MI Real Estate common mistakes
MI Real Estate · Understand the traps and how to avoid them.
Memorizing only the federal fair-housing protected classes and applying that list to a Michigan transaction without checking Michigan's Elliott-Larsen Civil Rights Act housing protections.
National prep materials emphasize federal law, so candidates treat the federal list as complete and miss state-specific protected characteristics.
What to do instead
Build a one-page Michigan protected-class comparison chart and drill scenario questions that ask which state or federal law applies.
A salesperson negotiates a commission directly with a seller and accepts a check made payable to the salesperson personally.
Candidates confuse independent-contractor status with being separately licensed to receive compensation.
What to do instead
Memorize and apply the rule that a salesperson is paid only through the employing broker; route all commission discussions and payments through the broker.
Computes acreage from a rectangular survey description such as 'the SW 1/4 of the NE 1/4' by multiplying the fractions left to right as written.
Candidates read the description as a math sentence rather than as a chain of subdivisions starting with the largest tract.
What to do instead
Parse survey descriptions from the last fraction back toward the first, treating a full section as 640 acres; practice five examples until the order is automatic.
Treats a verbal counteroffer as accepted and tells the buyer the deal is binding before any written acceptance is delivered.
Candidates conflate active negotiation with contract formation and forget the statute-of-frauds writing requirement for real estate contracts.
What to do instead
Use written counteroffers and state clearly that no contract exists until a written offer is accepted and acceptance is communicated; never confirm binding status orally.
Shows homes to a buyer for several weeks without a written agency agreement and later claims buyer agency in a commission or loyalty dispute.
Candidates assume that showing property automatically creates an agency relationship, so they skip the written agreement.
What to do instead
Execute a written agency agreement before providing services and disclose in writing which party the licensee represents; keep a dated copy in the file.
Calculates loan-to-value by dividing the loan amount by the purchase price even when the appraisal comes in below the contract price.
Candidates use the contract price as the only value figure and forget that lenders underwrite against the lesser of sale price or appraised value.
What to do instead
Recalculate LTV using the lesser of the sale price or appraised value whenever the appraisal is lower, and show the impact on down payment.
Adjusts comparable sales in the same direction as the feature, such as adding value to a comparable that has a feature the subject property lacks.
Candidates memorize adjustment categories without understanding that the goal is to make the comparable resemble the subject.
What to do instead
Apply the rule: if the comparable is superior, subtract from the comparable; if inferior, add to the comparable; always adjust the comparable toward the subject.
Tells a buyer that recording the deed is what transfers title to the property.
Candidates conflate the recording system with the legal act of conveyance and overlook delivery and acceptance.
What to do instead
State that title passes on valid delivery and acceptance of the deed; recording provides notice and priority but does not itself transfer title.
Prepares a comparative market analysis and presents it to the seller as an appraisal of market value.
Candidates blur the licensee's valuation role with the licensed appraiser's scope of practice.
What to do instead
Label the document a CMA, explain its purpose as a pricing tool, and refer any client needing a defensible appraisal to a licensed appraiser.
Omits a known material defect from the seller's disclosure statement because the seller asks the licensee to keep it quiet.
Candidates mistake loyalty to the seller for a duty to conceal and fail to recognize the independent duty to disclose material facts.
What to do instead
Explain the disclosure duty to the seller in writing, document the seller's instructions, and disclose the known material fact or withdraw from the listing.