NY Real Estate Exam NY Real Estate Contracts & Closings 2

Question 1

What is the role of a title company in a NY real estate closing?

Accepted Answer

To conduct a title search, issue title insurance, and ensure clear title transfer from seller to buyer

Answer

Title companies search public records for liens, judgments, and encumbrances, resolve title issues, issue title insurance protecting against future claims, and facilitate the closing process.

Question 2

What is a certificate of occupancy (CO) and why is it important in NY?

Accepted Answer

A document from the building department certifying that a building complies with codes and may be legally occupied for its stated use

Answer

In NY, especially NYC, the CO specifies the legal use and occupancy of a building. Changes in use, alterations, or new construction require an updated CO. Properties without proper COs can be difficult to finance or sell.

Question 3

What is a cooperative (co-op) apartment in New York?

Accepted Answer

A form of ownership where buyers purchase shares in a corporation that owns the building, along with a proprietary lease for their unit

Answer

In a co-op, residents own shares of stock in the cooperative corporation rather than real property. The corporation owns the building, and shareholders have proprietary leases for their units. Board approval is required for sales.

Question 4

What is the difference between a co-op and a condo in New York?

Accepted Answer

Co-op owners hold shares in a corporation; condo owners hold real property with individual deeds. Co-ops require board approval for sales; condos generally do not

Answer

Condos convey real property ownership with deeds, allowing easier financing and transfer. Co-ops involve corporate share ownership with proprietary leases, typically requiring board approval for sales and imposing stricter financial requirements.

Question 5

What is a flip tax in NYC co-ops?

Accepted Answer

A fee charged by the co-op corporation when shares are transferred, typically paid by the seller as a percentage of the sale price

Answer

Flip taxes (transfer fees) are common in NYC co-ops, typically ranging from 1-3% of the sale price. They generate revenue for the cooperative corporation and are usually the seller's responsibility per the building's proprietary lease.

(NY Real Estate Exam) New York Real Estate Exam Practice Test

(NY Real Estate Exam) New York Real Estate Exam Practice Test

NY Real Estate Exam NY Real Estate Contracts & Closings 2