OpenExamsFREE PRACTICE — ANY EXAM

Free Michigan Real Estate Salesperson Examination Practice Questions

194 free questions · Answer explanations · No signup required

View examination details, outline and sources

Loading selected examination banks…

Sample Practice Questions

Try these 10 sample questions from the Michigan Real Estate Salesperson Examination practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A homeowner permanently installs built-in kitchen cabinets as part of the house. How should the cabinets be classified when the real estate is sold?

    1. A. As a fixture conveyed with the real estate
    2. B. As a chattel requiring a separate bill of sale
    3. C. As personal property removable before closing
    4. D. As a removable fitting excluded from the deed

    Answer: A

    Explanation: "when they become so related to particular real estate that an interest in them arises under real estate law." The permanently built-in cabinets are fixtures of the home. The other classifications treat them as separate movable goods without a stated exclusion.

    Reference: Michigan Uniform Commercial Code, MCL 440.2909 — MCL 440.2909

  2. 2A Michigan salesperson prepares a market analysis solely to help a customer decide a listing price and charges no separate fee for the analysis. Does this activity require an appraiser license?

    1. A. No; this qualifying market analysis is an exception
    2. B. Yes; every price opinion requires appraiser licensure
    3. C. Yes; only a broker may give any market analysis
    4. D. No; any paid appraisal may be called a market analysis

    Answer: A

    Explanation: "A market analysis performed by a person licensed as a real estate broker or salesperson solely for the purpose of assisting a customer or potential customer in determining the potential sale, purchase, or listing price of real property or the rental rate of real property as long as a fee or any other valuable consideration is not charged for the analysis" The stated purpose, license, and absence of separate consideration satisfy the exception.

    Reference: Michigan LARA Real Estate Appraisers — Licensing exceptions, market analysis by broker or salesperson

  3. 3A buyer obtains a conventional mortgage with a small down payment and pays for private mortgage insurance. Whose loss does PMI protect if the borrower stops paying?

    1. A. The buyer's loss of the down payment
    2. B. The seller's loss of expected proceeds
    3. C. The lender's loss from loan default
    4. D. The title insurer's loss from a defect

    Answer: C

    Explanation: "PMI protects the lender—not you—if you stop making payments on your loan." The insured party is the lender, even when the borrower pays the premium.

    Reference: CFPB Private Mortgage Insurance — What is private mortgage insurance?

  4. 4A seller tells her Michigan agent the lowest price she would accept but has not authorized disclosure. A buyer's agent asks for that number. What must the seller's agent do?

    1. A. Keep the information confidential unless disclosure is permitted or required by law
    2. B. Disclose the number because the buyer's agent is also licensed
    3. C. Disclose the number because the buyer has made a written offer
    4. D. Send the number to every licensee at the brokerage office

    Answer: A

    Explanation: "Confidentiality of all information obtained in the course of the agency relationship, unless disclosed with the client's permission or as provided by law" The client's confidential negotiating information cannot be shared without permission or legal authorization.

    Reference: Michigan Occupational Code, Act 299 — MCL 339.2512d(2)(g)

  5. 5A Michigan tenant reports a loose stair railing that arose from ordinary wear during a residential lease. Which response meets the landlord's statutory repair covenant?

    1. A. Arrange reasonable repair of the railing during the lease
    2. B. Require the tenant to repair it before any landlord action
    3. C. Wait until the lease expires to consider the repair
    4. D. Repair only if the tenant first buys a new railing

    Answer: A

    Explanation: "To keep the premises in reasonable repair during the term of the lease or license" The ordinary-wear railing issue falls within the landlord's ongoing repair covenant.

    Reference: Michigan Landlord Repair Covenant — MCL 554.139

  6. 6A Michigan grantor intends to convey land with covenants that the grantor is lawfully seized, has the right to convey, and guarantees quiet possession. Which deed form supplies those covenants?

    1. A. A warranty deed
    2. B. A quitclaim deed
    3. C. A tax deed
    4. D. A trustee's deed

    Answer: A

    Explanation: "lawfully seized of the premises, has good right to convey the same, and guarantees the quiet possession thereof" Those covenants accompany the statutory warranty deed form.

    Reference: Michigan Warranty Deed Act — Sec. 1, warranty deed covenants

  7. 7In a Michigan county with fewer than 2,000,000 people, what county transfer-tax rate applies?

