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MI Sales Person PSI Exam 3 Hour Final Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What is the role of the Michigan Department of Licensing and Regulatory Affairs (LARA) in real estate transactions?✔✔It oversees the regulation and licensing of real estate professionals in Michigan.
What is the purpose of a "listing agreement" in real estate?✔✔It outlines the terms under which a real estate agent is authorized to sell a property for the seller.
What is "earnest money" in a real estate transaction?✔✔It is a deposit made by a buyer to show their commitment to purchasing a property.
What does the term "mortgage" refer to in real estate?✔✔It is a loan used to finance the purchase of a property.
What is the difference between a "deed of trust" and a "mortgage"? 1 / 4
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✔✔A deed of trust involves a third-party trustee to handle the property title, while a mortgage involves only the borrower and lender.
What is "closing costs" in a real estate transaction?✔✔They are fees associated with finalizing a real estate transaction, including title insurance, appraisal fees, and attorney fees.
What is "homeowner’s insurance" and why is it important in a mortgage transaction?✔✔It provides financial protection for the homeowner and the lender in case of property damage or loss.
What is the "Fair Housing Act" and what does it prevent in real estate transactions?✔✔It prohibits discrimination in housing based on race, color, religion, sex, familial status, national origin, or disability.
What is an "adjustable-rate mortgage" (ARM)?✔✔It is a mortgage with an interest rate that can change periodically based on market conditions.
What is the purpose of a "home inspection"? 2 / 4
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✔✔It is a thorough examination of a property’s condition, often performed before the buyer finalizes the purchase.
What is the definition of "equity" in real estate?✔✔It is the difference between the current market value of a property and the amount owed on the mortgage.
What is the role of a real estate broker in a transaction?✔✔A real estate broker facilitates the buying, selling, or leasing of properties and supervises real estate agents.
What is "title insurance"?✔✔It protects the buyer and lender against loss due to defects or issues with the property’s title.
What does the term "escrow" mean in a real estate transaction?✔✔It refers to a third-party account that holds funds or documents until the terms of the agreement are met.
What is a "listing agreement"? 3 / 4
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✔✔It is a contract between a seller and a real estate agent that grants the agent the right to market and sell the property.
What is a "contract for deed"?✔✔It is a type of seller financing where the buyer agrees to make payments directly to the seller instead of a traditional mortgage lender.
What does the "Real Estate Settlement Procedures Act" (RESPA) require?✔✔It requires lenders to disclose information about loan costs, closing procedures, and escrow accounts to buyers and sellers.
What is "zoning" in real estate?✔✔It refers to local government regulations that control how land can be used or developed.
What is the "deed" used for in a real estate transaction?✔✔A deed is a legal document that transfers the ownership of property from one party to another.
What is the significance of a "market analysis" in real estate?
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