Michigan Real Estate Salesperson Exam — All Questions

Michigan real estate licensing is governed by Article 25 of the Occupational Code and administered by which agency?

• a.The Michigan Department of Treasury
• b.The Michigan Association of Realtors
• c.The Federal Real Estate Commission
• d.The Department of Licensing and Regulatory Affairs (LARA)✓

Michigan real estate salespersons and brokers are licensed under Article 25 of the Occupational Code (P.A. 299 of 1980), administered by the Department of Licensing and Regulatory Affairs (LARA). A private trade association such as the Realtors does not license practitioners.

In Michigan, a licensed real estate salesperson may lawfully receive compensation for a completed transaction from:

• a.Any party to the transaction directly
• b.The buyer in cash at closing
• c.Another salesperson at a different brokerage
• d.Only the employing broker with whom the salesperson is associated✓

A Michigan salesperson must be associated with a licensed broker and may accept compensation only through that employing broker, not directly from buyers, sellers, or other licensees. This keeps the broker responsible for supervision.

How many clock hours of continuing education must a Michigan licensee complete in each licence cycle?

• a.Twelve clock hours in each three-year cycle
• b.Twenty-four clock hours in a three-year cycle
• c.Thirty clock hours in each three-year cycle
• d.Eighteen clock hours in a three-year cycle✓

Within each 3-year cycle a licensee must complete at least 18 clock hours of continuing education on subjects relevant to the management, operation and practice of real estate. Cite: LARA, Continuing Education Requirements for Renewal.

Within Michigan's 18-hour continuing education requirement, what must be completed in each calendar year?

• a.At least two hours on law, rules and court cases✓
• b.At least six hours on an approved real estate topic
• c.At least three hours on fair housing and civil rights
• d.At least one hour on brokerage trust accounting rules

At least 2 of the CE hours must be completed in EACH calendar year of the cycle and must involve law, rules, and court cases regarding real estate. A licensee who takes all 18 hours in one year still fails this requirement. Cite: LARA, Continuing Education Requirements for Renewal.

A Michigan licensee completes all 18 continuing education hours in the final year of the three-year cycle. Is the requirement met?

• a.Yes, only the eighteen-hour total is tested
• b.Yes, provided the courses were all preapproved
• c.No, two law hours are due in each calendar year✓
• d.No, at least six hours are due in each year

The 18-hour total is not the whole rule: at least 2 hours involving law, rules and court cases must fall in each calendar year of the cycle. Cramming the total into one year leaves the other two years short. Cite: LARA, Continuing Education Requirements for Renewal.

Since January 1, 2015, how does Michigan treat approval and reporting of continuing education courses?

• a.Courses need preapproval and must be reported after
• b.Courses need neither preapproval nor any reporting✓
• c.Courses need preapproval but no later reporting
• d.Courses need reporting but no prior approval

The law changed on January 1, 2015 so that CE courses no longer need to be preapproved or reported to the Department as a condition of renewal. The obligation shifted to the licensee to keep proof. Cite: LARA, Continuing Education Requirements for Renewal.

How long must a Michigan licensee retain evidence of completed continuing education?

• a.One year after the certification date
• b.Two years after the certification date
• c.Three years after the certification date
• d.Four years after the certification date✓

A licensee must retain evidence acceptable to the Department for at least 4 years after the date of that certification and must produce it at the Department's request. Cite: LARA, Continuing Education Requirements for Renewal.

Who keeps the authoritative record of a Michigan licensee's continuing education completed after 2014?

• a.The licensee, who must produce it if audited later✓
• b.The Department, which tracks every reported hour
• c.The sponsoring broker, within the office records
• d.The course provider, for a period of ten years

The Department does not maintain this information for post-2014 courses and instructs licensees not to call and ask. Documenting fulfilment is the licensee's responsibility, and proof is sent in only on audit. Cite: LARA, Continuing Education Requirements for Renewal.

How much of a Michigan broker's own money may be kept in each custodial trust or escrow account to cover bank charges and minimum balances?

• a.No money of the broker may ever be deposited
• b.Up to $500.00 in each separate trust account
• c.Not more than $2,000.00 in each trust account✓
• d.Up to one month of the office operating budget

A Michigan real estate broker may maintain more than one trust account and may deposit not more than $2,000.00 of its own money in each one to cover bank service charges and minimum balance requirements or to keep the account from closing. That money must still be accounted for in the trust records. Cite: MCL 339.2512(1)(k)(iv), Occupational Code art 25, as amended by 2024 PA 122, imd. eff. July 25, 2024.

A Michigan broker receives notice that all parties have accepted an offer to purchase. By when must the earnest money made payable to the broker be deposited in the trust account?

• a.Not later than 2 banking days after that notice✓
• b.Not later than 10 calendar days after that notice
• c.Not later than 5 business days after that notice
• d.Any time before the scheduled date of the closing

Money belonging to others and made payable to the broker must go into a separate custodial trust or escrow account not later than 2 banking days after the broker receives notice that an offer to purchase is accepted by all parties, and stays there until the transaction is consummated or terminated. Cite: MCL 339.2512(1)(k)(v), as amended by 2024 PA 122, imd. eff. July 25, 2024.

