Free Michigan Real Estate Practice Exam Questions (October 2026) 115+

The surface rights are the rights to use the surface of the earth. Subsurface rights are the rights to the natural resources lying below the earth's surface. Interestingly an owner may transfer rights without transferring the subsurface rights. For example, a landowner can sell his rights to an oil and gas company in his land but still can own the land itself.

Ginnie Mae exists to solely guarantee the security of the loan. Ginnie Mae is a government agency that guarantees securities backed by loans issued under other government agency programs, such as the VA and FHA. Fannie Mae, is a private corporation that buys loans from private lenders, assembles them into mortgage-backed securities to maintain an active secondary market.

In real estate, commingling refers to the act of mixing the client’s funds with the broker’s own funds. Commingling can be both legal and illegal depending on the state and circumstance. Typically, from an agent’s perspective, commingling should be avoided at all costs. Commingling can be legal in some circumstances, but in most cases, as an agent or a broker, it’s best to avoid it.

The Purchase Agreement is a contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller. So in plain terms, a Purchase Agreement is the document buyers and sellers sign with all the terms and conditions of their transaction on it.

The agent is not entitled to any compensation. With exclusive agency listings agents only get paid if they sell the property. No fee is earned if the owner alone sells the property. Also if it was open listing, the agent would still NOT be entitled to any compensation. This scenario only works because it is an exclusive agency listing.

Personal property is all things removable like clothes, lawn mowers, couches, TV's, and furniture. Real Property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line. There are some exceptions of items that can be moved but are still real property, like for businesses. In this case the only item that would qualify as real property is garage.

Weather-related issues and normal wear-and-tear are generally not included in a builder's home warranty. Other items that a builder's warranty may not cover include: Household appliances. Defects resulting from work conducted by the homeowner or anyone else after the builder's work is completed. No warranty covers damages caused by natural disasters.

While discrimination of race, gender, and religion are all illegal today, back then the specific law that extended equal rights in real property to members of all races was the Civil Rights Act of 1866.

A special agent is an agent hired to perform a specific duty. The real estate agent’s power and authority is limited to that specific task. Example: If you list a house on behalf of a seller, you are hired for one specific job – listing the house. Once that job is complete, then the agency relationship is over.

A lien is a legal claim on an asset. Mortgages are a type of lien as it provides the lender a claim over the borrower’s assets and allows the lender the right to detain the assets, property or goods to secure payment. Read More Here

Don’t overthink this. He is no longer the listing agent, he MUST inform the caller that information. Anything else would be deemed unethical and potentially illegal.

The proper procedure for changing a contract that has already become binding is to sign a separate amendment. Remember, separate amendments are used to modify or change executory contracts.

Duress is the unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against his or her will. A contract entered into under duress is voidable.

An addendum is a supplemental attachment incorporated into the agreement. Here, the parties include it with the original purchase agreement before signing.

An amendment changes an existing agreement and may change or add terms. Simply saying that a document “adds something” is not enough to distinguish the two. The timing, document language, and applicable forms matter; terminology can vary by jurisdiction.

For an official example, the Texas Real Estate Commission describes its Amendment to Contract as changing or adding terms to an already executed contract.

Users, owners, renters, developers, renovators, and facilitators are the main participants in real estate markets.

The overall appraisal process is based on a number of factors and appraisers usually use a combination of approaches but give weight to the most the most important. The income approach determines what a property generates in terms of income for its owner, that income, or potential for income. It is then used to calculate or identify the market value of the property. The income approach is primarily used for rental properties and this case would be given the most weight in the appraisal process.

Instead of being handed down to his family(since he has none), his assets (farm included) are going to go to the government in the process called escheat. Escheat is the government's right to take ownership of unclaimed real estate or assets. Read More Here

A conventional loan is a type of loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower. Yes, typically they are the most popular but the best definition by far is the following: A type of loan that is not insured or guaranteed by the government, but backed by private lenders.

Tax liens are imposed by the federal, state, or local government based upon back property taxes that are due. Not only can these seriously impact your credit report, but until they're paid off, they can prevent you from selling the property. Tax liens are involuntary and usually specific. The important thing to remember is the government always gets paid first in terms of money distribution.

Depreciation is any loss in the value of a property over time from any cause. There are three main forms of depreciation: Economic Obsolescence, Functional Obsolescence, and Physical Deterioration.

