Real Estate Maryland-Real-Estate-Salesperson Dumps

Net Operating Income (NOI) is the income remaining after deducting operating expenses from the property’s operating income. In appraisal (income approach) and investment analysis, the standard relationships are:

Potential Gross Income (PGI) = income at full occupancy (before vacancies and collection loss).

Effective Gross Income (EGI) = PGI minus vacancy/collection loss plus other income.

Once a building permit is issued, the local building department monitors the construction process through inspections at key stages (foundation, framing, electrical, plumbing, final).

The purpose of these inspections is to ensure that work complies with state and local building codes and safety standards.

Maryland’s pre-licensing course explains that certified building inspectors—not peers or the builder—conduct these inspections.

Only after passing all required inspections will the department issue a certificate of occupancy (CO) confirming code compliance and permitting lawful use of the structure.

Within the Agency/Fiduciary Duties portion of the course, self-dealing is identified as a breach of fiduciary duty that occurs when a licensee has a personal interest in a transaction and fails to disclose it fully and obtain informed consent. Examples include purchasing a client’s property for oneself (or through an undisclosed third party), steering a client to a business in which the licensee has a hidden financial stake, or otherwise placing personal gain ahead of the client’s interests without disclosure. Maryland law requires full disclosure of material interests and adherence to fiduciary duties of loyalty, disclosure, and obedience.

A listing agreement is a legally binding contract that establishes an agency relationship between the seller (client) and the listing broker (agent).

The agreement authorizes the broker to market the property and represent the seller’s interests in finding a ready, willing, and able buyer.

While the salesperson may work directly with the seller, the contractual relationship exists between the broker and the seller—not the individual licensee.

This principle is emphasized in the Maryland course under “Listing Agreements and Buyer Representation.”

Maryland law requires that a licensee acting as a seller’s agent must provide any unrepresented buyer with the "Understanding Whom Real Estate Agents Represent" disclosure at the first scheduled face-to-face meeting about a specific property.

The purpose is to ensure that consumers understand who represents whom before discussing confidential or motivational information.

This rule is clearly detailed in the Maryland Agency Law module of the pre-licensing course.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Maryland Agency Law section.

– Business Occupations and Professions Article §17-530 through §17-534.

– COMAR 09.11.07.01 – Agency Disclosure Requirements.

Maryland recognizes dual agency within a brokerage when the brokerage represents both sides of a transaction. With the informed written consent of both parties, the broker (or branch manager) serves as the dual agent, and the broker may appoint separate associated licensees to represent each party; those appointees are called intra-company agents. Each intra-company agent owes undivided fiduciary duties to their respective client, while the broker maintains neutrality as the dual agent. This structure is specific to Maryland’s agency framework.

Polychlorinated biphenyls (PCBs) are synthetic chemical compounds formerly used as coolants and insulators in electrical equipment, hydraulic systems, and fluorescent-light ballasts. They are toxic, persistent in the environment, and regulated by the U.S. EPA under the Toxic Substances Control Act (TSCA). Maryland’s course covers PCBs among major environmental hazards requiring disclosure or remediation.

Meeting potential buyer clients in-person allows the licensee to establish agency, verify identity, discuss representation agreements, and assess buyer motivation and qualifications. Maryland’s brokerage-operation standards emphasize that the licensee should determine whether prospects are ready, willing, and able to purchase before proceeding, ensuring compliance with agency-disclosure and record-keeping requirements.

In leasing, a covenant is a binding promise or agreement contained within the lease. It can require or restrict certain actions by either the lessor (landlord) or lessee (tenant)—for example, a covenant of quiet enjoyment, a covenant to pay rent, or a covenant to maintain the property. These promises are enforceable under contract and property law.

When an agency relationship ends (expiration, completion, mutual agreement, or termination), certain duties survive: chiefly confidentiality (protecting client confidences and motivations) and accounting (proper handling and return of money, keys, and documents; final accounting for trust funds). Duties such as loyalty and reasonable skill and care do not continue after termination.

