AR Real Estate common mistakes
AR Real Estate · Understand the traps and how to avoid them.
Answers every fixture/personal-property question by asking only 'is it attached to the building?', then stops there.
Attachment is the easiest factor to spot in a fact pattern, so candidates latch onto it and never run the other two tests; sellers'-vs-buyers' framing then gets decided on one fact instead of three.
What to do instead
Before choosing, write out three lines: method of annexation, adaptation to the realty, and expressed or implied intention of the party who installed it. If the three conflict, intention controls, and trade fixtures favor the tenant who can remove them before the lease ends.
Answers a land-use question by matching the vocabulary word in the stem to a definition, without first naming which government power is being exercised.
Zoning, subdivision regulation, building codes, condemnation, and tax lien questions all use overlapping words like 'taking,' 'regulation,' and 'public use,' so the stem's noun gets matched to the wrong power.
What to do instead
Label the stem's action in one word before reading the answer choices: police power (regulating use, no compensation), eminent domain (forced transfer, compensation required), taxation, or escheat. Only then pick the answer that fits the labeled power.
Names 'loyalty' as the breached duty in almost every fiduciary question, even when the facts describe a missing deposit, a commingled escrow check, or a failure to pass along an offer.
'Loyalty' is the headline fiduciary duty taught first, so it becomes the default answer; the four duties are studied as a list rather than as distinct fact triggers.
What to do instead
Build a one-line trigger for each duty: loyalty = undisclosed self-interest or secret profit; obedience = following lawful client instructions; disclosure = telling the client everything material; accounting = money and documents, deposits, and records. Match the fact to the trigger, not to the word 'fiduciary.'
Treats the brokerage relationship as switching off at closing, so the candidate answers that the licensee may freely use the former client's negotiating position afterward.
The license law timeline (disclosure, engagement, termination) is memorized as a sequence of events, and candidates assume duties track that timeline rather than survive it.
What to do instead
Separate the two categories. Duties of confidentiality and accounting for money or documents continue after the relationship ends; duties of obedience to current instructions and ongoing advocacy end with the engagement. Answer accordingly, and remember the firm, not the individual licensee, is the party to the agency agreement.
Decides enforceability from whether the parties shook hands or exchanged emails, without running the Statute of Frauds elements for the specific transaction.
Part performance, promissory estoppel, and 'we had an agreement' sound fair, so the fairness instinct overrides the checklist; candidates also forget which documents must be in writing versus which are exempt.
What to do instead
Before answering, tally the required writing elements for that transaction type: parties, property description, price/terms, signature of the party to be charged. Then check whether an exception genuinely applies (e.g., a lease term short enough to fall outside the writing requirement) rather than assuming part performance rescues it.
Computes a closing proration correctly but assigns the debit and credit to the wrong party, or mixes a 360-day banker's year with actual calendar days inside the same problem.
Candidates do the arithmetic first and the direction second, and the debit/credit convention is visual on a settlement statement rather than intuitive; day-count method gets picked from habit instead of from the problem's stated terms.
What to do instead
Write 'who benefits, who pays' on scratch paper before calculating, then lock the day-count method once (seller's share of the day of closing, actual days in the month/year unless told otherwise) and keep it consistent for the whole item.
Plugs effective gross income, or income after debt service, into the cap-rate formula when the question asks for value or a capitalization rate.
Cap rate problems look like simple division, so candidates grab whichever income figure appears nearest the top of the reconstructed operating statement; NOI and cash flow get treated as synonyms.
What to do instead
Rebuild a three-line statement every time: potential gross income minus vacancy/collection loss = effective gross income; minus operating expenses = NOI; minus debt service = cash flow before tax. Cap rate and value always come from NOI; cash flow is used for cash-on-cash and DSCR questions.
Selects an appraisal approach based on which formula is easiest to compute rather than on the property type, e.g., using the sales comparison approach for a special-purpose property with no comparable sales, or the cost approach for a 60-year-old duplex.
Approach names are memorized as a set without the 'when is it reliable' pairing, so the candidate defaults to the approach used in the last practice problem.
What to do instead
Attach a property type to each approach before answering: sales comparison for typical residential and vacant land with comparables, cost for new or special-purpose construction and insurance/valuation of unique buildings, income for any property bought for its income stream. Note which approach is given the most weight and why in the explanation.
Answers that the Commission can order a licensee to pay a consumer's damages, settle a commission dispute between brokers, or otherwise act as a court.
Every other regulator in the candidate's experience has consumer-remedy powers, so the Commission's authority gets assumed rather than checked; candidates also blur the Commission with the recovery fund and with civil litigation.
What to do instead
State the Commission's powers as a closed list: license, suspend, revoke, fine, require education, and impose conditions on a license. Money recoveries come from the recovery fund under its own statutory limits or from civil court, not from a Commission order.
Treats the agency/brokerage-relationship disclosure as a closing-document formality, or assumes an oral explanation is enough, so the timing question is answered 'at closing' or 'whenever the offer is written.'
Disclosure is lumped in with the pile of closing paperwork candidates have seen in practice, and the specific statutory trigger point is memorized vaguely as 'early.'
What to do instead
Memorize the trigger as the first substantive contact with a consumer, and keep a separate note that the disclosure rules also govern the timing and form of any change in relationship. On timing questions, ask what the consumer knew and when, and pick the earliest point at which the relationship was actually established.