MI state Exam practice 120 Questions with Verified Answers
After accepting an offer in writing, if a seller withdraws acceptance and cancels the
... [Show More] transaction, which of the following is TRUE? - CORRECT ANSWER The broker, having facilitated a written acceptance of an offer, is entitled to compensation and may sue the seller for the commission.
A realty company has entered agency agreements with both the sellers and the buyers in the transaction of a property. Is this allowable? - CORRECT ANSWER Yes, as long as both parties agree in writing to the dual agency.
After a seller's listing agreement with ABC Realty expires, what restrictions exist if the seller decides to list with a different agency and ABC Realty has an interested buyer? - CORRECT ANSWER ABC Realty may represent the buyer but may not disclose any information about offers made on the property when it was listed with ABC Realty.
A real estate salesperson refers buyers to a particular lender knowing that the lender pays a fee for referrals. Which is TRUE? - CORRECT ANSWER The salesperson has acted injudiciously.
For which of the following actions must an agency agreement exist between a buyer and a real estate office? - CORRECT ANSWER To negotiate a reasonable price on a property
Which of the following is TRUE of buyer-brokerage contracts in Michigan? - CORRECT ANSWER The contract must be in writing to be enforceable.
John has started taking real estate re-licensing classes and agrees to help his neighbor sell her house for 3% commission. The house is sold and closing takes place 1 day after John receives his salesperson's license, but the neighbor refuses to pay the commission. Can John sue to recover the commission fee? - CORRECT ANSWER No, Michigan law prohibits lawsuits to collect commissions unless the injured party is a licensed broker whose license was in effect at the time the agreement was made.
Which of the following type of agency relationship is NOT recognized in Michigan? - CORRECT ANSWER Transaction brokerage agency
According to the Michigan Board of Real Estate Brokers and Salespersons, which of the following is NOT a required element of a listing agreement? - CORRECT ANSWER Qualified expert's report of property condition
In which of the following circumstances is a seller's disclosure statement NOT required? - CORRECT ANSWER If the property is a commercial property.
The seller's disclosure statement should be delivered to the buyer before which of the following events? - CORRECT ANSWER before the seller accepts the offer
To whom may a real estate agent divulge confidential information about a client? - CORRECT ANSWER To the supervising broker for the purposes of obtaining advice or assistance for the client.
Which of the following is true regarding disclosure of deaths in the state of Michigan? - CORRECT ANSWER AIDS-related deaths may not be disclosed.
Which of the following conditions applies to a salesperson who is interested in purchasing a property listed with his or her supervising broker? - CORRECT ANSWER The salesperson must inform the property owner, in writing, that he or she is a licensee in order to make an offer on the property.
A buyer bought a house which was found to have a leaky basement during spring rainstorms a few months later. The sellers had discussed the basement leaks with the listing agent but they agreed not to divulge those details to prospective buyers. The broker claims the seller did not specifically ask about the basement. Which of the following options is open to the buyer? - CORRECT ANSWER The buyer can sue the broker for nondisclosure of necessary information on the condition of a property.
At which point in proceedings would an agent be considered particularly remiss in their responsibilities if a written disclosure regarding agency relationships had not yet been distributed to a prospective buyer? - CORRECT ANSWER At the closing table
The seller accepts an offer from the buyer before providing the seller's disclosure statement. Which of the following actions may the buyer take? - CORRECT ANSWER The buyer may withdraw from proceedings any time prior to the closing.
A prospective buyer contacts a real estate office and tells the agent that he is interested in the area but is not ready to sign any agreements just yet. Which of the following may the agent NOT do? - CORRECT ANSWER The agent can prequalify the buyer for a mortgage.
Which of the following pieces of information is NOT considered confidential in a dual agency relationship? - CORRECT ANSWER Comparable market data for the seller after the buyer has requested and received such information
At which point must an agency relationship be formally established between the broker and a buyer or seller? - CORRECT ANSWER Prior to receiving any information that is considered confidential
. Which of the following entities administers the real estate license law in Michigan? - CORRECT ANSWER Michigan Board of Real Estate Brokers and Salespersons
Who selects the members of the Michigan Board of Real Estate Brokers? - CORRECT ANSWER The Governor
Which of the following is required under Michigan law? - CORRECT ANSWER Sellers must divulge all known material defects that might affect the sale.
