Real Estate Mid-term Part 2

What is first substantive contact?

The point at which agents must disclose and obtain signed acknowledgement of their agency relationships

A lead disclosure form must be signed if a house is built before

1978

Exclusive Right to Sell

Most common, hire one agent and they are guaranteed a commission

Exclusive Agency Listing

You hire one agent, but you keep the right to sell the house yourself without paying them

Open Listing

The agent that brings a ready, willing and able buyer receives commission

Exclusive-Right-to-Represent Agreement:

You hire one agent. They are guaranteed a commission even if you find the house.

Exclusive Agency

You hire one agent. They get paid only if they find the house; you pay $0 if you find it yourself.

Open (Non-Exclusive)

You hire any number of agents. Only the agent who finds the house you buy gets paid.

What is subagent?

An agent that works for the same brokerage firm as you

What is single agency?

Person represents a single client

What is the NYS disclosure form for buyer and seller?

Discloses roles and relationship in a transaction

Bedbug Disclosure Law:

Landlords must notify tenants of any bedbug history in the building (usually from the past year) before a lease is signed.

Truth-in heating law:

Sellers or landlords must provide two years of heating and cooling bills to prospective buyers or tenants upon request.

Rental-Income Producing Property:

Real estate purchased specifically to rent out to tenants to generate monthly profit (cash flow).

Asbestos

A hazardous mineral used in older building materials that must be disclosed if the seller knows it is present.

Lead

Toxic medal found in paint

PCB’s

Toxic man-made chemicals found in old electrical equipment that must be disclosed if the seller is aware of their presence.

Radon

Invisible, odorless, radioactive gas

EMF’s

Electric-magnetic field, associated with electrical power, high voltage, found it appliances

Underground Storage Tank:

Buried tanks used for oil or chemicals that must be disclosed if known because they can leak and cause soil contamination.

CFC’s

Gases found in old air conditioners and refrigerators that damage the ozone layer; they must be handled by certified professionals.

What is percolation test?

Soil testify to see how much waste water

What a common containment that pollutes drinking water?

Pestisides

Explain the NYS environmental quality review act:

SEQRA, A New York law requiring state and local agencies to assess environmental impacts before approving a project.

What did the comprehensive environmental response, compensation & liability act do?

CERCLA, A federal law that creates a fund to clean up hazardous waste sites and holds the parties responsible for the pollution liable for the costs.

Spanish

low pitch roof, tile roofing

Ranch:

Single story, L-shaped layout

Colonial:

symmetrical rectangular shape, traditional America home

Cape Cod:

A small, symmetrical, one-and-a-half-story house with a steep roof, central chimney, and dormer windows.

What is sheathing?

Ply-wood, insolation material applied to framing, makes walls

What are the two common foundation types?

Concrete Slab + pier and beam

Who is the mortgagee?

The lender

Who is the mortgagor?

The buyer

Lien Theory

The borrower holds the deed/title to the property, while the lender only has a lien (legal claim) until the loan is paid off.

Title theory

The lender holds the legal title to the property until the mortgage is fully paid; the borrower only has "equitable" title.

What is the LTV ratio?

Amount borrowed / Value, it tells a lender how much risk they are taking on a loan

Mortgage

Pledge of property given as collateral

Note/Bond

Serves as evidence of a debt and contains the borrower's promise to repay the loan.

Deficiency Judgment:

A court order requiring a borrower to pay the remaining balance if their foreclosed home sells for less than what is owed on the mortgage.

What is an acceleration clause used for?

A contract provision that allows the lender to demand the entire loan balance be paid immediately if the borrower defaults.

Explain the difference between a mortgage broker and mortgage banker?

Broker: Introduces 2 parties

Banker: originates the loan

What is RESPA?

A federal law that requires lenders to disclose all closing costs and prohibits "kickbacks" (illegal referral fees) between real estate professionals.

What is regulation z?

The federal rule that implements the Truth in Lending Act (TILA); it requires lenders to disclose the true cost of borrowing (like the APR) so consumers can compare loans.

3 Types of Foreclosures?

1. Strict

2. Judicial

3. Deed

What does PITI stand for?

• Principal

• Intrest

• Taxes

• Insurance

What is the difference between the primary and secondary mortgage market?

Primary: Lenders provide funds to borrowers

Secondary: Mortgage where loans get sold to investors

Fixed rate mortgage loans:

A loan where the interest rate stays the same for the entire life of the loan, ensuring the monthly payment never changes.

Adjustable rate mortgage loans:

A loan with an interest rate that changes periodically based on a market index, meaning monthly payments can go up or down.

Conventional mortgage loans:

Doesn’t have government protections

Non-Conventional mortgage loans

Government protection

Explain the difference a secured and unsecured note

Backed by collateral (like a house or car) that the lender can take if you don’t pay; an Unsecured Note is a signature loan backed only by your promise to pay, with no collateral at risk.

Explain the difference between a bank and a credit union

A Bank is a for-profit business owned by shareholders and open to the general public; a Credit Union is a non-profit cooperative owned by its members (who share a "common bond") and typically offers lower interest rates.

What are reasons a listing or agency agreement can be terminated?

Completion of sale, Expiration of the terms, Abandonment by a broker , Revocation by the owner (owner is liable for expenses), Cancellation by broker with mutual consent, Bankruptcy, death, or insanity, Destruction of the property and A change in the property due to outside forces