645 Questions
Which of the following is NOT a mission of the Division of Licensing?
to provide a vehicle for hearings for license law violations
How many hours of education is a broker candidate required to complete in addition to those required for a salesperson’s license?
75 hours
Which of the following is NOT one of the real estate broker license types?
salesperson
In order to become a licensed salesperson in NY, a candidate must ____ successfully.
complete the 77-hour pre-license course
What NY law gives the DOS authority to regulate real estate brokers?
Article 12-A of the NY Real Property Law
Sellers employ a broker to sell their home through the use of which of these documents?
listing contract
Which penalty is not imposed by the DOS on a real estate broker for engaging in fraud?
imprisonment
The Salesperson Exam is a written exam in a multiple-choice format and contains ___ questions.
75
Which additional requirement must a candidate meet to become a licensed associate broker?
submit the name of the sponsoring broker
How much is the fee charged by the DOS for an associate broker license?
$185
Which of the following is a requirement for becoming a licensed real estate broker in NY?
demonstrate fair knowledge of the English language
Which of the following is NOT a real estate license issued in NY?
sponsoring broker license
The final step of the real estate transaction when the buyer gets the deed to the property, the seller gets the proceeds from the sale, and the broker gets his or her commission is called?
settling the transaction
The mission of the NY Department of State, Division of Licensing Services (DOS) includes all of the following except?
to administer the compliance provisions of Article 12-A
How many members does the Governor appoint to the Board of Real Estate?
3 brokers and 4 public members
How many points are given for hotel sales experience?
400
Which of the following real estate licenses has a fee of $185?
broker and associate broker
The final step of the real estate transaction is
closing
How many total years may a member of the NYS Board of Real Estate serve?
10 years
Which of the following is NOT part of the transaction closing?
the title agent clears the title
How many members are on the Board of Real Estate?
15
In order to become a licensed broker in NY, a candidate must be at lease ___ years of age.
20
Real estate licensees should have a good knowledge of the loan programs that are currently available from local banks and other lenders so they can perform this state of the real estate transaction?
helping the purchaser with the financing process
A listing contract gives the broker the authority to
market the property
NY has established a point system to help determine the experience a Broker candidate needs. A total of ____ points and the equivalent to two years of full-time experience for broker candidates.
3500
In NY the real estate examinee must correctly answer at least ___ percent of the questions to pass the exam.
70
When does a broker receive his or her commission for listing and selling a property?
when the transaction is settled
Failure to notify the DOS of a change of business address is grounds for which of the followings?
suspension
An officer of a legal entity may only be licensed as
a broker
Which of the following is NOT a requirement regarding real estate business signs?
the sign must include the business telephone number
To avoid consumer confusion a business card must include all of the following information except?
the brokers social security number
Which of the following is required of an apartment information vendor?
pay a $400 licensure fine
In a partnership brokerage, what else do the partners need besides a broker license?
a partnership certificate
Which of the following statements is TRUE?
an associate broker who wants additional licenses must submit to the Department from each sponsoring broker acknowledging each licensure
Every licensed broker must keep and maintain a file of agency disclosures, listings, offers, closing statements and other transaction-related documents for a period of ___ years.
3
The fee for changing a broker's name or status is ____, except if the change is made on the renewal application.
$185
license
22.5
Brokers may share compensation with any of the following licensed persons except?
certified residential appraisers
How many hours of continuing education credit will a licensee receive for teaching an approved real estate course?
2 hours for each teaching hour
How many hours of continuing education is the salesperson licensee required to complete in cultural competency?
2 hours
Of the 22.5 hours of continuing education, the topic of fair housing and/or discrimination in the sale or rental of real property must be at least how many hours?
3
What score is required to pass the written examination if an individual failed to renew his or her license on time because the individual enlisted in the US armed forces?
the exam is not required
How would you define the following add placed by a broker in NY, "Two-family home, $190,000, Call 212-123-4567"?
a blind ad which is illegal in NY
The Licensing Department may issue a license to a corporation to conduct business as a real estate brokerage only if the applicant
is an officer of the corporation prior to licensing
Which of the following is required of a real property appraiser?
pay a $300 licensure fee
A broker maintaining more than one place of business must apply for and secure an additional ___ for each of the branch offices.
license
Which would be a service charged by the NYS Commission?
change from individual to a corporate license
Which of the following is required of an apartment information vendor?
pay a $400 licensure fee
What must a licensee do to renew a license after the 2-year renewal date?
retake and pass the licensure examination
Which of the following courses would not be acceptable to meet the continuing education requirment?
basic computer skills
If a licensee changes brokers, what must he or she do?
notify the DOS within 5 days of the change
Of the 22.5 hours of continuing education, the topic of fair housing and/or discrimination in the sale or rental of real property must be at least how many hours?
3
Which of the following is required of an apartment-sharing vendor?
maintain a trust account of $2,500
A salesperson can accept a commission from _____.
their sponsoring broker
A _______ is a fee or rebate that is paid to an agent or another participant in a transaction as an incentive to refer customers to a particular vendor.
kickback
Jayson is a NY licensed salesperson. A local moving company asks Jayson to recommend his moving company to clients looking to relocate. In exchange, the mover will pay Jayson $200 for every client who moves with his company. This type of arrangement is which of the following?
this type of kickback arrangement is prohibited in the Real Estate Settlement Procedures Act
The NY Department of State requires a broker to maintain what kind of bank account for client funds?
a separate, federally-insured trust or escrow account
Broker Dean has a file cabinet full of agency disclosures, listings, offers, closing statements and other transaction-related documents. How long does he need to keep these documents?
3 years
Other professions that deal with real estate but require other types of licenses other than a real estate broker or salesperson license include all of the following except?
attorney
How many hours of continuing education are required for salesperson license renewal?
22.5
Which of the following is NOT required of a home inspector?
a $2,500 interest-bearing escrow account
If a broker changes his or her business address and does not notify the DOS, what can happen?
the broker's license can be suspended
Under what conditions may a broker allow an associate broker to operate a branch office?
only under the broker's direct supervision (and an active Broker Association for a minimum of two years of four years of licensure
If the Department denies a license application, the applicant will be notified in writing and may then ask for a hearing within ___ days of receiving the denial notice.
30
The Determination section of a hearing decision
cites the penalty the court is imposing on the respondent
Who is responsible is an unlicensed assisant performs any activity that requires licensure?
both the associated licensee employer and the broker
What section of Real Property Law makes practicing real estate without a license unlawful?
Section 440-a
What is an Article 78 proceeding?
a judicial appeal
In the case studies, the Department of State is always which party?
complainant
If a licensee fails to pay child support, what is the DOS authorized to do?
suspend the licensee's license
Under which of the following circumstances would a broker lose or have their license suspended for a law violation committed by an associated licensee?
if the broker had actual knowledge of the violation
Which section of a hearing decision explains what violations the respondent committed?
opinion and conclusions of law
In the case studies, the person and/or firm against whom the complaint was filed is always which party?
respondent
Which of the following tasks may an unlicensed assistant legally perform?
compute commission checks
In cases brought against licensees in NY by the Department of State which of the following are the correct names of the parties?
complainant/respondent
Which of the following is NOT a penalty the DOS may impose for license law violations?