A universal agency has the broadest scope: the agent may act for the principal across all matters that may lawfully be delegated. A general agency concerns a particular business or continuing activity, while a special agency concerns a specific act or transaction. The scope of authority is the distinguishing fact; saying only that an agent may act for the principal is not enough.

It generally has to do with performance. Time is of the essence clause in real estate contracts refers to a clause that requires one party in a real estate contract to fulfill their obligations within a specific time frame.

Antitrust Laws are a collection of federal and state government laws that regulate the conduct and organization of business corporations, normally to promote fair competition for the benefit of consumers. In retrospect, antitrust laws protect the consumer and are healthy for a stable economy. It’s important to know and understand the ones that deal with real estate as they directly relate to how you function as an agent.

The Purchase Agreement is a contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller. A good example of a purchase agreement is when you order something online. Sometimes websites will ask you to sign or check a box that says terms and conditions. That's a purchase agreement. Most people don’t normally read those but truely should. Real Estate Purchase Agreements are the same but at a larger scale.

You’ll hear a lot of people use the word Market Value or Market Price. This just means the actual selling price of the property. So if your home sells for $250,000. Its market value is $250,000.

The Fair Housing Act is a law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more. Changing terms of a sale because someone is Chinese is clearly illegal and a violation of The Fair Housing Act.

Condemnation is the procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate. eminent domain is the right which grants the government to take privately owned land from someone while condemnation is the action of taking that land.

Fixing is the practice of setting the price of a good or service to make a particular price a standard. So in our terms, real estate fixing is when competing agents meet up and agree on the same commission rates. Any agreement even if it just implied with other brokerages to set a standard commission rate is a violation of the antitrust laws.

Dividing Territories is when competing brokers agree to split territories, and divide interests accordingly. This is a clear antitrust violation.

Conspiracy to Boycott occurs when two or more persons or entities conspire to restrict the ability of someone from competing. Another clear antitrust violation.

Selling property you listed to someone who resides in more than one state over is not a violation and is legal.

Mechanic's liens are legal documents that essentially reserve the rights of the filer to seek unpaid compensation. They are usually filed by contractors, subcontractors, or suppliers that never received payment for work that they performed or materials that they provided on the property.

A lender's refusal to lend money to potential homeowners attempting to purchase property located in predominantly minority neighborhoods is redlining. Steering is 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. It is a form of redlining. Its worth mentioning that, because people often get these two things confused. Steering is a FORM of redlining, and they are not exactly the same things.

Forgery refers to the false making or material alteration of a legal instrument with the specific intent to defraud anyone. It is illegal and real estate agents must be aware of the action.

Leo should use Contribution. Contribution is most commonly applied to determine how renovation and property changes may affect the property’s overall cost. In this case, since the owner wants a feasibility study, contribution would need to be used. Swimming pools are a common contribution example. It's worth noting the cost doesn't always equal the value to the home. For example, a pool could add $5000 to the value of a home but cost $10,000 to build.

A satisfaction of mortgage is a document that confirms a mortgage has been paid off and details the provisions for the transfer of collateral title rights.

The rectangular survey system consists of principal meridian lines that cover most states in the US, running north to south and baselines running east to west. These principal meridian lines are named or numbered to identify their location. Using those lines for references, quadrangles are formed, which are smaller squares identifiable by where they are located near the principal meridian and baseline. This process continues, creating a smaller and smaller grid that can be used to identify the specific location of any property.

An amendment typically changes terms of a contract. An addendum “adds” terms to a contract. For example, let's say a buyer and seller have agreed to an April 10th closing date but later both agreed to change the closing date to April 25th. They would use an amendment. Addendums are used to add or delete terms or conditions NOT previously agreed to. That's the difference.

A landowner of land which borders a navigable waterway owns the property up to the high-water mark at the water’s edge. The government owns the water and land beneath it, and the public has an easement right to travel on the water. The owner would be unsuccessful because the owner's property extends only to the high-water mark.

If demand increases more than supply does, we get an increase in price. If supply rises more than demand, we get a decrease in price. If they rise or decrease the same amount, the price remains the same.

Verifying ingress and egress rights is an essential part of the due diligence process when purchasing property for both real estate agents and buyers. If one of your clients is planning to buy landlocked property, don't assume anything. Check records. Have the land surveyed, if necessary. Due diligence is the process of examining the details of a transaction to make sure it's legal. When the deal satisfies both aspects of due diligence, the two parties can finalize and correctly price the transaction. Read More Here

The correct answer is void. An agreement whose sole purpose is unlawful is void from the outset; it is not a valid agreement that one party may choose to avoid.

