Accurate 2014 New York State (NYS) Salesperson Realty Real Estate Exam
Terms in this set (203)
What agency issues real estate licenses?
The New York State Department of State (NYDOS), Division of Licensing Services
At what age can you become a real estate salesperson?
Do you need experience in the field to become a salesperson?
What is the minimum age to become a real estate broker?
Do you need a experience in the field to become a broker?
Yes, evidenced by two years in the business and the buildup of 3,500 points.
If your license is revoked, how long do you have to wait to re-apply for it?
One full year
As a licensed salesperson, I can receive compensation from ___.
Only from my sponsoring broker.
As a real estate licensee, you will more often than not be an ___, will receive a ___ from your broker, and will file a ___ on your tax return to detail your earnings vs. your expenses.
Independent contractor, 1099, schedule C
Attorneys admitted to the bar in NYS are ___ from the licensure law, unless they take on salespeople.
If you mix your client's money with the office operating funds, it's called ___ and you have violated which of the fiduciary obligations? ___
For how long does a broker need to keep all of his/her paperwork and records?
If my license has expired, for how long can I continue to practice real estate sales? In other words, what is the grace period?
No grace period
Your real estate license with the pocket card will be sent to your sponsoring broker. Who holds the license? Who holds the pocket card?
The broker, Me
As a real estate salesperson, you have to take continuing education every ___ years.
How many hours of CE are required?
There is also a three hour CE component of ___ required every two years.
Are real estate brokers also required to fulfill the CE requirement?
If a seller decides not to provide the purchaser with the 'Property Condition Disclosure Form', how much of a reduction in price does he have to give?
If you are truly an independent contractor, what is it that your broker can provide for you?
As an independent contractor, are you paid for the number of hours you put into a deal or for your 'production'?
What is the term of real estate licensure?
I want to make application to become a 'mortgage broker'. I can use my experience as a real estate licensee on my application to the NYS Department of Banking. How many years of experience do I need?
Violation of license law is a ___.
Referring to the question just above, what is the possible penalty? ___ and /or ___.
Up to a fine of $1,000 and /or up to a jail term of one year.
What is the very first document you should fill out with a new client or customer?
Agency Disclosure Form
At what moment should you take out the agency disclosure form?
At first substantive contact
Regarding the question above, define what [agency disclosure form] means.
In other words, when something of substance happens, such as when the customer starts to ask questions about the property.
What should you do if that client or customer refuses to sign the agency disclosure form?
Fill out an affidavit or a declaration stating the terms of the refusal to sign. Then sign the affidavit and have the signature notarized.
As a real estate salesperson, I am practicing ___ agency.
As a property manager, I am practicing ___ agency.
In estate planning, I am practicing ___ agency.
What would you call a situation where I represent the seller as my client but then work in the best interests of the buyer (my customer)?
Undisclosed dual agency
If I represent the buyer as a broker, this would be called ___.
I owe all of the fiduciary obligations to my client or to my customer?
I work ___ the client, and ___ the customer.
What does 'fiduciary' mean?
Position of trust
The fiduciary obligations accrue only to my ___.
So, what do I owe to the 'customer'? ___ and ___.
If it is my intention to protect my client (usually the seller) from the vicarious liability of another licensee violating the laws of licensure, I should always give out my listings to other licensees as 'broker's agents' or 'sub-agents'?
If I share the listing on a property with your broker and give you the opportunity to make the sale, your broker just became my ___.
If one broker is representing both the purchaser and the seller in the same transaction, you would call this ___.
What is the Department of State concerned when a real estate licensee also embarks upon the practice of writing mortgage applications as s mortgage rep? They are concerned about when ___.
Possibility of dual agency
I hire you to sell my house. You are my broker and I am your ___ or ___.
It has been long-standing that my driveway crosses over my neighbor's property - you would call that an ___.
In the above question, which estate is 'dominant', mine or neighbor's?
Mine, because I benefit from the easement.
So, what would you call my neighbor's estate?
What is it called if a utility company has an easement over many properties?
Easement is gross or Utility easement
If someone uses the property of another in a way that is open and notorious, exclusive, and adverse to the best interests of the true owner, you would call ___.
What are two other names for squatting?
Easement by prescription, Adverse possession
For how many years would you have to have use of that person's property to make claim of ownership?
If a person has the right to cross over your property, it's an ___.
If a thing is crossing over your property line, that's an ___.
