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MI Real Estate practice questions

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Question 1Michigan Real Estate Law, Licensing and Regulation

Which Michigan body actually issues real estate broker and salesperson licenses?

  1. The Bureau of Professional Licensing Correct answer.
  2. The Michigan Board of Real Estate Appraisers
  3. The Michigan Real Estate Commission
  4. The Michigan Secretary of State

Explanation

Real estate licenses in Michigan are issued by the Bureau of Professional Licensing within the Department of Licensing and Regulatory Affairs (LARA). The Michigan Board of Real Estate Brokers and Salespersons advises on standards and discipline but does not itself issue licenses.

Question 2Michigan Real Estate Law, Licensing and Regulation

How much approved prelicensing education must a Michigan real estate salesperson applicant complete before taking the exam?

  1. 20 hours
  2. 40 hours Correct answer.
  3. 90 hours
  4. 60 hours

Explanation

Michigan requires 40 clock hours of approved prelicensing coursework for salesperson applicants. Broker applicants must complete a longer approved program in addition to experience.

Question 3Michigan Real Estate Law, Licensing and Regulation

A Michigan salesperson with three years of full-time experience applies for a broker license. What education must the applicant complete beyond that experience?

  1. A bachelor's degree in real estate
  2. 50 additional hours of approved coursework
  3. No additional education beyond the salesperson course
  4. 90 hours of approved broker prelicensing coursework Correct answer.

Explanation

Michigan requires broker applicants to complete 90 hours of approved broker prelicensing education, along with the required experience. The salesperson course alone does not satisfy the broker education requirement.

Question 4Michigan Real Estate Law, Licensing and Regulation

How long does a Michigan real estate license remain valid before renewal is required?

  1. Two years
  2. One year
  3. Four years
  4. Three years Correct answer.

Explanation

Michigan issues real estate licenses on a three-year cycle with renewal tied to the licensee's established expiration date. Continuing education is completed within that same cycle.

Question 5Michigan Real Estate Law, Licensing and Regulation

What is the minimum age at which a person may hold a Michigan real estate salesperson license?

  1. 18 years Correct answer.
  2. There is no minimum age
  3. 16 years
  4. 21 years

Explanation

Michigan requires an applicant to be at least 18 years old, along with meeting education and examination requirements. Being a minor precludes licensure regardless of other qualifications.

Question 6Michigan Real Estate Law, Licensing and Regulation

A buyer hands a Michigan salesperson a $500 bonus check directly for a job well done. What should the salesperson do?

  1. Decline it; only the broker may be paid Correct answer.
  2. Cash it and report it to the broker
  3. Accept it if the broker approves in writing
  4. Accept it and split it with the broker

Explanation

A Michigan salesperson may be compensated only by the employing broker, never directly by a client or customer. All commissions and fees must flow through the brokerage.

Question 7Michigan Real Estate Law, Licensing and Regulation

A Michigan salesperson places a newspaper ad for a listing. Which element must the ad contain?

  1. The listing expiration date
  2. The name of the employing broker Correct answer.
  3. The seller's written approval
  4. The salesperson's license number

Explanation

Advertising by a Michigan salesperson must identify the employing broker, because the brokerage is the licensed entity responsible for the transaction. Salespersons advertise under the broker's authority.

Question 8Michigan Real Estate Law, Licensing and Regulation

How much continuing education must a Michigan real estate licensee complete to renew?

  1. 12 hours every two years
  2. 36 hours every three years
  3. 24 hours every two years
  4. 18 hours every three years Correct answer.

Explanation

Michigan requires 18 hours of approved continuing education within each three-year license cycle. Completing the hours is a condition of timely renewal.

Question 9Michigan Real Estate Law, Licensing and Regulation

A Michigan broker wishes to represent both the buyer and the seller in the same transaction. This is allowed only when:

  1. all parties give informed written consent Correct answer.
  2. the broker first notifies the licensing board
  3. two salespersons in the same office each represent one side
  4. the broker waives the commission from one party

Explanation

Michigan permits dual agency only with the informed written consent of every party to the transaction. Without that consent, the broker must decline one side of the deal.