$5,000 fine
Which of these actions would be a license law violation?
a salesperson accepting a commission directly from a seller
Which of the following statements is FALSE?
an agency relationship disclosure must be presented to the client prior to signing a listing agreement
In the hearing decision the licensee being charged with a violation is always which party?
the respondent
Which of the following tasks is illegal for an unlicensed assistant to perform?
discuss specific properties with customers
Which section of a hearing decision outlines what the court believes happened?
findings of fact
An owner's agent is showing a buyer an apartment building. The buyer notices water stains on the ceiling and informs the agent. What is the agent's best course of action?
inform the seller
Several real estate boards and associations were prosecuted in the 1970s under federal antitrust statutes and abandoned price-fixing by settling under which of the following?
consent decree
If an agency relationship arises because of the actions of the parties involved rather than by a written agreement, what is that agency called?
ostensible agency
The legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous or representation made by act, conduct or silence is called?
estoppel
The principles of an agency relationship include all of these factors except which one?
compensation
The statement "Let's not do business with XYZ Real Estate Company; they discount their commissions", would probably violate antitrust laws as an example of which of the following?
boycotting
Broker Bob must obey Seller Sue's directives in all EXCEPT which of the following?
do not show the home to families with more than 2 children
A property seller empowers an agent to market and sell a property on his behalf. What is this an example of?
special agency
The statement "Why don't you take the south side of town and our company will take the north side", would probably violate antitrust laws as an example of which of the following?
market allocating
If an agent fails to verify a fact before passing it to the buyer, the agent has committed
negligent misrepresentation
If Broker Bob lists Seller Sue's home for sale and then shows the home to Buyer John, to whom does Broker Bob owe fiduciary duties?
Seller Sue
When is a commission earned?
when an offer from a qualified buyer has been submitted and accepted and both parties have received signed copies of the agreement
When a client enters into a listing agreement with a brokerage firm, the broker is the agent of the client. The licensees that are affiliated with the brokerage firm are the agents of the broker and the _____ of the broker's clients.
subagents
In real estate the fiduciary relationship between agent and principal is called?
agency
The _____ can enforce compliance with the Sherman Act and some sections of the Clayton Act.
Federal Trade Commission (FTC)
The act by brokers from different brokerages having a conversation about the commission rates they charge clients may be considered?
price fixing
If Broker Bob lists Seller Sue's home for sale and then shows the home to Buyer Bill, who is the principal?
Seller Sue
Which of the following is not a fiduciary duty an agent owes to his or her principal?
blind obedience
Which of the following duties best describes what an agent owes customers?
fairness, care, and honesty
All of the following are common types of agency relationships that exist except?
facilitator agency
Which is the most confusing form of agency relationship?
subagency
When is dual agency allowed in NY?
only with disclosure and informed consent
Usually, dual agency must be disclosed at the time it arises; so the seller _______ agree to dual agency at the time he or she signs the listing.
does not have to
When the agency relationship has been terminated, the licensee is no longer considered the principal's agent and does not owe any further duties to the principal, except for the following?
confidentiality
Which of the following statement is TRUE?
a seller is not required to accept a subagency option when he or she signs a listing agreement
residential real property includes which of the following?
property that contains a single-family home
When must a seller agree to dual agency?
at the time a dual agency situation arises
Under the new regulations when a seller gives permission to a broker to submit the property to the MLS, the seller is authorizing the broker to make a blanker unilateral offer of/or _______ to all the other members of that MLS.
agree to accept or reject subagency
AS of January 1, 2011 the new residential disclosure form allows for advanced approval by each customer and client for _____ agency.
dual
What does a client give up in a designated agency?
the broker's fiduciary duty of undivided loyalty
Which part of the NY License law requires agency disclosures?
Article 12-A, Section 443
An agency relationship may be involuntarily terminated by which of the following?
by destruction of the property through fire, vandalism, or natural disaster
Subagents working for the seller have what duty to the buyer?
honesty
A broker can enter into a single agency agreement with any of the following except?
seller and buyer
A subagent owes customer level services to the buyer which include?
honesty, fair dealing and the proper disclosure of pertinent facts that affect the value of the property
If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?
seller
In all residential transactions licensees must give potential sellers or buyers a written disclosure form when thy make their _____ contact.
first substantive
Which of the following types of agency is not allowed in NY?
undisclosed dual agency
In an open listing, who is paid commission?
only the selling broker
A Property Condition Disclosure is
a representation of what the seller knows about the property
An agency must keep a copy of a signed agency disclosure document for
at least year years
Which listing agreement is the most commonly used?
exclusive right to sell
When does the first substantive contact take place?
a potential buyer or seller begins to discus his or her needs
Who is paid a commission with a NY property net listing?
no one
An open listing is often considered to be
a unilateral contract
All written residential listing agreements must contain which of the following definitions?
exclusive right to represent and exclusive agency
Which listing is illegal in NY?
net
Which statement is true about the Property Condition Disclosure?
it is required by law
What action must an agent take if a buyer or seller refuses to sign a disclosure form?
complete an affidavit and attach the original NYS disclosure form and have it notarized
When must a buyer's agent provide the agency disclosure to a seller?
at the time of first substantive contact
An agent must present a copy of the agency disclosure to a potential buyer and get it signed
before they sign a buyer's agency agreement
Which type of listing provides the most incentive for a broker to market a property?
exclusive right to sell
Brokers must include the DOS Disclose Form definitions of "exclusive right to sell", "exclusive agency", and "open listing" with the listing agreement except for:
commercial properties
How would a seller inform a buyer that the property has an underground storage tank?
the seller must include the information on the property condition disclosure
A property condition must include
anything the seller knows about the condition of the property
What occurs when the broker appoints one agent to represent the seller as a seller's agent and another to represent the buyer as a buyer's agent in a transaction?
Dual Agent with Designated Sales Agents
If the seller fails to provide the property disclosure statement to the buyer before they buyer signs the purchase contract
the buyer will receive $500 credit at closing
A broker must file an IRS Form 1099-MISC for an independent contractor who earns more than
$600
Which of these statements about an independent contractor is true?
he or she is paid in commission on all sales
Which of these guidelines is not part of the IRS safe harbor test?
contractors must have access to workers compensation benefits
DOS Regulation 175.23 requires that a broker do what?
keep written records of all real estate listings any salesperson obtains
Who would most likely pay advertising expenses?
the independent contractor
When negotiating an independent contractor agreement, which question should NOT be asked?
how many hours am I required to work each week?
What is the suggested length of time for a contractor's agreement?
12 months
Which NY law regulates how long brokers must retain transaction records?
DOS Regulation 175.23
Which of the following may a broker pay for an independent contractor?
errors and omissions insurance
When determining the level of control and independence of an employee or independent contractor, which category covers how the worker does his or her job?
behavioral
What method may a broker use to determine how an independent contractor is to perform the assigned tasks
none
Verification of the level of control and independence regarding IRS job classification falls into which of these?
