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REAL ESTATE EXAM FOR NEW YORK STATE/ NYS
REAL ESTATE TEST PREPARATIONS 2024 VERSION ALL
360 QUESTIONS ANSWERED CORRECTLY/ BEST GRADE
A+
What are the other DOS Licenses? (5) - ANSWER: 1. Notary public
- Apartment Information Vendor
- Apartment Sharing Agent
- Appraiser 5 Home inspector Office regulations - ANSWER: 1. Must have appropriate office signage
- Kickbacks are illegal!
- Blind ads are illegal! (bait and switch) Administrative discipline for misdeeds (3) - ANSWER: 1. suspension of license
- Revocation of license (must wait one year before applying for licensing privilege)
- Article 78 proceeding - Appeal a decision Stigmatized property disclosure - ANSWER: Article 443, sellers and seller agents do not have to disclose this info and may or may not disclose upon written request of the buyer or buyer agent. A seller agent can disclose only with permission of the seller. A buyer or buyer agent may provide written request for disclosure to the seller or seller agent during negotiations for purchase. Do Attorneys need a license to practice real estate brokerage? - ANSWER: No, except for when they employ licensee to work under their supervision
Revocation of a broker's license... - ANSWER: suspends the license of salespersons and associate brokers in the broker's employ Property Condition Disclosure Statement - ANSWER: must be provided to the buyer's agent before the sellers accept the purchase offer Uncapped natural gas wells - ANSWER: must be disclosed by seller to buyer before entering into a contract of sale. Agent - ANSWER: usually works for seller, but can also work for a buyer, representation, looks for best interest of party, for the buyer an agent usually services, goes through motions but no fiduciary responsibilty Customer - ANSWER: the party whom the agent brings to the pricipal as a seller or buyer of the property Client - ANSWER: the person who selects the agent to acts on his behalf dual agency - ANSWER: when agent acts for both buyer and seller (they only have fucidicary responsibilty to whom hired them) Fudiciary responsibilities - ANSWER: OLD CAR Obedience Loyalty Disclosure of Info Confidentiality Accountability
Exclusive Agency - ANSWER: The seller reserves the right to sell the property on her own, without paying a commission to her agent. This is different from an "exclusive right" listing, in which the seller's broker will receive a commission from the seller, regardless of who brings the buyer into the purchase Exclusive right to sell - ANSWER: What a salesperson strives for! Full disclosure - ANSWER: Agents must inform the principal of all matters through full disclosure. They must promptly communicate to the principal all information about the transaction relating to the agency relationship. A broker must present every offer to the seller. Designated sales associate or agent - ANSWER: With disclosure and informed consent, one sales agent in the firm is designated to represent the buyer and another agent is designated to represent the seller. Agency disclosure form - ANSWER: sellers and buyers may provide advance informed consent to dual agency with designated sales agents by indicating consent on this form What does the MLS offer - ANSWER: offers compensation and cooperation to participating members. It does not create an automatic subagency cooperating agents - ANSWER: seller agents from another real estate firm acting as subagents of the listing broker and seller. They can also be buyer agents from another firm. These agents work throug the usual system of offerings published through the MLS
Dual Agent must have what from both parties in NYS - ANSWER: WRITTEN approval of both parties after the agent's informed disclosure. The buyer and seller each agree to relinquish the individual, undivided loyalty in the fiduciary relationship Undisclosed dial agency - ANSWER: can result in a violation of property law! NY real estate firms can provide consensual dual agency for in house sales All agents must disclose what party they represent in a real estate transaction 1Agency Disclosure forms (2 types) - ANSWER: 1. buyers and sellers
- landlords and tenants Salespersons and the IRS - ANSWER: Salespersons are independent contractors. To quality agent must be licensed and they must enter into a written contract with the broker. Real property - ANSWER: deed Land and structure Personal property - ANSWER: Bill of sale objects Land rights - ANSWER: 1. surface rights (on ground, in house
