MA RE Broker cheat sheet

The Massachusetts Real Estate Board sits within the Division of Occupational Licensure; it adopts licensing rules at 254 CMR and enforces G.L. c. 112, §§ 87PP–87DDD.

Salesperson license requires being 18+, completing 40 hours of approved pre-license education, passing the exam, and filing with a sponsoring broker; broker license requires 18+, 40 hours broker pre-license education, and three years of full-time (or equivalent part-time) licensed salesperson experience.

A salesperson may only act under a licensed broker's supervision; commissions are owed to and paid through the broker, never directly to a salesperson.

License renewal runs on a two-year cycle; continuing education of 12 hours per cycle is required, including specific mandated topic hours set by the Board.

An agent must give the seller the agency disclosure notice at the first personal meeting and obtain a signed acknowledgement; the notice explains whom the agent represents.

Licensee must report criminal convictions, disciplinary actions, and changes of address or brokerage affiliation to the Board within the time set by regulation.

Unlicensed practice includes holding oneself out as a broker or salesperson, negotiating price or terms for another for compensation, and accepting referral fees for brokerage activity.

The Board may suspend, revoke, or fine for misrepresentation, commingling, undisclosed dual compensation, and failure to account for funds; penalties are separate from private civil liability.

Massachusetts recognizes seller agency, buyer agency, designated agency, and facilitator (non-agent) status; a facilitator owes honesty and fair dealing but not loyalty or confidentiality.

In designated agency the brokerage represents both sides but assigns different licensees to each party; confidential information of one client cannot be shared with the other licensee.

Written agency agreement with a client must state term, compensation, scope, and whether the relationship is exclusive; buyer agency agreements are required to be in writing.

Dual agency requires informed written consent from both parties before the licensee acts for both; absent consent the licensee must remain neutral as a facilitator.

Material defects known to the seller's agent that are not readily observable and not known to the buyer must be disclosed; latent structural, water, septic, and hazardous-material issues are typical examples.

Massachusetts requires a seller's statement of property condition for residential transfers of 1–4 units (with limited exemptions such as new construction and certain foreclosures).

Fair housing under G.L. c. 151B prohibits discrimination based on race, color, religion, sex, national origin, ancestry, handicap, familial status, sexual orientation, gender identity, age, marital status, veteran status, and public assistance.

Compensation may be offered through the MLS to cooperating brokers but must not be conditioned on steering buyers away from listings that offer less; offers of compensation are negotiable.

An offer to purchase (OTP) is a preliminary agreement; the standard Massachusetts P&S is the binding contract once signed by both parties and any stated deposit is delivered.

Standard P&S contingencies include attorney review (commonly 5 business days), mortgage commitment (commonly 30–45 days), home inspection, and sale of buyer's property; each must be exercised in writing within its deadline.

The P&S typically requires a deposit held in escrow by the listing broker or attorney, with the balance due at closing; the deposit is generally non-refundable after the contingency period expires.

Massachusetts practice uses a 5-business-day attorney review period in the standard form; either party may terminate during review unless the form was modified to delete it.

Statutory disclosures include lead paint (properties built before 1978), septic Title 5 inspection, smoke and carbon monoxide detector certificates, and the property condition statement.

The deed must be recorded; the closing date is set in the P&S, and time is generally of the essence only if the contract says so.

Residential leases of 12 months or less are typically oral or written; leases over 12 months must be in writing under the Statute of Frauds, and security deposits are capped at one month's rent under G.L. c. 186, § 15B.

Security deposits must be held in a separate, interest-bearing escrow account; the landlord must provide a receipt and a statement of the account, and return the deposit with itemized damages within 30 days.

Sales comparison approach: adjusted value = comparable sale price + adjustments for differences; subtract for features the subject lacks, add for features the subject has that the comparable lacks.

Cost approach: value = replacement cost new − depreciation + land value; most reliable for new or special-purpose properties.

Income approach: value = net operating income ÷ capitalization rate; NOI = gross income − vacancy/credit loss − operating expenses (excluding debt service and depreciation).

Gross rent multiplier = sale price ÷ gross monthly rent; used for quick income-property screening.

Loan-to-value = loan amount ÷ property value; a higher LTV raises required mortgage insurance and pricing.

Monthly payment on an amortizing loan: M = P × [i(1+i)^n] ÷ [(1+i)^n − 1], where i = annual rate ÷ 12 and n = term in months.

Escrow rules: broker must maintain a separate escrow account for client funds, keep records of each deposit and disbursement, and reconcile the account on a monthly basis; commingling with operating funds is prohibited.

Massachusetts requires escrow accounts to be interest-bearing for certain deposits, with interest payable to the depositor as set by regulation; the broker must give written notice of the account institution and account number.

Disbursement of escrow funds requires written authorization from all parties or a court order; disputed funds must remain in escrow until resolved.

254 CMR 3.00 governs broker and salesperson conduct, including advertising rules: ads must include the brokerage name and may not be misleading.

Licensees may not pay or receive undisclosed compensation, and referral fees to unlicensed persons for brokerage activity are prohibited.

Records of transactions, including listing agreements, offers, and escrow records, must be retained for the period set by regulation (commonly three years).

The Board may act on complaints filed by consumers, other licensees, or on its own motion; sanctions include reprimand, suspension, revocation, and civil penalties.

A licensee must respond to Board inquiries and produce records; failure to cooperate is itself a ground for discipline.

Continuing education must include Board-mandated hours in agency, ethics, and fair housing, in addition to elective hours.

A broker must supervise affiliated salespeople, review their advertising, and ensure escrow compliance; lack of supervision can be charged against the broker's license.

Licensure by reciprocity is limited; Massachusetts generally requires examination and education unless the applicant qualifies under a specific reciprocal agreement.