Real Estate Test Questions

A commonly used commercial lease for a retail establishment is retail center.

Percentage lease

The seller specifies a net amount of money he wants to receive upon sale of his property. Any monies above this amount are all the broker's commission. This type of listing is called:

Net Listing

Which one of the following agreements is commonly used when a property owner decides to personally sell the property (FSBO), and does not use a listing agent:

One Time Show Listing Agreement

Events caused by mother nature or people that do damages is known as

Perils

In New York, the real property is taxed based on ______.

The fair market value

A written complaint filed with the board of assessment review to protest an assessment is known as a (n):

grievance

_________ is a contract inferred from conduct or actions of another.

Implied contract

A city of _______ _____ has a population of 50,000 or more.

Second Class

The rental of the entire rentable portion of the floor space is a(n):

Loft Lease

__________ is the payment to make up the difference in a 1031 exchange of properties. It may be in cash, notes, chattels, or anything of agree-upon value.

Boot

Gains on capital assets held __________ are called short term Capital gains. They are taxed at the marginal rate for the taxpayer's income.

Less than 12 months

A loan officer normally issues a _____________.

Prequalification Letter

____________ is a form that contains the listings recently sold in past 6 months, currently being sold, and expired.

CMA Form

The Cost Approach applies to:

School, Hospital, or Government Properties

Records of Transactions must be maintained at least for a period of __________.

3 years

Under ___________ listing contract, only one broker lists the property. If anyone else sells the property during the contract tern, the broker is legally entitled to the commission.

Exclusive Right to Sell Agreement

Termination of Agency Relationship may be accomplished by:

When the listing contract terminates
Complete all the obligations termed in the contract
When broker's license is revoked

Government takes private property for public use without compensation is called:

Police Power

The document with a layout of a building that construction workers and project managers must follow. It includes a rendering of the rooms and their measurements. This document is called:

Building Plan

Some lending institutions circled certain local areas on the map and refusing to make loans within the circled areas based on some characteristic of property owners in the areas.

Redlining

Insurance Department & Banking Department were merged to become:

Department of Financial Service since Oct.

The policyholder - the person entitled to benefit by the policy's terms, is also known as:

The insured

The _______ is also known as the insurance company that issues the insurance policy to the policyholder

The Insurer

___________ protects a home or income business property against any physical damage or loss of assets in case of fire, theft, or vandalism.

Property insurance

What insurance policy includes several different types of coverage, such as property insurance and liability insurance?

Package policy

An insurance coverage to protect against claims alleging that one's negligence or inappropriate action resulted in bodily injury or property damage is called:

Liability insurance

Which one of the following types of homeowner insurance policies provides content coverage for apartment renters?

HO-4

True or False: If the deductible is increasing, the premium is lowered.

True (If the deductible is increasing, the premium is lowered)

Who owns the common areas in a cooperative?

The cooperative corporation

If you buy a coop unit, you will get:

Certificate of stock
Proprietary lease

If you buy a condo unit, you will get:

Master deed
Title

The title to the cooperative property, as shown on the deed, is in the name of ______.

The corporation

The Board of Directors oversees:

The maintenance
Finances
The policy decisions of the corporation

_____________ describes the terms under which the cooperative gives permission to a shareholder before making any changes or improvements to the apartment.

Alteration agreements

To create a condominium, the developer must sign:

Condominium declaration

________ includes rules on how the development may be advertised all advertising must be approved by the attorney general's office.

CPS-1 Statement

_____ are working for the lenders for loan purposes; _______ are working for the taxation division for tax purposes.

Appraisers; Assessors

Which of the following is fully exempt from real property tax:

Religious Organization

_______ is eligible for 50% real property tax exemption if annual income is under $29,000.
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Senior citizens

Which of the following does not belong to the homestead class of properties?

Industrial Park

A government organization that does not receive revenue from property tax is/are:

The state

True or False: After protesting an assessment, commercial property owners dissatisfied with the determination of the board of assessment review may file an appeal for tax certiorari proceedings in the NYS Supreme Court.

True (After protesting an assessment... supreme court)

If a property owner believes that his property's assessed value is greater than the property's full value, he may claim that he has been subject to:

excessive assessment

Relinquished real property tax is also known as:

back tax

The type of leasehold estate that will automatically renew for another period unless notice of termination is given 30 days prior to the termination date is called:

Periodic estate

When a landlord takes matters into his own hands, without the aid or control of the court system, and removes the tenant from the premises, this action is known as:

Illegal actual eviction

A licensee who deposits an earnest money deposit in his personal checking account instead of in the broker's trust account is guilty of:

Commingling

A meeting of the minds:

means that a seller and a buyer have, agreed to the contract terms

When a tenant signs a lease over to another party, which assumes both the responsibility for the rent and the liability for any subsequent damages to the property, as indicated in the original lease, it is called:

Novation

Rafael, a real estate salesperson, advises his buyer clients not to sign a contract of sale prepared by their attorney because he believes that the "as is" clause in the contract will cause them trouble later. Which of the following is TRUE?