References (Maryland Pre-Licensing Core Content):

Maryland 60-Hour Course: “Maryland Agency Law” (scope of fiduciary duties; duties that survive agency termination).

COMAR 09.11.02 (confidentiality and accounting obligations).

When a life estate is measured by the life of a life tenant (Jacob) and the grantor (Janice) specifies that, upon the life tenant’s death, the property passes to a third party, that third party holds a remainder interest (a present, non-possessory future interest). If the property were set to return to the grantor instead, the grantor would hold a reversionary interest.

A tax-deferred exchange, also known as a 1031 exchange, allows investors to exchange one qualifying investment or business property for another “like-kind” property and defer payment of capital gains taxes until the new property is sold.

This provision falls under Internal Revenue Code §1031.

In the Maryland pre-licensing curriculum, this is explained under the “Real Estate Financing and Investment” section to show how investors legally postpone capital gains recognition by following IRS guidelines.

In Maryland, a real estate licensee may only perform brokerage services and be entitled to compensation when a written brokerage agreement exists between the client and the broker.

This agreement must clearly state the broker’s duties, compensation terms, and representation type (buyer, seller, or dual).

Verbal agreements are insufficient to establish an enforceable right to a commission.

A promissory note is a borrower’s written promise to repay a specified amount of money under agreed terms.

A mortgage is the security instrument that pledges real property as collateral for that note.

Together, they form the legal and financial foundation for most real estate loans.

If the borrower defaults, the lender may foreclose on the property under the rights granted by the mortgage.

The Maryland 60-Hour Course explains that while some states use deeds of trust instead of mortgages, Maryland primarily uses mortgages and promissory notes in conventional real estate financing.

In Maryland, when a broker or brokerage firm represents both the buyer and the seller in the same transaction, dual agency may occur only with the informed written consent of both parties.

This consent must be initially obtained when the parties agree to representation and then reaffirmed in writing before either party signs the sales contract.

This ensures both understand the limitations on confidentiality and loyalty that dual agency imposes.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Maryland Agency Law section.

– Business Occupations and Professions Article §17-534.

– COMAR 09.11.07.07 – Consent to Dual Agency.

In Maryland, a redeemable ground rent (ground lease) allows the leasehold tenant to redeem (buy out) the ground rent by paying the statutory redemption amount to the ground rent holder, typically with advance written notice (often 30 days) after a minimum period has elapsed. An irredeemable ground rent cannot be bought out by the tenant. The question’s facts—15 years of payments and the tenant giving 30 days’ notice to buy out—match the characteristics of a redeemable ground lease.

A short sale occurs when the lender agrees to accept less than the total amount owed on the mortgage to release its lien so that the property can be sold.

The lender must approve the sale before closing.

This typically happens when the market value of the property is less than the outstanding loan balance, but foreclosure is avoided.

In the pre-licensing course, short sales are discussed under Financing and Foreclosure Alternatives, highlighting licensees’ duties to disclose the short-sale status to buyers and comply with lender requirements.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Financing and Foreclosure Alternatives section.

– Maryland Real Property Article §7-105.1 (Mortgage Default Remedies).

A buyer representation agreement establishes an agency relationship between a buyer and a broker, outlining the broker’s duties and compensation for assisting the buyer in finding and purchasing a property.

This agreement serves the same purpose as a listing agreement does for a seller—it defines the relationship, responsibilities, and authority between client and broker.

Both agreements are legally binding contracts and must include the terms of representation, duration, and agency disclosures as required by Maryland Real Estate Commission (MREC) regulations.

Maryland practice (as taught in pre-licensing) recognizes a customary 50/50 split of transfer and recordation taxes between buyer and seller, subject to local custom and negotiation. Parties may allocate differently in the contract, and some jurisdictions have varying defaults; however, exam-prep materials present 50/50 as the standard custom unless otherwise agreed.

A group boycott occurs when two or more competitors conspire to refuse to deal with another firm or individual, thereby attempting to eliminate competition.

This is a violation of the Sherman Antitrust Act and the Clayton Act, both covered in the “Ethics and Antitrust” section of the Maryland pre-licensing course.

