Real Estate Maryland-Real-Estate-Salesperson - Maryland Real Estate Salesperson Examination

In Maryland, a licensee owes clients fiduciary duties that include reasonable skill and care, loyalty, obedience to lawful instructions, disclosure, confidentiality, accounting, and prompt presentation of all written offers. Failing to present an offer promptly breaches the duty of reasonable care and the professional standard of practice and is treated as negligence (a failure to exercise the care a reasonably prudent licensee would exercise under similar circumstances). This is distinct from:

Fraud (intentional deception),

Misrepresentation (false statement or omission of material fact),

Puffing (non-factual opinion or sales talk).

Because the buyer’s financial harm flowed from the licensee’s carelessness (delay), the appropriate theory is negligence.

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

Maryland Business Occupations and Professions Article, Title 17 (Real Estate Brokers Act) — duties to clients; grounds for discipline for incompetence or negligence.

COMAR 09.11.02 (MREC Code of Ethics) — obligation to promptly present all written offers and perform with reasonable skill and care.

Maryland 60-Hour Pre-Licensing Course: “Real Estate Brokerage and the Law of Agency” (fiduciary duties; standards of care; prompt presentation of offers).

In Maryland, licensees must disclose material facts that are adverse, that they actually know, and that are physical to the property or the transaction—even to customers (non-clients). The MAAP framework (Material, Adverse, Actually known, Physical) is taught in pre-licensing to help practitioners decide what must be disclosed and to distinguish disclosable facts from confidential information or client motivations that must be protected. Examples include known structural defects, roof leaks, or latent physical conditions. This aligns with Maryland’s duties of honesty, disclosure of material facts, and prohibition against misrepresentation.

References (Maryland Pre-Licensing Core Content):

Maryland 60-Hour Course: “Real Estate Brokerage and the Law of Agency” (brokerage duties to clients and customers; disclosure vs. confidentiality; MAAP decision tool).

COMAR 09.11.02 (standards of practice: honesty; disclosure of material facts; avoidance of misrepresentation).

Business Occupations & Professions, Title 17 (grounds for discipline related to disclosure and misrepresentation).

An owner’s (buyer’s) title insurance policy protects the buyer against covered title defects (e.g., undisclosed liens, errors, or prior claims) that surface after closing, and can reimburse for covered losses up to policy limits. Homeowners insurance covers casualty risks, not title defects. Lien proceeds and a special deed (e.g., special warranty) do not provide post-closing insurance coverage.

In the “Math for Real Estate and Practical Applications” portion, area and measurement conversions are foundational. An acre is defined as 43,560 square feet. Option B (“43,560 feet”) is incorrect because it omits the necessary square unit. The course emphasizes accurate units and conversions for calculations involving land area, price-per-square-foot/acre, and legal descriptions.

References (Course Outline/Study Topics): Maryland 60-Hour Principles and Practices of Real Estate — “Math for Real Estate” (Area/acre conversions; unit accuracy).

A buyer representation agreement establishes an agency relationship between a buyer and a broker, outlining the broker’s duties and compensation for assisting the buyer in finding and purchasing a property.

This agreement serves the same purpose as a listing agreement does for a seller—it defines the relationship, responsibilities, and authority between client and broker.

Both agreements are legally binding contracts and must include the terms of representation, duration, and agency disclosures as required by Maryland Real Estate Commission (MREC) regulations.

A tax-deferred exchange, also known as a 1031 exchange, allows investors to exchange one qualifying investment or business property for another “like-kind” property and defer payment of capital gains taxes until the new property is sold.

This provision falls under Internal Revenue Code §1031.

In the Maryland pre-licensing curriculum, this is explained under the “Real Estate Financing and Investment” section to show how investors legally postpone capital gains recognition by following IRS guidelines.

Brokerage risk management includes cybersecurity best practices to protect client nonpublic information (e.g., transaction documents, IDs, financial data). Licensees are instructed to avoid unsecure/public networks and untrusted or suspicious websites, use secure/encrypted connections, maintain strong passwords and multi-factor authentication, and follow brokerage data security policies. Avoiding unsecure environments reduces exposure to malware, phishing, and interception.

In settlement prorations, prepaid items (e.g., prepaid property taxes or HOA dues) are credited to the seller and debited to the buyer, because the seller has paid for a period that extends beyond the closing date, and the buyer reimburses the seller for the buyer’s post-closing share. Conversely, accrued but unpaid items (e.g., the current year’s unpaid property taxes) are debited to the seller and credited to the buyer. The Maryland course teaches these conventions in the Closing and Math sections.

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.

In Maryland, all compensation earned by a licensed salesperson or associate broker must be paid through their supervising broker.

Salespersons are not permitted to receive direct payments from clients, customers, mortgage brokers, or other settlement service providers.

Violations can result in disciplinary action or license suspension.