New York State Real Estate Exam Preparation and Success Guide

By Gregory J. Caviness

This book is designed to not only prepare you for successfully passing the New York State Real Estate Licensing Examination, but to also prepare you for a successful real estate career.

This book is divided into three parts. The first part of this book provides the knowledge necessary for you to obtain a license to pursue the real estate profession. The second part covers the application of that knowledge which can serve as a precursor for achieving success in real estate. The third parts focuses on identifying the specific niche to which that knowledge would be applied. This section will concentrate on the development of steps and systems to apply the knowledge, inlcuding effective operations during a period of a health crisis.

It is with these three basic concepts that I write this book in hopes that you too can achieve the successes that have followed me throughout my career!

• Language: English
• Publisher: iUniverse
• Release date: Nov 25, 2021
• ISBN: 9781663202062

Gregory J. Caviness

Mr. Caviness is a licensed New York real estate professional who has taught, written and developed a collection of coursework for both real estate practitioners and the general public. As Associate Professor, Mr. Caviness has taught at colleges and universities to include Adelphi University and College of Mount St. Vincent. 7/2/2021: Mr. Caviness has worked in many capacities as a licensed professional, including residential and commercial real estate sales, property management, real estate investment, mortgage financing, credit repair, and building maintenance and supervision. Having received multiple successes in real estate sales in New York, Mr. Caviness sought to broaden his knowledge base by providing a high level of service to clients and customers. In 2002, Mr. Caviness entered the mortgage industry, arranging residential mortgage loans for borrowers in New York City. Drawing on his education in finance, he was elevated to senior loan officer and trainer for a Queens-based residential mortgage brokerage firm. Soon after, real estate schools approached him to teach loan-officer training courses to New York State licensed brokers as part of their continuing education requirement due to his innovative and effective teaching style. Prompted by his success as a mortgage educator, Mr. Caviness became certified as a New York State–approved real estate instructor. Since 2004, Mr. Caviness has taught real estate salespersons and broker licensee candidates. To this, he adds mortgage loan processing, foreclosure remediation, property management, credit repair, investment analysis, FHA 203K financing, short sale processing, mortgage acceleration procedures, and a host of other real estate and mortgage-related courses to his training repertoire. Mr. Caviness’s approach to teaching is interactive. With each lesson, he shares his experiences in real estate and provides real-world examples of how each subject relates to practical experience. Mr. Caviness have previously authored two books for real estate professionals, "Selling Real Estate in Foreclosure-Driven Markets" and "The Essential Home Buyer's Workshop".

Book preview

Copyright © 2021 Gregory J. Caviness.

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or

mechanical, including photocopying, recording, taping or by any information storage retrieval system without the

written permission of the author except in the case of brief quotations embodied in critical articles and reviews.

iUniverse

1663 Liberty Drive

Bloomington, IN 47403

www.iuniverse.com

844-349-9409

Because of the dynamic nature of the Internet, any web addresses or links contained in

this book may have changed since publication and may no longer be valid. The views

expressed in this work are solely those of the author and do not necessarily reflect the views

of the publisher, and the publisher hereby disclaims any responsibility for them.

Any people depicted in stock imagery provided by Getty Images are models,

and such images are being used for illustrative purposes only.

Certain stock imagery © Getty Images.

ISBN: 978-1-6632-0207-9 (sc)

ISBN: 978-1-6632-0206-2 (e)

