MICHIGAN REAL ESTATE 2026 EXAM QUESTIONS AND
ANSWERS GUARANTEE A+
✔✔Antitrust Laws - ✔✔Laws designed to preserve the free enterprise of the open
marketplace by making illegal certain private conspiracies and combinations formed to
minimize competition. Most violations of antitrust laws in the real estate business
involve either price-fixing (brokers conspiring to set fixed compensation rates) or
allocation of customers or markets (brokers agreeing to limit their areas of trade or
dealing to certain areas or properties).
✔✔Appraisal - ✔✔An estimate of the quantity, quality, or value of something. The
process through which conclusions of property value are obtained; also refers to the
report that sets forth the process of estimation and conclusion of value.
✔✔Appreciation - ✔✔An increase in the worth or value of a property due to economic or
related causes, which may prove to be either temporary or permanent; opposite of
depreciation.
✔✔Appurtenance - ✔✔A right, privilege, or improvement belonging to, and passing
with, the land; "runs with the land."
✔✔Appurtenant Easement - ✔✔An easement that is annexed to the ownership of one
parcel and allows the owner the use of the neighbor's land.
✔✔Area Preference - ✔✔People's desire for one area over another, based on a number
of factors such as history, reputation, convenience, scenic beauty, and location.
✔✔Asbestos - ✔✔A mineral once used in insulation and other materials that can cause
respiratory diseases.
✔✔Assemblage - ✔✔The combining of two or more adjoining lots into one larger tract to
increase their total value.
✔✔Assessment - ✔✔The imposition of a tax, charge, or levy, usually according to
established rates.
✔✔Assignment - ✔✔The transfer in writing of interest in a bond, mortgage, lease, or
other instrument.
✔✔Assume - ✔✔A buyer is personally obligated for the payment of the entire debt of a
seller; that is, the buyer assumes the debt. The original seller is not liable for the debt if
the property is foreclosed on.
,✔✔Attachment - ✔✔The act of taking a person's property into legal custody by writ or
other judicial order to hold it available for application to that person's debt to a creditor.
✔✔Attorney's Opinion Of Title - ✔✔An abstract of title that an attorney has examined
and has certified to be, in his or her opinion, an accurate statement of the facts
concerning the property's ownership.
✔✔Avulsion - ✔✔The sudden tearing away of land, as by earthquake, flood, volcanic
action, or the sudden change in the course of a stream.
✔✔Balloon Payment - ✔✔A final payment of a mortgage loan that is considerably larger
than the required periodic payments because the loan amount was not fully amortized.
✔✔Bargain And Sale Deed - ✔✔A deed that carries with it no warranties against liens
or other encumbrances but that does imply that the grantor has the right to convey title.
The grantor may add warranties to the deed at his or her discretion.
✔✔Base Lines - ✔✔The main imaginary line running east and west and crossing a
principal meridian at a definite point; used by surveyors for reference in locating and
describing land under the rectangular (government) survey system of legal description.
✔✔Basis - ✔✔The financial interest that the Internal Revenue Service attributes to an
owner of an investment property for the purpose of determining annual depreciation and
gain or loss on the sale of the asset. If a property was acquired by purchase, the
owner's basis is the cost of the property plus the value of any capital expenditures for
improvements to the property, minus any depreciation allowable or actually taken. This
new basis is called the adjusted basis.
✔✔Benchmarks - ✔✔Permanent reference marks or points established for use by
surveyors in measuring differences in elevation.
✔✔Beneficiary - ✔✔(1) The person for whom a trust operates or in whose behalf the
income from a trust estate is drawn. (2) A lender in a deed of trust loan transaction.
✔✔Bilateral Contract - ✔✔A legally enforceable promise or set of promises that must be
performed and for which, if a breach of the promise occurs, the law provides a remedy.
A contract may be either unilateral, by which only one party is bound to act, or bilateral,
by which all parties to the instrument are legally bound to act as prescribed.
