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New York Real Estate Broker — Requirements & Free Practice

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Licenses, application pathways and examination requirements

Each license and applicant pathway has its own requirements and exemptions. Choosing practice questions does not determine your eligibility.

Real Estate Branch Office License

Supplemental license for an additional office of an existing principal broker.

Licensing authority: New York State Department of State Division of Licensing Services · Application information

Initial supplemental branch office license
No examination is required for this applicant pathway.
Application
Branch application and prescribed fee; term two years.
Principal license
Existing licensed principal broker maintains branch in addition to principal place of business.
Supervision
Licensed broker, representative broker/manager or duly appointed qualified office manager directly supervises.

Official no-examination sources

Effective from 2026-09-22.

Renewal of supplemental branch office license
No examination is required for this applicant pathway.
Application
Branch application and prescribed fee; term two years.
Principal license
Existing licensed principal broker maintains branch in addition to principal place of business.
Supervision
Licensed broker, representative broker/manager or duly appointed qualified office manager directly supervises.

Official no-examination sources

Effective from 2026-09-22.

Real Estate Broker License Used by Administrator or Executor

Use of a deceased sole proprietor broker’s existing license by an appointed administrator or executor to complete unfinished realty transactions.

Licensing authority: NYS Department of State Division of Licensing Services · Application information

Estate continuation — extension and renewal
No examination is required for this applicant pathway.
Endorsement
Deceased, death date and administrator/executor name endorsed on license.
Estate authority
Good-cause extension at most another 120 days; license expiring during either period automatically continued without fee.

Official no-examination sources

Effective from 2026-09-22.

Estate continuation — initial use
No examination is required for this applicant pathway.
Endorsement
Deceased, death date and administrator/executor name endorsed on license.
Estate authority
Surrogate-authorized administrator/executor; at most 120 days after death to complete existing transactions.

Official no-examination sources

Effective from 2026-09-22.

temporary renewal license

Temporary continuation at Department discretion to allow attendance proof when its late submission is not the licensee’s fault.

Licensing authority: department of state · Application information

Temporary renewal — never examined competency review
NYS Real Estate Broker Examination
Competency
Never-examined licensee whose competency cannot reasonably be proved may be required to pass the broker exam.
Department discretion
Delay in attendance proof is not licensee’s fault; Department fixes temporary period.
Existing license
Existing broker license; temporary continuation, not initial qualification.
Hardship
177.6 requires renewal application, written request and hardship evidence.
Temporary renewal — previously examined
No examination is required for this applicant pathway.
Competency
Previously examined or reasonably able to prove competency.
Department discretion
Delay in attendance proof is not licensee’s fault; Department fixes temporary period.
Existing license
Existing broker license; temporary continuation, not initial qualification.
Hardship
177.6 requires renewal application, written request and hardship evidence.

Official no-examination sources

Effective from 2026-09-22.

