Property ownership (Salesperson 7 items/Broker 6 items)

• Classes of property
• Real versus personal property
• Defining fixtures
• Land characteristics and legal descriptions
• Physical characteristics of land
• Economic characteristics of land
• Types of legal property descriptions
• Usage of legal property descriptions
• Physical descriptions of property and improvements
• fMineral, air and water rights
• Encumbrances and effects on property ownership
• Liens (types and priority)
• Easements and licenses
• Encroachments
• Types of ownership
• Types of estates
• Forms of ownership
• Leaseholds
• Common interest ownership properties
• Bundle of rights

Land use controls and regulations (Salesperson 5 items/Broker 5 items)

• Government rights in land
• Property taxes and special assessment
• Eminent domain, condemnation, escheat
• Police power
• Public controls based in police power
• Zoning and master plans
• Building codes
• Environmental impact reportsd. Regulation of special land types (floodplain, coastal, etc.)
• Regulation of environmental hazards
• Abatement, mitigation and cleanup requirements
• Restrictions on sale or development ofcontaminated property
• Types of hazards and potential for agent or seller liability
• Private controls
• Deed conditions or restrictions
• Covenants, conditions and restrictions (CC&Rs)
• Homeowners association (HOA) regulations

Valuation and market analysis (Salesperson 8 items/Broker 6 items)

• Market value and market price
• Value
• Types and characteristics of value
• Principles of value
• Market cycles and other factors affecting property value
• Methods of estimating value/appraisal processa.
• Market or sales comparison approach
• Replacement cost or summation approach
• Income approach
• Basic appraisal terminology (e.g., replacementversus reproduction cost, reconciliation,depreciation, kinds of obsolescence
• Competitive/Comparative Market Analysis (CMA)
• Selecting and adjusting comparables
• Contrast CMA and appraisal
• Price per square foot
• Gross rent and gross income multipliers
• Capitalization rate
• Appraisal practice; situations requiring appraisal by a certified appraiser

Financing (Salesperson 6 items/Broker 7 items)

• General concepts
• LTV ratios, points, origination fees, discounts, broker commissions
• Mortgage insurance (PMI)
• Lender requirements, equity, qualifying buyers,loan application procedures
• Types of loans and sources of loan money
• Term or straight loans
• Amortized and partially amortized (balloon) loans and other nonconforming loan
• Adjustable rate mortgage (ARM) loans
• Conventional versus insured
• Reverse mortgages; equity loans; subprime and other nonconforming loans
• Seller/owner financing
• Primary market
• Secondary market
• Down payment assistance programs3. Government programs
  FHA
  VA
• Other federal programs
• Mortgages/deeds of trust
• Mortgage clauses (assumption, due-on-sale, alienation, acceleration, prepayment, release)
• Lien theory versus title theory
• Mortgage/deeds of trust and note as separate documents
• Financing/credit laws
• Lending and disclosures
• Truth in lending
• RESPA
• Equal Credit Opportunity
• Fraud and lending practices
• Mortgage fraud
• Predatory lending practices (risks to clients)
• Usury lending laws
• Appropriate cautions to clients seeking financing

General principles of agency (Salesperson 10 items/Broker 11 items)

• Nature of agency relationships
• Types of agents and agencies (special, general, designated, subagent, etc.)
• Nonagents (transactional/facilitational)
• Fiduciary responsibilities
• Creation and disclosure of agency and agency agreements (general, not state specific)
  Agency and agency agreements
• Disclosure when acting as principal or other conflict of interest
• Responsibilities of agent/principal
• Duties to client/principal (buyer, seller, tenant or landlord)
• Traditional common law agency duties; effect of dual agency on agent’s duties
• Responsibilities of agent to customers and third parties, including disclosure, honesty , integrity , accounting for money
• Termination of agency
• Expiration
• Completion/performance
• Termination by force of law
• Destruction of property/death of principal
• Mutual agreement

Mandated disclosures (Salesperson 8 items/Broker 9 items)

