MI Real Estate key terms

The Michigan statute that licenses real estate brokers and salespersons, defines brokerage activities, sets trust account and agency rules, and lists grounds for discipline.

A Michigan board within the Department of Licensing and Regulatory Affairs that advises on real estate licensing, education requirements, examinations, and disciplinary matters for brokers and salespersons.

A person licensed in Michigan to perform brokerage services only while sponsored by a licensed broker; a salesperson cannot independently list, sell, or manage property for others.

Illegally mixing client funds, such as earnest money, with a broker's personal or business operating funds; Michigan license law requires client money to be kept in a separate trust account.

The licensed Michigan broker responsible for supervising a salesperson or associate broker and for the brokerage acts performed under the broker's license.

A written contract between a broker and a client that creates an agency relationship, states the duties owed, and sets the term and compensation; Michigan license law requires agency relationships to be documented in writing.

A situation in which one broker represents both the buyer and the seller in the same transaction; Michigan allows it only after both parties give written informed consent.

A form of dual agency in which the broker appoints one licensee to represent the buyer and another to represent the seller, with written consent, while the broker remains neutral.

The legal duties an agent owes a client, commonly listed as care, obedience, loyalty, disclosure, accounting, and confidentiality; they require putting the client's interests ahead of the agent's.

A separate bank account a Michigan broker uses to hold client money, such as earnest money or security deposits, apart from the broker's own funds.

Money a buyer gives with an offer to show good faith; it is held in trust and applied to the purchase price or returned or forfeited according to the contract.

A written contract in which a buyer agrees to buy and a seller agrees to sell real property on stated terms, including price, contingencies, and closing date.

A condition in a real estate contract that must be satisfied, such as obtaining financing or a satisfactory inspection, or the party may cancel or renegotiate.

A legal rule requiring contracts for the sale of real estate, and certain leases, to be in writing and signed by the party to be charged.

A court remedy that orders a party to carry out a contract as agreed; it is common in real estate because each parcel of land is considered unique.

A seller-financed installment sale in which the buyer takes possession and pays over time while the seller keeps legal title until the price is paid.

A written security instrument in which real property is pledged to a lender as collateral for a loan; the borrower keeps title but the lender may foreclose if the debt is not paid.

A written promise by a borrower to repay a loan on stated terms, including principal, interest, and payment schedule; it is separate from the mortgage security instrument.

A mortgage clause letting the lender demand full repayment if the property is sold or transferred without the lender's consent, preventing the buyer from assuming the loan.

The four parts of a typical monthly housing payment: principal, interest, property taxes, and homeowners insurance; lenders use it to judge whether a borrower can afford a loan.

An appraisal method that estimates value by comparing the subject property with similar properties that recently sold, then adjusting for differences in features, condition, and location.

The most profitable, legally permitted, physically possible, and financially feasible use of a property, which supports the value estimate in an appraisal.

A comparative market analysis is a broker's or agent's opinion of a property's likely selling price, based on similar listings and sales; it is not a licensed appraisal.

A legal description that identifies a parcel by following boundary lines using distances, compass directions, and natural or artificial monuments, starting from a point of beginning.

A legal description that identifies a parcel by its lot number and block number on a subdivision plat recorded with the county, plus the plat's reference information.

A right to use another person's land for a specific purpose, such as a driveway or utility line; it is an interest in land but does not transfer ownership.

Personal property that has been attached to land or a building so that it becomes part of the real property; courts consider attachment, adaptation, and the parties' intent.

The highest and most complete form of real property ownership, lasting indefinitely, inheritable, and subject only to government powers and private restrictions.

Local government regulation that divides land into districts and limits how each district may be used, including building size, density, and setbacks.

A written legal instrument that transfers an interest in real property from a grantor to a grantee; it must be delivered and accepted to be effective.

A deed that transfers whatever interest the grantor may have in the property without promising that the title is good or that the grantor owns anything.

Filing a deed or other property document with the county register of deeds so that it becomes part of the public record and gives notice to later buyers and lenders.

An insurance policy that protects an owner or lender against losses from certain title defects, such as forged documents or undisclosed liens, that existed before the policy date.

The final settlement of a real estate transaction, where the buyer pays the price, the seller delivers the deed, and documents are signed and recorded.

Information that could reasonably affect a buyer's or seller's decision about a transaction; a Michigan licensee must disclose known material facts to the client and, in some cases, to other parties.

A Michigan-required written statement in residential sales in which the seller discloses known defects and conditions; failure to provide it can give the buyer a right to terminate.

A Michigan law that prohibits discrimination in housing based on religion, race, color, national origin, age, sex, height, weight, familial status, or marital status, among other protected characteristics.

An illegal practice of persuading homeowners to sell quickly by suggesting that members of a protected class are moving into the neighborhood and will lower property values.

Illegally guiding prospective buyers toward or away from certain neighborhoods based on race, color, religion, sex, disability, familial status, or another protected class.

The act of transferring title to real property from one person to another, usually by a written deed that is delivered and accepted.