A complaint seeking a penalty against a Michigan licensee for prohibited conduct in a real estate transaction must be filed no later than:

• a.6 months after the date of the alleged violation
• b.12 months after the closing of the transaction
• c.3 years after the end of the licence cycle
• d.18 months after the violation or the closing✓

A complaint that seeks a penalty under article 5 for a violation of section 2512 must be filed not later than 18 months after the date of the alleged violation or, if the violation occurred in connection with a real estate transaction, the date that transaction was completed, whichever occurs later. Cite: MCL 339.2512(2), as amended by 2024 PA 122, imd. eff. July 25, 2024.

A Michigan salesperson gives her broker written notice that she is leaving the firm. What must the broker do with her licence?

• a.Hold it until the salesperson's renewal date
• b.Deliver or mail it to the department within 5 days✓
• c.Return it directly to the salesperson at once
• d.Destroy it and notify the new employing broker

When a salesperson is discharged or gives written notice of termination, the broker must deliver or mail the salesperson's licence to the department within 5 days, and must separately notify the salesperson in writing that the licence has been sent. Cite: MCL 339.2507(1) and (2), Occupational Code art 25, as amended by 2016 PA 502, eff. Mar. 29, 2017.

A Michigan salesperson has filed a completed application to transfer his licence to a new broker. For how long does his pocket card serve as proper evidence of licensing?

• a.Until the new wall licence actually arrives
• b.For 10 days from the date of the application
• c.For 45 days from the latest date on the back of the card✓
• d.For the remainder of the three-year licence cycle

Once the department receives a completed transfer application and the fees, the pocket card is proper evidence of licensing for 45 days from the latest date written on the back of the card. If the application is incomplete or the new broker is not licensed, the card stops being valid immediately. Cite: MCL 339.2506(5), as amended by 2016 PA 502, eff. Mar. 29, 2017.

Under Michigan's Occupational Code, a broker may pay a fee to an unlicensed person for which of the following?

• a.Buying a commercially prepared list of names✓
• b.A referral of a named ready buyer
• c.The name of a neighbour thinking of selling
• d.Information identifying a likely seller

Section 2512(1)(h) forbids paying any valuable consideration to an unlicensed person, and expressly includes paying for the name of, or other information about, a potential seller or purchaser. It excludes only payment for the purchase of a commercially prepared list of names. Cite: MCL 339.2512(1)(h), as amended by 2024 PA 122, imd. eff. July 25, 2024.

A Michigan brokerage wants to run a prize drawing among visitors to a specific listed house. Is that permitted?

• a.Yes, if the drawing is registered with the department
• b.Yes, if every entrant is told the odds of winning
• c.Yes, if the prize is worth less than $500.00
• d.No, such a scheme cannot promote a specific property✓

A plan or scheme involving a lottery, contest, game, prize or drawing may not be used by a Michigan broker or salesperson to sell or promote the sale of real estate. A game promotion complying with MCL 750.372a may be used only for purposes other than the direct promotion of a specific piece of real estate. Cite: MCL 339.2511, as amended by 2010 PA 48, imd. eff. Apr. 22, 2010.

A Michigan salesperson is selling a rental house she owns herself. What does Article 25 require of her?

• a.Nothing, because she is selling her own property
• b.Written disclosure of ownership and her licence✓
• c.An oral statement made at the open house showing
• d.Placing the listing with a disinterested brokerage

A licensee selling property she owns or has an interest in must reveal both the ownership or interest and her licensure to the purchaser in writing before an offer to purchase is signed, and must be able to show the department written proof of that disclosure on request. Cite: MCL 339.2502b(3), added by 2016 PA 502, eff. Mar. 29, 2017.

A Michigan salesperson's name appears in a newspaper advertisement for a listing. What does the law require about the employing broker's business name?

• a.It may be omitted if the broker consents
• b.It must appear somewhere in the same publication
• c.It must appear in equal or greater type size✓
• d.It must appear only in the brokerage office window

Advertising published on or after January 1, 2018 that names an associate broker, a salesperson, or a cooperating group must carry the employing broker's telephone number or street address and the broker's business name in equal or greater type size than the name of the licensee or group. Cite: MCL 339.2512e(3), added by 2016 PA 502, eff. Mar. 29, 2017.

Under Michigan's 2024 amendments, a right-to-list home sale agreement is void and unenforceable if it runs for a period of more than:

• a.2 years✓
• b.5 years
• c.10 years
• d.40 years

A right-to-list home sale agreement is void and unenforceable if it is not in writing, is not signed by every owner, runs for more than 2 years, or lacks the required early termination option and first-page explanation. Cite: MCL 339.2512g(1)(c), added by 2024 PA 122, imd. eff. July 25, 2024.