Michigan Real Estate Salesperson Exam — All Questions

Which of the following is an essential element required for a real estate contract to be valid?

• a.Mutual assent (offer and acceptance) between competent parties✓
• b.A licensed attorney's signature
• c.A notary seal on every page
• d.Payment of the full purchase price at signing

A valid contract requires competent parties, mutual assent (offer and acceptance), consideration, a lawful object, and (for real estate) a writing under the statute of frauds. Attorney signatures, notarization of every page, and full payment at signing are not required.

A buyer signs a purchase agreement and deposits earnest money, then backs out without a valid contingency. What is the most likely consequence?

• a.The buyer automatically receives triple damages
• b.The seller must still convey the property for free
• c.The listing broker keeps the entire deposit personally
• d.The seller may be entitled to the earnest money as damages under the contract✓

Earnest money shows the buyer's good faith. If the buyer defaults without a contractual escape, the seller may be entitled to retain the deposit as liquidated damages, subject to the contract's terms. The broker does not personally keep escrowed funds.