Michigan State-Specific Chapter

State-portion supplement to the national real-estate manuscript. This chapter covers only the law and practice that are unique to Michigan. Study it together with the national chapters on agency, contracts, financing, valuation, and math.

How to use this chapter (please read first). Real-estate license law is a YMYL (Your Money or Your Life) subject: getting a rule wrong can cost a consumer money or cost you your license. Every rule below is tied to its governing authority so you can verify it. Numbers change — education hours, continuing-education (CE) hours, fees, renewal dates, and tax rates are all set by statute, rule, or administrative schedule and are periodically amended. So read the two kinds of figure below differently. A figure that carries a dated citation — for example (MCL 339.2504(2); checked 2026-09-05) — was read from that named source on that date. A figure that still carries a bracketed verify-current flag was not confirmed from a primary source and must be checked with the Michigan Department of Licensing and Regulatory Affairs (LARA) and the Michigan Board of Real Estate Brokers and Salespersons before you rely on it in real life or on exam day. Either way, when this book and an official source disagree, the official source wins.

1. Who regulates real estate in Michigan

Real-estate licensing in Michigan is administered by the Department of Licensing and Regulatory Affairs (LARA). Within LARA, real-estate licensing and enforcement run through the Bureau of Professional Licensing (BPL) (LARA, "Michigan Real Estate Salesperson Licensing Guide," rev. 1/26/2026 — masthead and renewal sections; checked 2026-09-05).

Policy and disciplinary judgment for the profession rest with the Michigan Board of Real Estate Brokers and Salespersons (referred to in this chapter as "the Board"). The Board is a state licensing board composed of licensed brokers/salespersons and public members. It promulgates administrative rules, sets educational and examination standards within the limits of the statute, and acts on disciplinary matters. LARA provides the administrative and investigative machinery; the Board provides professional oversight.

The governing statute is the Occupational Code, Public Act 299 of 1980, and real-estate brokers and salespersons are regulated under Article 25 of that Code (roughly MCL 339.2501 and following). Article 25 defines who must be licensed, the conduct standards, the agency-disclosure duties, and the grounds for discipline. General provisions that apply to all occupations licensed under the Code — investigations, hearings, penalties, license renewal mechanics — live in the earlier articles of PA 299 of 1980 (for example, the penalty and sanction provisions around MCL 339.601 and MCL 339.602). When a Michigan exam question asks "under what authority," the answer is almost always the Occupational Code (PA 299 of 1980), Article 25, as implemented by the Board's administrative rules.

Key takeaway: LARA = the department that issues and enforces licenses. The Board = the professional board that sets standards and disciplines. The Occupational Code, Article 25 = the law itself.

2. License types and the requirement to be licensed

Michigan issues two principal real-estate licenses under Article 25:

• Real Estate Salesperson — an individual licensed to perform real-estate brokerage acts (listing, selling, leasing, negotiating) only in the employ of, and under the supervision of, a licensed broker. A salesperson may never operate independently.
• Real Estate Broker — an individual (or a business entity holding a broker license) authorized to conduct a brokerage business, employ salespersons and associate brokers, and hold client funds.

An associate broker is a person who holds a broker-level qualification but works under another broker.

A license is required to, for another and for compensation, sell, list, buy, exchange, lease, or negotiate real estate or hold oneself out as doing so. The classic exemptions are consistent with the national pattern: an owner dealing with their own property, a person acting under a duly executed power of attorney, attorneys acting within their practice, and court-appointed persons (receivers, trustees, personal representatives) acting under court authority. Confirm the precise exemption language in Article 25 before relying on it.

Unlicensed activity and "sharing" commissions: A broker may pay a commission only to the broker's own licensed salespersons/associate brokers or to another licensed broker. Paying a referral fee or commission to an unlicensed person is prohibited and is a common disciplinary and exam trap.

