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Flashcards in Questions Deck (89):
1

Sam's house is worth $300,000. Assessment is 48%. Tax is 5%. What is annual tax?

$7200.

$Value x %assessment x percent tax= $annual tax
300k x 48%= 40k
40k x 5%= 7200

2

What is an assessment?

Adjustment to lower tax for high market values

3

Sam's house is worth $200,000. Assessment is 50%. Tax is $5 per $100 of value. What is semi annual tax?

$2500.

$5 per $100= 5%.

$200k x 50% = $100k
100k x 5%= $5000
semi annual=2500

4

What is the reason for a 1031 exchange?

A tax break or tax shelter

5

What is another name for a tax break?

tax shelter

6

What is boot?

personal property or money

7

What property is like-kind to a hotel?

ALL real estate

8

What does a qualified intermediary do?

Holds money in a RE exchange

9

Does a RE exchange have to be in the US?

Yes

10

What are the bundle of rights?

Possession
Quiet Enjoyment
Exclusion
Disposition
Control

11

What rights are freehold?

Possession
Quiet Enjoyment
Exclusion
Control
Dispostion

12

What rights are leasehold?

Possession
Quiet Enjoyment
Exclusion

13

What right do you have in a leasehold?
a) encroachment
b) escheat
c) easement
d) exclusion

d) Exclusion

encroachment= trespass by a thing
escheat= die, no will, no heirs = NYS takes RE
easement= someone can legally use your RE (can't drive or walk on RE)

14

Unless it is a lesser estate, what kind of freehold is it?
a) Fee Simple Absolute
b) Life Estate
c) Estate for Years
d) Estate at Will

A) Fee Simple

life estate= lesser estate
estate for years= leasehold
estate at will= leasehold

15

What is a primary example of a full estate with full bundle of rights?

fee simple absolute

16

What is an example of a lesser freehold where you only own RE for your lifetime and then it goes on to someone else? And what 2 bundles of rights are lacking?

Life Estate: Have Deed but lack Control + Disposition

17

What are two acronyms for the bundle of rights?

Please Quit Eating Candy Daily

DEEPC

18

Which department licenses mortgage professionals?

Department of Financial Services (DFS)

19

Which department licenses REA?

Department of State

20

What was the former name for the Department of Financial Services and who do they often license?

Dept of Banking

Mortgage Brokers

21

What state dept is in charge of drinking water and sewage?

Dept of Health

22

What fed govt protects wetlands?

Army Corps of Engineers

23

What do the Army Corps of Engineers protect?

Wetlands

24

What are 2 things the dept of health is in charge of?

drinking water & sewage

25

What is it called when you take a number and divide it up into smaller pieces?

Proration

26

Sam sells his house April 30. He already paid this year's RE tax of $2400 in full. Under proration, who owes what to whom?

$1600; debit to buyer

Buyer owes Sam for 8 months
Debit to buyer; Credit to Sam

$2400 / 12 months = $200
$200 x 8 months= $1600

27

What is the difference between debit and credit?

debit= you owe
credit= get paid

28

When calculating proration how many days are in a month?

30

29

A seller wants to net $180,000 on sale of his house after 10% commission's paid. What does sale price have to be?

$200,000.

$ Net price / % to seller = $ Sale price

100%-10% commission= 90%

180k/ 90%=$200k

Memorize:
Think 8= 2 o's= 200k
10% of 18= $2 tip = 200k

30

How do you calculate sale price?

Net price** / percent to seller* = sale price

*usually given percent to REA and need to determine percent to seller

**sometimes need to add closing costs + mortgage before dividing percent to seller

31

Sam wants to end up with $140,000 when he sells his house, but he has to pay $12,600 closing costs and $44,500 mortgage. Commission is 6%. What does sale price have to be?

$209,681

140k + 12,6k closing + 44,5k mortg = 197,100 net

197,100 / 94%= 209,680.85

Memorize:
Sam turns 140 into 209681. 140. 209681. 140-2096 ext 81

32

What is the slope of a roof called?
a- angle
b- pitch
c- variance
d- rise & run

pitch

33

What is a measurement of heat energy?
a- joules
b- r-factor
c- BTU
d- pascals

C- BTU: British Thermal Units. 1 lb H2O by 1 degree temperature

a- electricity
b- determines insulation
d- air pressure

34

What is a vertical piece that is part of a house frame?
a- rafter
b- wall stud
c- joist
d- girder

B- Wall Stud

a- roof beams (diagonal)
c- floor beams (horizontal)
d- beam that carries other beams

35

What system delivers hot & cold air through the same ducts?

forced warm air

36

What does the the forced warm air system do?

delivers hot & cold air through the same ducts

37

What do you call a piece of wood that connects wooden house frame to concrete foundation?

sill plate

38

What is a sill plate?

A piece of wood that connects wooden house frame to concrete foundation?

39

What is minimum electric service for a house?

100 amps; 110 volts

40

What is the difference between amps + volts and what is their minimum service req. for a house?

amps= elec charge
volts = elec pressur

amps= 100
volts= 110

41

What construction doc is not a drawing?
a- specifications
b- plan
c- rendering
d- elevation

A- Specifications

b- another word for blueprint
c- drawing
d- drawing of front of building

42

What do you call plywood sheets nailed to wall studs or rafters?

