IN Real Estate common mistakes
IN Real Estate · Understand the traps and how to avoid them.
Labeling every conveyance to two or more buyers as a joint tenancy, even when the facts show unequal shares or no survivorship language.
Candidates memorize 'two or more owners equals joint tenancy' and skip the required unities and express survivorship intent.
What to do instead
Test the four unities and survivorship: if any unity is missing, treat it as tenancy in common; joint tenancy requires express survivorship language and the same time, title, interest, and possession.
Calling a case-by-case permitted use a 'variance' instead of a conditional or special use permit.
All zoning exceptions sound alike, so candidates match on the word 'exception' rather than on the legal standard.
What to do instead
Classify by function: a variance addresses hardship from the ordinance; a conditional/special use is a permitted use with conditions; a nonconforming use is a pre-existing lawful use. Identify which body grants each.
Treating the licensee as the buyer's agent merely because the licensee showed the property, answered questions, or wrote an offer.
Candidates confuse customer service with agency and miss the moment an agency or limited-agency relationship is created.
What to do instead
Establish agency status at first substantive contact and disclose it in writing. Separate client duties from customer duties, and remember that Indiana limited agency requires the required written consent and disclosure.
Treating a counteroffer as an acceptance, or accepting an oral counteroffer for a land sale.
Candidates blend offer, acceptance, and counteroffer, and forget real estate's writing requirement.
What to do instead
A counteroffer rejects the original offer and creates a new offer. It must be communicated, accepted, and supported by consideration; a land sale contract must be in writing and signed by the party to be charged.
Using the APR as the note rate for a monthly payment calculation, or treating the down payment percentage as the loan-to-value ratio.
APR, note rate, down payment, and LTV are all percentages, so candidates substitute one for another under time pressure.
What to do instead
Compute payments from the note rate and amortization terms. Use APR only to compare borrowing cost. Compute LTV as loan amount divided by the lower of sale price or appraised value.
Assuming that recording a deed guarantees marketable title, or that a quitclaim deed carries warranty covenants.
Candidates conflate the type of deed with the effect of recording and with title assurance.
What to do instead
Separate the concepts: deed covenants define the grantor's promises; recording protects priority; title search and title insurance address title risk. A quitclaim deed conveys only the grantor's interest and contains no warranties.
Using listing price, assessed value, or original cost as market value in an appraisal question.
Candidates treat all dollar figures as interchangeable and skip the definition of market value.
What to do instead
Apply the market value definition and highest and best use. Use the sales comparison approach for residential resale, cost approach for new or special-purpose property, and income approach for income-producing property.
Skipping the seller's residential disclosure or the pre-1978 lead-based paint disclosure because the buyer will inspect or because the agent mentioned a known defect.
Candidates assume an inspection or an agent's statement satisfies all disclosure duties.
What to do instead
Treat seller disclosure, federal lead-based paint disclosure, and licensee disclosure of known material defects as separate duties. Check Indiana timing and exemptions, deliver the required forms, and never advise a party to waive a required disclosure.
Calculating commission on the down payment instead of the sale price, or prorating with the wrong day-count basis.
Candidates rush the order of operations and mix annual, monthly, and daily figures.
What to do instead
Write the formula first: commission equals sale price times rate; then apply the agreed split. For prorations, identify the annual amount, the closing date, and whether the problem uses a 360-day or actual-day basis before dividing.
Depositing earnest money into the brokerage's operating account or letting an unlicensed assistant negotiate price or terms.
Candidates treat trust money and clerical support as routine office tasks and overlook Indiana license-law limits.
What to do instead
Place earnest money in the broker's separate trust account and disburse it only as the contract or law allows. Unlicensed assistants may perform clerical work but may not negotiate, quote terms, or perform other licensed activities.