MD Real Estate Exam Flashcards

Q: What is the pass rate for the Maryland real estate salesperson exam?

The Maryland real estate salesperson exam has an estimated first-time pass rate of about 62% per PSI/MREC 2024 figures. You must score at least 70% on each portion (56/80 national and 21/30 state) in the same testing window; passing one portion retains credit for that portion while you retake the failed side. The exam is administered by PSI at Maryland testing centers.

Q: What is the retake policy if I fail the Maryland real estate exam?

PSI does not allow same-day retakes. You may re-register the next business day and retake as soon as a seat is available, subject to continued eligibility. You only retake the portion(s) you failed. There is no limit on attempts, but eligibility expires one year after course completion; after that you must complete a new pre-licensing program. Each attempt costs the $44 PSI fee and is non-refundable.

Q: How much pre-license education does Maryland require for a salesperson license?

Maryland requires 60 hours of approved pre-licensing education from an MREC-certified school, plus being at least 18 years old and of good character. After licensing, salespersons must be sponsored by a licensed Maryland broker and complete 15 hours of continuing education every 2 years, including 1.5 hours of fair housing, 3 hours of ethics, 3 hours of legislative updates, and 3 hours of brokerage relationships and disclosures.

Q: What is the difference between a salesperson, associate broker, and broker in Maryland?

A salesperson must work under the supervision of a licensed broker and cannot receive compensation directly from clients. An associate broker has met all broker requirements (3 of the past 5 years actively licensed as a salesperson, 135 hours of broker education, and passing the broker exam) but chooses to work under another broker rather than operating their own brokerage. A broker is licensed to operate independently and supervises all affiliated licensees.

Q: What Maryland-specific disclosures must a licensee provide?

Maryland requires the written agency 'Consent' disclosure at the first scheduled face-to-face meeting to discuss a specific property, explaining whom the agent represents and obtaining written consent. Sellers of residential property must provide either a Residential Property Disclosure Statement or a Disclaimer Statement, and for any pre-1978 dwelling a federal lead-based paint disclosure plus the EPA pamphlet must be delivered before the buyer is obligated. Condominium and HOA resales require a resale certificate, and known latent defects must be disclosed even when using the disclaimer form.

Q: How is the Maryland real estate exam formatted and administered?

PSI administers the Maryland salesperson exam as 110 multiple-choice questions split into an 80-question national portion (90 minutes) and a 30-question state portion (30 minutes), for 2 hours 30 minutes total. You must pass each portion at 70% (56/80 national, 21/30 state). The fee is $44 per attempt, paid to PSI. Remote proctoring is not available; the exam is taken in person at PSI testing centers throughout Maryland.

Question 1

Maryland Real Estate Commission (MREC) composition

Accepted Answer

Nine members appointed by the Governor with Senate consent: five industry members (brokers, associate brokers, or salespersons) and four consumer members. MREC operates under the Maryland Department of Labor and regulates real estate practice statewide.

Question 2

Pre-license education required for a Maryland salesperson license

Accepted Answer

Sixty hours of approved pre-licensing education from an MREC-certified school, plus being at least 18 years old and of good character. The course may be taken online or in person. Exam eligibility expires one year from course completion, so schedule the exam promptly.

Question 3

Maryland continuing education requirement for license renewal

Accepted Answer

Fifteen hours every two years. Mandatory components include 1.5 hours of fair housing, 3 hours of ethics, 3 hours of legislative updates, and 3 hours of brokerage relationships and disclosures, with the remainder in elective topics. Failure to complete CE by the renewal deadline automatically converts the license to inactive status.

Question 4

Maryland real estate license renewal cycle

Accepted Answer

Licenses renew every two years from the date of issuance shown on the license. Renewal requires completing the 15-hour CE requirement and paying the renewal fee. A licensee who misses the CE deadline is automatically moved to inactive status and cannot practice until CE is completed and the license is reactivated.

