Real Estate Concepts: Listing Agreements & Inspections

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Questions and Answers

What is the purpose of a home inspection?

To assess the property's compliance with local zoning regulations

To determine the fair market value of a property

To identify any potential defects or issues with a property (correct)

To provide an opinion on the structural integrity of a property

Which of the following individuals is exempt from requiring a real estate license in New York?

A person acting as a power of attorney for a property owner

A licensed real estate attorney representing a client in a real estate transaction (correct)

A property manager overseeing the maintenance of a commercial building

A homeowner selling their own primary residence

What does the term "escrow" refer to in real estate transactions?

The period of time during which a buyer can conduct due diligence on a property

The initial deposit made by a buyer when making an offer on a property

A third-party entity that holds funds and documents until certain conditions are met (correct)

The process of transferring ownership of a property from seller to buyer

What is a "Property Condition Disclosure Report", and who is typically required to complete it?

A form that outlines the condition of a property, completed and signed by the seller (C) Signup and view all the answers

What is the primary purpose of the "due diligence" period in a real estate contract?

To allow the buyer to thoroughly examine the property and its condition (A) Signup and view all the answers

Which of these is NOT typically included in a home inspection?

Property taxes and insurance history (B) Signup and view all the answers

Why might a seller decline to complete the Property Condition Disclosure Report?

All of the above (D) Signup and view all the answers

What is the potential consequence for a seller who does not complete the Property Condition Disclosure Report?

The buyer will receive a $500 credit at closing toward the purchase price (D) Signup and view all the answers

What is the primary purpose of hiring a title insurance company?

To report on property ownership and encumbrances (C) Signup and view all the answers

Which factor is NOT typically included in an environmental inspection of a property?

Condition of the roof (A) Signup and view all the answers

What is a net listing in real estate?

A price below which the owner will not sell the property (D) Signup and view all the answers

Which of the following actions can lead to the loss of a real estate license?

Offering properties for sale without owner's consent (C) Signup and view all the answers

What does the Article 12-A section of New York Real Property Law address?

Conduct of real estate salespersons and brokers (D) Signup and view all the answers

What is defined as a kickback in real estate transactions?

Payment of compensation to an unlicensed individual (B) Signup and view all the answers

Which of the following describes the duty of a seller's agent?

To maintain confidentiality and full disclosure to the seller (B) Signup and view all the answers

What is the consequence of practicing law without being a licensed attorney?

Loss of real estate broker license (C) Signup and view all the answers

Which item is required to be disclosed in advertising by real estate agents?

Agent's state license number (B) Signup and view all the answers

What does an Article 78 proceeding refer to?

An appeal against a ruling by a government agency (C) Signup and view all the answers

Study Notes

Listing Agreements

Listing agreements are employment contracts between a principal and agent, authorizing the agent to perform services involving the principal's property.

Home Inspections

Home inspections evaluate a property's condition, including roof, foundation, HVAC, plumbing, electrical systems, and safety aspects.
Inspectors look for signs of damage, insects, or issues impacting property value.

Escrow

Escrow is a written agreement where a third party holds instruments or property until specific conditions are met for delivery to a designated person.

Exemptions from Real Estate Licensing Course

Licensed real estate attorneys are considered licensed salespersons/brokers.
Public officers performing official duties related to real estate court proceedings are exempt.
Individuals acting under court orders/appointments from NY Supreme or federal courts are exempt.

Property Condition Disclosure Report

This report details a property's condition; it must be completed or a signed statement of refusal must be on file.
Seller's often decline to fully complete the report, which results in a $500 credit for the buyer, although it's advised to complete the report for better practice.
Homeowners aren't experts, and even minor issues can lead to claims later. Completing the report is often beneficial.

Due Diligence Process

The due diligence period allows buyers to assess the property.
It includes conducting a professional title search to uncover ownership history, liens, encumbrances, and any third-party rights.
Property engineers conduct inspections, evaluating the structure, mechanical systems, and the like.
Environmental investigations assess property for chemical spills or potential contamination, often more critical in commercial properties.

Uncapped Natural Gas Wells and Notices

The disclosure form for uncapped natural gas wells must be filled out, and the presence or absence of such wells must be disclosed.

Buyer and Seller Disclosure Forms

These forms ascertain an agent's representation (buyer, seller, or both) and protect the client's interest.
Seller's agents have fiduciary duties including care, loyalty, confidentiality, disclosure, obedience, and accounting.

Commingling

Commingling is mixing client funds with a broker's personal or business funds, which is prohibited.

Net Listing

A net listing sets a minimum price for the seller; the broker receives the price above this minimum as commission.

Article 78 Proceedings

Article 78 proceedings are appeals to challenge decisions of government agencies, such as license revocations.

Article 12-A

Article 12-A of the NY Real Property Law regulates real estate salespersons and brokers.

Kickbacks

Kickbacks are payments given to unlicensed people in real estate transactions. This is a violation. Penalties include license loss and fines up to three times the commission amount.

License Loss – Grounds

Material misstatements on the license application
Fraudulent practices
Demonstrated incompetence or untrustworthiness
Offering properties without the owner's consent
Taking listings from a former broker
Violations of anti-discrimination laws
Practicing law without a license.
Commingling funds
Net listing contracts
Kickbacks
Having an unlicensed assistant
Untruthful or misleading advertising
Advertising without the sellers' consent.
Failure to include name and license information in ads.

Administrative Discipline

State Departments enforce real estate license laws by imposing reprimands, denial, suspension, and revocation of licenses.

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Description

This quiz covers essential concepts in real estate, focusing on listing agreements, home inspections, escrow, and exemptions from licensing courses. Test your knowledge on these fundamental topics that are crucial for real estate professionals.