CRS cheat sheet

Fiduciary duties owed to a client are Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care (OLD CAR); they are not owed to customers.

NAR Code of Ethics Article 1 requires REALTORS® to protect and promote the client's interest while dealing honestly with all parties to the transaction.

Ethics complaints are heard by local REALTOR® association professional standards committees; state licensing boards separately enforce real estate license law.

A Code of Ethics complaint must be filed within 180 days after the facts became known or reasonably should have been known.

Antitrust law bars competitors from agreeing on commission rates, splits, or market allocation; every commission is negotiable between one broker and one client.

Federal Fair Housing protected classes are race, color, religion, sex, national origin, familial status, and disability; state and local laws may add classes such as source of income.

RESPA Section 8 prohibits giving or receiving any fee, kickback, or thing of value in exchange for referral of settlement service business.

Procuring cause is the broker whose uninterrupted efforts began the series of events that produced the sale, supporting that broker's compensation claim.

Exclusive right to sell: the broker is paid regardless of who procures the buyer, including when the seller finds the buyer; it is the most common residential listing type.

Exclusive agency: the seller may sell unrepresented and owe nothing; the broker is paid only when the broker or a cooperating broker procures the buyer.

A net listing sets the broker's fee as proceeds above the seller's stated net, creating a fiduciary conflict; it is prohibited or restricted in many states.

A buyer representation agreement fixes the term, geographic scope, and compensation owed, converting the buyer from a customer into a client.

Dual agency requires informed written consent from both parties and limits the broker to neutrality and disclosure of material facts, with no advocacy for either side.

Designated agency assigns separate agents within one brokerage to the buyer and the seller; it is permitted in some states as an alternative to dual agency.

MLS cooperating compensation is a unilateral offer made by the listing broker, is negotiable, and is not fixed by MLS rule.

Agency disclosure is generally required at first substantive contact and before the buyer reveals confidential financial information.

A CMA compares the subject to recent closed comparables, typically 3-6 sales within the past 3-6 months, adjusting each comparable toward the subject.

Adjustment rule: add value when the comparable is inferior to the subject, subtract when superior; never adjust the subject property itself.

Months of inventory = active listings ÷ (closed sales in the period ÷ months in the period); roughly 6 months indicates a balanced market.

Absorption rate = homes sold per month ÷ active listings; a rising absorption rate signals a strengthening seller's market.

Cap rate = net operating income ÷ price; rearranged, value = NOI ÷ cap rate, which is the core income-approach formula.

Gross rent multiplier = price ÷ gross monthly rent; it is a quick screening tool that ignores vacancy, operating expenses, and financing.

Paired sales analysis isolates the contributory value of a single feature by comparing two otherwise similar closed sales that differ only in that feature.

Sales comparison is the primary approach for owner-occupied residential property, cost approach for new or special-use property, and income approach for rentals.

Keep individual line-item adjustments near or under 10% and net adjustments near or under 15% of the comparable's price; excessive adjustment weakens the comparable.

Valid contract elements are offer, acceptance, consideration, capacity, and lawful purpose; real property contracts additionally require a writing under the Statute of Frauds.

Statute of Frauds: an agreement for the sale of real property is enforceable only if in writing and signed by the party to be charged.

A counteroffer terminates the original offer; the original offer cannot later be accepted unless the offeror revives it.

Earnest money is the buyer's consideration, held in escrow and credited at closing; a liquidated damages clause may allow the seller to retain it on buyer default.

Inspection, financing, and appraisal contingencies must be satisfied, waived, or released in writing by their deadlines or the contract may be terminated.

TRID requires delivery of the Closing Disclosure at least 3 business days before consummation; changes to the APR, loan product, or prepayment penalty reset the 3 days.

Time is of the essence: contract deadlines are strict, and extensions must be documented in writing before the deadline passes.

ZOPA is the overlap between the buyer's maximum and the seller's minimum; BATNA is each party's best alternative if no agreement is reached.

An escrow agent holds funds and documents and owes its duty to the escrow instructions rather than to either party individually.

LTV = loan amount ÷ the lesser of purchase price or appraised value; an LTV above 80% generally requires mortgage insurance.

DTI = total monthly debt payments ÷ gross monthly income; qualified mortgages generally cap the back-end ratio near 43%, and some programs allow up to 50%.

Maximum housing payment ≈ (gross monthly income × back-end DTI limit) − other monthly debt obligations.

Agent net commission = sale price × commission rate × agent split − desk fees, franchise fees, and per-transaction fees.

Cost per lead = marketing spend ÷ leads generated; cost per acquisition = marketing spend ÷ closed transactions produced by that spend.

Conversion rate = closed transactions ÷ leads × 100; tracking it by channel shows which marketing sources actually pay for themselves.

Section 1031 exchange: 45 days to identify replacement property and 180 days to close; capital gain is deferred, not eliminated.

Speed to lead matters: contact rates fall sharply after the first five minutes, so CRM routing and instant response alerts raise conversion.

Marketing ROI = (gross commission generated − channel cost) ÷ channel cost; a channel is kept only while ROI is positive.