Which of the following actions is under the authority of the Michigan Board of Real Estate Brokers and Salespersons? - CORRECT ANSWER Writing rules and regulations for real estate licensees to follow
In the following situations, which is NOT grounds for the Michigan Board of Real Estate Brokers and Salespersons to initiate an investigation of a licensee? - CORRECT ANSWER The Board votes to investigate a random selection of licensees on an annual basis in an attempt to uncover illegal practices.
In Michigan, which of the following individuals needs a real estate license? - CORRECT ANSWER Patty Lehmann is a leasing agent who employs 2 other leasing agents
Which of the following facts does NOT have to be disclosed in a listing contract? - CORRECT ANSWER the sellers net return
Which of the following activities is NOT considered to be "engaging in the real estate business"? - CORRECT ANSWER Building residential homes
An applicant for the real estate licensing exam in Michigan must submit which of the following along with an application? - CORRECT ANSWER appropriate fee
A non-licensed office manager performs the following activities; coordinating the flow of paperwork, preparing advertising copy, and hiring and supervising clerical support staff. Is she in violation of the license law? - CORRECT ANSWER No, she is not in violation of the license law because she is performing non-real estate activities that do not require licensure.
Which of the following is NOT a requirement for obtaining a broker's license in Michigan? - CORRECT ANSWER minimum age of 23
For what period of time will a passing score on a licensing examination be valid? - CORRECT ANSWER 1 year
Which of the following transactions requires a real estate license? - CORRECT ANSWER An entrepreneur negotiates the sales of businesses, including equipment and buildings, for a fee.
Which of the following is an applicant for a real estate license in Michigan NOT required to do? - CORRECT ANSWER Be pre-approved to join the National Association of Realtors
What penalty may an unlicensed individual who engages in activities deemed to constitute real estate business face for a first-time offense? - CORRECT ANSWER A fine not to exceed $500, imprisonment not to exceed 90 days, or both.
On what date do real estate salespersons' licenses expire in Michigan? - CORRECT ANSWER October 31st every 3 years
Which of the following is NOT a requirement to renew a salesperson's license? - CORRECT ANSWER Hold a valid Michigan driving license.
What is the deadline to renew an expired license without financial penalty? - CORRECT ANSWER There is no grace period without financial penalty after the expiration date.
Which of the following must a salesperson do BEFORE placing a "For Sale" sign on a listed property? - CORRECT ANSWER Obtain the property owner's consent
A salesperson who has failed to renew her license for 3 years. Which of the following steps is she NOT required to do in order to reinstate her license - CORRECT ANSWER Submit a written appeal to the Michigan Board of Real Estate Brokers and Salespersons petitioning for reinstatement of the expired license.
A real estate salesperson, has let his license lapse for 27 months. What must he do to renew the license at this point? - CORRECT ANSWER Complete 6 hours of approved continuing education for the licensing year and submit a new application along with the appropriate fee.
Which of the following activities may an unlicensed real estate assistant NOT perform? - CORRECT ANSWER Clarify the details of simple contract documents for prospective buyers
A broker wishes to open a branch office in a neighboring town 12 miles from the main office. Which of the following criteria does the branch office NOT have to fulfill? - CORRECT ANSWER Under the direct supervision of an associate broker.
An Indiana resident wishes to obtain a Michigan real estate broker's license. What must he do? - CORRECT ANSWER Establish a principal place of business in Michigan or be licensed under a resident Michigan broker
Which of the following MUST a licensee do if they change the address of their business location? - CORRECT ANSWER The licensee MUST give written notice to the Department.
Records of transactions, including bank accounts or deposits referred to in these regulations, shall be - CORRECT ANSWER available during usual business hours for inspection by the Department.
A seller listed his house for sale with a broker and signed a listing agreement for 5 months. 2 months later he decided the house was no longer for sale. Which of the following statements is TRUE? - CORRECT ANSWER The seller has withdrawn the broker's authority to sell the property and may be subject to a penalty.
