Massachusetts Academy of Real Estate

150 Wood Road Suite 104

Braintree, MA 02184

781-848-1404

info@massrealestateclasses.com

 

© 2019 Massachusetts Academy of Real Estate. All Rights Reserved.

  • YouTube Black Round
  • b-facebook
  • Twitter Round

 
The two outlines are attached as Word Documents on the right hand side of the page

NATIONAL REAL ESTATE EXAMINATION CONTENT SPECIFICATIONS

  1. Property ownership (Salesperson 8%; Broker 10%)

    1. Real versus personal property; conveyances 


    2. Land characteristics and legal descriptions

      1.  Types of legal descriptions; Metes and bounds, Lot and block, government survey 
( 155)

      2. Measuring structures 
Gross living Area , above grade

      3. Livable, rentable, and usable area 
(Gross Livable Area)

      4. Land Measurement 
155

      5. Mineral, air, and water rights 
55

    3. Encumbrances and effects on property ownership

      1. Liens 
135

      2. Easements and licenses 
137-138

      3. Encroachments 
139

      4. Other potential encumbrances of title 
134-140

    4. Types of ownership

      1. Tenants in common 
60

      2. Joint tenancy 
60

      3. Common‐ interest ownership 
62-65
        a) Timeshares
        b) Condominiums
        c) Co‐ops 


      4. Ownership in severalty/sole ownership 
60

      5. Life Estate ownership 
59

      6. Property ownership held in trust (BROKER ONLY) 


  2. Land use controls and regulations (Salesperson 5%; Broker 5%)

    1. Government rights in land 136

      1.   Property taxes and special assessments 
136

      2.   Eminent domain, condemnation, escheat 
140

    2. Government controls

      1.   Zoning and master plans 
139

      2.   Building codes 
140

      3.   Regulation of special land types
        
a) Flood zones  -Flood Plain  250K max insurance
        
b) Wet lands 
-  first 200 feet from flowing water regulated
                               First 100 feet from vegetated are a buffer zone

      4.   Regulation of environmental hazards
         
a) Types of hazards
         
b) Abatement and mitigation

          c) Restrictions on contaminated property 


    3. Private controls   ( 139)

      1.   Deed conditions or restrictions 


      2.  Covenants, conditions, and restrictions (CC&Rs) 


      3.   Homeowners association regulations 


 

  1. Valuation and market analysis (Salesperson 7%; Broker 7%)

    1. Appraisals

      1.   Purpose and use of appraisals for valuation 
(221)

      2.  General steps in appraisal process 
( 232)

      3.   Situations requiring appraisal by certified appraiser 
(
         

    2. Estimating Value

      1.   Effect of economic principles and property characteristics 


      2.   Sales or market comparison approach 
(228)

      3.   Cost approach 
(229)

      4.   Income analysis approach 
(228)

    3. Competitive/Comparative Market Analysis

      1.   Selecting comparables 
(221/228)

      2.   Adjusting comparables 
(233)

  2. Financing (Salesperson 10%; Broker 8%)

    1. Basic concepts and terminology

      1.   Points 
(201)

      2.   LTV 
(182)

      3.   PMI 
(182/201)

      4.   Interest 
(200)

      5.   PITI 
(183)

      6.   Financing instruments (mortgage, promissory note, etc.) 
(184)

    2. Types of loans

      1.   Conventional loans 
( 187)

      2.   FHA Insured loans 
(188)

      3.   VA guaranteed loans 
(188)

      4.   USDA/rural loan programs 
rural 100% financing (196)

      5.  Amortized loans ( table provided)

      6.  Adjustable rate loans (199)

      7.  Bridge loans (198)

      8.  Owner Financing (Land Contract/ Contract for Deed) (195)

    3. Financing and Lending

      1.  Lending Process Application

      2. Financing and Credit Rules

          a. Truth-in-Lending  (193)
          b. RESPA ( 193)
          c. Equal Credit Opportunity Act ( 193)
          d. CFPB/TRID rules on Financing and Risky Loans (193)
        
       3. Underwriting
          a. Debt Ratios ( 184)
          b. Credit Scoring ( 184)
          c. Credit history  ( 184)

  1. General principles of agency (Salesperson 13%; Broker 11%)

    1. Agency and non‐agency relationships ( Disclosure)

      1.         Types of agents and agencies 
(83-89)

      2.         Other brokerage relationships (non‐agents) 

                    a) Transactional 
(84)
                    b) Facilitators 


    2.         Agent’s duties to clients

      1.         Fiduciary responsibilities 
( OLDCAR)

      2.         Traditional agency duties (OLDCAR) 


      3.         Powers of attorney and other delegation of authority 

                (Attorney in Fact)