Question 10Michigan Real Estate Law, Licensing and Regulation

When must a Michigan licensee deliver the written agency disclosure statement to a consumer?

  1. Only if the consumer asks for one
  2. At the closing table
  3. Before the consumer signs an agency agreement Correct answer.
  4. Within three days after a purchase agreement is signed

Explanation

Michigan requires the written agency disclosure to be provided before the consumer signs an agency agreement, so the consumer understands who represents whom. Disclosure obligations also arise at first contact.

Question 11Michigan Real Estate Law, Licensing and Regulation

Michigan's Seller Disclosure Act governs transfers of which type of property?

  1. Residential property with one to four dwelling units Correct answer.
  2. Residential property with five or more units
  3. Commercial and industrial property only
  4. Any parcel of real property, including vacant commercial land

Explanation

The Seller Disclosure Act applies to residential property improved with one to four dwelling units, including condominium units. Larger multifamily and nonresidential property fall outside the act.

Question 12Michigan Real Estate Law, Licensing and Regulation

A Michigan broker deposits a client's $2,000 earnest money deposit into the firm's general operating account and uses part of it for office rent, planning to replace it before closing. This practice is:

  1. Permitted for deposits under $5,000
  2. Acceptable if the money is replaced before closing
  3. Acceptable if the broker keeps a ledger entry
  4. Prohibited commingling of trust funds Correct answer.

Explanation

Funds held for clients must be kept in a separate trust account and may not be mixed with the broker's own operating money. Using client funds for business expenses is prohibited commingling.

Question 13Michigan Real Estate Law, Licensing and Regulation

Which task may an unlicensed assistant lawfully perform for a Michigan brokerage?

  1. Show a home and discuss financing options
  2. Prepare advertising brochures and schedule showings Correct answer.
  3. Explain purchase agreement terms to a buyer
  4. Negotiate the price of a listing

Explanation

Unlicensed assistants may handle clerical and administrative work such as advertising preparation and appointment scheduling. Activities that involve negotiating or explaining transaction terms require a license.

Question 14Michigan Real Estate Law, Licensing and Regulation

In Michigan, a mortgage is best described as:

  1. a lien that leaves title with the borrower Correct answer.
  2. a conveyance of title to the lender until payoff
  3. an unenforceable agreement until recorded
  4. a promise to insure the lender's interest

Explanation

Michigan follows lien theory, so a mortgage gives the lender a lien while the borrower keeps title to the property. Title theory states, by contrast, treat the mortgage as a transfer of title to the lender.

Question 15Michigan Real Estate Law, Licensing and Regulation

A salesperson at a Michigan brokerage unintentionally misstates a listing's square footage in an ad. Who may face discipline for the error?

  1. Only the salesperson, because the broker was unaware
  2. Neither, if the error was unintentional
  3. Both the salesperson and the supervising broker Correct answer.
  4. Only the broker

Explanation

A Michigan broker is responsible for supervising affiliated licensees and the advertising that comes out of the office. Discipline can reach both the licensee who made the error and the broker who failed to catch it.

Question 16Michigan Real Estate Law, Licensing and Regulation

A seller signs an exclusive right to sell listing, then personally finds a buyer during the listing term. Under the listing's terms, the seller:

  1. owes no commission because the broker did not find the buyer
  2. owes half the agreed commission
  3. owes the broker the agreed commission Correct answer.
  4. owes a commission only if the broker advertised the property

Explanation

An exclusive right to sell entitles the broker to a commission no matter who produces the buyer during the listing term. A seller who wants to keep the right to sell personally would need an exclusive agency arrangement instead.

Question 17Michigan Real Estate Law, Licensing and Regulation

A Michigan salesperson's license lapses, and he continues writing a purchase agreement for a client the next week. This conduct is:

  1. Permissible if the broker supervises the work
  2. Unlicensed practice subject to disciplinary action Correct answer.
  3. Permissible if no commission is collected
  4. Permissible during a 60-day grace period

Explanation

Performing brokerage services after a license expires is unlicensed activity and exposes the person to disciplinary action. Broker supervision or forgoing pay does not convert the act into licensed conduct.