✔✔Blanket Loan - ✔✔A mortgage covering more than one parcel of real estate,
providing for each parcel's partial release from the mortgage lien upon repayment of a
definite portion of the debt.
✔✔Blind Ad - ✔✔An ad that does not list the company name so that readers believe
that the advertised property is offered by a private party.
,✔✔Blockbusting - ✔✔The illegal practice of channeling home seekers to particular
areas, either to maintain the homogeneity of an area or to change the character of an
area, which limits their choices of where they can live.
✔✔Board Of Real Estate Brokers And Salespersons - ✔✔The agency created by the
Occupational Code composed principally of licensed real estate salespersons and
brokers.
✔✔Boot - ✔✔Money or property given to make up any difference in value or equity
between two properties in an exchange.
✔✔Branch Office License - ✔✔The license that is required for any location, which in
addition to the principal business location, is held out to the public as a place where the
public may do business with a real estate licensee.
✔✔Breach Of Contract - ✔✔Violation of any terms or conditions in a contract without
legal excuse; for example, failure to make a payment when it is due.
✔✔Broker - ✔✔One who acts as an intermediary on behalf of others for a fee or
commission.
✔✔Broker - ✔✔An individual or business entity who with intent to collect a fee, or
receive valuable consideration, engages in the practice of real estate.
✔✔Broker's Price Opinion (Bpo) - ✔✔An opinion of real estate value commissioned by
a bank or attorney and provided by a broker.
✔✔Brokerage - ✔✔The bringing together of parties interested in making a real estate
transaction.
✔✔Brownfields - ✔✔Defunct, derelict, or abandoned commercial or industrial sites;
many have toxic wastes.
✔✔Budget Comparison Statement - ✔✔Compares actual results with the original
budget, often giving either percentages or a numerical variance of actual versus
projected income and expenses
✔✔Buffer Zones - ✔✔A strip of land, usually used as a park or designated for a similar
use, separating land dedicated to one use from land dedicated to another use
✔✔Building Codes - ✔✔An ordinance that specifies minimum standards of construction
for buildings to protect public safety and health.
, ✔✔Bundle Of Legal Rights - ✔✔The concept of land ownership that includes ownership
of all legal rights to the land—possession, control within the law, enjoyment, exclusion,
and disposition.
✔✔Buydown - ✔✔A financing technique used to reduce the monthly payments for the
first few years of a loan. Funds in the form of discount points are given to the lender by
the builder or seller to buy down or lower the effective interest rate paid by the buyer,
thus reducing the monthly payments for a set time.
✔✔Buyer Agency Agreement - ✔✔A principal-agent relationship in which the broker is
the agent for the buyer, with fiduciary responsibilities to the buyer. The broker
represents the buyer under the law of agency.
✔✔Buyer's Agent - ✔✔A residential real estate broker or salesperson who represents
the prospective purchaser in a transaction. The buyer's agent owes the buyer-principal
the common-law or statutory agency duties.
✔✔Capital Gain - ✔✔Profit earned from the sale of an asset.
✔✔Capitalization Rate - ✔✔The rate of return a property will produce on the owner's
investment.
✔✔Carbon Monoxide (Co) - ✔✔A colorless, odorless gas that occurs as a by-product of
fuel combustion that may result in death in poorly ventilated areas.
✔✔Cash Flow - ✔✔The net spendable income from an investment, determined by
deducting all operating and fixed expenses from the gross income. When expenses
exceed income, a negative cash flow results.
✔✔Cash Flow Report - ✔✔A monthly statement that details the financial status of the
property.
✔✔Cease And Desist Order - ✔✔A court order requiring a person to halt an activity and
not perform the activity again.
✔✔Censure - ✔✔An expression of disapproval of a licensee's professional conduct.
The censured conduct is not necessarily a violation of a law or rule.
✔✔Certificate Of Occupancy - ✔✔Permission by the municipal inspector to occupy a
completed building structure after being inspected and having complied with building
codes.
✔✔Certificate Of Reasonable Value (Crv) - ✔✔A form indicating the appraised value of
a property being financed with a VA loan.
