MI Real Estate flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Proposal A Taxable Value Cap

Michigan constitutional amendment limiting annual taxable value increases to the lesser of 5% or the inflation rate; the cap is removed in the year after a transfer of ownership.

State Equalized Value

In Michigan, the state equalized value is 50% of a property's true cash value; assessed value equals 50% of market value, but taxable value may be lower because of the Proposal A cap.

Michigan Real Estate Transfer Tax

Michigan imposes a state real estate transfer tax of $3.75 per $500 of consideration, and counties may add up to $1.10 per $500; the tax is paid when the deed is recorded.

Continuing Education Requirement

Michigan licenses run on a three-year cycle, and licensees must complete 18 hours of approved continuing education each cycle, including the required legal update hours.

Salesperson Compensation and Supervision

A Michigan salesperson must work under a licensed broker; commissions are paid to the broker, who then compensates the salesperson, and a salesperson may not accept payment directly from a client.

Broker Trust Account

Michigan brokers must place funds belonging to others, such as earnest money and security deposits, in a separate trust account and may not commingle them with business or personal funds.

Tenancy by the Entirety

A Michigan co-ownership form available only to married couples that includes the right of survivorship; a creditor of only one spouse generally cannot reach the property.

Adverse Possession Period

A Michigan action to recover land is barred after 15 years of possession that is actual, open, notorious, exclusive, hostile, and continuous.

Fixture Determination Test

Whether an item is real or personal property depends on the method of attachment, its adaptation to the property, and the intent of the parties who installed it.

Statute of Frauds

Michigan requires real estate purchase agreements, deeds, and leases longer than one year to be in writing and signed by the party to be charged.

Land Contract

An installment sale in which the seller keeps legal title while the buyer receives equitable title and possession; the deed is delivered after the final payment.

Marketable Record Title Act

Michigan's Marketable Record Title Act treats a title as marketable when the recorded chain shows an unbroken root of title for at least 40 years, subject to statutory exceptions.

Disclosed Dual Agency

A Michigan licensee may represent both the buyer and the seller only as a disclosed dual agent, after obtaining the informed written consent of all parties.

Fiduciary Duties

The duties owed in a Michigan agency relationship are care, obedience, loyalty, disclosure, accounting, and confidentiality; the duty of confidentiality continues after the relationship ends.

Exclusive Right to Sell

A listing agreement under which the broker earns a commission no matter who produces the buyer, including the owner, making it the strongest listing for the broker.

Loan Estimate Timing

Federal TRID rules require the lender to deliver the Loan Estimate within three business days of a completed application and the Closing Disclosure at least three business days before consummation.

Private Mortgage Insurance Threshold

Private mortgage insurance is normally required when the loan-to-value ratio exceeds 80%; the borrower may request cancellation once the balance reaches 80% of the original value.

Discount Point

One point equals one percent of the loan amount; borrowers pay points upfront to reduce the interest rate or to cover origination charges.

Capitalization Rate

Under the income approach, value equals net operating income divided by the capitalization rate; the gross rent multiplier equals sale price divided by gross monthly rent.

Comparable Adjustment Direction

In the sales comparison approach the subject is the benchmark, so a superior comparable is adjusted downward and an inferior comparable is adjusted upward.

Highest and Best Use

The reasonable, probable, and legal use of a property that is physically possible, appropriately supported, financially feasible, and produces the highest value.

Deed Preparation Statement

Michigan deeds must include a statement naming the person who prepared the instrument, plus the grantee's name and address, before the register of deeds will record it.

Race-Notice Recording

Michigan protects a later purchaser who records first and takes without notice of a prior unrecorded interest; recording provides constructive notice to the world.

Deed Delivery and Acceptance

A deed transfers title only when the grantor delivers it with present intent and the grantee accepts it; recording alone does not create a valid transfer.

Property Transfer Affidavit

In Michigan the buyer must file a Property Transfer Affidavit with the local assessor within 45 days of the transfer, which triggers reassessment and removal of the taxable value cap.

Michigan Property Tax Bills

Michigan property taxes are paid in arrears through a summer bill based on a July 1 levy and a winter bill based on a December 1 levy.

Owner's vs Lender's Policy

A lender's title policy protects the lender only up to the loan balance; an owner's policy protects the buyer for as long as the buyer or heirs retain title.

Elliott-Larsen Civil Rights Act

Michigan's civil rights statute bars discrimination in real estate based on religion, race, color, national origin, age, sex, height, weight, familial status, or marital status.

Broker Name in Advertising

Michigan salespersons may advertise only with the employing broker's name included, and may not hold themselves out as an independent brokerage.

Seller Disclosure Rescission

If the Michigan Seller's Disclosure Statement is delivered after the purchase agreement is signed, the buyer may rescind the agreement within 72 hours of receiving it.

Lead-Based Paint Disclosure

Federal law requires sellers and landlords of housing built before 1978 to disclose known lead-based paint hazards and give buyers the EPA pamphlet and a 10-day inspection opportunity.

Latent Defect Disclosure

A seller must disclose known latent defects that are not readily observable and that materially affect value or safety; licensees must disclose material facts they know.