Take this free practice test to get an idea of what is on the Michigan Real Estate Salesperson exam administered by the Michigan State Board of Department of Licensing and Regulatory Affairs. The actual exam has 115 questions and 3 hours is given to complete it.

To prepare for the actual exam check out our 125 Question Michigan Real Estate Salesperson Practice Exam with the same number of questions as the actual exam plus 350 bonus core real estate questions.

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1.	A property owned by one individual, with no co-owners, is an example of:
		a. Tenancy in the Entireties
		b. Tenancy in Severalty
		c. An Estate for Years
		d. Joint Tenancy

2.	The regulation of land use, typically practiced at the township or municipal level and justified by the police powers of the state, is called?
		a. Zoning
		b. Surveys
		c. Master Planning
		d. Government Investiture Rights

3.	The home valuation method where similar homes recently sold or currently on the market are used to determine a market value sales price for a subject property is:
		a. The Cost Approach
		b. The Residential Property Pricing Method
		c. The Sales Comparison Approach
		d. The Capitalization Approach

4.	A homeowner's equity in the home is calculated:
		a. By adding the total number of monthly mortgage payments made.
		b. By determining the remaining principal on the mortgage loan.
		c. By subtracting the mortgage loan balance from the home's current appraised value.
		d. By multiplying the payments toward principal over the life of the mortgage loan.

5.	The function of the secondary mortgage market is to:
		a. Regulate and provide liquidity for the primary mortgage market.
		b. Instruct the Federal Reserve on mortgage interest rates.
		c. Provide oversight for FANNIE MAE.
		d. Regulate mortgage lending institutions' advertising.

6.	Which is the correct list of an agent's fiduciary duties to their clients?
		a. Honesty, Loyalty, Obedience, and Control
		b. Loyalty, Obedience, Confidentiality, and Warranty
		c. Obedience, Care, Confidentiality, and Accounting
		d. Disclosure, Accounting, Care, and Due Process

7.	The formal agency relationship between the client and agent is created:
		a. When the client asks the licensee to be their agent.
		b. When the broker appoints the licensee to work with the client.
		c. When the agency disclosure form is signed.
		d. When a service provision contract is signed.

8.	Concerning property disclosure rules, a material fact is best described as:
		a. A contractual obligation between two parties.
		b. A cause of physical depreciation on a property.
		c. Information concerning a property that could influence someone's decision about it.
		d. Any fact related to a property's physical condition that is disclosed in writing.

9.	Salesperson Ryan wrote a purchase agreement for his buyers, but he mistakenly used the wrong postal address for the property being purchased. The contract is now:
		a. Illegal
		b. Invalid
		c. Valid as long as the legal description is correct
		d. Fraudulent

10.	The process of voiding a valid contract and replacing it with another valid contract, alleviating the parties of the first contract from all contractual responsibilities is called:
		a. Assignment
		b. Recission
		c. Novation
		d. Alienation

11.	The title of a property is considered successfully transferred when:
		a. The title company provides the abstract of the title to the buyer.
		b. When the buyer receives and accepts the new deed.
		c. When the mortgage documents are signed and closed.
		d. When the broker signs the new title.

12.	Salesperson Tony is showing houses to his clients, Mark and Janice. Janice informs Tony that she doesn't want to purchase a property in a neighborhood with black residents. Tony should:
		a. Fire his clients and report this to his broker.
		b. Show them houses in only white neighborhoods.
		c. Have his broker explain Fair Housing laws to his clients.
		d. File a complaint against his clients with the FHA.

13.	When showing houses to potential buyers who have not yet signed an exclusive buyer agency agreement, the licensee is:
		a. Acting legally
		b. Violating the Occupational Code
		c. A sub-agent of the sellers
		d. Acting under special agency

14.	Attempting to evict a tenant because he or she filed a complaint against the landlord is an example of a(n):
		a. Actual eviction
		b. Constructive eviction
		c. Retaliatory eviction
		d. Self-help eviction

15.	Randall purchased the NE 1/4 of Section 4 and the South 1/2 of Section 9 in Algoma Township, Michigan. How many acres did Randall purchase?
		a. 180
		b. 640
		c. 320
		d. 480

16.	The Department receives a complaint against licensed salesperson Todd. The Department can immediately take any of these actions except:
		a. Open an investigation
		b. Inform Todd's broker of the complaint
		c. Subpoena Todd's business records
		d. Revoke Todd's license

17.	Licensees must complete a minimum of _____ hours of approved continuing education on laws, regulations, and court cases during any one year of a license cycle.
		a. 2 hours
		b. 4 hours
		c. 6 hours
		d. 18 hours

18.	The Michigan Occupational Code requires real estate brokers and salespersons to present offers to sellers:
		a. As soon as received and all offers at once if there are multiple offers.
		b. Three days before closing.
		c. Only if they meet the sales criteria of the buyer in terms of price.
		d. Once title insurance has been purchased.

