Michigan Real Estate Flash Cards

Gain in-depth knowledge on passing the Michigan real estate exam by studying a wide range of over 100 phrases, questions, and definitions on key topics using our flash cards. You can start preparing now by clicking on a flash card to reveal the answer.

Which interests in property is held by a person who is granted a lifetime use of a property that will be transferred to a third party upon the death of the lifetime user?

A Life Estate

Recission of a Contract

A return of all parties to their condition before the contract was executed.

A clause in the mortgage that allows the lender to demands loan repayment if a borrower sells the property.

Alienation

How much cash MUST a buyer furnish in addition to a $2,500 deposit if the lending institution grants a 90% loan on an $80,000 property?

$5,500

What kind of single-family residences would get the MOST accurate appraisal by applying the reproduction cost approach to value?

A Historic Property

A real estate licensee acting solely as a seller's agent is MOST likely to be held liable for claims of misrepresentation by a buyer if the licensee committed which of the following acts in the course of the transaction?

Obeyed the seller’s instructions to leave all discussions of property condition to the seller.

A lender wanting title insurance coverage on property pledged as collateral would ask for which of the following policies?

A Mortgagee’s Policy

A business property is valued at $30,000. To earn 10% on the total investment, the property should return a monthly income of ...

$250

A lender is making a loan on a property and wants to make sure that a borrower will be legally obligated to pay off the entire unpaid loan balance if the borrower defaults on the payments. Which clause should be in the contract?

Acceleration

Financial arrangement by which a buyer purchases property using borrowed funds but does not actually receive title to the property until after the loan has been fully repaid is BEST referred to as a ...

Land Contract

The office which houses all bureaucracy is known as?

The Department of Licensing and Regulatory Affairs

The board that represents occupation is?

The Board of Real Estate Brokers and Salespersons

The amount of members of he Board that represent the occupation is?

Who establishes the penalty when a violation has been made?

The Board

The 5 test a salesperson needs to take in order to be considered an independent contractor.

1. At Risk
2. Licensed
3. Annually negotiated independent contract
4. No minimum job requirements
5. Not less than 90% of money from broker is commission from real estate activities.

When the Department denies someone's application for a license, is there any recourse?

You can go before the Board for a review for this matter.

Does a licensed builder who is selling his own inventory need to get a real estate license?

A licensed builder may sell all of the one to four family, new construction, never having been occupied, that he builds and owns.

Does a property manager in Michigan need a real estate license?

The Occupational Code includes leasing or offing for lease, renting or offering for rent real estate or its improvements for others for compensation as an activity requiring a real estate license.

How many brokers can you have in a real estate company?

One

Define Principal Associate Broker.

Officer, owner, member, or manager of the company.

Define Non-principal Broker.

Neither an officer, member, owner, or manager of the company.

Every 3 years, real estate licensees are required to take continuing education. How many hours must be completed?

Requirements need if a broker decides to open a branch office in a nearby town.

The broker needs to apply for a branch office license and if the branch is more than 25 miles from the city limits of the main office, an additional associate broker will be needed to manage that office.

Is it required for a broker to possess a written policy and procedures manual?

If a broker supervises others, than YES.

Advertising a property for sale without indicating the ad was placed by a licensee is considered what?

Blind Ad

In the state of Michigan must you disclose if a property was the site of a murder, or suicide?

Must you disclose the previous owner of the property had a disability?

Which broker is responsible for the earnest money deposit?

Whoever receives the deposit is responsible for bringing it to the closing.

How long after learning the offer has been accepted must the earnest money be deposited?

Upon receipt of an earnest money deposit, the broker shall deposit within two banking days of learning of the acceptance.

The four test to determine a valid contract.

Legally Competent Parties, Mutual Agreement, Lawful Object, Consideration

An agreement formed by an exchange of a promise in which the promise of one party is consideration supporting the promise of the other party.

Bilateral Contract

Contract in which a promise is exchanged for performance and only one party is bound is called?

