MI RE Broker flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Michigan salesperson employment rule
- A Michigan real estate salesperson must be associated with and supervised by a licensed real estate broker; a salesperson cannot independently broker real estate transactions.
- Broker supervision responsibility
- A Michigan real estate broker is responsible for supervising affiliated salespersons and associate brokers, including advertising, escrow handling, and transaction documents.
- Commingling prohibited
- Michigan licensees may not mix client or escrow funds with personal or brokerage operating funds; escrow money must be deposited and accounted for separately as required.
- Unlicensed assistant limits
- Unlicensed assistants may perform clerical or administrative tasks but may not negotiate, show property, or perform acts requiring a Michigan real estate license.
- Advertising broker identification
- Michigan real estate advertising must identify the licensed broker or brokerage; salespersons may not advertise property in their own name without the broker.
- Grounds for license discipline
- Michigan may discipline licensees for fraud, misrepresentation, commingling, failing to account for funds, unlicensed activity, or violating license law and board rules.
- Michigan continuing education
- Michigan real estate licensees must complete continuing education during each three-year renewal cycle to maintain an active license, as required by state licensing rules.
- Fiduciary duty of loyalty
- A real estate agent must place the client's lawful interests above the agent's own and avoid undisclosed conflicts, self-dealing, or secret profit in the transaction.
- Dual agency written consent
- A Michigan broker may represent both buyer and seller as a dual agent only after both parties give informed written consent to the limited representation.
- Designated agency explained
- Designated agency allows different licensees within one brokerage to represent the buyer and seller separately while the brokerage remains neutral and confidential information is protected.
- Material fact disclosure
- A licensee must disclose known material facts that could affect a party's decision or property value and may not conceal defects or misrepresent the property.
- Present all offers promptly
- A seller's agent must promptly present all written offers to the seller unless the seller has instructed otherwise in writing.
- Agency agreement contents
- A written agency agreement should identify the parties, term, compensation, scope of services, and duties, and should be understood before the agent provides services.
- Confidentiality after agency ends
- An agent's duty of confidentiality generally continues after the agency relationship ends, protecting the former client's nonpublic information from disclosure or misuse.
- Fee simple absolute estate
- Fee simple absolute is the broadest ownership estate; it can last indefinitely, is inheritable, and is subject only to government powers and private restrictions.
- Tenancy in common feature
- Tenancy in common gives co-owners separate undivided interests with no right of survivorship; each owner may transfer their share by deed or will.
- Joint tenancy survivorship
- Joint tenancy includes the right of survivorship, so a deceased co-owner's interest passes automatically to the surviving joint tenants rather than by will.
- Quitclaim deed effect
- A quitclaim deed transfers whatever interest the grantor may have in the property without warranty of title or guarantee that the interest is valid.
- Easement appurtenant
- An easement appurtenant benefits a neighboring parcel and runs with the land; it transfers automatically when the benefited property is conveyed.
- Recording gives notice
- Recording a deed or mortgage in the appropriate Michigan office gives constructive notice to later purchasers and generally establishes priority under recording laws.
- Statute of frauds
- Michigan real estate sale contracts must be in writing and signed by the party to be charged, because the statute of frauds requires written evidence for land transfers.
- Counteroffer rejects offer
- A counteroffer is a new offer that rejects the original offer; the original offer cannot later be accepted unless the other party renews it.
- Earnest money purpose
- Earnest money shows buyer commitment and is held in escrow; the purchase contract states who receives it if the sale closes or defaults.
- Financing contingency
- A financing contingency allows the buyer to cancel or renegotiate if loan approval is not obtained by a stated deadline, protecting the buyer's deposit.
- Closing deed delivery
- At closing, the seller delivers a deed transferring title; the buyer receives title evidence and the deed is recorded to protect the buyer's ownership.
- Closing prorations
- Closing prorations divide ongoing costs such as property taxes and rent between buyer and seller based on the closing date and contract terms.
- Loan-to-value ratio formula
- Loan-to-value equals the loan amount divided by the property's appraised value or purchase price, whichever is lower, expressed as a percentage.
- Discount point cost
- One discount point equals one percent of the loan amount; points are prepaid finance charges used to obtain a lower interest rate.
- PITI payment components
- PITI includes principal, interest, property taxes, and hazard insurance, the four common components of a monthly mortgage payment.
- Capitalization rate formula
- Capitalization rate equals net operating income divided by property value; rearranged, value equals net operating income divided by capitalization rate.
- Gross rent multiplier
- Gross rent multiplier equals sale price divided by gross annual rent; estimated value equals gross annual rent multiplied by the selected multiplier.
- Acre square footage
- One acre contains 43,560 square feet; to convert rectangular dimensions to acres, multiply length by width and divide by 43,560.