REAL General Content Outlines

MINNESOTA State Content Outlines General Exam Content Outline for Salespersons and Brokers Effective: June 01, 2020

The general portion of the real estate exam is made up of eighty (80) scored items, which are distributed as noted in the following content outline. The general examination also contains five (5) pretest items that are not counted toward the score. These items are used to gather statistics on performance and to help assess appropriateness for use on future examinations. Because pretest items look exactly like items that are scored, candidates should answer all the items on the examination.

I. REAL CHARACTERISTICS, 3. transfer LEGAL DESCRIPTIONS, AND PROPERTY USE a. Voluntary alienation (SALES 9; BROKER 9) b. Involuntary alienation A. vs. 4. the title 1. Fixtures, trade fixtures, emblements a. Constructive and actual notice 2. Attachment, severance, and bill of sale b. Title abstract and chain of title B. Characteristics of real property c. Marketable title and cloud on title 1. Economic characteristics d. Attorney title opinion, lawsuit, and title 2. Physical characteristics insurance C. Legal descriptions III. PROPERTY VALUE AND APPRAISAL 1. Methods used to describe real property (SALES 11; BROKER 10) 2. Survey A. Concept of value D. Public and private land use controls – encumbrances 1. Market value vs. market price 1. Public controls – governmental powers 2. Characteristics of value a. Police power, eminent domain, taxation, 3. Principles of value b. Zoning ordinances B. Appraisal process 2. Private controls, restrictions, and encroachments 1. Purpose and steps to an appraisal a. Covenants, conditions, and restrictions (CC&Rs), HOAs 2. Federal oversight of the appraisal process b. C. Methods of estimating value and Broker Price c. and encroachments Opinions (BPO) II. FORMS OF , TRANSFER, AND RECORDING 1. Sales comparison approach (market data) OF TITLE (SALES 8; BROKER 8) 2. Cost approach A. Ownership, estates, rights, and interests a. Improvements and depreciation 1. Forms of ownership b. Physical deterioration, functional, and economic 2. estate obsolescence a. absolute c. Reproduction or replacement costs b. Fee simple defeasible, determinable, and condition 3. Income approach subsequent 4. Gross rent and gross income multipliers c. Life estate 5. Comparative Market Analysis (CMA) d. 6. Broker Price Opinion (BPO) 3. Leasehold estates and types of 7. Assessed value and tax implications a. Estate for years and from period to period IV. REAL ESTATE AND AGENCY (periodic estate) (SALES 16; BROKER 17) b. Estate at will and estate at sufferance A. Types of contracts c. Gross, net, and percentage leases 1. Express vs. implied 4. and priority 2. Unilateral vs. bilateral 5. Surface and sub-surface rights B. Required elements of a valid B. , title, transfer of title, and recording of title C. Contract performance 1. Elements of a valid deed 1. Executed vs. executory 2. Types of 2. Valid vs. void