Behavioral, Financial, and Type of Relationship
Salespersons must perform all activities in the name of _______.
the employing broker
If an IRS audit determines a salesperson is an employee and not an independent contractor, which of the following will the employing broker NOT be liable for?
liability insurance
Which of the following is NOT a characteristic of an estate in common?
unequal rights
Which of the following best defines accretions?
any increase in the land mass that results from the deposit of soil by water or wind action
Surface rights include
water rights
Co-tenants share property in what is known as
undivided possession
Upon the death of the owner, a life estate passes to whom?
the original owner or other named person
When does a landowner own the actual water to which he or she has water rights?
when the body of water is entirely contained within the boundaries of the property
Brothers Jim and Frank jointly hold a parcel of land. The property is held in
co-ownership
When a single individual or entity owns a fee or life estate in a real property, the type of ownership is what?
tenancy in severalty
If a landowner retains the right to plant and cultivate crops on the land but leases the rest of the land to a tenant, what right has the owner exercised?
right to transfer
If an owner wants an antique chandelier to remain personal property, what must he or she do?
any of the above
What does the right to encumber all a landowner to do?
mortgage the land
Mary and sister Jill jointly hold a parcel of land. The property is held in
co-ownership
Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. What type of ownership is this?
tenancy in common
Which of the following best describes personal property?
is readily moveable from one location to another
What determines a landowner's water rights?
movement of the water
What distinguishes a freehold estate from a leasehold estate?
a leasehold endures only for a specific period of time
What is the highest form of ownership interest one can acquire in real estate?
absolute fee simple estate
If a person owned one airspace unit together with associated interest in common elements, this person would have ownership in what?
condominium
Which of the following is NOT an act of waste?
maintaining landscape features
Which of the following is special purpose real estate?
a public park
What part of a non-navigable waterway does the owner of an abutting property own?
to the middle of the waterway
Tenancy in severalty is the same as
sole ownership
The right to encumber property means the right to
mortgage the property as collateral for debt
Littoral rights include
land ownership up to the high-water mark
If a third party has been using a portion of a landowner's land without the owner's permission but with the owner's knowledge for 12 years, what type of easement may the third party obtain from a court order?
easement by prescription
Rancher Norm is allowed to bring his cattle onto the neighbor's property to access a public water source. What type of easement does Norm have?
easement by implication
Which of the following is a superior lien?
special assessment lien
In New York, how long can a judgement real property lien remain in effect?
10 years
Jill was notified that a piece of property she owns has a pending suit. What type of notice has Jill received?
lis pendens
When a notice of lis pendens has been served
the property cannot be freely encumbered
How many liens can be attached to a property at one time?
multiple
When must a mechanic's lien be placed if the contractor is not paid?
within 4 months of work completion on a single dwelling
How is a lien terminated?
payment of the debt
Seller John sold two parcels of land. Parcel B is now land-locked by Parcel A. What type of easement is given to provide road access to Parcel B?
easement by necessity
Which type of estate is an encumbrance?
none of the above
What type of lien does an owner create when a property mortgage in negotiated?
voluntary
What is it called when an unauthorized, physical intrusion of one owner's real property comes into that of another?
an encroachment
What type of action might a creditor take to force the sale of attached property to collect a debt?
writ of execution
Which of the following statements is TRUE?
an easement does not give possessory rights
Which of the following encumbrances would restrict the landowner's ownership, value, and right to transfer a clear title?
lien
Which type of lien has priority over all other liens regardless of the date placed?
ad valorem tax liens
Which of the following describes a situation in which an easement might be created again the wishes of the property owner?
the property has been continuously used as an easement with the knowledge but without the permission of the owner for a period of time
What does a Habendum clause do?
describes the type of estate being conveyed
The gradual addition of land as a result of movement by streams or rivers is called
accretion
When does a deed become valid?
upon delivery and acceptance by the grantee
Why should a grantee record a deed?
recording the deed gives the public constructive notice of the grantee's ownership
A bargain and sale deed with covenants has which of the following special warranty covenants?
I own and will defend against my acts only
How many sections are there in a township?
thirty-six
What instrument is used by an owner to voluntarily transfer title to real estate?
deed
A property owner can gain real estate through the action of water depositing soil on a bank through what process?
accretion
Which of the following is NOT a method of determining legal description?
property inspection
Which type of will is generally not valid for the transfer of real property?
nuncupative
What action might a property owner take to avoid adverse possession?
sue to quiet title
A deed of conveyance occurs when
a living owner makes a private grant
Acceptance by the grantee
allows for a deed to convey title
Farmer Nick's property has a stream that floods almost every year and deposits soil to his side of the bank. This action is known as what?
accretion
If a person having several heirs dies intestate, what will happen to the property?
the estate passes to lawful heirs according to the state's laws of descent and distribution, or succession
Which of the following would NOT be used as a legal land description?
parcel method
Reliction is
the gradual receding of water from its usual watermark to allow access to "newly" found land
Which of the following is NOT a process by which involuntary alienation occurs?
death of the owner
RESPA gives the buyer the right to review the completed settlement statement how long before closing?
three days before closing
The TRID Rule requires lenders to give a loan estimate to borrowers
at the time of loan application
What is the total a seller would pay in state transfer tax and NYC transfer tax for a property with a sale price of $499,000?
$6,986
Sellers Glen and Jill are closing on their home sale next week. How will they know how much money they will receive from the sale?
the escrow agent will subtract the seller's total debits from the total credits and arrive at what the seller will receive at closing
Which statement is true about accepting referral fees?
it could be a violation of state licensing laws
Who should have title insurance?
the buyer and the lender
Which of the following locations is the least likely place to hold a closing?
broker's office
Which of these would be a CREDIT to the seller at closing?
insurance premium paid in advance
Which statement about the Torrens system is FALSE?
it is necessary to search public records to ascertain the status of title
Who should have title insurance?
the buyer and the lender
A defective conveyance of title in the property's history results in a
clouded title
Which of the following does NOT occur at closing?
the mortgage loan is approved
Paul will get the second quarter water bill at the end of June. The bill is $39.00 per quarter. If closing is on May 7, what will be Paul's share of the bill?
$23.09
How much is the NYC RPTT for a property with a sale price of $600,000?
$8,550
Revenue stamps are also known as
transfer tax
What property is exempt from FIRPTA requirements?
buyer's personal residence with a sale price under $300,000
Which of the following is not an item that a buyer usually pays at closing?
fee for clearing the title
What is the broker's main role leading up to closing?
checking on progress of closing activities
Which of the following statements best describes the purpose of a Closing Disclosure?
an official settlement statement used by settlement agents and title companies to itemize all charges for a borrower and seller
Money that the buyer or seller needs to pay at closing is called what?
debit
A Closing Disclosure is required by RESPA for all
federally-related mortgage loans
What is "chain of title"?
a chronology or successive owners of record of a parcel of real estate
Who files a satisfaction of mortgage document with the county clerk's office?
the seller's attorney
Proof of ownership of a property is called what?
evidence of title
The buyer's primary function at closing is to
pay the purchase price for the property
Prepaid expenses are those that
were paid in advance
Most lenders require buyers to purchase
homeowner's insurance
Which of these would be a CREDIT to the buyer at closing?
earnest money deposit
Who pays for the credit investigation?
the buyer
How much is NYC RPTT for a property with a sale price of $492,000?
