MA RE Broker flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Board's enabling statute

Massachusetts real estate licensing is governed by G.L. c. 112, §§ 87PP–87DDD, with detailed rules in 254 CMR, enforced by the Real Estate Board within the Division of Occupational Licensure.

Salesperson pre-license hours

Massachusetts requires 40 hours of approved pre-license education for a salesperson, plus being at least 18, passing the exam, and filing with a sponsoring broker.

Broker license experience

A broker applicant must complete 40 hours of broker pre-license education and document three years of full-time licensed salesperson experience, or the part-time equivalent.

Commission payment rule

Commissions are earned by and paid to the brokerage, not the individual salesperson; a salesperson may not accept compensation directly from a client or another broker.

Continuing education cycle

Massachusetts licenses renew on a two-year cycle with 12 hours of continuing education, including Board-mandated topic hours such as agency, ethics, and fair housing.

Unlicensed practice examples

Negotiating price or terms for another for compensation, holding oneself out as a licensee, and accepting referral fees for brokerage activity are unlicensed practice in Massachusetts.

Facilitator duties

A facilitator assists a buyer or seller without representing either party; the facilitator owes honesty, fairness, and disclosure of known material defects but not loyalty or confidentiality.

Designated agency

The brokerage represents both buyer and seller but assigns separate licensees to each; confidential information held by one designated agent is not shared with the other.

Dual agency consent

Acting for both parties in the same transaction requires informed written consent from both before the licensee acts; without consent the licensee must remain a neutral facilitator.

Seller property condition statement

Massachusetts requires a seller's statement of property condition for residential transfers of one to four units, with limited exemptions such as new construction and certain foreclosures.

Material defect disclosure

A seller's agent must disclose known latent material defects not readily observable and not known to the buyer, such as structural, water, septic, or hazardous-material problems.

Fair housing protected classes

G.L. c. 151B bars housing 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 offers in MLS

Offers of compensation to cooperating brokers are negotiable and may be published in the MLS, but a licensee may not steer a buyer based on the amount offered.

Offer to purchase vs P&S

The offer to purchase is preliminary; the standard Massachusetts purchase and sale agreement becomes the binding contract when signed by both parties and the deposit is delivered.

Attorney review period

The standard Massachusetts P&S includes a five-business-day attorney review period during which either party may terminate, unless the form is modified to delete it.

Mortgage contingency

A P&S commonly conditions the buyer's obligation on obtaining a written mortgage commitment within 30 to 45 days; failure to secure it timely can allow termination and deposit return.

Deposit escrow in P&S

The P&S deposit is held in escrow by the listing broker or attorney, with the balance due at closing; the deposit generally becomes non-refundable once contingencies expire.

Lead paint disclosure

For properties built before 1978, federal and Massachusetts law require disclosure of known lead-based paint hazards and delivery of the EPA pamphlet to the buyer.

Title 5 septic inspection

Massachusetts requires a Title 5 inspection of septic systems before transfer of certain residential property, with results disclosed to the buyer.

Security deposit cap

Under G.L. c. 186, § 15B, a landlord may not require a security deposit exceeding one month's rent, and the deposit must be held in a separate interest-bearing account.

Security deposit return

The landlord must return the deposit with interest and an itemized list of damages within 30 days of tenancy termination; failure can forfeit the right to withhold.

Sales comparison formula

Indicated value equals the comparable sale price plus or minus adjustments for differences; add when the subject has a feature the comparable lacks, subtract when the reverse.

Cost approach formula

Value under the cost approach equals replacement cost new minus depreciation plus land value; it is most reliable for new construction and special-purpose properties.

Capitalization rate formula

Value equals net operating income divided by the capitalization rate; NOI is gross income less vacancy and operating expenses, excluding debt service and depreciation.

Gross rent multiplier

The gross rent multiplier equals sale price divided by gross monthly rent; it provides a quick screen for comparing income properties before detailed analysis.

Loan-to-value ratio

LTV equals the loan amount divided by property value; higher LTV generally increases mortgage insurance requirements and interest rate pricing.

Amortizing payment formula

Monthly payment equals principal times [i(1+i)^n] divided by [(1+i)^n − 1], where i is the annual rate divided by 12 and n is the term in months.

Escrow account separation

Broker escrow funds must be held in a separate account apart from operating funds; commingling client money with brokerage money is prohibited and grounds for discipline.

Escrow reconciliation

The broker must reconcile the escrow account monthly, keeping records of each deposit and disbursement, and provide written notice of the account institution and number.

Escrow disbursement rule

Escrow funds may be released only with written authorization from all parties or a court order; disputed funds must remain in escrow until the dispute is resolved.

Advertising rules

Under 254 CMR 3.00, advertising must include the brokerage name and may not be misleading; brokers must review advertising by affiliated salespeople.

Record retention

Licensees must retain transaction records, including listing agreements, offers, and escrow records, for the period set by Board regulation, commonly three years.