SC Real Estate cheat sheet

Agency is a fiduciary relationship created by written agreement in South Carolina; without a written agreement the consumer is a customer, not a client.

Fiduciary duties are remembered as OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable Care.

Dual agency exists when one brokerage represents both parties in the same transaction and requires the informed written consent of all parties.

Designated agency assigns different licensees within the same brokerage to represent each side, avoiding a single-agent conflict.

Confidentiality survives termination of the agency relationship; it does not expire with the listing or buyer agreement.

Duties owed to a customer: honesty, reasonable care, disclosure of known material facts, and accounting for funds or documents.

Termination occurs by expiration, performance, mutual agreement, revocation by the principal, death or incapacity of the principal, or bankruptcy.

A principal is vicariously liable for the acts of a licensee performed within the scope of authority; the licensee remains liable for personal misrepresentation.

Valid contract formation requires offer, acceptance, consideration, competent parties, and a lawful objective; real estate contracts must also satisfy the Statute of Frauds.

Statute of Frauds: contracts for the sale of land and leases exceeding one year must be in writing and signed by the party to be charged.

Bilateral contract = promise exchanged for a promise; unilateral contract = promise exchanged for performance (option, reward, open listing).

An option requires consideration to be enforceable; a right of first refusal requires only the opportunity to match a third party's offer.

Time is of the essence only when the contract states it; contingency deadlines must be met or expressly waived in writing.

Earnest money is not required for contract validity; a liquidated damages clause is enforceable only if the amount is a reasonable estimate of loss.

Assignment transfers contract rights and duties; novation substitutes a new party and releases the original; rescission cancels the contract and restores the parties.

Remedies for breach include compensatory damages, specific performance, rescission, and liquidated damages.

LTV = loan amount / lesser of purchase price or appraised value; required down payment = 100% minus LTV.

Conventional loans above 80% LTV typically require private mortgage insurance; borrowers may request cancellation at 80% of original value and termination is automatic at 78%.

FHA loans are government-insured and carry upfront and annual mortgage insurance premiums; VA loans offer a guaranty and a funding fee instead of monthly mortgage insurance.

RESPA Section 8 prohibits fees, kickbacks, or things of value for referral of settlement services; Section 10 limits lender escrow reserves.

TILA/Regulation Z requires the Loan Estimate within three business days of application and the Closing Disclosure at least three business days before consummation.

Fixed-rate amortizing loans: monthly payment = loan amount x payment factor per $1,000; early payments apply mostly to interest.

ARM mechanics: index + margin = fully indexed rate; periodic and lifetime caps limit payment increases.

Qualifying ratios commonly used: housing expense around 28-31% of gross monthly income and total debt around 36-43%.

Acceleration and due-on-sale clauses let the lender call the loan on default or unauthorized transfer of the secured property.

Fee simple absolute is the most complete freehold estate; a life estate ends at death and is followed by a remainder or reversion.

Joint tenancy requires the four unities (time, title, interest, possession) plus survivorship; tenancy in common permits unequal shares and has no survivorship.

Tenancy by the entirety is available only to married couples and generally cannot be conveyed by one spouse alone.

Easement appurtenant benefits a dominant parcel; an easement in gross benefits a person or entity; an easement by necessity arises when a parcel is landlocked.

Prescriptive easement elements: open, notorious, continuous, hostile, and adverse use for the statutory period, generally 20 years in South Carolina.

Government powers over private land: police power (zoning), eminent domain (condemnation with just compensation), taxation, and escheat.

Zoning relief: variance for hardship, special exception or conditional use permit, nonconforming use protection, and rezoning (spot zoning is invalid).

Water rights: riparian rights apply to rivers and streams, littoral rights to lakes and oceans; accretion and reliction add land, avulsion does not move boundaries.

Leasehold estates: estate for years, periodic tenancy, tenancy at will, and tenancy at sufferance.

Sales comparison approach: adjust the comparables, never the subject; add value when the comparable is inferior, subtract when it is superior.

