Practice of Real Estate: What You Need to Know
Practice of Real Estate covers the operational and regulatory aspects of working as a licensed real estate professional. This topic bridges theory and practice, testing your knowledge of fair housing, advertising, trust accounts, and professional responsibilities.
Fair Housing is the most heavily tested subtopic within Practice of Real Estate. The Federal Fair Housing Act (Title VIII of the Civil Rights Act of 1968, amended in 1988) prohibits discrimination based on seven protected classes: race, color, religion, sex (including sexual orientation and gender identity per 2021 Supreme Court ruling), national origin, familial status, and disability. Know the specific prohibited practices: steering, blockbusting, redlining, and discriminatory advertising. Many states add additional protected classes.
Trust account management is another critical area. Know the rules about commingling (mixing client funds with personal or business funds — prohibited) and conversion (using client funds for personal use — illegal). Understand anti-trust violations: price fixing (agreeing on commission rates), market allocation (dividing territories), boycotting (refusing to work with certain businesses), and tie-in agreements. These are per se violations — no justification is accepted.