NYS Real Estate Broker Examination

Provider
New York State Department of State
Format
Multiple-choice written examination
Time limit
2 1/2 hours
Passing score
Reported as passed or failed; no numerical score reported
Exam fee
$15
Examination outline
  • License Law and Regulations
    • 1. INTRODUCTION
    • A. The purpose of the licensing law
    • B. The different categories of licensure
    • • Real Estate Broker
    • • Real Estate Associate Broker
    • • Real Estate Salesperson
    • C. Responsibilities of Licensure
    • • Broker (to the public, to licensees)
    • • Associate Broker (to broker, to the public)
    • • Salesperson (to broker, to the public)
    • D. Education requirements for obtaining licenses
    • E. The duties that are performed that require licensure
    • F. Exemptions for licensure
    • G. Maintaining a license
    • • who physically holds the license
    • • pocket cards
    • • changes in name/status/location
    • • branch office requirements
    • • fee for licensure
    • H. Changes of Association/Termination
    • I. Dual Licensure-Broker/Salesperson
    • J. Renewals and continuing education
    • • hours of approved courses/programs
    • • renewal requirements
    • • responsibilities of sponsoring brokers
    • K. Regulations promulgated by the Department of State
    • L. Guidelines on advertisements
    • M. Description of most common violations of license law
    • N. Liabilities & penalties for violation of law or regulations
    • O. Unlicensed assistants guidelines
    • P. Article 14 - “Property Condition Disclosure Act”
    • Q. Disclosure of uncapped natural gas wells - section 242 of the Real Property Law
    • R. Case studies involving disciplinary proceedings instituted by the Department of State
    • Key terms: • Administrative discipline
    • Key terms: • Apartment information vendor
    • Key terms: • Apartment sharing agent
    • Key terms: • Article 12-A
    • Key terms: • Blind ad
    • Key terms: • Associate real estate broker
    • Key terms: • Change of Association
    • Key terms: • Commingling
    • Key terms: • Continuing education
    • Key terms: • Escrow
    • Key terms: • Exemption
    • Key terms: • Home inspector
    • Key terms: • Irrevocable consent
    • Key terms: • Kickback
    • Key terms: • Listing agreement
    • Key terms: • Misdemeanor
    • Key terms: • Article 78 proceeding
    • Key terms: • Multiple listing service
    • Key terms: • Net listing
    • Key terms: • Pocket card
    • Key terms: • Real estate appraiser
    • Key terms: • Real estate broker
  • Law of Agency
    • 1. INTRODUCTION
    • A. The Real Estate Agent
    • • Licensure
    • • Definition of Agency
    • • Client or customer - Who does the agent represent?
    • B. The Agent as Fiduciary
    • • Basic agency relationships
    • • Fiduciary responsibilities
    • • Loyalty, confidentiality, full disclosure, obedience, reasonable skill and care and duty to account
    • • Scope of agent's authority
    • • Duties of the agent to the other parties in the transaction
    • • Misrepresentation and their consequences
    • C. Agency and Brokerage - Are they synonymous?
    • • Who is the Agent?
    • • The role of a Salesperson (subagent)
    • • The nature of Cooperating Brokers (agents? subagents? dual agents? buyer brokers? broker's agents?)
    • D. The Creation of Agency
    • • How is agency created?
    • • How is compensation determined?
    • • Anti-Trust Issues
    • -Group Boycotting
    • -Price Fixing
    • -Market Allocation Agreements
    • -Tie-in Arrangements
    • • Implied agency
    • • Ratification and Estoppel
    • • How does an Agent decide who he or she represents?
    • E. Agency Alternatives
    • • Agent
    • • Subagent
    • • Dual Agent
    • • Dual Agent with Designated Sales Agent
    • • Single Agent
    • • Seller’s Agent
    • • Buyer’s Agent
    • • Broker's Agent
    • • Landlord’s Agent
    • • Tenant’s Agent
    • F. Subagency/Subagent or Buyer's Broker?
    • • Who creates subagency?
    • • The "blanket unilateral offer of subagency" (does it still exist?)
    • • Rejecting subagency
    • • The relationship of a principal to a subagent
    • • Can brokerage be conducted without subagency?
    • • Obligations of the subagent to the seller
    • • Obligations of the subagent to the buyer
    • G. Dual Agency
    • • What is Dual Agency?
    • • Obligation of Informed Consent from all parties
    • • Obtaining the Informed Consent
    • -Advance consent to dual agency
    • • Risks of Dual Agency
    • • Undisclosed Dual Agency and its consequences
    • H. Consensual Dual Agency - Does it Work?
    • • Single Licensee Dual Agency
    • • Broker Dual Agency
    • • The New York Regulatory Scheme
    • • Receiving compensation for services rendered to another party in the transaction
    • -Mortgage brokerage referral fees
    • • Relationship of Regulation 175.7 to RPL Section 443
    • Company Policies:
    • • Seller agency exclusively
    • • Buyer agency exclusively
    • • Consensual dual agency for in-house sales with seller agency only as the norm
    • • Consensual dual agency for in-house sales with buyer agency exclusively for all other transactions
    • • Designated agents
    • I. Agency Relationships
    • • Single Agency
    • o Practicing single agency
    • o Providing advice to clients (principals)
    • o Duties and obligations to each of the parties in the transaction "A single agency broker represents either the buyer or the seller in a transaction but never both"
    • • Seller/Landlord Agency
    • o The relationship of the salesperson
    • o Express or implied seller agency
    • o Handling in-house sales
    • o Handling cooperative sales
    • • Buyer/Tenant Agency
    • o Why buyer brokerage
    • o Does everyone need an agent?
    • o Who pays the buyer's broker?
    • o Buyers as clients
    • o Buyers as customers
    • o Broker's Agent
    • • Consensual Dual Agency
    • • Disclosure requirements under New York Law (RPL Section 443)
    • J. Termination of Agency
    • K. Forms and Disclosure Policy
    • • The exclusive right to sell agreement
    • • The exclusive agency agreement
    • • The open listing agreement
    • • The exclusive right to rent agreement
    • • The exclusive right to represent (Buyer's broker)
    • L. Disclosure Requirements under section 443 of the Real Property Law
    • • How to explain the Agency Disclosure documents
    • o Agency Disclosure Form prior to January 1, 2011
    • o Agency Disclosure Form effective January 1, 2011
    • M. Completing the Signature Page
    • • What is the first substantive meeting?
    • • Have you made your role clear?
    • • What if buyer or seller refuses to sign?
    • • Once you have assumed a role as buyer's agent or a seller's agent can you change roles?
    • Key terms: • accountability
    • Key terms: • advance consent to dual agency
    • Key terms: • advance consent to dual agency
    • Key terms: • with designated sales associate
    • Key terms: • agency disclosure form
    • Key terms: • agent
    • Key terms: • broker's agent
    • Key terms: • buyer agent
    • Key terms: • client
    • Key terms: • confidentiality
    • Key terms: • cooperating agent
    • Key terms: • customer
    • Key terms: • designated sales agent
    • Key terms: • disclosure
    • Key terms: • dual agency
    • Key terms: • estoppel
    • Key terms: • exclusive agency
    • Key terms: • exclusive right to sell
    • Key terms: • expressed agency
    • Key terms: • fiduciary
    • Key terms: • fiduciary duties
    • Key terms: • first substantive contact
    • Key terms: • general agent
    • Key terms: • group boycott
    • Key terms: • implied agency
    • Key terms: • informed consent
    • Key terms: • landlord’s agent
    • Key terms: • loyalty
    • Key terms: • market allocation
    • Key terms: • misrepresentation
    • Key terms: • obedience
    • Key terms: • open listing
    • Key terms: • price fixing
    • Key terms: • principal
    • Key terms: • reasonable care
    • Key terms: • self-dealing
    • Key terms: • seller's agent
    • Key terms: • special agent
    • Key terms: • subagent
    • Key terms: • tie-in arrangement
    • Key terms: • undivided loyalty
    • Key terms: • undivided loyalty
    • Key terms: • undisclosed dual agency
    • Key terms: • vicarious liability
    • 2. INDEPENDENT CONTRACTOR EMPLOYEE
    • A. The nature of the Independent Contractor Relationship
    • B. Independent Contractor Employee
    • C. Common Law
    • • case law
    • • IRS
    • • New York State
    • D. 1986 Independent Contractor Laws - New York State
    • • 1986 additions to New York State Labor Law and Worker's Compensation Law
    • • Internal Revenue Code Section 3508
    • E. Compliance with 1986 Law
    • • Compensation directly related to sales or other output
    • • Written contract between broker and salesperson
    • • Written contract not executed under duress
    • F. Elements of Independent Contractor Relationship
    • • Commissions payable without deductions for taxes and directly related to output
    • • No remuneration for number of hours worked
    • • Salespersons are permitted to work any hours they choose
    • • Salespersons can work from home or a broker's office
    • • Brokers can provide office facilities and supplies but salespersons are responsible for expenses
    • • Broker supervises but does not direct and control
    • • Either party may terminate at any time
    • • Both Federal and State Law requires a Written Contract
    • • Consequences of Non-Compliance
    • o Sales associates deemed employees
    • o Broker responsible for unemployment insurance premiums, Federal unemployment insurance, worker's compensation, disability insurance and liability for Federal and State withholding taxes including Social Security benefits.
    • • Consequences to Salespersons
    • o inability to file Form 1040, Schedule C and deduct expenses, all compensation subject to withholdings.
    • • Review of recommended forms
    • • Substance Over Form - Written documentation will not overcome broker's direction and control of salesperson
    • • Balancing the need to supervise
    • • DOS regulation 175.21 - Supervision of Salesperson by broker
    • • DOS regulation 175.23 - Records of transaction to be maintained
    • • Implications for the future - Will licensees become employees?
    • Key terms: • employee
    • Key terms: • independent contractor
  • Legal Issues
    • 1. ESTATES AND INTERESTS
    • A. Introduction - Overview
    • • bundle of rights
    • • land
    • • real estate
    • • real property
    • • personal property
    • B. Uses of Real Property
    • • residential
    • • commercial
    • • industrial
    • • agricultural
    • • special purpose
    • • characteristics of real property
    • C. Freehold Estates
    • • fee, fee simple, fee absolute
    • • qualified fee
    • • fee on condition
    • • life estates
    • D. Leasehold Estates
    • • estate for years
    • • periodic estate
    • • estate at will
    • • estate at sufferance
    • E. Forms of Ownership
    • • Estate (Ownership) in severalty
    • • Co-ownership
    • o tenancy in common
    • o joint tenancy
    • o tenancy by the entirety
    • o termination of joint tenancies
    • o termination of co-ownership by Partition
    • o community property rights (an understanding)
    • F. Trusts
    • • Definition
    • G. Ownership of Real Estate by Business Organizations
    • • Partnerships
    • o general, limited, uniform partnership act, tenancy in common
    • • Corporations
    • o ownership in severalty
    • • Syndicates
    • • Cooperative and Condominiums
    • o What interests are transferred
    • o What is owned
    • Key terms: • act of waste
    • Key terms: • air rights
    • Key terms: • beneficiary
    • Key terms: • bundle of rights
    • Key terms: • chattel
    • Key terms: • curtesy/dower
    • Key terms: • escheat
    • Key terms: • estate for years
    • Key terms: • fee simple estate
    • Key terms: • fixture/trade fixture
    • Key terms: • homestead
    • Key terms: • illiquidity
    • Key terms: • joint tenancy
    • Key terms: • joint venture
    • Key terms: • life estate
    • Key terms: • littoral rights
    • Key terms: • parcel
    • Key terms: • partition
    • Key terms: • personal property
    • Key terms: • real estate/real property
    • Key terms: • remainder interests/remainderman
    • Key terms: • reversionary interest
    • Key terms: • right of survivorship
    • Key terms: • riparian rights
    • Key terms: • severalty
    • Key terms: • special purpose real estate
    • Key terms: • tenancy in common
    • Key terms: • subsurface rights
    • Key terms: • tenancy by the entirety
    • Key terms: • trustee/trustor
    • Key terms: • undivided interest
    • Key terms: • unities of interest, possession, time and title
    • 2. LIENS AND EASEMENTS
    • A. Encumbrances
    • • Liens - voluntary, involuntary
    • • General Liens
    • o judgments (Lis Pendens)
    • o estate and inheritance taxes
    • o deceased person's debt
    • o corporation franchise tax
    • o IRS Tax
    • • Specific Liens
    • o Tax Liens
    • o Mortgage Liens
    • o Mechanics Liens
    • • Effect on Liens and Title
    • • Priority of Liens
    • • Subordination Agreements
    • • Deed restrictions
    • • Easements
    • o easement appurtenant
    • o easement in gross
    • o easement by necessity
    • o easement by prescription
    • o party walls
    • • Creating an easement
    • • Terminating an easement
    • Key terms: • appurtenances
    • Key terms: • dominant tenement
    • Key terms: • easement
    • Key terms: • easement appurtenant
    • Key terms: • easement by condemnation
    • Key terms: • easement by grant
    • Key terms: • easement by implication
    • Key terms: • easement by necessity
    • Key terms: • easement by prescription
    • Key terms: • easement for light and air
    • Key terms: • easement in gross
    • Key terms: • encroachment
    • Key terms: • encumbrance
    • Key terms: • general lien/specific lien
    • Key terms: • involuntary/voluntary lien
    • Key terms: • license
    • Key terms: • lis pendens
    • Key terms: • mechanic's lien
    • Key terms: • mortgage
    • Key terms: • party wall
    • Key terms: • possessory/non-possessory
    • Key terms: • right of way
    • Key terms: • servient tenement
    • Key terms: • subordination agreement
    • Key terms: • tax lien
    • 3. DEEDS
    • A. Definition of a deed
    • B. Purpose of Deeds
    • C. Essential elements of a deed
    • • grantor
    • • grantee
    • • act of conveyance - granting clauses
    • • consideration
    • • legal description
    • o metes and bounds
    • o monuments
    • o lot and block (plat of subdivision)
    • • habendum clause
    • • designation of any limitations
    • • exemptions and reservations affecting the title ("subject to" clause)
    • • signature of the grantor
    • • delivery of the deed and acceptance
    • • Acknowledgment
    • • Recording
    • D. Forms of Deeds
    • • full covenant and warranty deed
    • o covenant of seizin
    • o covenant against encumbrances
    • o quite enjoyment
    • o further assurance
    • o warranty
    • • bargain and sale with covenants
    • • bargain and sale without covenants
    • • executor's deed
    • • quit claim deed
    • • referee's deed
    • E. Conveyance After Death
    • • Intestate
    • o administration, administrator
    • o title by descent
    • o intestate secession
    • o heirs
    • • Testate
    • o probate
    • o testator, testatrix
    • o devise
    • o devisee
    • o executor, executrix
    • Key terms: • accession
    • Key terms: • accretion
    • Key terms: • acknowledgment
    • Key terms: • adverse possession
    • Key terms: • alluvion
    • Key terms: • avulsion
    • Key terms: • bargain and sale deed
