MICHIGAN REAL ESTATE ACTUAL FINAL EXAM ALL
QUESTIONS AND ANSWERS SURE A+
✔✔Disclosure - ✔✔Required in every state by real estate brokers of agency relationship
✔✔Agency Relationships - ✔✔Express Agency - based on a formal agreement between
the parties
Implied Agency - results from the behavior of the parties
Compensation Source - does not determine agency because the agent may be
compensated by someone other than the agent's client, and agency can exist even if no
compensation is involved (gratuitous agency)
✔✔COLD AC (fiduciary relationship) - ✔✔Care - An agent must exercise a reasonable
degree of care
Obedience - An Agent must act in good faith at all times, with obedience toward the
principal's instructions
Loyalty - An agent must place the principal's interests above those of all others,
including the agent's own interests
Disclosure - An agent is duty bound to inform the principal of certain relevant facts
concerning the transaction, particularly those mandated by state law
Accounting - An agent must be able to report the status of all funds received from or on
behalf of the principal
, Confidentiality - An agent owes the principal confidentiality in carrying out agency
obligations
✔✔Termination of Agency - ✔✔May be accomplished by the completion, performance,
or fulfillment of purpose of agency; destruction or condemnation of the property;
expiration of the terms of the agency; mutual agreement of all parties to the contract;
breach by one of the parties, who may be liable for damages; and operation of law, as
in the bankruptcy of the principal
✔✔Agency Coupled With an Interest - ✔✔Cannot be revoked by the principal or
terminated upon the principal's death
✔✔Universal Agent - ✔✔Empowered to do anything the principal can do personally
✔✔General Agent - ✔✔Represents the principal in a broad range of matters
✔✔Special Agent (Limited Agent) - ✔✔Represents the principal in one specific act or
business transaction only, under detailed instruction
✔✔Designated Agent (Designated Representative) - ✔✔Is authorized by the broker to
act and the agent of a specific principal
✔✔Single Agency - ✔✔In which an agent represents only one party ina transaction
✔✔Dual Agency (Limited Agency) - ✔✔In which an agent represents two principals in
the same transaction
✔✔Buyers Broker - ✔✔Represents a buyer as an agent to find property that meets the
buyer's specifications, as set out by the buyer-broker agreement
✔✔Puffing - ✔✔A legal exaggeration of a property's benefits
✔✔Fraud - ✔✔The intentional misrepresentation of a material fact to harm or take
advantage of another person
✔✔Negligent Misrepresentation - ✔✔When a broker should have known that a
statement about a material fact was false
✔✔Latent Defects - ✔✔Seller has the duty to disclose any that are known that threaten
a building's structural soundness or an occupant's personal safety.
(In some states, an agent has an independent duty to conduct a reasonably competent
and diligent inspection of the property and to disclose defects to prospective buyers
QUESTIONS AND ANSWERS SURE A+
✔✔Disclosure - ✔✔Required in every state by real estate brokers of agency relationship
✔✔Agency Relationships - ✔✔Express Agency - based on a formal agreement between
the parties
Implied Agency - results from the behavior of the parties
Compensation Source - does not determine agency because the agent may be
compensated by someone other than the agent's client, and agency can exist even if no
compensation is involved (gratuitous agency)
✔✔COLD AC (fiduciary relationship) - ✔✔Care - An agent must exercise a reasonable
degree of care
Obedience - An Agent must act in good faith at all times, with obedience toward the
principal's instructions
Loyalty - An agent must place the principal's interests above those of all others,
including the agent's own interests
Disclosure - An agent is duty bound to inform the principal of certain relevant facts
concerning the transaction, particularly those mandated by state law
Accounting - An agent must be able to report the status of all funds received from or on
behalf of the principal
, Confidentiality - An agent owes the principal confidentiality in carrying out agency
obligations
✔✔Termination of Agency - ✔✔May be accomplished by the completion, performance,
or fulfillment of purpose of agency; destruction or condemnation of the property;
expiration of the terms of the agency; mutual agreement of all parties to the contract;
breach by one of the parties, who may be liable for damages; and operation of law, as
in the bankruptcy of the principal
✔✔Agency Coupled With an Interest - ✔✔Cannot be revoked by the principal or
terminated upon the principal's death
✔✔Universal Agent - ✔✔Empowered to do anything the principal can do personally
✔✔General Agent - ✔✔Represents the principal in a broad range of matters
✔✔Special Agent (Limited Agent) - ✔✔Represents the principal in one specific act or
business transaction only, under detailed instruction
✔✔Designated Agent (Designated Representative) - ✔✔Is authorized by the broker to
act and the agent of a specific principal
✔✔Single Agency - ✔✔In which an agent represents only one party ina transaction
✔✔Dual Agency (Limited Agency) - ✔✔In which an agent represents two principals in
the same transaction
✔✔Buyers Broker - ✔✔Represents a buyer as an agent to find property that meets the
buyer's specifications, as set out by the buyer-broker agreement
✔✔Puffing - ✔✔A legal exaggeration of a property's benefits
✔✔Fraud - ✔✔The intentional misrepresentation of a material fact to harm or take
advantage of another person
✔✔Negligent Misrepresentation - ✔✔When a broker should have known that a
statement about a material fact was false
✔✔Latent Defects - ✔✔Seller has the duty to disclose any that are known that threaten
a building's structural soundness or an occupant's personal safety.
(In some states, an agent has an independent duty to conduct a reasonably competent
and diligent inspection of the property and to disclose defects to prospective buyers
