Pass the Real Estate Maryland Real Estate Maryland-Real-Estate-Salesperson Questions and answers with ExamsMirror

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.

Bracketing is an appraisal technique used in the sales comparison approach.

An appraiser selects comparables (“comps”) that are both superior and inferior to the subject property in key features (size, amenities, condition, etc.) to ensure the subject’s value falls within a supported range.

This method provides a balanced and realistic market value estimate.

The Maryland pre-licensing course explains bracketing in the “Real Estate Appraisal and Valuation” section to prepare students for both state and national exam questions on comparative analysis.

Agreeing—or even coordinating—on a minimum commission or listing fee among competing brokerages is price fixing, a per se violation of antitrust law. Maryland pre-licensing emphasizes that competitors must not discuss or set commission rates, fees, or pricing policies; each brokerage must independently determine its fees.

Group boycotting = competitors conspiring to refuse to deal with a party.

Market allocation = dividing territories/customers.

Tie-in arrangement = conditioning sale of one product/service on purchase of another.

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

Maryland 60-Hour Course: “Real Estate Brokerage Operations” (antitrust compliance: price fixing, market allocation, group boycotts, tie-ins).

Sherman Antitrust Act principles as incorporated in Maryland real estate education.

COMAR 09.11.02 (ethical conduct; avoiding anticompetitive practices); MREC guidance on commissions being negotiable and set independently by each brokerage.

Under Maryland’s Code of Ethics and Professional Conduct, licensees must act with honesty, integrity, and reasonable skill and care.

If a licensee lacks experience in a specialized area, they must disclose that fact to the client and either refer the client or seek assistance from a qualified professional—with the client’s informed consent.

By being transparent and collaborating with an experienced commercial broker, Manny fulfills his ethical obligation of competence and disclosure while protecting his client’s interests.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Ethics and Professional Conduct section.

– COMAR 09.11.02.01 – Code of Ethics for Real Estate Licensees.

– Business Occupations and Professions Article §17-322.

An option contract gives the optionee (Monique) the exclusive right to purchase a property within a specified period and under specific terms, but not the obligation to do so.

When properly executed and supported by consideration (the option fee), the option is a binding contract on the property owner (Mark) and any subsequent owners who take title with constructive notice of the existing option.

Therefore, when Monique exercises her valid option within the option period, Shelly must honor it—the property must be sold to Monique under the agreed terms.

In Maryland, buyers have the right to receive full disclosure of any additions, alterations, or improvements made to a property. This is crucial because such modifications may have required building permits and inspections under state and local building codes.

A buyer wants to know whether permits were obtained to ensure that:

The work was done legally and safely,

It meets local code requirements, and

There are no future liability or resale issues.

Unpermitted work can lead to enforcement actions or costly repairs. The Maryland Property Disclosure and Disclaimer Statement (per Real Property §10-702) requires sellers to disclose known material defects or improvements.

In a gross lease, the landlord/lessor pays the property’s operating expenses—commonly including real estate taxes, property insurance, and maintenance—while the tenant pays a fixed rent. By contrast, in net and especially triple-net (NNN) leases, the tenant bears some or all of these operating costs (with NNN typically meaning taxes, insurance, and maintenance are all tenant-paid). A percentage lease bases rent (in whole or part) on the tenant’s gross sales and does not inherently shift taxes/insurance/maintenance to the landlord.

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 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 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).