Question 5

Requirements to obtain a Maryland broker license

Accepted Answer

Be actively licensed as a salesperson for at least 3 of the past 5 years, complete 135 hours of broker education from an MREC-approved school, and pass the broker exam. A college degree in real estate is NOT required. The broker exam has 80 national questions and 40 state questions (vs. 30 for salesperson).

Question 6

Associate broker vs. salesperson in Maryland

Accepted Answer

An associate broker has satisfied every broker requirement (experience, 135-hour education, and exam) but chooses to work under another broker instead of opening their own brokerage. A salesperson has only completed the 60-hour pre-license course and must always work under a supervising broker.

Question 7

Maximum fine MREC can impose per license-law violation

Accepted Answer

Up to $5,000 per violation under the Maryland Real Estate Brokers Act. The Commission may impose this fine in addition to or instead of reprimanding, suspending, or revoking the license. MREC may investigate any written complaint from any person alleging a violation.

Question 8

Maryland Real Estate Commission Guaranty Fund

Accepted Answer

Pays up to $25,000 per claim (transaction) to consumers who obtain an unpaid judgment against a licensee for fraud, misrepresentation, or other covered violations. The fund is funded by licensee assessments and provides a recovery path when the licensee cannot pay a judgment directly.

Question 9

Maryland record retention requirement for licensees

Accepted Answer

All real estate documents (contracts, disclosures, correspondence, trust account records, deposit slips, and reconciliations) must be retained for at least five years from the date of the transaction and made available for MREC inspection on demand.

Question 10

Maryland branch office license rule

Accepted Answer

Any location separate from the broker's main office where real estate activities are conducted requires its own branch office license and a designated branch office manager. The designated broker bears ultimate supervisory responsibility for all licensees affiliated with the brokerage, including those at branch offices.

Question 11

Can a Maryland salesperson receive a commission directly from a seller?

Accepted Answer

No. All compensation must flow through the salesperson's supervising broker. A salesperson who accepts compensation directly from any party violates Maryland license law and faces MREC disciplinary action. The broker disburses the salesperson's share per their written agreement.

Question 12

PSI Maryland salesperson exam format

Accepted Answer

One hundred ten multiple-choice questions: 80 national (90 minutes) and 30 state (30 minutes), for 2 hours 30 minutes total. You must pass each portion at 70% (56/80 national, 21/30 state). The fee is $44 per attempt, paid to PSI, and is non-refundable. Remote proctoring is not offered; testing is in person at Maryland PSI centers.

Question 13

What is 'first substantive contact' under Maryland agency law?

Accepted Answer

The first meeting where specific real estate needs, financial qualifications, or motivation are discussed. This triggers the requirement to provide the written agency disclosure before soliciting confidential information. Providing it earlier is always acceptable; waiting until after substantive discussion is a violation.

Question 14

The Maryland Consent form

Accepted Answer

Maryland's required written agency disclosure. It must be presented at the first scheduled face-to-face meeting to discuss a specific property, explains the available agency relationships, and obtains the consumer's written consent for the chosen relationship. Both the licensee and the client must sign, and failure to provide it can trigger MREC discipline.

Question 15

Buyer's agent in Maryland

Accepted Answer

An agent who represents only the buyer and owes fiduciary duties (loyalty, confidentiality, obedience, reasonable care, accounting, disclosure) exclusively to the buyer. The buyer is a client, not a customer. The agent must advocate for the buyer's best interests and keep the buyer's motivations and financial ceiling confidential.

Question 16

Customer vs. client in Maryland agency relationships

Accepted Answer

A client is owed fiduciary duties under a written or implied agency agreement; a customer is a party the licensee works with without representing (typically the unrepresented side). A licensee who shows property to an unrepresented buyer is the seller's agent (or sub-agent) unless a written buyer agency is established, so the buyer receives only honesty and fair dealing, not fiduciary duties.

