Real Estate Pt 3

The policyholder is responsible for paying the deductible. The deductible is the amount that the policyholder must pay out of pocket before the insurance company will cover the remaining expenses. This is a common practice in insurance policies to ensure that the policyholder has some financial responsibility and to prevent excessive claims.

Conversion is the process by which an existing residential property becomes a cooperative or a condominium. This typically involves changing the ownership structure of the property from a single owner to multiple owners. The conversion process may include legal and financial steps, such as creating a homeowners' association, drafting and filing necessary documents, obtaining approval from local authorities, and transferring ownership to individual unit owners. This allows the property to be divided into separate units that can be individually owned and sold.

A liability policy covers bodily injury, which means it provides coverage for any harm or injury caused to another person as a result of the insured's actions or negligence. This coverage helps protect the insured from legal and financial consequences that may arise from such injuries, including medical expenses, legal fees, and potential settlements or judgments.

A master plan is one of the most important documents for a planning board because it provides a comprehensive and long-term vision for the development and growth of a community or region. It outlines goals, policies, and strategies for land use, transportation, infrastructure, and other aspects of urban planning. The master plan serves as a guide for making informed decisions about zoning, development projects, and public investments. It helps ensure that future development is coordinated, sustainable, and aligned with the community's vision and values.

A town assessor is responsible for determining the value of properties within a town for tax purposes. They assess the market value of properties by considering factors such as location, size, condition, and recent sales of similar properties. This assessment is used to calculate the property taxes that owners must pay. The assessor's role is crucial in ensuring that property taxes are fair and accurately reflect the value of each property.

A mortgage broker who is also the real estate broker in a transaction must disclose this dual status at the first substantive contact between the broker and the borrower. This is important for transparency and to ensure that the borrower is aware of the broker's role in both aspects of the transaction. By disclosing this information early on, the borrower can make an informed decision and be aware of any potential conflicts of interest that may arise throughout the business relationship.

A property manager is responsible for various tasks related to managing and maintaining a property. Renting property and leasing property are both functions performed by a property manager, as they involve finding tenants and negotiating lease agreements. Keeping costs within budget is another important responsibility of a property manager, as they need to ensure that expenses are controlled and financial goals are met. However, preparing the property deed is not typically a function of a property manager. This task is usually handled by a real estate attorney or a title company, as it involves legal documentation and transfer of ownership rights.

The property manager's fee is typically determined as a percentage of the rental income generated from the property. This means that the property manager receives a portion of the rental income as their fee for managing the property. This fee is a common way for property managers to be compensated for their services and is often agreed upon in the property management contract.

A mega mall is a type of retail center that is anchored by three or more full-line department stores. This means that the mall has multiple large department stores as its main attractions, which helps draw in a large number of customers. These department stores typically offer a wide range of products and brands, making the mega mall a popular destination for shopping.

The CPM designation is reserved for individuals who meet a certain level of education and experience. This designation stands for Certified Property Manager and is awarded by the Institute of Real Estate Management (IREM). It signifies that the individual has demonstrated expertise in managing and operating residential and commercial properties. The CPM designation is highly respected in the real estate industry and is recognized globally.

A loan is considered nonconforming when it does not meet the criteria set by the Federal Reserve Bank for funding. This means that the loan does not adhere to the specific guidelines and requirements set by the Federal Reserve Bank, which could include factors such as loan amount, borrower qualifications, or property type.

An important task for a manager of a condo or cooperative is physically managing the property. This involves overseeing the maintenance and upkeep of the building, ensuring that repairs are made, coordinating with contractors and vendors, and addressing any issues or concerns that arise regarding the physical aspects of the property. This task is crucial in order to maintain the value and functionality of the property and to provide a safe and comfortable living environment for the residents.

The main purpose of the zoning board of appeals is to interpret zoning ordinances. This means that they are responsible for determining the meaning and application of the regulations and rules set forth in the zoning ordinances. They play a crucial role in resolving any disputes or conflicts that may arise regarding the interpretation of these ordinances. Their goal is to ensure that the zoning regulations are applied fairly and consistently, and that any decisions made regarding land use and development are in accordance with the established ordinances.

Gina is acting as a dual agent. As a licensed real estate and mortgage broker, she is representing both the sellers, Mary and Bob Jones, in the sale of their home, and also negotiating a mortgage for the buyers. This means that she is acting as an agent for both parties involved in the transaction.

The owner of a 2-to-4 family dwelling would probably not pay for gas expenses. This is because gas expenses are typically the responsibility of the tenants, who would be responsible for paying their own gas bills. The owner may be responsible for other expenses such as outside lights, laundry room costs, and water, but gas expenses would likely be the responsibility of the individual tenants.

The main difference between a condo and a co-op is the form of ownership. In a condo, individuals own their individual units and have shared ownership of common areas. In a co-op, individuals own shares in a corporation that owns the entire building, and they lease their individual units from the corporation. This difference in ownership structure affects the rights and responsibilities of the owners and the level of control they have over the property.

