MN Real Estate key terms

A person licensed by Minnesota to conduct real estate transactions for others, hold client trust funds, and sponsor salespeople. A broker may own or manage a brokerage and is responsible for supervising the licensees who work there.

A Minnesota licensee who performs brokerage activities for compensation while sponsored by a licensed broker. A salesperson may not operate independently, accept compensation directly from clients, or control trust funds outside the broker's authority.

The state agency that licenses real estate brokers and salespeople, reviews applications and complaints, and enforces Minnesota real estate statutes and rules. It may suspend, revoke, or condition a license and impose civil penalties.

Coursework a Minnesota licensee must complete during each license renewal cycle to keep the license active. Required hours include specified subject areas such as fair housing, agency, and state disclosure law, and completion is reported to the state.

A written notice a licensee must give a consumer explaining which party the licensee represents and the duties owed. It is intended to be delivered before the consumer signs an agreement or relies on the licensee's advice.

The legal obligations a licensee owes to a client: loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting for money and property. These duties are owed to clients and not to unrepresented parties.

A situation in which one brokerage represents both the buyer and the seller in the same transaction. Because complete loyalty to both is impossible, Minnesota law requires informed written consent and limits what the licensee may share with either side.

A written contract in which a buyer hires a brokerage and sets out services, duration, and how the brokerage is paid. It creates the agency relationship and triggers the agency disclosure requirements.

Facts a client tells a licensee that could weaken the client's bargaining position if revealed, such as a willingness to accept less or a deadline to move. It must stay confidential without the client's permission, even after closing.

A written employment contract between a seller and a brokerage authorizing marketing of the property. It states the asking price, listing term, compensation, and type of listing, such as exclusive right to sell.

The written contract in which a buyer promises to buy and a seller promises to sell real property. It sets out price, closing date, contingencies, and inspection terms, and binds the parties once accepted.

A buyer's good-faith deposit that is credited toward the purchase price at closing. The purchase agreement should name the holder, say when it becomes nonrefundable, and explain what happens if the sale fails.

A condition written into a purchase agreement that must be satisfied or waived before closing, such as obtaining financing or a satisfactory inspection. If the contingency fails, the buyer may usually cancel and recover earnest money.

A written statement Minnesota residential sellers give buyers about known conditions and defects in the property and its systems. It reflects the seller's actual knowledge and is not a warranty, guarantee, or substitute for an inspection.

A hidden problem the buyer could not reasonably discover through ordinary inspection, such as buried debris or a failing septic system. Sellers who know of a latent defect must disclose it rather than stay silent.

A sale in which the buyer accepts the property in its present condition and the seller promises no repairs. It does not eliminate the seller's disclosure obligations or liability for fraud or known hidden defects.

A Minnesota document identifying the location and status of water wells on property being transferred. It is signed by the seller, filed with the county, and given to the buyer when a well exists.

A written instrument that transfers an interest in real property from a grantor to a grantee. To be effective the deed must be signed and delivered and must describe the property; recording protects priority against later claims.

A deed in which the grantor gives up whatever interest the grantor has without promising that title is good. It is often used in family transfers and to clear title problems, and gives the grantee little recourse.

A right to use another owner's land for a limited purpose without owning it, such as a shared driveway or utility corridor. Easements can be created by written grant, long use, necessity, or implication.

A form of co-ownership in which each owner holds a separate, transferable share and there is no right of survivorship. When an owner dies, that share passes to heirs or under a will, not to the other owners.

A person's primary residence, which Minnesota law protects from forced sale for most debts up to a statutory amount. Homestead rules also affect a surviving spouse's rights and require a spouse's signature on a mortgage or deed.

A written document that makes real property security for a debt. In Minnesota the borrower generally keeps title to the property, and the lender can foreclose by advertisement or through court action if the loan is not paid.

The borrower's written promise to repay a loan according to stated terms, including interest rate, payment schedule, and due date. The mortgage supports the note by giving the lender a claim against the property.

A standard disclosure a lender must provide soon after a mortgage application. It shows the estimated interest rate, monthly payment, closing costs, and cash needed to close so borrowers can compare loan offers.

A standard form stating the final loan terms, closing costs, and cash to close. In most residential transactions the borrower must receive it at least three business days before the loan is consummated.

The loan amount divided by the property's appraised value or purchase price, whichever is lower, stated as a percentage. Higher ratios generally require mortgage insurance and can mean a higher interest rate.

A purchase arrangement in which the buyer pays the seller over time and receives the deed only after the price is paid. Minnesota law sets notice and cancellation steps the seller must follow before terminating.

Personal characteristics that may not be used to deny or vary housing terms. Federal law covers race, color, religion, sex, national origin, familial status, and disability; Minnesota adds classes such as sexual orientation, creed, marital status, and public assistance status.

Guiding buyers toward or away from neighborhoods, or limiting a seller's exposure, because of a protected characteristic. Steering violates fair housing law even when a buyer is never outright refused.

A change in rules, policies, practices, or services that a housing provider must make so a person with a disability can use and enjoy the home, such as waiving a no-pet rule for an assistance animal.

A licensee's analysis of recently sold, pending, and active listings to suggest a listing or offer price. It is an opinion prepared for marketing purposes and is not an appraisal.

An appraisal method that estimates value by comparing the subject property with similar properties that sold recently, adjusting for differences in size, condition, features, and location.

A bank account a broker uses to hold other people's money, such as earnest money and security deposits, separate from the broker's own funds. Minnesota rules govern deposits, withdrawals, records, and authorized signers.

Putting client money into the broker's own business or personal account, or mixing client funds with the broker's funds. It is a license law violation even when no money is missing.

The requirement that a brokerage keep transaction files, contracts, disclosures, and trust account records for a set period and produce them when the Department of Commerce requests them during an audit or investigation.

Holding money or documents with a neutral party until the conditions of a sale are satisfied. In lending, escrow also means the account that collects part of the taxes and insurance each month with the mortgage payment.

Dividing ongoing costs such as property taxes, rent, or homeowners association dues between buyer and seller at closing, so each pays for the portion of the period during which they owned or occupied the property.

A Minnesota form reporting the price and terms of a real property sale, filed with the county recorder or registrar for most transfers. State and local agencies use it for sales data and property tax administration.