Question 17

Dual agency in Maryland

Accepted Answer

One agent representing both buyer and seller in the same transaction. Permitted only with the written informed consent of both parties, who must understand the implications before signing. The dual agent may NOT disclose the buyer's top price or the seller's bottom price, and must otherwise maintain confidentiality to both sides.

Question 18

Confidentiality limits for a Maryland dual agent

Accepted Answer

A dual agent cannot reveal the price the buyer is willing to pay, the lowest price the seller will accept, or either party's motivation to sell quickly. Confidentiality is owed to both parties simultaneously. Factual information (property condition, listed price, status) may be shared; negotiating strategy may not.

Question 19

Intra-company agent (Maryland designated agency)

Accepted Answer

Maryland's term for designated agency within a single brokerage: the broker assigns one licensee in the firm to represent the buyer and another licensee to represent the seller in the same transaction. Each designated agent owes full fiduciary duties only to their assigned client, avoiding the conflicts of dual agency.

Question 20

What happens if a Maryland licensee shows property without establishing buyer agency?

Accepted Answer

The licensee is considered an agent of the seller (or sub-agent) unless a written buyer agency is created. The buyer becomes a customer receiving only honesty and fair dealing, not fiduciary duties. Maryland law presumes seller representation until the Consent form establishes otherwise, so the disclosure conversation matters at the first contact.

Question 21

Maryland agency disclosure signature requirement

Accepted Answer

Both the licensee and the client must sign the agency disclosure form. The signature acknowledges that the disclosure was provided and that the client understands the agency relationship being offered. A form signed only by the licensee does not satisfy the requirement and is treated as not provided.

Question 22

Consequence of failing to provide the Maryland agency disclosure on time

Accepted Answer

Failure to provide the written agency disclosure at the first scheduled face-to-face meeting (or before substantive services) is a violation of Maryland license law and COMAR. MREC may impose fines up to $5,000 per violation, suspend or revoke the license, or require remedial education. The defect cannot be cured retroactively after confidential information has been shared.

Question 23

Maryland fiduciary duties owed by an agent to a client

Accepted Answer

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care (OLDCAR). The agent must follow the client's lawful instructions, put the client's interests first, disclose all material facts, keep confidential information private, account for client funds, and exercise competence. These survive termination only as to confidentiality.

Question 24

How does a Maryland agency relationship terminate?

Accepted Answer

When the listing expires, the parties mutually cancel, the property sells and closes, or either party dies or becomes incapacitated. The duty of confidentiality survives termination indefinitely; other fiduciary duties (loyalty, obedience, disclosure) end when the relationship ends.

Question 25

Maryland duty when showing property to a buyer already represented by another agent

Accepted Answer

Treat that buyer as a customer, not a client. Do not provide advice adverse to the buyer's agent, do not solicit confidential information, and respect the existing agency relationship. The showing licensee's duties run to their own client (typically the seller); the represented buyer's agent holds the fiduciary duties to that buyer.

Question 26

Maryland timing rule for written agency disclosure before showings

Accepted Answer

Maryland law requires the agency relationship to be disclosed at the earliest practical time and in any event before showing properties to a buyer or listing a home for a seller. The Maryland Residential Real Estate Disclosure Form explaining whom the agent represents must be delivered before substantive services begin, not after an offer is written.

Question 27

What is contract ratification in Maryland?

Accepted Answer

The moment all parties have signed the contract and agreed to all terms, including any counteroffers. The contract becomes legally binding at ratification, and deadlines (earnest money deposit, inspection contingencies, financing) begin running from that date. A counteroffer automatically rejects the original offer and creates a new one.

Question 28

Maryland earnest money deposit deadline

Accepted Answer

Earnest money must be delivered to the broker and deposited into the trust account within 7 business days of contract ratification, or within a shorter period if the contract specifies one. If an offer is withdrawn before acceptance, the earnest money must be returned in full because no contract was formed.