Cost approach: value = replacement or reproduction cost - accrued depreciation + land value; most reliable for new construction and special-use property.

Income approach: value = net operating income / capitalization rate; cap rate = NOI / value; NOI excludes debt service and income taxes.

Gross rent multiplier = sale price / gross rent; value = GRM x gross rent.

Depreciation types: physical deterioration, functional obsolescence (curable or incurable), and external obsolescence, which is generally incurable by the owner.

Highest and best use test: legally permissible, physically possible, financially feasible, and maximally productive.

Reconciliation weights the approaches by reliability of the data; federally related appraisals must conform to USPAP.

Licensees may prepare comparative market analyses and broker price opinions; they may not perform appraisals or issue value opinions requiring a licensed appraiser.

Months of supply = active listings / monthly absorption rate; rising supply indicates a buyer's market.

Deed requirements: competent grantor, identifiable grantee, words of conveyance, legal description, consideration recital, grantor's signature, and delivery with acceptance.

General warranty deed warrants against all title defects; special warranty covers only defects created by the grantor; quitclaim conveys whatever interest the grantor holds with no warranty.

Warranty covenants: seisin, right to convey, quiet enjoyment, warranty forever, and further assurance.

Involuntary transfers include foreclosure, tax sale, adverse possession, and escheat; voluntary transfers include deed, will, and dedication.

South Carolina adverse possession period: generally 10 years under color of title and 20 years without color of title.

Recording gives constructive notice; a subsequent bona fide purchaser who records first may prevail over a prior unrecorded interest.

Owner's title policy: one-time premium, coverage equal to purchase price, runs with the property; lender's policy: declining balance, coverage equal to the loan.

Marketable title is free of liens and encumbrances a reasonable buyer would object to; a quiet title action removes clouds on title.

Testate succession occurs under a valid will; intestate succession follows the state statute of descent and distribution.

Exclusive right to sell: broker is paid regardless of who procures the buyer, including the owner; exclusive agency: owner retains the right to sell without paying; open listing: only the procuring broker is paid.

Procuring cause is the uninterrupted chain of events initiated by the broker that leads to the sale; it supports a commission claim.

A broker earns the commission by producing a ready, willing, and able buyer on the listed terms, even if the seller later refuses to close.

Trust funds must be deposited into a separate account, never commingled with operating funds, and never converted to personal use.

Paying a referral fee or splitting compensation with an unlicensed person is illegal; brokerage services require a license.

Section 1031 like-kind exchanges require investment or business property, identification within 45 days, and closing within 180 days.

Advertising must show the brokerage name; unlicensed assistants may perform clerical work but may not negotiate, show property, or discuss terms.

South Carolina sellers of residential property of one to four units must provide the state Residential Property Condition Disclosure Statement, subject to statutory exemptions such as foreclosure, gift, and court-ordered transfers.

The seller disclosure is not a warranty; the buyer retains a duty to inspect and verify.

A licensee must disclose known material adverse facts to all parties regardless of the seller's instruction to remain silent.

Agency relationship disclosure must be made in writing at the first substantive contact with a consumer.

Federal lead-based paint rule: pre-1978 housing requires disclosure of known lead hazards, the EPA pamphlet, and a 10-day inspection opportunity.

Stigmatizing events (death, illness) that do not affect the physical condition of the property are generally not required disclosures.

Licensees must disclose any personal interest in a transaction, such as purchasing a client's property or a referral relationship.

Confidential client information may not be disclosed, but material facts affecting the property must be.

Federal protected classes under the Fair Housing Act: race, color, religion, sex, national origin, familial status, and disability.

Prohibited practices include refusing to sell or rent, varying terms, steering, blockbusting, redlining, discriminatory advertising, and retaliation.

Limited exemptions: private owner sales without a licensee, owner-occupied buildings of four or fewer units (Mrs. Murphy), religious organizations, and private clubs.

Disability rules: reasonable accommodation changes rules or policies; reasonable modification changes the physical unit, generally at the tenant's expense.

Familial status protects households with children under 18 and pregnant women; occupancy limits must be based on reasonable standards.