    1. A. $0.55 per $500 or fraction
    2. B. $0.75 per $500 or fraction
    3. C. $3.75 per $500 or fraction
    4. D. $4.30 per $500 or fraction

    Answer: A

    Explanation: MCL 207.504 sets the county tax at "55 cents in a county with a population of less than 2,000,000" per $500 or fraction.

    Reference: Act 134 of 1966 — MCL 207.504

  8. 8A person regularly negotiates sales of other owners' real estate for compensation. Which Michigan license category covers that activity?

    1. A. Real estate broker
    2. B. Residential builder
    3. C. Real estate appraiser
    4. D. Mortgage servicer

    Answer: A

    Explanation: MCL 339.2501(u) defines a real estate broker to include one who, for compensation, "negotiates the purchase, sale, or exchange of real estate."

    Reference: Act 299 of 1980 — MCL 339.2501(u)

  9. 9Under whose business name must a Michigan salesperson ordinarily advertise listed property?

    1. A. The salesperson's team name alone
    2. B. The employing broker's business name
    3. C. The property owner's name
    4. D. The closing company's name

    Answer: B

    Explanation: MCL 339.2512e(3) requires the salesperson to advertise "under the supervision of, and in the business name of, his or her employing broker."

    Reference: Act 299 of 1980 — MCL 339.2512e(3)

  10. 10Which property setting triggers the Land Division Act's private-road disclosure rule?

    1. A. A parcel in an incorporated city on an accepted public street
    2. B. A lot or unplatted parcel in an unincorporated area abutting an unaccepted road
    3. C. A condominium unit adjoining a state highway
    4. D. A commercial leasehold beside a county-maintained road

    Answer: B

    Explanation: MCL 560.261 applies to "any lot in a recorded plat or any parcel of unplatted land in an unincorporated area" that abuts an unaccepted street or road.

    Reference: Act 288 of 1967 — MCL 560.261

Topics in this practice bank

These topics describe the available practice for Michigan Real Estate Salesperson Examination. Review the examination outline and its sources for scope and allocation details.