Question 18Michigan Real Estate Law, Licensing and Regulation

A Michigan broker wants to pay $300 to an unlicensed friend who introduced a buyer to the firm. That payment is:

  1. Permitted if disclosed to the buyer
  2. Prohibited because compensation for referrals requires a license Correct answer.
  3. Permitted if the amount is under $500
  4. Permitted because the friend is not a licensee

Explanation

Paying a referral fee for brokerage activity to an unlicensed person is prohibited, since the recipient would be compensated for procuring business without a license. Only licensed entities may be paid for referrals.

Question 19Michigan Real Estate Law, Licensing and Regulation

After a Michigan residential sale closes, the buyer must file the Property Transfer Affidavit with the local assessor within:

  1. 30 days
  2. 90 days
  3. 10 days
  4. 45 days Correct answer.

Explanation

Michigan requires the Property Transfer Affidavit to be filed with the assessor within 45 days of the transfer. The form lets the assessor adjust the property's taxable value after the sale.

Question 20Michigan Real Estate Law, Licensing and Regulation

A Michigan deed should be recorded with which office?

  1. The county register of deeds Correct answer.
  2. The Michigan Secretary of State
  3. The local assessor
  4. The county clerk

Explanation

Deeds are recorded in the office of the register of deeds for the county where the property sits. Recording provides constructive notice of the interest to later purchasers and lienholders.

Question 21Michigan Real Estate Law, Licensing and Regulation

Michigan's non-judicial foreclosure process, where the lender publishes notice and a sheriff's sale follows without a court action, is known as:

  1. Deed in lieu of foreclosure
  2. Foreclosure by advertisement Correct answer.
  3. Strict foreclosure
  4. Summary ejectment

Explanation

Foreclosure by advertisement is Michigan's statutory non-judicial procedure, which relies on publication and posting rather than a lawsuit. Judicial foreclosure remains available and is used in some circumstances.

Question 22Michigan Real Estate Law, Licensing and Regulation

For a typical Michigan home with four or fewer units that the owner occupies, the statutory redemption period after a foreclosure sale is:

  1. 12 months
  2. 3 months
  3. 6 months Correct answer.
  4. 30 days

Explanation

Michigan gives the borrower six months after the foreclosure sale to redeem most residential property. Longer periods apply to certain agricultural and larger properties, and shorter periods apply when the property has been abandoned.

Question 23Michigan Real Estate Law, Licensing and Regulation

What is Michigan's state real estate transfer tax rate?

  1. $5.00 per $1,000 of value
  2. $3.75 per $500 of value Correct answer.
  3. $1.10 per $500 of value
  4. $2.25 per $1,000 of value

Explanation

The Michigan state transfer tax is $3.75 for each $500 of the property's value, which equals $7.50 per $1,000. Counties may add their own transfer tax on top of the state rate.

Question 24Michigan Real Estate Law, Licensing and Regulation

Which transfer is excused from Michigan's seller disclosure requirement?

  1. A single-family home sold by its owner
  2. A duplex sold by an investor
  3. A condominium unit resold by its owner
  4. A newly built home that has never been occupied Correct answer.

Explanation

Michigan's Seller Disclosure Act lists specific exempt transfers, including residential property that has never been occupied. The disclosure form is designed to reveal the history of an occupied home.

Question 25Michigan Real Estate Law, Licensing and Regulation

When Michigan real property is transferred to a new owner, the taxable value of the property:

  1. is frozen until the next countywide revaluation
  2. drops to half of the property's true cash value
  3. remains capped indefinitely at the prior owner's level
  4. is uncapped and resets to state equalized value Correct answer.

Explanation

A transfer of ownership uncaps the property's taxable value, which resets to the state equalized value for the following tax year under Proposal A. The annual cap resumes from that new base.

Question 26Michigan Real Estate Law, Licensing and Regulation

What is the minimum amount of approved prelicensing education required for a Michigan real estate salesperson license?