Do not confuse an unlawful purpose with a missing signature or writing. A failure to satisfy an applicable statute of frauds raises enforceability issues, and the result depends on the law and facts. For example, California Civil Code section 1598 addresses an agreement with a single unlawful object, while section 1624 separately addresses writing requirements.

California Civil Code section 1598

Void contracts are not contracts because they lack an essential element of a contract and are thus unenforceable. Voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects.

Estates can be divided into two different sections: freehold estates, and less than freehold estates(or leasehold estates).The key difference between a leasehold estate and a freehold estate is the limitation of time. A freehold estate is an estate in which you have exclusive right to enjoy the possession of a property for an undefined length of time, while a leasehold estate is an estate held by one who rents or leases property for a period of time. Read More Here

Home inspection contingencies are one of the most common home buying contingencies. According to NAR, around 80% of homebuyers include a home inspection contingency in their purchase agreement. Financing is right behind it, as it allows the buyer to terminate the contract if they cannot obtain a loan.

Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A corporation has certain rights, privileges, and liabilities beyond those of partnerships. Doing business as a corporation has its advantages and disadvantages. Because a corporation is a legal entity, it can purchase property. One large disadvantage especially when it comes to corporations is when owning income producing property they experience double taxation. Since its a legal entity they must pay taxes on profits. Dividends from the remaining corporate profits are then distributed to the shareholders and then taxed again as part of the shareholder's income.

A cash reserve fund is an account set aside by an individual or business to meet any unexpected future costs, as well as the future costs of upkeep. Property managers use these funds for variable expenses.

Trusts can be created during an individual's lifetime, or they can be established following someone's death. A trust works as it follows: the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary. The trustee is required to manage the trust property in accordance with the trustor's wishes and in the beneficiary's best interests. A trustor can be an individual or organization.

Adverse possession is a legal principle under which a person who does not have legal title to a property acquires legal ownership based on the continuous occupation of the property. If successful in proving adverse possession, the person or parties are usually not required to pay the owner for the land. Read More Here

In order for a contract to be valid a few things must occur:

-The party must be at least 18 years old and of sound mind.

-A contract must be legal. For example, there cannot be a contract to kill, steal or anything illegal.

-The contract must hold a clear and definite consideration.

-There must be mutual consent of the contract.

Any offer to purchase real estate MUST be signed by both the buyer and seller in order to be valid. Both parties must follow these guidelines. It becomes a legal contract as soon as both parties sign.

Codicil (pronounced kaa-duh-sl) is a written supplement or amendment to an existing will such as one affecting the transfer of real estate upon death. In plain terms it's an addendum of any kind to a will.

It’s important the buyer and seller clearly understand the document as it becomes legally binding as soon as both parties sign. It is an agent's duty to explain to purchase agreement and not mislead both or either parties.

Economic obsolescence refers to the loss of property value due to external factors, meaning things off the property affecting the properties value. A new noisy highway would be considered economic obsolescence because it is an external factor. Usually, in these circumstances, homeowners cannot do anything to prevent it. Read More Here

Generally speaking, everyone must comply. The law applies to owners, managers, salespersons, brokers, builders, appraisers, rental agents, and more.

Covenants are agreements or promises within deeds. For example, a warranty deed can include six forms of covenants. Those six are a series of legally binding promises and warranties to the grantee agreeing to protect the grantee against any prior claims and demands of all persons whomsoever in regards to the conveyed land.

If a Michigan real estate broker's license is revoked, all the licenses under that broker's authority are automatically suspended. Per Michigan License Law.

The acceleration clause is a contract provision that requires a borrower to repay all of an outstanding loan if upon a breach of the contract.

A depth table is used to estimate the value of commercial properties. A depth table is a table used by real estate appraisers to show land values in percentages based on variations in the depth of the lot.

All of the options would be justifiable reasons to insist on a mutual release except the buyer finding another property they prefer.

In an exclusive right to sell listing the agent gets paid no matter who sells the property, regardless of whether it’s the agent or the seller. Knowing this, it's safe to assume this was an exclusive right to sell listing.

The Fair Housing Act is a law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more.

