Licenses for real estate brokers and salespersons are granted after the exam by each state. The problem that creates is that every state has its own laws governing real estate procedures, practices, and license law. Real estate laws are ever changing either by legislative action or court decree. Research your state’s laws!
Agency law
Agency law is the law that governs the relationship between a client and an agent, in this case a buyer or seller and you their real estate agent. Every state has its own version of how it defines this relationship. Of all the state-specific exam information, agency law is the most complicated and the most important. Look for what your state has to say about these topics:
Agency disclosure
Buyer agency
Buyer agency agreements
Dual agency
Listing agreements (including net listings)
Transactional or facilitating brokerage
Any other type of permitted or prohibited agencies in your state
Fair housing
Most fair housing laws come from the federal government. Many states, however, and some large cities, have supplemented the federal regulations with their own. In the case of two different laws covering the same thing, the stricter law applies. Check out
Protected classes
Exceptions to the exceptions
Additional prohibited activities
License law
Every state has its own procedures for obtaining and maintaining a real estate license. Find out everything you can about your state’s licensing law. Something as minute as knowing the fee for filing a change of address has been asked on exams. Check online for your state’s laws.
Limitations on land use
A variety of local governmental controls govern how you use your property. Questions you may want to ask about local regulations include the following:
What board or agency adopts and amends the zoning ordinance?
What board or agency grants variations from the zoning ordinance?
What local procedures are required for approval of a subdivision and who or what board or agency gives the approval?
What are the statutory time limits for protesting deed restriction violations?
Are any statewide historic preservation programs or environmental review laws in effect?
Does your state require you to know something about construction?
Money stuff
Money makes the world go round, including the world of real estate. A few things that you may want to check out in your state with respect to money issues include:
State-sponsored mortgage loan or guarantee programs that may make money available to homebuyers under favorable conditions like lower-than-normal interest rates.
Special incentive, rebate, or exemption programs for property taxes, such as a senior citizen tax exemption.
How you protest your property tax assessment.
Ownership rights, forms, and theories
You may want to check out the following ownership issues in your home state:
The applicability of the following terms in your state: community property, curtesy, dower, and homestead.
Whether your state recognizes the right of survivorship in joint tenancy.
Whether the terms town house and condominium mean the same thing.
If your state is a title theory or lien theory state.
Whether your state uses tenancy by the entirety or some other form of ownership specific to married couples.
Property disclosure
The issue of what must be disclosed to the customer, which in most cases is the buyer, can vary. As an agent, you may want to check out the following responsibilities of an agent and owner:
Latent defects
Material defects
Stigmatized property
Megan’s Law
Disclosure procedures
Penalties
Special environmental hazards such as earthquake prone areas
Tenants’ rights and rent control
Check out any laws in your state that specifically guarantee certain protections to tenants in rental buildings. These types of laws can cover anything from placement of window guards and other security features to notification about rent increases. Pay particular attention to the number of units a building must have for the laws to apply.
The other thing to check out is whether your state or any municipalities in your state have laws that control rental rates and rent increases. This refers to control over rents in privately owned rental buildings. Check out what the rules are and to what buildings or tenants they may apply. And be aware that even within the same state, two ways for controlling rents may be in effect.
Transferring ownership involuntarily
Two state-specific factors to check out regarding the loss of property against your will are
The statutory time period needed to claim adverse possession or prescriptive rights against someone else’s property.
The laws of descent, which govern the distribution of your estate if you die intestate (without a will). Because as an agent you may help heirs dispose of real estate that they’ve inherited, many states want you to know something about these laws.
Voluntary transfer of ownership
Perhaps the most important item you need to check out for exam and for practical purposes is to what extent you’ll be involved in the legal side of things. In some places, real estate agents handle most, if not all, of the work in actually transferring ownership of the property from one person to another. In other parts of the country, attorneys take over after an offer is accepted.
The specific things that you need to check out for your state’s exam include:
The type of deed most commonly used.
Requirements for a valid deed. These can vary a little from one state to another.
The type of property description most commonly used in a deed.
The use of title insurance, abstract of title, or other systems for certifying marketable title to the property.
Who pays what closing costs.
Who owns the property on the day of closing.
Who’s responsible if the property is destroyed while under contract for sale.
Whether property transfers commonly close in escrow.
