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

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.

Under the federal Fair Housing Act, “handicap” (disability) is a protected class. HIV/AIDS is considered a disability, and making statements or disclosures that identify or single out someone based on a protected characteristic is prohibited. Disclosing that an owner (or occupant) has HIV is treated as discriminatory, violates fair housing standards, and also breaches confidentiality. Maryland fair housing law mirrors and expands federal protections, and the pre-licensing course emphasizes that licensees must never disclose information tied to protected classes because it can facilitate or signal discriminatory treatment (e.g., steering, discouraging, or differential terms).

A federally related transaction is defined as any real estate-related financial transaction that involves a federal financial institution regulator, such as the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, Office of the Comptroller of the Currency (OCC), or any transaction intended for sale to a government-sponsored enterprise like Fannie Mae or Freddie Mac.

Under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), federal agencies require that real estate appraisals used in federally related transactions be performed by state-licensed or state-certified appraisers.

In Maryland’s 60-Hour Pre-Licensing Course, this concept is taught within the “Real Estate Appraisal and Valuation” topic to ensure future licensees understand when a certified appraisal is legally mandated. The course emphasizes that federally related transactions generally include:

The sale, lease, purchase, investment, or exchange of real property.

The financing, refinancing, or use of real property as security for a loan.

Transactions regulated by federal financial agencies.

Therefore, the correct definition of a federally related transaction is a real estate transaction in which a federal financial agency or regulatory authority is involved.

Reference (Maryland and Federal Sources):

Maryland 60-Hour Principles and Practices of Real Estate Pre-Licensing Course – “Real Estate Appraisal and Valuation” Module (Appraisal Standards Section)

Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Title XI – Appraisal Standards

12 U.S.C. § 3350 – Definitions (Federally Related Transaction)

The Civil Rights Act of 1866 was the first federal law to address discrimination in housing and property rights. It declares that all U.S. citizens shall have the same rights as white citizens to inherit, purchase, lease, sell, hold, and convey real and personal property, regardless of race or color.

Unlike later fair housing laws, this Act includes no exemptions—it applies to all property transactions, public or private.

This law is a foundation of modern fair housing legislation, and its absolute prohibition on racial discrimination still applies today.

Reference (Maryland Source):

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

– Civil Rights Act of 1866, 42 U.S.C. §1982.

An amendment is a written change or modification to an existing contract that is made after the original agreement has been executed.

All parties must agree to and sign the amendment for it to be legally binding.

This differs from an addendum, which is added before or at the same time as the contract and becomes part of the original agreement.

The Maryland course highlights amendments as critical tools in real estate practice for making mutually accepted changes—such as closing dates, purchase prices, or contingencies—without voiding the original contract.

An appraisal is a professionally developed opinion of value for a specific property as of a specific effective date, performed in accordance with USPAP (Uniform Standards of Professional Appraisal Practice) and, when required (e.g., federally related transactions), by a state-licensed or state-certified appraiser.

An assessment is the value assigned by a taxing authority for property tax purposes.

An evaluation may be an estimate of value that does not necessarily comply with USPAP or require a state-licensed appraiser (often for certain banking purposes where an appraisal is not required).

An inspection is an examination of a property’s condition, not an opinion of value.

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

USPAP (definition of appraisal; effective date of value).

Maryland Business Occupations and Professions, Title 16 (Real Estate Appraisers) — licensure/certification framework.

FIRREA Title XI (federally related transactions require state-licensed/certified appraisers).

Maryland 60-Hour Pre-Licensing Course: “Real Estate Appraisal and Valuation” (definitions; scope; USPAP).

Earnest money (good-faith deposit) demonstrates buyer commitment and is typically credited to the buyer at closing, most commonly applied toward the buyer’s down payment or closing costs. Hence some materials describe it informally as a “down payment on the down payment.” Handling, escrow, and timely deposit of earnest money are covered under Maryland brokerage procedures.

Only licensed or certified appraisers may perform an appraisal for a fee in a federally related transaction.

A real estate licensee, however, may prepare a Comparative Market Analysis (CMA) or Broker Price Opinion (BPO) to help a seller decide on a listing price or a buyer to make an offer.

A CMA compares recent sales, active listings, and expired listings of similar properties to estimate a realistic price range.

This procedure is emphasized in the “Appraisal and Valuation” module as a permitted pricing tool for real estate professionals.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices of Real Estate Pre-Licensing Course, Valuation and CMA section.

– Business Occupations and Professions Article §17-511 (b).

A home inspection is a professional, non-invasive evaluation of the property’s physical condition (systems and components) to inform buyers about defects and needed repairs. It is not an appraisal (value) and doesn’t set list price; while it can reveal “red flags,” its primary purpose is to provide the buyer an accurate picture of condition to inform negotiations and contingency decisions.

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).