    • Key terms: • consideration
    • Key terms: • conveyance
    • Key terms: • dedication/dedication by deed
    • Key terms: • delivery and acceptance
    • Key terms: • description
    • Key terms: • executor
    • Key terms: • full covenant and warranty deed
    • Key terms: • grantee/grantor
    • Key terms: • habendum clause
    • Key terms: • involuntary/voluntary alienation
    • Key terms: • land patent
    • Key terms: • lot and block
    • Key terms: • metes and bounds
    • Key terms: • public grant
    • Key terms: • quit claim deed
    • Key terms: • referees deed
    • Key terms: • reference to a plat
    • Key terms: • survey
    • 4. TITLE CLOSING AND COSTS
    • INTRODUCTION
    • A. Significance of the closing: what is a title closing and why is it important to those who attend?
    • B. Functions of those who will attend a closing, the importance of recording acts and what will be done at the closing.
    • THE TITLE CLOSING
    • A. Consummation of a real estate transaction
    • B. The seller is paid the balance of the purchase price
    • C. Existing liens against the real property are satisfied
    • D. The purchaser normally will pay the balance of the purchase price through a combination of funds obtained through an acquisition mortgage and the purchaser's own funds.
    • E. Significance of:
    • • deed and other closing documents
    • • recording acts
    • • chain of title
    • • abstract of title
    • • title insurance
    • F. Where are closings held?
    • G. A broker or salesperson's role prior to closing involves inspection of the property with the purchaser
    • H. Payment of the commission
    • I. Homeowner's insurance
    • J. RESPA
    • K. Closing statement
    • CLOSING COSTS AND ADJUSTMENTS
    • A. Seller's closing costs
    • • transfer taxes
    • o state
    • o local
    • • broker's commission
    • • attorney's fees
    • • recording documents to clear title
    • • satisfy existing liens
    • • special
    • o co-op and condo fees
    • B. Purchaser's closing costs
    • • appraisal and credit report fees
    • • inspections
    • • mortgage recording tax
    • • title insurance
    • • attorney's fees
    • • bank fees
    • • recording
    • • mortgage insurance
    • • special
    • o co-op and condo fees
    • C. Adjustments
    • • real estate taxes and assessments
    • • insurance
    • • fuel
    • • water and sewer charges
    • • rent
    • • security deposits
    • • arithmetic of prorations
    • Key terms: • abstract of title
    • Key terms: • assessments
    • Key terms: • chain of title
    • Key terms: • closing statement
    • Key terms: • constructive notice; actual notice
    • Key terms: • credits
    • Key terms: • debits
    • Key terms: • marketable title
    • Key terms: • proration
    • Key terms: • proration
    • Key terms: • Real Estate Settlement
    • Key terms: • Procedures Act (RESPA)
    • Key terms: • reconciliation
    • Key terms: • survey
    • Key terms: • title
    • Key terms: • title closing
    • Key terms: • title insurance
    • Key terms: • title search
  • The Contract of Sales and Leases
    • 1. LEASES
    • A. Definition
    • B. Types of Leasehold Estates
    • • estate for years
    • • periodic estate
    • • estate at will
    • • tenancy at sufferance
    • C. Standard Lease Provisions
    • • The Law of Contracts governs the making, interpretation, and enforcement of leases. Therefore, the requirements for making a valid lease are the same as making a valid contract.
    • o capacity to contract
    • o a demising clause - "the demised premises"
    • o description of the premises
    • o clear statement of the "term" (length)
    • o specification of rent and how it is to be paid (consideration). Unless lease provides otherwise rent is due in arrears.
    • o must be in writing for a term of more than one year
    • o signatures (not notarized) unless to be recorded
    • o plain language requirement for residential leases
    • o use provisions
    • o often a point of negotiation in a commercial lease. Hence the significance of the language "for no other purpose" versus "any lawful purpose"
    • • usually expressed in annual terms
    • • commercial leases often provide for:
    • o renewals or options to renew
    • o no rights to renewal by statute
    • • residential leases
    • o under ETPA (Emergency Tenant Protection Act), tenant in most cases is entitled to a one- or two-year renewal
    • o decontrolling of a stabilized unit
    • - luxury decontrol
    • - Can occur when the legal registered rent reaches $2000; and household income exceeds $175,000 for 2 years preceding the legal rent of $2000
    • o household income defined
    • o non-primary resident
    • o define primary resident
    • o security deposits
    • o possession and habitability
    • o improvement
    • o assignment & subletting
    • o apartment sharing
    • o renewals
    • o termination
    • Key terms: • assignment
    • Key terms: • constructive eviction
    • Key terms: • covenant
    • Key terms: • eviction/actual and constructive
    • Key terms: • graduated lease
    • Key terms: • gross lease
    • Key terms: • ground lease
    • Key terms: • holdover tenant
    • Key terms: • implied lease
    • Key terms: • index lease
    • Key terms: • landlease
    • Key terms: • lease/net lease/triple net lease
    • Key terms: • leasehold estate
    • Key terms: • lessee/lessor
    • Key terms: • option to renew
    • Key terms: • percentage lease
    • Key terms: • periodic lease
    • Key terms: • proprietary lease
    • Key terms: • quiet enjoyment
    • Key terms: • security deposit
    • Key terms: • sublease
    • 2. CONTRACTS
    • A. Definition
    • B. Types
    • • expressed
    • • implied
    • • bilateral
    • • unilateral
    • C. Essentials of a valid contract
    • • competent parties
    • • mutual agreement
    • • lawful objective
    • • consideration
    • • in writing
    • D. Sales Contract
    • • date
    • • identification of parties
    • • legal description
    • • personal property provision
    • • consideration
    • • terms of payment
    • • "subject to" provision
    • • type of deed
    • • closing time and place
    • • broker clause
    • • apportionments
    • • lien law
    • • condition of property
    • • merger clause
    • • limit of seller's liability
    • • liquidation of seller's liability
    • • loan contingency clause
    • • possession paragraph
    • • down payment
    • • no survival (unless provide D)
    • E. The use of binders
    • F. Purchase offers
    • G. Installment sales contract
    • • when is deed delivered?
    • • cash flow reason for purchaser
    • • tax reasons for seller
    • H. Lease with option to buy/Right of first refusal
    • I. Contracts affecting brokers
    • • employment contracts
    • • listing agreements
    • • sales contracts
    • • leases
    • J. Statute of Frauds GOL 5-703 sub. 2
    • Key terms: • assignment
    • Key terms: • caveat
    • Key terms: • caveat emptor
    • Key terms: • consideration
    • Key terms: • contingency
    • Key terms: • counteroffer
    • Key terms: • earnest money deposit
    • Key terms: • express/implied contracts
    • Key terms: • executed contract/executory contract
    • Key terms: • forbearance
    • Key terms: • liquidated damages
    • Key terms: • novation
    • Key terms: • option
    • Key terms: • power of attorney
    • Key terms: • reformation
    • Key terms: • rescission
    • Key terms: • rider
    • Key terms: • right of first refusal
    • Key terms: • specific performance
    • Key terms: • Statute of Frauds
    • Key terms: • Statute of Limitations
    • Key terms: • "time is of the essence"
    • Key terms: • Uniform Commercial Code
    • Key terms: • void/voidable
    • 3. CONTRACT PREPARATION
    • A. What Form of Contract to Use
    • • Upstate Contracts
    • • Downstate Contracts
    • B. Data Required for Contract Preparation
    • • Prior deed
    • • Prior title insurance policy
    • • Survey
    • • Certificate of occupancy (what must the preparer look for?)
    • • Personal data (i.e., names, addresses, telephones, marital status, social security numbers, etc.)
    • • Tax bills
    • C. Verifying Property Description
    • • Metes and bounds description
    • • Lot on a filed map
    • • Tax map designations
    • • Street addresses
    • • Which is to be used?
    • D. Who Prepares the Contract?
    • • Seller’s attorney
    • • Seller’s broker
    • • Purchaser’s broker (purchase offer contracts)
    • • Other
    • E. The Mortgage Contingency
    • • Traditional mortgage financing
    • • VA or FHA financing
    • • Purchase Money Mortgage
    • • Assumable Mortgages
    • F. The Down Payment
    • ▪ Custom and practice in New York regarding the amount of down payment upon contract
    • ▪ Who holds the down payment?
    • o listing agent
    • o seller’s attorney
    • o no escrow agent?
    • o advantages of lawyers holding down payments (Lawyers Fund for Client Protection)
    • G. Contract Procedures
    • ▪ Who signs first and why?
    • ▪ Review of contract with seller to verify accuracy of information
    • ▪ Riders
    • ▪ Clauses relating to lead-based paint (properties constructed after 1978)
    • ▪ Requirement for inclusion of section 443 Disclosure statement when brokers prepare contracts
    • H. Customs and Practices Regarding Signing of Contract
    • • Delivery by mail
    • • Sit down contract signings
    • o delivery of down payments
    • o who can give legal advice with respect to contract? (Should brokers ever prepare riders?)
    • o attorney review clauses
    • Key terms: • Attorney review clause
    • Key terms: • Down payment
    • Key terms: • Lawyer’s fund for client protection
    • Key terms: • Mortgage contingency clause
  • Real Estate Finance
    • A. Mortgage – Definition
    • • creates a lien
    • • owner retains the usual rights of ownership
    • • mortgagee (lender) has the right to pursue mortgagor's (borrower) real estate to satisfy debt
    • • bond/note
    • • secures the repayment of a promissory note
    • • principal, interest, taxes and insurance (PITI)
    • • foreclosure
    • • deficiency judgement
    • • discount points
    • B. Duties of a mortgagor
    • • keep the property in good repair
    • • to insure the property
    • • to pay all taxes and assessments
    • • to pay the debt insured by the mortgage
    • C. Sale of Property that has a mortgage
    • • sale free and clear
    • • sale subject to the mortgage
    • • sale subject to the mortgage with the buyer assuming the mortgage debt
    • D. Recording of the mortgage
    • E. General Types of Mortgages
    • • conventional
    • • governmental insured or guaranteed
    • F. Specific loans and payment
    • • fixed rate
    • • adjustable rate
    • • balloon
    • • graduated payment
    • • open-end
    • • blanket
    • • wraparound
    • • swing/bridge loan
    • • purchase money
    • • construction
    • • land contract
    • • equity loan
    • • reverse mortgage
    • G. Government Backed Loans
    • • FHA
    • • VA
    • • Rural Housing Service (RHS)
    • • Sonyma
    • H. Secondary Markets
    • • Fannie Mae (FNMA)
    • • Ginnie Mae (GNMA)
    • • Federal Home Loan Mortgage Corporation
    • I. Truth in Lending (Regulation Z)
    • • Consumer Credit Protection Act
    • • disclosure
    • • right to rescind
    • • advertising
    • • effect on real estate licensees
    • J. PMI
    • K. Lender's Criteria for Granting a Loan
    • • Investment quality of property
    • o sales price
    • - appraised value
    • o location
    • o condition
    • o comparable
    • o loan to value
    • - down payment
    • o type of property
    • - one (1) to four (4) family
    • - owner occupied
    • - income producing
    • • Borrower's ability to repay loan
    • o income/salary
    • o qualifying ratios
    • o employment history
    • o stability and continuance
    • - education/training
    • o sole proprietor, partnership, corporation
    • o verification/documentation
    • o liquid assets
    • o monthly obligations, history of repayment/credit reports
    • o Consumer Credit Protection Act
    • L. Predatory Lending
    • • What is Predatory Lending?
    • o Sub-prime loans
    • o high interest loans and closing costs --hidden fees
    • o balloon payments
    • o unqualified buyers refinancing (flipping)
    • o debt consolidation
    • o home equity loans
    • • Fraud
    • • Foreclosures caused by predatory lending practices
    • • Predatory Lending Laws
    • Key terms: • acceleration clause
    • Key terms: • adjustable-rate mortgage (ARM)
    • Key terms: • alienation clause
    • Key terms: • amortization
    • Key terms: • assignment
    • Key terms: • balloon mortgage
    • Key terms: • blanket mortgage
    • Key terms: • bridge loan
    • Key terms: • buydown
    • Key terms: • construction mortgage
    • Key terms: • conventional mortgage
    • Key terms: • default
    • Key terms: • discount points
    • Key terms: • "due on sale" clause
    • Key terms: • FHA/mortgage
    • Key terms: • grace period
    • Key terms: • graduated mortgage
    • Key terms: • home equity loan
    • Key terms: • inflation
    • Key terms: • interest and tax deductibility
    • Key terms: • lifetime cap/ceiling
    • Key terms: • loan flipping
    • Key terms: • loan to value ratio
    • Key terms: • margin
    • Key terms: • MIP/mortgage insurance premium
    • Key terms: • mortgage, mortgagor, mortgagee
    • Key terms: • negative amortization
    • Key terms: • package mortgage
    • Key terms: • pledged account mortgage
    • Key terms: • PMI/private mortgage insurance
    • Key terms: • point
    • Key terms: • predatory lending
    • Key terms: • prepayment penalty clause
    • Key terms: • primary market/secondary market
    • Key terms: • promissory note
    • Key terms: • rate cap; payment cap
    • Key terms: • red lining
    • Key terms: • Regulation Z
    • Key terms: • release clause
    • Key terms: • RESPA/Real Estate Settlement
    • Key terms: • Procedures Act
    • Key terms: • reverse annuity mortgage
    • Key terms: • sale-and-leaseback
    • Key terms: • satisfaction of mortgage
    • Key terms: • shared equity mortgage
    • Key terms: • SONYMA/State of New York Mortgage
    • Key terms: • Association
    • Key terms: • straight mortgage/term mortgage
    • Key terms: • sub-prime loan
    • Key terms: • usury
    • Key terms: • VA/mortgage
    • Key terms: • wrap-around mortgage
  • Land Use Regulations
    • A. Bundle of rights and "As of Right Zoning"
    • B. The need to plan for the future
    • C. Private Land Use Controls: Deed restrictions, Covenants
    • • State Environmental Quality Review
    • D. Police Power
    • • New York State Article 9-A
    • • Interstate Land Sales Full Disclosure Act
    • • Environment Impact Statements
    • • Taxation
    • • State Building and Fire Codes Regulations
    • • Local Authority
    • o enacts local zoning ordinance and building codes
    • o zoning classifications: residential, commercial, industrial, vacant, agricultural, public open space, park lands, recreational, institutional
    • o incentive zoning
    • o clustering
    • o open meetings law (Sunshine Law)
    • o local legislative body: planning board & zoning, board of appeals
    • E. The Planning Board - Planning Defined
    • • Master of Comprehensive Plan, Official Map, etc.
    • o subdivisions
    • o development costs
    • o zoning actions
    • o capital budgeting
    • o other planning related actions
    • • FHA approval
    • • Plat, density, street/traffic patterns
    • • PUD - Planned Unit Development
    • • Site plan and review
    • F. The zoning board of appeals: administrative and quasi-judicial, not policy making. Local administrative appeal mechanisms. Interpreter of Ordinance.
    • • Article 78 Procedure
