MICHIGAN REAL ESTATE LICENSING EXAM QUESTIONS AND ANSWERS 2024|GUARANTEED SUCCESS

Allodial System The type of land ownership existing in the United States whereby individuals may hold title to real property absolutely. Association of Real Estate License Law Official (ARELLO) Founded in 1929, a group of real estate license law officials that regulates more than 2 million real estate licensees. Feudal System A type of land ownership in medieval Europe, whereby only the king could hold absolute title to real property. Free Market An economic condition in which buyer and seller have ample time to negotiate a beneficial purchase and sale without undue pressure or urgency. Heterogeneity A variety of dissimilar uses of property; nonhomogeneous. Highest and Best Use The use of land that will preserve its utility and yield a net income flow in the form of rent that, when capitalized at the proper rate of interest, represents the highest present value of the land. Homogeneity Neighborhoods made up of similar and compatible properties. Immobility Incapable of being moved, fixed in location; an important physical characteristics of land. Indestructibility A physical characteristic of land describing that land as a permanent commodity that cannot be destroyed. Investment The outlay of money for income or profit. Land Use Controls Governmental restrictions on land use (e.g., zoning laws and building codes) Leverage The use of borrowed funds; the larger the percentage of borrowed money, the greater the leverage. Listing Contract A contract whereby a property owner employs a real estate broker to market the property described in the contract. Location An economic characteristic of land having the greatest effect on value in comparison to any other characteristic. National Association of Realtors (NAR) The largest and most prominent trade organization. Personal Property All property that is not land and is not permanently attached to land; everything that is movable; chattel. Real Estate Land and everything permanently attached to land; sometimes used interchangeable with the terms real property and realty. Real Property The aggregate of rights, powers, and privileges conveyed with ownership of real estate. REALTOR A registered trademark of the National Association of Realtors; its use is limited to members only. Realty Land and everything permanently attached to land. Scarcity (a) An economic characteristic of real property. (b) In appraisal, supply of property in relation to effective demand. Supply & Demand The principle stating that the greater the supply of any commodity in comparison to demand, the lower the value; conversely, the smaller the supply and the greater the demand, the higher the value. Bill of Sale An instrument transferring ownership of personal property. Bundle of Rights The rights of an owner of a freehold estate to prossession, enjoyment, control, and disposition of real property. Chattel Personal property Community Property A form of co-ownership limited to husband and wife; does not include the right of survivorship. Concurrent Ownership Simultaneous ownership of real property by two or more people. Condominium A form of ownership of real property, recognized in all states, consisting of individual ownership of some aspects of the property. Convey To pass another (as in title). Cooperative A form of ownership in which stockholders in a corporation occupy property owned by the corporation under a lease. Co-Ownership Title to real property held by two or more persons at the same time; also called concurrent ownership. Curtesy A husband's interest in the real property of his wife. Declaration Master deed containing legal description of the condominium facility, a plat of the property, plans and specifications for the building and units, a description of the common areas, and the degree of ownership in the common areas available to each owner. Deed A written instrument transferring an interest in real property when delivered to the grantee. Defeasible Subject to being defeated by the occurrence of a certain event. Dower A wife's interest in her husband's real property. Emblements Personal property growing in the soil, requiring planting and cultivation; annual crops. Estate at Sufferance Continuing to occupy property after lawful authorization has expired; a form of leasehold estate. Estate at Will A leasehold estate that may be terminated at the desire of either party. Estate for Years A leasehold estate of definite duration. Estate from Year to Year A leasehold estate that automatically renews itself for consecutive periods until terminated by notice of either party; also called estate from period to period or periodic tenancy. Estate in Real Property An interest sufficient to provide the right to use, possession, and control of land; establishes the degree and duration of ownership. Fee Simple Absolute An inheritable estate in land providing the greatest of any form of title. Fixture Personal property that has become real property by having been permanently attached to real property. Freehold Estate A right of title to land. Joint Tenancy A form of co-ownership that includes the right of survivorship. Leasehold Estate Nonfreehold estate; of limited duration, providing the right of possession and control but not title. Life Estate A freehold estate created for the duration of the life or lives of certain named persons; a noninheritable estate. Life Tenant One holding a life estate. Master Deed The instrument that legally establishes a condominium; also called condominium declaration. Michigan Condominium Act Details rights of condominium purchasers in Michigan. Nonfreehold Estate Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as opposed to ownership in fee. Pur Autre Vie A life estate based on the life of another. Remainder Conveyance is from grantor to G for life and then to a named person or persons upon the death of G, it is an estate in remainder. Reversion Return of title to the holder of a future interest, such as the grantor in a life estate in a life estate not in remainder. Right of First Refusal Clause A statement in a lease or condominium articles of association that provides for a lessee or an association to have the first opportunity to purchase the property before it is offered to anyone else. Right of Inheritance The right for property to descend to the heirs of the owner as set out by will or by intestate succession. Right of Survivorship The right of an owner to receive the title to a co-owner's share upon death of the co-owner, as in the case of joint tenancy and tenancy by the entirety. Separate Property Any property acquired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife. Severalty Ownership by only one person. Site Condominium Condominium until composed of only vacant land with surface improvements or with air space within which a building is to be constructed. Tenancy by the Entirety A form of co-ownership limited to husband and wife, with the right of survivorship. Tenancy In Common A form of co-ownership that does not include the right of survivorship. Timesharing A form of ownership in which the purchaser owns the property for a certain specified time interval. Trade Fixtures Item that is installed by a commercial tenant and is removable upon termination of the tenancy. Unities of Ownership Time, title, interest, and possession; concurrent ownerships require at least one unity between co-owners. Americans with Disability Act (ADA) A federal law protecting the rights of individuals with physical or mental impairments. Blockbusting For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of particular race, color, religion, sex, or national origin. Civil Rights Act of 1866 A federal law that prohibits all discrimination on the basis of race.