Michigan Real Estate Licensing Exam Questions And
Answers Verified 100% Correct
Disability - ANSWER A physical or mental impairment that substantially limits one or
more of the major life activities of a person.
Discriminatory Advertising - ANSWER Any advertising that states or indicates a
preference, limitation, or discrimination on the basis of race, color, religion, sex,
national origin, handicap, or familial status in offering housing for sale or rent.
Elliott-Larsen Civil Rights Act - ANSWER Replaced the 1968 Michigan Fair Housing
Act in prohibiting discrimination in the sale, rental, or lease of housing accommodation.
Fair Housing Act of 1968 - ANSWER A federal prohibition on discrimination in the sale,
rental, or financing of housing on the basis of race, color, religion, sex, or national
origin.
Fair Housing Amendments Act of 1988 - ANSWER A law adding to the Fair Housing
Act provisions to prevent discrimination based on mental or physical handicap or
familial status.
Familial Status - ANSWER An adult with children under 18, a person who is pregnant,
one who has legal custody of a child or who is in the process of obtaining.
Handicap - ANSWER A mental or physical disability that impairs any of a person's life
functions.
Michigan Civil Rights Commissions - ANSWER Investigates alleged discrimination and
secures the equal protection of civil rights.
Michigan Persons with Disabilities Civil Rights Acts of 1976 - ANSWER Requires that
an owner or any other person engaging in a real estate transaction, a real estate
broker, or a real estate salesperson shall not, on the basis of a disability that is
unrelated to the individual's ability to acquire, rent, or maintain property or use by an
individual of adaptive devices or aids, engage in a number of discriminatory practices.
National Fair Housing Alliance (NFHA) - ANSWER Coalition of private, nonprofit fair
housing groups that has joined with federal and state government fair housing
enforcement agencies to substantially improve fair housing enforcement activities.
,Redlining - ANSWER The refusal of lending institutions to make loans for the
purchase, construction, or repair of a dwelling because the area in which the dwelling in
located is integrated or populated by minorities.
Steering - ANSWER The practice of directing prospective purchasers toward or away
from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
Tester - ANSWER A person (or persons) employed by a fair housing organization to
pose as a buyer or seller or renter of real estate to determine if the licensee or landlord
is acting in compliance with the law.
Board of Real Estate Brokers and Salespersons - ANSWER The governing board for
real estate licensees in Michigan
Broker - ANSWER A person or a nonperson (partnership, association, corporation,
common law trust, or combination) acting as agent for others in negotiating the
purchase and sale of real property or other commodities for a fee.
Employ - ANSWER License law term that describes a type of relationship between a
broker and his or her licensees.
Independent Contractor - ANSWER A relationship that meets the following criteria: (1)
the broker and licensee must have a written agreement stating the licensee is not an
employee for federal and state or income tax purposes, and (2) not less than 75% of
the licensee's income may come from commissions earned through the sale of real
estate.
Police Power - ANSWER The power of government to regulate the use of real property
for the benefit of the public.
Promulgate - ANSWER To put into effect by public announcement; to put into
operation.
Salesperson - ANSWER A real estate salesperson must be a person.
Stipulation - ANSWER The violations and fines or penalties, which the department and
the licensee have agreed upon.
Acceptance - ANSWER Voluntary expression by the person receiving the offer to be
bound by the exact terms of the offer; must be unequivocal and unconditional.
Accord and Satisfaction - ANSWER A new agreement by contracting parties that is
satisfied by full performances, there by terminating the prior contract as well.
,Assignee - ANSWER One to whom contractual right are transferred.
Assignment - ANSWER Transfer of legal rights and obligations by one party to another.
Assignor - ANSWER The person transferring contractual rights to another.
Bilateral Contact - ANSWER An agreement based o mutual promises that provide the
consideration.
Breach of Contract - ANSWER Failure, without legal excuse, to perform any promise
that forms the whole or part of a contract.
Buyers Contact - ANSWER A contract in which a buyer hires a broker to obtain
property that he or she may purchase; the broker is the agent of the buyer, who is his
or her principal.
Carry Over Provision - ANSWER A statement in a listing contract protecting the
broker's commission entitlement for a specified period of time after the contract expires;
also called extender clause.
Compensatory Damages - ANSWER The amount of money actually lost, which will be
awarded by a court in case of a breached contract.
Competence - ANSWER The mental/emotional capacity to enter into contracts.
Complete Performance - ANSWER Execution of a contract by virtue of all parties
having fully performed all terms.