  1. 60 hours
  2. 40 hours Correct answer.
  3. 30 hours
  4. 15 hours

Explanation

Michigan requires salesperson applicants to complete 40 clock hours of approved real estate coursework before taking the licensing exam. A broker applicant must complete a longer course of 90 hours.

Question 27Michigan Real Estate Law, Licensing and Regulation

How frequently must a Michigan real estate license be renewed?

  1. Every five years
  2. Every three years Correct answer.
  3. Every two years
  4. Every year

Explanation

Michigan real estate licenses run on a three-year renewal cycle, with the renewal deadline falling on October 31 of the expiration year. Renewal requires payment of the fee and completion of the required continuing education.

Question 28Michigan Real Estate Law, Licensing and Regulation

Which person may market and sell real property in Michigan without holding a real estate license?

  1. A person paid a fee to negotiate a purchase for a buyer
  2. An owner selling the home she has occupied as her residence Correct answer.
  3. A property manager who leases units on behalf of other owners
  4. A person who finds tenants for landlords in exchange for a fee

Explanation

Michigan's licensing statute exempts a person who deals with his or her own property; an owner selling a personal residence is not acting for another for compensation and needs no license. Activities performed for others for a fee generally fall within the definition of brokerage.

Question 29Michigan Real Estate Law, Licensing and Regulation

A Michigan salesperson wants to be affiliated with two separate brokerages at the same time. How does Michigan law treat this arrangement?

  1. Allowed with written consent of both brokers
  2. Not permitted; one broker per salesperson Correct answer.
  3. Allowed if one position is part-time
  4. Allowed after three years of experience

Explanation

A Michigan salesperson license is tied to a single employing broker, and the salesperson may not be affiliated with more than one brokerage simultaneously. Any change of employing broker must be reflected in the licensing records before the salesperson works under the new broker.

Question 30Michigan Real Estate Law, Licensing and Regulation

How many hours of approved prelicensing education must a Michigan real estate broker applicant complete?

  1. 90 hours Correct answer.
  2. 40 hours
  3. 60 hours
  4. 120 hours

Explanation

Michigan requires 90 clock hours of approved coursework for a broker applicant, which is more than the 40 hours required of salesperson applicants. The applicant must also satisfy the statutory experience requirement.

Question 31Michigan Real Estate Law, Licensing and Regulation

How is the commission charged by a Michigan broker on a residential listing determined?

  1. Negotiable between the broker and the client Correct answer.
  2. Set by the local association of REALTORS
  3. Fixed by a schedule published by the state
  4. Capped at six percent by Michigan statute

Explanation

Commission rates are set by negotiation between the broker and the client; Michigan law does not prescribe or cap them, and competitors may not agree on rates. Published fee schedules among competitors would raise antitrust concerns.

Question 32Michigan Real Estate Law, Licensing and Regulation

Which Michigan department issues real estate licenses and processes disciplinary complaints against licensees?

  1. Department of Licensing and Regulatory Affairs Correct answer.
  2. Department of Treasury
  3. Department of State
  4. Department of the Attorney General

Explanation

Real estate licensing in Michigan is administered by the Department of Licensing and Regulatory Affairs through its Bureau of Professional Licensing, with the Board of Real Estate Brokers and Salespersons providing oversight. Complaints and disciplinary proceedings are handled within that structure.

Question 33Michigan Real Estate Law, Licensing and Regulation

An investor owns a 20-acre unplatted parent parcel in Michigan and wants to create separate buildable lots without recording a plat. Under the Land Division Act, within a 10-year period the investor may create no more than:

  1. Ten parcels, if each is at least one acre
  2. Two parcels, each of at least 10 acres
  3. An unlimited number, if each parcel meets the minimum width
  4. Four parcels from the parent parcel Correct answer.

Explanation

Michigan's Land Division Act permits a parent parcel to be divided into no more than four parts within a 10-year period without platting; further divisions require a recorded plat. Each resulting parcel must still satisfy local zoning and the act's size and accessibility standards.

