Alabama Real Estate Salesperson Cheat Sheet

National Property Characteristics and Use

Not published of exam
11 Scored Items Fixtures Legal Descriptions Land Controls

National Ownership and Title

Not published of exam
9 Scored Items Estates Deeds Recording

National Value and Appraisal

Not published of exam
11 Scored Items Value Principles Appraisal Approaches CMA and BPO

National Contracts and Agency

Not published of exam
16 Scored Items Contract Types Validity Agency Duties

National Real Estate Practice

Not published of exam
10 Scored Items Listings Fair Housing Risk Management

National Disclosures and Environment

Not published of exam
9 Scored Items Material Facts Hazards Environmental Liability

National Financing and Settlement

Not published of exam
7 Scored Items Loan Programs Federal Rules Closing

National Real Estate Math

Not published of exam
7 Scored Items Area Valuation Math Closing Math

Alabama Commission Role

Not published of exam
1 Scored Item AREC Public Protection Rulemaking

Alabama Licensing Requirements

Not published of exam
7 Scored Items Qualifications Education Renewal

Alabama License Status

Not published of exam
2 Scored Items Transfer Inactive Status Reactivation

Alabama Brokers and Companies

Not published of exam
5 Scored Items Qualifying Broker Company License Branch Office

Alabama Recovery Fund

Not published of exam
2 Scored Items Compensatory Damages Fund Limits Repayment

Alabama Discipline Process

Not published of exam
2 Scored Items Complaints Hearings Appeals

Alabama Estimated Closing Statement

Not published of exam
1 Scored Item Written Offers Cost Estimates Dated Receipt

Alabama Trust Funds

Not published of exam
2 Scored Items Immediate Delivery Separate Account Qualifying Broker

Alabama RECAD

Not published of exam
3 Scored Items Transaction Facilitator Agency Agreements Designated Single Agency

Alabama Disciplinary Violations

Not published of exam
15 Scored Items Misrepresentation Advertising Compensation

Quick Facts

Credential Salesperson
Provider Pearson VUE
General scored 80 items
Alabama scored 40 items
Pretest 10-15 unscored items
General time 2.5 hours
Alabama time 1 hour
Pass score Scaled 70
Exam fee $73
Authorization 6 months
Passing result Valid 90 days
Calculator Online calculator only

Government Powers NA

Police, Eminent domain, Escheat, Taxation
Police regulates Eminent domain takes Escheat receives Taxation funds

Real vs Personal Property NA

Real property

Land and attachments
Transfers by deed

Personal property

Movable items
Transfers by bill-of-sale
Apply attachment intent

Property Characteristics and Use NA

Fixture Personal property becomes real
Trade fixture Tenant business item
Emblements Cultivated annual crops
Attachment Personal becomes real
Severance Real becomes personal
Metes and bounds Directions, distances, monuments
Lot and block Recorded plat reference
Government survey Township, range, sections
Police power Regulates property use
Eminent domain Taking with compensation
Escheat Ownerless property transfers to state
Easement Nonpossessory use right

Fixture Test NA

Method, Adaptation, Relationship, Intention, Agreement
Agreement controls Intention usually dominates

Actual vs Constructive Notice NA

Actual notice

Direct personal knowledge
Expressly learned fact

Constructive notice

Public record available
Law presumes knowledge
Recording creates constructive notice

Ownership and Title NA

Fee simple Greatest ownership estate
Life estate Measured by a life
Estate for years Fixed lease term
Periodic estate Renews until notice
Tenancy in common Separate undivided shares
Joint tenancy May include survivorship
Severalty Ownership by one entity
Lien Monetary title encumbrance
Constructive notice Public record gives notice
Marketable title Free from reasonable doubt
Quitclaim deed Conveys existing interest only
General warranty deed Broadest deed covenants

Value Characteristics NA

Demand, Utility, Scarcity, Transferability
Demand wants Utility serves Scarcity limits Transferability conveys

Market Value vs Market Price NA

Market value

Opinion under conditions
Most probable price

Market price

Actual amount paid
May differ from value
Value is estimated; price happened

Appraisal Method Picker NA

Many comparable homes → Sales comparison ( Adjust comparables )
New special-purpose building → Cost approach ( Deduct depreciation )
Income property → Income approach ( Capitalize NOI )
One-to-four unit rental → GRM ( Price divided rent )
Seller needs pricing → CMA ( Not an appraisal )
Lender requests broker estimate → BPO ( Follow applicable law )

Value and Appraisal NA

Market value Most probable competitive price
Market price Actual transaction amount
Substitution Comparable ceiling on value
Highest and best use Legal, feasible, most productive
Sales comparison Adjust comparable sales
Cost approach Land plus cost minus depreciation
Income approach Capitalizes future benefits
CMA Licensee pricing analysis
BPO Broker price opinion
Physical deterioration Wear and damage
Functional obsolescence Design deficiency
Economic obsolescence External value loss