    • • Special exception use permit or special use permit
    • • USE variance: "Unnecessary Hardship"
    • o applicant is deprived of all economic use or benefit
    • o hardship is unique, not universal to area or neighborhood
    • o variance will not change essential character of neighborhood
    • o alleged hardship is not self-created
    • • AREA Variance "Practical Difficulty", Health, Safety, Welfare
    • o Undesirable change or detriment to nearby properties if granted
    • o If benefit sought can be achieved by other feasible means
    • o If requested variance is substantial
    • o If it would have an adverse effect or impact on physical or environmental conditions in the neighborhood or district
    • o If the difficulty was self-created (does not preclude granting)
    • • Local Enforcement
    • o Building department: inspector, code enforcement officer, etc.
    • o Professional services: engineer, environmental, planning, etc.
    • o Board of Health
    • o Local courts
    • Key terms: • abutting
    • Key terms: • accessory apartment uses
    • Key terms: • accessory uses
    • Key terms: • air rights
    • Key terms: • building code
    • Key terms: • building permit
    • Key terms: • census tract
    • Key terms: • CO/certificate of occupancy
    • Key terms: • condemnation
    • Key terms: • cul-de-sac
    • Key terms: • deed restriction
    • Key terms: • demography
    • Key terms: • Doctrine of Laches
    • Key terms: • easement
    • Key terms: • eminent domain
    • Key terms: • escheat
    • Key terms: • family, defined
    • Key terms: • group home
    • Key terms: • home occupations
    • Key terms: • infrastructure
    • Key terms: • lead agency
    • Key terms: • master plan
    • Key terms: • moratorium
    • Key terms: • New York State Office of Parks, Recreation and Historic Preservation
    • Key terms: • (OPRHP) non-conforming use
    • Key terms: • police power
    • Key terms: • restrictive covenant
    • Key terms: • right-of-way
    • Key terms: • setbacks
    • Key terms: • spot zoning
    • Key terms: • subdivision regulations
    • Key terms: • survey
    • Key terms: • "taking's defined by courts
    • Key terms: • topography
    • Key terms: • Transfer of Development Rights
    • Key terms: • variance/area variance/use variance
    • Key terms: • zoning ordinance
  • Construction and Environmental Issues
    • CONSTRUCTION
    • 1. INTRODUCTION
    • A. Land Use
    • • plans, specifications
    • • building permits and requirements
    • • codes
    • • certificates of occupancies
    • B. Site Requirements
    • • New York State on-site well, requirements
    • • New York State on-site sanitary waste system requirements
    • • New York State Energy Code
    • C. Site Use
    • • drainage
    • • landscaping
    • • appurtenances
    • • shading
    • • walks
    • • zoning
    • D. Structure
    • • footings
    • • foundation walls
    • • wood framing members
    • • sill plates
    • • beams/joists
    • • girders
    • • lally columns
    • • studs
    • • roof rafters
    • • roof ridge beam
    • • sheathing
    • • slab-on-grade construction
    • E. Structural tie-in of all components
    • • terminology
    • • headers
    • • bearing walls
    • • lintels
    • • fitch plates
    • F. Energy Efficiencies
    • • R-factor
    • • types of installation
    • • location of insulation
    • G. Tie-in of insulation with structural components
    • 2. MAJOR SYSTEMS HEATING - AIR CONDITIONING, PLUMBING & ELECTRICAL
    • A. Ventilation
    • • why is ventilation important
    • • ventilation systems
    • • proper ventilation
    • B. Types of heating systems and components/identification/sizing/life expectancies
    • • Heating:
    • o hot water system
    • o steam system
    • o forces/warm air
    • • Application of:
    • o electrical heating
    • o oil fired heating
    • o gas fired heating
    • • Oil Tanks:
    • o UST - underground storage tanks
    • o AST - above ground storage tanks
    • o DEC - Department of Environmental Conservation regulations on oil tanks (abandonment, testing, etc.)
    • o BTU ratings
    • o Life expectancies
    • • Air conditioning:
    • o central air conditioning
    • o major air conditioning components
    • o integral systems with forced air
    • o water cooled systems
    • o air cooled systems
    • o BTU ratings
    • o life expectancies
    • • Heat Pumps:
    • o air to air heat pumps
    • o cycling of systems
    • o advantages and disadvantages
    • • Plumbing:
    • o hot water heating, (i.e., hot water tanks, boiler coils, sizing requirements, etc.)
    • o sanitary waste systems
    • - on-site
    • - municipal
    • o Type of piping:
    • -cast iron
    • -galvanized
    • -copper
    • -PVC
    • o domestic water
    • - incoming services - well and town
    • - type of piping materials (galvanized, brass, copper)
    • - advantages/disadvantages of piping materials (all)
    • - pipe sizing for adequate pressures
    • - venting requirements of plumbing fixtures
    • C. Electrical:
    • • Incoming services
    • o above ground
    • o below ground
    • • Utility company responsibilities
    • • Landowner responsibilities
    • • Voltage - what is voltage? How to identify 110/220
    • • Amperage - what is amperage?
    • o Capacity requirements
    • o fuses vs. circuit breakers
    • o how to identify amperage
    • • Aluminum vs. copper wiring
    • • Wiring materials
    • o BX
    • o Romex
    • o Conduit
    • o Greenfield
    • • Diagram main panel interior with distribution (show 110 and 220 connections)
    • • National Electric Code
    • 3. MANDATED GUARANTEES AND WARRANTEES
    • • Home improvement
    • • New home construction
    • Key terms: • amperage
    • Key terms: • basement
    • Key terms: • beam
    • Key terms: • bearing walls
    • Key terms: • blueprint
    • Key terms: • BTU/British Thermal Unit
    • Key terms: • building envelope
    • Key terms: • circuit breaker
    • Key terms: • crawl space
    • Key terms: • eave
    • Key terms: • fascia
    • Key terms: • flashing
    • Key terms: • footing
    • Key terms: • foundation walls
    • Key terms: • fuse
    • Key terms: • girder
    • Key terms: • headers
    • Key terms: • joists ENVIRONMENTAL ISSUES
    • Key terms: • lally columns
    • Key terms: • percolation rate
    • Key terms: • pitch
    • Key terms: • plaster board/wall board
    • Key terms: • platform construction
    • Key terms: • post and beam construction
    • Key terms: • rafter
    • Key terms: • R-value
    • Key terms: • septic system
    • Key terms: • sheathing
    • Key terms: • siding
    • Key terms: • sill plates
    • Key terms: • slab-on-grade construction
    • Key terms: • soffit
    • Key terms: • specifications
    • Key terms: • studs
    • Key terms: • voltage 3 HOURS
    • 1. INTRODUCTION OVERVIEW OF TODAY'S MAIN ENVIRONMENTAL ISSUES
    • A. Long Standing Issues
    • • air
    • • water
    • • septic
    • • termites
    • B. Contemporary Issues
    • • asbestos
    • • lead (paint, water, soil)
    • • radon
    • • indoor air quality (sick building syndrome)
    • • polychlorinated biphency's (PCBs)
    • • environmental assessment (Phase I, II, III)
    • • underground storage tanks
    • • electro-magnetic fields
    • • chloro-fluoro carbons (CFCs)
    • • mold
    • 2. LONG STANDING ISSUES - FAMILIAR TO ALL
    • A. Water
    • • municipal drinking water - public
    • • private distribution systems
    • • private water systems
    • o wells
    • o private
    • o community
    • • health related issues
    • o bacteria
    • o minerals
    • o hardness
    • o Ph
    • o Organic
    • • Testing Procedures and Remediation
    • B. Private Sewerage Disposal Systems - Septic Systems
    • • governed by the Department of Health
    • • must be designed by professional engineer or a registered architect
    • • most septic for homes have As Built Drawings filed with the local health department
    • • testing & remediation
    • C. Wood Destroying Insect Testing
    • • must be certified by the New York State Department Environmental Conservation (NYSDEC)
    • • testing & remediation
    • 3. CONTEMPORARY ISSUES
    • A. Asbestos
    • • historical overview
    • o what is asbestos?
    • o what are its uses?
    • • health effects
    • o asbestosis
    • o lung cancer
    • o mesothelioma
    • • testing procedures
    • o bulk sampling
    • o air monitoring
    • o wipe sampling
    • o Removal procedures
    • B. Lead
    • • paint
    • • water
    • • soil
    • • health effects
    • o adults
    • o children
    • • testing and remediation
    • • disclosure requirements
    • C. Radon
    • • radon entry/behavior
    • • testing & remediation
    • • new construction
    • • health effects
    • D. Indoor Air Quality
    • E. Poly-Chlorinated Biphenyls - (PCB's)
    • • where they come from
    • • testing & remediation
    • F. Environmental Assessments
    • • primarily used during commercial real estate transactions
    • • Phase I, II, III and IV
    • o Phase I - investigative
    • o Phase II - testing phase
    • o Phase III - remediation
    • o Phase IV - management phase
    • G. Underground storage tanks
    • • concerns of leaking
    • • age of tanks
    • • testing and remediation
    • H. Electro-magnetic fields
    • • health effects
    • • testing and remediation
    • I. Chloro-fluoro carbons - CFC's
    • • problems with CFC's
    • o depletes ozone layer
    • • major CFC problems in homes
    • o aerosol
    • o air conditioners
    • o testing techniques
    • J. Mold
    • • testing and remediation
    • 4. AGENT'S ROLE
    • • Impact on salesperson/broker
    • • Liability on salesperson/broker
    • Key terms: • asbestos
    • Key terms: • asbestosis
    • Key terms: • CAA/Clean Air Act
    • Key terms: • CERCLA/Comprehensive Environmental
    • Key terms: • Environmental Response, Compensation and Liability Act
    • Key terms: • chlordane
    • Key terms: • chloro-flouro carbons (CFCs)
    • Key terms: • due diligence
    • Key terms: • electro-magnetic field
    • Key terms: • environmental impact state
    • Key terms: • friable
    • Key terms: • freon Instructors should consult state regulations for any chances reference to Sections B, G, H, I --these areas are evolving made.
    • Key terms: • groundwater
    • Key terms: • HUD/Department of Housing
    • Key terms: • and Urban Development
    • Key terms: • lead
    • Key terms: • mold
    • Key terms: • poly-chlorinated byphenols (PCBs)
    • Key terms: • radon
    • Key terms: • SDWA/Safe Drinking Water Act
    • Key terms: • Superfund Amendments and Act
    • Key terms: • AAceAActReauthorization underground storage tanks
    • Key terms: • urea formaldehyde foam insulation (UFFI)
    • Key terms: • wetlands
    • Key terms: • underground storage tanks to these areas of concern, especially with very quickly, and constant changes are being
  • Valuation Process and Pricing Properties
    • A. Differences between Appraisal, Valuation and Evaluation
    • • Appraisal - an unbiased estimate of the nature, quality, value or utility of an interest in or aspect of, identified real estate and related personality. Is a CMA an appraisal?
    • • Valuation - the process of estimating the value of an identified interest in specific property as of a given date.
    • - Types of value:
    • o Market value (see below)
    • o Investment value - based on specified value
    • o Insurable value - omits land and foundations
    • o Other defined value - value in use, etc.
    • • Evaluation - a study of the nature, quality, or utility of certain property interests in which a value estimate is not necessarily required (e.g., highest and best use, feasibility, market supply and demand, etc.)
    • • Market Value - is the most probable price, as of a specific date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should be sold after reasonable exposure in a competitive market under all conditions requisite to fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.
    • o probable price vs. highest
    • o price vs. "first offer"
    • o specific date
    • o cash equivalency
    • o specified rights
    • o reasonable exposure vs. marketing time
    • o conditions requisite to fair sale - broad market, widely publicized offering, time, knowledge, no duress, both parties "cool".
    • B. Difference between value, price, and cost
    • • Price - an amount a particular purchaser agrees to pay, and a particular seller agrees to accept under the circumstances surrounding the transactions (may or may not equal value).
    • • Cost - the total dollar expenditure for labor, materials, legal services, architectural design, financing, taxes during construction, interest, contractor's overhead and profit, and entrepreneurial overhead and profit (may or may not equal value).
    • • Types of Costs
    • -Direct costs - labor and materials (hard costs)
    • -Indirect costs
    • o architectural and engineering fees
    • o professional fees (appraiser)
    • o financing costs
    • o lease-up costs
    • o administration
    • o filing fees, etc.
    • C. Comparative Market Analysis
    • • How is a CMA used? - by law CMA’s may never be referred to as appraisals
    • • CMA’s are opinions of value
    • D. Residential Market Analysis
    • • recent sold properties
    • • current competing properties
    • • recent expired properties
    • • buyer appeal
    • • market position
    • • assets
    • • drawbacks
    • • area market conditions
    • • recommended terms
    • • market value range
    • E. Salesperson's Role
    • • competence
    • • diligence
    • • documentation
    • • effective communication
    • F. Highest and Best Use
    • • as vacant
    • • as improved
    • G. Site Valuation
    • H. Three Approaches to Value
    • • sales comparison approach
    • • cost approach
    • • income approach
    • I. Pricing Properties
    • • Preparing the CMA
    • o data collection
    • o listing comparable past sales (sold within the last 12 months)
    • o expired listings and current competition
    • o making adjustments
    • o formulating a price
    • Key terms: • appraisal
    • Key terms: • assessed value
    • Key terms: • comparative market analysis
    • Key terms: • cost
    • Key terms: • cost approach
    • Key terms: • depreciation
    • Key terms: • direct cost
    • Key terms: • evaluation
    • Key terms: • income approach
    • Key terms: • indirect cost
    • Key terms: • insured value
    • Key terms: • investment value
    • Key terms: • market price
    • Key terms: • market value
    • Key terms: • mortgage value
    • Key terms: • obsolescence/functional/external
    • Key terms: • plottage
    • Key terms: • price
    • Key terms: • sales comparison approach
    • Key terms: • valuation
    • Key terms: • value-in-use
  • Human Rights and Fair Housing
    • 1. FAIR HOUSING
    • A. Pressure from society
    • • landlord and sellers requesting specific types of people to be shown their dwellings
    • • what will the neighbors think, say or do?
    • • buyers and renters
    • o making statements about certain parts of the community
    • o asking pointed questions about the community
    • o refusing to be shown houses if certain people live in that part of the community
    • • Anti-Bias Training
    • o Explain how attitudes or stereotypes affect an individual’s understanding, actions, and decisions in an unconscious manner
    • B. Broker's Responsibility
    • • maintain a Fair Housing Policy
    • o post Fair Housing signs
    • o ensure compliance with Fair Housing Laws in advertising
    • • ongoing training and education of staff and agents
    • • reporting of any Fair Housing violations
    • • have available all necessary material for record keeping by broker and agents
    • C. Salesperson's Responsibility
