MD Real Estate key terms

The state agency that licenses and regulates Maryland real estate brokers, salespersons, and associate brokers; it investigates complaints, holds disciplinary hearings, and may impose fines, suspension, or license revocation.

A Maryland credential allowing a person to perform brokerage activities only while supervised by a licensed broker; a salesperson may not accept compensation for brokerage services directly from clients or customers.

A person holding a Maryland broker license who works under another broker rather than independently; the associate broker may supervise salespersons and perform brokerage acts for the employing broker.

The legal obligations an agent owes a client, including loyalty, obedience to lawful instructions, confidentiality, reasonable care and diligence, disclosure of material facts, and accounting for money and documents.

A relationship in which one brokerage represents both buyer and seller in the same transaction; Maryland requires the informed written consent of all parties, and the licensee must remain neutral.

A Maryland requirement that a licensee have a written agreement with a client before providing brokerage services, stating the relationship, its term, compensation, and any consent to dual agency.

A written notice Maryland licensees must give consumers explaining brokerage relationships and identifying whom the licensee represents, usually before substantive discussion of the transaction.

Information that a reasonable party would consider important in deciding whether or how to buy, sell, or lease; agents must disclose it to clients and may not conceal it from others.

A listing agreement that pays the broker a commission regardless of who procures the buyer, including the seller; it gives the broker the most protection and is the most common listing type.

A written contract establishing an agency relationship between a buyer and a broker, defining duties, compensation, the agreement's term, and whether dual agency is permitted.

A contract provision making a party's obligation conditional on a future event, such as a satisfactory inspection, loan approval, or appraisal; if the condition fails, that party may terminate.

Money a buyer deposits when the contract is signed to show serious intent; the broker typically holds it in trust, and it is applied to the price or may be forfeited on default.

A Maryland arrangement under which a homeowner pays annual rent to the owner of the land beneath the house; the leasehold tenant may generally redeem, or buy out, the ground rent by statute.

A deed in which the grantor warrants title only against defects caused by the grantor's own acts, not those of earlier owners; commonly used for Maryland residential resales.

A deed that releases whatever interest the grantor may have with no warranty of title; frequently used to clear clouds on title or to transfer property between family members.

A form of co-ownership available to married couples in Maryland that carries a right of survivorship and generally shields the home from one spouse's individual creditors.

A right to use another person's land for a limited purpose, such as a driveway, path, or utility line; an easement is an encumbrance that runs with the land.

A claim against property that secures payment of a debt, such as a mortgage, tax lien, or mechanics' lien; liens generally must be paid or released at settlement for clear title.

A policy protecting against losses from title defects such as undisclosed liens, forgery, or recording errors; a lender's policy protects the lender and an owner's policy protects the buyer.

Maryland's usual home-loan security instrument in which the borrower conveys title to trustees who may sell the property at foreclosure after default, without a court-supervised mortgage foreclosure.

Maryland's tax on transferring title, computed on the consideration paid and usually divided between buyer and seller by contract; first-time buyers of a principal residence may qualify for a reduced state rate.

A tax charged when a deed or other instrument is recorded, based on the consideration and the county where the property sits, with different rates and exemptions for certain transfers.

A Maryland credit that caps annual increases in the taxable assessment of an owner's principal residence, limiting how quickly the owner's property tax bill can rise.

The closing meeting where the buyer signs loan documents, funds are disbursed, liens are paid, and title is transferred; Maryland settlements are typically conducted by attorneys or title companies.

Money a landlord holds to cover unpaid rent or damage beyond ordinary wear; Maryland limits the amount and requires a receipt, a move-in inspection, and a timely itemized return.

The court procedure a landlord must use to remove a tenant; in Maryland the landlord files a failure-to-pay-rent or tenant-holding-over action, and self-help lockouts are illegal.

A remedy under which a tenant pays rent into a court or escrow account instead of to the landlord because of serious uncorrected defects, rather than simply withholding rent.

Federal law barring discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability; Maryland law adds further protected classes.

Telling homeowners that members of a protected class are moving into the neighborhood in order to prompt a sale; this panic-selling tactic is illegal under fair housing law.

Channelling buyers or renters toward or away from particular neighborhoods because of protected characteristics rather than their stated needs; a form of illegal discrimination.

An illegal agreement among competitors, such as brokers agreeing on commission rates, that restrains trade; brokerage fees must be negotiated individually with each client.

An analysis of recently sold, pending, and active comparable properties that a licensee uses to suggest a listing or offer price; it is not an appraisal.

An appraisal method that estimates value by adjusting the sale prices of comparable properties for differences in size, features, condition, and market conditions.

The use of a property that is legally permissible, physically possible, financially feasible, and yields the greatest value; it frames the analysis in all three approaches to value.

Maryland's form on which a seller either discloses known defects or disclaims knowledge of them; it must be given to the buyer before contract, though some transfers are exempt.

Federal requirement that sellers and landlords of housing built before 1978 disclose known lead hazards and give buyers or tenants the EPA pamphlet and a chance to test.

A hidden physical problem that a reasonable inspection would not reveal, such as a broken sewer line; sellers must disclose known latent defects that materially affect value or use.

A separate account in which a broker holds client money such as earnest deposits and security deposits; mixing it with the broker's own funds is prohibited and can cost the license.

Dividing an expense such as property taxes, rent, or homeowner association dues between buyer and seller according to how many days each owns the property during the billed period.

The seller's cash at closing, calculated by subtracting loan payoffs, commissions, transfer and recordation taxes, and settlement charges from the gross sale price.