- subsurface rights (underground)
- air rights (air) - dictated by government
Tenancy in Common - ANSWER: co-ownership with no Right of Survivorship. Must have wills about who will get property. Business partnership Joint tenancy - ANSWER: right of survivorship, a couple not necessarily married (DP) Tenancy by entirety - ANSWER: must be married (old school) Ownership of Real estate by business organizations - ANSWER: (investments) sole proprietorship partnerships corporations LLC (limited liability companies) Syndicates Joint Ventures Liens - ANSWER: Usually a bad thing Voluntary liens (good) it's accepted, mortgage lien, property is collatoral Involuntary lien (bad) forced Specific liens (against a property) General lien (against a person and all his/her property -- eg: a deadbeat dad Easements - ANSWER: GROSS (public) sidewalk, street, utility pole, cable lines
APPURTENANT (private) driveway is common example Dominant (control) Servient (suffers) Negative (visual) -- in air, buy air rights Affirmative (physical) - solid Encroachments - ANSWER: (objects trespassing) fence is encrouching tree branches ChattelVoln - ANSWER: objects not connected to a piece of real property Deed - ANSWER: Document shows ownership and used to transfer real property Voluntary vs. Involuntary alientation - ANSWER: Voluntary- sale etc Involuntary - court action Essentials of a good deed - ANSWER: Must be in writing Grantor = seller ALL GRANTORS MUST SIGN DEED Grantee = usually the buyer Granting clauses - indicates its' the grantors intention to transfer the title to the named grantee Habendum clause Consideration (something of value, usually $1 in a deed) Legal description (metes and bounds/ monument)
Executor, executrix Escheat - ANSWER: died without a will= state will take your property Dedication by Deed - ANSWER: Gives property to the government Public Grant - ANSWER: Government gives property to someone or some entity Adverse possession - ANSWER: 10+ years of possession Eg: misplaced fence *** make sure property boundaries are accurate! Use a surveyor Title Closing - ANSWER: - Deeds, survey
- marketable title- title search goes 40 years back, TITLE INSURANCE RESPA - ANSWER: Real estate settlement procedures act Rules governing lenders procedure and disclosures have to disclose everything! Buyers' closing costs - ANSWER: attorneys credit reports application fees if coop or condo homeowners insurance mortgage expenses overpaid by seller taxes
recording of deed recording of mortgage documents appraisal fee brokers fee if buyer broker exists Sellers Closing Costs - ANSWER: transfer taxes flip taxes attorneys fees brokers fees deed preparation mortgage satisfaction, interest fees transfer tax Leasehold estate - ANSWER: rentals Estate for years - ANSWER: typical 1 year lease with definite expiration date Periodic estate - ANSWER: automatically renews if there is no termination on either side Estate at will - ANSWER: month to month, everything is assumed legal Estate at sufferance - ANSWER: squattor Rent control - ANSWER: since world war 2 (discount in RE taxes)
Implied contract - ANSWER: handshake deal- not in writing; goes through motions that create a liability (example of this is pumping gas before you pay for it...) Bilateral contract - ANSWER: contract in which two parties have made promises of some kind to each other; because both parties make the promises, the contract binds the parties unilateral contract - ANSWER: One party makes a promise to induce a second party to do something Executed contract - ANSWER: fully performed and finished Executory contract - ANSWER: contract that is not fully performed or completed Valid contract - ANSWER: one that is binding and enforceable in all concerned parties Voidable contract - ANSWER: when the contracting parties do not meet some legal requirement in negotiating the agreement Usually one party is a victim of wrongdoing by the other party *parties can voluntarily perform a voidable contract Unenforceable contract - ANSWER: not enforceable in court. Examples are:
- verbal contracts where one of the parties reneges on the agreement
- Time to enforce the contract has run out
- one of the party has a voidable contract
- contracts that are vague in meaning and or poorly worded Elements of a contract - ANSWER: 1. competent parties
- Mutual agreement
- Lawful objective
- Consideration (aka Money)