Condition - ANSWER Any act or event that, if it occurs or fails to occur, automatically
creates or extinguishes a legal obligation.
Condition Concurrent - ANSWER When the parties are to exchange performance at the
same time.
Condition Precedent - ANSWER An act or events that must exist or occur before a duty
of immediate performance of a promise arises.
Condition Subsequent - ANSWER Any fact, the existence or occurrence of which, by
agreement of the parties, operates to discharge a duty of performance after it has
become absolute.
, Conditional Sales Contract - ANSWER Land Contract; A contract of sale and a
financing instrument wherein the seller agrees to convey title when the buyer completes
the purchase price installment payments; also called installment land contract, contract
for deed, and conditional sales contract.
Constructive Condition - ANSWER A condition in a contract imposed by a court.
Contract - ANSWER An agreement between competent parties upon legal
consideration to do, or abstain from doing, some legal act.
Contract for Deed - ANSWER Land Contract; A contract of sale and a financing
instrument wherein the seller agrees to convey title when the buyer completes the
purchase price installment payments; also called installment land contract, contract for
deed, and conditional sales contract.
Counter Offer - ANSWER A new offer made by an offer or rejecting an offer.
Doctrine of Equitable Conversion - ANSWER The vendor cannot do anything to
jeopardize the interest of the vendee.
Duress - ANSWER The inability of a party to exercise his or her free will because of
fear of another party.
Earnest Money - ANSWER A deposit a buyer makes at the time of submitting an offer,
to demonstrate the true intent to purchase; also called binder, good faith deposit,
escrow deposit.
Equitable Title - ANSWER An interest in real estate such that a court will take notice
and protect the owner's rights.
Estoppel - ANSWER Preventing a person from making a statement contrary to a
previous statement.
Exclusive Agency Listing - ANSWER A listing given to one broker one (exclusive), who
is entitled to the commission if the broker or any agent of the listing broker effects a
sale, but imposes no commissions obligation on the owner who sells the property to a
person who was not interested in the property by efforts of the listing broker or an agent
of the listing broker.
Exclusive right to sell Listing - ANSWER A listing given to one broker only, who is
entitled to the commission if anyone sells the property during the term of listing contract.
Executed Contract - ANSWER An agreement that has been fully performed.
Answers Verified 100% Correct
Disability - ANSWER A physical or mental impairment that substantially limits one or
more of the major life activities of a person.
Discriminatory Advertising - ANSWER Any advertising that states or indicates a
preference, limitation, or discrimination on the basis of race, color, religion, sex,
national origin, handicap, or familial status in offering housing for sale or rent.
Elliott-Larsen Civil Rights Act - ANSWER Replaced the 1968 Michigan Fair Housing
Act in prohibiting discrimination in the sale, rental, or lease of housing accommodation.
Fair Housing Act of 1968 - ANSWER A federal prohibition on discrimination in the sale,
rental, or financing of housing on the basis of race, color, religion, sex, or national
origin.
Fair Housing Amendments Act of 1988 - ANSWER A law adding to the Fair Housing
Act provisions to prevent discrimination based on mental or physical handicap or
familial status.
Familial Status - ANSWER An adult with children under 18, a person who is pregnant,
one who has legal custody of a child or who is in the process of obtaining.
Handicap - ANSWER A mental or physical disability that impairs any of a person's life
functions.
Michigan Civil Rights Commissions - ANSWER Investigates alleged discrimination and
secures the equal protection of civil rights.
Michigan Persons with Disabilities Civil Rights Acts of 1976 - ANSWER Requires that
an owner or any other person engaging in a real estate transaction, a real estate
broker, or a real estate salesperson shall not, on the basis of a disability that is
unrelated to the individual's ability to acquire, rent, or maintain property or use by an
individual of adaptive devices or aids, engage in a number of discriminatory practices.
National Fair Housing Alliance (NFHA) - ANSWER Coalition of private, nonprofit fair
housing groups that has joined with federal and state government fair housing
enforcement agencies to substantially improve fair housing enforcement activities.
,Redlining - ANSWER The refusal of lending institutions to make loans for the
purchase, construction, or repair of a dwelling because the area in which the dwelling in
located is integrated or populated by minorities.
Steering - ANSWER The practice of directing prospective purchasers toward or away
from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
Tester - ANSWER A person (or persons) employed by a fair housing organization to
pose as a buyer or seller or renter of real estate to determine if the licensee or landlord
is acting in compliance with the law.