Examples include two brokerages agreeing not to cooperate with a third brokerage or to exclude another licensee from access to listings.

Maryland law and the National Association of REALTORS® Code of Ethics prohibit any conduct that restricts trade or limits consumer choice.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Fair Housing and Ethics / Antitrust section.

– Sherman Antitrust Act (15 U.S.C. §1).

– Clayton Antitrust Act (15 U.S.C. §12–27).

Under Maryland Agency Law (Business Occupations and Professions Article, Title 17, Subtitle 5), a listing agent represents the seller and owes the seller the fiduciary duties of loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting.

A primary fiduciary obligation is to promote the interests of the client at all times during the transaction, as outlined in the Maryland Real Estate Commission’s Agency Disclosure materials.

While the listing agent must disclose all material facts to all parties (facts that affect value or desirability), the agent’s duty of loyalty and advocacy is owed to the seller client.

Therefore, the correct answer is that a listing agent must promote the client’s interests throughout the entire transaction.

Under “Leases and Property Management,” the course explains that a net lease requires the tenant to pay base rent plus some or all of the operating expenses, such as property taxes, insurance, and maintenance (often abbreviated as T, I, M). Variations include single-net (N), double-net (NN), and triple-net (NNN) leases.

A gross lease has the landlord paying most operating expenses, with the tenant paying a single rent figure. A percentage lease bases part of rent on the tenant’s gross sales (common in retail). A sublease is a transfer arrangement, not a lease type that determines expense responsibility.

References (Course Outline/Study Topics): Maryland 60-Hour Principles and Practices of Real Estate — “Leases and Property Management” (Gross vs. net vs. percentage leases; expense allocations).

The Better Business Bureau (BBB) accepts complaints related to false, misleading, or deceptive advertising practices and can investigate, mediate, or forward concerns to regulatory agencies.

The Maryland pre-licensing course advises licensees that maintaining truthful and transparent advertising is an ethical and legal requirement under both Maryland Real Estate Commission regulations and the Federal Trade Commission (FTC) rules.

Consumers may also contact the Maryland Real Estate Commission (MREC) for license law violations, but general deceptive ad complaints typically begin with the BBB.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Ethical Advertising and Consumer Protection section.

– COMAR 09.11.02.01 – Ethical Standards of Advertising.

– Federal Trade Commission Act, 15 U.S.C. §45.

The financing module defines a Growing Equity Mortgage (GEM) as a fixed-rate loan with scheduled payment increases applied directly to principal, accelerating amortization and reducing total interest over the life of the loan. This differs from negative amortization (where payments don’t cover interest and the balance grows), blanket mortgages (cover multiple parcels with a release clause), and pledged account mortgages (use a pledged savings account to subsidize payments).

In the Environmental Issues and Disclosures section, the course teaches that radon is a naturally occurring, colorless, odorless, radioactive gas that results from the decay of uranium in soil, rock, and water. Radon can migrate into buildings through foundation cracks and openings and accumulate to levels that pose health risks. Licensees must understand radon basics, testing options, mitigation methods, and disclosure responsibilities in transactions.

For pre-1978 residential properties, federal law (Title X) requires disclosure of any known lead-based paint or hazards, provision of the EPA pamphlet, and a 10-day inspection opportunity (unless waived). Licensees must ensure required disclosure forms are completed and disclose known material facts, but they must not state lead exists if they do not actually know. Licensees are not responsible for abatement and must never assist in concealing hazards.

Underground storage tanks (USTs), particularly older ones made of steel, may corrode and leak, releasing hazardous substances such as oil or fuel into the soil and groundwater.

Maryland environmental law and the 60-Hour Course emphasize that sellers must disclose known environmental hazards, and buyers should be aware of potential remediation costs.

The Maryland Department of the Environment (MDE) regulates USTs, requiring proper registration, maintenance, and closure procedures to prevent contamination.

