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Real Estate Exam Quick Reference: Fifty Facts, Sorted by Subject
Everything below is general-principles material. Your state portion is written locally and is not summarized here: pull the current candidate handbook from the exam vendor your jurisdiction contracts with, and read your commission's own statute and rules for the state items.
Fifty entries, grouped by subject, covering the settled definitions and formulas that show up across national exam outlines. Nothing here is a trick or an edge case. These are the items a candidate is simply expected to know cold.
Use it as a recall check rather than as instruction. Read a line, look away, restate it, and mark anything you could not restate. Those marks are your study list.
Ownership Interests and How Title Is Held
1. Fee simple absolute carries the fullest bundle of rights recognized in law. It has no built-in end date and passes by sale, gift or inheritance without a condition attached.
2. A life estate is measured by a person's lifetime. On that person's death the interest moves to whoever holds the remainder or reverts to the grantor; it is not part of the life tenant's estate.
3. Joint tenancy depends on four unities being present together, commonly recalled as time, title, interest and possession. Destroy one and the surviving co-ownership is a tenancy in common.
4. Tenancy by the entirety exists only between spouses where a state recognizes it, and neither spouse can unilaterally defeat the survivorship feature.
5. In community property jurisdictions, what a spouse acquires during the marriage is generally owned equally by both. Which states follow that system is a matter of state law, so confirm it for the jurisdiction you are tested in.
6. Water rights split along the type of water: land touching a lake, sea or other still body carries littoral rights, while land along a river or stream carries riparian rights.
7. An easement appurtenant benefits a neighboring parcel and conveys with that parcel automatically. An easement in gross belongs to a person or company rather than to any dominant land.
Contract Formation and the Duties an Agent Owes
8. Four elements make a contract enforceable: parties with legal capacity, agreement reached through offer and acceptance, an object that is lawful, and consideration exchanged.
9. Under the Statute of Frauds, an agreement transferring an interest in land generally has to be written and signed before a court will enforce it.
10. Fiduciary obligations to a principal are frequently taught with the mnemonic OLDCAR: obedience, loyalty, disclosure, confidentiality, accounting and reasonable care.
11. When a single licensee or firm acts for buyer and seller in one transaction, that is dual agency. Where a state permits it at all, informed written consent from both sides is the norm.
12. Under an option, the optionee may buy on stated terms within a stated window but is not compelled to. Only the optionor is locked in.
13. A deposit is evidence of serious intent, not a requirement for formation. When it is taken, it belongs in the broker's trust or escrow account rather than in operating funds.
14. Specific performance is the equitable remedy that compels the breaching party to convey as promised instead of writing a check for damages.
15. A time-is-of-the-essence clause converts the written dates into strict conditions, and blowing one can put a party in default.
Financing Terms and Lending Disclosure
16. Loan-to-value divides the loan by the lesser of appraised value or price. Borrow $240,000 against a $300,000 valuation and the ratio is eighty percent.
17. Private mortgage insurance is an insurer's promise to the lender, not protection for the borrower. Lenders commonly require it on conventional loans above a stated loan-to-value threshold.
18. FHA lending is insured by the Federal Housing Administration and is known for a low minimum investment by the borrower. The current minimum, and the mortgage insurance that goes with it, are published in FHA program rules.
19. A VA-guaranteed loan is available to eligible service members and veterans, and its signature feature is that qualified borrowers may finance the purchase without a down payment.
20. Discount points are interest paid up front to buy the note rate down. One point equals one percent of the amount borrowed.
21. RESPA governs the settlement process: it mandates cost disclosure to the consumer and forbids kickbacks and unearned fees for referrals.
22. TILA is the consumer-credit disclosure statute. It is why a borrower receives the annual percentage rate, the finance charge and the payment schedule in writing.
23. Usury statutes cap what a lender may charge. A rate written above the statutory ceiling is unlawful, and the ceiling itself is set by state law.
24. Hypothecation describes pledging property as security for a debt while keeping possession and use of it.
Appraisal Method and Value Principles
25. Appraisers work from three approaches. Comparison of recent similar sales dominates residential assignments, the cost approach suits new or special-purpose improvements, and the income approach drives investment property.
26. Capitalization rate is net operating income divided by value. Net income of $100,000 on a property worth $1,000,000 gives a rate of ten percent.
27. The gross rent multiplier divides price by gross rent for the period used. It is a rough screening tool, not a substitute for a full analysis.