ANSWERS GUARANTEE A+
✔✔Antitrust Laws - ✔✔Laws designed to preserve the free enterprise of the open
marketplace by making illegal certain private conspiracies and combinations formed to
minimize competition. Most violations of antitrust laws in the real estate business
involve either price-fixing (brokers conspiring to set fixed compensation rates) or
allocation of customers or markets (brokers agreeing to limit their areas of trade or
dealing to certain areas or properties).
✔✔Appraisal - ✔✔An estimate of the quantity, quality, or value of something. The
process through which conclusions of property value are obtained; also refers to the
report that sets forth the process of estimation and conclusion of value.
✔✔Appreciation - ✔✔An increase in the worth or value of a property due to economic or
related causes, which may prove to be either temporary or permanent; opposite of
depreciation.
✔✔Appurtenance - ✔✔A right, privilege, or improvement belonging to, and passing
with, the land; "runs with the land."
✔✔Appurtenant Easement - ✔✔An easement that is annexed to the ownership of one
parcel and allows the owner the use of the neighbor's land.
✔✔Area Preference - ✔✔People's desire for one area over another, based on a number
of factors such as history, reputation, convenience, scenic beauty, and location.
✔✔Asbestos - ✔✔A mineral once used in insulation and other materials that can cause
respiratory diseases.
✔✔Assemblage - ✔✔The combining of two or more adjoining lots into one larger tract to
increase their total value.
✔✔Assessment - ✔✔The imposition of a tax, charge, or levy, usually according to
established rates.
✔✔Assignment - ✔✔The transfer in writing of interest in a bond, mortgage, lease, or
other instrument.
✔✔Assume - ✔✔A buyer is personally obligated for the payment of the entire debt of a
seller; that is, the buyer assumes the debt. The original seller is not liable for the debt if
the property is foreclosed on.
,✔✔Attachment - ✔✔The act of taking a person's property into legal custody by writ or
other judicial order to hold it available for application to that person's debt to a creditor.
✔✔Attorney's Opinion Of Title - ✔✔An abstract of title that an attorney has examined
and has certified to be, in his or her opinion, an accurate statement of the facts
concerning the property's ownership.
✔✔Avulsion - ✔✔The sudden tearing away of land, as by earthquake, flood, volcanic
action, or the sudden change in the course of a stream.
✔✔Balloon Payment - ✔✔A final payment of a mortgage loan that is considerably larger
than the required periodic payments because the loan amount was not fully amortized.
✔✔Bargain And Sale Deed - ✔✔A deed that carries with it no warranties against liens
or other encumbrances but that does imply that the grantor has the right to convey title.
The grantor may add warranties to the deed at his or her discretion.
✔✔Base Lines - ✔✔The main imaginary line running east and west and crossing a
principal meridian at a definite point; used by surveyors for reference in locating and
describing land under the rectangular (government) survey system of legal description.
✔✔Basis - ✔✔The financial interest that the Internal Revenue Service attributes to an
owner of an investment property for the purpose of determining annual depreciation and
gain or loss on the sale of the asset. If a property was acquired by purchase, the
owner's basis is the cost of the property plus the value of any capital expenditures for
improvements to the property, minus any depreciation allowable or actually taken. This
new basis is called the adjusted basis.
✔✔Benchmarks - ✔✔Permanent reference marks or points established for use by
surveyors in measuring differences in elevation.
✔✔Beneficiary - ✔✔(1) The person for whom a trust operates or in whose behalf the
income from a trust estate is drawn. (2) A lender in a deed of trust loan transaction.
✔✔Bilateral Contract - ✔✔A legally enforceable promise or set of promises that must be
performed and for which, if a breach of the promise occurs, the law provides a remedy.
A contract may be either unilateral, by which only one party is bound to act, or bilateral,
by which all parties to the instrument are legally bound to act as prescribed.
✔✔Blanket Loan - ✔✔A mortgage covering more than one parcel of real estate,
providing for each parcel's partial release from the mortgage lien upon repayment of a
definite portion of the debt.
