Real Estate Salesperson Syllabus
Real Estate Salesperson Syllabus
Real Estate Salesperson Syllabus
SYLLABUS
REAL ESTATE SALESPERSON SYLLABUS
• Leases 1 Hour
• Contracts 1 Hour
• Contract Preparation 1 Hour
Total 75 Hrs
Examination 3 Hrs
1
SUBJECT # 1 LICENSE LAW AND REGULATIONS (3 HOURS)
1. INTRODUCTION
C. Responsibilities of Licensure
• Broker (to the public, to licensees)
• Associate Broker (to broker, to the public)
• Salesperson (to broker, to the public)
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
KEY TERMS
• administrative discipline • multiple listing service
• Apartment information vendor • net listing
• Apartment sharing agent • pocket card
• Article 12-A • real estate appraiser
• Article 78 proceeding • real estate broker
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• blind ad • real estate salesperson
• associate real estate broker • revocation
• Change of Association • sponsor
• commingling • suspension
• continuing education • termination
• escrow • termination of association notice
• exemption • violation
• home inspector
• irrevocable consent
• kickback
• listing agreement
• misdemeanor
3
SUBJECT # 2 LAW OF AGENCY (11 HOURS)
1. INTRODUCTION 10 hours
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
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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
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
• Practicing single agency
• Providing advice to clients (principals)
• 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
• The relationship of the salesperson
• Express or implied seller agency
• Handling in-house sales
• Handling cooperative sales
Buyer/Tenant Agency
• Why buyer brokerage
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• Does everyone need an agent?
• Who pays the buyer's broker?
• Buyers as clients
• Buyers as customers
• Broker's Agent
Consensual Dual Agency
• Disclosure requirements under New York Law (RPL Section 443)
J. Termination of Agency
KEY TERMS
• accountability • group boycott
• advance consent to dual • implied agency
• advance consent to dual • informed consent
• with designated sales • landlord’s agent
• agency disclosure form • loyalty
• agent • market allocation
• broker's agent • misrepresentation
• buyer agent • obedience
• client • open listing
• confidentiality • price fixing
• cooperating agent • principal
• customer • reasonable care
• designated sales agent • self dealing
• disclosure • seller's agent
• dual agency • special agent
• estoppel • subagent
• exclusive agency • tie-in arrangement
• exclusive right to sell • undivided loyalty
• expressed agency • undivided loyalty
• fiduciary • undisclosed dual
• fiduciary duties • vicarious liability
6
• first substantive contact
• general agent
KEY TERMS
• employee
• independent contractor
7
SUBJECT # 3 LEGAL ISSUES (10 HOURS)
A. Introduction - Overview
• bundle of rights
• land
• real estate
• real property
• personal 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
- tenancy in common
- joint tenancy
- tenancy by the entirety
- termination of joint tenancies
- termination of co-ownership by Partition
- community property rights (an understanding)
F. Trusts
• Definition
KEY TERMS
• act of waste • partition
• air rights • personal property
• beneficiary • real estate/real property
• bundle of rights • remainder interests/remainderman
• chattel • reversionary interest
• curtesy/dower • right of survivorship
• escheat • riparian rights
• estate for years • severalty
• fee simple estate • special purpose real estate
• fixture/trade fixture • tenancy in common
• homestead • subsurface rights
• illiquidity • tenancy by the entirety
• joint tenancy • trustee/trustor
• joint venture • undivided interest
• life estate • unities of interest, possession, time and
• littoral rights title
• parcel
A. Encumbrances
• Liens - voluntary, involuntary
• General Liens
- judgments (Lis Pendens)
- estate and inheritance taxes
- deceased person's debt
- corporation franchise tax
- IRS Tax
• Specific Liens
- Tax Liens
- Mortgage Liens
- Mechanics Liens
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• Creating an easement
• Terminating an easement
KEY TERMS
• appurtenances • general lien/specific lien
• dominant tenement • involuntary/voluntary lien
• easement • license
• easement appurtenant • lis pendens
• easement by condemnation • mechanic's lien
• easement by grant • mortgage
• easement by implication • party wall
• easement by necessity • possessory/non-possessory
• easement by prescription • right of way
• easement for light and air • servient tenement
• easement in gross • subordination agreement
• encroachment • tax lien
• encumbrance
3. DEEDS 2 ½ Hours
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
- metes and bounds
- monuments
- 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
- covenant of seizin
- covenant against encumbrances
- quite enjoyment
- further assurance
- warranty
• bargain and sale with covenants
• bargain and sale without covenants
• executor's deed
• quit claim deed
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• referee's deed
KEY TERMS
• accession • full covenant and
• accretion • grantee/grantor
• Acknowledgment • habendum clause
• adverse possession • involuntary/voluntary
• alluvion • land patent
• avulsion • lot and block
• bargain and sale deed • metes and bounds
• consideration • public grant
• conveyance • quit claim deed
• dedication/dedication by • referees deed
• delivery and acceptance • reference to a plat
• description • survey
• executor
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.