Library of Congress Control Number: 2021923740

iUniverse rev. date:  11/24/2021

CONTENTS

Preface

Acknowledgments

Reasons You Want to Get into Real Estate

Ten Questions to Ask Before Getting into Real Estate

Frequently Asked Questions

New York State Real Estate Licensure Requirements

Preface

Part One: Preparing for the Real Estate Licensing Exam

Lesson Summary 1: License Law and Regulations

Lesson Summary 2: Independent Contractor vs Employee

Lesson Summary 3: Law of Agency

Lesson Summary 4: Estates and Interests

Lesson Summary 5: Liens and Easements

Lesson Summary 6: Deeds

Lesson Summary 7: Leases

Lesson Summary 8: Commercial Leases

Lesson Summary 9: Real Estate Finance and Predatory Lending

Lesson Summary 10: Contracts

Lesson Summary 11: Contract Preparation

Lesson Summary 12: Mortgage Brokerage and Banking

Lesson Summary 13: Property Insurance

Lesson Summary 14: Land-Use Regulations

Lesson Summary 15: Title Closing and Closing Costs

Lesson Summary 16: Municipal Agencies

Lesson Summary 17: Construction Issues

Lesson Summary 18: Real Estate Mathematics

Lesson Summary 19: Environmental Issues

Lesson Summary 20: Valuation Process and Pricing Properties

Lesson Summary 21: Commercial and Investment Properties

Lesson Summary 22: Income Tax Issues in the Real Estate Transaction

Lesson Summary 23: Condominiums and Cooperatives

Lesson Summary 24: Property Management

Lesson Summary 25: Human Rights and Fair Housing

Lesson Summary 26: Taxes and Assessments

Lesson Summary 27: Licensee Safety

Part Two: Achieving Success as a Licensed Real Estate Professional

Twelve Steps to Success

Getting Started

The Listing Presentation

Prospecting

Documents

COVID-19

Conclusion

About the Author

Glossary

PREFACE

Success in real estate is largely a matter of knowledge. The right knowledge will take you from a formal introduction to a signature on the listing or rental agreement. You do not want to underestimate your customers. Listening to your clients’ and customers’ needs and analyzing those needs through the prism of knowledge works to find solutions for them.

The successful real estate professional strives to make the client/customer feel that the decision to purchase, sell, or rent is a safe, sensible, and self-enhancing one. The ability to consistently make people feel good about their decisions pays enormous dividends.

As a new real estate agent, you have much to learn and a wealth of information at your disposal. You may be overwhelmed by this information and confused and undecisive about which steps to take to bring you to profit and productivity. As an agent and independent contractor, you are running your own business. You must embrace your real estate career as a business and show a real profit at the end of each transaction.

Real estate can be a rewarding and profitable career, or it can be an exercise in futility, depending on how you approach your participation as a business. This book is designed to guide you through passing the real estate licensing exam; outline the steps necessary to achieve success in real estate; and acquaint you with the forms and procedures used in real estate transactions. Understanding the meaning and use of these forms is instrumental to achieving successful outcomes.

ACKNOWLEDGMENTS

I wish to thank the following people for their help in the development of and making of this book:

• Gary Keller, whose detailed real estate knowledge put forward in his book The Millionaire Real Estate provided insights into how successful agents achieve success

• Floyd Wickham, whose timeless humor, knowledge, and professionalism through his teachings helped me to acquire my dreams in real estate

• Marcia Spada, whose primer on real estate pre-licensing training helped bolster me toward a career as a state-certified real estate instructor

• and the thousands of real estate students who have broadened my knowledge of real estate through their thought-provoking, inquisitive, and incisive questioning, helping me to formulate an instructional approach that is both comprehensive and interactive

• My brother, Rodney Caviness, who, without his artistic contribution and professional design ability to interpret and simplify complex concepts, this work would not have been possible

REASONS YOU WANT TO GET

INTO REAL ESTATE

• You have the determination and can acquire the resources to go for it!

• The recent pandemic has stimulated seller relocation, creating a seller’s market, which is good for generating listing prospects.

• You enjoy the scheduling flexibility. As an independent contractor, you can work full-time or part-time from your home or office.

• Advances in information technology and the internet have made it possible for real estate brokers and agents to make their own schedules.

• The real estate industry’s cyclical nature offers the optimum time to get in at the ground-floor level, which presents a unique opportunity for upward mobility at the outset.

• You will generally be working harder to make a deal in the beginning, and, in the process, will develop a network of contacts who admired your tenacity through the lean years. This will pay huge dividends when the next boom comes along, as you will have the combination of persistence, work ethic, referrals in place, and foresight to know when the current cycle ends and the next one begins.

• You are disciplined and have a plan and goals to start your career with a company that offers good training.

• You know it’s an excellent career choice for those who are self-motivated and hard-working.

• You appreciate the opportunity to own your own business.

• Buying or selling a home or renting an apartment are major, often stressful undertakings in people’s lives. They look to the knowledgeable real estate broker and sales agent who can unravel the complexities and help make the transaction as easy and as rewarding as possible to all the parties. Real estate brokers and sales agents understand and know all aspects of the communities they serve. They know which neighborhoods match their clients’ needs and financial capabilities and are familiar with zoning laws.

• Information technology has made existing agents and brokers more productive.

• Getting a real estate license is an inexpensive and easy process.

• People always need housing and will always need a place to live.

TEN QUESTIONS TO ASK BEFORE

GETTING INTO REAL ESTATE

1. Do you want to own your own business?

2. Do you aspire to become independently wealthy?

3. Are you self-motivated?

4. Do you enjoy working with and helping people?

5. Do you enjoy overcoming challenges?

6. Are you disciplined?

7. Are you goal-oriented?

8. Do you pay attention to detail?

9. Are you hard-working?

10. Are you able to recover from failure?

If your answer to all of these questions is yes, you are well-positioned to achieve success in real estate. Your first task will be passing the salesperson’s exam. It is the goal of this book to help you accomplish this first task and give you a firm foundation on which to build a successful real estate career.

