Ch2 Michigan Licensing Law

Question 1

What can happen if a licensee does not immediately present a purchase offer to a seller ?

Answer 1

The licensee can face disciplinary action

Question 2

Brokerage firms often pay a fee to other brokers for

Answer 2

Referring clients

Question 3

When writing up a purchase offer, the licensee should

Answer 3

Make certain that all the terms & conditions are listed in the written offer

Question 4

Why is a transaction coordinator role a precarious one ?

Answer 4

Cannot give advice to either customer at risk for creating an implied agency

Question 5

Applications for initial licensure & updates may be found at

Answer 5

www.michigan.gov/icola

Question 6

Who can file a compliant alleging violations of the code?

Answer 6

Anyone from the public, private associations, department, board or attorney general’s

Question 7

Branch office Licenses are issued for terms of

Answer 7

3 years

Question 8

Those acts that a licensee might perform for a consumer which are informative & do not establish active representation on the consumers behalf are known as

Answer 8

Ministerial acts

Question 9

What must a licensee carry at all times while transacting real estate business

Answer 9

The pocket card sent from the department

Question 10

What is a licensee prohibited from disclosing?

Answer 10

If the seller has HIV orAIDS

Question 11

What is the rate for county/state transfer tax?

Answer 11

County: $.55 per $500 or fraction thereof

State: $3.75 per $500 or fraction thereof

Question 12

What role does the board have with schools, courses & continuing education?

Answer 12

They recommend school, courses & continuing education

Question 13

What exceptions exist to the number of continuing education hours required?

Answer 13

Licenses issued in the second year of the 3 year cycle is required to 12 hours of continuing education for renewal

Licenses issued in the third year of the three year cycle are required 6 hours of continuing education for renewal

Question 14

Types of real estate licenses in Michigan are

Answer 14

Broker

Associate broker

Salesperson

Branch office

Question 15

If an agent represents a seller & disclosures confidential information to a buyer

Answer 15

It is a beach duty & could result in civil action against the agent

Question 16

Under what circumstances can a citation be removed from a licensee’s public file?

Answer 16

If the licensee does not have any additional disciplinary action within the next five years

Question 17

How are ministerial acts different from specific assistance?

Answer 17

Ministerial acts are routine acts that can be performed without creating an agency relationship

Specific assistance is any communication beyond casual convo that leads to the discovery of confidential information

Question 18

The disbursement of an earnest money deposit is made

Answer 18

At the consummation or termination of a purchase agreement

Question 19

A licensee should inform their buyer that after submitting a purchase offer the seller

Answer 19

Does not have to look at offers in the order they come in & can consider multiple offers

Question 20

What happened to listings buyer’s agency agreement & property management agreement if a broker’s license is revoked?

Answer 20

They are automatically cancelled. They cannot be transferred or sold. The seller & lessors must be notified of their rights to list or lease with someone else

Question 21

Real estate License Laws is designed to do what?

Answer 21

To protect the general public

Question 22

The fiduciary relationship between an agent & principal refers to

Answer 22

The principal’s trust & confidence in the agent

Question 23

What is the makeup of the board?

Answer 23

Total of 9 members

6 are real estate licensees, the other members of the general public

Question 24

In a listing agreement one of the duties a seller owes to an agent

Answer 24

Paying a commission for a ready, willing & able buyer

Question 25

What piece of information must be included in any/all real estate ads?

Answer 25

Brokers name as licensed Telephone number or street address

Question 26

What happens if a seller does not provide a disclosure before they executes a binding purchase agreement with a buyer?

Answer 26

The buyer has 72 to 120 hours ( depending on the method of delivery) to terminate the agreement.

Question 27

How does a non principle broker differ from a principal broker?

Answer 27

It’s not an owner, partner, officer, or member Has the same duties as a salespersons

Question 28

What is a License limitation?

Answer 28

Limitation mean a condition or restriction attached to a license

Question 29

When does a new construction purchase agreement for a condominium become binding?