Board of Real Estate Brokers and Salespersons - ANSWER The governing board for
real estate licensees in Michigan
Broker - ANSWER A person or a nonperson (partnership, association, corporation,
common law trust, or combination) acting as agent for others in negotiating the
purchase and sale of real property or other commodities for a fee.
Employ - ANSWER License law term that describes a type of relationship between a
broker and his or her licensees.
Independent Contractor - ANSWER A relationship that meets the following criteria: (1)
the broker and licensee must have a written agreement stating the licensee is not an
employee for federal and state or income tax purposes, and (2) not less than 75% of
the licensee's income may come from commissions earned through the sale of real
estate.
Police Power - ANSWER The power of government to regulate the use of real property
for the benefit of the public.
Promulgate - ANSWER To put into effect by public announcement; to put into
operation.
Salesperson - ANSWER A real estate salesperson must be a person.
Stipulation - ANSWER The violations and fines or penalties, which the department and
the licensee have agreed upon.
Acceptance - ANSWER Voluntary expression by the person receiving the offer to be
bound by the exact terms of the offer; must be unequivocal and unconditional.
Accord and Satisfaction - ANSWER A new agreement by contracting parties that is
satisfied by full performances, there by terminating the prior contract as well.
,Assignee - ANSWER One to whom contractual right are transferred.
Assignment - ANSWER Transfer of legal rights and obligations by one party to another.
Assignor - ANSWER The person transferring contractual rights to another.
Bilateral Contact - ANSWER An agreement based o mutual promises that provide the
consideration.
Breach of Contract - ANSWER Failure, without legal excuse, to perform any promise
that forms the whole or part of a contract.
Buyers Contact - ANSWER A contract in which a buyer hires a broker to obtain
property that he or she may purchase; the broker is the agent of the buyer, who is his
or her principal.
Carry Over Provision - ANSWER A statement in a listing contract protecting the
broker's commission entitlement for a specified period of time after the contract expires;
also called extender clause.
Compensatory Damages - ANSWER The amount of money actually lost, which will be
awarded by a court in case of a breached contract.
Competence - ANSWER The mental/emotional capacity to enter into contracts.
Complete Performance - ANSWER Execution of a contract by virtue of all parties
having fully performed all terms.
Condition - ANSWER Any act or event that, if it occurs or fails to occur, automatically
creates or extinguishes a legal obligation.
Condition Concurrent - ANSWER When the parties are to exchange performance at the
same time.
Condition Precedent - ANSWER An act or events that must exist or occur before a duty
of immediate performance of a promise arises.
Condition Subsequent - ANSWER Any fact, the existence or occurrence of which, by
agreement of the parties, operates to discharge a duty of performance after it has
become absolute.
, Conditional Sales Contract - ANSWER Land Contract; A contract of sale and a
financing instrument wherein the seller agrees to convey title when the buyer completes
the purchase price installment payments; also called installment land contract, contract
for deed, and conditional sales contract.
Constructive Condition - ANSWER A condition in a contract imposed by a court.
Contract - ANSWER An agreement between competent parties upon legal
consideration to do, or abstain from doing, some legal act.
Contract for Deed - ANSWER Land Contract; A contract of sale and a financing
instrument wherein the seller agrees to convey title when the buyer completes the
purchase price installment payments; also called installment land contract, contract for
deed, and conditional sales contract.
Counter Offer - ANSWER A new offer made by an offer or rejecting an offer.
Doctrine of Equitable Conversion - ANSWER The vendor cannot do anything to
jeopardize the interest of the vendee.
Duress - ANSWER The inability of a party to exercise his or her free will because of
fear of another party.
Earnest Money - ANSWER A deposit a buyer makes at the time of submitting an offer,
to demonstrate the true intent to purchase; also called binder, good faith deposit,
escrow deposit.
Equitable Title - ANSWER An interest in real estate such that a court will take notice
and protect the owner's rights.
Estoppel - ANSWER Preventing a person from making a statement contrary to a
previous statement.
Exclusive Agency Listing - ANSWER A listing given to one broker one (exclusive), who
is entitled to the commission if the broker or any agent of the listing broker effects a
sale, but imposes no commissions obligation on the owner who sells the property to a
person who was not interested in the property by efforts of the listing broker or an agent
of the listing broker.
Exclusive right to sell Listing - ANSWER A listing given to one broker only, who is
entitled to the commission if anyone sells the property during the term of listing contract.
Executed Contract - ANSWER An agreement that has been fully performed.
