Real estate chapter 2

The requirements for obtaining a broker or associate broker license are the same. There is only one type of associate broker's license. However, there are two categories of responsibility within an associate broker license. A principal associate broker A nonprincipal associate broker

A principal may be issued more than one (1) associate real estate broker's license. A nonprincipal will not be issued more than one (1) associate real estate broker's license as a nonprincipal, but may hold one (1) or more associate real estate broker's licenses as a principal.

Michigan Law provides for two funds related to license fees. 1). Real Estate Education Fund The Department will deposit fifteen dollars ($15) of each license fee into this fund. The money will be used only for the operation of programs related to the educational requirements of all licensees or license applicants. 2). Real Estate Enforcement Fund The Department will deposit fifteen dollars ($15) of each license fee into this fund. The money will be used only for the enforcement of Article 25 and to reimburse the attorney general for expenses incurred in conducting prosecutions of unlicensed practices.

Any unexpended balance in either of these funds at the end of a fiscal year will carry forward to the next fiscal year.

t is the role of the Michigan Board of Real Estate Brokers and Salespersons to assist the Department of Licensing and Regulatory Affairs in the implementation of the Code.

Licensing duties are divided between the Department and the Board.

Public Act 299 of 1980, known as the _____________ Code, regulates the licensing of various occupations in Michigan.

Occupational code

To meet the broker education requirement, credit will be given for either of the following situations: Having a law degree will automatically earn 60 clock hours and six (6) hours of civil rights law and equal opportunity in housing. Having a Master's Degree in Business Administration from an accredited institution of higher learning will automatically earn 60 clock hours of real estate education.

Proof of education must be in the form of completion certificates, transcripts or other official verification from the course provider. The 90 hours is in addition to any hours required to obtain a salesperson license.

How much will Salesperson Bill pay to transfer his license to another office?

$10.00

A home sold for $375,000.00. The buyers obtained a mortgage for $305,750.00. What will the state transfer tax be on this sale?

$2,812.50

Broker James has a listing based on net price. Which statement is true?

This listing is illegal in Michigan.

The following licenses are available in Michigan. Broker Associate Broker Salesperson Branch Office

A broker's license may be issued to an individual, sole proprietorship, partnership, association, common law trust or a combination of those entities. Associate broker and salesperson licenses are issued only to individuals.

Which of the following is NOT an agency relationship? The relationship between

A rental property owner and a tenant

Which of the following is a real estate licensee NOT allowed to perform under Michigan license law?

Appraise property

The members of the Michigan Board of Real Estate Brokers and Salespersons are selected by

Governor appointment

Who is responsible for preparing closing documents?

Listing broker

Which of the following is NOT exempt from the Seller's Disclosure Act?

Sale of a two-unit residence by the owner

Which is not a type of agency recognized in Michigan?

Undisclosed dual agency

Which of the following loan programs is NOT available through the Michigan State Housing Development Authority?

VA loan

License application fees are valid for how long?

12 months

If the Seller's Disclosure Statement is not delivered before the seller executes a binding purchase agreement with the purchaser, the transferee has the authority to withdraw the offer or revoke the acceptance without liability within how long following the statement's delivery by registered mail?

120 hours

Which of the following is not a requirement for obtaining a broker's license?

21 years old

How many of the 40 hours of approved salesperson instruction must be in the area of civil rights law and equal opportunity in housing?

4

The mix of licensed and unlicensed members of the commission is

6 licensed and 3 unlicensed

What is the maximum number of years a Board member may serve?

8 years

A non-resident applicant for a license must file which of the following with the license application?

A "Consent to Service of Process" form allowing appropriate action to be brought against him or her in Michigan

All Michigan real estate licenses

Are renewed every three years

Jim owns an apartment complex. When should Jim first present his rules and regulations to tenants that want to lease an apartment?

At the time the tenant is ready to sign the rental agreement.

lena's listing with Ben of Homeland Real Estate Group has expired, so she lists with Associated Realty. Ben finds a buyer for Elena's home. Which statement is true?

Ben cannot disclose any information about offers that Elena received during her listing with him.

The phrase "engaging in the real estate business" means acting for another in exchange for a fee in all but which of the following situations?

Building a home for another

Broker Karen received an earnest money check from buyer, Dan. What should Karen do with the money?

Deposit the money in a non-interest bearing trust account that holds other escrow funds.

The Department can revoke salesperson Tom's license if he does which of the following actions?

Deposits an earnest money check in his personal account.

Since a broker has a duty to supervise all of her agents, Tammy would be in violation of license law if she

Did not give written policies to her agents

Broker John is listing a home. He asks the seller to complete a Seller's Disclosure form. Which statement is true?

Filling out a disclosure form that states all known property conditions is a Michigan requirement.

Front Footage Front footage is the width of the lot and the expanse of road exposure that a lot offers. It is typically used to describe commercial lots and parcels. Remember that when a rectangular lot is described using its dimensions, such as "300 feet by 150 feet," the first dimension is the width of the lot and second dimension is the depth of the lot. Depth means how far back the lot goes if you were standing in front of it.

If the EZ Sales car lot is valued at $150,000 and is 300' wide, how much is it worth per front foot? Example: Steps: $150,000 ÷ 300 = $500 per front foot

Which would NOT be a penalty for violating the Wetland Protection Act?

Individual civil fine of up to $15,000.00 per day of violation

Seller Mitch took broker Adam to court for fraud. Mitch won and was awarded damages in the civil suit. If the Department finds out about this, what can they do?