An owner wants to list his single-family home for sale. Which of the following statements is TRUE? - CORRECT ANSWER He does not need a real estate license to sell his house on his own
Which of the following steps is required of an applicant for a real estate salesperson's license in Michigan? - CORRECT ANSWER Complete a 40 hour course in the general principles of real estate
The annual continuing education requirement in Michigan can be satisfied by which of the following? - CORRECT ANSWER 6 hours of coursework offered by an approved CE provider
Who administers over the Michigan real estate license laws? - CORRECT ANSWER Department of Licensing and Regulatory Affairs (LARA)
A broker holds a Michigan broker's license but claims Illinois as his home state. Which of the following is true? - CORRECT ANSWER He must maintain a physical office in Michigan regardless of whether or not he operates an office in Illinois and agree to "Consent to Service in Illinois".
Which one of the following circumstances would NOT warrant revocation of a broker's license in Michigan? - CORRECT ANSWER Acceptance of a commission rate above 8%
Which of the following is NOT a type of real estate license in Michigan? - CORRECT ANSWER Salesperson apprentice
A salesperson's license may be revoked in which of the following circumstances? - CORRECT ANSWER She deposits a buyer's earnest money into her personal savings account.
Which of the following is a salesperson's license NOT issued to? - CORRECT ANSWER A real estate partnership
What are the two distinct categories within an associate broker license? - CORRECT ANSWER Principal associate broker and nonprincipal associate broker
Which business card would be appropiate? - CORRECT ANSWER Roy Walters, Real Estate Salesperson, Residential Property Specialist. Sponsoring broker: Willie James
Can an associate broker hold more than 1 broker license simultaneously? - CORRECT ANSWER A principal broker MAY hold more than 1 associate broker license at a time; a nonprincipal broker may NOT hold more than 1 associate broker license at a time.
Holding a law degree or masters degree in business administration will automatically will automatically earn ____ hours of real estate education towards a broker's license. - CORRECT ANSWER 60 hours
A real estate salesperson is developing a website to promote her services. What, if anything, must she specifically include in the content of her web site? - CORRECT ANSWER Name and location of her employing broker's office and a list of states in which she is licensed
What is the state of Michigan's view of listings based on net price? - CORRECT ANSWER They are illegal in Michigan.
How are commissions regulated in Michigan? - CORRECT ANSWER Commissions are fully negotiable between brokers and clients.
When must funds received on behalf of a buyer be deposited in an escrow or trust account? - CORRECT ANSWER Within 2 banking days of receiving all signatures on the contract
A broker receives an earnest money deposit from the buyer for an offer on a house. What must the broker do with the money? - CORRECT ANSWER Deposit the money into the brokerage's existing non-interest-bearing escrow account for all such transactions.
What is accepted practice for managing an escrow account? - CORRECT ANSWER The brokerage must keep a journal detailing all account activity and a ledger detailing each transaction.
Which of the following activities may be performed by brokers and salespeople who are not lawyers? - CORRECT ANSWER Completing blanks on preprinted form contracts
. A salesperson's license applicant must have completed ____ hours of approved instruction. The course must consist of instruction in fundamentals of real estate, including ____ hours of civil rights law and equal opportunity in housing. - CORRECT ANSWER 40 hours, 4 hours
In Michigan, which of the following need NOT be included in a listing contract? - CORRECT ANSWER Disclosure of any known material defects
How much previous experience is required before someone can apply for a broker's license and salesperson's license? - CORRECT ANSWER Broker's - 3 years; salesperson's - none
Within what period of time must a housing discrimination charge be filed with the Michigan Civil Rights Commission? - CORRECT ANSWER 180 days
With which agency or individual may a person file a complaint regarding fair housing practices? - CORRECT ANSWER With HUD or the Michigan Civil Rights Commission
What is the legal view of a clause added to preprinted contracts in Michigan? - CORRECT ANSWER As long as the language does not directly involve the conveyance of title to real property, the real estate broker may add a requested clause
From whom may a Michigan real estate salesperson collect compensation? - CORRECT ANSWER Only from the employing broker
When may a salesperson be licensed under more than 1 broker simultaneously? - CORRECT ANSWER never
Gail has decided to leave her employing broker and work for a new employing broker in a larger brokerage. Which of the following steps must she take to notify the board? - CORRECT ANSWER Nothing; it is the current broker's responsibility.