Question 29

Maryland broker trust (escrow) account requirements

Accepted Answer

Held at a federally insured Maryland financial institution and reported to MREC with the bank name and account number. COMAR requires the account to be non-interest-bearing for trust funds. Commingling trust funds with personal or business operating funds is strictly prohibited and is grounds for license suspension or revocation.

Question 30

Commingling of trust funds in Maryland

Accepted Answer

Mixing client earnest money or escrow funds with the broker's personal or operating funds. Strictly prohibited under Maryland license law. Even accidental commingling (leaving earned commissions in the trust account, for example) is a violation. Penalties include license suspension or revocation and MREC fines up to $5,000 per violation.

Question 31

Maryland trust account reconciliation

Accepted Answer

The broker must regularly verify that the bank balance equals the sum of all individual client ledger balances. Reconciliation catches missing, misappropriated, or commingled funds. Trust account records (deposit slips, checks, reconciliations) must be retained for 5 years and produced for MREC inspection on demand.

Question 32

Maryland statute of limitations on written real estate contracts

Accepted Answer

Three years from the date of breach for written contracts, including real estate purchase agreements. Lawsuits for breach must be filed within this window or the claim is barred. Oral contracts have a shorter 3-year limit as well, but the written-contract rule governs standard real estate transactions.

Question 33

Typical Maryland home inspection contingency window

Accepted Answer

Seven to fourteen days from contract ratification is the customary inspection contingency period in Maryland contracts. If the inspection reveals major defects, the buyer may withdraw within the contingency period, request repairs, or negotiate a price reduction. Withdrawing after the contingency expires typically forfeits earnest money unless another contingency applies.

Question 34

Maryland state transfer tax rate and how it is split

Accepted Answer

0.5% of the purchase price, customarily split equally between buyer and seller (0.25% each) unless the contract negotiates otherwise. Counties separately charge their own local transfer tax (varying by county) and recordation tax. The County Circuit Court Clerk collects the state transfer tax when the deed is recorded.

Question 35

First-time Maryland homebuyer transfer tax benefit

Accepted Answer

A qualified first-time Maryland homebuyer pays a reduced state transfer tax of 0.25% (half the standard 0.5%), and that reduced amount is paid entirely by the seller rather than split. The buyer must sign an affidavit affirming first-time buyer status to qualify. The seller still pays their normal share at the reduced rate.

Question 36

Recordation tax in Maryland

Accepted Answer

A county-imposed tax on recording deeds and mortgages in the land records, separate from the state transfer tax. Rates vary by county, typically expressed per $500 of consideration. By custom, the buyer pays recordation tax on the new mortgage and the seller pays recordation tax on the deed transfer, though everything is negotiable in the contract.

Question 37

Closing Disclosure timing in a Maryland residential mortgage transaction

Accepted Answer

Under federal TRID rules, the Closing Disclosure must be delivered to the buyer at least 3 business days before closing for most residential mortgage loans. This gives the buyer time to review loan terms, projected payments, and all closing costs. The HUD-1 is used only for non-TRID transactions.

Question 38

Who may conduct a Maryland real estate closing?

Accepted Answer

Maryland is NOT an attorney-only closing state. Title companies and settlement agents routinely conduct settlements as neutral third parties who handle document execution and disbursement. However, the deed and mortgage must be prepared by or under the supervision of an attorney (or by a party to the instrument).

Question 39

Maryland property tax proration at closing

Accepted Answer

Property taxes are prorated based on the number of days each party owns the property during the tax year. The seller is responsible for their share up to the closing date, and the buyer pays from closing forward. The proration appears as a debit/credit on the Closing Disclosure and is calculated from the annual tax bill.

