MO Real Estate cheat sheet

The Missouri Real Estate Commission (MREC) administers licensing within the Division of Professional Registration, Missouri Department of Commerce and Insurance; its rules are codified at 20 CSR 2250.

License tiers are broker, broker-salesperson, and salesperson; a salesperson may perform licensed acts only while sponsored by and acting under the supervision of a licensed broker.

Salesperson applicants must be at least 18, hold a high school diploma or equivalent, complete 48 hours of approved pre-examination instruction, pass the state exam, and clear a criminal background check.

Continuing education is 12 hours per two-year renewal cycle, including a required block of Missouri-specific core material.

MREC may refuse, censure, suspend, revoke, or fine; a licensee contesting discipline is heard by the Administrative Hearing Commission, with judicial review afterward.

Client funds such as earnest money and security deposits must be deposited in a separate escrow/trust account; commingling with broker operating funds and conversion of trust funds are prohibited.

Brokerage fees are fully negotiable; a licensee may not pay a commission, referral fee, or other compensation to an unlicensed person for brokerage activity.

All advertising must show the brokerage's licensed name and be placed with the broker's authorization; a salesperson may not advertise property independently.

A licensee who buys or sells for their own account must disclose their licensed status in writing to the other party.

Fiduciary duties owed to a client are obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care.

The agency relationship is held by the brokerage, not the individual salesperson; licensees act on the broker's behalf under a written brokerage agreement.

Missouri permits dual agency only when the conflict is disclosed in writing and both parties consent in writing; acting as an undisclosed dual agent is prohibited.

Compensation does not create agency: a buyer's broker may be paid by the seller or through a cooperative split without representing the seller.

Confidentiality survives termination of the agency, but it never justifies withholding material facts about the property.

A licensee must disclose known material adverse facts affecting value or a party's decision even when the client instructs silence.

Ministerial acts for an unrepresented customer (scheduling showings, supplying preprinted forms, quoting public records) do not create an agency or fiduciary relationship.

A licensee may not act as an undisclosed principal in a transaction.

Missouri's Statute of Frauds (RSMo 432.010) requires sale contracts, options, and leases longer than one year to be in writing and signed by the party to be charged.

Essential contract terms: competent parties, identifiable property description, price and terms, signatures, and mutual assent; earnest money amount and disbursement rules are customarily stated.

Equitable conversion: on execution of a binding sale contract the buyer holds equitable title while the seller retains legal title until the deed is delivered.

Contingencies (inspection, financing, appraisal, sale of the buyer's home) must be satisfied or waived in writing by their stated deadlines or the contract may be terminated.

Time is not of the essence unless the contract expressly says so.

"As is" language addresses condition, not title; it does not waive statutory disclosure duties.

On buyer default, the seller's remedy is typically retention of earnest money as liquidated damages if the contract provides; on seller default the buyer may seek specific performance or return of the deposit.

Closing mechanics: deed delivered and accepted, funds disbursed, documents recorded; taxes, rents, and association dues are prorated as of the closing date using the contract's method.

A deed must be acknowledged before a notary to be eligible for recording in Missouri.

One discount point equals 1% of the loan amount and is paid to buy down the interest rate.

Loan-to-value = loan amount divided by the lesser of price or appraised value; PMI is generally required above 80% LTV on conventional loans.

PITI = principal + interest + property taxes + hazard insurance; HOA dues and mortgage insurance are added when qualifying the borrower.

Common qualifying ratios are 28/36 for conventional loans and 31/43 for FHA loans, with automated underwriting flexibility.

Monthly payment on an amortizing loan = principal × [i(1+i)^n] ÷ [(1+i)^n − 1], where i is the periodic rate and n the number of payments.

RESPA Section 8 prohibits kickbacks and unearned fees; affiliated business arrangements require written disclosure, and lender escrow accounts are limited to a two-month cushion (1/6 of annual charges).

TRID: the Loan Estimate must be delivered within 3 business days of application, and the Closing Disclosure at least 3 business days before consummation; certain changed circumstances restart the 3-day clock.

TILA gives a 3-business-day right of rescission on refinances and home equity loans secured by a principal residence; purchase-money loans are excluded.

Missouri is a lien-theory state; security is usually a deed of trust in which a trustee may conduct a non-judicial sale after notice and publication when the borrower defaults.

Freehold estates: fee simple absolute, fee simple defeasible (determinable or subject to condition), and life estate; leaseholds: estate for years, periodic tenancy, tenancy at will, tenancy at sufferance.

Co-ownership: tenancy in common (distinct shares, no survivorship), joint tenancy (four unities plus right of survivorship), tenancy by the entirety (spouses only); Missouri is not a community property state.

Easements are appurtenant (benefit a dominant parcel) or in gross (benefit a person); they arise by express grant, implication, necessity, or prescription and end by merger, release, abandonment, or prescription.

Deed types: general warranty (present and future covenants, including quiet enjoyment and warranty forever), special warranty, bargain and sale, quitclaim, trustee's deed, executor's deed.

A valid deed requires a competent grantor, a named grantee, words of conveyance, a legal description, the grantor's signature, and delivery plus acceptance.

Recording in the county where the land lies gives constructive notice; an unrecorded interest is generally void against a later good-faith purchaser who records.

Missouri assessment ratios: residential 19%, commercial/industrial 32%, agricultural 12%, personal property 33⅓% of market value; tax = levy per $100 of assessed value.

Valuation approaches: sales comparison (adjusted comparables), cost (replacement cost less depreciation plus land), income (value = NOI ÷ capitalization rate); GRM = price ÷ gross rent.

Key principles: substitution, highest and best use, contribution, conformity, progression/regression, anticipation, change, plottage, and external obsolescence.

Federal protected classes: race, color, religion, sex (HUD interprets this to include sexual orientation and gender identity), national origin, familial status, and disability.

The Missouri Human Rights Act covers the same classes plus ancestry; complaints may be filed with the Missouri Commission on Human Rights or with HUD.

Prohibited practices include refusing to deal, offering different terms or conditions, discriminatory advertising, steering, blockbusting, redlining, and retaliation.

Narrow exemptions include a non-agent FSBO sale without discriminatory advertising, owner-occupied buildings of four or fewer units (Mrs. Murphy), certain religious organization housing, and housing for older persons (62+, or 55+ with 80% occupancy).

Disability rules: reasonable accommodation in rules and policies at the owner's expense, reasonable modification at the tenant's expense, and service/assistance animals are not pets.

Advertising may not state a preference or limitation based on a protected class; use of the Equal Housing Opportunity mark is encouraged.

For housing built before 1978, sellers and landlords must disclose known lead-based paint hazards, provide the EPA pamphlet, and give buyers a 10-day inspection opportunity.

Missouri's Seller's Disclosure Statement applies to transfers of one-to-four residential units and must reach the buyer before the buyer is bound; foreclosure, gift, government, and co-owner transfers are exempt.

The Missouri Merchandising Practices Act prohibits deceptive or unfair practices in trade, including misrepresentation by a licensee; a fair housing complaint may be filed with HUD within one year or in court within two years.