    • • know the Fair Housing Laws
    • • Housing and Anti-Discrimination Disclosure Form
    • • Reasonable Accommodation and Reasonable Modification Disclosure Form
    • • act in accordance with the law
    • • compliant social media and Advertising
    • • learn excellent record keeping skills
    • • attend Fair Housing training seminars
    • D. Federal Laws
    • • Discussion of the development of Fair Housing Laws
    • o the legacy of segregation, unequal treatment, and historic lack of access to opportunity in housing
    • • Civil Rights Act of 1866
    • • Civil Rights Act of 1964
    • • Fair Housing Act of 1968
    • • 1896 Plessy vs. Ferguson
    • • 1917 Buchanan vs. Warley Supreme Court
    • • 1954 Brown vs. Board of Education
    • • The Housing and Community Development Act of 1974
    • • The Fair Housing Amendment Act of 1988
    • • Federally protected classes
    • E. New York State Law
    • • Executive Law includes the Civil Rights Law of the State, (NY Human Rights Law – Article 15)
    • • additional protected classes; age and marital status
    • • New York City Commission on Human Rights
    • • protected classes in New York State
    • F. Exemptions and exceptions
    • • senior citizen housing
    • • drug users and alcohol abusers
    • • two family exemption
    • G. Types of Discrimination
    • • refusal to rent, deal, sell or to work with a member or members of a protected class
    • • unequal treatment in terms of not showing or making available all possible dwellings within clients’ price range
    • • misinformation or different information
    • • steering
    • • blockbusting
    • o creating panic in a neighborhood or street which causes individuals to decide to sell their homes immediately
    • • advertising awareness
    • • understand different forms of discrimination
    • o unequal access to amenities and resources based on protected characteristics
    • H. Responsibility in the legal sense
    • • responsibilities of the broker
    • • responsibilities of the individual agent
    • • legal ramifications of discrimination fines and penalties
    • • emotional results of discrimination in housing
    • • discussion of responsibilities
    • I. The Fair Housing Agent
    • • role playing
    • • discussion
    • J. Cease and Desist Lists
    • K. Non-solicitation Orders
    • Key terms: • Americans with Disabilities Act
    • Key terms: • blockbusting
    • Key terms: • cease and desist list
    • Key terms: • Civil Rights Act of 1866
    • Key terms: • disability or handicap
    • Key terms: • Fair Housing Act of 1968
    • Key terms: • familial status
    • Key terms: • filtering down
    • Key terms: • HUD/Department of Housing and Urban Development
    • Key terms: • Jones vs. Mayer Supreme Court
    • Key terms: • Decision, 1968
    • Key terms: • marital status
    • Key terms: • N.Y. State Human Rights Law
    • Key terms: • non-solicitation order
    • Key terms: • redlining
    • Key terms: • steering
    • Key terms: • testers
  • Real Estate Mathematics
    • 1. Percentages
    • • commissions
    • • interest
    • • appreciation and depreciation
    • • points
    • 2. Calculating area and length
    • • square feet
    • • irregular lot size
    • • perimeter
    • • acre
    • • hectare
    • • price per square foot
    • 3. Basic Mortgage Qualifying
    • • mortgages
    • 4. Rates
    • • real property transfer fax
    • • mortgage recording tax
    • • real property tax
    • Key terms: • acre
    • Key terms: • commission
    • Key terms: • front foot
    • Key terms: • gross income/net income
    • Key terms: • hectare
    • Key terms: • interest
    • Key terms: • point
    • Key terms: • principal
    • Key terms: • real property tax rate
  • Municipal Agencies
    • A. Description of the following agencies matched with their functions:
    • • City/Town Council: Elected Village Board of Trustees: Elected Adoption of laws and ordinances including zoning ordinance and cluster zoning Approval
    • o Adoption of budget and tax rate
    • • Planning Board: Appointed
    • o Master Plan
    • -Subdivision approval
    • o Advises all other boards on land use matters
    • • Zoning Board of Appeals
    • o Variances
    • o Zoning interpretations
    • o Special Permits (may be other agencies)
    • • Architectural Review Board
    • o Approves new construction and remodeling per municipal ordinances
    • • Conservation Advisory Council/Wetlands Commission
    • o Deals with environmental issues per municipal ordinances
    • • Historic Preservation/Landmark Commission
    • o Approves construction/remodeling of designated properties
    • o Recommends properties for preservation
    • • Building Department
    • o Building permit approvals
    • o Acts as “gatekeeper” for all construction activity
    • • Planning Department
    • o Professional advisement to all agencies and boards
    • • Tax Assessor
    • o Assessments
    • o Records
    • • Receiver of Taxes/Treasurer
    • o Collects taxes
    • o Accounting functions
    • • City/Town/Village Engineer
    • o Roads
    • o Sewer and water connections
    • • County Health Department
    • o Septic system approval
    • -Certain sewer approvals
    • Key terms: • Architectural Review Board
    • Key terms: • Building department
    • Key terms: • Conservation Advisory Council
    • Key terms: • County Health Department
    • Key terms: • Historic Preservation/Landmark Commissions
    • Key terms: • Planning board
    • Key terms: • Receiver of Taxes
    • Key terms: • Tax assessor
    • Key terms: • Village Board of Trustees
    • Key terms: • Zoning Board of Appeals
  • Property Insurance
    • A. The purpose of property insurance
    • B. Choices in purchasing property insurance
    • • independent agents
    • • insurance companies
    • • insurance brokers
    • C. Types of policies
    • • Monoline policy
    • • Package policy
    • D. Standard coverage on a home-property, liability, medical
    • • Fire, windstorm, hail, tornados, vandalism, and other physical damage
    • • Theft of personal property
    • • Someone injured on the property because of owner's or owner's family negligence or damage by insured to someone else's property due to negligence
    • E. Basic types of homeowners and tenant policies in New York
    • • Homeowners -1 (HO)-1 Basic Policy-standard insurance against perils
    • • Homeowners -2 (HO-2) Broad Form Policy -coverage in HO-1 plus other perils
    • • Homeowners-3 (HO-3) Special Form Policy-Most widely used policy for the home; covers all forms of loss except those specifically excluded
    • • Homeowners -5 (HO-5) Comprehensive Form Policy -Includes all coverage in HO-3 plus personal property
    • • Homeowners- 8 (HO-8) Market Value Policy-modified version of HO-1; provides cash value coverage instead of replacement cost coverage
    • • Homeowners-4 (HO-4) Tenants or Cooperative Owners Policies
    • • Homeowners-6 (HO-6) Condominiums Owners Policies
    • F. The amount of insurance needed
    • • Actual cash value or replacement cost
    • o Structure
    • o Contents
    • • Basic amounts of coverage
    • • Adding to the basic policy
    • o Increased limits of liability
    • o Insuring additional personal property and other structures on the property
    • G. Problems in Obtaining Insurance
    • • New York Property Insurance Underwriting Association
    • • National Flood insurance Program
    • • Coastal Residents Assistance
    • H. Cancellation and non-renewals of a policy
    • I. The cost of homeowner's insurance
    • J. Insurance policy deductibles
    • • New York disclosure requirements regarding deductibles for windstorm damage
    • K. Other types of property insurance
    • • Commercial policies
    • • Umbrella policies
    • L. Real Estate Agents Role
    • • Explain the purpose and costs of property insurance to a buyer
    • • Explain the lenders’ interest in property insurance
    • • Explain the escrow of property insurance along with property taxes
    • • Explain when to obtain property insurance if there is a cash sale
    • Key terms: • actual cash value
    • Key terms: • deductible
    • Key terms: • liability insurance
    • Key terms: • package policy
    • Key terms: • property insurance
    • Key terms: • replacement cost
    • Key terms: • umbrella policy
  • Licensee Safety
    • A. General Safety Concerns
    • • Know your surroundings
    • • Office point of entry/exit
    • • Security cameras, alarms, and lighting
    • • Accounting of Staff and visitors
    • • Office access/ Keys and security codes
    • B. Safety at the Office
    • • Working alone
    • • Entering and exiting office while alone
    • • Meeting unknown individuals
    • C. Safety on the Road and at Home
    • • Meeting clients at vacant home(s)
    • • Safety on the road
    • • Open houses
    • • Home office safety concerns
    • D. Licensee Safety Issues
    • • Protection of online personal and electronic information
    • • Cyber Security
    • • Protection of client information
    • • Identity theft concerns for licensee/client
    • E. Liability Issues with Accidents, Incidents & Injuries
    • • Broker
    • • Agent
    • • Buyer/Seller
    • • Third Party Acts (Liability limited in listing contract)
    • • Aggressor (Penal Code Article 35 Use of Physical Force)
    • F. Risk Reduction
    • • Establishing and Implementing an Office Policy
    • • Buyers/Sellers Liability
    • • Incident Follow-up
    • • Broker's/Agent's Responsibility
  • Taxes and Assessments
    • A. Purpose of Taxation
    • • Pay for municipal services
    • • Exempt properties
    • B. Why tax land and improvements (as opposed to sales and income taxes)?
    • • Predictable
    • • Hard to conceal
    • • Historic relationship to wealth and land productivity
    • C. Calculation of real estate taxes
    • D. Assessed Value
    • • Relationship to full or market value
    • • Assessment ratio
    • • Equity issues
    • • Why assessments differ
    • • Old vs. new construction
    • • Undeclared improvements
    • • Community wide re-assessment
    • • Re-assessment upon sale
    • o illegal
    • o legal
    • o undeclared improvements discovered
    • o relationship of building permit process to re-assessment
    • o back taxes
    • E. Tax Rate
    • • Municipal budget
    • • Sample calculations of tax rate Sample calculations of taxes
    • F. Various Taxing Jurisdictions
    • • City
    • • Town
    • • Village
    • • County
    • • State (no real estate taxes)
    • • Equalization
    • H. Special Assessment Districts
    • • Purpose
    • I. Exemptions
    • • Veterans
    • • Elderly
    • • Star program
    • J. Protesting Assessments
    • K. Tax Assessor
    • • Factual errors
    • L. Grievance Board
    • • Unequal assessment
    • • Full value disagreement
    • • Unequal assessment ratio
    • • Possible decisions
    • o Full denial
    • o Full re-assessment per application
    • o Partial re-assessment
    • M. Small Claims Assessment Review
    • • Residential only
    • • Filing with county clerk
    • • Hearing procedure
    • o Types of evidence:
    • -Sales information
    • -Assessment information
    • -Assessment ratios
    • • Possible decisions
    • o Same as grievance board
    • • Appeal
    • N. Protesting Commercial Property Assessments
    • • Certiorari proceedings
    • O. Tax Liens
    • • Tax foreclosure
    • • Tax sale
    • P. Agent Responsibilities
    • • Calculate taxes
    • Key terms: • ad valorem taxes
    • Key terms: • appropriation
    • Key terms: • assessed value
    • Key terms: • assessing unit/approved assessing unit
    • Key terms: • assessment
    • Key terms: • assessment review board
    • Key terms: • homestead/non-homestead
    • Key terms: • in rem
    • Key terms: • levy
    • Key terms: • lien
    • Key terms: • special assessment
    • Key terms: • special assessment districts
  • Condominiums and Cooperatives
    • 1. Condominiums
    • A. Define a Condominium (real property)
    • B. Condo Issues
    • • By-Laws
    • • Role of the sponsor
    • o Appointment of board members
    • o Appoints managing agent
    • o Limitation on sponsor control of the board
    • C. New Development
    • • Reading an Offering Plan
    • o Special risks
    • o Real estate tax validation
    • o Floor plans (sq. ft.)
    • o Price increases
    • o Hidden fees
    • o Closing date
    • D. Letters of Intent
    • • CPS1 Phase
    • • Written offers to reserve specific units - nonbinding as to purchaser or price
    • • Legal ramifications
    • • How to submit “letters of intent”
    • E. Price Changes
    • • Offering plan amendments
    • • Why and when developers raise prices
    • • Current market practices
    • F. Certificate of Occupancy (C of O’s)
    • • Requirements to obtaining C of O
    • • C of O’s and mortgage financing
    • G. Flipping/Simultaneous Closings Developer’s Policy
    • H. Title Issues in Purchase of Condominiums
    • I. Closing Costs
    • • Buyer’s fees
    • • Sellers’ fees
    • • Sponsor’s fees
    • • Buyer’s concern
    • o Common charges
    • o Real Estate Tax
    • o Tax deductions
    • o “Right of First Refusal”
    • o Mortgage Recording Tax
    • o Mansion Tax
    • o Title Insurance
    • • Buyer’s financial ability to purchase a cooperative or condominium residence: Income and Related Topics
    • o Various Types of Income: salary, commission, bonus, interest, dividend, capital gains, business, rental, trust, alimony, social security.
    • • Income Parameters and Bank Financing:
    • o acceptable and non-acceptable income earnings to debt ratios
    • o loan to value ratios
    • o fixed rate and adjustable mortgages
    • o mortgage terms
    • o no income verification
    • • Income Parameters for Coop/Condo Admission: acceptable and non-acceptable income, earnings to debt ratios, loan to value ratios.
    • o Assets and Related Topics
    • -Various Types of Assets: cash, stocks, bonds, mutual funds, T-bills, privately held companies, trust funds, gifts, real estate, collectibles, retirement assets.
    • -Asset Requirements for Bank Financing: down payment, gifts, cash reserves, retirement assets.
    • -Asset Requirements for Coop/Condo Admission: down payment, gifts, cash reserves, retirement assets.
    • 2. COOPERATIVES
    • A. Define a Cooperative (what are shares)
    • B. Due Diligence Issues
    • • Understanding a financial statement
    • • What key issues to review in Coop’s Board Minutes
    • o maintenance and assessment history
    • o underlying mortgage reserve fund
    • • Is ownership fee simple ownership or lease hold?
    • C. Documents Needed by Agent for Sale/Purchase of Coops
    • • Proprietary lease (what does it proscribe for owners)
    • • Stock certificate
    • • Offering plan
    • • House rules - why are they important to an agent?
    • • Alteration agreements
    • • Board packages
    • o Who reads board packages?
    • o What information does the board look for?
    • • Financing
    • o Coop lien search
    • o Lender/Coop recognition agreements
    • E. Cooperative Board Application and Interview Preparation
    • • Board package checklist
    • o Purchase Application Form
    • o Fully Executed Contract of Sale
    • o Financial Statement (verification of all assets)
    • o Letters of Personal Reference
    • o Employment Verification Letter
    • o Business Letters of Reference
    • o Tax Returns (3 years recommended)
    • o Credit Search (authorization with signature)
    • o Appropriate NYS Disclosure Forms (eg. Lead Paint)
    • • Interview Preparation
    • o What role timing plays to schedule board interview (most boards meet once a month)
    • o Familiarize purchaser with his/her complete package for purpose of discussion
    • o Need for total disclosure by purchaser during interview
    • F. Primary Residency vs. Subletting Issues in Coop