If you buy materials from a supply house and fail to pay them, they can file a ___ - unfortunately "materialmen's lien" isn't a choice.
We talked about a formal legal description, an FLD - what is one example of a formal legal description?
Section, block, and lot number -or- Metes and bounds description
Which description would not be a formal legal description?
The street name and address
Who determines what the real estate commission will be on a particular deal?
The broker, Client
If someone dies without having a valid will, he died ___.
If someone dies without having a valid will and the state cannot locate any heirs or creditors, that person's property reverts to the state through a process called ___.
What is the name of the standardized closing statement or settlement statement, required by RESPA (1974) called?
What is a synonym for 'proration'?
What's the name of the deed which gives the most legal promises (covenants and warranties) to the buyer?
The Full covenant and Warranty deed
What is it called if I track back the successive owners of a piece of real estate, starting with the current deed and working my way backwards in time?
Chain of title
Deed is a ___.
The instrument that conveys a grantor's interest in real property.
Generally speaking, who creates the real estate 'Contract of Sale'?
Who signs the contract first?
What does the buyer attach to the contract after signing it?
Earnest money deposit, Down payment
Who holds the earnest deposit money from the buyer from the signing of the contract until closing?
Seller's attorney in escrow
Who signs the contract last?
The fullest interest I can have in my ownership of real estate is called having a ___ interest.
Unlike residential leases where if you add a 'fixture' such as a ceiling lamp, it becomes part of the real property, in a commercial environment it's understood that if you add cabinets, refrigerator units, etc, that they are leaving when the lease is over. You would call these ___.
Tenants in common is characterized by ___.
Rights of inheritance
Joint tenants is characterized by ___.
Rights of survivorship
In NYS, husband and wife takes ownership as ___.
Tenants by the entirety
What would you call it when one person buys a property all by himself/herself?
Ownership in severalty
What would you call the power of teh government to acquire personally held real property for the benefit of the public?
Eminent domain, Condemnation
A zoning ordinance would NOT require ___.
C - material
When I go to the building department and I want to put an extension on a house or modify something, I'm making application for a ___.
If I'm turned, down because my application doesn't meet the letter of the building code, I'm going to make an appeal to the ___.
Zoning Board of Appeals (ZBA)
And if the ZBA approves my application, I'm going to be granted a ___.
Roof rafters are ___ in orientation and establish the pitch or the ___ of the roof.
What are the vertical wooden members inside the walls?
Circuit breakers and ___both serve the same function. They are over-current protection devices.
What is put on the outside of the studs to begin to weatherproof the house?
"A" for Amps, "A" for the ___ of current available in a structure.
What is minimum amperage for new construction in NYS?
"Voltage" is the ___ or ___ of the current in a particular electrical circuit.
What is the standard voltage in the United States?
What is the "R" factor?
'Resistence' to heat transfer
The lowest part of the roof which includes the soffit and fascia in called the ___ or ___.
Bent pieces of metal that serve to waterproof a house are called ___.
You would call a BTU, British Thermal Unit, a measure of ___.
What is the name of the refrigerant that was destroying the ozone layer of the atmosphere, the layer that protects us from the ultra-violet rays of the sun which give us skin cancer?
What is the law that regulates CFC's (Freon)?
Clean Air Act
What would you call the first wooden member to be laid down on the foundation wall? It serves to connect the concrete foundation to the flooring system of the house. It's the ___.
When I build a house, I'm going to have an architectural rendering of it - what is that called?
And I'm going to spell out how it is to be built along the lines of the blueprints - what is that called?
What material was used for insulating heating pipes, a naturally occurring mineral fiber, now banned from use because it is a carcinogen (cancer causing)?
What is the name of a colorless, odorless, radioactive gas that is the byproduct of uranium in the soil?
Percolation rate is the rate ___.
Of water movement through soil.
A CMA (comparative market analysis) is not a/an ___.
An estimation of how much a property will sell for in a typical transaction is the ___.
The lowest price a seller will take, the highest price a buyer will pay is called the ___.
*An apartment building has a heating system which although is in good repair, does not meet the needs of its current tenants. This an example of ___.
*Which term best identifies the most probable price for which specified property rights should sell to a knowledgeable buyer in a competitive market?
*What is a study of recently sold properties, currently competing listings, monthly expired listings, buyer appeal market position, assets and drawbacks, area market conditions, recommended terms and market value range?
Comparative Market Analysis (CMA)
What do you call people who get into real estate offices to make sure that all people are being treated the same way?
