Michigan Real Estate Salesperson Exam — All Questions
10 questions
In Michigan, a common method of financing in which the seller retains legal title while the buyer takes possession and pays in installments is called a:
- a.Reverse mortgage
- b.Wraparound appraisal
- c.Sale-leaseback
- d.Land contract✓
Land contracts (installment sales) are a traditional Michigan seller-financing tool: the buyer takes possession and pays over time while the seller keeps legal title until the contract is paid in full.
When a Michigan brokerage holds a buyer's earnest money deposit pending closing, those funds must be kept in:
- a.The listing salesperson's account
- b.The broker's personal savings account
- c.A separate broker trust or escrow account✓
- d.The seller's account immediately
Client deposits must be held in a separate broker trust/escrow account, not mixed with the broker's or salesperson's personal funds. This protects the funds and prevents commingling.
Which Michigan transfer is exempt from the Seller Disclosure Act?
- a.A sale of a rented duplex to an investor
- b.A transfer from a parent to a child✓
- c.A sale of a lakefront cottage held in joint names
- d.A sale by an owner who occupied the home for a decade
Section 3 exempts transfers made to a spouse, parent, grandparent, child or grandchild, alongside court-ordered transfers, foreclosure sales, transfers between co-tenants and transfers to or from a governmental entity. Cite: MCL 565.953(f), 1993 PA 92, eff. Jan. 10, 1994.
At what rate is the Michigan state real estate transfer tax levied?
- a.$0.55 for each $500.00 of value
- b.$1.10 for each $1,000.00 of value
- c.$2.20 for each $500.00 of value
- d.$3.75 for each $500.00 of value✓
Since January 1, 1995 the state tax has been levied at $3.75 for each $500.00, or fraction of $500.00, of the total value of the property transferred. Cite: MCL 207.525(1), State Real Estate Transfer Tax Act, 1993 PA 330, as amended by 1994 PA 224, eff. July 5, 1994.
Who is liable for the Michigan state real estate transfer tax, and when is it due?
- a.The seller, within 15 days after delivery of the instrument✓
- b.The buyer, within 15 days after delivery of the instrument
- c.The seller, within 45 days after the closing date
- d.The buyer and seller equally, at the time of recording
The person who is the seller or grantor is liable for the tax, and it must be paid to the county treasurer where the property is located not later than 15 days after the instrument effecting the conveyance is delivered. Cite: MCL 207.523(2) and (3), as amended by 2015 PA 217, imd. eff. Dec. 15, 2015.
In addition to the state tax, what county real estate transfer tax applies in a Michigan county of fewer than 2,000,000 people?
- a.No county tax is levied in those counties
- b.25 cents for each $500.00 of total value
- c.55 cents for each $500.00 of total value✓
- d.75 cents for each $500.00 of total value
The county tax is 55 cents for each $500.00 or fraction of the total value in a county with a population under 2,000,000; only a county of 2,000,000 or more may authorise up to 75 cents. Cite: MCL 207.504, 1966 PA 134, as amended by 1980 PA 413, eff. Mar. 31, 1981.
Michigan buyers and sellers sign a land contract under which title passes only when the price is fully paid. How does the state transfer tax treat that instrument?
- a.Tax is due on the full contract price at signing
- b.The land contract itself is exempt from the tax✓
- c.Tax is due on each installment as it is paid
- d.Tax is due only if the contract is not recorded
A land contract in which legal title does not pass to the grantee until the total consideration specified in the contract has been paid is expressly exempt from the state transfer tax; the taxable event comes with the later conveyance. Cite: MCL 207.526(o), as amended by 2018 PA 172, imd. eff. June 11, 2018.
A Michigan land contract vendee falls behind. After the vendor serves a written notice of forfeiture, how long does the vendee have to pay up or cure, absent a longer agreed period?
- a.3 days after service of the notice
- b.7 days after service of the notice
- c.10 days after service of the notice
- d.15 days after service of the notice✓
Unless the parties have agreed in writing to a longer time, a person served with a notice of forfeiture has 15 days to pay the money due and cure other material breaches or deliver possession, and the notice must declare the forfeiture effective in that period. Cite: MCL 600.5728, added by 1972 PA 120, eff. July 1, 1972.
A Michigan court enters a judgment for possession on a forfeited land contract where the buyer had paid 30% of the price. When may the writ of restitution issue?
- a.After 90 days from entry of the judgment✓
- b.After 10 days from entry of the judgment
- c.After 6 months from entry of the judgment
- d.Immediately, because the contract was forfeited
Where judgment for possession rests on forfeiture of an executory purchase contract, the writ may not issue for 90 days if less than 50% of the purchase price has been paid, or for 6 months if 50% or more has been paid. Cite: MCL 600.5744(4), as amended by 2019 PA 2, eff. July 2, 2019.
Michigan's Elliott-Larsen Civil Rights Act bars a broker from refusing to negotiate on a basis the federal Fair Housing Act does not list. Which basis is that?
- a.Religion of the prospective buyer
- b.National origin of the prospective buyer
- c.Marital status of the prospective buyer✓
- d.Familial status of the prospective buyer
Section 502 forbids discrimination in real estate transactions on the basis of religion, race, colour, national origin, age, sex, sexual orientation, gender identity or expression, familial status or marital status. Age and marital status go beyond the federal list. Cite: MCL 37.2502(1), Elliott-Larsen Civil Rights Act, as amended by 2023 PA 6, eff. Feb. 13, 2024 and 2024 PA 180, eff. Apr. 2, 2025.