    3.         Creation of agency and non‐agency agreements; disclosure of conflict of interest  ( 15)

      1.         Agency and agency agreements
 ( 87)
        a) Key elements of different types of listing contracts
        
b) Key elements of buyer brokerage/tenant representation   
              contracts 


      2.         Disclosure when acting as principal or other conflict of interest 
(15)

    4. Responsibilities of agent to customers and third parties, including disclosure, honesty, integrity, accounting for money 


    5.         Termination of agency

      1.         Expiration 


      2.         Completion/performance 


      3.         Termination by force of law 
( Force Majure)

      4.         Destruction of property/death of principal 


      5.         Mutual agreement 


  2. Property disclosures (Salesperson 6%; Broker 7%)

    1. Property condition (43)

      1. Property condition that may warrant inspections and surveys 


      2. Proposed uses or changes in uses that should trigger inquiry about public or private land 
use controls 


    2.         Environmental issues requiring disclosure 
(32-36)

    3.         Government disclosure requirements (LEAD) 


    4. Material facts and defect disclosure 
(31-32)

       

  3. Contracts (Salesperson 17%; Broker 18%) 


A.     General knowledge of contract law

  1. Requirements for validity 
(112)

  2. Factors affecting enforceability of contracts 
(112)

  3. Void, voidable, unenforceable contracts 
(113-114)

  4. Rights and obligations of parties to a contract 


  5. Executory and executed contracts 
(114)

  6. Notice, delivery and acceptance of contracts 
(110-111)

  7. Breach of contract and remedies for breach 
(115)

  8. Termination, rescission and cancellation of contracts 


  9. Electronic signature and paperless transactions 
 (110)

  10. Bilateral vs. unilateral contracts (option agreements) 
(114)
     

 

  1. Contract Clauses, including amendments and addenda 


  2. Offers/purchase agreements  (111)

    1. General requirements 


    2. When offer becomes binding 
(110-111)

    3. Contingencies 
(111)

    4. Time is of the essence 
(111)

  3. Counteroffers/multiple offers 


  1. Counteroffers 
(111)

  2. Multiple offers 
(111)


Leasing and Property Management (Salesperson 3%; Broker 5%)

VIII. Leasing

  1. Basic concepts/duties of property management 
(119)

  2. Lease Agreements 
(117-119)

  1. Types of leases, e.g., percentage, gross, net, ground 


  2. Key elements and provisions of lease agreements 


C.         Landlord and tenant rights and obligations (117) ( 29)

  1. Property manager’s fiduciary responsibilities 
(119)

  2. ADA and Fair Housing compliance in property management 
(120)

  3. Setting rents and lease rates (BROKER ONLY) 


     

IX. Transfer of Title (Salesperson 8%; Broker 7%)

  1. Title Insurance  (159-161)

    1. What is insured against 


    2. Title searches, title abstracts, chain of title 


    3. Marketable vs insurable title 


    4. Potential title problems and resolution 


    5. Cloud on title, suit to quiet title (BROKER ONLY) 


  2. Deeds  ( 153-159)

    1. Purpose of deed, when title passes 


    2. Types of deeds and when used 


    3. Essential elements of deeds 


    4. Importance of recording 


  3. Escrow or closing; tax aspects of transferring title to real property

    1. Responsibilities of escrow agent 
( 114-115)

    2. Prorated items 


    3. Closing statements/TRID disclosures 
(192)

    4. Estimating closing costs 


    5. Property and income taxes 


  4. Special processes (190)

    1. Foreclosure 


    2. Short sale 


  5. Warranties

    1. Purpose of home or construction warranty programs 


    2. Scope of home or construction warranty programs 


 

  1. Practice of real estate (Salesperson 13%; Broker 14%)

    1. Trust/escrow accounts (14)

      1. Purpose and definition of trust accounts, including monies held in trust accounts 


      2. Responsibility for trust monies, including commingling/conversion 


    2. Federal fair housing laws and the ADA  (Chart/92-94)

      1. Protected classes 


      2. Prohibited conduct (red‐lining, blockbusting, steering) 


      3. Americans with Disabilities (ADA) 


      4. Exemptions 


    3.  Advertising and technology

      1. Advertising practices
        a) Truth in advertising
        
b) Fair housing issues in advertising 


      2. Use of technology
        
a) Requirements for confidential information
            ( Real Estate Office should have a Written Information security Program in place to protect any personal information collected (WISP)
        
b) Do‐Not‐Call List 

         