    • • Sponsor shares
    • • Holder of unsold shares
    • • Sold shares
    • G. Define and differentiate a “condop” from a condominium and cooperative property
    • • What is a Cond-op?
    • o Condo or Coop
    • • Why is it created?
    • • 80/20 rule concerning passive income activities
    • Key terms: • Alteration agreement
    • Key terms: • Board package
    • Key terms: • By-laws
    • Key terms: • Common elements
    • Key terms: • Condominium
    • Key terms: • Condop
    • Key terms: • Cooperative
    • Key terms: • Covenants, Conditions and Restrictions (CCRs)
    • Key terms: • Declaration
    • Key terms: • Flip tax
    • Key terms: • Flipping
    • Key terms: • House rules
    • Key terms: • Letter of Intent
    • Key terms: • Maintenance
    • Key terms: • Offering statement
    • Key terms: • Proprietary lease
    • Key terms: • Recognition agreement
    • Key terms: • Share loan
    • Key terms: • Sponsor
  • Commercial and Investment Properties
    • A. Characteristics of Real Property Investments
    • • Risk
    • • Liquidity
    • • Leveraging
    • B. Investment Properties Types
    • • Unimproved Land
    • • Office Building Low-rise Mid-rise High-rise
    • • Residential Building
    • o Single Family
    • o Multi-Family
    • • Mixed Use Building
    • • Retail
    • o Strip Centers Neighborhood Centers Malls
    • o Regional Malls Mega Malls Outlet Centers
    • • Manufacturing
    • o Industrial
    • o Warehouses
    • o Loft Buildings
    • • Fee Simple versus Leasehold
    • o Ownership in Land
    • o Long-term lease on land
    • C. Property Analysis and Terminology
    • • Reconstructed Income and Expense Statement
    • o Cash World
    • -Deriving the Net Operating Income (NOI) Examining Income and Expense
    • -Deriving the Before Tax Cash Flow (BTCF) Formula for Equity Dividend Rate (Cash on Cash Return)
    • -Deriving the After Tax Cash Flow (ATCF)
    • o Tax World
    • -Formula for deriving the Income Tax
    • • Valuation Overview via Capitalization
    • o Determining the Cap Rate
    • -Income/Rate/Value (IRV)
    • • Square Footage
    • - Rentable
    • - Useable
    • - Carpetable
    • • Loss and Add-On Factors
    • - Common Areas
    • • Net Lease
    • • Gross Lease
    • • Office Lease
    • • Retail Lease
    • - Percentage Lease
    • - Natural Break-Even
    • • Loft Lease
    • • Lease Clauses
    • - Use Clause
    • - Attornment
    • - Estoppel
    • - Sublease/Assignment Subordination/Non-Disturbance Clause
    • - Electric Service
    • o Direct Meter
    • o Sub-Meter
    • o Rent Inclusion
    • • Lease Escalation Clauses
    • - History/Purpose
    • - Proportionate Share(s) of Occupancy
    • - Base Year
    • - Operating/Tax Stop
    • - Real Property Tax Clause
    • - Direct Operating
    • - Porter’s Wage Escalation Formula
    • - Fixed Percentage Increases
    • - Consumer Price Index (CPI)
    • Key terms: • anchor tenant
    • Key terms: • debt service
    • Key terms: • capitalization rate cash flow/before tax cash flow/after tax cash flow
    • Key terms: • cash on cash return
    • Key terms: • common areas
    • Key terms: • lease escalation clause
    • Key terms: • leverage
    • Key terms: • net operating income
    • Key terms: • gross income
    • Key terms: • proforma statement
    • Key terms: • tax shelter
    • Key terms: • time value of money
    • Key terms: • rate of return
    • Key terms: • useable (usable) square footage
    • Key terms: • rentable square footage
  • Income Tax Issues in Real Estate Transactions
    • A. Taxpayer Relief Act of 1997
    • • Federal Income Tax Treatment
    • o Primary/Principal Residence
    • - Use of IRA funds toward down-payment without penalty
    • - Permitted Deductions Property Tax Mortgage Interest
    • o Second Home/Vacation Home
    • • Capital Gains
    • o Short-term Gain
    • o Long-term Gain
    • o Sale of a Primary/Principal Residence
    • - $250,000/$500,000 Rule
    • o Sale of Investment Property
    • -Three Classifications of Income:
    • - Active Income
    • - Passive Income
    • - Portfolio Income
    • o Calculating the Gain or Loss
    • - Tax rate on Recaptured Depreciation
    • - Formula for calculating Federal Tax on income derived from operations
    • o Like-Kind Exchanges (1031 Exchange) Eligible Property for Exchange
    • - Residential, Commercial, Industrial
    • - Leaseholds greater than 30 years
    • - Unimproved land (non-dealer held property)
    • - Hotels/Motels
    • - Taxable Realized Gain
    • - Boot
    • o Qualified Intermediary
    • o Rules Concerning 1031 Exchanges
    • - 45-day replacement property identification
    • - Closing on replacement property
    • - Must occur at the earlier of 180 days or prior to tax return due date
    • - Reverse Exchanges
    • • Federal Tax Rules on Acquisition and Subsequent Financing
    • o Interest Deductions
    • -Home Acquisition Financing
    • -Refinancing Rules and Limitations
    • -Home Equity Financing
    • -Home Improvement Loans
    • -Construction Financing
    • o Rules Concerning Treatment of Points and Closing Costs
    • o Prepayment Penalties
    • • Low Income Housing Incentives
    • • Depreciation
    • o Straight-line method
    • - Income Producing Residential — 27.5 years
    • - Income Producing Non-Residential — 39 years b.
    • - Calculating Depreciable Basis
    • Key terms: • Adjusted basis
    • Key terms: • Appreciation
    • Key terms: • Basis/adjusted basis
    • Key terms: • Boot
    • Key terms: • Capital gain
    • Key terms: • Capital loss
    • Key terms: • Cash flow
    • Key terms: • Debt service
    • Key terms: • Passive activity income/active income
    • Key terms: • Tax depreciation
    • Key terms: • Tax depreciation/recaptured depreciation/straight-line depreciation
    • Key terms: • Tax shelter
    • Key terms: • Tax-deferred exchange
  • Mortgage Brokerage
    • A. What is a Mortgage Broker?
    • B. Requirements and Responsibilities of a Mortgage Broker
    • o Dual agency disclosure under the Banking Law for those that are also real estate brokers
    • C. Mortgage Broker vs. Mortgage Banker
    • D. The role of a Mortgage Broker in the Real Estate Transaction
    • Key terms: • mortgage banker
    • Key terms: • mortgage broker
    • Key terms: • mortgage broker dual agency disclosure form
    • Key terms: • mortgage commitment
    • Key terms: • lender rebate
    • Key terms: • nonconforming loan
    • Key terms: • pre application and fee agreement
    • Key terms: • preapproval
    • Key terms: • prequalification
    • Key terms: • rate lock
    • Key terms: • underwriting
  • Property Management
    • A. Introduction
    • • What is property management?
    • • What are the functions of a property manager?
    • • What types of property are managed?
    • • When is a license required?
    • B. The Management Agreement
    • • The management agreement creates an agency
    • • Property manager becomes a general agent and as such owes loyalty to the owner
    • • The management agreement is a contract and should be in writing, as well as signed and contain some or all of the following:
    • o Description of property
    • o Length of agreement
    • o Management authority Reporting
    • o Management fee
    • o Accounting responsibilities
    • o Insurance and risk management
    • o Report
    • o Owners’ responsibility and objectives
    • o How or why agreement may be terminated
    • C. Skills Required of a Property Manager
    • • A property manager must be able to:
    • o Supervise others
    • o Understand general accounting principles (GAP)
    • o monthly and yearly reports
    • o Understand building systems: heating, ventilating, and air conditioning (HVAC), structural engineering, waterproofing, plumbing, electrical, gas, oil, water, chiller, water, security, maintenance, elevators, etc.
    • o Handles landlord-tenant relations, must have working knowledge of local laws
    • o Lease space including space planning, area design, and building layout
    • o Advertising and marketing
    • o Codes and regulations - local, state and national
    • o Union negotiations
    • o Purchasing
    • o Appraisal, finance, money markets, depreciation techniques, financial trends, local market conditions
    • o General construction knowledge
    • o Ecology
    • D. Differences Between Markets
    • • Office building management
    • • Retail management
    • • Residential management
    • • Condominium and cooperatives
    • • Management office operations
    • E. Obligations to Owner
    • • Goals
    • • Maintenance criteria
    • • Future of the project
    • • Reporting
    • F. The Management Field
    • • How does one become a property manager?
    • • Education and designation
    • G. Examples of:
    • • A budget
    • • Marketing plan
    • • Rent roll
    • • Expenses
    • • Management proposal
    • Key terms: • anchor stores
    • Key terms: • capital expense
    • Key terms: • capital reserve budget
    • Key terms: • corrective maintenance
    • Key terms: • eviction - actual/constructive
    • Key terms: • fiduciary
    • Key terms: • general agent
    • Key terms: • lessee
    • Key terms: • lessor
    • Key terms: • management agreement
    • Key terms: • management proposal
    • Key terms: • operating budget
    • Key terms: • planned unit development
    • Key terms: • preventative maintenance
    • Key terms: • property management
    • Key terms: • property management report
    • Key terms: • property manager
    • Key terms: • resident manager
    • Key terms: • risk management
    • Key terms: • stabilized budget
    • Key terms: • tenancy for years
    • Key terms: • variable expense
  • Agency Law, License Law and Operating a Real Estate Office
    • • Explain how the Law of Agency will enable the brokerage to function as a fiduciary entrepreneurship. This requires understanding:
    • o How Agency Law protects the public by demanding competence and trustworthiness from the agent.
    • o How Agency Law compliance promotes business success while ennobling the profession through the performance of real estate services that consumers want need and can trust.
    • o How each of the following agency concepts protects the public while advancing the real estate profession:
    • ▪ Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care.
    • ▪ Vicarious liability as it relates to buyers, sub, and broker’s agencies.
    • ▪ Informed consent and advanced informed consent to dual agency.
    • ▪ Representation legally defined and implemented.
    • ▪ Disclosure, first substantive contact, and the effect of disclosure on protecting commission rights (i.e., licensed, employed and procuring cause).
    • ▪ Conflict of interest and the in-house sale and ways to resolve conflict of interest especially through dual agency with designated sales associates.
    • ▪ Repercussions from violations of Agency Law and fiduciary duties.
    • • Explain how the application of Article 12A and the Rules and Regulations(R&Rs) found in 19NYCRR, Parts 175 to 179 advances competence and trustworthiness. This requires understanding:
    • o How and to what extent the broker is liable for the real estate actions of the sponsored licensees as well as the extent of liability of the licensees.
    • o How the NYS DOS interprets Article 12A and the R&Rs and enforces same to protect the public.
    • o The reasoning for NYS DOS rulings concerning the actions of licensees.
    • o How the Law and R&Rs command the broker to train and supervise the sponsored licensees. Furthermore, this requires understanding:
    • ▪ Principles for screening and selecting capable and trustworthy prospective licensees, to include:
    • • Selecting a personality profile test and critical thinking test.
    • • Developing a template from the behavior tests of successful real estate licensees.
    • • Perfecting interview competencies to elect behavior traits of licensee prospects.
    • ▪ How to design initial and ongoing training programs/procedures so that principles from the pre-licensing course are fully incorporated into the sponsored licensee’s real estate service delivery system.
    • • What the independent contractor law prescribes.
    • • How to effectively supervise sponsored licensees to insure competence and trustworthiness while in compliance with the independent contractor (IC) guidelines.
    • • How to guide sponsored licensees to be compliant ICs.
    • • How to terminate a sponsored licensee.
    • • How to assure that unlicensed assistants do not perform tasks requiring a license.
    • • How ADA laws may impact brokerage.
    • • Explain how to design onboarding/Continued training programs to:
    • • Create good habits and work ethic
    • • Maintain compliance with independent contractor law
    • • Keep current in the real estate industry
    • • Explain best business practices for Broker supervision & Use of office managers
    • • Definition of office manager
    • • Duties of an office manager
    • • Establishing policies, rules and procedures
    • • Issues that arise with a lack of oversight
    • • Explain the legal relationship between the sponsored licensee and the broker including:
    • o How the License Law and pertinent Rules and Regulations impose rights and obligations on both licensees in the performance of their business relationship and functions.
    • o How Agency Law restricts and protects both licensees as they work together to provide quality service to consumers.
    • • Explain how the licensee earns a commission when the licensee negotiates a “meeting of the minds” of the contract parties. This requires understanding:
    • o The meaning of “ready, willing and able.”
    • o That “ready, willing and able” parties are essential for a “meeting of the minds.”
    • o That preserving “ready, willing and able” parties from contract to closing is the responsibility of the licensee.
    • o TRID, the TILA/RESPA Integrated Disclosure (aka Know before You Owe), Loan Estimate and Closing Disclosure, the responsibilities of each closing participant and sensitive time dates in the closing process.
    • o The important and value-added role that the licensee must play to orchestrate the closing for the client and, as a result, to secure both the transaction and the commission.
    • • Explain why licensees must exhibit critical thinking skills to insure competence in the performance of real estate services for the public. This requires understanding:
    • o What the following skills are and how they are acquired and sustained:
    • ▪ Market value expertise.
    • ▪ How the four value characteristics influence market value.
    • ▪ The value principles and their influences on market value.
    • ▪ How to apply paired-sales analysis to recognize and understand why specific factors are contributing to market value
    • ▪ Methodology of the sales comparison approach to value and its relationship to the comparative market analysis.
    • ▪ When to select and apply some of the procedures of the cost approach to market value.
    • ▪ The principles and critical thinking skills for securing the best, possible transaction for the client.
    • ▪ How these client-beneficial transaction skills are distinguished from selling skills and are required by Agency Law when representing the interests of the client.
    • • Explain which legal business formation will enable the broker to operate a successful fiduciary entrepreneurship. This requires understanding:
    • o The different types of legal structures, i.e. Corporation, Limited Liability Company/ partnership, partnership, limited partnership, sole partnership.
    • o The advantages and disadvantages of each.
    • • Explain best business practices that will secure a successful fiduciary entrepreneurship. This requires understanding:
    • o Lawful application of teams
