Mississippi Real Estate Exam – General Portion

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Property ownership (Salesperson 7 items/Broker 6 items)

Classes of property

Real versus personal property

Defining fixtures

Land characteristics and legal descriptions a. Physical characteristics of land

Economic characteristics of land

Types of legal property descriptions

Usage of legal property descriptions

Physical descriptions of property and improvements

fMineral, air and water rights

Encumbrances and effects on property ownership

Liens (types and priority)

Easements and licenses

Encroachments

Types of ownership

Types of estates

Forms of ownership

Leaseholds

Common interest ownership properties

Bundle of rights

Land use controls and regulations (Salesperson 5 items/Broker 5 items)

Government rights in land

Property taxes and special assessment

Eminent domain, condemnation, escheat

Police power

Public controls based in police power

Zoning and master plans

Building codes

Environmental impact reportsd. Regulation of special land types (floodplain, coastal, etc.)

Regulation of environmental hazards

Abatement, mitigation and cleanup requirements

Restrictions on sale or development ofcontaminated property

Types of hazards and potential for agent or seller liability

Private controls

Deed conditions or restrictions

Covenants, conditions and restrictions (CC&Rs)

Homeowners association (HOA) regulations

Valuation and market analysis (Salesperson 8 items/Broker 6 items)

Market value and market price

Value

Types and characteristics of value

Principles of value

Market cycles and other factors affecting property value

Methods of estimating value/appraisal processa.

Market or sales comparison approach

Replacement cost or summation approach

Income approach

Basic appraisal terminology (e.g., replacementversus reproduction cost, reconciliation,depreciation, kinds of obsolescence

Competitive/Comparative Market Analysis (CMA)

Selecting and adjusting comparables

Contrast CMA and appraisal

Price per square foot

Gross rent and gross income multipliers

Capitalization rate

Appraisal practice; situations requiring appraisal by a certified appraiser

Financing (Salesperson 6 items/Broker 7 items)

General concepts

LTV ratios, points, origination fees, discounts, broker commissions

Mortgage insurance (PMI)

Lender requirements, equity, qualifying buyers,loan application procedures

Types of loans and sources of loan money

Term or straight loans

Amortized and partially amortized (balloon) loans and other nonconforming loan

Adjustable rate mortgage (ARM) loans

Conventional versus insured

Reverse mortgages; equity loans; subprime and other nonconforming loans

Seller/owner financing

Primary market

Secondary market

Down payment assistance programs3. Government programs
FHA
VA

Other federal programs

Mortgages/deeds of trust

Mortgage clauses (assumption, due-on-sale, alienation, acceleration, prepayment, release)

Lien theory versus title theory

Mortgage/deeds of trust and note as separate documents

Financing/credit laws

Lending and disclosures

Truth in lending

RESPA

Equal Credit Opportunity

Fraud and lending practices

Mortgage fraud

Predatory lending practices (risks to clients)

Usury lending laws

Appropriate cautions to clients seeking financing

General principles of agency (Salesperson 10 items/Broker 11 items)

Nature of agency relationships

Types of agents and agencies (special, general, designated, subagent, etc.)

Nonagents (transactional/facilitational)

Fiduciary responsibilities

Creation and disclosure of agency and agency agreements (general, not state specific)
Agency and agency agreements

Disclosure when acting as principal or other conflict of interest

Responsibilities of agent/principal

Duties to client/principal (buyer, seller, tenant or landlord)

Traditional common law agency duties; effect of dual agency on agent’s duties

Responsibilities of agent to customers and third parties, including disclosure, honesty , integrity , accounting for money

Termination of agency

Expiration

Completion/performance

Termination by force of law

Destruction of property/death of principal

Mutual agreement

Mandated disclosures (Salesperson 8 items/Broker 9 items)

Property condition disclosure

Property owner’s role regarding property condition

Licensee’s role regarding property condition

Warranties

Purpose of home or construction warranty programs

Scope of home or construction warranty programs

Need for inspection and obtaining/verifying information

Explanation of property inspection process and appropriate use

Agent responsibility to inquire about “red flag” issues

Responding to non-client inquiries

Material facts related to property condition orlocation

Land/soil conditions

Accuracy of representation of lot or improvementsize, encroachments or easements affecting use

