Michigan Real Estate Salesperson Exam — All Questions

Under Michigan law, before a licensee discloses confidential information in a prospective transaction, the licensee must provide the consumer with:

• a.A title insurance policy issued for the property
• b.A written appraisal prepared by a state appraiser
• c.An agency statement describing the representation✓
• d.A fully executed and delivered purchase agreement

Michigan requires licensees to disclose the nature of their agency relationship using an agency disclosure statement before disclosing confidential information, so consumers understand whom the licensee represents.

A Michigan seller of a single-family home (1 to 4 units) generally must give the buyer which document about the property's known condition?

• a.A signed waiver of the buyer's appraisal rights
• b.A Seller Disclosure Statement under Michigan law✓
• c.A federal HUD-1 settlement statement at listing
• d.A zoning variance issued by the local authority

The Michigan Seller Disclosure Act requires sellers of residential property of 1 to 4 units to deliver a Seller Disclosure Statement describing the known condition of the property. It is a disclosure of known facts, not a warranty.

A Michigan broker and a seller sign a listing but no designated agency agreement. Who is the seller's agent?

• a.Only the salesperson who took the listing
• b.The broker and all its affiliated licensees✓
• c.Only the broker, personally and individually
• d.Whichever licensee first shows the property

In the absence of a written designated agency agreement, the client is considered to have an agency relationship with the broker and all affiliated licensees. A designated agency agreement is what narrows the relationship to a named licensee. Cite: MCL 339.2517(6), as amended by 2008 PA 91, eff. July 1, 2008.

Two designated agents at the same Michigan brokerage represent the buyer and the seller in one transaction. What is the result?

• a.Each designated agent becomes a disclosed dual agent
• b.The transaction must be referred out to another firm
• c.Neither the agents nor the broker owe dual agency duties
• d.The broker and supervisory brokers become dual agents✓

Two designated agents who are affiliated licensees may each represent a different party and are not dual agents, but the broker and all supervisory brokers are then considered disclosed consensual dual agents, and the clients must be notified before an offer is made or presented. Cite: MCL 339.2517(7) and (8), as amended by 2008 PA 91, eff. July 1, 2008.

Which duty owed by a Michigan licensee under a service provision agreement can never be waived by a limited service agreement?

• a.Loyalty to the interest of the client✓
• b.Presenting offers and counteroffers
• c.Negotiating and communicating offers
• d.Assistance after the purchase agreement is signed

Only the three services in section 2512d(3)(b), (c) and (d) may be waived in a limited service agreement. The duties in subsection (2), including loyalty, reasonable care, confidentiality and accounting, are not waivable. Cite: MCL 339.2512d(2) and (5), added by 2008 PA 90 and amended by 2016 PA 502, eff. Mar. 29, 2017.

At the time a purchaser executes an offer, what must a Michigan licensee acting under a service provision agreement recommend?

• a.A structural inspection by a licensed engineer
• b.A survey certified to the date of the closing
• c.A fee title policy in the amount of the price✓
• d.A home warranty contract paid for by the seller

Among the minimum services, at the time an offer to purchase is executed the licensee must recommend that the purchaser require the seller to provide a fee title policy in the amount of the purchase price, issued or certified to the approximate date of closing. Cite: MCL 339.2512d(3)(b), as amended by 2016 PA 502, eff. Mar. 29, 2017.

A Michigan seller under a limited service agreement asks the listing broker to market the house as "for sale by owner" so buyers will negotiate directly. The broker may:

• a.Do so, because the service was waived
• b.Not do so; that advertising is prohibited by statute✓
• c.Do so if the commission is reduced accordingly
• d.Do so with written consent from both parties

A broker or salesperson representing a seller under a service provision agreement may not advertise the property to the public as "for sale by owner" or otherwise mislead the public into believing the seller is unrepresented. Waiving services does not authorise that advertising. Cite: MCL 339.2512d(4), as amended by 2016 PA 502, eff. Mar. 29, 2017.

Michigan's agency statute defines a transaction coordinator as a licensee who:

• a.Represents the seller only after the closing date
• b.Works exclusively for the title insurance company
• c.Represents both parties with their written consent
• d.Is the agent of neither the buyer nor the seller✓

A transaction coordinator is defined as a licensee who is not acting as the agent of either the buyer or the seller, and Article 25 does not prevent a licensee from acting in that role on proper notice to all parties. Cite: MCL 339.2517(11)(k) and 339.2517(5), as amended by 2008 PA 91, eff. July 1, 2008.

In a Michigan sale, when must the Seller Disclosure Statement be delivered to the prospective buyer?

• a.Before the seller executes a binding purchase agreement✓
• b.Within 7 days after the offer is accepted
• c.At the closing, with the other transfer documents
• d.Only when the buyer asks to see it in writing

For a sale, the written statement must reach the prospective transferee before the transferor executes a binding purchase agreement; for an installment sales contract or lease with option, before the transferor executes that contract. Cite: MCL 565.954(1), Seller Disclosure Act, 1993 PA 92, eff. Jan. 10, 1994.

A Michigan buyer signs a purchase agreement and is handed the Seller Disclosure Statement in person the next day. How long does she have to terminate?

• a.24 hours after delivery of the statement
• b.48 hours after delivery of the statement
• c.72 hours after delivery of the statement✓
• d.10 days after delivery of the statement

If a disclosure or amendment is delivered after the seller executes a binding purchase agreement, the buyer may terminate by written notice within 72 hours of personal delivery, or within 120 hours if the statement was delivered by registered mail. Cite: MCL 565.954(3), 1993 PA 92, eff. Jan. 10, 1994.