The estates module distinguishes freehold estates (ownership for an indefinite/indeterminable duration, such as fee simple or life estates) from leasehold estates (possession for a definite, limited term under a lease, such as estate for years or periodic tenancy). “Homestead” is a protective legal concept, not a duration type. Therefore, ownership for an indeterminable length of time is a freehold estate.

A contract assignment occurs when a buyer (the assignor) transfers his or her contractual rights to another party (the assignee) before closing.

However, this is only allowed if the original purchase contract permits assignment—that is, if it includes an assignability clause or does not prohibit assignment.

If the contract specifically states “non-assignable” or “assignment requires seller consent,” the assignor must comply with those terms.

This concept appears in the Contracts and Transaction Procedures section of the course.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Real Estate Contracts and Assignments section.

– Maryland Contract Law Principles (General Common Law on Assignability).

In practice and per course guidance, the buyer is responsible for initiating and completing the loan application, arranging the appraisal through the lender, ordering the home inspection, and securing homeowners insurance prior to closing. Although lenders order the appraisal to comply with appraisal independence rules, the buyer is the party who applies for financing and is responsible for ensuring the appraisal, inspection, and insurance are in place to meet loan and contract conditions by closing.

Bulk zoning regulates the intensity of land use—controlling density through standards such as lot size, setbacks, height limits, floor-area ratio (FAR), and open-space requirements. Its primary purpose is to restrict density and prevent overcrowding, not to group similar uses (which is the role of traditional/Euclidean zoning). This is taught in the course’s Land Use Controls and Property Development section.

Maryland’s Code of Ethics and Standards of Practice for real estate licensees is promulgated in COMAR (Code of Maryland Regulations) under the real estate subtitle, but enforcement rests with the Maryland Real Estate Commission (MREC). The Commission investigates complaints and may impose sanctions (education, fines, suspension, revocation) for violations. REALTOR® associations enforce the NAR Code of Ethics, which is separate and contractual to membership, not the state’s legal code.

Under Maryland law, agency relationships are determined by who the licensee represents, not by who pays the compensation.

Even though the buyer’s agent may receive payment from the listing broker via a cooperative compensation (often shared through the MLS), that payment does not make the buyer’s agent an agent of the seller.

The licensee’s fiduciary duties—loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting—belong solely to the buyer, the client under the brokerage agreement.

This principle is detailed under the Maryland Agency Law section of the pre-licensing course.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Law of Agency module.

– Business Occupations and Professions Article §17-530 through §17-534.

– COMAR 09.11.07.01 – Disclosure of Agency Relationships.

In Maryland, earnest money (“trust money”) is disbursed strictly according to the purchase contract and escrow instructions, and a broker must hold it in escrow until: (1) the contract terms specify its release (e.g., upon default or a “non-refundable”/“hard” deposit provision), (2) the parties sign a mutual written release, or (3) there is a court order.

“Hard money” (non-refundable deposit) is contractually designated as the seller’s if the buyer terminates for reasons not protected by a contingency. If the buyer agreed to hard money and then cancels due to a low appraisal after waiving or not having an appraisal/financing contingency, the deposit is typically forfeited to the seller per the contract.

If the buyer properly invokes an appraisal (or related financing) contingency (Option A), the earnest money is generally returned to the buyer, not disbursed to the seller.

Conversion by an escrow agent (Option C) is misconduct, not a lawful disbursement.

If the seller wrongfully cancels (Option D), the buyer usually receives the deposit back and may pursue additional remedies.

References (Maryland Sources / Pre-Licensing Core Content):

Maryland 60-Hour Course: “Closing the Real Estate Transaction” and “Real Estate Brokerage Operations” (trust/escrow money handling; release conditions; default and liquidated damages).

Business Occupations & Professions (Maryland Real Estate Brokers Act), Title 17 (broker escrow duties; release only per contract, mutual release, or court order).

COMAR 09.11.01 (Trust/escrow accounts), COMAR 09.11.02 (standards of practice; prohibition on conversion).

