New York Real Estate Salesperson Examination flashcards

An appraisal principle stating that a prudent buyer will pay no more for a property than the cost of acquiring an equally desirable substitute property.

• Forms the basis for the sales comparison approach.
• Applies to both buyers and sellers.
• Value is limited by the availability of comparable alternatives.

Memory trick: Value's Principles: CA(P) CON(T) SUB.

Funds a borrower has remaining after closing costs are paid, indicating their financial stability and ability to cover future expenses.

• Often expressed as months of mortgage payments
• Provides a buffer against financial hardship
• Considered during underwriting for borrower capacity

Memory trick: Reserves are like your financial 'rainy day fund' for the loan.

New York real estate licensees must disclose known material defects and, when a buyer expresses concern about a visible issue, should provide any relevant information from the seller, including professional assessments.

• Material defects must be disclosed.
• Even for non-material, transparency is key when buyer expresses concern.
• Provide available supporting documentation.

Memory trick: Defect Revealed? Share the Story, then let them Explore it.

The NY Department of State reviews license applications from individuals with criminal convictions based on 'good moral character' factors, without automatic denial, considering the nature of the crime, time elapsed, and rehabilitation.

• No automatic denial for convictions.
• DOS considers 'good moral character'.
• Factors include nature of offense, time since, rehabilitation.

Memory trick: Past Mistakes? DOS will Review and Gauge your Character's True.

In New York, real estate licensees should refer buyers asking about neighborhood demographics, especially racial composition, to independent, public information sources to avoid potential Fair Housing violations like steering.

• Avoids steering accusations.
• Empowers buyer to research independently.
• Protects licensee from perceived discrimination.

Memory trick: Demographics? Direct to the Data, don't Delineate.

An agency relationship where the agent is authorized to perform a specific act or transaction for the principal, with limited authority.

• Most common type of agency in real estate brokerage.
• Agent's authority is limited to the specific task (e.g., selling a house, finding a buyer).
• Does not grant broad decision-making power to the agent.

Memory trick: U.G.S.D. are the agent's many roles, you see.

A seller's agent has a duty to their client to help verify a prospective buyer's financial ability to purchase a property, typically by requesting pre-approval or proof of funds.

• Standard practice for seller representation.
• Ensures buyer qualification, saves seller's time.
• Usually involves pre-approval letter or proof of funds.

Memory trick: Verify the Buyer's Bank, to protect the Seller's plan.

The principal's unilateral withdrawal of the agent's authority to act on their behalf, which typically terminates the agency relationship.

• The principal generally has the power to revoke agency at any time, even if it breaches the contract.
• Revocation may lead to the principal owing the agent damages for breach of contract.
• The agency relationship (authority to act) ends, but contractual obligations (like compensation) may persist.

Memory trick: P.I.N.D.A.N.C.E. brings agency to an end.

To evaluate the financial stability of a condominium association, buyers should examine the offering plan and the association's recent financial statements.

• Offering plan details initial budgets and governance.
• Financial statements show current income, expenses, and reserves.
• Reserve study assesses long-term repair/replacement needs.

Memory trick: For Condo Cash, check the Plan and Statements, clear as glass.

In rent-stabilized apartments in NYC, landlords must offer tenants a choice of a one-year or two-year lease renewal.

• Applies to rent-stabilized units in NYC.
• Tenant chooses between one or two years.
• Landlord cannot refuse renewal without cause.

Memory trick: Stabilized leases offer Stable Choices: One or Two years.

A mortgage where the borrower pays only the interest on the principal balance for an initial period, after which payments typically increase to include principal.

• Lower initial monthly payments
• Principal balance does not decrease during the interest-only period
• Can be risky if not properly managed

Memory trick: Interest-Only: Just the 'I' in the 'O' of your initial payments.

For non-material defects, a New York real estate licensee's duty of obedience to their client (to follow lawful instructions) generally outweighs a duty to disclose, as long as the instruction is lawful and ethical.

• Duty of obedience is paramount for lawful instructions.
• Non-material defects do not legally require disclosure in NY.
• Disclosure of material defects overrides obedience.

Memory trick: Non-Material means Obey, Material means Reveal, no delay.

A type of foreclosure that requires the lender to file a lawsuit in court to obtain a judgment of foreclosure and an order to sell the property.

• Involves court proceedings and oversight
• Common in states like New York
• Ends with a court-ordered public sale of the property

Memory trick: Judicial: The 'Judge' says 'Go Sell' the house!

A paramount fiduciary duty requiring an agent to act solely in the best interests of their principal, even above their own.

• Requires the agent to put the principal's interests first.
• Includes avoiding conflicts of interest and maintaining confidentiality.
• Applies throughout the duration of the agency relationship.

Memory trick: Loyalty: Always put your client's heart first.

In New York, tenants in occupancy during a rental building's conversion to condominiums have significant protections, including the right of first refusal to purchase their unit.

• Applies to tenants in occupancy at filing time
• Grants right to purchase their existing unit
• Part of broader tenant protection laws

Memory trick: Converting to condos? Remember the 'Tenant's First Right,' like a VIP pass to buy their home.

In New York, lawful dual agency requires the appointment of separate designated agents for the buyer and seller and informed written consent from both parties.

• Requires informed written consent
• Designated agents must be appointed
• Broker acts as dual agent, salespersons as designated agents

Memory trick: Dual agency in NY: 'Designate and Consent' in writing, or it's a no-go!

New York State real estate licensees must complete mandatory continuing education, including specific hours dedicated to agency disclosure, covering both buyer and seller agency.

• Required for license renewal
• Includes 2 hours of agency disclosure
• Must cover 1 hour of buyer agency and 1 hour of seller agency

Memory trick: Renewing your NY license? Remember the Agency ABCs: Always Be Compliant!

For properties built before 1978, federal law mandates sellers and landlords to disclose known lead-based paint hazards and allow buyers a 10-day inspection period.

• Applies to pre-1978 housing
• Seller must disclose known hazards
• Buyer gets 10-day inspection option

Memory trick: Lead paint? 1978 is the date, 10 days for the buyer to investigate!

Steering is the illegal practice of guiding prospective buyers or renters to or away from certain neighborhoods based on protected characteristics, violating Fair Housing Laws.

• Illegal under federal and NY law
• Based on protected characteristics (e.g., ethnicity)
• Agents must refuse discriminatory requests

Memory trick: Fair Housing is about 'Equal Access for All,' so 'NO Steering' through the neighborhood gates.

The New York Department of State (DOS) can take various disciplinary actions against real estate licensees for violations, ranging from warnings to license revocation.

• DOS investigates complaints
• Actions range from fines to revocation
• Revocation is the most severe penalty

Memory trick: DOS disciplinary actions are like a judge's gavel, from a tap to a final bang: Revoke!