The assessed value is a property's determined valuation to calculate the appropriate tax rates.

The correct abbreviation is CC&Rs (also written CCRs): covenants, conditions, and restrictions.

Restrictive covenants and deed restrictions overlap; they should not be treated as mutually exclusive answer choices to a simple synonym question. Restrictions may appear in deeds, other agreements, or a recorded subdivision declaration. Their enforceability depends on applicable law and the documents.

Source: California DRE title guide, pages 73–76.

“The Board consists of 9 members: 6 professional members, and 3 public members. Each member serves 4 year terms. The appointments to this board are subject to the advice and consent of the Senate.” Per Michigan Board of Real Estate Brokers and Salespersons

States may require additional information, but federally at the minimum, all advertising for property or services must include the broker firm's name. This is all for all advertising, social media included.

The amount owed is called the principal and the price of borrowing the money is called the interest.

The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The EPA was established in December 1970 by an executive order of United States President Richard Nixon. The agency enforces all federal environmental rules and regulations.

Earnest-money handling and deposit deadlines are governed by applicable state law and the transaction’s lawful written instructions. Written permission is not a universal exemption from deposit requirements, and verbal permission or broker status alone is not sufficient.

Some jurisdictions allow a different deposit time when the required parties agree in writing; others impose specific deadlines and conditions. Identify the jurisdiction and follow its rule rather than assuming the money may be held indefinitely.

Compare Texas Rule 535.146 with the Florida escrow rules, including 61J2-14.008 and 61J2-14.010.

Special use properties are properties that are there to "benefit the public," such as: Schools, Hospitals and Police Stations. These properties are described as different, because they are usually designed in a way that cannot fit in a typical zone. More examples include of religious facilities, nursing homes, assisted living facilities, hotels, truck terminals, meat processing plants, seed plants, and more. Think multiple buildings, large areas, etc.

A less than freehold estate (also known as a leasehold estate) is an estate held by one who rents or leases property. The key difference between a leasehold estate and a freehold estate is the limitation of time. As lease is a legal estate, leasehold estate can be bought and sold on the open market.

The correct answer is tenancy at will: consensual occupancy for an indefinite duration without a fixed term or agreed recurring rental period. Termination must follow applicable notice and other legal requirements; it does not necessarily mean the tenant can be required to leave immediately.

A month-to-month arrangement is commonly described as a periodic tenancy. State terminology can differ: Massachusetts also uses tenancy-at-will for month-to-month arrangements, whether oral or written. The existence of a signed document alone does not determine the tenancy type.

Source: Massachusetts Attorney General’s tenancy guide.

“All trust or escrow account records must be maintained for a period of not less than 3 years from the date of inception of the records.” Per Michigan Administrative Code 339.22313

Novation is the procedure in which an original contract is terminated and replaced with a new one. The legal process of novation makes it possible to transfer all contract benefits and liabilities from previous parties to a set of new ones. In plain terms, it’s a simple way to replace an old contract with a new one while maintaining most or all of its original properties.

The lot and black method identifies land by reference to lot and block numbers appearing on maps or a plat map. The lot and block survey system is a method used in densely populated metropolitan areas, suburban areas and suburbs. It is sometimes referred to as the recorded plat survey system or the recorded map survey system.

When a property owner dies and leaves no proper documented inheritance plan, the property ownership reverts to the government. Escheat ensures that property always has ownership. Escheat is part of the reason it's critical to have a will or when you are purchasing property you establish a clear right to survivorship. Read More Here

Antitrust Laws are a collection of federal and state government laws that regulate the conduct and organization of business corporations, normally to promote fair competition for the benefit of consumers. While selling a house without a license is illegal and some of the other answers are too, the only clear antitrust violation is dividing territories. Which is when competing brokers agree to split territories, and divide interests accordingly. An example of this is if agencies meet up and agree to divide the town in to three separate areas to work in. This prevents competition which is bad for the consumer and a clear antitrust violation.

A salesperson whose license was revoked must wait at least three years to apply for a new license. In addition, they must complete the same requirements as a new applicant. Per Michigan License Law.

For anything business-related, property management included, you need a real estate license per Michigan law. Selling your own residential property via FSBO is perfectly acceptable and legal.

A double net lease is when two additional costs will be added to your base rent. Usually taxes and insurance costs are added to your monthly payment.

