MT Real Estate common mistakes
MT Real Estate · Understand the traps and how to avoid them.
Answers license-law questions by describing what agents 'usually' do (advise the client on whether to sign, explain the legal effect of a contract clause, draft a deed or a special warranty clause, or let an unlicensed assistant hold an open house and quote price terms alone) instead of what a Montana licensee may lawfully do.
Candidates study agency and contracts first, so they default to 'helpful agent' behaviour and never separate licensed acts from acts that only a lawyer, accountant, or appraiser may perform.
What to do instead
Build a two-column drill: 'Licensee may do' (fill in preprinted forms, present options, disclose facts, refer to counsel) vs 'Must refer out' (give legal/tax advice, draft custom contract language, prepare deeds, perform appraisals). On every practice question, ask: is this licensed activity, and is a license required at all?
Treats one licensee representing both buyer and seller in the same transaction as a normal, consent-only option, or describes the brokerage as a 'dual agent' and then attributes knowledge of one client to the other side.
Textbook materials from other states treat dual agency as routine, and candidates transfer that assumption to Montana, which instead relies on written agency agreements, relationship disclosure, and designated agency within a brokerage rather than a single licensee serving two principals.
What to do instead
Memorize the Montana relationship options (seller agency, buyer agency, designated agency, nonagency) and the rule that a client's confidential information is not passed to the other party. When a practice question says 'the same agent represents both parties', stop and look for the designated-agency or written-consent answer, not automatic dual agency.
Labels every burden on title an 'encumbrance that clouds title', and cannot distinguish an easement appurtenant from an easement in gross, or a lien from a deed restriction, when deciding whether a property is marketable or how a right passes with the land.
The vocabulary is taught as a list of terms, so candidates recognise words without mapping them to who benefits, whether the right runs with the land, and whether it blocks transfer.
What to do instead
For each item, ask three questions: who benefits (neighbouring parcel vs a specific person/entity), does it run with the land on transfer, and does it affect title marketability or only use? Practise sorting a mixed list: easement appurtenant, easement in gross, deed restriction, mortgage lien, tax lien, encroachment, licence.
Counts a counteroffer or a reply that adds a new term ('we accept if the fridge stays and closing moves to the 15th') as an acceptance, then builds the rest of the answer on a binding contract.
Everyday speech treats 'yes, but...' as agreement, and mirror-image acceptance plus the mailbox/revocation rules are memorised as isolated facts rather than a sequence.
What to do instead
Apply a fixed sequence to every contract question: offer, mirror-image acceptance or counteroffer (which terminates the original offer and creates a new power of acceptance), consideration, capacity, legal purpose, statute of frauds, contingencies. If new terms appear, restart at 'counteroffer' before answering anything about remedies or earnest money.
Uses the note rate and the APR interchangeably, treats discount points as a lender fee that never affects yield, and cannot say when the Loan Estimate or Closing Disclosure must be delivered relative to consummation.
Finance is the most formula-dense domain, so candidates memorise 'APR = cost of credit' as a slogan and skip the disclosure-timing rules that exam writers test with dates.
What to do instead
Write one page that separates: note rate (interest on the balance), APR (rate plus finance charges over the loan term), points (prepaid interest that raises lender yield and lowers the rate), and the disclosure timing anchors (Loan Estimate shortly after application; Closing Disclosure at least three business days before consummation, with a new three-day window if certain terms change). Drill date arithmetic, not just definitions.
Adjusts comparables in the wrong direction - adding value when the comp is superior to the subject, subtracting when it is inferior - or reconciles the final estimate by simply averaging all adjusted comps.
Candidates focus on the arithmetic and forget the principle: the adjustment converts the comparable into the subject, so superior features are removed from the comp's price.
What to do instead
State the rule out loud before calculating: 'Comp is better, so subtract; comp is worse, so add.' Then reconcile by weighting the most similar, most recent, most reliable comps rather than averaging, and check that the final value sits within the adjusted range. Also confirm the cap-rate direction: higher cap rate, lower value for the same income.
Assumes recording creates or cures title, or assumes a signed deed alone transfers ownership, and then mis-answers questions about who holds title, what a quitclaim conveys, and whether a warranty deed guarantees against all defects.
Recording, delivery, and deed covenants are studied together in one chapter, so candidates blur 'recorded', 'valid', and 'marketable' into one idea.
What to do instead
Separate three tests every time: valid transfer (competent grantor, identifiable grantee, words of conveyance, legal description, signature, delivery and acceptance), recording (priority and notice, not validity), and covenant strength (quitclaim: no covenants; bargain and sale or special warranty: limited; general warranty: broad). Ask 'what does this document promise?' before 'was it recorded?'.
Applies the 'Mrs. Murphy' room-rental exemption to ordinary sales and leasing, or misses steering in a scenario (guiding a family away from a building with mostly older residents, quoting different terms based on marital status or disability, or a discriminatory ad) because no one said the word 'discrimination'.
Candidates memorise exemptions as a shield and read scenarios for keywords instead of for conduct that has a discriminatory effect.
What to do instead
State the exemption narrowly (owner-occupied building of a small number of units, no discriminatory advertising, no broker involved) and test each scenario against conduct: was a person treated differently in availability, terms, or information? Treat steering, different terms, and exclusionary advertising as violations even when the motive sounds benign, and review Montana and local protected classes alongside the federal seven.
In property-management scenarios, mixes the owner's operating funds with tenant security deposits or earnest money, or answers a lease question by treating a rental agreement and a long-term lease as identical on duration and formality.
Trust-account rules and lease classifications are memorised as lists, so candidates miss the practical scenario facts - who holds the money, when it must be disbursed, and what the agreement's term and renewal pattern imply.
What to do instead
Drill with a ledger: identify every dollar's owner, the account it belongs in, and the deadline for disbursement or transfer at closing or lease end. Then classify each document by term and renewal structure before answering about notice, holdover, or deposit disposition.
Puts closing costs on the wrong side of the statement (charging the seller for something the buyer pays, or reversing a debit and a credit) and prorates taxes, rent, or interest without knowing the day-count and who owns the day of closing.
The math is done under time pressure with formulas half-remembered, and the debit/credit convention ('a debit to the seller is money the seller owes; a credit to the seller is money the seller receives') is never made mechanical.
What to do instead
Write the debit/credit rule on scratch paper first, then build a two-column statement and force every item through the question 'who is paying whom, and is this party receiving or owing?'. For prorations, use the day-count the question specifies (actual days in the month and year unless a 30/360 convention is stated), state who owns the closing day per the question, and compute the per-diem before multiplying.