A sole proprietor's license has been suspended for 2 years due to mismanagement of client records. How will his associated brokers and affiliated salespeople be impacted by his suspension? - CORRECT ANSWER Their licenses are suspended until they find new employing brokers.
An associate broke, received a thank-you note and generous bonus check from a client whose house she had sold. May she cash the check? - CORRECT ANSWER No, she may not accept the money if it comes from any party other than her employing broker.
What information must a broker supply to be eligible for a license for a branch office in a town 90 miles away from the home office? - CORRECT ANSWER The name of a broker associate who will act as branch manager.
Which of the following is NOT required at the time of submitting a formal application for a salespersons license? - CORRECT ANSWER Information from an employing broker
A broker has 3 different trust accounts when a colleague tells him that he is only allowed 1 under Michigan real estate law. Which is TRUE? - CORRECT ANSWER A broker can maintain more than 1 trust account.
What stipulation governs the inspection of records and escrow accounts in real estate offices? - CORRECT ANSWER The records will be opened to a state designee during the office's normal business hours.
Can a broker place his own money into a trust fund account? - CORRECT ANSWER Yes, providing it is not over $500 of his own money
All trust fund records must be kept for at least ____ years from the date of transaction. - CORRECT ANSWER 3 years
The owner and occupant of a condominium has just signed a contract with a buyer. Under which circumstances does the buyer have the right to cancel the signed contract? - CORRECT ANSWER The contract may not be canceled in this situation
Of the following scenarios, which would NOT result in licensing proceedings against a salesperson? - CORRECT ANSWER A licensee fails to submit an offer to a seller who is already under contract.
A broker receives trust fund monies made payable to a third party title insurance company. What MUST he do with this money? - CORRECT ANSWER The broker MUST pay the funds over to the third party within 2 banking days after the broker has received notice of the acceptance of the purchase agreement by all parties.
Which of the following is TRUE of a broker's commission in a real estate sales transaction? - CORRECT ANSWER The commission, which is negotiable between broker and seller, must be stipulated in the listing agreement.
Which of the following do the Department of Licensing and Regulatory Affairs and the Michigan Board of Real Estate Brokers and Salespersons NOT have the power to do? - CORRECT ANSWER Sentence a violating licensee to prison.
The department receive a letter from a consumer who feels they were misled by a salesperson in a real estate transaction. Which of the following is TRUE? - CORRECT ANSWER The Department will investigate ALL complaints that allege a violation of the licensing code or administrative rules.
Which of the following legal agreements need NOT be set forth in writing? - CORRECT ANSWER Multiple listing
Which of the following is NOT a protected class under Michigan fair housing law? - CORRECT ANSWER Sexual preference
What ceiling is specified for interest rates on properties financed by sellers? - CORRECT ANSWER 11%
Does Michigan Law require a landlord to allow a visually impaired girl with a guide dog to reside in an apartment complex with a "no pets" policy? - CORRECT ANSWER Yes, Michigan law prohibits a landlord from refusing to rent the apartment to a visually impaired person on the basis of a no pets policy
The person ultimately responsible for preparing documents for a closing would be which of the following individuals? - CORRECT ANSWER the listing broker
whose responsible for filing a 1099 - CORRECT ANSWER the listing agent
Which of the following actions does not lie within the realm of responsibility of a broker preparing for a closing? - CORRECT ANSWER Completion of required title searches
What constitutes a "tract " under the Land Division Act? - CORRECT ANSWER 2 or more parcels with a common property line and under the same ownership.
What is the allowable depth-to-width ratio for a created parcel of land smaller than ten acres? - CORRECT ANSWER The depth may not exceed 4 times the width, with certain exceptions.
