MN Real Estate flashcards

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

Compensation Through Broker Only

In Minnesota a salesperson may not accept a commission or other compensation directly from a client or customer; payment must be made to and disbursed by the supervising broker.

Minnesota Prelicense Education Hours

Minnesota requires 30 hours of approved prelicense education to obtain a salesperson license and 90 hours to obtain a broker license, plus passing the state examination.

Continuing Education Two-Year Cycle

Minnesota licensees must complete 30 hours of approved continuing education during each two-year license period in order to renew a real estate license.

First Substantive Contact Disclosure

Minnesota law requires a broker to give a consumer the written agency disclosure form at the first substantive contact about a specific property or transaction.

Facilitator Role Minnesota

A Minnesota facilitator assists a buyer or seller without representing either party as an agent, so it owes honesty and disclosure of material facts but no fiduciary duty.

Dual Agency Written Consent

Representing both buyer and seller in the same transaction requires the informed written consent of both parties and impartial treatment; without consent the broker must decline the dual role.

Fiduciary Duties to Client

An agent owes the client loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting for money or property entrusted to the agent.

Statute of Frauds Land

A contract for the sale of land must be in writing and signed by the party to be charged before a Minnesota court will enforce it.

Counteroffer Terminates Original Offer

A counteroffer ends the original offer, so the original offer can no longer be accepted unless the offeree revives it before the other party accepts the counteroffer.

Earnest Money Liquidated Damages

Earnest money is a good-faith deposit applied to the price at closing; a seller may keep it as agreed liquidated damages when the buyer defaults outside a contingency.

Minnesota Seller's Property Disclosure

Sellers of one-to-four unit residential property in Minnesota must deliver a written disclosure of known material defects before the buyer signs the purchase agreement.

Well Disclosure Certificate

Before signing, a Minnesota seller must deliver a well disclosure certificate listing the location and status of all known wells, or state that none exist.

Lead-Based Paint Disclosure Rule

Federal law requires sellers of pre-1978 housing to disclose known lead-based paint hazards, provide the EPA pamphlet, and allow a ten-day inspection opportunity.

Lien Theory State

Minnesota is a lien theory state, meaning a mortgage gives the lender a lien on the property while the borrower keeps title until a foreclosure sale occurs.

Race-Notice Recording Statute

Minnesota recording law protects a later purchaser who records first without notice of a prior unrecorded interest, combining race and notice elements.

Torrens Registered Land

Under Minnesota's Torrens system, registered land is evidenced by a certificate of title, and later transfers and liens are noted as memorials on that certificate.

Adverse Possession Fifteen Years

Minnesota's general adverse possession period is fifteen years of continuous, hostile, open, and exclusive possession of land owned by another person.

Loan Estimate Timing

Under RESPA and TRID rules, a lender must deliver the Loan Estimate within three business days after receiving a complete residential mortgage application.

Closing Disclosure Waiting Period

The consumer must receive the Closing Disclosure at least three business days before loan consummation, and certain changed terms require a revised disclosure and new waiting period.

Contract for Deed Cancellation

Minnesota statutes require a seller to serve written notice of cancellation and allow a statutory cure period, generally sixty days for most residential contracts for deed.

Comparable Adjustment Direction

In the sales comparison approach, comparables are adjusted toward the subject: a feature the subject has that the comparable lacks adds value to the comparable.

Capitalization Rate Formula

Under the income approach, value equals net operating income divided by the capitalization rate, with the rate extracted from sales of similar income properties.

Highest and Best Use

Highest and best use is the legally permissible, physically possible, financially feasible use that produces the greatest value and supports the market value estimate.

Federal Fair Housing Classes

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, sex, national origin, familial status, and disability.

Minnesota Additional Protected Classes

The Minnesota Human Rights Act adds creed, marital status, status with regard to public assistance, and sexual orientation to the federal protected classes in housing.

Reasonable Accommodation Disability

Housing providers must make reasonable exceptions to rules, policies, or practices when needed to give a person with a disability equal opportunity to use and enjoy housing.

Commingling Prohibited

A broker may not mix client trust funds with personal or business operating funds; earnest money and other trust funds must be held in a separate trust account.

Monthly Trust Reconciliation

Brokers must reconcile trust account records each month, matching the checkbook balance to individual transaction ledgers and to the reconciled bank balance.

Broker Supervision Duty

A Minnesota broker is responsible for supervising affiliated licensees and unlicensed staff, including their advertising, transactions, and handling of trust funds.

Proration at Closing

Recurring items such as property taxes, rent, and association dues are divided between buyer and seller at closing, usually with the seller charged through the day of closing.

FIRPTA Withholding Requirement

When a foreign person sells United States real property, the buyer must withhold fifteen percent of the gross sales price and remit it to the Internal Revenue Service.

Owner's Versus Lender's Title Policy

An owner's title policy protects the buyer against covered title defects existing before closing, while a separate lender's policy protects only the mortgagee's interest.