Content Outlines page 01 State of Minnesota Real Estate 3. Voidable vs. unenforceable a. Errors and Omissions 4. Breach of contract, rescission, and termination b. General Liability 5. Liquidated, punitive, or compensatory damages VI. PROPERTY DISCLOSURES AND ENVIRONMENTAL 6. Statute of ISSUES (SALES 8; BROKER 8) 7. Time is of the essence A. Property conditions and environmental issues D. Sales contract 1. Hazardous substances 1. Offer and counteroffer a. Lead-based paint 2. Earnest money and liquidated damages b. Asbestos, radon, and mold 3. Equitable title c. Groundwater contamination and underground storage 4. Contingencies tanks 5. Disputes and breach of contract d. disposal sites and brownfields 6. Option contract and installment sales contract e. Flood plains, flood zones, and flood insurance 2. Clean Air and Water Acts E. Types of agency and licensee-client relationships 3. Environmental Protection Agency (EPA) F. Creation and termination of agency a. Comprehensive Environmental Response, G. Licensee obligations to parties of a transaction Compensation, and Liability Act (CERCLA) V. REAL ESTATE PRACTICE (SALES 14; BROKER 13) b. Superfund Amendment and Reauthorization Act (SARA) A. Responsibilities of broker c. Environmental site assessments (including Phase I and 1. Practicing within scope of expertise II studies) and impact statements 2. Unauthorized practice of d. Wetlands protection B. Brokerage agreements between the broker and B. Disclosure obligations and liability principal (seller, buyer, landlord, or tenant) VII. FINANCING AND SETTLEMENT (SALES 7; BROKER 7) 1. Seller representation – Types of listing agreements A. Financing concepts and components a. Exclusive right-to-sell and exclusive agency listing 1. Methods of financing b. Non-exclusive or open listing a. Mortgage financing – conventional and non-conventional c. Net listing (conflict of interest) loans d. Multiple listing service (MLS) b. Seller financing – land contract/contract for deed 2. Buyer representation 2. Lien theory vs. title theory and deed of trust 3. Property management agreement 3. Sources of financing (primary and secondary mortgage a. Accounting for funds markets, and seller financing) b. Property maintenance 4. Types of loans and loan programs c. Leasing property 5. Mortgage clauses d. Collecting rents and security deposits B. Lender Requirements 4. Termination of agreements 1. FHA requirements 5. Services, fees, and compensation 2. VA requirements C. Fair Housing 3. Buyer qualification and Loan to Value (LTV) 1. Equal opportunity in housing 4. Hazard and flood insurance 2. Protected classes 5. Private mortgage insurance (PMI) and mortgage insurance premium (MIP) 3. Fair housing C. Federal Financing Regulations and Regulatory Bodies 4. Illegal practices, enforcement, and penalties 1. Truth-in-Lending and Regulation Z 5. Prohibited advertising 2. TILA-RESPA Integrated Disclosures (TRID) 6. Housing and Urban Development (HUD) a. Consumer Financial Protection Bureau (CFPB) 7. Americans with Disabilities Act (ADA) b. Loan Estimate (LE) D. Risk management c. Closing Disclosure (CD) 1. Supervision 3. Real Estate Settlement Procedures Act (RESPA) 2. Compliance with federal regulations; including Privacy and Do Not Contact a. Referrals 3. Vicarious liability b. Rebates 4. Antitrust laws 4. Equal Credit Opportunity Act (ECOA) 5. and misrepresentation 5. Mortgage fraud and predatory lending 6. Types of insurance D. Settlement and closing the transaction

Content Outlines page 02 State of Minnesota Real Estate VIII. REAL ESTATE MATH CALCULATIONS (SALES 7; BROKER 8) A. Property area calculations Real Estate 1. Square footage 2. Acreage total General/National Resources

B. Property valuation • Mastering Real Estate Principles, Gerald R. Cortesi, 1. Comparative Market Analysis (CMA) 7th Edition, Dearborn 2. Net Operating Income (NOI) • Modern Real Estate Practice, Fillmore W. Galaty, 3. Capitalization rate Wellington J. Allaway, Robert C. Kyle, etc., 20th 4. Gross rent multiplier- Broker Only edition, Dearborn 5. Gross income multiplier- Broker Only • Principles of Real Estate Practice, Stephen Mettling, 6. in property 6th Edition, Performance Programs Company 7. Establishing a listing price • Property Management, Robert C. Kyle, 10th Edition, 8. Assessed value and property taxes Dearborn C. Commission/compensation • Real Estate Finance, J. Keith Baker and John D. Loan financing costs P Wiedemer, 10th Edition, OnCourse Learning 1. Interest Publishing 2. Loan to Value (LTV) • Real Estate Fundamentals, Wade E. Gaddy, 10th 3. Fees Edition Dearborn 4. Amortization, discount points, and prepayment penalties E. Settlement and closing costs • Real Estate Law, Charles J. Jacobus, 3rd Edition, OnCourse Learning Publishing 1. Purchase price and down payment 2. Monthly mortgage calculations- principal, interest, taxes, • Real Estate Law, Elliot Klayman, 10th Edition, and insurance (PITI) Dearborn 3. Net to the seller • The Language of Real Estate, John W. Reilly, 8th 4. Cost to the buyer Edition, Dearborn 5. Prorated items 6. Debits and credits Pearson VUE does not endorse any particular 7. Transfer tax and recording fee prelicensing provider or study materials. F. Investment 1. Return on investment 2. Appreciation 3. Depreciation 4. Tax implications on investment G. Property management calculations 1. Property management and budget calculations 2. Tenancy and rental calculations

State of Minnesota Real Estate Content Outlines page 03 Minnesota Real Estate Licensing Examination Content Outline Effective Date: January 1, 2019

Salesperson 50 scored items, 5-10 pretest (unscored) items Broker 60 scored items and 5-10 pretest items The pretest items are not identified and will not affect a candidate’s score in any way.