Question 40

Maryland real estate commission rule

Accepted Answer

Commission is fully negotiable between the broker and the client. No fixed rate is set by law, regulation, or any trade association. Commission is typically paid from the seller's proceeds at closing and split between listing and cooperating brokerages per the MLS or cooperation agreement. Any agreement between brokers to fix commission rates is illegal price-fixing.

Question 41

Maryland lead-based paint disclosure for pre-1978 homes

Accepted Answer

For any residential dwelling built before January 1, 1978, sellers and landlords must disclose known lead-based paint hazards, provide available records, deliver the EPA pamphlet 'Protect Your Family From Lead in Your Home,' and allow time for a lead inspection. The disclosure must be provided before the buyer becomes obligated under the contract.

Question 42

Maryland lead paint registration for rental properties

Accepted Answer

Landlords of pre-1978 rental properties must register with the Maryland Department of the Environment and comply with the Lead Risk Reduction in Housing Act, including meeting specific risk reduction standards before renting to families with children under 6. Owners can be held liable for lead paint hazards, and failure to register bars eviction actions.

Question 43

Maryland Residential Property Disclosure vs. Disclaimer

Accepted Answer

Sellers of residential property choose one of two forms: the Disclosure Statement lists known material defects (roof, plumbing, heating, electrical, etc.), or the Disclaimer Statement disclaims all warranties and transfers risk to the buyer. Either way, known latent defects must still be disclosed. Failure to provide either form lets the buyer withdraw any time before closing without penalty.

Question 44

Maryland latent defect rule even under the Disclaimer form

Accepted Answer

A latent defect is a hidden problem not discoverable through reasonable inspection (e.g., a crack in the foundation behind finished drywall). Maryland sellers must disclose known latent defects even when using the Disclaimer form, because the buyer cannot protect themselves by inspection. Nearby registered sex offenders are NOT a required disclosure.

Question 45

Maryland Homestead Property Tax Credit

Accepted Answer

Caps the annual increase in taxable assessment of owner-occupied principal residences at 10% statewide; many counties and Baltimore City set lower caps (some as low as 0-4%). Only the owner's principal residence qualifies; investment and second homes do not. Homeowners must apply by December 31 of the year they purchase the property, and the credit continues as long as it remains their principal residence.

Question 46

Maryland property reassessment cycle and assessment basis

Accepted Answer

The State Department of Assessments and Taxation (SDAT) reassesses one-third of all properties each year on a three-year cycle. Real property is assessed at 100% of full cash (market) value; Maryland does not use a fractional assessment ratio. Local jurisdictions (county and municipal) set the actual tax rate applied to that assessed value. Owners may appeal within 45 days of the assessment notice.

Question 47

Maryland fair housing protected classes beyond federal law

Accepted Answer

Maryland adds marital status, sexual orientation, gender identity, source of income, and military status to the seven federal protected classes (race, color, religion, national origin, sex, disability, familial status). The Maryland Commission on Civil Rights enforces these provisions and investigates complaints.

Question 48

Maryland source-of-income protection

Accepted Answer

Refusing to rent to someone because their lawful income comes from Section 8 housing vouchers, Social Security, or other government assistance is discrimination under Maryland fair housing law. A landlord cannot impose different terms, deny a rental, or steer such applicants based on the source of their income, though they may still verify amount and stability of income.

Question 49

Ground rent in Maryland

Accepted Answer

A unique Maryland arrangement where one party owns the building but leases the land beneath it. The ground rent owner (lessor) charges an annual rent; the homeowner (lessee) owns the improvements. Ground rent must be disclosed in any real estate transaction, and the lessee has redemption rights to purchase the ground rent interest under statutorily set terms.

Question 50

Maryland condominium resale certificate and buyer cancellation right

Accepted Answer

The condominium or HOA must deliver a resale certificate within 20 days of a written request from the unit owner or settlement agent. The buyer has 5 days after receiving the certificate to cancel the contract for any reason. If the certificate is never delivered, the buyer may void the contract at any time before receiving it, even after other contingencies have expired.

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