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In Maryland pre-licensing, licensees are taught to help buyers—especially first-time purchasers or those with recent credit challenges—understand appropriate, suitable financing options (fixed vs. adjustable rates, government-backed loans, down payment assistance, points, APR, mortgage insurance, qualifying ratios), and to avoid steering to high-risk or predatory products. This aligns with consumer-protection principles, agency duties, and federal disclosure frameworks (TILA/RESPA) covered in the financing module.

A federally related transaction is defined as any real estate-related financial transaction that involves a federal financial institution regulator, such as the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, Office of the Comptroller of the Currency (OCC), or any transaction intended for sale to a government-sponsored enterprise like Fannie Mae or Freddie Mac.

Under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), federal agencies require that real estate appraisals used in federally related transactions be performed by state-licensed or state-certified appraisers.

In Maryland’s 60-Hour Pre-Licensing Course, this concept is taught within the “Real Estate Appraisal and Valuation” topic to ensure future licensees understand when a certified appraisal is legally mandated. The course emphasizes that federally related transactions generally include:

The sale, lease, purchase, investment, or exchange of real property.

The financing, refinancing, or use of real property as security for a loan.

Transactions regulated by federal financial agencies.

Therefore, the correct definition of a federally related transaction is a real estate transaction in which a federal financial agency or regulatory authority is involved.

Reference (Maryland and Federal Sources):

Maryland 60-Hour Principles and Practices of Real Estate Pre-Licensing Course – “Real Estate Appraisal and Valuation” Module (Appraisal Standards Section)

Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Title XI – Appraisal Standards

12 U.S.C. § 3350 – Definitions (Federally Related Transaction)

In a seller-agency relationship, the agent owes the client (seller) fiduciary duties, which include loyalty, obedience (lawful instructions), disclosure, confidentiality, accounting, and reasonable care. Practical responsibilities include advising the seller on pricing and marketing strategy, actively marketing the property, presenting offers, and negotiating in the seller’s best interests. Duties owed to buyers (customers) are limited to honesty and disclosure of material facts, not advocacy. Therefore, “Market and sell the property” reflects the seller’s agent’s core duty; negotiating for the buyer or representing the buyer would conflict with loyalty to the seller unless properly disclosed and permitted as dual agency under Maryland law.

When personal property (chattel) is physically attached to real property in such a way that it becomes part of the real estate, it becomes a fixture. Fixtures transfer with the property upon sale unless specifically excluded in the contract. The determination depends on attachment, adaptation, and intent. Maryland’s course addresses fixtures under “Real Property and the Law,” emphasizing how they affect ownership and conveyance.

A promissory note is a borrower’s written promise to repay a specified amount of money under agreed terms.

A mortgage is the security instrument that pledges real property as collateral for that note.

Together, they form the legal and financial foundation for most real estate loans.

If the borrower defaults, the lender may foreclose on the property under the rights granted by the mortgage.

The Maryland 60-Hour Course explains that while some states use deeds of trust instead of mortgages, Maryland primarily uses mortgages and promissory notes in conventional real estate financing.

Antitrust violations occur when individuals or companies engage in activities that restrict competition in the marketplace and limit consumer choice.

In real estate, this includes price-fixing, group boycotts, market allocation, and tie-in agreements, all of which are prohibited under the Sherman Antitrust Act and Federal Trade Commission Act.

Maryland’s real estate license law reinforces these prohibitions, and the Maryland 60-Hour Course covers antitrust compliance under “Fair Housing and Ethics” to ensure licensees act in the public’s best interest and avoid practices that restrain trade.

Maryland law establishes that the Maryland Real Estate Commission has nine members: five must be licensed real estate professionals (one from each of Maryland’s five geographic regions) and four must be consumer members who are not engaged in the real estate business. This composition ensures both industry expertise and public representation. The pre-licensing course presents this under Maryland License Law and MREC structure, aligning with the Maryland Business Occupations and Professions Article, Title 17 (§17-202).

A lot-and-block legal description identifies land within a recorded subdivision plat, referencing a specific lot number, block number, map book, and page filed with the county recorder. It’s the most common method for urban and suburban properties in Maryland.

Choices B and D represent metes-and-bounds and rectangular survey systems, respectively; A is simply a street address.

In development analysis, costs include impacts that require public or private expenditure—for example, the increased demand on infrastructure (roads, utilities, schools, water/sewer), which necessitates capacity expansions, impact fees, or mitigation measures.

Crime rates and lower unemployment are socio-economic conditions/impacts, not direct development costs.

Local density zoning rules are regulatory constraints (land-use controls), not a cost in themselves (although they can influence costs).

References (Maryland Pre-Licensing Core Content):

Maryland 60-Hour Course: “Land Use Controls and Property Development” (infrastructure capacity, impact fees, concurrency, mitigation of development impacts).

Planning and subdivision concepts taught in Maryland curriculum (infrastructure and service demands as development costs).

Radon is a naturally occurring radioactive gas that results from the decay of uranium found in soil, rock, and groundwater. It is colorless, odorless, and tasteless and can accumulate in enclosed spaces, such as basements and homes.

The U.S. Environmental Protection Agency (EPA) identifies radon exposure as a leading cause of lung cancer among nonsmokers.

In Maryland, the pre-licensing course emphasizes that while radon testing is not mandatory, sellers and licensees have a duty to disclose known environmental hazards to buyers.