Answer 29

9 days after the developer has delivered the required documents to the purchaser

Question 30

In an agency relationship the person the agent represents is known as the

Answer 30

Principal

Question 31

What happens if a complaint is not resolved?

Answer 31

It will be scheduled for a hearing

Question 32

Under what circumstances can a salesperson close a real estate transaction?

Answer 32

Under direct supervision of their broker

Question 33

To receive credit for a real estate course a student must attend

Answer 33

100% of the course hours

Question 34

Who own listing?

Answer 34

The broker owns the listing. A listing agent that is not the broker may not take listings with them when leaving the firm

Question 35

Under what circumstances can a game promotion be used in real estate business?

Answer 35

No specific payment of any kind is required Not tied to a specific property or properties

Question 36

What monetary level of errors & omissions insurance must a licensee carry?

Answer 36

Michigan does not require licensee to carry errors & omissions insurance although it would be wise for licensees to choose to do so

Question 37

How long must a salesperson whose license was revoked wait until they can reapply for a new license ?

Answer 37

3 years

Question 38

What duty does an agent have to disclose about psychologically impacted property?

Answer 38

No duty since it has no material effect on the condition of the property

Question 39

Janice obtained her license on March 22, 2016 when will her license expire

Answer 39

October 31,2019

Question 40

As the result of an agency agreement, a [blank] relationship is created between the agent & principal

Answer 40

Fiduciary

Question 41

The illegal practice of having two contracts from one buyer-one to purchase the property & a second contract that is used to gain financing is called a

Answer 41

Dual contracts

Question 42

A current balance of all trust accounts must be maintained & available to [blank] upon request

Answer 42

The department

Question 43

The purpose of a seller’s disclosure act?

Answer 43

To forewarn buyers of property’s condition before making an offer

Question 44

A licensee can get 60 hours credited towards a broker’s license if they

Answer 44

Has a masters degree in business administration

Question 45

Michigan allows a broker to maintain personal funds in the trust account but not to exceed

Answer 45

$2,000

Question 46

A qualified salesperson applicant must complete how many hours of approved instruction?

Answer 46

40 hours

Question 47

If a lender or title company conducts the closing, who is responsible for the closing statement?

Answer 47

The listing broker

Question 48

If a residential unit converts to a condominium how long can a disabled person continue to lease?

Answer 48

From 1 to 10 years depends on the circumstances

Question 49

Once the pre license course has been successfully completed, a broker candidate has how long to apply for a license?

Answer 49

36 months

Question 50

The most common types of listing agreements. which is the most often used in Michigan*.

Answer 50

*Exclusive right to sell Exclusive agency Open listing

Question 51

Purchase offers can be delivered in what ways

Answer 51

By telephone In person By email

Question 52

The person who is authorized by the broker to act as the agent of a specific principal in a transaction is known as

Answer 52

The designated agent

Question 53

The broker’s compensation is set forth in the

Answer 53

Brokerage agreement

Question 54

If a license is suspended or revoked the licensee must

Answer 54

Return their license & pocket card to the department & refrain from real estate activities

Question 55

What specific info is a licensee prohibited from disclosing under the Michigan person with disabilities act?

Answer 55

Seller having HIV or AIDS

Question 56

What role does the department have with schools, courses & continuing education

Answer 56

Approved schools, courses & continuing education

Question 57

How long is the grace period for a salesperson who does not renew their license by the expiration date?

Answer 57

60 days

Question 58

What are a licensee’s responsibilities & liabilities regarding the seller’s disclosure?