  • I. Property Ownership (Sales 10%)
    • A. Real and personal property; conveyances
    • B. Land characteristics and legal descriptions
    • B.1. Metes and bounds method of legal property description
    • B.2. Lot and block (recorded plat) method of legal property description
    • B.3. Government survey (rectangular survey) method of legal property description
    • B.4. Measuring structures (linear and square footage)
    • B.5. Land measurement
    • C. Encumbrances and effects on property ownership
    • C.1. Types of liens and their effect on the title and value of real property
    • C.2. Easements, rights of way and licenses, including their effect on the title, value and use of real property
    • C.3. Encroachments and their effect on the title, value and use of real property
    • C.4. Potential encumbrances on title, such as probate, leases, or adverse possession
    • C.5. Property rights that may be conveyed separately from use of the land surface, such as mineral and other subsurface rights, air rights, or water rights
    • D. Types of ownership
    • D.1. Ownership in severalty/sole ownership
    • D.2. Implications of ownership as tenants in common
    • D.3. Implications of ownership in joint tenancy
    • D.4. Forms of common-interest ownership, such as Timeshares, Condominiums and Co-ops
    • D.5. Property ownership held in a trust or by an estate
    • D.6. Ownership by business entities
    • D.7. Life Estate ownership
  • II. Land use Controls (Sales 5%)
    • A. Government rights in land
    • A.1. Government rights to impose property taxes and special assessments
    • A.2. Government rights to acquire land through eminent domain, condemnation and escheat
    • B. Government controls on land use
    • C. Private controls
    • C.1. Deed conditions or restrictions on property use
    • C.2. Subdivision covenants, conditions and restrictions (CC&Rs) on property use
    • C.3. Condominium and owners’ associations regulations or bylaws on property use
  • III. Valuation (Sales 8%)
    • A. Appraisals
    • A.1. Appraisals for valuation of real property
    • A.2. Situations which require appraisal by a licensed or certified appraiser and brokerage-related actions that constitute unauthorized appraisal practice
    • A.3. General steps in appraisal process
    • B. Estimating Value
    • B.1. Economic principles and property characteristics that affect value of real property
    • B.2. Sales or market comparison approach to property valuation and appropriate uses
    • B.3. Cost approach to property valuation and appropriate uses
    • B.4. Income analysis approach to property valuation and appropriate uses
    • C. Comparative Market Analysis (CMA)
    • C.1. Competitive/Comparative Market Analysis (CMA), BPO or equivalent
    • C.2. Automated Valuation Method (AVM), appraisal valuation and Comparative Market Analysis (CMA)
  • IV. Financing (Sales 10%)
    • A. Basic Concepts and Terminology
    • A.1. Loan financing (for example, points, LTV, PMI, interest, PITI)
    • A.2. General underwriting process (e.g., debt ratios, credit scoring and history)
    • A.3. Standard mortgage/deed of trust clauses and conditions
    • A.4. Essential elements of a promissory note
    • B. Types of Loans
    • B.1. Conventional loans
    • B.2. Amortized loans, partially amortized (balloon) loans, interest-only loans
    • B.3. Adjustable-rate mortgage (ARM) loans
    • B.4. Government Loans
    • B.4.a. FHA insured loans
    • B.4.b. VA guaranteed loans
    • B.4.c. USDA/Rural Development loan programs
    • B.5. Owner financing (for example, installment or land contract/contract for deed)
    • B.6. Reverse-mortgage loans
    • B.7. Home equity loans and lines of credit
    • B.8. Construction loans
    • B.9. Rehab loans
    • B.10. Bridge loans
    • C. Financing and Lending
    • C.1. Real Estate Settlement Procedures Act (RESPA), including kickbacks
    • C.2. Truth-in-Lending Act (Regulation Z), including advertising
    • C.3. Requirements and time frames of TRID (TILA-RESPA Integrated Disclosures)
    • C.4. Equal Credit Opportunity Act
    • C.5. Lending Process (application through loan closing)
    • C.6. Risky loan features, such as prepayment penalties and balloon payments
  • V. Contracts (Sales 19%)
    • A. General Contract Law
    • A.1. General principles of contract law
    • A.2. Elements necessary for a contract to be valid
    • A.3. Effect of the Statute of Frauds
    • A.4. Offer and a contract
    • A.5. Enforceability of contracts
    • A.6. Void, voidable and unenforceable contracts
    • A.7. Bilateral and unilateral contracts
    • A.8. Nature and use of option agreements
    • A.9. Notice, delivery, acceptance and execution of contracts
    • A.10. Appropriate use, risks, and advantages of electronic signatures and paperless transactions
    • A.11. Rights and obligations of the parties to a contract
    • A.12. Possible remedies for breach or non-performance of contract
    • A.13. Termination, rescission and cancellation of contracts
    • B. Purchase and Lease Contracts
    • B.1. Addenda and amendments to contracts
    • B.2. Purchase agreements
    • B.3. Contract contingencies and methods for satisfying them
    • B.4. Leases and rental agreements
    • B.5. Lease-purchase agreements
    • B.6. Types of leases
    • C. Proper handling of multiple offers and counteroffers
  • VI. Agency (Sales 13%)
    • A. Agency and non-agency relationships
    • A.1. Agency relationships and how they are established
    • A.2. Types of listing contracts
    • A.3. Buyer brokerage/tenant representation contracts
    • A.4. Other brokerage relationships, including transaction brokers and facilitators
    • A.5. Powers of attorney and other assignments of authority
    • A.6. Conditions for termination of agency or brokerage service agreements