E. Significance of:
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• deed and other closing documents
• recording acts
• chain of title
• abstract of title
• title insurance
C. Adjustments
• real estate taxes and assessments
• insurance
• fuel
• water and sewer charges
• rent
• security deposits
• arithmetic of prorations
KEY TERMS
• abstract of title • proration
• assessments • Real Estate Settlement
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• chain of title Procedures Act (RESPA)
• closing statement • reconciliation
• constructive notice; actual notice • survey
• credits • title
• debits • title closing
• marketable title • title insurance
• proration • title search
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SUBJECT # 4 THE CONTRACT OF SALES AND LEASES (3 HOURS)
1. LEASES 1 Hour
A. Definition
2. CONTRACTS 1 Hour
A. Definition
B. Types
• expressed
• implied
• bilateral
• unilateral
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
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• no survival (unless provide D)
F. Purchase offers
KEY TERMS
• assignment • option
• caveat • power of attorney
• caveat emptor • reformation
• consideration • rescission
• contingency • rider
• counteroffer • right of first refusal
• earnest money deposit • specific performance
• express/implied contracts • Statute of Frauds
• executed contract/executory contract • Statute of Limitations
• forbearance • "time is of the essence"
• liquidated damages • Uniform Commercial Code
• novation • void/voidable
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6. Tax bills
G. Contract Procedures
1. Who signs first and why?
2. Review of contract with seller to verify accuracy of information
3. Riders
4. Clauses relating to lead based paint (properties constructed after 1978)
5. Requirement for inclusion of section 443 Disclosure statement when
brokers prepare contracts
Key Terms
• Attorney review clause
• Down payment
• Lawyer’s fund for client protection
• Mortgage contingency clause
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SUBJECT # 5 REAL ESTATE FINANCE (5 HOURS)
A. Mortgage - Definition 4 Hours
• 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
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H. Secondary Markets
• Fannie Mae (FNMA)
• Ginnie Mae (GNMA)
• Federal Home Loan Mortgage Corporation
J. PMI
Sub-prime loans
high interest loans and closing
costs hidden fees
balloon payments
unqualified buyers
refinancing
(flipping)
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debt
consolidation
home equity
loans
Fraud
KEY TERMS
• acceleration clause • mortgage, mortgagor,
• adjustable rate mortgage • negative amortization
• alienation clause • package mortgage
• amortization • pledged account mortgage
• assignment • PMI/private mortgage insurance
• balloon mortgage • point
• blanket mortgage • predatory lending
• bridge loan • prepayment penalty clause
• buydown • primary market/secondary
• construction mortgage • promissory note
• conventional mortgage • rate cap; payment cap
• default • red-lining
• discount points • Regulation Z
• "due on sale" clause • release clause
• FHA/mortgage • RESPA/Real Estate Settlement
• grace period • Procedures Act
• graduated mortgage • reverse annuity mortgage
• home equity loan • sale-and-leaseback
• inflation • satisfaction of mortgage
• interest and tax • shared equity mortgage
• lifetime cap/ceiling • SONYMA/State of New York
• loan flipping • Association
• loan to value ratio • straight mortgage/term
• margin • sub-prime loan
• MIP/mortgage insurance • usury
• VA/mortgage
• wrap-around mortgage
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SUBJECT # 6 LAND USE REGULATIONS (3 HOURS)
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
- enacts local zoning ordinance and building codes
- zoning classifications; residential, commercial, industrial, vacant,
agricultural, public open space, park lands, recreational, institutional
- incentive zoning
- clustering
- open meetings law (Sunshine Law)
- local legislative body: planning board & zoning, board of appeals
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- If the difficulty was self-created (does not preclude granting)
• Local Enforcement
- Building department: inspector, code enforcement officer, etc.
