Free Real Estate Maryland-Real-Estate-Salesperson Practice Exam with Questions & Answers | Set: 2

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 reference to a recorded plat (lot and block system) is a form of legal description, an essential element that precisely identifies the property being conveyed. Consideration is the value exchanged; the granting clause (words of conveyance) shows intent to transfer; the habendum clause defines the estate being granted (e.g., “to have and to hold…”).

Personal property (also known as chattel) refers to movable items that are not permanently attached to the land or the improvements on it.

Examples include furniture, vehicles, and trade equipment. In contrast, real property includes land, improvements, and the legal rights associated with ownership.

The distinction between real and personal property is a core principle of real estate law covered early in the Maryland 60-Hour Course under “Real Property and the Law.”

A corporation is a single legal entity, separate from its shareholders. When it holds title to real property, ownership is in severalty, meaning “sole” ownership by one legal person. Unlike joint tenancy or tenancy in common, there are no co-owners in severalty; the corporate entity alone holds all rights of ownership. This principle is highlighted in the ownership portion of the Maryland pre-licensing curriculum.

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.

Appreciation refers to the increase in a property's value over time due to factors such as market demand, improvements, inflation, or location desirability.

It is the opposite of depreciation, which is a decline in value. Appreciation may result from physical improvements (e.g., renovations) or external factors (e.g., neighborhood development).

This concept is emphasized in the Maryland 60-Hour Course within the “Real Estate Appraisal and Valuation” module as a key element of market analysis and investment potential.

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.

Lenders that make federally related loans must require flood insurance if the property is located in a Special Flood Hazard Area (SFHA), as designated by the Federal Emergency Management Agency (FEMA).

Flood insurance protects the lender’s collateral and the borrower’s investment.

The Maryland pre-licensing course covers flood hazards in the “Environmental Issues and Disclosures” unit.

An owner’s (buyer’s) title insurance policy provides financial protection to the buyer after closing against covered defects in title (e.g., undisclosed liens, errors in the public record, forgeries) that existed as of the policy date. An abstract of title and a chain of title are historical summaries used in the examination of title but do not provide indemnity. An attorney’s opinion of title is an expert assessment, not an insurance contract, and similarly does not indemnify the buyer against losses from covered defects discovered later.

Interest is the cost of borrowing money, expressed as a rate applied to the outstanding principal. Principal is the loan amount itself. Discount points are prepaid finance charges used to adjust the loan’s yield/interest rate. Usury refers to charging an illegally high interest rate, not the ordinary charge itself.