    • B. Agent Duties
    • B.1. Fiduciary duties of agents
    • B.2. Agent’s duties to customers/non-clients, including honesty and good faith
    • C. Agency Disclosures
    • C.1. Disclosure of agency/representation
    • C.2. Disclosure of possible conflict of interest or self-interest
  • VII. Property Disclosures (Sales 7%)
    • A. Property Condition
    • A.1. Seller’s property condition disclosure requirements
    • A.2. Property conditions that may warrant inspections or a survey
    • A.3. Red flags that warrant investigation of public or private land use controls
    • B. Environmental and Government Disclosures
    • B.1. Environmental issues requiring disclosure
    • B.2. Federal, state, or local disclosure requirements regarding the property
    • C. Disclosure of material facts and material defects
  • VIII. Property Management (Sales 3%)
    • A. Duties and Responsibilities
    • A.1. Procurement and qualification of prospective tenants
    • A.2. Fair housing and ADA compliance specific to property management
    • A.3. How to complete a market analysis to identify factors in setting rents or lease rates
    • B. Landlord and tenant rights and obligations
  • IX. Transfer of Title (Sales 6%)
    • A. Types of deeds
    • B. Title Insurance and Searches
    • B.1. Title insurance policies and title searches
    • B.2. Potential title problems and resolutions
    • B.3. Marketable and insurable title
    • C. Closing Process
    • C.1. When transfer of ownership becomes effective
    • C.2. Process and importance of recordation
    • C.3. Settlement procedures (closing) and parties involved
    • C.4. Home and new construction warranties
    • D. Special Processes
    • D.1. Special issues in transferring foreclosed properties
    • D.2. Special issues in short sale transactions
    • D.3. Special issues in probate transactions
  • X. Practice of Real Estate (Sales 12%)
    • A. Antidiscrimination
    • A.1. Federal Fair Housing Act general principles and exemptions
    • A.2. Protected classes under Federal Fair Housing Act
    • A.3. Protections against discrimination based on gender identity and sexual orientation
    • A.4. Prohibited conduct under Federal Fair Housing Act (Redlining, Blockbusting, Steering, Disparate Treatment)
    • A.5. Fair housing advertising rules
    • A.6. Americans with Disabilities Act (ADA) obligations pertaining to accessibility and reasonable accommodations
    • B. Legislation and Regulations
    • B.1. Licensees’ status as employees or independent contractors
    • B.2. Antitrust laws and types of violations, fines and penalties
    • B.3. Do-Not-Call List rule compliance
    • B.4. Proper use of Social Media and Internet communication and advertising
    • C. Duties and Responsibilities
    • C.1. Protection of confidential personal information (written, verbal or electronic)
    • C.2. Duties when handling funds of others in transactions
    • C.3. Licensee responsibility for due diligence in real estate transactions
  • XI. Real Estate Calculations (Sales 7%)
    • A. Calculations for Transactions
    • A.1. Seller’s net proceeds
    • A.2. Buyer funds needed at closing
    • A.3. Real property tax and other prorations
    • A.4. Real property transfer fees
    • A.5. PITI (Principal, Interest, Taxes and Insurance) payments estimate given loan rate and term
    • B. General Concepts
    • B.1. Equity
    • B.2. Rate of return/Capitalization rate
    • B.3. Loan-to-Value ratio
    • B.4. Discount points and loan origination fees
  • Duties and Powers of the Department and the State Board of Real Estate (Salesperson-3 Items)
    • a. General powers
    • b. Investigations, conferences, hearings, and exemptions
    • c. Penalties
  • Licensing Requirements (Salesperson-5 Items)
    • a. Activities requiring a license and exemptions
    • b. Types of licenses
    • c. Eligibility for licensing
    • d. License renewal, including continuing education
    • e. Transfer or change in license
  • Statutory Requirements Governing the Activities of Licenses (Salesperson-10 Items)
    • a. Advertising
    • b. Commissions and Specific Services for Which Fees may be charged
    • c. Disclosure/conflict of interest
    • d. Handling of contracts, documents, listing and recommendations
    • e. Handling of monies and trust accounts
    • g. Record keeping
    • h. Inducements
    • j. No disclosure duty attaches to stigmatized property
    • k. Closing responsibilities
  • Contractual Relationships (Salesperson – 5 Items)
    • a. Agency relationships available in MI
    • a.1. Transaction coordinator
    • a.2. Designated agency
    • a.3. Dual agency
    • a.4. Agency disclosures
    • b. Broker/Salesperson relationships
    • c. Service Provision Agreements (Listings, Buyer Broker)
  • Additional State Topics (Salesperson-12 Items)
    • a. Land Division Act - Public Act 591 (Disclosure of Private Road)
    • b. Michigan fair housing
    • b.1. Elliott-Larsen Civil Rights Act
    • b.2. Persons with Disabilities Civil Rights Act
    • c. Landlord Tenant Relationship Act, Truth in Renting Act
    • e. State Transfer Tax
    • f. Michigan Condominium Act
    • g. Michigan State Housing Development Authority (MSHDA)
    • h. Uniform State Anti-trust Act
    • i. Michigan Right to Farm Act (Seller’s Disclosure Required)
    • j. Changes in the Land Contract Laws (Dodd Frank Law—federal)

How to use these free practice questions

Choose an answer, check the explanation, and review your progress by chapter. Practice questions and explanations are free to access without signing up.

These are independent study questions, not actual examination items. For examination requirements and official information, view Michigan Real Estate Salesperson Examination details.