MN RE Broker flashcards

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

Minnesota Department of Commerce

State agency that licenses real estate brokers and salespersons, administers Minn. Stat. ch. 82, investigates complaints, and imposes discipline from fines to license revocation.

Broker supervision duty

The licensed broker is responsible for the real estate activities of affiliated salespersons and must establish written policies and procedures to supervise those activities.

Commingling

Illegally mixing client trust funds, such as earnest money or security deposits, with the broker's personal or business funds instead of keeping them in a designated trust account.

Agency disclosure requirement

Minnesota requires a written agency disclosure explaining the types of representation and the duties owed, presented at first substantive contact and acknowledged by the consumer.

Facilitator

A Minnesota licensee who assists a buyer or seller without representing either as an agent, owing honesty, material fact disclosure, and accounting but not loyalty or confidentiality.

Dual agency consent

A broker representing both buyer and seller in the same transaction must obtain the informed written consent of both parties and may not advocate for one over the other.

Confidentiality duty

A fiduciary obligation to keep a client's nonpublic information private; in Minnesota it continues after the agency relationship ends unless disclosure is required by law.

Material fact disclosure

A licensee must disclose known facts that could affect a party's decision, such as latent defects, regardless of which party the licensee represents.

Statute of Frauds

Legal rule requiring real estate contracts and deeds to be in writing and signed by the party to be charged before they are enforceable in court.

Earnest money

A deposit made by the buyer to show good faith; the purchase agreement states who holds it and the conditions under which it is returned or forfeited.

Seller's Property Disclosure

Minnesota residential disclosure form in which the seller reports known conditions and defects in the property before the buyer signs the purchase agreement.

Inspection contingency

A purchase agreement provision giving the buyer a stated period to inspect the property and then accept it, request repairs, or terminate and recover earnest money.

Well disclosure certificate

Minnesota document disclosing the location and status of wells on the property, required to be provided to the buyer at or before closing.

Tenancy in common

Ownership by two or more persons with separate, divisible shares and no right of survivorship; each owner may transfer their interest independently.

Joint tenancy

Ownership by two or more persons with equal undivided interests and a right of survivorship, so the surviving owner takes the deceased owner's share.

Race-notice recording

Minnesota rule protecting a later purchaser who records first and takes without notice of a prior unrecorded interest in the same property.

Torrens title

System of registered title in which the state issues a certificate of title that is conclusive as to ownership, subject to memorials noted on the certificate.

Title commitment

Document issued before closing that lists the requirements to be met and the exceptions to coverage that will appear in the title insurance policy.

Mechanic's lien period

In Minnesota a mechanic's lien generally must be recorded within 120 days after the last furnishing of labor or materials to preserve the claim.

Closing Disclosure timing

Under TRID rules the Closing Disclosure must be delivered to the borrower at least three business days before consummation of the loan.

Loan Estimate timing

The Loan Estimate must be provided within three business days after the lender receives a mortgage loan application.

Escrow cushion limit

RESPA limits the amount a servicer may hold in escrow for taxes and insurance to one-sixth of the estimated annual disbursements.

Proration at closing

Allocation between buyer and seller of items such as property taxes, rents, and association dues based on the closing date and the period each party owns the property.

Sales comparison approach

Valuation method that adjusts recent comparable sales for differences from the subject property to indicate the subject's market value.

Capitalization rate

Ratio of a property's net operating income to its value or sale price, used in the income approach to estimate value for income-producing property.

Comparative market analysis

A pricing analysis prepared by a real estate licensee using comparable listings and sales; it is not an appraisal and cannot be used as one.

Adjustment direction rule

When comparing sales, the comparable is adjusted toward the subject: subtract for features the comparable has that the subject lacks, add for features the subject has.

Nonconforming use

A use that lawfully existed before a zoning ordinance was adopted and may continue, though it generally cannot be expanded without a variance or conditional use permit.

Radon disclosure

Minnesota requires disclosure of radon hazards in residential transactions and gives the buyer a period to test for radon before proceeding.

Security deposit return

Minnesota landlords must return a tenant's deposit with an itemized statement of any withholding generally within 21 days after the tenancy ends.

Protected classes

Federal fair housing protects race, color, religion, sex, national origin, familial status, and disability; Minnesota adds sexual orientation, marital status, and public assistance status.

Reasonable accommodation

A change in rules, policies, or services needed by a person with a disability to have equal opportunity to use and enjoy a dwelling.

Trust account reconciliation

Monthly process in which the broker compares the trust account bank balance to the sum of individual client ledgers and resolves any discrepancy.

Commission payment rule

A salesperson may receive compensation for brokerage services only from the affiliated broker, not directly from a client or an unlicensed party.

Transaction record retention

Brokers must keep transaction files, disclosure records, and trust account records for the period required by statute and rule and produce them to the Commissioner on request.