The correct answer is "flipping". Flipping refers to the practice of buying a property, usually at a lower price, and then quickly selling it for a profit. In this case, Great buys condos, lives in them for a short period, and then sells them at a higher price, making a profit. This is a common strategy in real estate investing.

The board of directors approves a prospective purchaser's purchase in a cooperative. This is because the board of directors is responsible for managing the affairs of the cooperative, including approving new shareholders. They review the prospective purchaser's application and determine if they meet the requirements and qualifications set by the cooperative. The board of directors has the authority to accept or reject the prospective purchaser's application based on their evaluation.

The correct answer is "the chance of experiencing a loss." This definition accurately captures the concept of risk, which refers to the possibility or probability of facing negative outcomes or losses. It acknowledges that risk involves uncertainty and the potential for adverse consequences.

The class life for residential structures is 27.5 years. This means that residential structures are expected to have a useful life of 27.5 years before they are considered to be fully depreciated. This is a standard estimation used for tax purposes and helps determine the amount of depreciation that can be claimed each year.

A mortgage broker is not typically involved in providing the funds for a loan. Their role is to connect borrowers with lenders, assist in the loan application process, and negotiate the terms of the loan. The funds provider is usually the lender or financial institution that actually provides the money for the loan.

If a homeowner receives a tax bill that she feels is outrageous, she can file a complaint with the local board of assessment review. This is a common course of action for homeowners who believe that their property has been overvalued or that the tax assessment is incorrect. By filing a complaint, the homeowner can request a reassessment of the property value or challenge the accuracy of the tax bill. This allows for a fair review of the situation and the possibility of a reduced tax bill if the complaint is successful.

The homeowner's total tax bill is derived by multiplying each district's tax rate by the assessed value of the owner's property. This calculation takes into account the specific tax rates set by each district and the assessed value of the property to determine the amount of taxes owed by the homeowner.

Condo common elements refer to the shared areas or facilities within a condominium complex that are owned and maintained by all unit owners collectively. These elements typically include common spaces like hallways, lobbies, and recreational areas, as well as shared utilities and infrastructure. An elevator is a common element because it is a shared amenity that provides access to different floors for all residents. On the other hand, a closet, kitchen equipment, and personal property are not considered common elements as they are typically owned and maintained by individual unit owners.

Grandfathered debt refers to debt on mortgages taken out prior to October 13, 1987. This term is used to describe debt that is exempt from certain regulations or restrictions that may apply to newer debt. In this case, it specifically refers to mortgages taken out before a certain date, indicating that these mortgages have different rules or conditions compared to more recent mortgages.

A mortgage broker usually acts as a middleman between borrowers and lenders, facilitating the process of obtaining a mortgage loan. They bring borrowers and lenders together by connecting individuals seeking a mortgage with lenders who are willing to provide the loan. The broker helps borrowers navigate the mortgage market, assess their financial situation, and find the best loan options that suit their needs. By bringing borrowers and lenders together, the mortgage broker facilitates the process of securing a mortgage loan.

The banking department dual agency affidavit is submitted to the NY banking department by applicants for a mortgage broker license who are also real estate brokers.

Flood coverage is always excluded from homeowners and tenants policies. This is because flood damage is typically covered by separate flood insurance policies, as it is considered a high-risk and costly type of damage. Homeowners and tenants policies generally do not provide coverage for flood-related damages, so individuals need to purchase additional flood insurance to protect their property from flood damage.

The concept of using other people's money for investing is known as leverage. Leverage involves borrowing funds or using borrowed capital to make an investment in order to potentially increase the returns. By using leverage, an investor can amplify the potential gains or losses on their investment. This strategy is commonly used in real estate, business acquisitions, and financial markets, where borrowed funds are used to make larger investments and potentially generate higher profits.

The investigation fee for a mortgage broker applicant is $1,500.

The state does not receive revenue from property taxes. Property taxes are typically collected by local governments such as cities, towns, and school districts to fund local services and infrastructure. The state government, on the other hand, relies on other sources of revenue such as income taxes, sales taxes, and corporate taxes to fund its operations and services.

The government is most likely to pass rental control laws on apartment buildings because they are commonly rented out to individuals or families for residential purposes. Rental control laws aim to regulate and protect tenants by setting limits on rent increases, ensuring fair rental agreements, and preventing unjust evictions. These laws are typically implemented in areas where there is a high demand for housing and limited affordable options, which is often the case in urban areas where apartment buildings are prevalent.

The correct answer is to smooth out wide discrepancies of assessed values within the district. This means that the equalization process is used to make sure that properties are assessed fairly and consistently across the district, reducing any significant differences in assessed values. This helps to ensure that property owners are treated fairly and that tax bills are distributed more equitably.

An annual budget that includes income and expenses for ongoing operations refers to the operating budget. This budget outlines the financial plan for day-to-day activities and regular expenses of a business or organization. It includes revenue from sales or services and the costs associated with running the business, such as salaries, utilities, and supplies. The operating budget helps in monitoring and controlling expenses, making informed financial decisions, and ensuring the smooth functioning of the business.