    4. Licensee and responsibilities (13)

      1. Employee 


      2. Independent Contractor 


      3. Due diligence for real estate transactions 


      4. Supervisory responsibilities (BROKER ONLY) 

        a) Licensees 

        b) Unlicensed personnel 


    5.  Antitrust laws (82)

      1. Antitrust laws and purpose 


      2. Antitrust violations in real estate 


  2. Real estate calculations (Salesperson 10%; Broker 8%)

    1. Basic math concepts

      1. Loan‐to‐value ratios 


      2. Discount points 


      3. Equity 


      4. Down payment/amount to be financed 


    2. Calculations for transactions

      1. Property tax calculations 


      2. Prorations 


      3. Commission and commission splits 


      4. Seller’s proceeds of sale 


      5. Buyer funds needed at closing 


      6. Transfer fee/conveyance tax/revenue stamps 


      7. PITI (Principal, Interest, Taxes and Insurance) payments 


    3.  Calculations for valuation, rate of return (BROKER ONLY)

      1. Net operating income 


      2. Depreciation 


      3. Capitalization rate 


      4. Gross Rent and gross income multipliers 


OUTLINE :  MASSACHUSETTS SECTION OF THE EXAMINATION 

( 40 Questions)

 

STATE PORTION (MASSACHUSETTS STATE REAL ESTATE LAWS AND REAL ESTATE BOARD RULES)

Duties and Powers of the Board of Registration of Real Estate (2 items)

 

1. Examination of records 7-10

2. Hearings and appeals

3. Sanctions
     a. Fines
     b. License suspension and revocation

 

Licensing Requirements (4 items)

1. Activities requiring a license (3)

2. Types of licenses a. Active, inactive, and expired (4-6)

3. Eligibility for licensing (4)

4. License renewal and continuing education (6)

5. Board notifications (11)

6. Surety bonds (5)

 

Requirements Governing Licensees (14 items)

1. Advertising (14)

2. Broker/salesperson relationship (11)

3. Commissions (Procuring Cause) Co-Broke (46) Notes from board

4. Disclosures

  a. Consumer/Licensee Relationship (Agency Disclosure)

  b. Conflict of interest (15)

  c. Rental fee disclosures (45)

5. Agency and Non-Agency Relationship (Disclosure form)

6. Handling of documents (Broker) 3 years

7. Handling of monies ( 14)

8. Maintenance of place of business

9. Record Keeping ( 3 years) (6-7)

10. Rentals (45) ( 23032)

11. Legal Advice –(16) Lawyers do P&S

12. Home inspectors--licensee responsibility (44)

 

Additional Topics (20 items)

1. Transfer stamps (Paid by the Grantor) ( 48) Board example

2. Massachusetts Fair Housing Laws (39-40/93-95/Handout)

3. Property taxes (Town assessor issues annually) ( 40)

4. Landlord/tenant relationships (28-32)

5. Zoning and land-use regulations

  a. State Sanitary Code ( Code requiring conditions and occupancy) (31)

6. Ownership

   a. Condominiums, Cooperatives, and Timeshares (62)

   b. Easements (62)( 138)

   c. Adverse Possession (Oceans/20 years in Massachusetts) (163)

   d. Riparian Rights ( Flowing water) ( 56)

   e. Registered Land ( Land Court/Action to Quiet Title/Torrens System) (46) (164)

   f. Deeds and closings (154-161)

   g. Homestead ( 500k Protection in equity/125K in not filed) (47)(164)

 

7. Legal descriptions (156)

 

8. Contracts

   a. Offer to Purchase ( McCarthy v Tobin) (112)

   b. Purchase and Sale agreement (Attorney finishes the deal/copies to be delivered)

   c. Statute of Frauds ( MYLEGS) requires certain contacts to be in writing) (111)

   d. Leases (117)

   e. Listing and Buyer Agreements (88)

   f. Electronic signatures (MEUTA) acceptable in Mass (111)

 

9. Finance, foreclosure, and insurance

 

10. Massachusetts Consumer Protection Act  (93A) ( 32)

   a. Property disclosures (93A-known material defect)

   b. Misrepresentation ( Accidental misstatement could be 93A violation)

   c. Other provisions

   d. Sanctions and enforcements (8-10)

   e. Psychologically impacted property (46)

   f. Enforcement ( RE Board) (7)

 

11. Hazardous materials

   a. Lead  ( MGL 111)  ((23-29)

   b. Asbestos ( Disclosure required/ ( 35)

   c. Fuel storage (removal with permits from the Fire Department)(34)

   d. Massachusetts Superfund Law 21E (34)

 

12. Environmental issues

   a. Radon (Test when basement used/ledge in area) (35)

   b. Private sewage disposal ( Title V) ( 35)

   c. Smoke and carbon monoxide detection (signed by local Fire Chief) (47)

   d. Wetlands and rivers protection. ( 36)