$4,920
Which of the following is not an item that a seller usually pays at closing?
homeowner's insurance
Who reports the property transfer transaction to the IRS?
closing agent
On closing day, the broker
all of the above
Recording the deed is done through which of these?
constructive notice
When might decontrolling of an apartment occur?
when the apartment becomes vacant
A lease conveys exclusive use and
it may also restrict some uses
Constructive eviction occurs when
the landlord defaults on the lease terms
Which kind of lease has no time limit?
estate at will
When a tenant agrees to pay all taxes, insurance, maintenance, and repairs, that tenant has what kind of lease?
net
Which lease would include a recapture clause?
percentage lease
Which type of lease has no automatic renewal?
estate for years
Mark earns $185,000 a year and he pays $2,600 per month for a rent-stabilized apartment. Which statement is true?
the apartment can be decontrolled
Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, Grant makes monthly rent payments and the owner accepts them. How would Grant's lease at this time be classified?
estate from period to period
If a tenant leaves a leased premises, under what condition would that not be considered abandonment?
the tenant continues to abide by the lease terms
Which of the following statements is TRUE?
the landlord may limit the total number of occupants of a rental unti
Most apartment leases are
estates from period to period
Which lease is common for office properties?
gross lease
Which type of lease requires proper notice to terminate?
estate from period to period
Mary has remained in her apartment two weeks past her move-out date, without any payment. What type of tenant is Mary?
holdover tenant
Bill has informed his landlord that he will be moving in 30 days. What action has Bill taken regarding his lease requirement?
he has given notice
For a rent-regulated apartment, how much is the typical security deposit?
1 month's rent
In NYC, how often may rent be adjusted for an apartment under rent control?
every 2 years
What is an important legal characteristic of an option to buy agreement?
the option must perform if the optionee takes the option, but the optionee is under no obligation to do so
installment sales contract is which type of contract?
bilateral
An option-to-buy is what kind of contract?
unilateral contract
Mike signed a rental agreement for his friend Norm. What must be enforced for this contract to be binding?
power of attorney
When is a contract terminated?
after it is performed
If Joe entered into a contract with Sue only to discover the circumstances leading up to the contract, Joe has entered into which kind of contract?
voidable
What contract provision shows a division of expenses between buyers and sellers?
Apportionments
A contract is
an intangible agreement
The NY sales contract provision that states whatever was promised in prior negotiations is of no importance is called the
merger clause
Which contract element indicates a mutual agreement?
offer and acceptance
Which legal remedy resets parties to pre-contract status?
rescission
Buyer Bill has agreed to pay for a computer system after all hardware has been installed and operational. What type of contract does Bill hold?
executory
What is a parol contract?
an oral contract
During the specified period of an installment sales contract, what type of title does the buyer receive?
equitable title
Which contract provision makes previous promises null and void?
Merger Clause
A contract that conveys an interest in real estate must
contain a legal description of the property
A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, what is the status of the offer?
it's still an offer
An option to buy is what kind of contract?
unilateral
When an agent is reviewing the accuracy of a contract, which item does not need to be included?
the date the buyers will begin occupancy
How does the Lawyer's Fund help legal clients?
the Fund reimburses losses caused by attorney misconduct
The buyer typically has ______ from the date the purchase contract is signed to obtain a loan commitment.
60 days
Why would a buyer choose to make an additional down payment at closing?
the buyer wants to lower the mortgage loan
If a real estate salesperson prepares a contract without using a preprinted form, the salesperson may
all of the above
In what area of NY are sit-down contract signings most common?
Upstate NY
If an attorney makes changes to an offer, what action should follow?
all parties to the contact must initial the changes
Which statement best defines a Certificate of Occupancy?
a certificate issued by a local building department that indicates that the building is in proper condition to be occupied
Which one of the following documents is lease like a binder?
property disclosure statement
Which of the following is one of the purposes of the Lawyers' Fund?
to reimburse clients for money that was misused by their attorney
Broker Norm prints and completes lease agreements to which he is not a party. What can be said about Norm's action?
brokers may not complete leases to which they are not a party
What is the customary down payment amount on residential property in NY
10 percent
What is the purpose of the Lawyer's Fund?
designed for law clients who are unable to get reimbursement from their lawyer who has causes them loss
If a real estate agent prepares a sales contract and an attorney makes modifications to it, which statement is TRUE?
all the parties must initial the changes
Who typically holds the down payment?
the broker
Any modifications or additions to a contract must be
initialed by all parties
Which of the following terms is not used to describe a binder?
buyer's statement
In NY, an earnest money deposit can equal up to ______
10% of the property purchase price
Jim has a loan where the entire payment amount goes tot he interest owed What type of loan does Jim hold?
straight
Which method of selling a property with a mortgage is the simplest?
free and clear
A measure of economic conditions is a(n)
index
Al is seeking an FHA loan. Where would he NOT go to make an application?
local HUD office
In the event of default by the purchaser, the lender has the right to bring legal action through the courts to satisfy the debt. This is called by what name?
judicial foreclosure
The loan origination fee on a VA loan cannot exceed
1 percent of the loan amount
Where does SONYMA get its funding?
proceeds from tax exempt mortgage revenue bonds
Which loan covers the period of time between the end of one mortgage and the beginning of another?
bridge
What is the interest rate on the ARM tied to?
index
Borrower Jake has defaulted on his mortgage and the lender has required the loan to paid in full This action is based on which mortgage feature?
acceleration clause
What percent equity of the purchase price allows a borrower to request cancellation of PMI?
20%
When might a lender be willing to release the original seller from liability in a mortgage assumption?
all of the above
The index plus the margin establishes the
calculated rate
Most conventional loans follow the underwriting standards outlined by
Freddie Mac and Fannie Mae
What would an 8% interest rate become if 4 points were charged??
8 1/2%
What type of loan is often used when a seller will not accept a property sale contingency?
bridge loan
How does a borrower use private mortgage insurance?
a borrower can get a conventional loan with a lower down payment by insuring the loan through private mortgage insurance
PMI loans made after July 1999 require that the loan must be released
when the loan-to-value ratio reaches 78 percent
Mark gets a home loan and the lender will charge him 3 points at closing. If the loan is for $68,000, what will Mark be assessed in points?
$2,040
Which repayment plan is known as an interest-only loan?
straight
What type of document does a homeowner sign when agreeing to a mortgage?
promissory note
Which mortgage clause requires a borrower to maintain the physical condition of the mortgaged property?
Preservation and Maintenance of Property
Which mortgage clause requires the borrower to maintain the physical condition of the property?
preservation and maintenance of property
In which of the following types of loans is the payment allocated only to interest?
interest only
Loan flipping is
when a lender encourages a borrower to refinance a loan so that they can charge high points and fees for the new loan
Which of the secondary mortgage market agencies is a shareholder-owned company?
Fannie Mae
Which of the following is a major credit reporting agency?
Experian
Which of the secondary mortgage market agencies is now a private corporation?
Fannie Mae
When a lender requires a higher down payment due to the neighborhood where the property is located, this is called
redlining
Lenders use all of the following to determine whether or not to grant a loan EXCEPT
the marketability of the property's title
Licensees who violate Regulation Z advertising requirements may be fined up to
$1,000
Which of the secondary mortgage market agencies sets guidelines for conforming loans?
