MO Real Estate flashcards

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

Missouri Real Estate Commission

The state agency, within the Division of Professional Registration, that licenses Missouri brokers and salespersons, adopts licensing rules, and imposes discipline for violations.

Salesperson supervision rule

A Missouri salesperson may perform licensed brokerage activities only while sponsored by and working under the supervision of a licensed Missouri real estate broker.

Commission rates are negotiable

Missouri law and commission rules do not set brokerage fees; the amount and split are freely negotiated between the broker and the client in the brokerage agreement.

Fees to unlicensed persons

A licensee may not pay a commission, referral fee, or other compensation to an unlicensed person for performing licensed brokerage activity; doing so is a disciplinary violation.

Advertising broker identification

Property advertising placed by a salesperson must display the brokerage's licensed name and be published with the broker's authorization.

Six fiduciary duties

Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care are the duties a licensee owes a client throughout the agency relationship.

Dual agency written consent

Representing both buyer and seller in the same transaction requires written disclosure of the conflict and the written consent of both parties before acting.

Confidentiality after termination

The duty to protect a former client's confidences continues after the agency ends, but it never permits concealing material facts about the property.

Material fact disclosure

A licensee must reveal known facts that materially affect property value or a party's decision, even when the client instructs the licensee to remain silent.

Compensation and agency

Who pays a licensee's fee does not establish representation; a buyer's broker may be compensated by the seller without owing the seller any fiduciary duty.

Missouri statute of frauds

Missouri requires real estate sale contracts, options, and leases exceeding one year to be written and signed by the party against whom enforcement is sought.

Equitable title at contract

Once a valid sale contract is signed, the buyer holds equitable title to the property while the seller retains legal title until the deed is delivered.

Deed delivery and acceptance

A deed becomes effective only when the grantor delivers it with intent to convey and the grantee accepts; recording is evidence but is not what creates validity.

Contract contingency clause

A condition such as inspection, financing, or appraisal that must be satisfied or waived in writing by a stated deadline before the buyer is obligated to close.

Proration at closing

Property taxes, rents, and association dues are divided between buyer and seller as of the closing date using the method specified in the contract.

Discount point cost

One discount point equals one percent of the loan amount and is an upfront charge paid to obtain a lower interest rate on the mortgage.

Loan-to-value ratio

The loan amount divided by the lesser of the purchase price or appraised value, expressed as a percentage; it drives down payment and mortgage insurance requirements.

PITI payment components

The four parts of a monthly housing payment: principal, interest, property taxes, and hazard insurance; mortgage insurance and HOA dues are added in qualifying.

RESPA Section 8

The federal ban on kickbacks and unearned fees for settlement services; affiliated business arrangements are allowed only with written disclosure of the relationship.

Closing Disclosure timing

Under TRID rules, the borrower must receive the Closing Disclosure at least three business days before loan consummation, and certain changed circumstances restart that period.

Tenancy in common

Co-ownership in which owners hold distinct, freely transferable shares with no right of survivorship; each may convey or encumber their interest independently.

Joint tenancy survivorship

Co-ownership requiring unity of time, title, interest, and possession, plus equal shares; on an owner's death the interest passes to the surviving owners automatically.

General warranty deed

A deed containing present covenants (seisin, right to convey, against encumbrances) and future covenants (quiet enjoyment, warranty forever) protecting the grantee against title defects.

Constructive notice by recording

Recording a deed or lien in the county where the land is located gives the public legal notice of the interest, whether or not anyone actually reads the records.

Missouri residential assessment ratio

Missouri assesses residential property at 19 percent of market value; commercial and industrial property at 32 percent; and agricultural property at 12 percent.

Capitalization rate formula

Net operating income divided by property value equals the capitalization rate; rearranged, value equals net operating income divided by the cap rate.

Federal protected classes

Race, color, religion, sex, national origin, familial status, and disability are protected in the sale or rental of housing under the federal Fair Housing Act.

Blockbusting

Inducing owners to sell or rent by suggesting that members of a protected class are moving into the neighborhood, thereby profiting from the resulting panic selling.

Steering

Directing prospective buyers or tenants toward or away from particular neighborhoods or properties based on a protected characteristic rather than their stated needs.

Reasonable accommodation

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

Lead-based paint disclosure

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

Missouri Seller's Disclosure Statement

Sellers of one-to-four unit residential property must give buyers a written statement of known defects and material facts before the buyer becomes obligated.