How to Pass the Michigan Real Estate
Exam in 2026

About 12 questions test how Michigan defines real property, fixtures, legal descriptions, estates, and water rights. Michigan uses the rectangular (government) survey system across most of the state, alongside metes-and-bounds and recorded-plat descriptions. Water rights are a signature Michigan topic because of the Great Lakes and inland lakes: owners of land abutting a flowing waterway hold riparian rights, while those abutting a lake or sea hold littoral rights — both generally include reasonable use and access to the water. Pitfall: candidates swap the two terms or forget Great Lakes bottomlands are held in public trust. Title is conveyed primarily by warranty deed (full covenants) or covenant/quitclaim deeds with fewer warranties. Michigan is not a community-property state. Click2CE drills the riparian-versus-littoral distinction because Michigan tests it nearly every cycle.

About 15 questions cover Michigan agency, overseen by the Department of Licensing and Regulatory Affairs (LARA). Michigan recognizes seller agency, buyer agency, dual agency, and designated agency. The Michigan agency disclosure statement must be provided to a prospective buyer or seller before disclosing any confidential information — typically at the first substantive contact — and the consumer signs to acknowledge receipt. Pitfall #1: candidates think the disclosure itself creates an agency relationship; it only explains the options. Pitfall #2: dual agency is permitted only with the written, informed consent of both parties. Worked scenario: a licensee showing a home to a buyer must deliver the disclosure before discussing the buyer's financial position. A salesperson works under an associate or principal broker. Click2CE drills the pre-disclosure-before-confidential-information rule because it is heavily tested.

About 15 questions test contract law, purchase agreements, land contracts, contingencies, and breach. Michigan's signature contract instrument is the land contract (installment sale): the seller retains legal title while the buyer takes possession and pays over time, receiving the deed only after the final payment. Pitfall #1: candidates confuse a land contract (seller financing with retained title) with a mortgage. Pitfall #2: forgetting that a defaulting land-contract buyer may be subject to forfeiture or foreclosure depending on equity built up. Worked example: a buyer who has paid down significant equity may be entitled to foreclosure (with redemption) rather than quick forfeiture. The Seller Disclosure Act requires a residential property condition disclosure on most 1-4 unit transfers. Click2CE drills land contracts and the seller-disclosure requirement because both recur on the Michigan portion.

About 12 questions cover mortgage instruments, loan qualification, government programs, and Michigan lending rules. Michigan is a lien-theory state: the mortgage is a lien on the property, and the borrower keeps title. The dominant remedy is foreclosure by advertisement — a largely non-judicial process where notice is published and posted, the property is sold at a sheriff's sale, and the borrower then has a statutory redemption period (commonly six months for residential, longer for large agricultural parcels) to buy the property back. Pitfall: candidates miss the post-sale redemption period, which is a defining Michigan feature. Land contracts are also a financing tool (see Contracts). Federal TRID timing applies. Click2CE drills foreclosure by advertisement plus the redemption window so candidates answer Michigan financing questions correctly.

About 8 questions test the federal Fair Housing Act plus Michigan's Elliott-Larsen Civil Rights Act, which expands protection beyond the seven federal classes. Elliott-Larsen prohibits discrimination in real estate based on religion, race, color, national origin, age, sex, height, weight, familial status, marital status, and — following a 2023 amendment — sexual orientation and gender identity. Pitfall #1: candidates forget Michigan's unusual height and weight protections. Pitfall #2: missing the recent addition of sexual orientation and gender identity. Worked scenario: refusing to show units based on an applicant's marital status or weight violates Elliott-Larsen even though federal law does not list those classes. Click2CE drills the Elliott-Larsen class list — especially height, weight, and the new additions — because the state portion tests them reliably.

The largest state section — about 25 questions on LARA oversight, license requirements, trust/escrow accounts, the Seller Disclosure Act, transfer tax, and wetlands protection. Michigan requires 40 hours of pre-license education; the salesperson exam has 115 questions, a 180-minute limit, and a 70% passing standard on both portions. Broker trust money must be deposited promptly into a separate escrow account; commingling is grounds for discipline. The state real estate transfer tax is generally $3.75 per $500 of value ($7.50 per $1,000, or 0.75%), plus a county transfer tax; the seller customarily pays. Michigan's wetlands and inland-lakes protections regulate development near regulated waters. Continuing education requires 18 hours per three-year renewal cycle, including legal-update content. Click2CE drills the transfer-tax math, escrow rules, and seller-disclosure requirements every diagnostic.

About 14 calculation questions cover the three approaches to value, CMA mechanics, commission splits, prorations, and the Michigan transfer tax. Michigan customarily uses a 360-day banker's year for prorations unless the contract specifies otherwise. Transfer-tax math is heavily tested: the state tax is $3.75 per $500 of value, so a $200,000 sale owes 200,000 ÷ 500 = 400 units × $3.75 = $1,500 state transfer tax, plus county tax. Pitfall: candidates apply the rate to the wrong unit base ($500 vs. $1,000) and miscompute. Worked proration: annual taxes of $3,600 with the seller responsible for 120 days → $10/day × 120 = $1,200. A broker's CMA is not an appraisal and cannot replace one in a federally related transaction. Click2CE's AI Tutor walks each formula step-by-step.

About 6 questions cover landlord-tenant law, the Truth in Renting Act, leases, and eviction. Michigan's Truth in Renting Act governs residential lease terms and prohibits certain unenforceable or one-sided clauses (for example, provisions waiving a tenant's legal rights). Security-deposit rules cap the deposit at 1.5 months' rent and require the landlord to disclose where the deposit is held and to provide an itemized list of damages within the statutory timeframe after move-out. Pitfall: candidates miss the 1.5-month cap and the strict deposit-return deadline. Eviction (summary proceedings) runs through the district court; self-help lockouts are illegal. Worked scenario: a landlord who fails to return or account for the deposit on time can lose the right to keep it. Click2CE drills the Truth in Renting Act and deposit rules.

About 8 questions cover the closing process, settlement statements, title insurance, and escrow. Michigan closings are commonly handled by title companies, with state and county transfer taxes collected and remitted at the table. Title insurance includes an owner's policy (protects the buyer's equity against title defects) and a lender's policy (protects the loan balance). Pitfall: candidates confuse the two policies or forget who customarily pays the transfer tax (the seller). Worked scenario: an unreleased prior mortgage discovered after closing is exactly the type of recorded defect an owner's title policy covers. The Closing Disclosure must reach the buyer at least 3 business days before consummation under TRID. Click2CE drills the title-policy distinction and the Michigan transfer-tax collection step at settlement.