Fannie Mae
________ is a shareholder-owned company that works to make sure mortgage money is available for people across the country
Fannie Mae
Ginnie Mae developed the first mortgage-backed security in
1970
What is the risk of debt consolidation?
a person could lose all his financed assets when they cannot pay the one bill
In what type of mortgage-backed security does the security holder receive payment of both principal and interest, whether or not it has been collected?
the fully modified pass-through security
Loans originated in the primary mortgage market can be bought, sold, or traded in the
secondary mortgage market
It is important for the lender to determine the ______ of a particular piece of property at any given point in time.
market value
Freddie Mac introduced the first conventional-loan-backed security in
1970
If Tara and Al are putting 35% down on their home purchase, this is considered a(n)
low loan-to-value ratio
What is not a common way that mortgage funds are shifted?
the Federal Reserve purchasing mortgages from smaller member banks
What is a type of zoning in which density is determined for an entire area, rather than on a lot-by-lot basis?
cluster zoning
Who can enact zoning ordinances?
city or county governments
What can Sarah's neighbors do if she violates restrictive covenants and installs a swimming pool on her property?
file for an injunction
A non-profit organization wants to erect a much-needed daycare center in a residential zone. Given other favorable circumstances, the local authorities grant permission by allowing what?
a special exception
If a municipality exerts its power of eminent domain against a certain property owner, what happens?
the owner must sell the property or grant an easement to the municipality for just compensation
What is typically not covered by building codes?
the zoning of a building
If a person dies with no heirs and no one else to receive the deceased person's property, the state uses the power of ______ to claim the property.
escheat
New York's ___________________ requires all state and local government agencies to assess the environmental significance of all actions they have discretion to approve, fund, or directly undertake.
State Environmental Quality Review Act
In NY, ________ liens take priority over any other liens.
property tax
The following is NOT an example of the exercise of police power.
restrictive covenants
What do we call programs that encourage a shift in development away from environmentally sensitive areas to more appropriate areas?
transfer of development rights
If the zoning appeals board rejects a zoning appeal, the landowner may appeal the ruling by petitioning the NY Supreme Court through a/n
Article 78 proceeding
Which of the following has a stake in privately owner property?
all of the above
What is the fundamental purpose of a building permit?
to ensure that improvements comply with codes
Zoning is
the process of planning for land use by a locality to allocate certain kinds of structures in certain areas
Where does the term "taking" come from in regard to eminent domain?
The Fifth Amendment
The regulation that requires a sub-divider to make a filing with the NYS DOS before offering to sell or lease subdivided vacant lands on an installment plan is
NYS Article 9-A
What makes it possible for there to be a free exchange of development rights without having to buy or sell land?
transfer of development rights
________ control of land use was the precursor to public land use control in the US.
private
How are covenants enforced?
by injunction
In platform framing, what are the members called that frame the structure?
studs
A ________ is a protective device containing a wire that melts and breaks the circuit when the current exceeds a certain value.
fuse
The double top plate used in load-bearing walls is called a
flitch beam
Oil-fired heating has what disadvantage?
requires delivery and storage
_______ insulation is a two-part liquid containing a polymer and a foaming agent.
Spray foam
How is amperage calculated?
watts or kilowatts
What kind of gas is used for cooling in air conditioners?
freon
What does the NY Unifrom Fire Prevention and Building Code require regarding vapor barriers that the National Building Code does not require?
the barrier must be treated for termites
A building envelope
is the outer shell that protects the indoor environment
Where would a contract find a list of materials needed for building construction?
the specifications
What holds the entire weight of the structure?
footings
The part of the foundation which transmits loads directly to the soil is called
the footing
Who provides guidelines for the construction of private wells in NY?
The NYS Department of Health
What type of furnace has a heat exchanger to burn the fuel, which is either natural gas, propane, or butane?
a gas-fired furnace
Which of these types of wire would probably not be found in a residence/
steel wire
When construction is complete, final inspections will be done and if all is up to code, the building department will issue a
certificate of occupancy
________ is anything attached to a piece of land or building such that it becomes a part of that property and is passed on to a new owner when the property sells.
an appurtenance
What amount of heat energy is needed to raise the temperature of one pound of water by one degree F?
a british thermal unit
What onsite system is designed to treat and dispose of domestic sewage?
a septic system
_______ minerals are fibrous silicates with a crystalline structure and are found in rock formations throughout the US and the world.
asbestos
Radon is caused by the decay of
uranium
Who should remove asbestos?
a certified professional
Which phase of an environmental assessment confirms contamination at a site?
Phase II
The government regulates USTs when the storage capacity reaches how many gallons?
1100
What is the primary environmental hazard of underground storage tanks?
they might leak hazardous substances which will contaminate the groundwater
What is the primary hazard of chlorofluorocarbons to the environment?
they deplete the ozone layer
Which of the following statements is TRUE regarding sick building syndrome?
live plants reduce the number of contaminants
Whose responsibility is it to have private well water tested?
the homeowner
An area that contains water at or near the surface of the soil is called a
all of the above
The maximum water containment level is defined by
The NY Sanitary Code
In most cities and towns, water utility companies provide drinking water through a
municipal system
Areas where water covers the soil, or is present either at or near the surface of the soil all year are
wetlands
Asbestos should only be removed
by a professional
When is a percolation test used?
before a septic tank is installed
When does asbestos pose a health hazard?
when it is released into the air as dust or fibers
The Superfund regulates
cleanup of hazardous waste dumps and spills
Mold grows as a result of
moisture
In the ________ section of the Lead-Based Paint Disclosure Form, the real estate licensee initials to indicate that he or she has informed the sellers as required and is aware of his or her responsibility to ensure compliance.
Agent's Acknowledgment
Which of the following is not a consideration when doing a residential market analysis?
the value of the property's land
Under the ______ heading of the Comparative Market Analysis Form is a row to add all the pertinent information about the seller's property.
subject
The cost approach would be most reliable for which of these properties?
county court house
The highest price a buyer is willing to pay and the lowest price the seller will accept for a property is known as what?
market value
The licensee should keep track of the pending sales and the active listings of the homes that he or she included in the CMA. This responsibility falls under
documentation
If a comparable lacks a feature that the seller's property has the licensee will
add the value of the feature to the price of the comparable
The nominal value of a property that has reached the end of its economic life is called _______ value.
salvage
Which of the following would not be found in a competitive market analysis?
recently remodeled homes
Ian Prazer is assessing Ryan Seller's property using the sales comparison method. Which of the following statements is FALSE?
Ian's first step will be to estimate the potential gross income of Ryan's property
What is the last step in the cost valuation approach?
add the land value to the depreciated cost
If a comparable has a feature that the seller's property does not have, the licensee will
subtract the value of that feature from the price of the comparable
The income capitalization approach, or income approach, is more specifically used for appraising
income or rental properties
The licensee will always be making the adjustments to
the comparables
A competitive market analysis is an attempt to do what?
identify an estimate of a property's value based on comparables
The extra value created by merging two parcels of land is called
plottage value
A taxing authority determines the
assessment value
A broker or salesperson who is attempting to establish a listing price, or range of prices for a property, uses a scaled-down version of the appraiser's sales comparison approach called a
comparative market analysis, or CMA
If the appraiser is using the cost approach to determine the value or a property where the land is valued at $20,000 and the replacement cost of the improvements is $125,000 with a total depreciation of $9,000, what is the indicated value of the property?
$136,000
A property's market price is
the highest price a buyer will pay and the lowest price the seller will accept
When did the Americans with Disabilities Act become effective?
1992
How many hours must a licensee complete in fair housing and discrimination education as part of continuing education requirements?
3 hours
Which of the following is not prohibited by a non-solicitation order?
advertisements in the newspaper
A person who believes he or she has been discriminated against has how long from the time of the alleged violation to file a suit in a state or federal court?