Client Duty Cluster NA

Loyalty, obedience, disclosure, confidentiality, accounting, care
Client receives advocacy All parties receive honesty

Void vs Voidable NA

Void

No legal effect
Cannot be ratified

Voidable

Valid until rescinded
Protected party decides
Ask whether validity ever existed

Contract Status Picker NA

Missing legal essential → Void ( Never enforceable )
Protected party may cancel → Voidable ( Valid until rescinded )
Writing requirement unmet → Unenforceable ( Court remedy barred )
All duties completed → Executed ( Fully performed )
Duties remain → Executory ( Performance pending )
Terms materially change → Counteroffer ( Original rejected )

Contracts and Agency NA

Bilateral contract Promise exchanged for promise
Unilateral contract Promise exchanged for performance
Valid All legal essentials present
Void No legal effect
Voidable One party may rescind
Unenforceable Court remedy unavailable
Executed Fully performed
Executory Performance remains due
Counteroffer Rejects original offer
Option Keeps offer open
Equitable title Buyer interest after contract
Agency Fiduciary representation relationship

Real Estate Practice NA

Exclusive right-to-sell Broker paid whoever sells
Exclusive agency Owner sale avoids commission
Open listing Procuring broker earns commission
Net listing Creates broker conflict
MLS Broker cooperation system
Property management Manages property for owner
Price fixing Illegal competitor agreement
UPL Unauthorized legal practice
Fair Housing Act Protects seven federal classes
ADA Public accommodation accessibility

Disclosures and Environment NA

Material fact Influences reasonable decision
Latent defect Hidden property defect
Lead disclosure Applies pre-1978 housing
CERCLA Federal cleanup liability
Phase I Records and site review
Phase II Environmental sampling and testing
Radon Radioactive soil gas
Asbestos Friable fibers create danger
Mold Moisture-driven growth
Flood zone May trigger insurance requirements

Housing Payment Parts NA

Principal, Interest, Taxes, Insurance
Principal reduces balance Interest pays lender

FHA vs VA Loans NA

FHA

Federal insurance
Uses mortgage insurance premium

VA

Federal guaranty
Eligible service borrowers
FHA insures; VA guarantees

Financing and Settlement NA

Promissory note Evidence of debt
Mortgage Lien securing note
LTV Loan divided by value
FHA loan Federally insured loan
VA loan Federally guaranteed loan
PMI Conventional mortgage insurance
MIP FHA mortgage insurance
Primary market Originates mortgage loans
Secondary market Purchases existing loans
TILA Consumer credit cost disclosure
RESPA Bans settlement kickbacks
TRID Loan Estimate plus Closing Disclosure

Math Formula Picker NA

Need acreage → Square feet ÷ 43,560 ( Memorize conversion )
Need commission → Price × rate ( Convert percent )
Need NOI → Income minus expenses ( Exclude debt service )
Need property value → NOI ÷ cap rate ( Income approach )
Need cap rate → NOI ÷ value ( Decimal result )
Need loan amount → Value × LTV ( Use lender value )
Need equity → Value minus debt ( Owner interest )
Need simple interest → Principal × rate × time ( Match time units )

Real Estate Math NA

One acre 43,560 square feet
One mile 5,280 feet
Commission Price times rate
NOI Effective income minus operating expenses
Cap rate NOI divided by value
Income value NOI divided by cap rate
Loan amount Value times LTV
Discount points Loan times points rate
Simple interest Principal times rate times time
Equity Value minus debt
GRM Price divided by rent
Proration Use stated year convention

Scaled Score vs Raw Percent AL

Scaled score

Adjusted across exam forms
Passing threshold equals 70

Raw percent

Percent answered correctly
Not reported passing rule
Seventy is not seventy percent

Commission Role AL

AREC Alabama licensing regulator
Pearson VUE Examination provider
License law Protects Alabama public
Commission rules Govern licensed practice

Licensing Requirements AL

Minimum age 19 years
Immigration status Citizen or lawful permanent resident
Residency Any United States state
Education baseline High school or GED
Prelicense course 60 clock hours
Course grade Minimum 70
Exam window Six months after course
Licensed activity Services for expected compensation
Out-of-state cobroker Written Alabama broker agreement
Postlicense education Temporary-license requirement

License Status AL

Active status May perform licensed acts
Inactive status No licensed activity
License transfer Requires commission processing
Reactivation Meet current requirements
Registration Tied to specific office

Brokers and Companies AL

Qualifying broker Supervises company licensees
Broker responsibility Includes entrusted funds
Company license Required business authority
Branch office Requires branch licensing
Associate broker Works under qualifying broker
Temporary qualifying broker Maintains company continuity
Home office Must satisfy office rules
Broker supervision Reviews practice and compliance