• Property condition disclosure
• Property owner’s role regarding property condition
• Licensee’s role regarding property condition
• Warranties
• Purpose of home or construction warranty programs
• Scope of home or construction warranty programs
• Need for inspection and obtaining/verifying information
• Explanation of property inspection process and appropriate use
• Agent responsibility to inquire about “red flag” issues
• Responding to non-client inquiries
• Material facts related to property condition orlocation
• Land/soil conditions
• Accuracy of representation of lot or improvementsize, encroachments or easements affecting use
• Pest infestation, toxic mold and other interiorenvironmental hazards
• Structural issues such as roof, gutters,downspouts, doors, windows, foundation
• Condition of electrical and plumbing systems, andof equipment or appliances that are fixtures
• Location within natural hazard or specificallyregulated area, potentially uninsurable property
• Known alterations or additions
• Material facts related to public controls, statutes of public utilities
• Zoning and planning information
• Boundaries of school/utility/taxation districts,flight paths
• Local taxes and special assessments, other liens
• External environmental hazards
• Stigmatized/psychologically impacted property
• Megan’s Law issues

Contracts (Salesperson 11 items/Broker 12 items)

• General knowledge of contract law
• Requirements for validity
• When contract is considered performed/discharged
• Assignment and novation
• Breach of contract and remedies for breach
• Contract clauses
• Listing agreements
• General requirements for valid listing
• Exclusive listings
• Non-exclusive listings
• Buyer/tenant representation agreements, including key elements and provisions of buyer and/or tenant agreements
• Offers/purchase agreements
• General requirements
• When offer becomes binding (notification)
• Contingencies
• Time is of the essence
• Counteroffers/multiple counteroffers
• Counteroffer cancels original offer
• Priority of multiple counteroffer
• Leases
• Types of leases, e.g., percentage, gross, net,ground
• Lease with obligation to purchase or lease withan option to purchase
• Other real estate contracts
• Options
• Right of first refusal

Transfer of title (Salesperson 5 items/Broker 5 items)

• Title insurance
• What is insured against
• Title searches, title abstracts, chain of title
• Cloud on title, suit to quiet title
• Deeds
• Purpose of deed, when title passes
• Types of deeds (general warranty, special warranty, quitclaim) and when used
• Essential elements of deeds
• Importance of recording
• Escrow or closing; tax aspects of transferring title to real property
• Responsibilities of escrow agent
• Prorated items
• Closing statements/HUD-1
• Estimating closing costs
• Property and income taxes
• 1031 exchanges
• Special processes
• Foreclosure/short sale b. Real estate owned (REO)

Practice of real estate (Salesperson 12 items/Broker 12 items)

• Trust/escrow accounts (general, not state specific)
• Purpose and definition of trust accounts,including monies held in trust accounts
• Responsibility for trust monies, including commingling/conversion
• Federal fair housing laws
• Protected classes
• Covered transactions
• Specific laws and their effects
• Compliance
• Types of violations and enforcement
• Exceptions
• Advertising and technology
• Incorrect “factual” statements versus “puffing”
• Truth in advertising
• Fair housing issues in advertising
• Fraud, technology issue
• Uninformed misrepresentation versus deliberate misrepresentation (fraud)
• Technology issues in advertising and marketing
• Agent supervision
• Liability/responsibility for acts of associated licensees and employees
• Responsibility to train and supervise associated licensees and employees
• Commissions and fees
• Procuring cause/protection clauses
• Referrals and other finder fees
• General ethics
• Practicing within area of competence
• A voiding unauthorized practice of law
• Antitrust laws
• Antitrust laws and purpose
• Antitrust violations in real estate

Real estate calculations (Salesperson 6 items/Broker 4 items)

• Basic math concepts
• Area
• Loan-to-value ratios
• Discount points
• Equity
• Down payment/amount to be financed
• Calculations for transactions, including mortgage calculations
• Property tax calculations
• Prorations (utilities, rent, property taxes, insurance, etc)
• Seller’s proceeds of sale
• Transfer tax/conveyance tax/revenue
• Amortization tables
• Interest rates
• Interest amounts
• Monthly installment payments
• Buyer qualification ratios
• Calculations for valuation
• Competitive/comparative market analyses (CMA)
• Net operating income
• Depreciation
• Capitalization rate
• Gross rent and gross income multipliers (GRM,GIM)

Specialty areas (Salesperson 2 items/Broker 3 items

• Subdivisions, including deed restrictions
• Commercial, industrial and income property
• Types of lease
• Trade fixtures
• Accessibility
• Tax depreciation
• 1031 exchanges
• Trust fund account