National Portion: General Real Estate Principles and Practices
The frameworks examiners favor
Most national items are built from six frameworks: agency (who represents whom, plus the fiduciary duties of care, obedience, loyalty, disclosure, accounting, and confidentiality); contract law (offer, acceptance, consideration, legality, capacity, statute of frauds, contingencies, earnest money); ownership and encumbrances (severalty, tenancy in common, joint tenancy, tenancy by the entirety; easements appurtenant versus in gross; liens and priority); transfer of title and recording; valuation (sales comparison, cost, income); and finance and consumer protection (LTV, PITI, amortization, discount points, RESPA/TRID, TILA, ECOA, Fair Housing). Land use controls and property management round out the pool.
Traps that show up repeatedly
- Client versus customer. A customer is owed honesty and fairness, not loyalty or confidentiality. Questions love to swap these labels.
- Agency timing. Disclosure of whom the licensee represents must occur before confidential information is shared.
- Adjust the comparable, never the subject, in the sales comparison approach.
- Points versus fees. One discount point equals 1% of the loan amount and is prepaid interest that buys down the rate; an origination fee is a separate charge.
- Proration conventions. Use whatever day-count the question states, and watch which party is credited on the closing day.
- Lien priority. Property tax and special assessment liens generally outrank recorded mortgages.
Worked example
Income approach: Value = Net Operating Income ÷ Capitalization rate. With NOI of $54,000 and a 9% cap rate, value = $54,000 ÷ 0.09 = $600,000. Reverse it when asked for the rate. Commission math runs the same way: price × rate, then apply splits in sequence. A $420,000 sale at 5.5% generates $23,100; a 50/50 broker split leaves $11,550; a 70/30 agent split pays the agent $8,085.