Question 34Michigan Real Estate Law, Licensing and Regulation

A seller tells her Michigan listing agent that she does not want the house shown to buyers who have young children. The agent should:

  1. Refuse the instruction and keep showing the home to all qualified buyers Correct answer.
  2. Follow the instruction, since the seller controls showing terms
  3. Terminate the listing and report the seller to the state board
  4. Follow the instruction if the seller puts it in the listing agreement

Explanation

Familial status is a protected class under the federal Fair Housing Act, and Michigan's Elliott-Larsen Civil Rights Act bars discriminatory housing practices as well. A licensee may not carry out a seller's instruction to exclude buyers with children, though the agent may educate the seller about fair housing obligations.

Question 35Property Ownership, Interests and Legal Descriptions

Which estate in land gives an owner the most complete bundle of rights, lasts indefinitely, and passes to the owner's heirs?

  1. Life estate
  2. Fee simple absolute Correct answer.
  3. Estate for years
  4. Easement appurtenant

Explanation

Fee simple absolute is the most complete estate recognized by law; it has no fixed expiration date, is freely inheritable and transferable, and is limited only by the government powers of taxation, police power, eminent domain and escheat. Lesser estates such as a life estate end on a specified event.

Question 36Property Ownership, Interests and Legal Descriptions

Which instrument transfers only whatever interest the grantor may hold and contains no covenants of title?

  1. Warranty deed
  2. Land contract
  3. Option agreement
  4. Quitclaim deed Correct answer.

Explanation

A quitclaim deed conveys the grantor's present interest, if any, without promising that title is good, so the grantee has no action on covenants if a defect appears. It is commonly used to clear clouds on title or to release doubtful interests.

Question 37Property Ownership, Interests and Legal Descriptions

How many acres are contained in one section of the government rectangular survey system?

  1. 640 acres Correct answer.
  2. 40 acres
  3. 1,280 acres
  4. 160 acres

Explanation

A township is a square six miles on each side divided into 36 sections, and each section is one square mile, or 640 acres. Sections are then divided into halves, quarters and quarter-quarters for smaller descriptions.

Question 38Property Ownership, Interests and Legal Descriptions

Which form of co-ownership permits owners to hold unequal fractional shares with no right of survivorship?

  1. Community property
  2. Tenancy by the entirety
  3. Joint tenancy
  4. Tenancy in common Correct answer.

Explanation

In a tenancy in common each co-tenant owns a separate fractional interest that may be unequal and passes by will or intestacy rather than to the other owners. Unity of time, title, interest and possession is not required.

Question 39Property Ownership, Interests and Legal Descriptions

An easement that benefits a particular parcel of land and passes automatically when that parcel is sold is best described as:

  1. Easement appurtenant Correct answer.
  2. Easement in gross
  3. Commercial license
  4. Profit à prendre

Explanation

An easement appurtenant benefits a dominant parcel and burdens a servient parcel, so it runs with the land and passes with a conveyance of the dominant estate even if the deed is silent. It cannot be separated from the benefited parcel.

Question 40Property Ownership, Interests and Legal Descriptions

A mortgage recorded against a property is best described as:

  1. An encumbrance Correct answer.
  2. A covenant
  3. An appurtenance
  4. A profit

Explanation

A mortgage creates a lien, which is a non-possessory burden on title that must be satisfied or released before a buyer can receive marketable title. Encumbrance is the general term covering liens, easements, restrictions and similar burdens.

Question 41Property Ownership, Interests and Legal Descriptions

A deed reads, "To Ann for life, then to Ben and his heirs." Ben holds:

  1. A life estate
  2. An easement
  3. A remainder Correct answer.
  4. A reversion

Explanation

A remainder is a future estate created in a person other than the grantor in the same instrument that creates the preceding estate. It becomes possessory automatically when Ann's life estate ends, with no further act required.

Question 42Property Ownership, Interests and Legal Descriptions

A landowner whose property borders a river and who may make reasonable use of the water is exercising:

  1. Riparian rights Correct answer.
  2. Prescriptive rights
  3. Littoral rights
  4. Air rights

Explanation

Riparian rights attach to land bordering a watercourse such as a river or stream and permit reasonable use of the water subject to the same rights of other riparians. Littoral rights are the comparable rights of owners bordering a lake or sea.