PITI is the standard mortgage-payment acronym: Principal (loan balance reduction), Interest (finance charge), Taxes (property taxes, typically escrowed), and Insurance (homeowner’s and, when applicable, mortgage insurance). Lenders use PITI to calculate housing ratios and total debt-to-income requirements during underwriting—core content in the financing section of Maryland’s pre-licensing course.

Under Maryland’s Fair Housing laws (Title 20, State Government Article), limited exemptions exist for owner-occupied buildings with four or fewer rental units.

In these cases, the owner may exercise limited discretion in selecting tenants; however, race discrimination is never permitted.

The pre-licensing course explains that while federal law (the Fair Housing Act) allows some exemptions, Maryland law still prohibits discriminatory advertising and extends protections to include sexual orientation, gender identity, marital status, and source of income.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Maryland Fair Housing Law section.

– State Government Article, Title 20, §20-704.

The cost approach to appraisal is based on the principle of substitution, which assumes that a buyer will not pay more for a property than it would cost to purchase a similar site and construct a comparable building with equal utility.

The process involves:

Estimating the value of the land as if vacant,

Estimating the current cost to reproduce or replace the improvements,

Subtracting depreciation (physical, functional, or external), and

Adding the land value to the depreciated improvement cost.Thus, the cost approach measures the cost to acquire the land and construct a reproduction or replacement of the improvements—making option A correct.

The course stresses that licensees must protect a seller’s privacy and personal security when marketing property. Photos that display personal possessions such as firearms, medications, financial documents, or valuables should never be published. Revealing these items can create a safety and liability risk for the seller and may violate professional ethical standards regarding confidentiality.

Therefore, the image showing the owner’s collection of antique guns should not be made public.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices of Real Estate Pre-Licensing Course, Listing and Marketing Property section.

– Maryland Code of Ethics for Real Estate Licensees, COMAR 09.11.02.01 et seq.

The buyer determines the amount of the earnest money deposit, since it is the buyer’s good-faith indication of intent to perform under the contract.

The licensee can explain customary local practices and typical deposit amounts but may not set or require a specific figure.

The offer, including the deposit amount, becomes binding only when accepted by the seller.

This is emphasized in the Contracts and Offer Preparation module, which explains that the buyer controls all offer terms, including price, contingencies, and deposit.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Real Estate Contracts section.

– Business Occupations and Professions Article §17-322 (Improper Brokerage Practices).

While a client (in this case, Ben) may terminate a listing agreement at any time, the termination does not necessarily release the client from contractual obligations that have already been incurred.

A listing agreement is a bilateral contract between the seller and the broker. If a client ends the agreement without cause, the broker may still be entitled to compensation for expenses or commissions if the property sells to a ready, willing, and able buyer who was introduced during the term.

The Maryland course explains that unilateral termination may constitute breach of contract, depending on the agreement’s terms.

In the “Math for Real Estate and Practical Applications” portion, area and measurement conversions are foundational. An acre is defined as 43,560 square feet. Option B (“43,560 feet”) is incorrect because it omits the necessary square unit. The course emphasizes accurate units and conversions for calculations involving land area, price-per-square-foot/acre, and legal descriptions.

References (Course Outline/Study Topics): Maryland 60-Hour Principles and Practices of Real Estate — “Math for Real Estate” (Area/acre conversions; unit accuracy).

Maryland agency law requires that licensees disclose and explain brokerage relationship options and obtain a signed brokerage agreement before providing client-level services. Prior to entering an exclusive right to sell, the licensee must present available forms of representation (e.g., exclusive right to sell vs. exclusive agency) and explain the duties, compensation, and implications of each so the seller can make an informed choice. Listing or marketing cannot lawfully proceed as client-level services without the executed agreement and required disclosures.

A syndicate is an association of two or more investors who unite their capital to own or develop real estate projects.

When investment interests are offered to the public, the syndicate becomes subject to federal securities regulations administered by the Securities and Exchange Commission (SEC).

Maryland’s pre-licensing course explains that syndications may take the form of limited partnerships, corporations, or real-estate investment trusts (REITs), but the unifying element is pooled investor participation under securities law oversight.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Forms of Ownership and Syndication section.

