State: Michigan | Category: Real Estate | All tests in this Category:
Practice Test 1 Practice Test 21. Which value is used to calculate property taxes in Michigan?
Property taxes are calculated using Taxable Value (TV) multiplied by the millage rate; other values are used for assessment and equalization processes.
2. If you perform a structural alteration in Michigan, which code would you reference to ensure compliance?
Structural alterations fall under the Michigan Building Code, which is based on IBC/IRC with state amendments.
3. In Michigan, designated agency allows two licensees from the same brokerage to represent:
Designated agency assigns separate licensees to represent each client within the same brokerage, preserving fiduciary duties to each party.
4. Advertising real estate services in Michigan must identify...
Advertisers must clearly identify the licensee and the broker to avoid misrepresentation and ensure accountability.
5. Which loan is paid first in a foreclosure sale?
In foreclosure, loans are paid in order of priority. The first trust deed (senior loan) is paid before junior liens or second trust deeds.
6. The main purpose of a real estate appraisal is to determine:
The primary goal of a real estate appraisal is to determine the property's market value, which reflects the price it would likely sell for under typical market conditions.
7. A Transfer of Development Rights (TDR) program is used to:
TDR programs shift development rights from one area (often farmland or open space) to another area to preserve valuable land while allowing growth elsewhere.
8. What is Taxable Value (TV) used for in Michigan property taxation?
Taxable Value is the base used to calculate property taxes by applying the combined millage rates; it is derived from SEV and may be capped by Prop A.
9. In Michigan, which lien arises by statute to secure payment for work or materials furnished to improve real property?
A mechanic's lien is a statutory lien designed to secure payment to contractors, subcontractors, and suppliers for improvements to real property.
10. Which of the following is typically the landlord's responsibility under the Michigan Landlord and Tenant Act?
Landlords generally must provide essential services (like heat and hot water) and maintain the premises in a habitable condition as required by law.
11. Which adjustment is made when a comparable has fewer bathrooms than the subject?
Since the comparable is inferior (fewer bathrooms), value is added to it to equate it to the subject property's features.
12. Which adjustment is made when a comparable property is smaller than the subject?
If a comparable is smaller than the subject, its price is increased to make it comparable to the subject property.
13. What is the Michigan mailbox rule for contract acceptance?
Under the mailbox rule, a properly mailed acceptance is effective when mailed, not when received.
14. How many hours of approved prelicensing education are required for a Michigan real estate salesperson license?
Michigan requires 90 hours of approved prelicensing education for real estate salespersons.
15. When property bearing a tenant is sold, the new owner becomes the landlord and is bound by the existing lease due to which concept?
Privity of contract (the contract between landlord and tenant) and privity of estate (the landlord's interest in the property) bind successors in ownership to the lease terms.
16. Which of the following is considered a physical component of real property?
Soil is a tangible part of the land, whereas rights like water or minerals are interests, not physical components.
17. Which statement is true about the sale of a life estate?
A life tenant can transfer their life estate; the buyer obtains the same life-estate interest for the remainder of the measuring life.
18. Which term refers to property rights that are transferred separately from the land itself?
Appurtenances are rights or interests that are attached to the land but can be transferred with it.
19. A mortgage loan where only interest is paid during the term and the principal is due at the end is called:
A straight note, also called an interest-only loan, requires the borrower to pay only interest during the term. The entire principal is due as a lump sum at maturity.
20. Which of the following is primarily a residential mortgage lender in the U.S.?
Savings and loan associations (S&Ls) historically focus on residential mortgages, whereas commercial banks have broader lending portfolios.
21. What is the primary purpose of zoning in Michigan?
Zoning aims to promote orderly growth, protect public health and safety, and separate incompatible land uses.