Answer 58

Responsibilities: Obtain the completed form Deliver form to buyers Request signed copy from buyers before presenting offer to seller. Liabilities: None - if the agent didn’t know if they violated the act

Question 59

What the county tax, state tax & total tax for a home sold for $275,750 You will need a calculator 😀

Answer 59

County/state tax $275,750 divided by $500 = 551.5 round up to 552 State tax 552 x $3.75 = $2070 County tax 552 x $.55 = $303.60 Total transfer tax on the $275,750 sale $303.60 + $2070 = 2373.60

Question 60

What are the duties that an agent owes to their client

Answer 60

``` Confidentiality Obedience Loyalty Disclosure info Accounting Care ```

Question 61

What must a broker do if they decide to work for another broker as a salesperson?

Answer 61

Surrender their broker license & apply for a salesperson license

Question 62

How many hours of continuing education are required in a three year cycle

Answer 62

18 hours

Question 63

A written agency disclosure form must be completed & signed by the client

Answer 63

Prior to giving any specific assistance

Question 64

Which situation would a licensee be a transaction coordinator?

Answer 64

When the licensee is not working with customers but is not anyone’s agent

Question 65

If a licensee has their license revoked, what happens

Answer 65

The licensee must return the license & pocket card to the department & must cease engaging in any real estate activities

Question 66

A(n) [blank] agent has complete authority over the principal’s property & can bind the principal in any contact, including buying, selling, leasing, exchanging or encumbering

Answer 66

Universal agent

Question 67

What happens to the salesperson & associate broker in a firm when the broker’s license is suspended or revoked?

Answer 67

All licenses will be suspended pending change of broker & issuing of new licenses

Question 68

A situation in which a broker mixes their personal funds with their other funds in their broker trust account is known as

Answer 68

Commingling

Question 69

What’s the difference between a employee & an independent contractor

Answer 69

An “employee” has federal and state taxes withdrawn from their real estate compensation and is subject to rules by the broker regarding office hours vacation hours etc. An “independent contractor” pays their own federal & state income taxes and at least 75% of the annual compensation paid to them by the broker is from commissions from the sale of real estate

Question 70

What is a protection clause?

Answer 70

The protection clause states that the broker is still entitled to a Commission for a set period after the listing expires if the properties is sold to anyone who looked at the property with The broker or any cooperating broker during the period the property was listed.

Question 71

Under what condition does Michigan allow for dual agency?

Answer 71

With the informed written consent of both buyer & seller

Question 72

If there is evidence of a violation that Attorney’s general office may issue one of the four notices. What are they?

Answer 72

A formal complaint A cease & desist order A notice of summary suspension A citation

Question 73

Brokers compensation is determined by

Answer 73

The listing agreement

Question 74

Define the duty of confidentiality. how long does this duty last

Answer 74

Agents have a strict duty to keep information confidential. Disclosing confidential information is a breach of duty and could result in civil action against the agent. the duty extends beyond the time of the Ancy contract.

Question 75

What does Michigan require of a broker who wants to manage property?

Answer 75

A written property management employment contract that outlines the broker duties, responsibilities & activities as the property manager; & describes the handling, management, safekeeping, investment, disbursement & use of the property management money funds & accounts.

Question 76

If a person whose license was suspended or revoked as a result of disciplinary action wishes to reapply for relicensure, the department may require the applicant to

Answer 76

File a surety bond of up to $5000 for a period of up to 5 years

Question 77

Non principal

Answer 77

Is not a owner partner, officer, or member but can be primary signatory on broker’s trust account and can sign closing statements.

Question 78

List the violations of the condominium act

Answer 78

Misrepresenting the facts in the recorded master deed Distributing an advertising pamphlet prospectus or letter concerning the project which contains false statements Representing a project as a condominium project when it has not been recorded as such

Question 79

Who initiated action when the Michigan uniform securities act has been violated

Answer 79

The securities administrator

Question 80

When a new construction purchase agreement is signed it’s not binding until

Answer 80

9 business days after the developer delivers the required documents to purchaser

Question 81

The securities administrator may

Answer 81

Suspended or revoked registration Issue a cease & desist order Impose a civil fine of up to $1000 for each violation not to exceed a total of $10,000