Taking a real estate license exam is the first step to becoming a certified real estate agent. Each state needs real estate agents to possess a license – and to go through and pass a state examination to acquire the license. But passing the exam is not an easy task as one would like to imagine. If it were easy, then there wouldn’t be more than 50% first-attempt failures. Real estate course is extensive, so one needs to cover a lot of ground. Unfortunately, many candidates wait until it’s too late before they can start revising for the exam, so they end up failing.
That doesn’t have to be your story. Not when you can revise and prepare adequately and even take advantage of the free real estate prep guide trial that’s available online. To help point you in the right direction, here is a brief guide to real estate exams.
Confusing word pairs
Before sitting for your real estate exam, you need to understand the commonly used, yet confusing terms in the industry. Here are some examples of these words:
- Cooperative/condominium owner – a cooperative owner, has shares in a company that owns a premise, while a condo owner owns the property.
- Grantor/grantee – a grantor, sells, transfers or gives property to the grantee, who is the receiver of the property
- Foreclosure/forfeiture – foreclosure is when a lender sells off a lender’s property to pay off a debt, while forfeiture is loss of estate due to violation of deed’s conditions
- Leasehold/leased fee – leasehold is the interest of the tenant in the property, while the leased fee is the interest of the landlord or owner.
Other real-estate terms that are usually confused include mortgagor -mortgagee, replacement cost – reproduction cost and tax credit-tax deduction.
Types of real estate ownership
Many newbies assume that there is only one type of property ownership. However, there are four different types of ownership – and you’ll need to know them to pass your final exam.
- Tenancy in common – this is full ownership between people – if one owner passes on, their share is passed down to his heirs.
- Tenancy by the entirety – this means a property may not be sold without the consent of both parties. It’s common among couples.
- Joint tenancy – joint tenancy includes four unities: interest (where owners have the same interest), possession (owners have undivided interest), title (owners get their interest with the same deed) and time (owners get their interest at one go). If one owner passes on, their interest goes to the other owners.
Your fiduciary duties as an agent
A fiduciary relationship is a relationship between you (the agent) and a client. Fiduciary stands of a faithful servant – where you are fiduciary of your client. Here are some fiduciary duties you owe your client:
- Confidentiality – you must protect any information that your client discloses – particularly if the information may damage the client in a negotiation
- Accounting – you must account for every cent that your client gives you and not mix the monies with your personal or business funds
- Care – you need to handle your clients’ needs in the best way possible
- Loyalty – you owe a full commitment to your client, and should always put their needs before your own