Contractual Relationships and Michigan Agency
Five of the 40 items. Michigan's agency vocabulary is statutory and precise: the current term for a listing or buyer agency agreement is a service provision agreement, and designated agency is the alternative to dual agency, not a form of it.
Agency Relationships Available in Michigan
MCL 339.2517(1) requires a licensee to disclose every type of agency relationship available and the duties each creates BEFORE the potential buyer or seller discloses confidential information. The disclosure is written, goes to the client, and substantially conforms to the statutory form in MCL 339.2517(3), which offers six statuses: seller's agent, seller's agent under a limited service agreement, buyer's agent, buyer's agent under a limited service agreement, dual agent, and none of the above. A transaction coordinator is a licensee who is not acting as the agent of either party (MCL 339.2517(11)(k)) and may act on proper notice to all parties (MCL 339.2517(5)). A dual agent represents both sides, permitted only with the knowledge and informed consent, in writing, of both. Failing to give the agency disclosure is a disciplinable act (MCL 339.2512(1)(b)).
Designated Agency
A broker and a client may enter a written designated agency agreement naming an individual salesperson or associate broker as the client's legal agent; in the absence of one, the client has an agency relationship with the broker and all affiliated licensees (MCL 339.2517(6)). The agreement must name every associate broker authorized to act as a supervisory broker. Where two designated agents who are affiliated licensees represent different parties in the same transaction, MCL 339.2517(8) says they "shall not be considered dual agents" — but MCL 339.2517(7) makes the broker and all supervisory brokers disclosed consensual dual agents for that transaction, and requires the designated agents to notify their clients that their broker represents both sides before an offer to purchase is made or presented. A designated agent's knowledge of confidential information is not imputed to affiliated licensees who do not represent that client, and may be shared only with a supervisory broker, for the client's benefit (MCL 339.2517(8)-(9)). A listing or buyer's agency agreement may be amended in writing at any time to create designated agency or change supervisory brokers (MCL 339.2517(10)).
Broker and Salesperson Relationships
A salesperson or associate broker acts for and in the name of the employing broker and may be compensated only by that broker (MCL 339.2510(1)). An independent contractor relationship requires a written agreement and at least 75% of annual compensation from sales commissions (MCL 339.2501(h)) — and it does not relieve the broker of the duty to supervise regulated acts (MCL 339.2501(g)). MCL 339.2512f(1) defines supervision as regular direct communication, review of the salesperson's practice and reports, analysis and guidance of performance, and written operating policies and procedures; MCL 339.2512f(2) forbids any contract that limits that authority. Commissions earned while employed by a broker may still be paid to the licensee after she leaves or even after she is no longer licensed (MCL 339.2510(2)).
Service Provision Agreements
A service provision agreement is a buyer agency agreement or listing agreement that establishes an agency relationship (MCL 339.2501(x)). The licensee must complete it fully before the parties sign and give them a true executed copy at signing; it must contain a definite expiration date and must not require the client to give notice of an intention to cancel on or after that date (R 339.22131). A licensee may not become a party to a NET service provision agreement as a means of securing a commission (R 339.22135). MCL 339.2512d(2) sets the minimum duties owed — reasonable care and skill, performance of the agreement, loyalty, legal compliance, referral to other professionals, timely accounting, confidentiality — and MCL 339.2512d(3) the minimum services. Only the services in subdivisions (b), (c) and (d) may be waived, and only by a written limited service agreement in the statutory form (MCL 339.2512d(5); MCL 339.2517(4)). A right-to-list home sale agreement is expressly NOT a service provision agreement (MCL 339.2501(w)) and is governed by MCL 339.2512g.
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State-specific details
State exam facts
- State regulator
- Michigan Dept. of Licensing and Regulatory Affairs (LARA)
- Exam vendor
- PSI
- Prelicensing education
- 90 hours of approved broker prelicensure education (in addition to the salesperson's 40)
- Passing score
- 75% (raw score of 90)
- Scored questions
- 115
- Time limit
- 210 minutes
Who regulates real estate brokers in Michigan?
The Michigan Department of Licensing and Regulatory Affairs (LARA), through the Board of Real Estate Brokers and Salespersons, licenses brokers under Article 25 of the Occupational Code (MCL 339.2501 to 339.2518). LARA contracts with PSI to administer the licensing exam. The current administrative rules are R 339.22101 to R 339.22165, effective June 4, 2025; the older rule numbers from R 339.22201 onward have all been rescinded.
What experience do I need before the Michigan broker exam?
MCL 339.2505(7) requires the equivalent of three years of full-time experience in the business of real estate — which is a credit schedule, not a calendar. A licensed salesperson earns one year of credit for each 12-month period in which she closed five or more real estate transactions, so holding a license without closing anything earns no credit. The statute also credits builders, investors (capped at one year), attorneys, licensed appraisers and full-time real estate finance or conveyancing work, and R 339.22115 adds credit for out-of-state licensees and for managing at least 10 Michigan units for three or more years. On top of that, brokers complete 90 clock hours of approved prelicensure classroom courses, at least 9 of them on civil rights and fair housing law, within the 36 months before applying unless they held an active salesperson license through that period.
How is the Michigan broker exam structured?
PSI delivers one integrated exam of 115 scored questions worth 120 points in 210 minutes; passing is 75%, a raw score of 90. There is no separate Michigan state portion — PSI bulletin 837 never uses the phrase — so 40 of the scored items are Michigan law and rules and the other 75 are the percentage-weighted national block. The 40 Michigan items are published as 3 on the duties and powers of the Department and the Board, 4 on licensing requirements, 15 on the statutes governing licensee activities, 5 on contractual relationships, and 13 on additional state topics. (Salespersons sit the same 115 questions for 180 minutes at 70%, a raw score of 80.) Older mirrored copies of the Michigan bulletin from 2016-2017 say 120 questions and only 6 additional-state-topic items; those are out of date.
How much continuing education does a Michigan license need?
Eighteen clock hours per license cycle — and, since 2023 PA 246 took effect on February 13, 2024, at least 2 hours of law, rules and court cases plus at least 1 hour of fair housing in every year of the cycle, with the remaining 9 hours completable at any point. Evidence must be kept for at least four years (MCL 339.2504a; R 339.22161).
Sources: https://test-takers.psiexams.com/api/content/bulletin/837, https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-339-2505, https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-339-2504a, https://ars.apps.lara.state.mi.us/AdminCode/DownloadAdminCodeFile?FileName=R%20339.22101%20to%20R%20339.22667.pdf
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