✔✔Blind Ad - ✔✔An ad that does not list the company name so that readers believe
that the advertised property is offered by a private party.
,✔✔Blockbusting - ✔✔The illegal practice of channeling home seekers to particular
areas, either to maintain the homogeneity of an area or to change the character of an
area, which limits their choices of where they can live.
✔✔Board Of Real Estate Brokers And Salespersons - ✔✔The agency created by the
Occupational Code composed principally of licensed real estate salespersons and
brokers.
✔✔Boot - ✔✔Money or property given to make up any difference in value or equity
between two properties in an exchange.
✔✔Branch Office License - ✔✔The license that is required for any location, which in
addition to the principal business location, is held out to the public as a place where the
public may do business with a real estate licensee.
✔✔Breach Of Contract - ✔✔Violation of any terms or conditions in a contract without
legal excuse; for example, failure to make a payment when it is due.
✔✔Broker - ✔✔One who acts as an intermediary on behalf of others for a fee or
commission.
✔✔Broker - ✔✔An individual or business entity who with intent to collect a fee, or
receive valuable consideration, engages in the practice of real estate.
✔✔Broker's Price Opinion (Bpo) - ✔✔An opinion of real estate value commissioned by
a bank or attorney and provided by a broker.
✔✔Brokerage - ✔✔The bringing together of parties interested in making a real estate
transaction.
✔✔Brownfields - ✔✔Defunct, derelict, or abandoned commercial or industrial sites;
many have toxic wastes.
✔✔Budget Comparison Statement - ✔✔Compares actual results with the original
budget, often giving either percentages or a numerical variance of actual versus
projected income and expenses
✔✔Buffer Zones - ✔✔A strip of land, usually used as a park or designated for a similar
use, separating land dedicated to one use from land dedicated to another use
✔✔Building Codes - ✔✔An ordinance that specifies minimum standards of construction
for buildings to protect public safety and health.
, ✔✔Bundle Of Legal Rights - ✔✔The concept of land ownership that includes ownership
of all legal rights to the land—possession, control within the law, enjoyment, exclusion,
and disposition.
✔✔Buydown - ✔✔A financing technique used to reduce the monthly payments for the
first few years of a loan. Funds in the form of discount points are given to the lender by
the builder or seller to buy down or lower the effective interest rate paid by the buyer,
thus reducing the monthly payments for a set time.
✔✔Buyer Agency Agreement - ✔✔A principal-agent relationship in which the broker is
the agent for the buyer, with fiduciary responsibilities to the buyer. The broker
represents the buyer under the law of agency.
✔✔Buyer's Agent - ✔✔A residential real estate broker or salesperson who represents
the prospective purchaser in a transaction. The buyer's agent owes the buyer-principal
the common-law or statutory agency duties.
✔✔Capital Gain - ✔✔Profit earned from the sale of an asset.
✔✔Capitalization Rate - ✔✔The rate of return a property will produce on the owner's
investment.
✔✔Carbon Monoxide (Co) - ✔✔A colorless, odorless gas that occurs as a by-product of
fuel combustion that may result in death in poorly ventilated areas.
✔✔Cash Flow - ✔✔The net spendable income from an investment, determined by
deducting all operating and fixed expenses from the gross income. When expenses
exceed income, a negative cash flow results.
✔✔Cash Flow Report - ✔✔A monthly statement that details the financial status of the
property.
✔✔Cease And Desist Order - ✔✔A court order requiring a person to halt an activity and
not perform the activity again.
✔✔Censure - ✔✔An expression of disapproval of a licensee's professional conduct.
The censured conduct is not necessarily a violation of a law or rule.
✔✔Certificate Of Occupancy - ✔✔Permission by the municipal inspector to occupy a
completed building structure after being inspected and having complied with building
codes.
✔✔Certificate Of Reasonable Value (Crv) - ✔✔A form indicating the appraised value of
a property being financed with a VA loan.
