advance Consent to Dual Agency

When an agent notifies both parties and has them sign an Agency Disclosure form, which states that the agent is acting as a dual agent

Ownership in severalty

When title to real estate is in the name of only one person or entity

purchaser

Who signs The Contract first?

Deed

a document used to convey title legally to real property.

Functional Obsolescence

an outdated design or floor plan.

Littoral rights

applies to property bordering a stationary body of water. Example=Lake

Riparian rights

belongs to the owner of a property bordering a flowing body of water. Example: River

Full Covenant and Warranty Deed

contains the broadest form of guarantee of title of any type of deed and provides the greatest protection to the grantee.

Building Codes

ensures a safe, properly functioning environment for the occupants. Minimum standards for NY. If federal or city codes are more stringent then the more stringent code will supersede.

Replacement costs

insured will be covered and reimbursed for the actual cost of replacing damaged property. For example, if a refrigerator is destroyed in a fire, cost of buying another refrigerator would be covered.

NYS Department of State

is primarily responsible for issuing real estate licenses, pocket cards, and handing down disciplinary action.

Siding

materials on buildings that can be metal (such as aluminum), wood or vinyl. Behind it is a layer of sheathing.

In New York State, an individual must be__________&____________ to enter into a contract?

mentally and emotionally capable

NYS Department of Financial Services

registers and licenses all companies and individuals who conduct mortgage related services in New York. This includes mortgage brokers license.

Revocation

suspends the license of the salespersons and associate brokers affiliated with the broker.

Mortgagor

the borrower

Mortgagee

the lender

Eave

the lowest part of the roof that project beyond the wall of the structure.

Polychlorinated bihpenyls (PCBs)

were widely used as dielectric and coolant fluids, for example in transformers, capacitors, and electric motors. -have been known to leak into the ground from electrical transformers. Appears in groundwater and soil. Release toxins under High Temperatures.

Secondary mortgage markets

where the loans originated in the primary mortgage market are bought and sold