19.	Sonja is a real estate sales agent in Michigan. She is working with Tom to help him purchase vacant land. Susan has signed a buyer's service provision with Tom. Tom is Sonja's ____ and Sonja is Tom's _____ ?
		a. Client and Special agent
		b. Principal and Universal agent
		c. Customer and Attorney-in-fact
		d. Customer and General agent

20.	The Michigan Right to Farm Act relates to which activities?
		a. Homeowners planting vegetable gardens
		b. Farmers declaring their farm as organic
		c. Permitting Farmers to farm without the need for a state license
		d. The Act prevents farms from being declared a nuisance and fined when operating under standard farming practices.

Michigan Property Ownership

1.	A property owned by one individual, with no co-owners, is an example of:
		a. Tenancy in the Entireties
		b. Tenancy in Severalty
		c. An Estate for Years
		d. Joint Tenancy
Sole ownership of real estate is called tenancy in severalty. At first, the term appears confusing, as several implies many. But in this case, severalty comes from the root word, to sever, meaning to cut. Ownership in severalty implies having cut all others claims to the property. Tenancy in the Entireties may appear to be the correct answer, but this is the ownership structure for when married persons own property together. An estate for years is a lease agreement with a definite start and end date. Joint tenancy is a form of co-ownership. Incorrect answer. Please choose another answer.

Michigan Land Use and Controls

2.	The regulation of land use, typically practiced at the township or municipal level and justified by the police powers of the state, is called?
		a. Zoning
		b. Surveys
		c. Master Planning
		d. Government Investiture Rights
Zoning is typically practiced on the township or municipal level. It is a form of land use regulation aimed at promoting conformity to maintain the quality of life and the tax base. Zoning ordinances are justified via the police powers granted to the states in the US constitution. Master planning is part of the zoning process but is not the best answer. Incorrect answer. Please choose another answer.

Michigan Valuation and Market Analysis

3.	The home valuation method where similar homes recently sold or currently on the market are used to determine a market value sales price for a subject property is:
		a. The Cost Approach
		b. The Residential Property Pricing Method
		c. The Sales Comparison Approach
		d. The Capitalization Approach
The sales comparison approach, often called a comparative market analysis, is the primary method for valuing resident properties. Homes are priced by comparing them to similar homes currently on the market or recently sold. Assuming conformity, the prices should align with adjustments for contribution. The cost approach is a method of pricing based on land value and the cost of building, or replacing an existing structure. The capitalization approach is a pricing method for commercial real estate. Incorrect answer. Please choose another answer.

Michigan Financing

4.	A homeowner's equity in the home is calculated:
		a. By adding the total number of monthly mortgage payments made.
		b. By determining the remaining principal on the mortgage loan.
		c. By subtracting the mortgage loan balance from the home's current appraised value.
		d. By multiplying the payments toward principal over the life of the mortgage loan.
Equity means the owner's amount of value in the property at any given time. Equity can be calculated by taking the property's recent appraised value and subtracting the remaining balance on any existing mortgages. For example, a home appraised at $300,000 with a remaining mortgage principal of $240,000 would mean $60,000 equity for the owner. Incorrect answer. Please choose another answer.

Michigan General Principles of Agency

6.	Which is the correct list of an agent's fiduciary duties to their clients?
		a. Honesty, Loyalty, Obedience, and Control
		b. Loyalty, Obedience, Confidentiality, and Warranty
		c. Obedience, Care, Confidentiality, and Accounting
		d. Disclosure, Accounting, Care, and Due Process
Agency fiduciary duties in Michigan are Loyalty, Obedience, Accounting, Confidentiality, Care, and Disclosure. Warranty, Control, and Due process are not fiduciary duties. Incorrect answer. Please choose another answer.

Michigan Property Disclosure

8.	Concerning property disclosure rules, a material fact is best described as:
		a. A contractual obligation between two parties.
		b. A cause of physical depreciation on a property.
		c. Information concerning a property that could influence someone's decision about it.
		d. Any fact related to a property's physical condition that is disclosed in writing.
A material fact is any information concerning a property's condition or its situation that could influence the decision-making of a relevant party. Material facts would be the condition and age of the roof, the known presence of environmental hazards, the home's proximity to a firing range or industrial site, and other such issues. Incorrect answer. Please choose another answer.

Michigan Contracts

9.	Salesperson Ryan wrote a purchase agreement for his buyers, but he mistakenly used the wrong postal address for the property being purchased. The contract is now:
		a. Illegal
		b. Invalid
		c. Valid as long as the legal description is correct
		d. Fraudulent
Any mistake in a contract invalidates that contract. A wrong postal address, even with the correct legal description, would invalidate a contract. The intentional misrepresentation of facts in a contract is typically described as fraud. Incorrect answer. Please choose another answer.

Michigan Transfer of Title

11.	The title of a property is considered successfully transferred when:
		a. The title company provides the abstract of the title to the buyer.
		b. When the buyer receives and accepts the new deed.
		c. When the mortgage documents are signed and closed.
		d. When the broker signs the new title.
Deeds are written documents that convey or transfer the title. The title is considered transferred when a new deed is offered by the grantor and the grantee accepts it. Brokers don't sign titles and the abstract of title is a summary of the history of ownership. Incorrect answer. Please choose another answer.