    • ▪ Advertising Requirements
    • • Emails/Logos/Web-Based
    • ▪ Unlicensed & Licensed Assistants
    • ▪ Broker oversight
    • ▪ Prohibitions
    • ▪ Maintenance of documents
    • o Proper insurance coverage (i.e., liability, worker’s compensation, professional liability (Errors and Omissions) Premises liability, commercial crime bond, (fidelity policy) for property management brokerages.
    • o The importance of having a written policy and procedures manual.
    • o The various and sundry special disclosures, i.e., lead paint, agricultural districts, truth in heating, bedbug, etc...
    • o Anti-trust laws and penalties for violations.
    • o How to properly (i.e., timely) accept deposit, record, and subsequently disperse escrow monies.
    • o Obligations to avoid complicit or direct misrepresentations and fraud.
    • o How to permit, conduct and oversee broker price opinions (BPO’s)
    • o Strategies that create a safe environment for clients, customers, and agents.
    • o How to educate about and to enforce compliance with advertising regulations.
    • o How to participate responsibly with an MLS, and third party and for-profit listing services.
    • o How to design a consistent and profitable strategy for interaction with other brokerage firms.
    • o How to use the NYS DOS database to make changes and to ensure continuing education compliance.
    • • Explain how to create guidelines for maintaining agent safety and supervision
    • o How to identify potential threats
    • o Safety tactics
    • o Cyber security
    • • Explain how to budget and implement a financial management plan.
    • o Creating a budget
    • o How to implement an effective record-keeping system and data security
    • • Explain the importance of establishing standard operating procedures that all prospective homebuyers must meet prior to receiving any services, and making them publicly available:
    • o Standard requirements – identification /Exclusive broker agreement/Mortgage pre-approval
    • o Posting of SOP’s in office/websites and mobile applications
    • o Maintain records of alterations or updates
    • • Explain how to develop and regularly revise a business plan to assure legal, ethical, and competent service as well as business viability and client satisfaction. This requires understanding:
    • o How to build a plan with long-term and short-term goals and strategies to manage business effectiveness in the marketplace.
    • • Explain the required and complimentary roles of the ancillary service providers, i.e., mortgage brokers, home inspectors and appraisers. This requires understanding:
    • o The laws and regulations which govern the performances of each of these service providers.
    • o How each service provider delivers services and how the laws and regulations affect that delivery.
    • o The repercussions for both the service providers and the broker for violations of the laws and standards of practice required of the providers.
    • o The value-added benefits from the work performed by these service providers.
    • • Explain the basic principles of economics and discuss what forces, presently in the marketplace, may positively or negatively affect real property values and to know how to mobilize resources to generate and participate in community debates about the effectiveness of such forces (LO). This requires understanding (SC):
    • o The factors that contribute to the viability of a market area including supply and demand, employment, growth initiatives, municipal services, transportation, and taxes, among others.
    • o The avenues within which to assert influence within the community, such as:
    • ▪ planning boards
    • ▪ local legislative boards, i.e., legislatures, boards, and cornels
    • ▪ zoning board of appeal
    • ▪ school boards
    • ▪ local community groups
    • o How to educate people about these forces.
    • o How to motivate people to participate in understanding the impact of these forces.
  • Real Estate Finance
    • • Explain how the security interest of a mortgage lien has served to encourage lenders (i.e., thrifts, investment banks, mortgage bankers and private investors), through direct (aka retail) or wholesale lending, to aggressively participate in the real property market of the U.S. This requires understanding:
    • o The nature of the mortgage document as a legal instrument.
    • o The difference between lien theory and title theory mortgaging.
    • o The bond and the importance of its novation.
    • o The advantages and disadvantages of each of the following mortgaged loans:
    • ▪ fixed rate, conventional
    • ▪ adjustable rate, margins, indexes
    • ▪ variable rate, margins, indexes
    • ▪ prime, subprime, predatory
    • ▪ graduated payment
    • ▪ FHA insured
    • ▪ VA guaranteed
    • ▪ purchase money
    • ▪ gap
    • ▪ miniperm
    • ▪ wraparound
    • ▪ blanket
    • ▪ subordinate
    • ▪ lease as a means of financing
    • o The difference between licensed mortgage banker and licensed mortgage broker:
    • ▪ liquidity asset requirements
    • ▪ line of credit requirements
    • ▪ surety bond limits
    • ▪ initial and continuing educational requisites
    • ▪ character check
    • ▪ examination requisites
    • ▪ how each is compensated
    • ▪ mortgage broker as agent/fiduciary of the borrower
    • • Explain how to measure a financial analysis for commercial transactions
    • ▪ Property value
    • ▪ Vacancy rate
    • ▪ Percentage of operating expenses
    • • Explain risk management provisions as applied to both the borrower and the property appraised value process;
    • ▪ Inflation
    • ▪ Assessment
    • ▪ Leverage
    • ▪ Tax shelters
    • ▪ Debt to income ratios
    • ▪ Loan-to-value ratios
    • ▪ Full, low, no documentation loans
    • ▪ Residential/commercial loans
    • ▪ Foreclosures
    • ▪ Mortgage value
    • ▪ Equity stripping
    • o Explain the sources of loan products - investment monies
    • ▪ Regulation of these sources
    • ▪ Guarantees for these invested monies (i.e., FDIC, FHA/VA, PMI and maybe FNMA, GNMA, FHLMC)
    • • Explain how mortgaged money is made available through different loan products, why it is stronger, weaker or steady at times and how the money supply impacts demand for properties. This requires understanding:
    • o US government deficit spending and subsequent borrowing.
    • o The strength or weakness of foreign investor demand for US Treasury bills.
    • o The employment rate, wages, debt obligations of American consumers.
    • o How alluring are other investment instruments, i.e., stocks, bonds, CDs, and foreign business opportunities.
    • o The Federal Reserve interventions with the money supply, i.e., discount rates, liquidity asset requirements and/or the purchase/sale of US Treasuries.
    • • Explain how the Secondary Market works, when and why it began, and when and why the Primary Market participation in the Secondary Market seriously began. This requires understanding:
    • o The financial and political climate in the 1930s that precipitated the creation of Federal National Mortgage Association (FNMA) in 1938.
    • o How the Secondary Market is the conduit to bring investor monies from locations of excess to areas of need in the Primary Market.
    • o How the Secondary Market manages risk surrounding Primary Market mortgages that it purchases.
    • o How financial liability for defaulting mortgaged loans is distributed.
    • o How Secondary Market executives are compensated.
    • o How the Secondary Market participated in the Subprime Mortgage crisis.
    • o How the Secondary Market plays a role in the viability of the US economy.
    • • Explain how the US economic system functions in relation to the real estate market. This requires understanding:
    • o Employment rates and wages.
    • o Stock market.
    • o Valuation (realism).
    • o Affordability (buyer’s purchasing power).
    • o Recession, depression, inflation.
    • o Predatory lending; legal or illegal?
  • Real Property Investment
    • • Explain why investing in real estate has become a customary way for wealth accumulation in the U.S. economy. This requires understanding:
    • o Inflation hedge.
    • o Risk assessment.
    • o Leverage.
    • o Tax shelters.
    • o Limited disadvantages when lengthening holding period.
    • o Necessity for implementing a well thought out investment strategy before investing.
    • • Explain how correctly performed income approaches to value will help licensees assess the strengths and weaknesses of investment properties and, thereby, provide competent and trustworthy guidance to their investor clients.
    • • Explain how to measure and evaluate the financial viability of a particular investment property. This requires understanding:
    • o How the income approaches to value (both income capitalization and gross rent/income multipliers) are performed.
    • o How to develop a relevant capitalization rate:
    • ▪ Overall cap rate (OAR).
    • ▪ Built-up rate.
    • o How to create a reconstructed income statement for a property:
    • ▪ potential gross income
    • ▪ vacancy and collection loss
    • ▪ other income
    • ▪ effective gross income
    • ▪ operating expenses
    • • fixed
    • • variable
    • • reserves
    • ▪ net operating income
    • ▪ annual debt service
    • ▪ before tax cash flow
    • ▪ federal/state income tax
    • ▪ after tax cash flow
    • o How to calculate a property’s depreciable basis (aka book value) and its annual depreciation:
    • ▪ Land/building allocation ratios.
    • ▪ Yearly depreciation allowances (27.5 /39yrs); straight-line.
    • o How to calculate a property’s taxable income:
    • ▪ taxable income formula:
    • ▪ Net operating income plus reserves, minus loan interest, minus depreciation, minus amortized loan costs equals taxable income.
    • o How to calculate and utilize the following “multiplier” formulas:
    • ▪ potential gross income multiplier (PGIM)
    • ▪ effective gross income multiplier (EGIM)
    • ▪ net operating income multiplier (NOIM)
    • ▪ gross rent and gross income multipliers (GRM & GIM)
    • o How to calculate and utilize the following investment property “ratios” to assess the financial health of an investment property:
    • ▪ Equity dividend ratio.
    • ▪ Loan to value ratio.
    • ▪ Debt coverage ratio.
    • ▪ Operating expense ratio.
    • ▪ Cash-break-even ratio.
  • General Business Law
    • • Explain how laws are promulgated at different government levels, namely, federal, state and local and how these laws are enforced and with what priority. This requires understanding:
    • o The rationale for, scope and enforcement of federal laws affecting real property transactions:
    • ▪ Fair Housing and ADA requirements.
    • ▪ Lead paint disclosure.
    • ▪ Certain transaction-monies withheld from real estate sales of properties owned by foreigners.
    • ▪ Truth-in-lending disclosures.
    • ▪ Do-not-call lists and CAN SPAM laws.
    • o The rationale for, scope and enforcement of NYS laws affecting real property transactions:
    • ▪ Agency disclosures.
    • ▪ Exclusive agency and right listing disclosures.
    • ▪ Truth in heating law.
    • ▪ Agricultural districts disclosure.
    • ▪ Interest bearing escrow accounts for certain residential security deposits.
    • ▪ Time frame for returning residential security deposits.
    • o The rationale for, scope and enforcement of local laws affecting real property transactions:
    • ▪ References to local markets.
    • o How to access these specific decisions and understand:
    • ▪ Rationales for these decisions.
    • ▪ Application of these rationales to specific situations.
    • • Explain the nature of and intent for the Uniform Commercial Code (UCC). This requires understanding:
    • o The basic difference between real and personal property.
    • o When, where, and to what extent property is involved in real estate transfers:
    • ▪ Personal property sold as part of real property transaction.
    • ▪ Personal property as the real estate transaction, i.e. stock purchase and proprietary lease with co-op transfers.
    • • Explain how negotiable instruments are made negotiable. This requires understanding:
    • o What are negotiable instruments:
    • • notes
    • • drafts
    • • checks
    • • Certificates of deposit.
    • o What is required to make instruments negotiable:
    • • writing
    • • signed
    • • promise
    • • specific sum
    • • on demand and at a time specific
    • • endorsement
    • • holder in due course
    • • defenses.
    • • Explain how and why different means of dispute resolution may be used. This requires understanding:
    • o What are the means of dispute resolution:
    • ▪ mediation
    • ▪ arbitration
    • ▪ Litigation
    • o How does each of these means operate.
    • o Which means of dispute resolution is advantageous for which situation.
    • • Explain how federal bankruptcy laws and NYS exemptions may affect the sale of real property. This requires understanding:
    • o The three different bankruptcy chapters (i.e. 7, 11, 13).
    • o The amounts of exemptions as applied in NYS.
    • o The difference, position, and rights of secured and unsecured creditors.
    • o How the assets of the bankrupt party are determined and distributed.
    • • Explain how estate and gift taxes may affect real property transfers. This requires understanding:
    • o The nature of estates and how they are formed.
    • o How estates are administered.
    • o What the federal and state estate and gift taxes are.
    • • Explain how marital property and subsequent litigations affect real property value and transfers.
    • • Explain how the various NYS Statutes of Limitation affect real property value and transfers. This requires understanding:
    • o The specific statutes:
    • • Misrepresentation/fraud in contracts.
    • • Mechanics lien enforcement.
    • • Judgment lien enforcement.
    • • Against restriction violations.
    • o The process in NYS by which deed restrictions come back into force after deed restriction violations are removed.
  • Construction and Development
    • • Explain how agencies at various government levels regulate and oversee construction standards in order to protect and benefit the public. This requires understanding:
    • o The federal construction standards as created and enforced by the Federal Housing Administration (FHA).
    • o The NYS minimum building codes.
    • o The construction standards for counties, cities, towns and/or villages as they comply with or go beyond the NYS minimum building codes.
    • o How zoning laws impact new construction and development.
    • • Explain how these construction standards affect pre-contract building and real property transactions. This requires understanding:
    • o Where to find the construction standards.
    • o How to recognize both compliance and non-compliance with the standards.
    • o How to read and interpret building plans and specifications as they comply or not with the standards.
    • • Explain how building science advances have affected the utility of real property and how, at times, the market will prefer character and historical significance over utility. This requires understanding:
    • o Buyer preferences as markets change.
    • o Financial limitations and practicalities.
    • • Explain how the “modified” role of licensed home inspectors can be a practical means of ensuring and initiating the application of the new home warranty from the builder. This requires understanding:
    • o How home inspectors and new-built property inspections are different according to definitions in the NYS Home Inspector licensing law.
    • o How the visual acuity of skilled and well-trained home inspectors can assist the buyer of a new- built home to understand the quality of the construction and the homeowner’s diligence and concern for maintaining that quality.