I. REAL ESTATE BROKERAGE LAW B. Landlords and tenants Ch. 504B (SALESPERSON 15, BROKER 24) IV. CONVEYANCE PROCEDURES AND PROTECTION OF A. Definitions Ch. 82.55 PARTIES (SALESPERSON 8, BROKER 6) B. Licensing Ch. 82.57- 82.63, 82.65 A. Recording and fees C. Trust accounts Ch. 82.75 1. Registration, Torrens Ch. 508 D. Standards of Conduct Ch. 82.69, 82.72 - 82.73, 2. Mortgage Registry Tax; Deed Tax Ch. 287 82.81-82.82 B. Statutory Home Warranties Ch. 327A.02 Statutory E. Commissioner’s authority Ch. 45.011- 45.43 Warranties F. Real Estate Education, Research, and Recovery Fund C. Minnesota Statute of Frauds Ch. 82.86 1. Enforcement of Property Agreements and Other Contracts G. Minnesota Human Rights Act Ch. 363A Department Ch. 513 of Human Rights 2. Frauds Ch. 336.2A-201 II. CONTRACTS AND DISCLOSURES V. FINANCIAL INSTRUMENTS: OBLIGATIONS, RIGHTS, (SALESPERSON 15, BROKER 18) REMEDIES (SALESPERSON 5 , BROKER 6) A. Contracts 82.66 A. Mortgages/contracts for deed B. Agency Disclosure Requirements Ch. 82.67 1. Foreclosures/cancellation and redemption rights C. Other Disclosure Requirements Ch. 82.68 a. Mortgages; Foreclosure by Advertisement Ch. 580 D. Environmental Issues b. Mortgages; Foreclosure by Action Ch. 581 1. Septic systems; Individual Sewage Treatment Systems c. Mortgages; Foreclosure, General Provisions Ch. 582 Sec. 115.55 2. Contract for deed Sec. 559 2. Wells; Real property sale; disclosure of location of wells 3. Homestead exemptions Ch. 510 Sec. 103I.235 B. Liens; Labor, Material Ch. 514 3. Leaking underground storage tanks a. Pollution Control Agency Sec.116.46-48 b. Petroleum Tank Release Sec.115C.01-09 E. Compensation Ch. 82.70 III. INTERESTS IN REAL PROPERTY (SALESPERSON 7, BROKER 6) A. Ownership 1. Conveyance by Spouses Ch. 507.02, 500.19 2. Subdivided Lands Ch. 83.20 - 83.45 3. Common interest ownership a. Ch. 515 b. Uniform Act Ch. 515A c. Minnesota Common Interest Ownership Act 515B 4. Real estate taxes and special assessments Ch. 279, Ch.273.124

State of Minnesota Real Estate Content Outlines page 04 Minnesota Real Estate Abstracter Licensing Examination Content Outline Effective Date: January 1, 2019

50 scored items, 5-10 pretest (unscored) items The pretest items are not identified and will not affect a candidate’s score in any way.

I. LEGAL DESCRIPTION AND ELEMENTS OF REAL B. Encumbrances PROPERTY (10 ITEMS) 1. Types and priorities of liens A. Definitions and components of real property 2. Easements 1. Methods of legal description 3. Encroachments 2. Estates in real property III. RESEARCH AND COMPILATION OF ABSTRACT 3. Forms of ownership (20 ITEMS) B. Transfer and alienation of real property A. Indexes 1. Deeds 1. Abstract a. Types 2. Torrens b. Characteristics / elements B. Search requirements and techniques c. Warranties C. Documents and Entries 2. Other methods of transfer D. Legal description in abstract C. Land use controls E. Name searches (including judgments, bankruptcies, 1. Public and tax liens) 2. Private; covenants, conditions, and restrictions (CC&Rs) F. Real property tax records searches D. Common Interest Communities (CIC) G. Certification II. DOCUMENTS (15 ITEMS) IV. LICENSING AND PROFESSIONAL CONDUCT (5 ITEMS) A. Conveyance A. Licensing requirements 1. Deeds 2. Other

Content Outlines page 05 State of Minnesota Real Estate