Initiate its own investigation against Adam.

Tim has a "no pets" policy in his apartment building. Grace is visually impaired and has a guide dog. Grace wants to rent an apartment from Tim. Which statement is true?

Michigan Fair Housing law prohibits Tim from refusing to rent to Grace, regardless of his pet policy.

Which of the following would be in violation of license law if performed by broker Rhonda?

Prepare a document to correct a title defect.

If a licensee started or caused the chain of events in a real estate transaction that resulted in the sale of a listed property, this is known as

Procuring cause

The Lead-Based Paint Disclosure Act has several requirements. Which of the following is NOT one of them?

Remove any lead-based paint known or found to be on the property.

Seller Gordon refuses to accept an offer to purchase his home from buyer Juan Valdez of Columbia, South America because Gordon feels the earnest money of $100.00 is not enough. Which of the following statements about Gordon's refusal is correct?

Since Gordon refused on the basis of the earnest money, he is not in violation of Fair Housing.

The Department requires that brokers have written operating policies and procedures for their office. The broker must specify in these policies the type of agency relationships practiced in his or her office.

Single Agency In a single agency, the agent represents either the buyer or the seller, but never both, in a single transaction. Any third party to the transaction is a customer who is not represented by the agent, but for whom the agent may perform ministerial acts. A seller's agent singularly represents the seller and is often referred to as the listing agent. An agent singularly representing the buyer in a transaction is often referred to simply as the buyer's agent. Subagency A subagency occurs when both brokers in a single cooperative transaction represent the seller. A subagent is one agent working for another agent who has the listing contract with the principal. A subagent who is lawfully appointed represents the principal in like manner with the listing agent. Therefore, just as with a seller's agent, a subagent will disclose to the seller any known information about the buyer which the seller may use to his or her benefit. Dual Agency A dual agency is created when one agent represents both parties in a single transaction, both seller and buyer. Michigan law allows for dual agency with informed, written consent. This means that the broker must fully disclosure the arrangement and obtain consent, in writing, from both the buyer and the seller. In this agency arrangement, the licensee will not be able to disclose all known information to either the buyer or the seller. Designated Agency In a designated agency arrangement, a broker designates or appoints a salesperson or associate broker to act as the single agent for a client to the exclusion of all other licensees in the firm. The designated agency agreement must name all the associate brokers who are authorized to act as supervisory brokers. A client with a designated agency agreement is not considered to have an agency relationship with any affiliated licensees of the designated agent. The designated agent must not impart knowledge of his or her client's confidential information to any affiliated licensee not having an agency relationship with that client.

Gross Living Area, or GLA, the finished square footage of a structure that is measured using the outside dimensions. When calculating GLA: Only include areas that are finished Items excluded from the GLA typically include garages, carports, decks, and patios. Example: What is the GLA of this home?

Steps: Don't include the garage and the screened porch in the calculation because each is not finished. Calculate the dimensions of the house: 60' wide and 40' deep. Add the depth of the garage, 30', and the remaining depth of the house, 10', to get a total of 40' in depth:60' width x 40' depth = 2,400 SF GLA

If a salesperson fails to renew his or her license by the end of the grace period, but attempts to renew within the next 3 years, he or she may be granted relicensure by doing all of the following EXCEPT

Submitting a letter explaining the circumstances in place of the application form

When a licensed broker changes his or her place of business

The Department could choose to revoke the license if the broker fails to give proper notification of the change.

Broker Peter puts an ad in the newspaper with just a street address. Which statement is true?

The ad is illegal if it does not include the business name of the brokerage.

Tom and Mary have just signed a lease on an apartment. The lease contained a provision to waive their rights to the security deposit. Which statement is true?

he provision is unenforceable, but the lease is still good.

Buyer Tim contacts Will at Grayson Realty indicating that he's interested in buying a home in the area. Without a signed buyer agency relationship, Will CANNOT:

help Tim negotiate a good deal on a property.

Broker Dan is required to keep seller Gary informed of all material facts pertinent to the sale of his home. Which of the following facts must Dan tell Gary?

The buyer's lender will require the buyer to have private mortgage insurance (PMI).

Fifteen dollars ($15.00) of each license fee will be credited to

The enforcement fund

Broker Gary opens a branch office. Gary must appoint an associate broker to supervise this office under what circumstance?

The new office is 30 miles from the city limits.

When Broker Al represents a seller, the written disclosure of agency relationships must be given to

The seller, prior to disclosure by the seller of any confidential information

John is a licensed salesperson. He can hold a concurrent license with more than one broker under which circumstance?

Under no circumstances

Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara's home. Is this possible?

Yes, but only if Sara and Tom both give written consent to a dual agency arrangement.

Glenda is the office manager for a local real estate firm. She is responsible for coordinating the paperwork flow through the office, preparing ads and supervising the clerical staff. Glenda is

exempt from the license law

to renew a license, a broker must

have completed 18 hours of which 2 per calendar year involved law, rules and court cases

Which of the following situations in a listing agreement could lead to a suspended or revoked license?

no expiration date

The sale of a property can be marketed in many ways; however, one of the following is prohibited in Michigan. Which is it?

selling chances

To be entitled to receive a commission on her exclusive listing, the broker must prove all the following EXCEPT that he/she:

that he/she belonged to the real estate board

The application for the real estate licensing test must be accompanied by

the correct fee

The state and county transfer tax charged to the seller of a property is based on what?

the selling price