24 months
Which of the following BEST describes the term "preference?"
knowingly liking one thing or one person better than others
Which section of the NYS Human Rights Law prohibits discrimination in employment, housing, credit, places of public accommodations, and educational institutions?
Article 15
If discrimination is found, the Commissioner may order the respondent
to cease and desist and take appropriate action
Violations of the Americans with Disabilities Act may result in the Department of Justice imposing civil penalties up to ______ for second and subsequent violations.
$110,000
Who would not be protected under the protected class referred to as "familial status"?
a parent with a 24-year old son
Which is not a true statement about the Americans with Disabilities Act?
a duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities
In a process known as _______, dwellings that were formerly occupied by middle- and upper-income families decline in quality and value and become available to lower-income families.
filtering down
Fair Housing law first began with the ______ which prohibited discrimination in housing based on race.
Civil Rights Act of 1866
In which of the following NY discrimination exemptions may a real estate broker legally be involved?
restrictions of rentals to senior citizens
______ bias refers to how people primarily search for bits of evidence that back up their opinions, rather than looking at the whole picture.
Confirmation
Homeowners on a cease and desist list
cannot be solicited to sell, lease, or list their property
Testing for fair housing compliance must
report findings to HUD and your broker
Which race-related court case was decided by the Supreme Court to be based on a law that was unconstitutional?
Buchanan v. Warley
When would a model home in a real estate development need to comply with the ADA?
when it is used as the development's sales office
Sue has a seizure disorder and has a 70-pound seizure alert service dog. Bob has refused to rent an apartment to Sue because he has a "no pets over 30 pounds" policy.
Bob must allow Sue to rent the apartment with her larger service dog
Assuming a minimum tax rate of $0.75 to record a mortgage in NY, a mortgage of $175,000 would have a recording tax of?
$1,312.50
Beth is getting a $375,000 loan at 6.25% and will pay 2 origination points at closing. What will the effective interest rate be?
6.25%
If Joe sells a property for $375,000 with a 6.25% commission rate, how much commission will Joe receive (rounded to the nearest whole dollar)?
$23,438
A property has an assessed rate of $69,100. What are the annual taxes if the rate is $2.05 per $100?
$1,416.55
Calculate the transfer tax for a property that sold for $375,000 with an assumed mortgage of $125,000.
$1,000.00
What are the conventional loan guidelines for income and debt ratios?
28 income/36 debt
If a lender changes three (3) points on a $90,000 loan, the borrower would pay points of?
$2,700.00
A triangular lot measures 220 feet wide (base) and 160 feet deep (height), what is the area of the lot?
17,600 square feet
What is the simple interest on a $16,000 loan at 8% for 2 years?
$2,560
Tom is getting a $275,000 loan at 6.5% and will pay 1 origination point and 2 discount points. What will the total point cost be?
$8,250
John and Trish obtain a $500,000 mortgage loan for 20 years at a fixed rate of 6%. The amortization calculation indicates their monthly payment to be $2,965. How much will their second month's interest payment be?
$2,497.67
A parcel of property is 609,840 square feet. How many acres are in the parcel?
14 acres
If a property was purchased for $150,000 and appreciated 2% in 1 year, how much did the property appreciate?
$3,000
Calculate the total interest due on the following loan amount, $12,500 at 5.5% for one year?
$687.50
Tom and Jenna are getting a $175,000 loan at 5 percent and will pay 4 discount points. What will the effective interest rate be?
5.50%
A rectangular parcel contains 2.5 acres of land and has a road frontage width of 150 feet, what is the depth of the property?
726 feet
If a property was purchased at $250,000 with a land value of $30,000, what is the annual depreciation over an economic life of 25 years?
$8,800
What is the primary mission of a historic preservation commission?
identify and protect historic landmarks
What is one of the most important documents for a planning board?
master plan
In a city of less than 50,000 people, the board of health must include
at least 1 doctor
Compliance to building codes is overseen by
the building department
Your buyers want to purchase one of your listings and add a second story to it. Who should they consult?
building department
The NYC Board of Health consists of how many members?
1
A village board of trustees is made up of which of the following?
the mayor and a group of trustees (usually four) who are all elected officers
All residents of NY who do not live in a city or on an Indian reservation live in a
town
A function of a building department is to
oversee compliance to the building codes
If a homeowner wants to install a septic system, whose guidelines must the homeowner follow?
the department of health
Tax assessors are appointed at the _______ level.
municipal
In many cities a(n) ______ acts to preserve existing areas of natural beauty and cultural importance.
Architectural Review Board
What does a town assessor do?
determines a property's tax value
If a local building code happens to be more restrictive than the NY building code, which building code must be enforced?
local
Which statement about a town board is not true?
the town council must create a planning board
Members of the NYC Board of Health serve how long?
6 years
In NY State, a _______ is a highly autonomous incorporated area usually contained within a county.
city
What is the primary mission of the NYS Department of Environmental Conservation?
conservation of natural resources
Replacement cost coverage on a home's contents usually costs an additional
10% - 15%
For a hurricane to be covered by a policy with a compulsory windstorm deductible, regardless of the insurer, the storm must
be classified as a hurricane
Which type of coverage is NOT available through the NY Property Insurance Underwriting Association?
theft
Which of the following would be covered under the liability portion of a homeowner's policy?
injury of a person on the owner's property due to the negligence of the property owner or a member of the owner's family
How can a homeowner with a NYPIUA policy obtain liability coverage?
through wrap-around coverage with another carrier
Sue purchased a homeowner's policy to cover 75% of its replacement value and then experienced a $13,000 loss by vandals. How much can Sue expect to receive from her insurance company to cover the loss?
$12,187.50
If a homeowner installs hurricane or storm shutters the law mandates
the insurer must offer coverage discounts
Which is one of the things a property owner should do to determine how much insurance to purchase?
determine the cost to replace the home if it was completely destroyed
For consumers who are unable to purchase insurance from individual insurance companies, the NY Property Insurance Underwriting Association (NYPIUA) offers policies for
fire coverage
A Homeowners-1 (HO-1), or Broad Form policy, would insure against
damage from fire
When does an umbrella policy provide coverage?
when the liability on other policies has been exhausted
There is _________ coverage under a homeowner's policy for day care activities which result from a mutual exchange of services (e.g. watching your neighbor's children while she runs errands).
limited liability
How is the amount of coverage available for personal property normally figured?
it is a percentage of the amount of insurance carried on the structure
Which of these policies is the most common for a residential property?
HO-3
Which policy specifically for older homes whose replacement value exceeds the market value?
HO-8
Which policy is sold much less than other policies?
HO-1
The C-MAP program can help homeowners find insurance for what type of area?
coastal
Due to ________ the replacement cost of a home generally increases each year.
inflation
How many distinct codes words to have are considered the right amount?
3
What is known as "the illegal use of someone else's personal information in order to obtain money or credit?
identity theft
Which of the following is NOT one of the recommended personal agent safety steps listed in this course?
carry multiple firearms
According to the US Bureau of Labor Statistics, how many work related fatalities were recorded in 2014 for real estate salespersons and brokers?
