Real Estate Updated Maryland-Real-Estate-Salesperson Exam Questions and Answers by marla

The loan-to-value (LTV) ratio compares the loan amount to the property’s appraised value or purchase price, whichever is less. An LTV of 90/100 (or 90%) means the borrower’s loan equals 90% of the property’s value, and the borrower provides a 10% down payment.

Lenders use the LTV ratio to assess risk and determine if mortgage insurance is required. Maryland’s pre-licensing course explains this formula in the “Real Estate Financing” section under “Loan Underwriting and Ratios.”

Under sub-agency, a cooperating broker or licensee assists the listing broker in selling the property and represents the seller as a sub-agent of the listing broker.

A key drawback is that the listing broker is legally responsible for the sub-agent’s actions because the sub-agent owes fiduciary duties to the same principal (the seller).

Any misrepresentation, negligence, or violation by the sub-agent can expose the listing broker to disciplinary action or civil liability.

This is why many Maryland brokers now prefer buyer agency over sub-agency.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Agency Relationships and Sub-Agency section.

– Business Occupations and Professions Article §17-534.

A syndicate is an association of two or more investors who unite their capital to own or develop real estate projects.

When investment interests are offered to the public, the syndicate becomes subject to federal securities regulations administered by the Securities and Exchange Commission (SEC).

Maryland’s pre-licensing course explains that syndications may take the form of limited partnerships, corporations, or real-estate investment trusts (REITs), but the unifying element is pooled investor participation under securities law oversight.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Forms of Ownership and Syndication section.

– Securities Act of 1933 and 1934 (SEC Regulations).

In dual agency (and Maryland’s intra-company/dual agency framework), an agent cannot provide undivided loyalty to both clients in the same transaction. Maryland requires written, informed consent and limits the fiduciary duty of loyalty because representing opposing interests precludes undivided advocacy. The agent still owes honesty, disclosure of material facts, reasonable skill and care, and confidentiality (within statutory limits), but undivided loyalty is expressly curtailed in dual agency.