    • • Explain how the NYS constitutional provision for “home rule” affects subdivisions and developments. This requires understanding:
    • o the number of agencies and departments that have oversight and “sign-off” authority to approve or disapprove projects in accordance with land use planning, restrictions, zoning and other considerations.
    • o The time periods necessary for project approvals.
    • o The financial demands for project viability during protracted approval period.
    • • Explain how to determine project absorption rates in specific markets. This requires understanding:
    • o The formula for calculating absorption rates.
    • o How to gather and interpret market data in the absorption-rate formula to draw meaningful conclusions.
    • • Explain the requirements for the development and subsequent offering of newly constructed or newly- converted condominiums and/or cooperatives. This requires understanding:
    • o The filing process for project approval by the NYS Attorney General’s office.
    • o The relevance of the Cooperative Policy Statement #1.
    • o The tenant notification period in a conversion.
    • o The initial and subsequent unit/stock pricing.
    • o The relevance of temporary certificates of occupancy (TCOs).
    • o The applicability of the new home warranty for newly constructed high-rise condominiums or cooperatives.
  • Conveyance of Real Property
    • • Explain typical commercial lease terms
    • o Triple Net
    • o Full-Service Gross
    • o Modified Gross
    • o Sublease Clause
    • o Exclusive Right
    • o Rent escalation
    • • Explain standard residential leasing terms
    • o Length of lease agreement
    • o Rights of the landlord
    • o Rights of the tenant
    • • Explain how legal procedures that effect voluntary and involuntary transfers can impact real property values. This requires understanding:
    • o How transferability, as one of the four characteristics of value, contributes to the value of real property.
    • • Explain how real property is conveyed during the grantor’s life, at and after the grantor’s death. This requires understanding:
    • o The various voluntary means of transferring real property:
    • ▪ Sale
    • ▪ Gift
    • ▪ Dedication
    • ▪ Grant
    • o The various involuntary means of transferring real property:
    • ▪ Legal processes:
    • • Condemnation
    • • Foreclosure
    • • Partition
    • • Adverse possession
    • ▪ Natural processes:
    • • Accretion
    • • Avulsion
    • • Erosion
  • Real Property Management
    • • Explain the functions and responsibilities of the property manager.
    • • Explain the primary responsibilities of real estate management positions including site manager, property manager, portfolio manager and asset manager.
    • • Explain how licensees will provide competent and trustworthy property management services by improving and/or preserving the physical property, (i.e., it’s envelop and mechanicals), while improving the property’s net operating income. This requires understanding the:
    • o Relationship between property condition and risk.
    • o Relationship between risk and capitalization (CAP) rate.
    • o Relationship between cap rate and value.
    • o Necessary steps to increase net operating income (NOI).
    • ▪ Increasing potential gross income (P&I)
    • ▪ Selecting valuable tenants to reduce vacancy and collection loss (V&CL)
    • ▪ Producing initial or additional other income (OI)
    • ▪ Reducing operating expenses (OE)
    • • Fixed
    • • Variable
    • ● Explain rent types and lease clauses. This requires understanding:
    • o Gross rent
    • o Modified gross rent
    • o NNN Rent
    • o Concessions
    • o Tenant options
    • o Standard clauses
    • o Rentable vs. usable SF
    • • Explain how a comprehensive understanding of a property’s income and expense statement provides a template for delivering competent and trustworthy property management services. This requires understanding:
    • o How to collect, analyze and evaluate the supply of and demand for tenant-occupancy space.
    • o How to structure and create various landlord-protective leases
    • ▪ Residential
    • ▪ Commercial
    • ▪ Industrial
    • ▪ Medical office buildings
    • ▪ Hotels
    • o How to create effective strategies to capture and retain reliable and valuable tenants for managed space.
    • o How to create effective programs for ongoing, deferred, preventive and corrective maintenance.
    • o How to challenge excessive assessed property value.
    • o The differences between and among operating, capitalized and stabilized budgets.
    • o The Fair Housing and ADA laws and their many complex exceptions.
    • o the functioning and energy consumption of the mechanical systems:
    • ▪ Plumbing
    • ▪ Electrical
    • ▪ Heating and cooling
    • o The various building codes.
    • o The manager’s obligations to the owner:
    • ▪ Goals
    • ▪ Maintenance
    • ▪ Criteria
    • ▪ Future of the project
    • ▪ Reporting
    • o How to apply environmental laws for the sage and compliant management of property.
    • o How to develop and implement various emergency plans, i.e., evacuation, etc.
  • Taxes and Assessments
    • • Explain why there are assessment exemptions, whether full or partial, to what tax they apply and how to determine the true tax. This requires understanding assessment exemptions & taxes
    • o Personal exemptions:
    • ▪ Senior citizen
    • ▪ Veteran
    • ▪ Disability
    • ▪ STAR
    • ▪ Governmental
    • ▪ Organizational
    • ▪ PLOT
    • • Explain how governmental “forces” (i.e., one of the four “forces” that impact value), especially property taxes, impacts market value of real property. This requires understanding:
    • o How excessive property taxes, when calculated within the home indebtedness qualifying ratios (i.e., PITI) can lessen the purchasing power of potential buyers.
    • • Explain why frequently there is a difference between market and assessed values. This requires understanding:
    • o When the assessed value is determined.
    • o What market data are used to determine the property’s assessed value.
    • o The relationship between assessed and market values.
    • • Explain why there is an equalization rate and how it is derived and applied. This requires understanding:
    • o How the NYS constitutional provision for “home rule” creates a need for an equalization rate.
    • o What government agency/department establishes the equalization rate for a specific taxing municipality.
    • o To what taxes personal exemptions apply.
    • o The procedures to use to calculate the actual taxes (true tax) when the exemptions are removed.
    • o What tax-collecting action a municipality takes to recoup exempt taxes when a non-exempt purchaser buys a property from an exempt seller and takes possession during the exempt period.
    • • Explain how PILOT programs and special property tax abatements or incentives affect market value of properties. This requires understanding:
    • o How to gather and interpret market data to determine the percentage of positive/ negative impact on market values.
    • • Explain the need for research and discussion concerning the feasibility of consolidation of government services. This requires understanding:
    • o Whether consolidation of government services will or will not reduce property taxes.
  • Advanced Fair Housing and Fair Lending
    • • Explain how an integrated society sustains and advances real property values. This requires understanding:
    • o The protected classes in NYS.
    • o The extent of and exemptions to the fair housing, fair lending and ADA laws.
    • o Federal, State, and Local Fair Housing Laws
    • o How these laws apply to specific situations.
    • o How particular discriminatory situations are to be recognized, analyzed and evaluated.
    • o Unequal access to opportunity in housing
    • o How these situations are to be resolved by practices created from the guiding principles of the fair housing/lending and ADA laws.
    • o How government interventions have prevented or lessened the impact of gentrification.
    • o Blockbusting, steering and redlining.
    • o The legacy of segregation, unequal treatment, and historic lack of access to opportunity in housing.
    • o Some locally established protected classes.
    • • Explain how institutionalized discrimination, especially within lending sources, continues to underwrite and sustain segregated communities. This requires understanding:
    • o Disparate impact resulting from formalized lending policies.
    • o Unequal access to amenities and resources on the basis of race, disability and other protected characteristic.
    • o How the belief systems of individuals make it difficult to achieve the intent of fair housing, fair lending, and ADA laws.
    • • Explain the historical overview of fair housing. This requires understanding:
    • o Roadblocks to fair housing/fair lending
    • o The Civil Rights Act of 1964 Fair Housing Act of 1968
    • • Explain how diversity, equity and inclusion align with fair housing.
    • o The difference between equity and equality
    • o Importance of diversity and the impact on communities
    • o The need for inclusion
    • • Explain how the effectiveness of implicit bias training creates inclusive leadership.
    • o History of fair housing & implicit bias
    • o Identify implicit biases that plague agents/clients
    • o Identify interventions to mitigate implicit bias
    • • Cultural Competency Training 2 hours Explain how an awareness and understanding of cultural norms, preferences, and challenges creates diverse communities. This requires understanding:
    • o Cross cultural communication skills
    • o Social benefits of integration
    • o Strategies for cultural responsiveness
    • o Tailoring services provided to meet the needs of all
    • o Cultural responsiveness to ensure inclusion
    • o Inclusive multicultural marketing
    • o Effective negotiating techniques
    • o Inclusive business plan strategies
    • • Explain how the ADA and the Fair Housing Act relate to assistance animals and service animals
    • • Types of assistance animals
    • • Complying with fair housing laws
    • • Source of Income and Subsidy Programs
    • • Explain what subsidized housing is and how it works. This requires understanding:
    • o Requirements for subsidized housing
    • o Vouchers and tax breaks
  • Achieving Transactional Agreements through Transaction Analysis
    • Achieving Agreements through Transaction Analysis
    • • Explain importance of a user-friendly confidentiality agreement that will facilitate an open discussion and exchange among clients and their brokers in order to structure the best possible transactional agreement that is mutually beneficial to the parties. This requires understanding:
    • o How the inclusion of the fiduciary duty of confidentiality opens the way for the necessary incorporation of the other agency duties, especially reasonable care, and loyalty.
    • o What must be included in the confidentiality agreement to make it user-friendly.
    • Transaction Analysis
    • The purpose of transaction analysis is to design and achieve a transactional agreement that is mutually beneficial to the parties (i.e., seller, buyer, landlord or tenant).
    • • Principles of Application
    • • Not all transaction analyses end in transactional agreements.
    • • Wants must be differentiated from needs. This requires understanding:
    • o That wants are the un-tempered desires of a transaction party.
    • o That needs of a transaction party are the essential ingredients of a transactional agreement.
    • o That the un-tempered wants (desires) of one party must be evaluated and asserted only in consideration of the realistic prospects of the other party’s acceptance of those wants (desires).
    • o Awareness of potentially adverse objectives of one party must be molded into an understanding of the other party’s needs.
    • o Once this molded understanding is realized, both parties will thereby have formed a mutual interest that should culminate in a transactional agreement.
    • Individual considerations
    • • How the considerations of the client and the customer (other party) are the primary driving forces in the formation of a transactional agreement. This requires understanding of multiple factors including:
    • o The why, when, and how of the sale, purchase or lease that motivates the parties.
    • o How the market value and legal circumstances of the property establish the parameters within which a transactional agreement is formulated. This requires understanding:
    • ▪ That, since estimating market value is not an exact science, estimating a range of value is necessary.
    • • How the nature of financing and the financial resources of the parties are subject to change. This requires understanding:
    • ▪ The fluidity of financial market conditions.
    • ▪ The limitations based on the financial latitudes of each party.
    • Dual Objectives
    • • That the overall objective is to reach a transactional agreement on fair terms within a reasonable period of time.
    • • That a sense must be created that the other party understands and tries to address the concerns of the broker’s client.
    • • That the broker must always represent the best interests of the client.
    • • That the primary objective of the broker must be to reach a transactional agreement without sacrificing the interests of the client simply to achieve an agreement.
    • • That, if the dual objectives of both parties are prudently addressed by their brokers, the prospects of the individual considerations of each party being folded into a mutual interest of achieving a transactional agreement are considerably enhanced.
    • Transaction Agreement
    • • When completing the transaction analysis that should produce a transactional agreement, the broker must be able to identify and explain the many viable factors including:
    • • How each of the following could play a part in designing and achieving a transactional agreement:
    • o First and foremost, the price (usually most important to the parties)
    • o Occupancy
    • o Appraised versus market value
    • o Timing considerations
    • o Financial positions of each party
    • o Stacking of contingent sales
    • o Multiple offers
    • o Interest rate deadlines
    • o Lawyer’s unconditional approval
    • o Home inspection corrections (i.e., maintenance v. structural)
    • o Seller concessions
    • o Others
    • • How important are discussion, dialogue, and conferencing between and among the parties and their representatives. This requires understanding the:
    • o Importance of listening skills.
    • o Importance of communicating an “agreement attitude”; and
    • o Value of molding an agreement that is bilaterally beneficial, i.e., a win-win agreement.
  • Local Issues and Concerns
    • • Explain how local issues and concerns impact property values. This requires understanding:
    • o How property values play an important role in the viability of the U.S. economy.
    • o How government systems and services can advance or undermine property values.
    • o How real estate professionals can contribute to community discussions and debates about these issues and concerns.
    • Cease and desist regulations
    • Nonsolicitation orders
    • Illegal entities/conversions
    • Rent regulations (rent control, rent stabilization)
    • Farmland
    • Forestry
    • Sign ordinances
    • Zoning
    • Waterfront property
    • Wetlands/restrictions
    • Environment problems in an area
    • Role of real estate professionals in the community
    • Property values impact on the economy
    • Impact of government on property values
Examination sources