Trusts can be created during an individual's lifetime, or they can be established following someone's death. A trust works as it follows: the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary. The trustee is required to manage the trust property in accordance with the trustor's wishes and in the beneficiary's best interests. A trustee can be an individual or a financial institution such as a bank.

It's the seller that must make the disclosure. It's real estate professionals' job to make sure all parties are in compliance with the law, but ultimately it's the sellers obligation.

All of the following are protected. “The opportunity to obtain employment, housing and other real estate, and the full and equal utilization of public accommodations, public service, and educational facilities without discrimination because of religion, race, color, national origin, age, sex, height, weight, familial status, or marital status as prohibited by this act, is recognized and declared to be a civil right.” Per Michigan Elliot-Larsen Civil Rights Act

Water rights are appurtenant, meaning they run with the land and not with the original owner. In other words, if an oceanfront property is sold, the new owner gains the littoral rights and the seller relinquishes his or her rights. Read More Here

Correct answer: It reduces the loan amount the buyer can afford.

For the same loan term and monthly principal-and-interest budget, a higher mortgage rate means the buyer can borrow less. Higher borrowing costs can weaken housing demand. However, inflation or an interest-rate increase alone does not determine whether home prices rise or fall; supply, demand, income and other market conditions also matter.

The Federal Reserve may tighten monetary policy to address inflation, but this does not establish a rule that interest rates and housing prices always move in the same direction. Do not assume a guaranteed house-price change from an inflation statement alone.

Source: Federal Reserve: how monetary policy works.

An individual seeking to be excused from the requirements of a zoning ordinance needs a variance. Or a conditional use permit. A conditional use permit is a zoning exception that allows you to use your property in non-conforming ways. A variance is a request to deviate from current zoning requirements.

A property owner or homeowner can sue to obtain the required just compensation through the process of inverse condemnation. Inverse condemnation is the event in which the government takes private property but fails to pay compensation or just compensation. Read More Here

In this example the answer is 18 months. Established business relationship means a relationship between a seller and a consumer based on….. “ the consumer's purchase, rental, or lease of the seller's goods or services or a financial transaction between the consumer and seller, within the eighteen (18) months.” Per 16 CFR 310.2

The Michigan Elliott-Larsen Civil Rights Act advanced the state's efforts to eliminate discrimination in employment, education, housing, public service, real estate transactions, and more. It added many protected classes to Michigan fair housing.

The annual gross rent multiplier is the property price divided by gross annual rental income: $500,000 ÷ $75,000 = 6.6666..., which rounds to 6.67.

This question expressly asks for an annual GRM. Using monthly rent of $75,000 ÷ 12 = $6,250 would give a monthly multiplier of 80 instead. GRM and GIM can use monthly or annual income, but the time period must be applied consistently. GRM uses rental income; GIM can include other property income.

California DRE Reference Book, Chapter 15, page 419

The statute of frauds is a common law concept that requires written contracts for certain agreements to be legally binding. The statute applies to land sales and most purchases of goods over $500 (this includes real estate sales agreements). This is a bit of a trick question. There are some circumstances in real estate where a written contract is not required, so it is not ALL real estate contracts, but it is ALL real estate sales agreements.

A bit of a trick question. Crossing out part of a printed contract is actually allowed and legally enforceable as long as both parties and the original text is still readable.

Partition is a term used in real estate to describe an act, by a court order, to divide up a concurrent estate into separate portions representing interests of the owners of a property.

The principal is always the one whom you have an agency relationship with and therefore is the person whom you owe fiduciary responsibility.

In this example the answer is 3 months. Established business relationship means a relationship between a seller and a consumer based on….. “ the consumer's inquiry or application regarding a product or service offered by the seller, within the three (3) months.” Per 16 CFR 310.2

As a licensed real estate agent, it is important to make sure all clients are treated in the same fair and honest manner. There should be no differences in services provided based on one person to another.

Novation is the procedure in which an original contract is terminated and replaced with a new one. The legal process of novation makes it possible to transfer all contract benefits and liabilities from previous parties to a set of new ones. In plain terms, it’s a simple way to replace an old contract with a new one while maintaining most or all of its original properties. When you see any name transfers just think novation.

The habendum clause is the statement in a contract that describes the rights and interests being given. It almost always begins with the words "to have and to hold."

The lender generally orders the appraisal used for its mortgage decision. The borrower may be required to pay the appraisal fee; the seller does not automatically pay it merely because the property is sold. A mortgagor is the borrower, while a mortgagee is the lender.