Michigan Practice of Real Estate

12.	Salesperson Tony is showing houses to his clients, Mark and Janice. Janice informs Tony that she doesn't want to purchase a property in a neighborhood with black residents. Tony should:
		a. Fire his clients and report this to his broker.
		b. Show them houses in only white neighborhoods.
		c. Have his broker explain Fair Housing laws to his clients.
		d. File a complaint against his clients with the FHA.
When racial animus or discrimination is expressed by a client, the agent must end the agency relationship and inform their broker of the situation. It is not the role or duty of a broker or salesperson to engage the client in conversation over the discrimination or to convince them otherwise. Incorrect answer. Please choose another answer.

Michigan Leasing and Property Management

14.	Attempting to evict a tenant because he or she filed a complaint against the landlord is an example of a(n):
		a. Actual eviction
		b. Constructive eviction
		c. Retaliatory eviction
		d. Self-help eviction
Retaliatory eviction is when a landlord attempts to evict a tenant because the tenant has angered the landlord, but not breached the lease agreement. Leases are contracts and eviction may only happen if the tenant breaches the lease. The legal manner of eviction is called actual eviction. Constructive eviction is when a landlord attempts to make the premises uninhabitable, such as turning off the heat or water, to pressure a tenant to move. Constructive eviction is illegal. Incorrect answer. Please choose another answer.

Michigan Real Estate Calculations

15.	Randall purchased the NE 1/4 of Section 4 and the South 1/2 of Section 9 in Algoma Township, Michigan. How many acres did Randall purchase?
		a. 180
		b. 640
		c. 320
		d. 480
In Michigan, a section of any township is 1 square mile, which equals 640 acres. Randall purchased a 1/4 of a section which equals 160 acres, or a quarter of 640. Randall also purchased a half section, which equals 320 acres. Added together, Randall purchased 480 acres - 320 + 160 = 480. Incorrect answer. Please choose another answer.

Michigan Duties and Power of the Dept. and Board

16.	The Department receives a complaint against licensed salesperson Todd. The Department can immediately take any of these actions except:
		a. Open an investigation
		b. Inform Todd's broker of the complaint
		c. Subpoena Todd's business records
		d. Revoke Todd's license
The Department (LARA) cannot revoke someone's license without a hearing. However, they may immediately suspend a license temporarily if it is believed that a licensee is a threat to the public. In the case of our question, the Department would be required to open an investigation within 15 days of receiving the complaint. Todd's broker would be informed of the complaint and his records would likely be subpoenaed. Incorrect answer. Please choose another answer.

Michigan Licensing Requirements

17.	Licensees must complete a minimum of _____ hours of approved continuing education on laws, regulations, and court cases during any one year of a license cycle.
		a. 2 hours
		b. 4 hours
		c. 6 hours
		d. 18 hours
All licensed real estate salespersons must complete a total of 18 hours of continuing education credits over the course of their three-year licensing cycle. However, every licensed real estate salesperson must complete at least two hours of continuing education in legal updates, each year. Incorrect answer. Please choose another answer.

Michigan Statutory Rules Governing Agents

18.	The Michigan Occupational Code requires real estate brokers and salespersons to present offers to sellers:
		a. As soon as received and all offers at once if there are multiple offers.
		b. Three days before closing.
		c. Only if they meet the sales criteria of the buyer in terms of price.
		d. Once title insurance has been purchased.
Sellers should be notified as soon as possible when an offer is received. All offers must be shown to sellers, and if there is more than one offer, all offers must be disclosed and shown at the same time. It is up to the seller to determine the timing and order of reviewing the offers. Incorrect answer. Please choose another answer.

Michigan Contractual Relationships

19.	Sonja is a real estate sales agent in Michigan. She is working with Tom to help him purchase vacant land. Susan has signed a buyer's service provision with Tom. Tom is Sonja's ____ and Sonja is Tom's _____ ?
		a. Client and Special agent
		b. Principal and Universal agent
		c. Customer and Attorney-in-fact
		d. Customer and General agent
A special agent is one hired to complete a transaction or series of transactions aimed at achieving a single goal. Once the goal is met, the agency ends. Real estate salespersons and brokers are special agents in that the agency is aimed at buying or selling a house and once that goal is achieved, the agency ends. Tom, by signing a service provision contract with Sonja has established an agency relationship with her, making her his agent and he her principal, or client. Incorrect answer. Please choose another answer.

Michigan Additional State Topics

20.	The Michigan Right to Farm Act relates to which activities?
		a. Homeowners planting vegetable gardens
		b. Farmers declaring their farm as organic
		c. Permitting Farmers to farm without the need for a state license
		d. The Act prevents farms from being declared a nuisance and fined when operating under standard farming practices.
The Michigan Right to Farm Act protects farmers from being declared a nuisance and/or fined as long as they are operating according to standard farming practices. Occasionally, nearby residents of a farm may complain to authorities about dust, odors, or noise. As long as the farmer is conducting the farm according to acceptable farming practices, it is legal and any complaints will not be acted upon. Incorrect answer. Please choose another answer.

Michigan Real Estate Practice Exam