28. Loss in value falls into three buckets: physical deterioration from age and use, functional obsolescence from a design the market no longer wants, and external obsolescence caused by forces off the property.
29. Substitution holds that an informed buyer will pay no more than the cost of acquiring an equally desirable alternative.
30. A highest and best use conclusion must clear four tests at once. The use has to be legally allowed, physically possible, financially feasible, and the most productive of those that survive the first three.
Calculations Worth Memorizing
31. Total commission is price multiplied by the agreed rate. An individual licensee's share is that total multiplied by the applicable split.
32. Seller proceeds are what remains after commission and the seller's closing charges come out of the contract price.
33. Income capitalization runs both directions. Divide income by rate to solve for value; multiply value by rate to solve for income.
34. To prorate, reduce the annual figure to a daily figure, then multiply by the number of days the party is responsible for. Whether the year is treated as 365 days or as twelve thirty-day months depends on the contract and on local custom.
35. Rectangular area is length times width; a triangle is half the base times the height. There are 43,560 square feet in an acre.
36. A mill is one thousandth of a dollar. Tax equals assessed value multiplied by the mill rate and divided by one thousand.
37. Owner equity is the current market value less the balance of what is owed against the property.
38. To grow a value, multiply it by one plus the rate; to shrink it, multiply by one minus the rate. Watch for problems that apply the rate more than once.
Federal Fair Housing and Credit Statutes
39. The federal Fair Housing Act, as amended, bars housing discrimination on the basis of race, color, religion, national origin, sex, familial status and disability. Many states and localities protect additional classes.
40. Steering is guiding a prospect toward or away from particular areas or buildings because of a protected characteristic.
41. Blockbusting is provoking owners to list by playing on fears about who is moving into the area.
42. Redlining is a lender or insurer refusing service in a geographic area based on its racial or ethnic makeup rather than on the risk presented.
43. The Americans with Disabilities Act reaches places of public accommodation and commercial facilities. An ordinary private dwelling is addressed through fair housing law instead.
44. The Equal Credit Opportunity Act prohibits a creditor from discriminating on bases including race, color, religion, national origin, sex, marital status, age, and the fact that income comes from public assistance.
Public Controls, Zoning and Environmental Rules
45. Zoning ordinances divide a community by permitted use and intensity. A variance excuses one parcel from a dimensional or use requirement, and a nonconforming use is one that was lawful before the ordinance changed around it.
46. Eminent domain is the sovereign power to take private land for a public purpose, and the Fifth Amendment conditions the taking on payment of just compensation. Condemnation is the proceeding that carries it out.
47. Police power is the broad authority to legislate for health, safety, morals and general welfare. Zoning, building codes and similar controls all trace back to it.
48. Federal law requires lead-based paint disclosure and the accompanying pamphlet when target housing built before 1978 is sold or leased.
49. CERCLA, commonly called Superfund, can impose cleanup liability on current and former owners and operators without regard to who caused the contamination.
50. A Phase I environmental site assessment is a records and site reconnaissance exercise. Sampling of soil, groundwater or building materials belongs to Phase II.
Questions About Using a Reference Sheet Like This
May I take notes like these into the testing room?
No. Licensing exams are administered closed book, and printed or handwritten material is not permitted past check-in. That restriction is the whole reason a recall sheet is worth building before test day rather than after.
Will fifty facts carry me through the exam by themselves?
They will not. The items here are recall anchors, and a large share of exam questions ask you to apply a rule to a short scenario instead of restating it. Pair this list with timed, full-length practice.
Why is there nothing here about my own state's license law?
Because it would be wrong for most readers. License categories, trust account handling, advertising restrictions, required disclosures and renewal rules are written jurisdiction by jurisdiction. Build that half of your recall sheet from your commission's rules and your vendor's handbook.
What is the best way to work through this page?
Make one pass to sort the entries into known and unknown. Study only the unknown pile, with practice questions rather than rereading. Return for a single clean pass shortly before your appointment.
Are these guaranteed to appear on my exam?
No honest provider guarantees content, and nobody outside the vendor sees the live item pool. What can be said is that these subjects sit inside the published national content outline, which is the document to check for the weighting used on your version of the exam.
How do I find out which of these I actually know?
Sit the free diagnostic before you study anything. It scores you by subject, your PassPulse Score tracks whether the gains hold up, and your PassMap™ puts the weakest subjects first. Full access is $79 one time, with a 30-day money-back guarantee.
Where to go next: Vocabulary and Recall Pages
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