Sheathing

43

What is a piece of metal bent over a crack to block rain?

Flashing

44

What is slab on grade?

Concrete on ground

45

What is the most common foundation?

basement

46

What is the most common house frame?
a- western
b- balloon
c-trabeated
d- platform

D. Platform

47

What test should you do when selling land in a place that doesn't have sewer lines?

Percolation test

48

What is the percolation test?

A test you should do when selling land in a place that doesn't have sewer lines

49

What is NOT covered by NYS General Business Law 36B?
a- 1 year workmanship
b- 2 years trade
c- 3 years build out
d- 6 years material defects

C- 3 years building out

36B = B 3 & 6. 1+2 & 6.

50

What do you do if you give an agency disclosure form and they don't sign it?

Keep record (Time, Date, Names & Reason).

51

Happy RE sells a house for $178,000 and gets $11,570 commission. Happy must pay 3% to co broker & then pay half the remainder to their sales person. How much does Happy keep?

$3115

co-brkr gets 3% of sale price.

178k x 3%= 5340 co-brkr

11570 gross - 5340 co-brkr= $6230 remainder

$6230/ 2= $3115

Memorize
3% & $115(70) commission = $3115

52

What is the difference between:
agency
client
customer

agent= represents someone
client= who you work for
customer= who you bring to deal

53

If you represent the tenant, who is the customer?

landlord

54

How is your client determined?

via agency agreement

55

What is the agency disclosure form express?

tells who you work for/ represent

56

If you work for Bond, and KB calls to say she wants to sell your house, what is the current law of agency?

KB= seller
You= sales person
Bond= broker

57

What 2 forms do you bring when someone wants to sell their house?

agency disclosure
listing contract

58

Once the listing contract + agency disclosure forms are signed, what is the new law of agency?

kb= client
you= subagent
bond= agent

59

Who are sales contracts always between?

Broker + Client

60

If a broker wants to enlist other brokers to help, this is called what?

co-broker invitation

61

If a brokerage signs a co-broker invitation they become what?

a subagent of the seller (even if they bring in a buyer)

62

When is a co-broker considered a subagent of the seller?

when they sign the cobroke invitation

63

What does it mean to be a co-broker?

When 2 RE firms do a deal together & share commission (usually 50/50- but on state test they are unequal).

Most (90%) of deals are cobroke.

64

On the test, do co-brokers work for buyer or seller?

seller

65

A co-broker represents everyone except:
a- client
b- seller
c- broker
d- buyer

D- Buyer

a- who you work for
b- who they work for
c- who they work with

66

What is vicarious liability?

Responsibility for someone else. In RE brokers have specific responsibility to supervise according to 12A.

67

What is it called when in RE, brokers have specific responsibility to supervise and take responsibility for their sales people (according to 12A)?

Vicarious Liability

68

If you break license law, what are you breaking?

art 12 a

69

When is dual agency okay?

when both sides agree in writing; informed consent

70

What is it called when the broker- not the seller- takes vicarious liability for all subagents?

Broker's agent

71

What is broker's agent?

when the broker- not the seller- takes vicarious liability for all subagents

72

Who usually takes vicarious liability in a RE sale?
a- buyer
b- seller
c- subagent
d- broker

B. Seller

(A hired dog walker would not take responsibility for someone else's dog's actions if the dog bit someone.)

73

How would a lawyer try to sneak in broker's agent?

by changing one word: seller's agent is now broker's agent who now possesses vicarious liability (very rare)

74

If someone wants to fight RE tax, who do they go to?

Board of Assessment Review

assessment= tax

75

What is another name for tax?

assessment

76

Who signs contract first?
a- seller
b- buyer
c- broker
d- subagent

B. Buyer

77

If a loan to value ratio is high, does that mean the owner's equity is:
a- doesn't change
b- high
c- low
d- unrelated

C. Low

The higher LTV, the lower the equity.

78

If a loan to value ratio is low, does that mean the owner's equity is:
a- doesn't change
b- high
c- low
d- unrelated

B. High

The lower LTV, the higher the equity

79

If someone buys a house and a boat on the same mortgage, this is called what?

A package mortgage

80

If money supply goes up, what do interest rates do?
a- increase
b- depends
c- stay the same
d- decrease

D. Decrease

Money supply UP
Interest DOWN

81

What is money supply?

Amount avail for ppl to borrow

82

How do you determine efficiency factor?

useable sq ft / rentable sq ft

83

What does the following equation determine:
(useable sq ft / rentable sq ft)?

efficiency factor

84

If 2 competing brokers discuss commission rates, this violates which law and why?

Sherman Anti-trust as Price Fixing

85

What is the rule of reason state?

That 2+ brokers discussing the RE Market are only violation Sherman act if there's a "Restraint of Trade"

86

What is restraint of trade?

When consumers don't have a choice

87

What is it called when 2+ brokers discussing the RE Market are only violation Sherman act if there's a "Restraint of Trade"?

Rule of Reason

88

What is it called when consumers don't have a choice?

restraint of trade

89

Is encroachment legal?

No