Recovery Fund AL

Covered loss Actual compensatory damages
Excluded amounts Interest and court costs
Location Conduct within Alabama
Own or family property Licensee acts excluded
Original-license fee $30 fund contribution
License restoration May require fund repayment

Discipline Process AL

Complaint Starts alleged violation review
Probable cause Supports formal proceeding
Hearing Evidence and testimony considered
Discipline May fine, suspend, revoke
Rehearing Commission reconsideration request
Appeal Judicial review path

Estimated Closing Statement AL

Transaction scope Single-family residential sale
Trigger Each written offer or counteroffer
Contents Best estimates of closing costs
Amounts Approximate each expected cost
Acknowledgment Dated consumer signature
Retention Qualifying broker file

Commingling vs Conversion AL

Commingling

Mixes funds improperly
Ownership remains unchanged

Conversion

Uses another's funds
Wrongful possession or spending
Mixing differs from taking

Alabama Funds and Offer Picker AL

Salesperson receives funds → Deliver broker immediately ( Do not hold )
Broker holds trust funds → Separate insured account ( Alabama institution )
Parties dispute funds → Hold pending authority ( Agreement or court )
Buyer signs written offer → Give cost estimate ( Obtain dated signature )
Seller receives written offer → Give cost estimate ( Obtain dated signature )
Counteroffer changes costs → Give updated estimate ( Every written counteroffer )

Trust Funds AL

Salesperson receipt Deliver broker immediately
Trust account Separate federally insured account
Account location Alabama financial institution
Account authority Qualifying broker included
Deposit responsibility Qualifying broker
Written relief May shift broker responsibility
Disputed funds Agreement or court order
Commingling Mixing client and business funds

Client vs Customer AL

Client

Written agency agreement
Receives loyalty and advocacy

Customer

No agency representation
Receives statutory baseline duties
Agency requires written agreement

RECAD Relationship Picker AL

No written agency agreement → Transaction facilitator ( Nonagent default )
Represent one party → Single agency agreement ( Written bilateral contract )
One licensee represents both → Dual agency ( Written informed consent )
Separate in-house agents → Designated single agency ( Not dual agency )
Before brokerage services → Provide office policy ( Consumer receives policy )
Before confidential disclosure → Provide RECAD form ( Seek signature )
Consumer refuses signature → Note refusal ( Keep completed form )
Listing or submitting offer → Written brokerage agreement ( Compensated services )

RECAD Relationships AL

Single agent Represents only one party
Dual agent One licensee represents both
Transaction facilitator Nonagent assists parties
Default relationship Transaction facilitator
Agency creation Written bilateral agreement
Dual agency Prior written informed consent
Designated single agents Separate agents, separate clients
Designated result Not dual agency
Disclosure form Before confidential information disclosure
Office policy Before brokerage services
Consumer refusal Note refusal on form
Showing property No agency agreement required

Single Agent vs Facilitator AL

Single agent

Represents one client
Owes client loyalty

Transaction facilitator

Represents no party
Assists without advocacy
No writing means facilitator

Dual vs Designated Single Agency AL

Dual agent

One licensee represents both
Needs written informed consent

Designated single agents

Separate licensees represent parties
Not dual agency
Count licensees representing parties

Disciplinary Violations AL

Misrepresentation False material statement
Dishonest dealing Bad-faith transaction conduct
Contract interference Inducing unjustified breach
Advertising Must identify licensed company
Unlicensed compensation Prohibited commission payment
Rebate Giving or receiving prohibited
Personal interest Requires timely written disclosure
Written offers Present timely and truthfully
Sale terms Disclose true transaction terms
Transaction documents Deliver and retain properly
Required records Maintain broker files
Commission order Violation triggers discipline

Common Traps

Scaled Passing Score

Scaled 70 passes ≠ Seventy percent is not required

Two Exam Portions

General has eighty scored ≠ Alabama has forty scored

Unidentified Pretest Items

General adds five ≠ Alabama adds five-to-ten

Current RECAD Language

Say transaction facilitator ≠ Subagency was removed

Trust Fund Timing

Salesperson delivers immediately ≠ Qualifying broker controls deposit

Calculator Policy

Personal calculators prohibited ≠ Online calculator provided

Memorized Math Facts

Acre equals 43,560 square feet ≠ Mile equals 5,280 feet

Last Minute

1. Know 80 plus 40 scored
2. Expect 10-15 unscored pretests
3. Scaled 70 is not percent
4. Bring two signature IDs
5. Arrive thirty minutes early
6. Use only online calculator
7. Memorize acre and mile conversions
8. Default relationship equals facilitator
9. Dual means one licensee both
10. Designated singles are not dual
11. Deliver trust funds immediately
12. Prepare every required cost estimate
13. Retake entire exam after failure
14. Apply within ninety days