– Securities Act of 1933 and 1934 (SEC Regulations).

The course’s Environmental Issues content explains that while owners can perform basic prevention (reducing moisture, sealing entry points, monitoring for signs, installing vapor barriers), the application of many pesticides—particularly restricted-use pesticides and termite treatments—must be performed by properly licensed pest management professionals due to health, safety, and regulatory requirements. Real estate professionals should know when to recommend qualified, licensed contractors for inspections and treatment and understand disclosure duties regarding known infestations and prior treatments.

Under Maryland’s agency law, a licensee must establish a relationship of trust, confidence, and loyalty with a client.

Meeting face-to-face helps the agent explain agency relationships, present the Understanding Whom Real Estate Agents Represent disclosure, and begin building rapport and confidence, which are critical in fiduciary relationships.

As emphasized in the Brokerage and Agency module, personal contact helps ensure informed consent and professional transparency—never to collect personal demographic or financial data outside proper procedures.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Law of Agency and Broker-Client Relationships section.

– Business Occupations and Professions Article §17-530 through §17-534.

A land trust is a type of living trust in which real property is the only asset placed into the trust.

Under a land trust, the trustee (fiduciary) holds legal title to the property, while the beneficiary retains the rights to control, manage, and receive income or proceeds from the property.

The Maryland pre-licensing course explains that land trusts are commonly used for privacy, estate planning, and avoiding probate, since the property is owned and transferred through the trust rather than by individual deed.

Under sub-agency, a cooperating broker or licensee assists the listing broker in selling the property and represents the seller as a sub-agent of the listing broker.

A key drawback is that the listing broker is legally responsible for the sub-agent’s actions because the sub-agent owes fiduciary duties to the same principal (the seller).

Any misrepresentation, negligence, or violation by the sub-agent can expose the listing broker to disciplinary action or civil liability.

This is why many Maryland brokers now prefer buyer agency over sub-agency.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Agency Relationships and Sub-Agency section.

– Business Occupations and Professions Article §17-534.

Maryland law establishes that the Maryland Real Estate Commission has nine members: five must be licensed real estate professionals (one from each of Maryland’s five geographic regions) and four must be consumer members who are not engaged in the real estate business. This composition ensures both industry expertise and public representation. The pre-licensing course presents this under Maryland License Law and MREC structure, aligning with the Maryland Business Occupations and Professions Article, Title 17 (§17-202).

Under COMAR 09.11.02.33A(5) and the Maryland Code of Ethics, a licensee must promptly present all written offers to the property owner until an offer has been accepted. After acceptance, new offers need not be presented unless the seller specifically requests. This rule ensures fair treatment and full disclosure to clients while maintaining professional standards of practice.

In the sales comparison approach, after making market-supported adjustments to comparable sales, the appraiser engages in reconciliation—a professional judgment process that weighs the quality and relevance of each comparable (e.g., similarity, extent and reliability of adjustments, data verification) and does not simply average the indicated values.

Bracketing is a selection technique (choosing comps slightly superior and inferior to the subject), and conformity is an appraisal principle (value is maximized when properties are similar). Neither is the final weighing process.

Under the Internal Revenue Code (IRC §168), depreciation is a method for recovering the cost of income-producing property over time.

Residential income-producing properties (such as apartment buildings) are depreciated over 27.5 years.

Commercial income-producing properties (such as office buildings) are depreciated over 39 years.These timelines are based on the Modified Accelerated Cost Recovery System (MACRS) used for tax purposes.This concept is included in the Maryland Pre-Licensing Course within the Appraisal and Valuation section, to ensure licensees understand property valuation and investment considerations.

For pre-1978 residential housing, federal law (Title X) requires the lead-based paint disclosure, EPA pamphlet delivery, and an opportunity for a lead assessment. This is a material, mandatory disclosure. Medical history of prior occupants (e.g., HIV, Ebola) is not disclosed and implicates fair housing and privacy. Number of prior owners is not a material defect by itself.