If I have a disabled tenant who wants to make a modification, what do I do?
Let them make modification(s) at their own expense and return it to its original condition at their own expense prior to vacating unit.
What was the year of the first major federal fair housing legislation?
What was the one protected class in that piece of legislation?
What was the year of the first major legislation to directly affect property ownership rights?
What would be an exception to the discrimination laws?
A person renting out rooms in their own house, which they actually live in, to members of the same sex.
What was the year of the second major piece of federal fair housing legislation?
What classes were protected under that legislation?
Race, Religion, National origin
In 1974, there was an amendment - what class was added?
In 1988, there was an amendment - what classes were added?
Disability and Familial status
I'm taking 'green' customers only to 'green' people neighborhoods. What is this called?
I'm going into a neighborhood and including 'panic selling'. What is this called?
A banker decides not to lend in a community because of the infusion of people of a particular race, religion, or nationality. What is this called?
What is exempt from federal fair housing laws?
There are NEVER any exemptions from fair housing laws based on ___.
*Solicitation of the sale or lease of property, due to a change in the ethnic structure of a neighborhood is ___.
What is the age of majority in NYS, in other words, the minimum age to enter into a contract?
If you were to sell your house to someone under the age of 18, how would you characterize the contract of sale?
Voidable by the minor
What is the name of the 'regulation' that requires the lead paint disclosure?
I have to give the "protect your family from lead paint in your home" and the lead paint disclosure form to prospective tenants and buyers if the building was constructed prior to what year?
Sometimes a condo association will reserve the right to be the first buyer if you decide to sell. You would call this a ___.
Right of first refusal
I'm going to rent an apartment from you for one week - what type of leasehold estate is this?
An estate for years
Coop ownership is what type of an estate?
How would you best describe one interest in a co-op unit?
A mortgage that covers and includes more than a single property is called a ___.
A mortgage that finances both the real property and the personal property is called a ___ mortgage.
What would you call a loan that allows you to move from one property to another? For instance, you find a house you really want to buy but your first house isn't sold so you use this type of loan to make the jump.
Bridge, Swing, Interim
What would you call a financing situation where the buyer receives financial assistance with the down payment and closing costs, and in exchange gives up some share of the equity buildup in the property?
Shared equity loan
There is a type of mortgage where the monthly payment increases as your ability to pay more improves, for instance for someone who doesn't have much income but has great income potential, for instance someone just graduating from law school or medical school. This is a ___.
Graduated payment mortgage
When money is plentiful, what happens to interest rates?
A transaction that involves the sale of property to free up the liquid assets that are trapped in the real estate and a lease of the same property is called a ___.
You would call the borrower ___.
You would call the lender ___.
What is the definition of a "wrap-around mortgage"?
Look for an answer that references an existing 'first' mortgage lumped together with a new 'second' in the form of owner financing. Also one identifying characteristic of a wrap is that the second mortgage component is significantly larger than the first mortgage component. Normally, the first would be for a greater amount than the second, because the interest rate on a first mortgage is usually more preferable than for a second mortgage.
What is the act of charging interest that is over the legal limit?
What regulates the advertising of consumer loans, or the terms of lending?
A straight term mortgage consists of payments that include ___ only.
Which named 'peril' is not covered on an HO policy (home owner) or a DP policy (dwelling policy)?
From the question above, from whom do you purchase that insurance?
If I want higher limits of liability insurance on my house and cars? I would buy an ___ policy.
If I were a renter, in order to protect my stuff and also give me liability insurance, I would buy an ___ policy.
Which is the 'lien of the highest priority'?
Real property tax
What does the "Municipal Engineers" office do?
It plans, designs and does the construction of New York's public works facilities and projects.
What governmental authority oversees our fresh water drinking supply?
Department of Health
Does the building department write the building code or enforce it?
What governmental agency oversees how the community is developed?
The planning board
*Homeowner policies which provide content coverage for apartment owners is the ___.
What governmental body overseas mortgage brokers and mortgage bankers?
The NYS Department of Banking
The income that I earn from getting out of bed in the morning and going to work, for example: salary, bonuses, commissions is called ___.
The income that I earn from rental income is categorized by the IRS as ___.
The income that I earn from my paper assets is ___.
If I have rental properties, the income that I derive from renting out parking spaces, closets in the basement, my coin op washer/dryer is ___.
We are taxed on our real property according to the value of the property, 'ad valorum', and the question is which value?
Over how many years can you depreciate a residential property?