Pest infestation, toxic mold and other interiorenvironmental hazards

Structural issues such as roof, gutters,downspouts, doors, windows, foundation

Condition of electrical and plumbing systems, andof equipment or appliances that are fixtures

Location within natural hazard or specificallyregulated area, potentially uninsurable property

Known alterations or additions

Material facts related to public controls, statutes of public utilities

Zoning and planning information

Boundaries of school/utility/taxation districts,flight paths

Local taxes and special assessments, other liens

External environmental hazards

Stigmatized/psychologically impacted property

Megan’s Law issues

Contracts (Salesperson 11 items/Broker 12 items)

General knowledge of contract law

Requirements for validity

When contract is considered performed/discharged

Assignment and novation

Breach of contract and remedies for breach

Contract clauses

Listing agreements

General requirements for valid listing

Exclusive listings

Non-exclusive listings

Buyer/tenant representation agreements, including key elements and provisions of buyer and/or tenant agreements

Offers/purchase agreements

General requirements

When offer becomes binding (notification)

Contingencies

Time is of the essence

Counteroffers/multiple counteroffers

Counteroffer cancels original offer

Priority of multiple counteroffer

Leases

Types of leases, e.g., percentage, gross, net,ground

Lease with obligation to purchase or lease withan option to purchase

Other real estate contracts

Options

Right of first refusal

Transfer of title (Salesperson 5 items/Broker 5 items)

Title insurance

What is insured against

Title searches, title abstracts, chain of title

Cloud on title, suit to quiet title

Deeds

Purpose of deed, when title passes

Types of deeds (general warranty, special warranty, quitclaim) and when used

Essential elements of deeds

Importance of recording

Escrow or closing; tax aspects of transferring title to real property

Responsibilities of escrow agent

Prorated items

Closing statements/HUD-1

Estimating closing costs

Property and income taxes

1031 exchanges

Special processes

Foreclosure/short sale b. Real estate owned (REO)

Practice of real estate (Salesperson 12 items/Broker 12 items)

Trust/escrow accounts (general, not state specific)

Purpose and definition of trust accounts,including monies held in trust accounts

Responsibility for trust monies, including commingling/conversion

Federal fair housing laws

Protected classes

Covered transactions

Specific laws and their effects

Compliance

Types of violations and enforcement

Exceptions

Advertising and technology

Incorrect “factual” statements versus “puffing”

Truth in advertising

Fair housing issues in advertising

Fraud, technology issue

Uninformed misrepresentation versus deliberate misrepresentation (fraud)

Technology issues in advertising and marketing

Agent supervision

Liability/responsibility for acts of associated licensees and employees

Responsibility to train and supervise associated licensees and employees

Commissions and fees

Procuring cause/protection clauses

Referrals and other finder fees

General ethics

Practicing within area of competence

A voiding unauthorized practice of law

Antitrust laws

Antitrust laws and purpose

Antitrust violations in real estate

Real estate calculations (Salesperson 6 items/Broker 4 items)

Basic math concepts

Area

Loan-to-value ratios

Discount points

Equity

Down payment/amount to be financed

Calculations for transactions, including mortgage calculations

Property tax calculations

Prorations (utilities, rent, property taxes, insurance, etc)

Seller’s proceeds of sale

Transfer tax/conveyance tax/revenue

Amortization tables

Interest rates

Interest amounts

Monthly installment payments

Buyer qualification ratios

Calculations for valuation

Competitive/comparative market analyses (CMA)

Net operating income

Depreciation

Capitalization rate

Gross rent and gross income multipliers (GRM,GIM)

Specialty areas (Salesperson 2 items/Broker 3 items

Subdivisions, including deed restrictions

Commercial, industrial and income property

Types of lease

Trade fixtures

Accessibility

Tax depreciation

1031 exchanges

Trust fund account

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