Raphael is engaging in the illegal practice of law.

The law that places a time limit on the years allowed to commence a lawsuit is the:

Statute of Limitations

Who signs the contract of sales first?

The purchaser (buyer)

The term of office of New York City council is:

Four Years (term)

Master plan can be also called:

Comprehensive Plan

_____________ is composed of those with expertise in art, architecture, and planning, oversee these design issues. Local laws can give them the authority to review building plans and specifications. They can withhold approval of building permits.

Architectural Review Board

Why should we make investment in real estate?

To keep the value of money, against inflationary trend
Tax shelter
It is a long term but low-risk investment

The ________ the risk of loss, the _______ potential rate of return the investor can expect.

Greater, Greater

A process that calculates the value of an asset in the past, present, or future is called:

The Time Value of Money

The percentage of income per dollar amount invested that the investor gets back on an investment is called:

Rate of Return

_________ means that by using other people's money, expertise or abilities, the investors can make more profit.

Leverage

The square footage of a neighborhood centers should be:

30,000 - 100,000 ft2

The square footage of a outlet centers should be:

100,000 - 300,000 ft2

Which one of the following commercial lease provides for the landlord (= lessor) to pay all kinds of expenses

Gross Lease

The ratio between the net income from a real estate investment and the value of the investment expressed as a percentage is called:

Capitalization Rate

The area that the tenant actually occupies is called:

Useable FT^2

__________ refers to the consent to a transfer of right. It usually describes a situation where a tenant accepts being a tenant of the new landlord by staying on after the sale of the leased property.

Attornment Clause

___________ call for increased cost to the tenant for different reasons at specified times during the lease terms.

Lease escalation Clause

Under IRS regulations, certain items such as _____________ can be deducted on the tax return. They are an incentive to purchase real estate.

Property taxes
Mortgage interest

$250,000/$500,000 Rule applies to _______________, and 1031 Like-Kind Tax Deferred Exchange applies to ______________.

Residential properties, Commercial or investments

An individual applying to become a mortgage broker or a mortgage banker who also holds a real estate broker license must prepare and submit a:

Dual Agency Affidavit

Most real estate agents will not work with a purchaser who has not already acquired a:

Preapproval Letter
Prequalification Letter

A statement by a lending institution that assures the purchaser that the lender will loan a certain sum of money is called:

Mortgage Commitment

Mortgage Brokers and Mortgage Bankers are registered by the:

Department of Financial Services (DFS)

___________ is an impartial estimate of value or opinion of value.

Appraisal

_____________ is sometimes called (ad Valorem) FMV is the most probable price a property will bring.

Market Value

_____________ is the cost of replacing or reproducing the structure in case of a total loss of an insured hazard

Insured Value

Direct cost means the cost of labor and material costs. Direct cost can be also called:

Hard Cost

The Sales Comparison Approach applies to:

Residential Properties

The Income Approach applies to:

Commercial or Industrial Buildings

Which one of the following is not a valid real estate license?
Salesperson
Associate Salesperson
Associate Real Estate Broker
Broker

Associate Salesperson

To become a real estate salesperson, you need to be at least:

18 years old

To become a real estate broker, you need to be at least:

20 years old

Salespersons and brokers must complete 22.5 hours of Continuing Education and renew license:

Every two years

Working as an independent contractor, none of these taxes or deposits is made and no money is withheld from the worker's pay. If the independent contractor earns $600 or more, the employer must file only a Form _________.

1099 Misc

Principal brokers are allowed to pay which of the following for the sales associates?

Office phone bill

The _________ who hires you becomes your _________.

Customer, Client

Which one of the following is one of the fiduciary responsibilities?

Obedience
Confidentiality
Accountability

A property manager is an example of:

General agent

A real estate listing broker is an example of:

Special agent

__________ may be structural or other problems that a seller may know about, but that is not obvious to the purchaser. (Example: hidden water damage & faulty wiring.)

Latent Defect

An agency by ____________ exists when a principal does not stop an individual (agent) from representing his or her interests, thus creating an agency relationship between the two.

Estoppel

A business activity where there is a monopoly or conspiracy that negatively impacts another individual or company to do business is called:

Restraint of trade

If an agent exaggerates his/her experience in order to get a listing agreement, this agent may be guilty of:

Misdemeanor

An agent who is working as a seller's agent and working as a purchaser's agent in the same transaction at the same time is called:

Dual Agent

Dual agency is illegal in New York, but New York law permits consensual dual agency with:

Disclosure and informed consent of all parties

In a cooperating sale, who pays the buyer agent?

Listing Broker

An agent if hired only by the seller is called:

Single Agent
Seller Agent

True/False - A property owner can use multiple agents to find potential buyers with open listing. However, the seller must pay all agents if the house is sold by any of the agents.

False (A property owner... any of the agents)

True/False - To use Multiple Listing Service (MLS), you must pay annual membership fee.

True (MLS)

Section 443 of New York Property Law requires Licensees to present a written Agency Disclosure Form to the customers ____________.

At the first substantive contact