Free Michigan Real Estate Practice Test (2026) — LicenseIQ

Question 1

A Michigan licensee who assists both parties with a transaction but is not the agent of either is a:

Accepted Answer

MCL 339.2517(11) defines a transaction coordinator as a licensee who is not acting as the agent of either the buyer or the seller; the role is allowed upon proper notice to all parties. A dual agent, by contrast, represents both.

Question 2

A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

Accepted Answer

Latent (hidden) defects known to the seller or agent must be disclosed; failing to do so can create liability for both.

Question 3

To sue a seller for a commission in Michigan, a broker generally must show:

Accepted Answer

MCL 339.2512a requires the plaintiff to prove licensure, and MCL 566.132(1)(e) requires the commission promise to be in a signed writing. Procuring cause alone is not enough without the writing.

Question 4

A home in Oakland County sells for $275,000. Using the state rate of $3.75 per $500 and the county rate of $0.55 per $500, what is the total transfer tax?

Accepted Answer

$275,000 / 500 = 550 units. State: 550 x $3.75 = $2,062.50. County: 550 x $0.55 = $302.50. Total = $2,365.00. $2,062.50 is the state tax alone.

Question 5

A licensee representing the seller who learns the buyer will pay more than the offer must:

Accepted Answer

Loyalty and disclosure require the seller's agent to share material information that benefits the client. The agent owes the buyer-customer no confidentiality.

Question 6

A Michigan condominium is established by recording a:

Accepted Answer

Under the Michigan Condominium Act, a condominium project is created by recording a master deed, which includes the bylaws and subdivision plan. A proprietary lease is used in cooperatives.

Question 7

On a closing statement, the purchase price is a:

Accepted Answer

The seller receives the price (credit); the buyer owes it (debit).

Question 8

Under IRC Section 121, a single homeowner may generally exclude how much capital gain on a primary residence?

Accepted Answer

Section 121 allows up to $250,000 exclusion for a single filer ($500,000 married filing jointly) on a primary residence used 2 of the last 5 years.

Question 9

Under Elliott-Larsen, housing intended and operated in good faith for persons of what age may be exempt from the age and familial status provisions?

Accepted Answer

MCL 37.2503 exempts housing intended, advertised, designed, or operated in good faith for persons 50 or older (and housing meeting federal, state, or local senior programs) from the age and familial status provisions. Federal HOPA uses 55 and 62 thresholds.

Question 10

A single-family home rents for $2,100 per month. Comparable homes sell at an ANNUAL gross rent multiplier of 12. What is the estimated value?

Accepted Answer

Annual rent = $2,100 x 12 = $25,200; value = $25,200 x 12 = $302,400.

Question 11

A REALTOR is asked to value a type of property she has never handled. Under the Code of Ethics she should:

Accepted Answer

Article 11 requires competence; if lacking expertise, the REALTOR must get qualified help (disclosed to the client) or decline.

Question 12

Which is NOT one of the government's four powers in land (PETE)?

Accepted Answer

PETE = Police power, Eminent domain, Taxation, Escheat. Encroachment is a private intrusion, not a government power.

Question 13

A retail tenant pays $3,000 per month base rent plus 5% of annual gross sales over a $600,000 breakpoint. Annual gross sales are $750,000. What is the total annual rent?

Accepted Answer

Base: $3,000 x 12 = $36,000. Overage: ($750,000 - $600,000) x 0.05 = $7,500. Total = $43,500.

Question 14

Federal law requires disclosure of lead-based paint for homes built before:

Accepted Answer

The federal lead-based paint disclosure rule covers housing built before 1978, the year lead paint was banned for residential use.

Question 15

Under Michigan's Seller Disclosure Act, when must a seller deliver the disclosure in an installment land contract sale with no separate purchase agreement?

Accepted Answer

MCL 565.954(1) requires delivery before the transferor executes the installment sales contract when there is no binding purchase agreement.

Question 16

When a tenant fails to pay rent, the landlord's lawful remedy to remove the tenant is:

Accepted Answer

Actual eviction requires a court proceeding and judgment. Self-help lockouts or utility shutoffs are illegal.