A property manager's first responsibility to the owner is to realize maximum profit. This means that the property manager should prioritize strategies and decisions that will maximize the financial returns for the owner. This can involve setting appropriate rental rates, minimizing vacancies, managing expenses efficiently, and identifying opportunities for increasing revenue. By focusing on maximizing profit, the property manager can ensure that the owner's investment is generating the highest possible return.

The purpose of a homestead tax exemption is to offer some amount of tax relief on an owner's principal residence. This exemption is designed to reduce the property taxes that homeowners have to pay on their primary residence, providing them with financial relief. It is not intended to encourage multiple property investment or to exempt owners of principal residences who rent their properties.

A condop refers to a building that combines both condominium and cooperative ownership within the same structure. In a condop, some units are individually owned as condominiums, while others are owned as cooperative shares. This means that some residents own their units outright, while others own shares in a cooperative corporation that grants them the right to occupy a specific unit. This hybrid ownership structure allows for different types of ownership and financing options within the same building.

An indexed lease is based on the cost-of-living index. This means that the lease agreement includes a provision that allows for the rent to be adjusted periodically based on changes in the cost of living. The cost-of-living index is a measure of the average price level of goods and services in a specific geographic area, and it is used to determine the rate of inflation. By using the cost-of-living index as a basis for the lease, both the landlord and the tenant can ensure that the rent remains in line with changes in the overall cost of living.

The monthly depreciation allowance is calculated by dividing the initial tax basis by the number of months in a year. In this case, Sam's initial tax basis is $395,250. Dividing this by 12 (the number of months in a year) gives us $32,937.50. Therefore, his monthly depreciation allowance is $32,937.50.

Passive activity income refers to investment funds from investors who do not actively participate in managing the investment. This means that they are not involved in day-to-day decision-making or operations of the investment. They may contribute capital or provide financial support, but they do not have a direct role in managing the investment. This type of income is typically generated from activities such as rental properties, limited partnerships, or other passive investments where the investor's involvement is minimal.

In a lock-in loan program, the components typically include points, appraisal, loan program, and interest rate. The appraisal is not a part of a lock-in loan program as it is a separate process that determines the value of the property being used as collateral for the loan.

The city council is made up of persons who are elected to their positions. They are elected by the residents of the city to represent their interests and make decisions on behalf of the community. The other groups mentioned, such as the town board of health, planning board, and historic preservation commission, may also have members who are appointed or selected in other ways, rather than being elected by the public.

The lease clause of subordination, non-disturbance, and attornment would protect a tenant if the property is foreclosed upon. Subordination means that the tenant agrees that their lease is subordinate to any mortgage or lien on the property, allowing the lender to foreclose without terminating the lease. Non-disturbance ensures that if the property is foreclosed upon, the tenant's rights under the lease will not be disturbed by the new owner. Attornment means that the tenant agrees to recognize and attorn to the new owner as their landlord in the event of foreclosure. This clause provides the tenant with some level of protection and continuity of their lease agreement.

A management proposal typically includes information related to the management of a property. It may include details about the property description, schedule of property inspections, and management fee information. However, tenant credit histories would not usually be found in a management proposal as they are more relevant to tenant screening and selection processes rather than the overall management of the property.

A fee for preparing a stock certificate is not a possible condo closing cost for a buyer because stock certificates are not typically associated with the purchase of a condominium. Condo closing costs typically include expenses such as mansion tax, real property tax put in escrow, and move-in fees, which are more relevant to the purchase of a property. However, the preparation of a stock certificate is more commonly associated with the purchase of stocks or shares in a company, rather than a real estate transaction.

Investing in land is riskier than other forms of investment because land cannot be depreciated for tax purposes. Depreciation allows investors to deduct the decrease in value of an asset over time, reducing their taxable income. Since land does not have any improvements, such as buildings or structures, it cannot be depreciated. This means that investors cannot take advantage of this tax benefit, potentially reducing their overall returns on the investment.

A motel is not considered a residential property because it is primarily designed for short-term stays, typically for travelers or tourists. In contrast, a duplex, condo, and cooperative are all types of residential properties where people live on a more permanent basis.

The term "proprietary" refers to something that is privately owned or exclusive to a particular individual or organization. In the context of commercial leases, "proprietary" is not a recognized type of lease. The other options listed - gross, net, and percentage - are all valid types of commercial leases that are commonly used in real estate transactions.

Losses on personal residences cannot be claimed on income taxes because personal residences are considered personal assets and not business assets. Income taxes only allow deductions for losses on business-related properties such as apartment buildings, retail stores, and development lots, which are considered investment or business assets.

A like-kind exchange refers to the exchange of similar types of assets for tax purposes. In this scenario, all the options involve the exchange of one type of property for another, except for the exchange of a single-family home for a motel. This is not considered a like-kind exchange because a single-family home and a motel are not similar types of properties.