FREQUENTLY ASKED QUESTIONS

Why do I need to be licensed?

Generally, Article 12-A of the New York State Real Property Law provides that anyone who, on behalf of another and for a fee, 1) negotiates a sale, exchange, or rental of real property; 2) collects rent; or 3) negotiates a commercial loan secured by a mortgage must be licensed as a real estate broker.

What is the difference between a real estate broker and a real estate salesperson?

A real estate broker is responsible for the supervision and the conduct of the real estate brokerage business. This individual applies for and holds the license on behalf of the brokerage firm and is known as the principal or representative broker.

A real estate salesperson works for and is supervised by the broker. The salesperson acts as the principal broker’s agent. All listings, although negotiated by a salesperson, are transacted on the behalf of the principal broker.

How do I become a real estate salesperson or broker?

In order to qualify for licensure as a real estate salesperson in New York, an applicant must have satisfactorily completed a seventy-five-hour salesperson qualifying education course in real estate approved by the New York State, Secretary of State and have passed a qualifying examination administered by the New York Department of State.

In order to qualify for licensure as a real estate broker, an applicant must have at least two years of experience as a licensed real estate salesperson; at least three years of experience in the general real estate field; or a combination of the two. The applicant must also meet the minimum points required for the experience type (e.g., buying and selling your own property, managing property owned by your employer), have satisfactorily completed both the qualifying Salesperson course of seventy-five hours and an additional forty-five-hour real estate Broker course as approved by the New York State, Secretary of State, and have passed a qualifying examination administered by the New York Department of State.

Note: Completion of a school-administered proctored examination is required as evidence of successful completion of the qualifying course, in addition to the qualifying examination administered by the Department of State. If you have any questions about the school-proctored examination, contact your school provider.

Once either of these courses has been applied toward a license, they will not expire and can be used for an upgrade.

How do I manage my real estate license online by using eAccessNY?

eAccessNY is a secure, password-protected occupational licensing management system available online 24/7, where you can schedule the NYS licensing exam and renew your license. It is a useful source-provider of information for state-licensed professionals.

How do I obtain a waiver from the 75-hour salesperson or 120-hour broker course requirement?

You must submit a written request stating the waiver you are applying for along with original proof of course completion, a detailed outline listing topics and hours, and a course description. (Home-study/correspondence courses are not accepted.) The pre-licensing Salesperson’s course must include at least 75 hours of classroom instruction and the Broker’s course 120 hours.

If you have a bachelor’s degree with a concentration in real estate, you may qualify for a waiver of the 120-hour qualifying course requirement. You must submit an official transcript with your waiver request.

What are the best strategies for taking the exam?

• Answer every question as you go along. If you do not know an answer, take a guess or mark down the question number on scratch paper and return to it later. (Department of State exam proctors collect all scratch paper upon completion of the exam.)

• Read each question carefully, slowly, and cautiously. The question may ask for a negative answer rather than a positive answer. Do not read into the question; read it as it actually reads. Do not look for deeper hidden meanings. If you have studied, the first answer that occurs to you is generally the correct answer.

• Read every answer before deciding on your choice.

• Note that questions usually contain two distracters (incorrect choices) that are obviously wrong. Spot them, and you have a 50 percent chance of selecting the correct answer. There may be a third distracter that is not as obviously wrong as the other wrong answers, so if you eliminate all three, all that is left is the correct answer! Sometimes you can find the correct answer in the question. There may be a word or words that are in the question that are repeated in the answer.

• Watch out for must and always. If an answer has any exceptions, these words generally indicate a wrong answer.

• Time yourself for maximum results:

o Because every question counts the same, do not spend a lot of time on one unknown answer if it means you are running out of time. Finish the exam and then go back to the questions you either guessed at or could not answer.

o Use your allotted time effectively. You have 1.5 hours (90 minutes) to answer 75 multiple-choice questions for the Salesperson’s exam. You may have time remaining upon completing the exam. Use this time to go back to the answers you are unsure of. When you reread a question, you might see it in a different light.

o Before handing in your exam, review all of your answers. If you spot just one wrong answer, remedying it could make the difference between passing and failing.

o If you are unsure of an answer, go with your first impression.

• Mark your answer sheet carefully.

o The Department of State is using the bubble sheet, which is filled in with a No. 2 pencil. Be sure that your answer sheet is lined up correctly with the each of the questions.

o If you erase, then erase completely. The computerized test reader could pick up a faint mark.

o When marking answers you are certain of (and will not return to later), press down with the pencil on the answer sheet so that the test reader picks up the answer.

What are the continuing education requirements?