3. Becoming a salesperson: qualifications, education, exam, and fees

To qualify for a Michigan salesperson license an applicant generally must:

1. Be at least 18 years of age.
2. Complete the required pre-license real-estate education from an approved provider.
3. Pass the state licensing examination.
4. Apply through LARA, disclose relevant background/criminal history, and be sponsored/employed by a licensed broker to activate the license.

Pre-license education

Before sitting for the salesperson examination an applicant must show proof of at least 40 clock hours of approved prelicensure classroom courses in principles of real estate, including at least 4 clock hours of instruction on civil rights law and equal opportunity in housing, and must complete those 40 hours within the 36-month period preceding the date of the application (MCL 339.2504(2); checked 2026-09-05). LARA states the same 40/4 split in its current licensing guide (LARA, "Michigan Real Estate Salesperson Licensing Guide," rev. 1/26/2026; checked 2026-09-05).

Broker contrast (tested): a broker applicant must complete at least 90 clock hours of approved prelicensure classroom courses, of which at least 9 clock hours must be civil-rights and fair-housing instruction, and those 90 hours are in addition to the salesperson hours (MCL 339.2504(1)(b); checked 2026-09-05).

The licensing examination

LARA has contracted the examination program to PSI Services LLC; PSI schedules and delivers the Michigan real-estate examinations at computer test centers in Michigan (PSI/LARA, "Real Estate Licensing Salesperson and Broker Examinations — Candidate Information Bulletin," https://test-takers.psiexams.com/mire; checked 2026-09-05). The exam has a national (real estate principles and practices) portion and a Michigan-specific portion; this chapter targets the state portion.

Current PSI examination specifications:

(PSI/LARA Michigan Real Estate Candidate Information Bulletin, "Examination Summary Table"; checked 2026-09-05.)

Trap: the salesperson standard is not "answer 70% of 115 questions." It is a raw score of 80 out of the 115 available points, which is what 70% resolves to. Note also that the broker exam has 115 questions but 120 points — national broker items can be scored up to two points — so a broker candidate needs 90 points, not 90 questions. On top of the scored items, PSI may add roughly 10% unscored experimental questions; they do not count toward your score but they do consume your clock.

Fees

As published by LARA and PSI on the dates cited, the salesperson figures are:

• New salesperson application + 3-year license fee: $88.00 (LARA, "Michigan Real Estate Salesperson Licensing Guide," rev. 1/26/2026; checked 2026-09-05).
• Salesperson renewal application fee: $78.00 (same guide, "Renewal Requirements Checklist"; checked 2026-09-05).
• 3-year salesperson relicensure application + fee: $108.00 (same guide; checked 2026-09-05).
• PSI examination fee: $79, non-refundable, and it expires one year after registration if you do not test (PSI/LARA Michigan Real Estate Candidate Information Bulletin; checked 2026-09-05).

Fee schedules are amended, so re-read the LARA guide before you quote a number to a client — but the point for exam day is that the application fee and the license fee are billed together, and the exam fee is paid to PSI, not to LARA.

4. Employment by a broker; supervision and compensation

A salesperson's license is only valid while it is held by (associated with) a sponsoring broker. Core Michigan rules:

• A salesperson may not accept compensation from anyone other than the employing broker. All commissions and fees flow through the broker, not directly from a buyer or seller to the salesperson.
• A salesperson may not conduct brokerage business in their own name; advertising and contracts run under the broker's licensed name (with the broker's supervision of team/personal marketing).
• When a salesperson changes brokers, the license must be transferred through LARA and the new broker must be recorded before the salesperson works for the new firm. A salesperson whose license is not currently attached to a broker is inactive and may not practice.
• The broker is responsible for supervising the licensees and for the handling of client funds (see trust-account section). Article 25 imposes duties on the broker for the acts of the salespersons under their supervision.

Exam trap: A buyer offers to pay "a little extra, directly to you, if you get the deal done." The correct answer is always: the salesperson cannot accept it; compensation must go through the broker.

