Free Michigan State Law Practice Test — LicenseIQ

Question 1

An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

Accepted Answer

Conditioning one service on the purchase of another is a tying arrangement prohibited by antitrust law.

Question 2

A seller hands the completed disclosure statement to the listing agent. The listing agent must:

Accepted Answer

MCL 565.954(1) allows delivery to the seller's agent, who must then provide a copy to the prospective buyer or the buyer's agent. Delivery to the buyer's agent counts as delivery to the buyer.

Question 3

A Michigan broker conducts a closing without a title company. The broker must:

Accepted Answer

MCL 339.2512d(3)(e) requires a broker or associate broker involved in a closing to furnish a detailed signed statement of receipts and disbursements to both parties, unless a licensed title company conducts the closing.

Question 4

The Michigan seller disclosure statement is best described as:

Accepted Answer

The statutory form states that it is a disclosure of the property's condition under the act and not a warranty of any kind by the seller or agents, and is not a substitute for inspections.

Question 5

The Michigan state real estate transfer tax rate is:

Accepted Answer

MCL 207.525 sets the state rate at $3.75 per $500 or fraction thereof ($7.50 per $1,000). $0.55 per $500 is the standard county rate.

Question 6

A licensee's advertising must generally:

Accepted Answer

Ads must identify the licensed broker/brokerage; salespersons cannot advertise under only their own name.

Question 7

In a lease, the tenant holds a ____ estate and the landlord holds a ____.

Accepted Answer

The lessee has a leasehold (non-freehold) estate; the lessor retains the leased fee interest plus the reversion.

Question 8

A salesperson's neighbor, who is not licensed, tells the salesperson about a coworker who wants to sell and later asks for a $250 referral fee. Which statement is correct?

Accepted Answer

MCL 339.2512(1)(h) prohibits paying a fee or commission to an unlicensed person, specifically including someone who supplies information about a prospective buyer or seller. No dollar threshold or consent exception exists for individuals; the only carve-outs are a commercially prepared list of names and an out-of-state broker who does not negotiate in Michigan.

Question 9

A licensed residential builder wants to sell, without a real estate license, a duplex it just built that has never been occupied. Under Michigan law this is:

Accepted Answer

The builder exemption in MCL 339.2503 covers a new, never-occupied detached single-family home, duplex, triplex, or quadruplex built by a licensed residential builder. The distractor limiting it to single-family homes understates the exemption.

Question 10

A salesperson receives an earnest money check from a buyer. The salesperson should:

Accepted Answer

The broker manages the trust account; licensees must promptly deliver trust funds to the broker.

Question 11

A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $6,000 / $150,000 = 0.04 = 4%.

Question 12

Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

Accepted Answer

Agreeing with competitors to refuse to deal with another business is an illegal group boycott.

Question 13

A broker received a 4.2% commission totaling $12,600. What was the sale price?

Accepted Answer

Sale price = commission / rate = $12,600 / 0.042 = $300,000.

Question 14

Which statement about the Land Division Act's depth-to-width rule is correct?

Accepted Answer

MCL 560.109 generally limits resulting parcels to a 4:1 depth-to-width ratio, but the ratio does not apply to parcels larger than 10 acres or to the remainder of the parent parcel.

Question 15

A licensee completes 6 law hours, 3 fair housing hours, and 9 elective hours, all in the final month of the three-year cycle. Is the licensee in compliance?

Accepted Answer

The 2 law hours and 1 fair housing hour must be completed in each year of the cycle. Only the 9 remaining hours may be taken at any time. Meeting the cycle total in one month does not satisfy the annual minimums.

Question 16

On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

Accepted Answer

$20,000 x 0.50 = $10,000 to the buyer's broker.

Question 17

Who must sign a Michigan salesperson's license application?

Accepted Answer

Under MCL 339.2505, a salesperson's application is signed by the employing broker; a salesperson can be licensed only in association with a broker.

Question 18

Under the 2025 Michigan rules, a licensee who fully discloses material facts about a property's condition:

Accepted Answer

R 339.22139 prohibits misrepresenting material facts and provides that full disclosure of material facts about a property's condition is not grounds for discipline.

Question 19

In a life estate, the person who receives the property when the life tenant dies is the:

Accepted Answer

The life tenant has a present interest; the remainderman holds a future interest. If the property returns to the grantor, it is a reversion.

Question 20

A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 21

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 22

A home sells for $400,000 with a 5% total commission. What is the total commission?

Accepted Answer

$400,000 x 0.05 = $20,000.

Question 23

A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?

Accepted Answer

Net + other costs = $256,000, which equals 94% of the price (100% - 6%). Price = $256,000 / 0.94 = $272,340.43, about $272,340. Adding 6% to $256,000 ($271,360) understates the price.

Question 24

Which activity may an unlicensed assistant generally perform?

Accepted Answer

Unlicensed staff may perform clerical tasks like typing licensee-prepared ads, but may not compose ads, negotiate or show property.

Question 25

A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $15,750 / $450,000 = 0.035 = 3.5%.

Michigan real estate state law practice test

1. An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

2. A seller hands the completed disclosure statement to the listing agent. The listing agent must:

3. A Michigan broker conducts a closing without a title company. The broker must:

4. The Michigan seller disclosure statement is best described as:

5. The Michigan state real estate transfer tax rate is:

6. A licensee's advertising must generally:

7. In a lease, the tenant holds a estate and the landlord holds a .

8. A salesperson's neighbor, who is not licensed, tells the salesperson about a coworker who wants to sell and later asks for a $250 referral fee. Which statement is correct?

9. A licensed residential builder wants to sell, without a real estate license, a duplex it just built that has never been occupied. Under Michigan law this is:

10. A salesperson receives an earnest money check from a buyer. The salesperson should:

11. A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

12. Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

13. A broker received a 4.2% commission totaling $12,600. What was the sale price?

14. Which statement about the Land Division Act's depth-to-width rule is correct?

15. A licensee completes 6 law hours, 3 fair housing hours, and 9 elective hours, all in the final month of the three-year cycle. Is the licensee in compliance?

16. On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

17. Who must sign a Michigan salesperson's license application?

18. Under the 2025 Michigan rules, a licensee who fully discloses material facts about a property's condition:

19. In a life estate, the person who receives the property when the life tenant dies is the:

20. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

21. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

22. A home sells for $400,000 with a 5% total commission. What is the total commission?

23. A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?

24. Which activity may an unlicensed assistant generally perform?

25. A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

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