29
How does the National Association of REALTORS feel about requesting that prospects fill out an ID form prior to showing property?
they recommend an ID Form and provide a template for offices to use
Every time we connect to ___________ we make decisions that affect out cybersecurity.
all the answers shown
There are many steps that can be taken to avoid becoming victims of identity theft or online scams. Which of the following would not qualify as a step to take to minimize your chances of identity theft?
when in doubt, save it
"Assessed value x tax rate = annual taxes" is the formula for circulating
property tax
The installation of __________ is more likely to prompt a reassessment than other types of construction projects.
an in-ground swimming pool
What option is available to a homeowner who receives a tax bill that she feels is outrageous?
file a complaint with the local board of assessment review
Jerry and Sue's home is valued at $500,000 and is assessed at 90% of its value. If the tax rate is 3%, what is Jerry and Sue's annual tax bill?
$13,500
The purpose of a homestead tax exemption is
to offer some amount of tax relief on an owner's principal residence
Excessive assessment complains fall into any one of the following categories EXCEPT
denial of permanent exemption
The Real Property Tax Law requires that state equalization rates be established _______ for ________.
annually; each county, city, town, and village
The property tax exemption provided to qualifying seniors is
a 50% reduction of the taxable value of their home
Who has the burden of proof for an assessment change when a homeowner appeals an assessment?
the homeowner
What does a tax certificate do?
entitles its holder to apply for a tax deed after a certain period
The Real Property Tax Law requires state equalization rates to be established every
year
Who is eligible to a small claims assessment review?
single family homeowner occupant
Which limited use farm structure does NOT qualify for a permanent property tax exemption?
milking barn
The alternative veteran's exemption is available only for residential property owned by veterans who
served during wartime and/or earned a medal
What is a unique characteristic of a special assessment tax?
it only applies to properties which will benefit from the public improvement
Which of the following is one reason why equalization is necessary in NY?
there isn't a fixed percentage at which property must be assessed; municipalities can set their own percentages
Tax bills are calculated based on
the assessment of the property and the local tax rates
To recover taxes owed on a property, the state of NY allows a taxing district to
foreclose on the property and hold an administrative tax sale
Local taxing authorities find taxing land to be beneficial. Which of the following is one of those benefits?
property taxes raise more revenue than income and sales taxes
A borrower's _________ is calculated based on all of the monthly obligations the borrower has, including those items or payments the borrowers must make for other debts, such as car payments or revolving charge accounts.
debt ratio
Condominium common elements can include which of the following?
elevator
What can happen if a buyer's temporary certificate of occupancy expires?
inability to extend homeowner's insurance, or to sell or refinance home
Which of the following fees are NOT the buyer's responsibility?
transfer tax
A temporary certificate of occupancy is typically effective for _______ after the issue date.
90 days
Which document is used to reserve a condominium for purchase?
letter of intent
What are the monthly payments that cover a condo owner's share of the costs of operating the building, including building upkeep, insurance, and salaries for building staff?
common charges
What are the three documents that are considered the legal blueprint of a condominium?
Declaration, Articles of Incorporation, and Rules and Regulations
The document intended to help buyers make an informed decision about their purchase is called a(n)
all of the above
The consent of the cooperative corporation is required for a shareholder to make any changes to his or her unit. This is done in the form of
an alteration agreement
Condominium flipping requires
the developer's permission
Which closing cost is the seller responsible for?
NY State Transfer Tax
In a new building, when does the sponsor have to submit an amendment to the Attorney General?
only if the price changes for all units or a section of units
The sale of co-op shares, condo units, or interest in homeowners' associations is subject to the Martin Act, as is the sale of other securities, such as stocks and bonds. The law requires that a complete description of these kinds of real estate interest be provided in
an offering plan
A condominium can be
all of the above
The document that describes the way the condominium is governed is called the
Declaration
Who approves a prospective purchaser's purchase in a cooperative?
board of directors
How long do tenants have exclusive right to buy their units in converted buildings?
90 days
CPS1 allows the developer to
market test the condominiums
The condo sponsor does not
serve on the board
Along with the amount of income, what else do banks want to see in a borrower's income?
stability and permanence of the income
Which type of property is the riskiest investment?
unimproved land
What type of retail centers have a total leasable area of up to 30,000 square feet and are usually anchored by a convenience store, such as a minimarket?
strip centers
How can an investor obtain a substantial tax benefit when investing in a fixer upper?
live in the home for 2 years
Mega malls contain
three or more full-line department stores
Which occurrence is advantageous to investing in undeveloped land?
appreciation potential
A building that contains retail space on the first floor and office space on the second floor is what type of property?
mixed-use
With a two-to-four family dwelling as an investment, which of the following expenses would the owner probably not pay for?
gas
Financial leverage can be measured as
a debt to equity ratio
Leverage is
using other people's money for investing
Real estate is typically
illiquid
What is the primary advantage(s) of owning a condominium as an investment property?
condos are easy to rent and the condo's association provides exterior and grounds maintenance
Which of the following is an advantage of investing in a two-to-four unit dwelling?
tenants ofter pay for their own utilities and repairs
Why are condominiums good investment properties?
they are easy to rent and the investor is not responsible for exterior maintenance
Which office building would have one to five stories with landscaping?
garden
When dealing with a fixer-upper, which principle of value will not have an effect on the property?
progression
What covenant might a condominium have that would interfere with an investor's plans for the condo?
requirement to live in the condo for 1 year before leasing it
Unexpected inflation can diminish an investor's rate of return if the income from the investment does not increase enough to make up for the effect of the inflation. This risk is known as
inflation risk
Which of the following is NOT a disadvantage of investing in a single-family home?
scarcity
If an investor has a property that has an income of $100,000, expenses of $16,000, and a debt service of $25,000, what is that property's BTCF?
$59,000
Which of the following factors does NOT affect the net operating income of a property?
purchase price
Which of these factors does not affect net operating income?
amenities
The principal and interest payments made over a period of time is called the
debt service
At any particular point in time, all the space that is available in a building may not be leased. When units are empty, this is referred to as
vacancy
A tax shelter is
any investment designed to delay, reduce, or avoid income taxes
If a property has an NOI of $23,500 and mortgage expenses of $12,000, what is the amount of before-tax cash flow for this property?
$11,500
The ______ measures the investor's ability to pay the property's monthly mortgage payments from the cash generated from renting the property.
debt coverage ratio
Which of the following is a variable expense?
management fees
If an investor has a before-tax cash flow of $18,000 and a tax liability of $2,500, what is this investor's after-cash tax flow?
$15,500
What is the formula for cash-on-cash return?
(annual before-tax cash flow) / (total cash invested)
Investor Kiki's property has a potential rental income of $86,000. The vacancy and collection losses for the year were $21,400. The property had operating expenses of $38,780. Kiki's mortgage expenses for the property were $40,200. What is the before-tax cash flow for Kiki's property?
($14,380)
Investor Amanda’s property has a potential rental income of $44,400. The vacancy and collection losses for the year were $1,230. The property had operating expenses of $5,120. Amanda’s mortgage expenses for the property were $12,550. Amanda invested $200,000 cash with the property's down payment. What is the before-tax cash-on-cash return for Amanda’s property?
12.75%
Which rate is used to determine the value of a property?
capitalization rate
If John's investment property has an NOI of $100,000 the first year, mortgage payments of $75,000 with $60,000 in interest, and a first-year depreciation of $55,000, how much tax will John pay?
none
What is the profit that an investor actually received from income-producing property?
after-tax cash flow
Sue's NOI is $128,000, and her operating expenses are $26,400. She has mortgage expenses of $55,250 with $48,000 of that being interest. Her property has depreciated $8,500 for the year and is in a 24% tax bracket. What is Sue's tax liability?