5. Michigan agency law and required agency disclosure

Michigan codifies agency relationships and mandatory agency disclosure inside Article 25 of the Occupational Code (the agency-disclosure provisions are found around MCL 339.2517 and MCL 339.2518). This is one of the most heavily tested Michigan-specific areas, so learn it precisely.

Recognized agency relationships

Michigan recognizes the standard set of relationships a licensee may have:

• Seller's agent (listing/subagent) — represents the seller.
• Buyer's agent — represents the buyer.
• Dual agent / disclosed dual agent — represents both parties in the same transaction, permitted only with the written, informed consent of both parties.
• Transaction coordinator (sometimes "transaction facilitator") — assists in the transaction without representing either party as a fiduciary. Article 25 expressly permits a licensee to act as a transaction coordinator on proper notice to all parties (MCL 339.2517(5); checked 2026-09-05).
• Designated agent — a broker and a client may sign a designated agency agreement. Two designated agents who are affiliated licensees may represent opposite parties in the same transaction and are not dual agents, though the broker and any named supervisory brokers are then treated as disclosed consensual dual agents and must notify their clients before an offer to purchase is made or presented. Absent a written designated agency agreement, the client is considered to have an agency relationship with the broker and all affiliated licensees (MCL 339.2517(6)–(8); checked 2026-09-05).

The Agency Disclosure — content and TIMING

Michigan requires a licensee to give the buyer or seller a written disclosure of the type of agency relationship the licensee has. The statute's timing rule is the critical point:

A licensee shall disclose all types of agency relationships available and the duties each creates "before the disclosure by the potential buyer or seller to the licensee of any confidential information specific to that potential buyer or seller." The disclosure of the type of agency relationship must be in writing, must be provided to the client, and must substantially conform to the statutory form titled "Disclosure Regarding Real Estate Agency Relationships." (MCL 339.2517(1) and (3); checked 2026-09-05.)

Recent change — mind the wording. Michigan's trigger is "before the disclosure … of any confidential information." The phrase "first meaningful contact" does not appear anywhere in MCL 339.2517; it is prep-industry shorthand borrowed from other states' statutes. Earlier printings of this chapter taught "first meaningful contact" as if it were the Michigan rule. If a Michigan question offers both, pick the confidential-information trigger. The statutory acknowledgment block even says so on its face: "this form was provided to them before the disclosure of any confidential information."

In practice: hand the form to the consumer and obtain acknowledgment at the outset of the relationship, not at the closing table. Failing to provide the written agency disclosure required by section 2517 is itself an enumerated ground for penalty (MCL 339.2512(1)(b); checked 2026-09-05).

Dual agency

A disclosed dual agency is legal in Michigan only with the knowledge and informed consent, in writing, of both the seller and the buyer, and in that situation "the licensee will not be able to disclose all known information to either the seller or the buyer" (MCL 339.2517(3), statutory disclosure form, "Dual Agents"; checked 2026-09-05). So the licensee may not tell the buyer the seller will take less, or tell the seller the buyer will pay more. Acting for more than one party in a transaction without the knowledge of the parties — except in property management — is an enumerated ground for penalty (MCL 339.2512(1)(a); checked 2026-09-05).

Service-provider / affiliated-business disclosure

Trap — Michigan demands consent, not just disclosure. A licensee who is entitled to a real-estate commission on a sale may not also take a referral fee or other valuable consideration for placing a loan in that transaction unless the licensee first obtains the prior written consent of the buyer and the seller — and the fee is not otherwise barred by RESPA, 12 USC 2601–2617. The same rule applies to a referral fee from an abstract, home warranty, title insurance, or other settlement service provider, except that there the required prior written consent is that of the party or parties with whom the licensee has an agency relationship (Mich. Admin. Code R 339.22137(1)–(2), 2025 MR 12, eff. June 4, 2025; checked 2026-09-05). So the exam answer to "we also own the title company" is not merely "disclose it" — it is get prior written consent, or do not take the fee.