A fair housing complaint may be filed with HUD within one year; the Department of Justice may bring pattern-or-practice suits.

Advertising must use the Equal Housing Opportunity logotype and describe the property, never the preferred buyer or tenant.

Steering and separate showing lists based on protected class characteristics are prohibited; testing is a standard enforcement tool.

The REALTOR® Code of Ethics contains 17 articles governing duties to clients, customers, the public, and other licensees.

Article 1 requires protecting and promoting the client's interests while treating all parties honestly; Article 2 prohibits exaggeration, misrepresentation, and concealment of pertinent facts.

Article 3 requires cooperation with other brokers unless it is contrary to the client's interest; compensation must be disclosed and agreed in advance.

Article 10 prohibits discrimination; Article 16 requires respect for the exclusive agency of other brokers.

Antitrust violations include price fixing, group boycotts, and market allocation; competitors may not agree on commission rates.

Ethics complaints are heard by the local board's professional standards committee; commission disputes go to arbitration.

Undisclosed dual compensation, secret profits, and failure to disclose a personal interest in the transaction are ethical violations.

The Code is interpreted by the golden rule: conduct toward others as you would have them conduct toward you.

Total commission = sales price x commission rate; each broker's share = total commission x agreed split percentage.

Loan amount = price (or appraised value, whichever is less) x LTV; down payment = price - loan amount.

One discount point = 1% of the loan amount.

Net operating income = effective gross income - operating expenses; value = NOI / cap rate; cap rate = NOI / value.

Gross rent multiplier = price / gross monthly rent; value = GRM x gross rent.

Area conversions: 1 acre = 43,560 square feet; 1 square mile = 640 acres; 1 mile = 5,280 feet.

Prorations use either a 365-day or a 12-month/30-day method; the daily rate = annual amount / 365 (or monthly amount / 30).

South Carolina deed recording fee is $1.85 per $500 of consideration, rounded up to the next $500 increment.

Return on investment = (net proceeds - total cost) / total cost; appreciation = current value - original cost.

The South Carolina Real Estate Commission is an agency of the Department of Labor, Licensing and Regulation and licenses salespersons, brokers, broker-in-charge designees, and property managers.

A salesperson must be affiliated with and supervised by a broker-in-charge and may not conduct brokerage independently.

Licensure requires completion of Commission-approved prelicensing education, a criminal background check, passing the licensing examination, and affiliation with a broker-in-charge.

Licenses renew on a biennial cycle and require Commission-approved continuing education and payment of renewal fees to remain active.

Grounds for discipline include misrepresentation, breach of trust, commingling or conversion of trust funds, undisclosed dual compensation, and failure to supervise.

Available sanctions include reprimand, probation, additional education, administrative fines, suspension, and revocation.

Broker-in-charge duties include supervising affiliated licensees, maintaining transaction and trust records, and ensuring advertising shows the brokerage name.

Unlicensed assistants may not negotiate, show property, quote terms, or handle trust funds.

Nonresident licensing is available through reciprocity or cooperative agreements with certain states.

The Real Estate License Law is codified in Title 40, Chapter 57 of the South Carolina Code, with supporting regulations adopted by the Commission.

A written agency agreement establishes a client relationship; a written agency disclosure must be provided at the first substantive contact with a consumer.

Each office must have a designated broker-in-charge who is responsible for supervision and for compliance with recordkeeping and trust account rules.

Trust funds must be held in a separate trust account, disbursed only as authorized by the parties, documented by ledgers, and never commingled.

Brokerage records, including agency agreements, transaction files, and trust account records, must be retained and made available to the Commission on request.

A licensee who buys, sells, or leases property in which the licensee has an interest must disclose that interest in writing to all parties.

Compensation may not be shared with or paid to an unlicensed person for brokerage activity, and referral fees to unlicensed persons are prohibited.

Property management activities such as leasing, collecting rent, and managing rentals require licensure; an owner managing the owner's own property is exempt.

The Commission may investigate complaints, subpoena records, conduct hearings, and impose disciplinary sanctions.