Question 43Property Ownership, Interests and Legal Descriptions

A neighbor has actually, openly, exclusively and continuously occupied and cultivated a strip of another owner's land in Michigan without permission. After how many years may the neighbor claim title by adverse possession?

  1. 20 years
  2. 10 years
  3. 5 years
  4. 15 years Correct answer.

Explanation

Michigan's statutory period for acquiring title by adverse possession is 15 years, during which possession must be actual, open and notorious, exclusive, continuous and hostile. Once the period runs, the record owner's action to recover the land is barred.

Question 44Property Ownership, Interests and Legal Descriptions

To establish a prescriptive easement, a claimant must show use of another's land that is:

  1. Exclusive and accompanied by tax payments for the statutory period
  2. Open, adverse, and continuous for the statutory period Correct answer.
  3. Granted in a recorded writing signed by the servient owner
  4. Reasonably necessary to reach the claimant's parcel

Explanation

A prescriptive easement arises from use that is open and notorious, adverse under a claim of right, and continuous and uninterrupted for the 15-year period. Unlike adverse possession, exclusivity is not required because the claimant seeks only a right of use, not title.

Question 45Property Ownership, Interests and Legal Descriptions

A single owner divides a large tract and sells an interior lot that has no frontage on any public road and no other access. The buyer of the interior lot most likely holds:

  1. Easement by estoppel
  2. Easement by prescription
  3. Easement by necessity Correct answer.
  4. Easement in gross

Explanation

An easement by necessity arises when common ownership is severed and one resulting parcel is left without access to a public way, so the law implies a right of passage across the grantor's retained land. It requires strict necessity at the time of severance and lasts only while the necessity continues.

Question 46Property Ownership, Interests and Legal Descriptions

A metes and bounds legal description ordinarily begins with:

  1. An area stated in acres
  2. A monumented point of beginning Correct answer.
  3. A recorded lot and block number
  4. A township and range call

Explanation

A metes and bounds description starts at a point of beginning tied to a monument or landmark, follows courses and distances around the parcel, and returns to the point of beginning to close the boundary. Lot and block and township/range references belong to other survey systems.

Question 47Property Ownership, Interests and Legal Descriptions

The SW 1/4 of the NE 1/4 of a section contains how many acres?

  1. 20 acres
  2. 10 acres
  3. 80 acres
  4. 40 acres Correct answer.

Explanation

A section contains 640 acres; a quarter section contains 160 acres and a quarter-quarter section contains 40 acres. The SW 1/4 of the NE 1/4 describes one quarter-quarter tract of 40 acres.

Question 48Property Ownership, Interests and Legal Descriptions

Three people take title as joint tenants. One of them conveys her interest to a stranger. As a result:

  1. A tenancy in common as to all three Correct answer.
  2. No change to the joint tenancy
  3. A tenancy by the entirety with the stranger
  4. A life estate for the stranger

Explanation

A joint tenant's conveyance destroys the unity of title and severs the joint tenancy as to that share, which the grantee then holds as a tenant in common. The two remaining owners continue to hold their shares as joint tenants between themselves.

Question 49Property Ownership, Interests and Legal Descriptions

Under Michigan condominium ownership, the owner of a unit also holds:

  1. A time-share interval in the unit
  2. A proprietary lease of the unit
  3. Shares in a corporation holding title
  4. An undivided share of common elements Correct answer.

Explanation

A condominium unit owner holds fee title to the unit together with an undivided interest in the common elements as a tenant in common with the other unit owners. The condominium documents allocate the percentage of that undivided interest.

Question 50Property Ownership, Interests and Legal Descriptions

In a housing cooperative, residents typically hold:

  1. Fee title to a unit plus common elements
  2. A life estate in a chosen unit
  3. A recorded time-share interval
  4. Corporate shares with a proprietary lease Correct answer.

Explanation

In a cooperative the corporation owns the real estate, and each resident owns shares of stock coupled with a proprietary lease granting the right to occupy a particular unit. The resident's interest is personal property, and the lease may be terminated for failure to meet the cooperative's obligations.