MN Real Estate common mistakes
MN Real Estate · Understand the traps and how to avoid them.
At the first substantive contact with a buyer, the candidate discusses price, property features, and financing without delivering the required agency disclosure, then delivers it only when writing the offer.
Candidates confuse the general duty to disclose agency relationships with a vague 'disclose when it matters' rule and do not internalize Minnesota's first-substantive-contact timing.
What to do instead
Memorize the first-substantive-contact trigger, rehearse a 30-second disclosure script before any substantive discussion, and attach the required agency disclosure form to every initial contact record.
Treats a facilitator as the buyer's agent and tells the buyer the facilitator owes fiduciary duties of loyalty and advocacy.
Candidates assume every licensee who helps a buyer is automatically the buyer's agent and do not distinguish Minnesota's non-agency facilitator role.
What to do instead
Separate agency from facilitation in study notes: a facilitator does not represent either party and owes honesty, accounting, and material-fact disclosure but not loyalty or advocacy; obtain written acknowledgment of the facilitator relationship.
Lets an inspection or financing contingency deadline pass without a written extension or cancellation, then advises the client they can still terminate and get the earnest money back.
Candidates assume contingencies remain open until closing and overlook 'time is of the essence' language and written-notice requirements.
What to do instead
Calendar every contingency date at signing, require written amendments or cancellations before deadlines, and state in client communications that oral assurances do not extend a contingency.
Tells a seller that selling 'as-is' eliminates the duty to provide the Seller's Property Disclosure Statement.
Candidates conflate the property's physical condition with the statutory disclosure obligation and assume 'as-is' waives all seller disclosures.
What to do instead
Learn that the Seller's Property Disclosure Statement is generally required for residential property and that 'as-is' does not waive statutory disclosure duties; review the form and exceptions with the seller.
Completes the Seller's Property Disclosure Statement but omits well disclosure or fails to state whether any wells are located on the property.
Candidates focus only on the main disclosure form and forget Minnesota's separate well disclosure requirements.
What to do instead
Build a disclosure checklist that includes the Well Disclosure Certificate or a 'no wells' statement, and confirm the status with the seller before listing.
Uses only the federal protected classes in a fair housing scenario and misses Minnesota Human Rights Act classes such as marital status, status with respect to public assistance, sexual orientation, and creed.
Candidates study federal Fair Housing Act classes and assume the state list is identical.
What to do instead
Memorize the state-law additions separately, and on every fair housing question list both federal and Minnesota protected classes before selecting an answer.
Deposits a buyer's earnest money check into the broker's general operating account or uses trust funds to pay business expenses.
Candidates treat earnest money as broker revenue or as a convenience account rather than as client funds held in trust.
What to do instead
Route all earnest money to the designated trust account, prohibit commingling, and reconcile trust records on the required schedule.
Calculates loan-to-value using the purchase price even when the appraisal is lower, and concludes the buyer's down payment is sufficient.
Candidates use a simplified LTV formula and forget that lenders base LTV on the lesser of sales price or appraised value.
What to do instead
Apply LTV = loan amount divided by the lesser of sales price or appraised value, and test each financing scenario with a low-appraisal example.
Adjusts comparables only for square footage and ignores lot size, condition, garage, updates, and current market conditions; or treats the county assessed value as market value.
Candidates reduce valuation to a single price-per-square-foot calculation and do not understand assessed value's role.
What to do instead
Practice paired-sales adjustments across all major features, reconcile the adjusted range to a final opinion, and explicitly distinguish assessed value from market value.
Tells a buyer or seller that the broker can release earnest money on request after a deal falls apart, without a signed cancellation or adjudicated order.
Candidates assume the broker controls the funds and can choose the 'fair' recipient.
What to do instead
Learn that earnest money release requires written agreement of the parties or a court/arbitration order, and follow the escrow instructions exactly.