Over how many years can you depreciate a commercial property?
MATH - Depreciation: If you see a depreciation problem, you always have to deduct the cost of the ___ from the acquisition cost of the property, then divide by the appropriate number of years.
How much is the capital gains tax incentive for a single person? Explanation: If a single person buys a home as his/her owner-occupied residence, then sells it after two or more years, the first $___ is free of capital gains taxation.
And [capital gains tax after 2-years on a owner-occupied home] for a married couple?
Husband and wife purchased a house in their 60's for $50,000. The husband passed on and the wife sold it for $300,000. How much of the profit will be subject to capital gains taxation.
When the government gives tax incentives on capital gains or through depreciation, you would call that ___.
MATH - Tax assessment: What is the assessed value of a property with a market value of $180,000 if the rate of assessment is 20%?
$180,000 times .20 = $36,000
*Property types which are exempt from real property assessment are ___.
No types are exempt
Property types which are exempt from real property taxation are ___.
*For purposes of property, tax valuation, a residential condominium would be ___ property.
Industrial and commercial parcels and most vacant land are considered ___ property.
Each discount point is or discount points are generally what percentage of the total loan amount?
*A building that includes condominium and cooperative ownership is called ___.
Which group oversees management of a cooperative entity?
Board of directors
*With what state agency is the offering plan for a condominium or cooperative building submitted?
If a property manager is giving attention to a potential problem before it really becomes a problem, you would call that ___.
If a property owner is fixing a leaking faucet, what kind of maintenance is this called?
What is a 'proforma statement'?
A schedule of the projected income and expense for a real estate investment.
What is the 'use' clause in a lease?
It details how you may 'use' the rented space, for instance either for residential or commercial use.
Commercial space is very often rented out using a ___ lease.
Generally speaking, residential leases are ___ - meaning that you pay your landlord the gross amount (total) of rent and then the landlord pays the expenses associated with the rental.
A lease for large unfinished space would be called a ___ lease.
In what type of rental environment would you find a "percentage lease"?
In a sublease arrangement, who is ultimately always responsible to be sure the lessor (the landlord) gets paid?
*What determines the value of an asset in the past, present, and future?
The time value of money
MATH - Net Operating Income: What is the net operating income if the property was acquired for $500,000 with a 10% return-on-investment?
$500,000 times .10 = $50,000
MATH - Cash on Cash Return: Joe buys a $2,000,000 building, laying $500,000 out of pocket. The building generates $15,000 per month. What is the cash on cash return?
$15,000 times 12 = $180,000 then divide by $500,000 = .36 = 36%
MATH - Loss Factor: A building has 10,000 rentable square feet and 8,000 usable square feet. What is the loss factor? Conversely, what percentage of the total area is being used 'efficiently'?
10,000 minus 8,000 = 2,000. 2000 divided by 10,000 = .20 = 20%
MATH - Cap Return Problem: There is a building with an NOI of $40,000 that Jim wants to buy and his intended cap rate (rate of return he is expecting) is 10%. How much should Jim pay for the building?
Unknown times .10 = $40,000
MATH - Mortgage Qualification: Joe earns $1000 per week. His local bank is willing to give him mortgage financing based on the front end ration of 28%. What does he qualify for as a monthly mortgage payment?
$1,000 times 52 divided by 12. That answer is then multiplied by .28 = $1,213.33
MATH: If seller nets $180,000 from the sale of his property after paying a broker fee of 10%, what was the selling price of the property?
Unknown times .90 = $180,000 so x is $200,000
MATH - Net to Seller: If the seller wants to net $250,000 after paying his broker a commission of 5%, calculate the actual sales price.
Unknown times .95 = $250,000 so x is $263,157.90
Net operating income (NOI) formula
Value times Rate of Return
Cap rate formula
Building value times Cap rate = Net operating income
Property Value Assessment formula
Market value times RoA(?)
(Property cost minus Land cost) divided by Years
Net to Seller formula
Net = %, Broker fee = %, Salesprice = 100%
Loss Factor formulas
#1) Rentable minus Usable = Loss Factor. #2) Rentable minus Loss = Efficiency Factor
Cash on Cash Return (CoCR) formula
1 year revenue divided by out of pocket $
Mortgage Qualification formula
Monthly salary times Ratio = Mortgage
Length times Width
Triangle are formula
(Base times Height) divided by 2
An acre equals how many square feet?
43,560 square feet
A square mile equals how many acres?
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