Escheat is the government’s power to take title to property when someone dies intestate (without a will) and no heirs or creditors can be found. This differs from eminent domain (the government’s power to take private property for public use with just compensation) and from a taking (the act under eminent domain). A life estate is a private freehold interest measured by a person’s lifetime, not a government power. These core definitions are covered in the Real Property and the Law module.

The appraisal principle of supply and demand explains market power: when supply increases relative to demand (more homes on the market), conditions shift toward a buyer’s market, where buyers hold greater negotiating power and prices tend to soften rather than rise. Sellers generally cannot demand more in a high-supply environment.

In subdivision and zoning review, density is evaluated using physical and regulatory site controls—minimum lot size, setbacks, yard requirements, lot coverage, height limits, open space ratios, and boundaries—to determine how many dwelling units may be placed per acre and how they’re arranged. While property values and federal approvals can be relevant to other processes, density determinations rest primarily on local zoning metrics such as setbacks and boundaries.

The loan-to-value (LTV) ratio compares the loan amount to the property’s appraised value or purchase price, whichever is less. An LTV of 90/100 (or 90%) means the borrower’s loan equals 90% of the property’s value, and the borrower provides a 10% down payment.

Lenders use the LTV ratio to assess risk and determine if mortgage insurance is required. Maryland’s pre-licensing course explains this formula in the “Real Estate Financing” section under “Loan Underwriting and Ratios.”

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), enacted in 1980 and commonly known as “Superfund,” authorizes the Environmental Protection Agency (EPA) to identify and clean up sites contaminated with hazardous substances.

CERCLA also establishes liability for potentially responsible parties (PRPs)—including current and past owners, operators, and those who arranged for disposal of hazardous substances.

Maryland’s pre-licensing course covers CERCLA as a federal regulation that affects real estate transactions involving contaminated properties, as buyers and sellers must be aware of any cleanup responsibilities before transfer.

In real property conveyance, certain interests and transfers occur by operation of law and therefore supersede contrary provisions in a will. Common examples include joint tenancy with right of survivorship, tenancy by the entirety, life estates with a named remainderman, and properly created transfer-on-death/beneficiary designations. These interests vest automatically at death and are not controlled by the decedent’s will.

“Intestate” refers to dying without a valid will and does not itself take precedence over a will. The heirs’ wishes have no legal effect against properly vested interests. Therefore, where applicable, operation of law controls over will terms regarding those interests.

Licensees owe duties of honesty, good faith, and disclosure of material facts. A planned freeway immediately behind the property is a material fact affecting value and desirability and must be disclosed to prospective buyers. If a seller instructs the agent to conceal material facts, the agent must refuse to withhold such information; if the seller insists, the appropriate course is to decline or terminate the listing rather than participate in misrepresentation.

Option C shows conflicting promises to the client; the correct ethical and legal approach is to require disclosure as a condition of representation (Option D).

Puffery refers to subjective statements of opinion or sales talk that a reasonable person would not take as a factual representation.

Phrases like “best views,” “dream home,” or “finest neighborhood” are considered puffing, not misrepresentation.

Maryland’s pre-licensing course distinguishes puffery (legally permissible) from misrepresentation, which involves false statements of material fact that can lead to disciplinary action or liability.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Ethical Conduct and Misrepresentation section.

– Maryland Business Occupations and Professions Article §17-322 (Grounds for Disciplinary Action).

The agency module explains that agency may be created by express agreement (written or verbal) or by implication through conduct. When parties act as if an agency relationship exists—for example, a licensee regularly advising and assisting buyers without a signed agreement—this can form implied agency. Because no express (written or oral) agreement exists in this scenario, the relationship described is implied agency, created by the parties’ behavior and course of dealings.

In the Fair Housing and Ethics module, the course emphasizes that unlawful housing discrimination often occurs in subtle or less visible forms, including steering, disparate impact, selective marketing, inconsistent application of qualifiers, and micro-level decision-making that the public may not observe. The fact that discrimination is illegal does not eliminate hidden practices; therefore, practitioners must know the protected classes, recognize subtle violations, and implement consistent, documented, and neutral business practices.