All licensees are required to successfully complete 22.5 hours of approved continuing education, including at least three hours of instruction pertaining to fair housing and/or discrimination in the sale or rental of real property and at least one hour of instruction pertaining to the law of agency, except in the case of the initial two-year licensing term for real estate salespersons, in which case two hours of agency-related instruction must be completed. In addition, 2.5 hours must be devoted to the subject of ethical business practices, and at least one hour to recent legal matters.

Any salespersons who successfully completes an approved Broker qualifying course (which requires passing the final exam) within their current term will receive 22.5 hours of continuing education credit for completion of that course. Please note: The broker course does not satisfy the mandatory three-hour fair-housing requirement.

Attorneys admitted to the New York State Bar who are acting as real estate brokers are exempt from this requirement.

Who licenses mortgage loan originators (MLOs)?

To negotiate a mortgage loan on residential property (one-to-four-family building), licensing with the Department of Financial Services is required.

If I am a real estate management company, do I need a real estate broker’s license?

That depends on the services you provide. If you collect rent or place tenants in vacant spaces on behalf of more than one owner/client, the answer is yes. If, on the other hand, your services are strictly maintenance, the answer is no. You are not acting as a fiduciary (not handling another person’s money).

Whom do I call if I am not sure whether I completed my 22.5 hours of continuing education during my license term?

Contact the school(s) you attended. Schools are required by law to maintain course completion records for three years. You may request duplicate certificates from the school(s) in the event you are audited.

What happens if I do not renew my license?

If you do not renew your license, you cannot conduct any real estate activities that require a New York State real estate license in accordance with Article 12-A of the Real Property Law. There are no grace periods that allow you to continue working while not licensed. You have two years from the date your license expires to renew your license. If you fail to renew within that period, you will be required to pass the state written examination. No continuing education will be required to repeat the licensing process again.

When you submit your new salesperson application, you must include the following: your new examination results, application fee, and a copy of your expired license/photo ID card or original proof of completing the Salesperson’s course. If possible, it is better to submit original proof of your Salesperson’s course. If you do not have an original certificate, call the school where you took the course to request another one.

If you are applying for your broker’s license, you must submit original proof of your seventy-five-hour salesperson course and forty-five-hour broker course or a copy of your expired broker’s license.

What commission rate should I expect to receive?

The commission or compensation for a real estate broker is not regulated by statute or regulation; therefore, the amount and terms are negotiable. A real estate broker shall never offer a property for sale or lease without the authorization of the owner. Therefore, prior to the listing or marketing of a client’s real property, it is incumbent upon the real estate broker and the client to mutually agree on a reasonable rate of compensation.

Can brokers pay rebates to customers and offer other incentives?

The payment of cash or offering an incentive to encourage a consumer to do business with a broker is permitted. The Real Property Law prohibits brokers from sharing commissions with unlicensed individuals. It is often misinterpreted as prohibiting the payment of cash or offering of another business-generating incentive to a consumer. The law prohibits a broker from sharing a commission as compensation for an activity that would require a real estate license.

Can real estate brokers keep records in electronic format?

Yes. Both electronic and paper records must be kept on file by the broker for a minimum period of three years.

NEW YORK STATE REAL ESTATE

LICENSURE REQUIREMENTS

• You must be at least eighteen years of age at the time of applying.

• You must have successfully completed a Department of State approved 75-hour qualifying course by passing the 75-hour course examination. There are 75 multiple-choice questions, and the passing grade is 65 percent (70 percent in some real estate training institutions). You must then take the New York State (NYS) real estate licensing exam, for which the passing score is 70 percent for 75 multiple-choice questions.

• You must find a sponsoring NYS licensed real estate broker.

• You must complete a NYS real estate license application, have a sponsoring broker sign the application, and submit it to the New York Department of State with a $55 application fee. (see Figure 1).

• You must pass the New York State real estate salesperson examination. To apply for the examination, you must first establish an account at the Department of State website, https:/appext20.dos.ny.gov.nydos/registration.do?from=loginPage

o Create account.

o Select and register for the exam location, date, and time you prefer.

o Bring a government-issued photo ID to the exam location.

o Bring a basic calculator and two No. 2 pencils with clean erasers.

There are 75 multiple choice questions. The passing grade for the NYS exam is 70 percent. The exam fee is $15, paid at the time of initial exam scheduling, which applies each time the exam is taken. The state exam can be taken as often as necessary until you have successfully passed.

• When you apply for your real estate license, you must have a photo on record at the NYS Department of Motor Vehicles. If you do not have a valid NYS driver’s license or non-driver ID with photo, you must visit a DMV office to have your picture taken before applying for your real estate license.

Figure%201%20%20Salespersons%20License%20Application%20pg1.jpg

Figure 1: Real Estate Salesperson