Sources: CFPB appraisal guide; NCUA mortgage glossary.

The general warranty deed offers the grantee the most protection. General warranty deeds protect homeowners from stakes and claims from previous people, from the beginning of time to right now. It also protects homeowners from any potential encumbrances. A general warranty deed grants an undeniable fact that this property is coming with no liens and no heirs they could potentially lay claim to the piece of property. Read More Here

Severance is the opposite of attachment. Severance is taking an item that is attached to the land and removing it as personal property.

The term retroactive liability is used in connection with CERCLA and the Superfund. It means that all previous owners also can be held accountable for the hazardous waste site.

Condominium often shortened to condo, is a type of living space which is similar to an apartment but which is independently sellable and therefore regarded as real estate. Unlike apartments, which are leased by their tenants, condominium units are owned outright. The answer is all the condominium owners in the form of percentage undivided interests because all condominium owners legally own a portion of all the facilities there.

Economic life is the expected period of time during which an asset remains useful to the average owner. When an asset is no longer useful to its owner, then it is said to be past its economic life. The economic life of an asset could be different than its actual physical life.

Compensation is negotiated between the broker and the seller and may be transferred and distributed in many ways. As long as the seller and broker agree compensation no matter how much, when, or in any avenue is legal.

The primary public land-use control is zoning. The primary private land-use control is deed restrictions or restrictive covenants, which limit what can be done on the property by the owner. Deed restrictions are limitations to the use of the property imposed by a past or current owner and are usually legally bound forever.

Michigan requires real estate licensees to earn 18 hours of continuing education every three years.

Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. A liquidated damages clause specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract.

Percentage lease which pertains to commercial real estate. A Percentage lease is a rental that is based on a percentage of the monthly or annual gross sales made on the premises. Percentage leases are common with large retail stores, especially in shopping centers.

The correct answer is riparian rights. In this question, the property adjoins a river or stream and the owner may make reasonable use of its water. Water-rights terminology and limits vary by state; for example, California includes lakefront land within its definition of riparian land. Riparian rights are subject to applicable law and do not mean unrestricted use. Read More Here

A Listing agreement is a document in which a property owner contracts with a real estate agent to find a buyer for the owner's property. The owner executes the listing agreement to give a real estate broker the authority to act as the owner's agent in the sale of the owner's property, for which the owner agrees to pay a commission. A listing agreement is a personal service contract. That means that should the seller die, or either party becomes incapacitated, or the property is physically destroyed in an accident, the listing agreement is terminated.

By definition, a dominant estate is a parcel of real property that has an easement over another piece of property.

A month-to-month tenancy is a periodic tenancy that does not have an expiration date and thus runs indefinitely. Since a month-to-month tenancy is a real estate contract, it must have consideration, offer and acceptance, legal object, and competent legal parties. If it's for less than one year, it can be oral with some exceptions.

A life estate is an interest in real property which is held for the duration of the life of a designated person. It may be limited by the life of the person holding it or by the life of another person. This designated person is called a life tenant. Read More Here

Most real estate agents make money through commission. A commission is a fee paid to an agent for performing a transaction. A commission is usually a percentage of the property's selling price, although sometimes it can be a flat fee.

This is a bit of a trick question. There are four main elements of a valid real estate contract: The party must be the legal age of 18 or older and deemed legally competent. The contract must be legal or hold a legal purpose. A clear and specific consideration must be included in the agreement. The contract must hold mutual consent or be agreed upon by both parties. Monetary consideration is optional. Consideration is a main element, but it doesn't necessarily have to be money. Remember, consideration is anything of legal value, it could be a promise or promise to perform an action.

Think of supply and demand like a scale usually if one side raises, the other will lower or vice versa. Generally, low supply and high demand increase price. In contrast, the greater the supply and the lower the demand, the price tends to fall. So in real estate terms, when the supply of available houses in an area increases significantly the average cost of housing goes down.

A timeshare is a property with a divided form of ownership or use rights. These properties are typically resort building units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted their period of time. They differ from regular condominiums as they typically are exclusively for vacations.

The seller is usually entitled to keep the earnest money, because this is considered forfeiture of the contract. The only way the buyer can back out and get their earnest money back is if something happens with the inspection, appraisal, or they have a contract clause offering that protection.