The Department deposits $15 of each license fee received during its license cycle into the real estate enforcement fund. What is this money used for? - CORRECT ANSWER The Department will use the money for enforcing code and reimbursing expenses in regards to unlicensed real estate activities.
Ben owned a ranch on which valuable minerals were discovered in 1976. Subsequently, he has sold the property but retains ownership of the mineral rights. Which of the following is true? - CORRECT ANSWER Ben must record his ownership of mineral rights every 20 years
By when must all condominium documents be delivered to the purchaser in a new construction condominium sale? - CORRECT ANSWER Prior to the contract becoming binding
Which of the following is NOT required of a Michigan broker who promotes the sale of land located in another state? - CORRECT ANSWER Holding a real estate license for the other state as well as Michigan.
What is the principal method of describing property in Michigan? - CORRECT ANSWER metes and bounds
Trust accounts must be held in WHICH type of bank account? - CORRECT ANSWER Non-interest-bearing demand accounts only.
What type of activity performed without a permit in a designated wetlands area would violate Michigan's Wetland Protection Act? - CORRECT ANSWER Installing an in-ground swimming pool
Which of the following is NOT grounds to file a complaint against a licensee with the Department? - CORRECT ANSWER Allowing a license to lapse when not practicing real estate.
Which of the following pieces of information would also be required in this telephone directory listing, "Mr. James Lowe, Real Estate Salesperson, Residential Property My Specialty" ? - CORRECT ANSWER The name of his employing broker
Which of the following is an obligation of a broker or licensed salesperson upon obtaining a listing? - CORRECT ANSWER To give the person(s) signing the listing a copy of what they have signed
The Department have held an investigation and found a licensee to have committed a violation. Which of the following can the Department or Attorney General NOT do? - CORRECT ANSWER Initiate criminal proceedings against the licensee.
The Simsons hope to acquire an easement on their neighbor's property. Their neighbor's property has a woods that borders a public lake on which they frequently sail in warm weather. The Simsons have been hauling their boat through their neighbor's woods for 5 years; how much longer must they continue this pattern of use in order to obtain an easement? - CORRECT ANSWER 10
Having received a formal complaint against them from the Department, which of the following is a licensee NOT required to do within 15 days to prevent the Department from proceeding to a hearing? - CORRECT ANSWER turn in their licenses
What is the minimum age at which an individual may enter a legally enforceable contract? - CORRECT ANSWER 18
A college student found the perfect apartment just at the edge of campus. She has 2 years until graduation and asked the landlord to give her a lease for the full 2-year period in exchange for a small discount on rent. What type of lease may the landlord record for her extended lease term? - CORRECT ANSWER A notice of lease
A sales contract requires a termite inspection certificate and the buyer asks the salesperson to order one. The salesperson orders an inspection, knowing the pest control company will pay him a referral fee. Is this a violation? - CORRECT ANSWER Yes, because a salesperson may not receive a brokerage-related fee from anyone other than his employing broke
A tenant skipped out before paying July's rent on a lease that expired at the end of July. Which of the following actions may the landlord take? - CORRECT ANSWER The landlord may keep a portion of the security deposit to cover the rent owed.
A tenant has been evicted from her apartment for continual violations of the apartment's "no pets" rule and her pet is not a service animal. If she does not remove her belongings, under summary process, what course of action is available to the landlord? - CORRECT ANSWER The landlord may summon the sheriff to place the belongings on the street.
The Department deposits $15 of each license fee received during its license cycle into the real estate education fund. What is this money used for? - CORRECT ANSWER The Department will use the money for educational programs for licensees and license applicants.
A tenant has established a year-to-year tenancy with his landlord over the past 5 years. Now, the landlord wishes to terminate the year-to-year tenancy and convert the apartments into a new form. What notice is the landlord required to provide the tenant? - CORRECT ANSWER The number of days equivalent to the basis on which rent is paid
Maxim Apartments charges $450 monthly rent for each of their studio units. What is the maximum amount that the landlord may require for a security deposit according to the Michigan Security Deposit Act? - CORRECT ANSWER 675 [Show Less]