MI RE Broker key terms

A governor-appointed board within the state licensing department that oversees real estate licensure in Michigan, approves prelicense and continuing education courses, reviews applications, and recommends disciplinary action against licensees who violate the licensing act or rules.

The Michigan executive department that licenses and regulates real estate brokers and salespersons through its occupational licensing bureau, investigates complaints, holds disciplinary hearings, and enforces the occupational code and administrative rules.

A person licensed to perform brokerage services for compensation on behalf of others, including listing, selling, buying, exchanging, leasing, or managing real property, and who may employ or supervise licensed salespersons and associate brokers.

A person who holds a Michigan broker license but works under the supervision of another licensed broker rather than operating an independent brokerage, performing brokerage services for that broker's clients and sharing in the broker's compensation arrangement.

A licensee who performs brokerage activities only while affiliated with and supervised by a licensed broker, cannot accept compensation directly from clients, and must be paid through the supervising broker.

A separate bank account a broker maintains for money belonging to others, such as earnest money deposits, rents, and security deposits, kept apart from the broker's own operating funds and documented with complete records of each transaction.

The improper act of mixing client money, such as earnest money or security deposits, with a broker's personal or business funds instead of holding it in a dedicated trust account; a common ground for license discipline in Michigan.

The ongoing education Michigan licensees must complete to renew a license, generally 18 clock hours every three years including any topic-specific hours the board mandates, such as fair housing, with proof retained in case of audit.

Under Michigan law, a licensee who provides specified services to a party in a transaction without representing that party as an agent, disclosing non-agency status in writing and refraining from advocating for either side.

A consensual relationship in which a licensed brokerage agrees to act on behalf of a client, creating fiduciary obligations; in Michigan it generally must be documented in a written agreement that states its scope and duration.

A party whom a licensee assists in a transaction but does not represent as an agent, so the licensee owes honesty and fair dealing rather than full fiduciary duties and must not disclose the customer's information to the client.

The duties an agent owes a client: loyalty, obedience to lawful instructions, disclosure of material information, confidentiality, accounting for money and documents, and reasonable care and skill in performing the work.

A situation in which one brokerage represents both the buyer and the seller in the same transaction, permitted in Michigan only after the brokerage discloses the conflicts and obtains written informed consent from all parties.

An arrangement in which a brokerage acting as a dual agent assigns one licensee to work with the buyer and another to work with the seller, with each licensee keeping the assigned party's confidences and the broker refraining from advocating for either side.

A statement a Michigan licensee must give a prospective client explaining the types of agency relationships available and the duties involved, provided before the person signs an agency agreement or listing.

Information that a reasonable person would consider important in deciding whether and on what terms to buy or sell, which a licensee must disclose to the client and must not conceal or misrepresent to any party.

The licensee whose efforts began or set in motion an uninterrupted series of events that resulted in a completed transaction; the concept is used to decide who earned a commission when more than one brokerage was involved.

The most complete form of ownership, giving the holder unlimited right to possess, use, encumber, and transfer the property, with the interest passing to heirs or devisees on the owner's death.

A freehold interest lasting only for the lifetime of a named person; the life tenant may possess and use the property but must not commit waste, and the property passes to a remainderman or back to the grantor afterward.

A nonpossessory right to use another person's land for a specific purpose, such as a driveway or utility line, which may run with the land when appurtenant or benefit a particular person when held in gross.

A private limitation on land use written into deeds or a plat, such as setback or single-family-residential requirements, enforceable by affected owners through court action rather than by government zoning enforcement.

A land description that starts at a point of beginning and traces boundaries using compass bearings, distances, and monuments, ending back at the starting point; it can describe irregular parcels that lot-and-block or survey references cannot.

A deed that transfers whatever interest the grantor may hold in the property without any promise that title is valid or free of defects, so the grantee receives no warranty protection.

A Michigan statutory deed containing covenants that the grantor holds good title, has the right to convey, guarantees quiet enjoyment, promises the property is free of encumbrances, and will defend title against lawful claims.

A policy that protects an owner or lender against financial loss from title defects, liens, or claims that existed before the policy date, issued after a title search and paid for with a one-time premium at closing.

The legal rule requiring certain agreements, including contracts for the sale of real property and leases longer than one year, to be in writing and signed by the party to be charged before a court will enforce them.

A response to an offer that changes its terms, which operates as a rejection of the original offer and creates a new offer that the other party may accept, reject, or counter again.

A deposit a buyer gives with an offer to show good faith and financial ability, held by the broker or closing agent in trust and usually credited toward the purchase price or returned under the contract's terms.

A contract condition that must be satisfied, such as obtaining financing or a satisfactory inspection, before a party is obligated to close; if it fails, the protected party may cancel and recover the deposit.

A Michigan installment sale in which the seller keeps legal title while the buyer takes possession and pays over time; the buyer holds equitable title and the seller may pursue forfeiture or foreclosure if the buyer defaults.

The beneficial ownership interest a buyer acquires under a signed purchase agreement or land contract before the deed is delivered, giving the right to compel transfer of legal title if the seller fails to perform.

The closing calculation that divides shared expenses such as property taxes, rents, and interest between buyer and seller based on the number of days each owns the property during the period covered.

The loan amount divided by the lesser of the property's purchase price or appraised value, expressed as a percentage; lenders use it to judge risk and to decide whether mortgage insurance is required.

The four components of a typical monthly housing payment: principal, interest, property taxes, and hazard insurance; lenders compare it to gross income when qualifying a borrower for a loan.

Prepaid interest a borrower pays at closing to obtain a lower interest rate, with each point equal to one percent of the loan amount and generally deductible over the life of the loan.

An account a lender uses to collect a share of annual property taxes and insurance with each monthly payment and then pay those bills when due, often required when the loan-to-value ratio is high.

A mortgage provision allowing the lender to demand immediate full repayment if the property is sold or transferred without the lender's written approval, which prevents a buyer from simply taking over the existing loan.

A rate used in the income approach that expresses the relationship between a property's net operating income and its value or price; dividing net operating income by the rate estimates value.

A quick income-based valuation tool found by dividing a property's price or value by its gross monthly or annual rent; the resulting factor is applied to comparable rents to estimate a subject property's value.

A state tax imposed on the grantor when real property is conveyed, charged at $3.75 per $500 of consideration, plus an optional county tax of $0.55 per $500, with the deed stamped before recording.