Free Michigan Property Practice Test — LicenseIQ

Question 1

In a deed, the party conveying title is the ____ and the party receiving title is the ____.

Accepted Answer

The seller (grantor) conveys to the buyer (grantee). A deed is the document; title is the ownership rights it transfers.

Question 2

A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

Accepted Answer

Taxes = $6,000 / 12 = $500; insurance = $1,200 / 12 = $100. PITI = $1,193.54 + $500 + $100 = $1,793.54.

Question 3

Under Proposal A, while a property is not transferred, its taxable value may increase each year by no more than:

Accepted Answer

Proposal A (1994) caps annual taxable value growth at the lesser of 5% or inflation, published as the Inflation Rate Multiplier. Taxable value is the lower of SEV or the capped value.

Question 4

A building has a no-pets policy. An applicant who is blind has a guide dog. The property manager must:

Accepted Answer

Fair housing law requires reasonable accommodations for persons with disabilities, including service animals despite no-pet rules.

Question 5

For a deed to be valid it must be:

Accepted Answer

Transfer requires a valid deed signed by the grantor and delivered to and accepted by the grantee. Recording gives constructive notice but is not required for validity between the parties.

Question 6

A lease in which the tenant pays a fixed rent and the landlord pays all property expenses is a:

Accepted Answer

In a gross lease the tenant pays flat rent and the landlord covers taxes, insurance and maintenance; in a net lease the tenant pays some or all of those expenses.

Question 7

A buyer of a unit in a cooperative receives:

Accepted Answer

In a co-op the corporation owns the building; members own shares and a proprietary lease (personal property). Condominium owners receive a deed.

Question 8

A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

Accepted Answer

EGI = $240,000 - 8% = $220,800; value = $220,800 x 6 = $1,324,800.

Question 9

In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

Accepted Answer

The ADA's accessibility rules primarily cover public accommodations and commercial facilities; housing accessibility is governed mainly by the Fair Housing Act.

Question 10

A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

Accepted Answer

Gaps in the chain or unreleased liens are clouds that must be cleared (e.g., by quitclaim deed or quiet title action) before title is marketable.

Question 11

Private restrictions placed in a deed by a developer are called:

Accepted Answer

Deed restrictions (covenants, conditions and restrictions) are private controls enforced by owners or associations, not government. Zoning and building codes are public controls.

Question 12

Recording a deed in the county records primarily serves to:

Accepted Answer

Recording provides public (constructive) notice, protecting the owner's interest against later claims.

Question 13

The Michigan Seller Disclosure Act applies to transfers of property containing:

Accepted Answer

MCL 565.952 applies the act to real estate with not less than 1 or more than 4 residential dwelling units.

Question 14

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 15

A $4,000,000 sewer project is assessed against properties with a combined assessed value of $160,000,000, payable over 5 years. What is the ANNUAL assessment on a property assessed at $240,000?

Accepted Answer

Rate = $4,000,000 / $160,000,000 = $0.025 per $1. Total = $240,000 x 0.025 = $6,000; annual = $6,000 / 5 = $1,200.

Question 16

A real estate licensee who is not an attorney may:

Accepted Answer

Licensees may complete attorney-prepared forms but may not draft contracts, amendments or addenda or give legal advice - that is the unauthorized practice of law.

Question 17

The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

Accepted Answer

Daily rent = $1,800 / 30 = $60. Buyer owns days 11-30 = 20 days. 20 x $60 = $1,200, credited to the buyer because the seller collected rent for days the buyer will own.

Question 18

Michigan's real estate licensing requirements are found primarily in which law?

Accepted Answer

Michigan regulates brokers and salespersons through Article 25 of the Occupational Code, 1980 PA 299, beginning at MCL 339.2501. There is no separate stand-alone real estate license act; the 1919 act distractor sounds plausible but is not the governing law.

Question 19

Which statement about Michigan property management trust accounts is correct?

Accepted Answer

MCL 339.2512c requires property management accounts to be separate from all other accounts, allows interest unless the contract says otherwise, and lets a broker or designated employee sign.

Question 20

A licensee representing a seller advertises the property as "For Sale By Owner." This is:

Accepted Answer

MCL 339.2512d(4) prohibits a broker or salesperson representing a seller from advertising the property as "for sale by owner" or otherwise implying the seller has no broker.

Question 21

The purchase agreement names a title company as escrowee for the earnest money. The licensee holding the check must deliver it to the title company within:

Accepted Answer

MCL 339.2512(1)(k)(vii) requires delivery to a non-broker escrowee within 2 banking days after learning of acceptance.

Question 22

A residential buyer files the Property Transfer Affidavit 90 days after the transfer. The maximum late penalty is:

Accepted Answer

The filing is 45 days late (90 - 45). At $5 per day that would be $225, but the residential penalty is capped at $200.

Question 23

A first offense of practicing real estate in Michigan without a license is punishable by:

Accepted Answer

MCL 339.601 makes unlicensed practice a misdemeanor; a first offense carries up to $500, 90 days, or both, and a repeat offense up to $1,000, one year, or both.

Question 24

The redemption period after foreclosure of abandoned residential property (1 to 4 units) under MCL 600.3241 is:

Accepted Answer

MCL 600.3240(9) provides a 1-month redemption period for abandoned residential property of 4 units or fewer under section 3241.

Question 25

How much real estate experience must a Michigan broker applicant demonstrate?

Accepted Answer

MCL 339.2505 requires broker applicants (or each principal of an entity) to show the equivalent of three years of full-time real estate experience; unlicensed activity does not count.

Michigan real estate property practice test

1. In a deed, the party conveying title is the and the party receiving title is the .

2. A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

3. Under Proposal A, while a property is not transferred, its taxable value may increase each year by no more than:

4. A building has a no-pets policy. An applicant who is blind has a guide dog. The property manager must:

5. For a deed to be valid it must be:

6. A lease in which the tenant pays a fixed rent and the landlord pays all property expenses is a:

7. A buyer of a unit in a cooperative receives:

8. A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

9. In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

10. A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

11. Private restrictions placed in a deed by a developer are called:

12. Recording a deed in the county records primarily serves to:

13. The Michigan Seller Disclosure Act applies to transfers of property containing:

14. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

15. A $4,000,000 sewer project is assessed against properties with a combined assessed value of $160,000,000, payable over 5 years. What is the ANNUAL assessment on a property assessed at $240,000?

16. A real estate licensee who is not an attorney may:

17. The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

18. Michigan's real estate licensing requirements are found primarily in which law?

19. Which statement about Michigan property management trust accounts is correct?

20. A licensee representing a seller advertises the property as "For Sale By Owner." This is:

21. The purchase agreement names a title company as escrowee for the earnest money. The licensee holding the check must deliver it to the title company within:

22. A residential buyer files the Property Transfer Affidavit 90 days after the transfer. The maximum late penalty is:

23. A first offense of practicing real estate in Michigan without a license is punishable by:

24. The redemption period after foreclosure of abandoned residential property (1 to 4 units) under MCL 600.3241 is:

25. How much real estate experience must a Michigan broker applicant demonstrate?

Sources

1. In a deed, the party conveying title is the ____ and the party receiving title is the ____.