Free Michigan Real Estate Practice Exam

Q1.The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) creates potential liability for property owners when:

• A.They fail to obtain proper building permits
• B.They violate local zoning ordinances
• C.They fail to pay property taxes
• D.Hazardous substances are released on their property, regardless of fault

Q2.A multi-board listing contract allows cooperation with other MLS systems. If a buyer's agent from a different MLS brings a successful offer, how is the commission typically handled?

• A.The listing broker keeps the full commission since it's their listing
• B.The commission is split equally between all participating MLS systems
• C.The buyer must pay their agent's commission separately
• D.The listing broker shares the commission with the cooperating broker per the MLS agreement

Q3.Under MCL 339.2519, which statement about trust account requirements is correct?

• A.Salespersons may maintain their own trust accounts with proper bonding
• B.Trust accounts may be interest-bearing if all parties consent in writing
• C.Only the designated broker may be signatory on trust accounts
• D.Trust funds may be commingled with business operating funds for up to 3 days

Q4.A Michigan real estate salesperson receives an earnest money deposit check from a buyer on a Friday evening after her broker's office has closed. Under Michigan law, when must the salesperson deliver the earnest money to the employing broker?

• A.Within 24 hours of receipt, regardless of whether the broker's office is open.
• B.No later than the next business day following receipt of the funds.
• C.Within 48 hours of receipt, excluding weekends and holidays.
• D.At the time of closing, as long as the check is kept in a secure location.

Q5.Which government-sponsored enterprise (GSE) primarily purchases conventional mortgage loans to provide liquidity to the mortgage market?

• A.Fannie Mae
• B.Federal Housing Administration (FHA)
• C.Veterans Administration (VA)
• D.Department of Housing and Urban Development (HUD)

Q6.According to EPA guidelines, which action regarding underground storage tanks (USTs) is required for real estate professionals when representing clients in commercial property transactions?

• A.Advising clients to investigate potential environmental liabilities associated with USTs
• B.Conducting soil contamination testing on all properties with current or former USTs
• C.Obtaining EPA permits for any existing USTs on the property
• D.Removing all USTs before completing the transaction

Q7.Under Michigan law governing land contracts (installment sales), if a buyer (vendee) defaults on payment obligations, which legal process must the seller (vendor) generally use to terminate the vendee's equitable interest in the property when the vendee refuses to vacate?

• A.A standard mortgage foreclosure by advertisement under MCL 600.3201 et seq., which requires the same 6-month redemption period as a mortgage
• B.A summary proceedings (landlord-tenant) eviction action in district court, treating the vendee as a month-to-month tenant
• C.A forfeiture proceeding under the Michigan Land Contract Forfeiture Act (MCL 600.5726 et seq.), which requires a statutory notice period tied to the amount paid and the nature of the default before a court can order possession
• D.A quiet title action in circuit court, which automatically extinguishes the vendee's interest upon filing without any notice period

Q8.Which of the following is the primary purpose of zoning ordinances?

• A.To generate revenue for local government
• B.To determine property tax assessments
• C.To regulate and control the use of land within a municipality
• D.To establish building construction standards

Q9.Under the Michigan Seller Disclosure Act (MCL 565.951 et seq.), when must a seller provide the Seller's Disclosure Statement to a prospective buyer?

• A.Before the buyer makes a written offer to purchase the property
• B.Within 10 days after the purchase agreement is signed by both parties
• C.At or before the closing of the sale
• D.Only if the buyer requests it in writing

Q10.In Michigan, which of the following statements correctly describes a land contract (installment sales contract)?

• A.The vendor (seller) transfers legal title to the vendee (buyer) at the time the land contract is signed
• B.The vendee receives equitable title upon execution of the land contract, while the vendor retains legal title until the purchase price is paid in full
• C.A land contract is not a recognized method of real property conveyancing in Michigan
• D.The vendee receives both legal and equitable title once 50% of the purchase price has been paid

Q11.A broker employs three salespersons under written employment agreements. One salesperson signs a listing agreement on behalf of the brokerage without the seller's knowledge that the salesperson—not the broker—signed. Under agency law, the brokerage is MOST likely:

• A.Bound by the listing agreement because the salesperson acted with apparent authority granted by the broker's employment relationship.
• B.Not bound because only a licensed broker may sign a listing agreement under any circumstances.
• C.Bound only if the broker subsequently ratifies the agreement in writing within 24 hours.
• D.Not bound because the salesperson lacked expressed written authority to sign contracts.

Q12.Under Michigan Administrative Rules R 339.22201, which of the following records must a real estate broker maintain for at least 3 years?

• A.Copies of all advertising materials only
• B.Transaction files and commission records
• C.Property tax records for listed properties
• D.Personal financial statements of clients

Q13.A Michigan licensed broker maintains a branch office where three affiliated salespersons operate. Under the Michigan Occupational Code (MCL 339.2512), which of the following statements correctly describes the broker's statutory supervisory obligations regarding that branch office?

• A.The broker must designate a licensed associate broker or broker to act as branch manager and ensure the branch office license is conspicuously displayed at that location.
• B.The broker may permit a salesperson to manage the branch office provided the salesperson has at least two years of active licensure experience.
• C.Branch offices do not require a separate license as long as all transaction records are maintained at the main office.
• D.The broker is only responsible for supervising salespersons if they are engaged in residential real estate transactions.

Q14.According to Michigan Administrative Rules, when must a real estate salesperson notify the Department of Licensing and Regulatory Affairs (LARA) of a change in business address?

• A.Within 10 days of the change
• B.Within 30 days of the change
• C.Within 60 days of the change
• D.At the next license renewal only

Q15.In a hostile environment harassment analysis, the key question is whether:

• A.The harasser intended to create discomfort
• B.The conduct was welcomed from the harasser's perspective
• C.The conduct occurred more than three times
• D.A reasonable person in the victim's position would find the conduct severe or pervasive