Real Estate Practice
The transaction timeline
Practice questions follow the deal from first contact to closing: establishing agency and delivering the agency pamphlet, signing a listing or buyer-broker agreement, researching the property and preparing a CMA, marketing, writing the offer, counteroffers, mutual acceptance, then contingencies for financing, inspection, appraisal, and title review before settlement.
A contract binds only on mutual acceptance of identical terms. A counteroffer terminates the original offer, so the original offeree can no longer simply accept. Contingencies allocate risk; a financing contingency protects the buyer, while a time-is-of-the-essence clause makes deadlines enforceable.
Money and prorations
Earnest money is trust funds, not the broker's money. At closing, taxes, rents, and HOA dues are prorated: the seller is debited and the buyer credited for the period after closing, and the reverse for prepaid items. Watch the year basis stated in the contract - a 365-day year versus a 360-day (banker's) year changes the answer.
Worked example: annual property tax $3,650, closing June 30, seller responsible through the day before closing (181 days). $3,650 ÷ 365 = $10.00 per day; 181 × $10 = $1,810 debited to the seller and credited to the buyer.
Conduct rules
Describe the property, never the people - fair housing violations arise from steering and from wording that signals a preference. Advertising must identify the firm, and a licensee may not advertise another broker's listing without authority. Discussing commissions or market allocation with a competitor is an antitrust problem, not sales talk.