Question 17

How long must a Michigan licensee keep proof of completed continuing education?

Accepted Answer

MCL 339.2504a and R 339.22161 require licensees to keep proof of completion for at least 4 years and produce it on request in an audit. Three years is the trust-record retention period, a different rule.

Question 18

The four unities required to create a joint tenancy are:

Accepted Answer

PITT: joint tenants must take equal interests, at the same time, by the same deed, with equal rights of possession.

Question 19

A VA loan is:

Accepted Answer

VA loans are guaranteed (not insured) by the VA for eligible veterans and service members, often with no down payment, and only for a primary residence.

Question 20

When an owner dies with no will and no heirs, the property passes to the state through:

Accepted Answer

Escheat transfers ownerless property to the state when there is no will and no heirs.

Question 21

Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

Accepted Answer

Specific terms like the down payment amount, number or amount of payments, finance charge or repayment period trigger full disclosure (including APR). General statements do not.

Question 22

A tenant who vacates because the landlord failed to keep the premises habitable may claim:

Accepted Answer

Constructive eviction is the tenant's remedy when the landlord's failures make the premises unlivable; actual eviction is the landlord's court-ordered removal of a tenant.

Question 23

How many hours of continuing education must a Michigan real estate licensee complete per three-year license cycle?

Accepted Answer

MCL 339.2504a and R 339.22161 require 18 hours per license cycle, an average of 6 per year.

Question 24

In Michigan, housing discrimination based on disability is addressed primarily by:

Accepted Answer

Disability is not among the Elliott-Larsen real estate classes; Michigan addresses it in the Persons with Disabilities Civil Rights Act (MCL 37.1101 et seq.), in addition to the federal Fair Housing Act.

Question 25

An unlicensed person negotiates the sale of a farm and the seller refuses to pay the promised fee. Under MCL 339.2512a, the unlicensed person:

Accepted Answer

MCL 339.2512a bars a person required to be licensed from maintaining a court action for compensation unless they allege and prove they held the license when they performed the act. A written agreement does not cure the lack of a license, and getting licensed later does not help.

Michigan real estate practice test

1. A Michigan licensee who assists both parties with a transaction but is not the agent of either is a:

2. A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

3. To sue a seller for a commission in Michigan, a broker generally must show:

4. A home in Oakland County sells for $275,000. Using the state rate of $3.75 per $500 and the county rate of $0.55 per $500, what is the total transfer tax?

5. A licensee representing the seller who learns the buyer will pay more than the offer must:

6. A Michigan condominium is established by recording a:

7. On a closing statement, the purchase price is a:

8. Under IRC Section 121, a single homeowner may generally exclude how much capital gain on a primary residence?

9. Under Elliott-Larsen, housing intended and operated in good faith for persons of what age may be exempt from the age and familial status provisions?

10. A single-family home rents for $2,100 per month. Comparable homes sell at an ANNUAL gross rent multiplier of 12. What is the estimated value?

11. A REALTOR is asked to value a type of property she has never handled. Under the Code of Ethics she should:

12. Which is NOT one of the government's four powers in land (PETE)?

13. A retail tenant pays $3,000 per month base rent plus 5% of annual gross sales over a $600,000 breakpoint. Annual gross sales are $750,000. What is the total annual rent?

14. Federal law requires disclosure of lead-based paint for homes built before:

15. Under Michigan's Seller Disclosure Act, when must a seller deliver the disclosure in an installment land contract sale with no separate purchase agreement?

16. When a tenant fails to pay rent, the landlord's lawful remedy to remove the tenant is:

17. How long must a Michigan licensee keep proof of completed continuing education?

18. The four unities required to create a joint tenancy are:

19. A VA loan is:

20. When an owner dies with no will and no heirs, the property passes to the state through:

21. Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

22. A tenant who vacates because the landlord failed to keep the premises habitable may claim:

23. How many hours of continuing education must a Michigan real estate licensee complete per three-year license cycle?

24. In Michigan, housing discrimination based on disability is addressed primarily by:

25. An unlicensed person negotiates the sale of a farm and the seller refuses to pay the promised fee. Under MCL 339.2512a, the unlicensed person:

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