- Professional services: engineer, environmental, planning, etc.
- Board of Health
- Local courts
KEY TERMS
• abutting • infrastructure
• accessory • lead agency
• accessory • master plan
• air rights • moratorium
• building code • New York State Office of
• building • Recreation and Historic
• census tract • Preservation (OPRHP)
• CO/certificate • non-conforming use
• condemnation • police power
• cul-de-sac • restrictive covenant
• deed • right-of-way
• demography • setbacks
• Doctrine of • spot zoning
• easement • subdivision regulations
• eminent • survey
• escheat • "taking's defined by courts
• family, defined • topography
• group home • Transfer of Development
• home • variance/area variance/use
• zoning ordinance
22
SUBJECT # 7 CONSTRUCTION AND ENVIRONMENTAL ISSUES (5 HOURS)
CONSTRUCTION - 2 HOURS
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
F. Energy Efficiencies
• R-factor
• types of installation
• location of insulation
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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
• Application of:
- electrical heating
- oil fired heating
- gas fired heating
• Oil Tanks:
- UST - underground storage tanks
- AST - above ground storage tanks
- DEC - Department of Environmental Conservation regulations on oil
tanks (abandonment, testing, etc.)
- BTU ratings
- Life expectancies
• Air conditioning:
- central air conditioning
- major air conditioning components
- integral systems with forced air
- water cooled systems
- air cooled systems
- BTU ratings
- life expectancies
• Heat Pumps:
- air to air heat pumps
- cycling of systems
- advantages and disadvantages
• Plumbing:
- hot water heating, i.e., hot water tanks, boiler coils, sizing requirements, etc.
- sanitary waste systems
- on-site
- municipal
Type of piping:
-cast iron
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-galvanized
-copper
-PVC
- 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
- above ground
- below ground
• Utility company responsibilities
• Land owner responsibilities
• Voltage - what is voltage?, how to identify 110/220
• Amperage - what is amperage
- capacity requirements
- fuses vs. circuit breakers
- how to identify amperage
KEY TERMS
• amperage • lally columns
• basement • percolation rate
• beam • pitch
• bearing walls • plaster board/wall board
• blueprint • platform construction
• BTU/British Thermal Unit • post and beam construction
• building envelope • rafter
• circuit breaker • R-value
• crawl space • septic system
• eave • sheathing
• fascia • siding
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• flashing • sill plates
• footing • slab-on-grade construction
• foundation walls • soffit
• fuse • specifications
• girder • studs
• headers • voltage
• joists
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
A. Water
• municipal drinking water - public
• private distribution systems
• private water systems
- wells
- private
- community
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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
3. CONTEMPORARY ISSUES
A. Asbestos
• historical overview
- what is asbestos?
- what are its uses?