- Must be in writing (statute of frauds) Discharge of Contracts - ANSWER: Contracts can be discharged by:
- agreement of the parties
- full performance
- impossibility of performance
- operation of law Novation - ANSWER: substitution of a new contract for a prior contract Contract remedies: specific performance - ANSWER: force other party of finish contract Contract remedies: rescission - ANSWER: takes back, removes, annuls; court orders the parties placed back in their original positions as if the contract never existed contract remedies: compensatory damages - ANSWER: amount of money actually lost is the amount of compensatory damages the court awards
defeasance clause - ANSWER: if you do default; full payment up to auction day Promissory note or bond - ANSWER: lender requires borrower to sign it, providing evidence that a valid debt exists. Note contains a promise that the borrrower is personally liable for paying the amount of money stated in the note. mortgage principal - ANSWER: amount of money borrowed on which interest is payed or received mortgage interest - ANSWER: money paid for using someone else's money Grace period - ANSWER: 15 days into the month, before a late fee. Foreclosure - ANSWER: bank suing for balance due Equity of redemption - ANSWER: if you default, you have the option to make full payment up to the date of auction Deed in lieu of foreclosure - ANSWER: sign deed over to bank in lie of foreclosure Deficiency judgement - ANSWER: if property auctions for less than is owed to the lender, the lender can go after the owner for the missing money Discount points - ANSWER: commission to mortgage broker. Buy down interest rate buy buying points
Sale subject to a mortgage - ANSWER: contingency-- contract is voidable pending mortgage approval Sale with assumption of mortgage - ANSWER: transfer of mortgage from seller to buyer Recording the mortgage - ANSWER: lender draws up document called a satisfaction of mortgage (paid off) Called a discharge of mortgage Failure to record may cloud the title to the property Conventional Loans - ANSWER: typically for 75 or 80% of property value and has equity of 20-25% Equity - ANSWER: difference between value of the property and the amount of the principal owed on a mortgage Amortized mortgage - ANSWER: Loan is installed in payments - payment is always the same Straight term loans - ANSWER: monthly payment only pays interest Adjustable rate mortgage - ANSWER: starts low and climbs over time Balloon mortgage - ANSWER: a mortgage in which a large portion of the borrowed principal is repaid in a single payment at the end of the loan period.
Home equity loan - ANSWER: loan against equity in a home Reverse annuity mortgage - ANSWER: must be 62 years old to qualfy. Lender makes payments to the borrower for a contacted time. Upon death of the homeowner or sale of property, lender recaptures the equity or amount paid during the mortgage term Package mortgage - ANSWER: personal property in addition to real property is pledged to secure payment of the mortgage loan ...could be appliances or furnishings Sale leaseback financing - ANSWER: Sell property to investor but they lease it bck to you as tenant FHA - ANSWER: insured by government usually for lower incomes VA Loan Program - ANSWER: guaranteed by government only applicable for military SONYMA - ANSWER: State of New York Mortgage Agency State mortgage from sale of NY tax exempt bonds low income Fannie Mae - ANSWER: Federal National Mortgage Association
Ginne Mae - ANSWER: Government National Mortgage Association only buy government backed loans Freddie Mac - ANSWER: Federal Home Loan Mortgage Corporation Truth in Lending Act - ANSWER: Consumer Credit Protection act 1980 Regulation Z Regulation Z - ANSWER: provides consumer protection in mortgage loans for residential real estate penalties up to $5K how do you advertise loan in the media; must be specific an disclose Lender criteria for granting a loan - ANSWER: debt to income ratio Predatory lending practices - ANSWER: 1. subprime loans (lenders who lend to borrowers with less than perfect credit) lenders charge higher interest and high closing costs to compensate for potential losses from customer who may later default. Mortgage - ANSWER: an IOU, a loan, a promisary note with conditions and terms recorded in court; a lien Mortgage broker - ANSWER: registered by NYS financial services; find money for buyer Mortgage banker - ANSWER: licensed by NYS banking department