$17,160
To find the _______, subtract the debt service from the net operating income.
before-tax cash flow
The best starting point for estimating a property's current operations is by
looking at the property's recent past operations
What document assigns rights, duties, and responsibilities between the owner and the tenant?
the lease
A lease escalation clause
periodically increases the rent
How is usable square footage determined?
(rentable square footage) - ((rentable square footage) x (loss factor))
Which of the following is NOT a common type of insurance purchased to cover the risks of leasing commercial property?
worker's compensation insurance
Which lease option allows the owner to relocate the tenant to another space in the same building during the term of the lease?
tenant relocation option
Which type of lease includes fluctuating periodic rent increases and a low base rent?
indexed lease
If the landlord quotes the size of a building at 128,000 square feet "rentable," with an 11% loss factor, how much usable space is there?
113,920 square feet
The ________ restricts a commercial tenant's utilization of the rented space by indicating what business activities are allowed by the tenant.
use clause
CAM stands for
common area maintenance
Which of the following is NOT a reason to lease instead of buy?
less flexibility with leasing
______ leases are usually individualized and are net leases. Most _______ leases have a three to five year term, although many tenants prefer longer-term leases, especially when they are installing expensive equipment that would be very difficult.
industrial
Which lease escalation clause passes on prorated increase in taxes, heat, and maintenance to the tenant?
direct operating
The difference between the rentable and useable square footage is the
loss factor
When evaluating a tenant, the owner considers all of the following EXCEPT which?
employee background
When the landlord pays the electric usage for the entire building based on one meter, this is called
master metering
What is the footage within the tenant's space that excludes such things as elevator shafts, public restrooms, heating and air conditioning equipment areas, and public stairwells?
usable square footage
With what kind of lease does the owner pay all of the operating expenses?
gross
Leases for small retail businesses tend to be for
1 to 2 years
Matt sold his house for $2,200,000 and had $195,000 in closing costs. His beginning basis was $1,955,000 and he spent $5,000 on capital improvements. What is Matt's capital gain for tax purposes? (assume he doesn't qualify for an exclusion)
$45,000
Carol sold her investment property for $450,000 and had $21,000 in closing costs. The property had a beginning basis of $312,000, capital improvements of $34,000, and depreciation of $80,000. What was Carol's capital gain?
$163,000
Homeowners can deduct all but which of the following from their income taxes?
depreciation
Home equity debt is any mortgage taken out after October 13, 1987 that
does not qualify as either home acquisitioned debt or grandfathered debt and is secured by the homeowner's qualified home
What is a measurement of how much is invested in the property for tax purposes?
basis
Rob and Lori purchased a home for $350,000 with an additional $5,000 in related purchase costs and then added a garage at a cost of $25,000. They sold the home for $450,000 and paid $28,000 in selling costs. How much was adjusted basis?
$380,000
Sam purchased a factory with an initial tax basis of $13,000,000. What is his monthly depreciation allowance?
$27,778
In a 1031 exchange, what is the period within which a person who has sold the relinquished property must receive the replacement property?
the exchange period
What is the formula for determining the amount realized from the sale of a home?
(sale price) - (costs of sale)
An unrealized capital gain is
the amount of profit that would result in the sale of an investment if it were to be sold
When was the Taxpayer Relief Act signed into law?
1997
A(n) _______ is the financial result of an investment that has been sold at a profit.
realized capital gain
Stan sold his investment property for $97,000 and had $8,000 in closing costs. The property had a beginning basis of $77,000, capital improvements of $4,000, and depreciation of $15,000. What was Stan's capital gain?
$23,000
The tax rate that applies to income is called the =
marginal tax bracket
The process wherein the depreciation portion of the gain is taxed as capital gain is called
recaptured depreciation
Rob and Lori purchased a home for $350,000 with an additional $5,000 in related purchase costs and then added a garage at a cost of $25,000. They sold the home for $450,000 and paid $28,000 in selling costs. How much was the gain on the sale of their home?
$42,000
Section 1031 exchanges are
tax deferred
In order to qualify for a tax-deferred exchange, how many days does an exchanger have to contract for the replacement property?
45
What income taxes do residents of NYC have to pay?
federal, state, and city income taxes
What is the maximum net capital loss that can be deducted annually?
$3,000
Jesse sold his home for $187,999. During the sale process, Jesse paid his broker a commission of 6% of the sale price, $1,500 in marketing for the home, and $5,000 in other closing costs. How much did Jesse realize from the sale of his home, rounded to the nearest dollar?
$170,219
A mortgage broker must provide which of the following disclosures to each person applying for a mortgage loan?
the amount of compensation the mortgage broker will receive from the lender
One way for a mortgage broker to get a favorable interest rate is to use a rate lock. The ________ the length of the rate lock, the ________ the interest rate will be.
longer, higher
Because mortgage bankers lend their own money, they are regulated __________.
less than traditional lending institutions, on a state level
All of the following statements are TRUE except
mortgage bankers use depositor money to make loans
What does a mortgage broker usually do?
bring borrower and lender together
The longer the length of the rate lock,
the higher the interest rate will be
Which of these components is not part of a lock in?
appraisal
The lender's loan prequalification letter
states that a potential borrower would qualify for a loan of a certain amount
All of the following are exempt from continuing education requirements EXCEPT
mortgage brokers
What is the main similarity of a mortgage banker and a savings and loan association in terms of mortgage loans?
they both make residential mortgage loans
Which of the following statements is TRUE?
a prequalification letter shows the seller that the buyer is qualified to make the purchase
Loans that are more than the bank funding criteria limits are called
nonconforming loans
All of the following are loan servicing duties EXCEPT for
title search
Penalties for violating the banking law do NOT include
letter of reprimand
When the owner and property manager sign a management agreement, they are creating a
general agency
What is an important task for a manager of a condominium or cooperative?
physically managing the property
Which of the following is an organization that offers educational and professionals programs in property management?
IREM
When a property manager or management company performs real-estate related tasks (such as collecting rent) for one owner, and that owner is paying the manager a salary,
the property manager is not required to have a real estate license
Which of the following is NOT a professional property management organization?
ISCC
When demand falls and the vacancy rates rise, the result is
fierce competition for tenants and reduced rental rates
When setting up a rent schedule, a property manager should analyze all of the following EXCEPT
new home sales
The property manager's responsibilities are outlined and bound in
the management agreement
To better achieve the owner's goal of return on investment and seeing a profit, the property manager should
provide as many tenant benefits as possible while staying within the budget
The property manager is responsible to
the property owner and tenants
"PUD" stands for
planned unit development
Which function is not performed by a property manager?
preparing the property deed
The Institute for Real Estate Management (IREM) was created as a subsidiary group of
National Association of REALTORS
BOMA includes ________ local associations, with chapters in all the major cities.
94
When thinking about tenant retention and owner profits, a property manager should
give tenants the most benefits possible while still ensuring a good return to the owner
A property manager must be license if he or she
is working for more than one owner
A high vacancy factor in the local area may result in
a high vacancy rate for the subject property
Which IREM Designation is reserved for individuals who meet a certain level of education and experience?
CPM
Test your knowledge of New York real estate licensing requirements with this quiz. Answer questions about the Division of Licensing missions, broker education hours, license types, candidate requirements, regulatory laws, and seller documents.
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