• health effects
- asbestosis
- lung cancer
- mesothelioma
• testing procedures
- bulk sampling
- air monitoring
- wipe sampling
• Removal procedures
B. Lead
• paint
• water soil
• health effects
• adults
• children
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F. Environmental Assessments
• primarily used during commercial real estate transactions
• Phase I, II, III and IV
- Phase I - investigative
- Phase II - testing phase
- Phase III - remediation
- Phase IV - management phase
J. Mold
- testing and remediation
4. AGENT'S ROLE
• Impact on salesperson/broker
• Liability on salesperson/broker
KEY TERMS
• asbestos • freon
• asbestosis • groundwater
• CAA/Clean Air Act • HUD
• CERCLA/Comprehensive Environmental
• Environmental Response, Compensation • Lead
• Liability
d Act • mold
• chlordane • poly-chlorinated byphenols (PCBs)
• chloro-flouro carbons (CFCs) • radon
• due diligence • SDWA/Safe Drinking Water Act
• electro-magnetic field • Superfund Amendments and
• environmental impact state Act
• friable • underground storage tanks
• urea formaldehyde foam insulation (UFFI)
• wetlands
Instructors should consult state regulations for any chances to these areas of concern, especially with
reference to Sections B, G, H, I --these areas are evolving very quickly and constant changes are
being made.
28
SUBJECT #8 VALUATION PROCESS AND PRICING PROPERTIES (3 HOURS)
A. Differences between Appraisal, Valuation and Evaluation
- Types of Costs
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o Direct costs - labor and materials (hard costs)
o Indirect costs - architectural and engineering fees,
professional fees (appraiser), financing costs, lease-
up costs, administration, filing fees, etc.
E. Salesperson's Role
o competence
o diligence
o documentation
o effective communication
G. Site Valuation
I. Pricing Properties
- Preparing the CMA
data collection
listing comparable past sales (sold within the last 12
months), expired listings and current competition
making adjustments
formulating a price
30
KEY TERMS
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SUBJECT # 9 HUMAN RIGHTS AND FAIR HOUSING (4 HOURS)
1. FAIR HOUSING
B. Broker's Responsibility
• Maintain a Fair Housing office
- post Fair Housing signs
- in advertising, maintain the concept of Fair Housing
• Ongoing training and education of staff and agents
• Reporting of any Fair Housing misconduct
• Have available all necessary material for record keeping by broker and
agents
C. Salesperson's Responsibility
• know the Fair Housing Laws and responsibility
• act in accordance with the law
• learn excellent record keeping skills
• attend Fair Housing training seminars
• know the referral resources
D. Federal Laws
• 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
1
Relevant portions enforced by NYS Division of Human Rights & NYS Homes & Community Renewal
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• two family exemption
Discussion of the development of Fair Housing Laws and the protected classes both
federally and protected classes in New York State
G. Types of Discrimination
• refusal to rent, deal, sell or to work with a member or members of a protected class
• unequal treatment by the client in terms of not showing or making available all
possible dwellings within their price range
• misinformation or different information
• steering minority home seekers to specific minority neighborhoods
• blockbusting-creating panic in a neighborhood or street which causes individuals to
decide to sell their homes immediately
• advertising awareness
• discussion for understanding of forms of discrimination
K. Non-solicitation Orders
KEY TERMS
• Americans with Disabilities • Jones vs. Mayer Supreme
• blockbusting • Decision, 1968
• cease and desist list • marital status
• Civil Rights Act of 1866 • N.Y. State Human Rights Law
• disability or handicap • non-solicitation order
• Fair Housing Act of 1968 • redlining
• familial status • steering
• filtering down • testers
• HUD/Department of Housing
and Urban Development
33
SUBJECT #10 REAL ESTATE MATHEMATICS (1 HOUR)
1. Percentages
• commissions
• interest
• appreciation and depreciation
• points
KEY TERMS
• acre • interest
• commission • point
• front foot • principal
• gross income/net • real property tax rate
• hectare
34