Unilateral Contract

The legal term for deciding to opt out of a binding agreement is referred to as ...

Breach of Contract

To sell, set over or transfer all of ones rights or liabilities in a contract is referred to as ...

Assignment

When a new contract replaces an old contract, this is called ...

Novation

A civil wring in which the injured party may sue the wrongdoer and recover damages is referred to as ...

A Tort

Contract that is pending and not yet fully performed is ...

Executory

Describe Option.

An opportunity to acquire property at some time in the future which is fixed as to price terms and time.

What is Right of First Refusal?

An opportunity to acquire property before it is conveyed to someone else.

Agency disclosure is required in Michigan at what point?

Before confidential information has been disclosed.

A listing which allows the sellers to list with as many brokers as they wish and still reserve the right to sell the property themselves and not pay a commission is called ...

Open Listing

A listing which involves one broker only, however the seller reserves the right to sell the property themselves and not pay a commission is referred to as ...

Exclusive Listing

To prohibit certain methods, acts, and practices in trade or commerce; to prescribe certain powers and duties; to provide for certain remedies, damages, and penalties; to provide for the promulgation of rules; to provide for certain investigations; and to prescribe penalties.

The Michigan Consumers Protection Act

What is Puffing?

Harmless Exaggeration

What was the effective date of banning lead based paint from residential application?

January 1. 1978

Lot 8, Block C, Pleasant Valley, Garden County, State of Michigan is an example of what type legal description?

Subdivision

How many feet in an acre?

43,560

How many acres in a section?

640

How many sections in a township?

The effective date of the Land Division Act was March 31, 1997. Before that time, it was referred to as the ...

Subdivision Control Act.

What law requires a property on a non-public maintained road to be disclosed?

The Land Division Act

An estate which is not full ownership and is sometimes referred to as non-freehold is called...

A leasehold estate.

Exclusive right to enjoy the possession and use of a parcel of land or other asset for an indefinite period.

Freehold Estate

An estate based upon the lifetime of the life tenant or the lifetime of another is called ...

Ownership of land for the duration of a person’s life.

The owner of a life estate is called ...

Life tenant.

The person who receives the life estate after the passing of the life tenant is called the ...

Remainderman or teversioner.

Ownership by one person only is ...

Tenancy in severalty.

Upon the passing of a joint tenant, the property goes to the ...

Survivors.

What is Riparian Rights?

The rights, which belong to landowners through whose property a natural watercourse runs, to the benefit of such stream for all purposes to which it can be applied.

Can someone sell of the riparian rights and retain the land?

No, the land can’t be separated from the riparian rights.

Sudden loss of land when an act of nature results in its watching away is called ...

Avulsion

Gain of land due to the permanent withdrawal of a body of water is called ...

Reiction

What should a licensee do if the seller refuses to fill out the sellers disclosure statement when required?

Refuse the Listing

Common law doctrine which transfers the property of a person who dies without heirs to the crown or state ...

Escheat

If one dies without a will, the property ...

Goes to the heirs as determined by the state’s order of intestate succession.

The conveyance which passes title to real property is referred to as ...

A deed.

What type deed provides the most protection for the grantee?

General Warranty Deed

The type of deed that the owner terminates any right and claim to the property, thereby allowing claim to transfer to the recipient.

Quitclaim Deed

What can terminate an easement?

Agreement, Merger, Abandonment

Process by which an applicant can request deviation from the set of rules a municipality applies to land use and land development, typically a zoning ordinance?

Variance

Michigan calculates property taxes on real property by multiplying the millage rate by which value?

The assessed value which is one-half the market value of the property.

The method in which an appraiser chooses to value vacant land.

Market Comparison Approach

Potential user of real estate won't, or shouldn't, pay more for a property than it would cost to build an equivalent.

Cost Approach

The ratio between the net operating income produced by an asset and its capital cost.

Capitalization Rate

The formula for area is ...

Length x Width.

The formula for volume is ...