MI RE Broker cheat sheet

Michigan real estate licenses are issued by the Department of Licensing and Regulatory Affairs, with the Board of Real Estate Brokers and Salespersons advising on rules and discipline.

A salesperson must be associated with a licensed broker and may not independently broker real estate.

Broker licensees supervise affiliated salespersons, advertising, escrow handling, and transaction records.

Escrow funds must be deposited and accounted for under Michigan rules; commingling with personal or operating funds is prohibited.

Advertising must identify the licensed broker or brokerage; a salesperson may not advertise independently.

Unlicensed assistants may perform clerical tasks but may not negotiate, show property, or perform licensed acts.

Discipline may be imposed for fraud, misrepresentation, commingling, failure to account for funds, unlicensed activity, or rule violations.

Licensees renew on a three-year cycle and must complete required continuing education to keep an active license.

Fiduciary duties include loyalty, confidentiality, disclosure, accounting, reasonable care, and obedience to lawful client instructions.

A broker may act as a dual agent only with informed written consent of both buyer and seller.

Designated agency lets different licensees in one brokerage represent opposing parties while the brokerage remains neutral.

A licensee must disclose known material facts affecting property value or a party's decision and must not conceal defects.

A seller's agent must present all written offers promptly unless the seller directs otherwise in writing.

A written agency agreement should identify parties, term, compensation, scope of services, and duties.

Confidential information learned during agency generally remains protected after the relationship ends.

Commissions are negotiable; Michigan law does not set a fixed commission rate.

Fee simple absolute is the broadest estate; it is inheritable, indefinite in duration, and subject to government powers and private restrictions.

Tenancy in common creates separate undivided shares with no survivorship; joint tenancy includes survivorship; tenancy by entirety is for spouses.

An easement appurtenant benefits a neighboring parcel and runs with the land; an easement in gross benefits a person or entity.

A deed must identify grantor and grantee, state the conveyed interest, be signed by the grantor, and be delivered and accepted.

A quitclaim deed transfers only the grantor's existing interest and contains no title warranty.

A warranty deed includes title covenants; Michigan recording gives constructive notice and generally establishes priority.

Legal descriptions commonly use metes and bounds, lot and block, or section, township, and range.

Michigan real estate transfer tax is based on consideration; specified transfers such as certain family conveyances may be exempt.

A valid real estate contract requires offer, acceptance, consideration, capacity, lawful purpose, and a writing signed by the party to be charged.

A counteroffer terminates the original offer; acceptance must match the offer's terms.

Earnest money is held according to the contract and Michigan escrow rules; default determines disbursement.

Contingencies such as financing, inspection, and appraisal must be satisfied or waived by stated deadlines.

Closing transfers title by deed delivery; the deed should be recorded to protect the buyer's interest.

Closing prorations divide taxes, rent, and similar items between buyer and seller as of the closing date.

Title evidence and owner's title insurance protect the buyer against covered title defects.

A licensee may complete contract forms but may not give legal advice or draft complex contract provisions; that is unauthorized practice of law.

Loan-to-value = loan amount divided by the lesser of appraised value or purchase price.

Down payment = purchase price minus loan amount.

One discount point = 1% of the loan amount.

PITI = principal + interest + property taxes + hazard insurance.

Cap rate = net operating income divided by property value; value = NOI divided by cap rate.

Gross rent multiplier = sale price divided by gross annual rent; value = gross rent multiplied by GRM.

Commission = sale price multiplied by commission rate.

Equity = current market value minus outstanding loan balance.

One acre = 43,560 square feet; rectangular area = length multiplied by width.