SUBJECT # 11 MUNICIPAL AGENCIES (2 Hours)
A. Description of the following agencies matched with their functions:
1. City/Town Council: Elected
2. Village Board of Trustees: Elected
3. Adoption of laws and ordinances including zoning ordinance and cluster zoning
approval
4. Adoption of budget and tax rate
5. Planning Board: Appointed
a. Master Plan
b. Subdivision approval
c. Advises all other boards on land use matters
6. Zoning Board of Appeals
a. Variances
b. Zoning interpretations
c. Special Permits (may be other agencies)
7. Architectural Review Board
a. Approves new construction and remodeling per municipal ordinances
8. Conservation Advisory Council/Wetlands Commission
a. Deals with environmental issues per municipal ordinances
9. Historic Preservation/Landmark Commission
a. Approves construction/remodeling of designated properties
b. Recommends properties for preservation
10. Building Department
a. Building permit approvals
b. Acts as “gatekeeper” for all construction activity
11. Planning Department
a. Professional advisement to all agencies and boards
12. Tax Assessor
a. Assessments
b. Records
13. Receiver of Taxes/Treasurer
a. Collects taxes
b. Accounting functions
14. City/Town/Village Engineer
a. Roads
b. Sewer and water connections
15. County Health Department
a. Septic system approval
b. Certain sewer approvals
Key Terms
• Architectural Review Board
• Building department
• Conservation Advisory Council
• County Health Department
• Historic Preservation/Landmark Commissions
• Planning board
• Receiver of Taxes
• Tax assessor
• Village Board of Trustees
• Zoning Board of Appeals
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SUBJECT # 12 PROPERTY INSURANCE (1 Hour)
Independent
agents Insurance
companies
Insurance brokers
C. Types of policies
Monoline policy
Package policy
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G. Problems in Obtaining Insurance
• Commercial policies
• Umbrella policies
Key terms
• actual cash value
• deductible
• liability insurance
• package policy
• property insurance
• replacement cost
• umbrella policy
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SUBJECT # 13 LICENSEE SAFETY (1 Hour)
• Working alone
• Entering and exiting office while alone
• Meeting unknown individuals
• Broker
• Agent
• Buyer/Seller
• Third Party Acts (Liability limited in listing contract)
• Aggressor (Penal Code Article 35 Use of Physical Force)
F. Risk Reduction
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SUBJECT #14 TAXES AND ASSESSMENTS (3 Hours)
A. Purpose of Taxation
1. Pay for municipal services
2. Exempt properties
B. Why tax land and improvements (as opposed to sales and income taxes)?
1. Predictable
2. Hard to conceal
3. Historic relationship to wealth and land productivity
D. Assessed Value
1. Relationship to full or market value
2. Assessment ratio
3. Equity issues
4. Why assessments differ
5. Old vs. new construction
6. Undeclared improvements
7. Community wide re-assessment
8. Re-assessment upon sale
a. Illegal
b. legal
c. undeclared improvements discovered
d. relationship of building permit process to re-assessment
e. back taxes
E. Tax Rate
1. Municipal budget
2. Sample calculations of tax rate
3. Sample calculations of taxes
G. Equalization
I. Exemptions
1. Veterans
2. Elderly
3. STAR program
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J. Protesting Assessments
K. Tax Assessor
1. Factual errors
L. Grievance Board
1. Unequal assessment
2. Full value disagreement
3. Unequal assessment ratio
4. Possible decisions
a. Full denial
b. Full re-assessment per application
c. Partial re-assessment
O. Tax Liens
1. Tax foreclosure
2. Tax sale
P. Agent Responsibilities
1. Calculate taxes
KEY TERMS
• ad valorem taxes
• appropriation
• assessed value
• assessing unit/approved assessing unit
• assessment
• assessment review board
• homestead/non-homestead
• in rem
• levy
• lien
• special assessment
• special assessment districts
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SUBJECT # 15 CONDOMINIUMS AND COOPERATIVES (4 Hours)
1. Condominiums
B. Condo Issues
1. By-Laws
2. Role of the sponsor
a. Appointment of board members
b. Appoints managing agent
c. Limitation on sponsor control of the board
3. New Development
a. Reading an Offering Plan
• Special risks
• Real estate tax validation
• Floor plans (sq. ft.)
• Price increases
• Hidden fees
• Closing date
C. Letters of Intent
1. CPS1 Phase
2. Written offers to reserve specific units - non binding as to purchaser or price
3. Legal ramifications
4. How to submit “letters of intent”
D. Price Changes
1. Offering plan amendments
2. Why and when developers raise prices
3. Current market practices
H. Closing Costs
1. Buyer’s fees
2. Sellers’ fees
3. Sponsor’s fees
4. Buyer’s concern
a. Common charges
b. Real Estate Tax
c. Tax deductions
d. “Right of First Refusal”
e. Mortgage Recording Tax
f. Mansion Tax
g. Title Insurance
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5. Buyer’s financial ability to purchase a cooperative or condominium
residence a. Income and Related Topics
• Various Types of Income: salary, commission, bonus, interest,
dividend, capital
gains, business, rental, trust, alimony, social security.
• Income Parameters and Bank Financing: acceptable and
non-acceptable income earnings to debt ratios, loan to value
ratios, fixed rate and adjustable mortgages, mortgage terms,
no income verification.
• Income Parameters for Coop/Condo Admission: acceptable and
non-acceptable income, earnings to debt ratios, loan to value
ratios.
b. 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
Key Terms
• Alteration agreement • Flip tax
• Board package • Flipping
• By-laws • House rules
• Common elements • Letter of Intent
• Condominium • Maintenance
• Condop • Offering statement
• Cooperative • Proprietary lease
• Covenants, Conditions & • Recognition agreement
Restrictions (CCRs) • Share loan
• Declaration • Sponsor
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SUBJECT # 16 COMMERCIAL AND INVESTMENT PROPERTIES (10 Hours)
A. Characteristics of Real Property Investments
• Risk
• Liquidity
• Leveraging
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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
Direct Meter
Sub-Meter
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)
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SUBJECT # 17 INCOME TAX ISSUES IN REAL ESTATE TRANSACTIONS (3 Hours)
A. Taxpayer Relief Act of 1997
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Home Equity Financing
Home Improvement
Loans Construction
Financing
b. Rules Concerning Treatment of Points and Closing Costs
c. Prepayment Penalties
5. Depreciation
a. Straight-line method
Income Producing Residential — 27.5 years
Income Producing Non-Residential — 39 years
b. Calculating Depreciable Basis
Key Terms
• Adjusted basis
• Appreciation
• Basis/adjusted basis
• Boot
• Capital gain
• Capital loss
• Cash flow
• Debt service
• Passive activity income/active income
• Tax depreciation
• Tax depreciation/recaptured depreciation/straight-line depreciation
• Tax shelter
• Tax-deferred exchange
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SUBJECT # 18 MORTGAGE BROKERAGE (1 Hour)
Key Terms
• mortgage banker
• mortgage broker
• mortgage broker dual agency disclosure form
• mortgage commitment
• lender rebate
• nonconforming loan
• pre application and fee agreement
• preapproval
• prequalification
• rate lock
• underwriting
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SUBJECT # 19 PROPERTY MANAGEMENT (2 Hours)
A. Introduction
1. What is property management?
2. What are the functions of a property manager?
3. What types of property are managed?
4. When is a license required?
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E. Obligations to Owner
1. Goals
2. Maintenance criteria
3. Future of the project
4. Reporting
G. Examples of:
1. A budget
2. Marketing plan
3. Rent roll
4. Expenses
5. Management proposal
KEY TERMS
• anchor stores • management proposal
• capital expense • operating budget
• capital reserve budget • planned unit development
• corrective maintenance • preventative maintenance
• eviction - • property management
actual/constructive • property management report
• fiduciary • property manager
• general agent • resident manager
• lessee • risk management
• lessor • stabilized budget
• management agreement • tenancy for years
• variable expense
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