15 free questions from the Cinna RE Michigan real estate exam bank (121 in the app). Tap an answer to check it. The rationale opens right away.
Under Michigan law, a listing agreement or other contract authorizing a broker to sell real estate and receive a commission generally must be:
Answer: B. In writing and signed by the party to be charged to be enforceable
Agreements concerning interests in real estate, including a broker's authority to sell and earn a commission, fall under the statute of frauds and must be in writing and signed by the party to be charged to be enforceable in Michigan.
A Michigan broker discovers that the trust-account balance is short by several thousand dollars due to a bookkeeping error and a personal withdrawal. The broker's correct response is to:
Answer: B. Immediately restore the trust account to the correct balance, correct the records, and ensure no client funds were misused
A trust account must always hold the full amount owed to clients. The broker must promptly restore the account to the proper balance, correct the records, and ensure client funds are intact. Leaving a shortage, or moving client funds into the operating account, would constitute commingling/conversion violations.
Under Michigan brokerage practice, who is ultimately responsible for the proper maintenance and reconciliation of the firm's trust/escrow account?
Answer: D. The employing/managing broker
The employing or managing broker bears ultimate responsibility for the firm's trust accounting, including proper deposits, record-keeping, and reconciliation. Even when staff handle day-to-day entries, the broker is accountable to LARA for the integrity of the account.
Which document does Michigan law require a seller of most residential one-to-four-unit property to deliver to a prospective buyer?
Answer: A. A Seller's Disclosure Statement describing the condition of the property
Michigan's Seller Disclosure Act requires sellers of most residential property of one to four units to deliver a Seller's Disclosure Statement describing the known condition of the property.
A Michigan licensee managing rental property must notify a tenant before lawfully recovering possession for nonpayment of rent. The appropriate FIRST step under Michigan landlord-tenant procedure is to:
Answer: C. Serve the required written notice (such as a demand for possession) before pursuing a court eviction action
Michigan prohibits self-help eviction (locking out, removing belongings, or shutting off utilities). A landlord must serve the proper written notice, such as a demand for possession, and then proceed through the court eviction (summary proceedings) process to lawfully regain possession.
Which of the following activities, if done for compensation without a license, would generally require a Michigan real estate license?
Answer: C. Negotiating the sale of real estate for another person for a fee
Negotiating, selling, or offering to sell real estate for another person in exchange for compensation is licensed activity in Michigan and requires a real estate license. Owners selling their own property and attorneys acting within their legal practice are common exemptions.
Which of the following disciplinary sanctions is within the authority of Michigan's regulators against a licensee who violates the Occupational Code?
Answer: C. Suspending or revoking the license and imposing fines
Michigan's regulators may impose administrative discipline such as suspension or revocation of a license, fines, censure, or conditions on licensure. Criminal sentencing is a court function, not an administrative sanction.
In a Michigan transaction, which type of agency relationship represents both the buyer and the seller in the same transaction with the informed written consent of both parties?
Answer: A. Dual agency
Dual agency occurs when one licensee or firm represents both buyer and seller in the same transaction. In Michigan this is permitted only with the informed, written consent of both parties because of the inherent conflict of interest.
A buyer confides to her Michigan buyer's agent the maximum price she is willing to pay. The agent's duty of confidentiality means the agent must:
Answer: A. Keep that information from the seller and seller's agent
Confidentiality, a core fiduciary duty owed to a client, requires the buyer's agent to protect the buyer's negotiating position, including her maximum price. Revealing it to the seller or other brokers would breach that duty and could be grounds for discipline.
A Michigan licensee accepts a referral fee or commission split from an unlicensed person for helping arrange a sale. Under Michigan license law, paying compensation for real estate services to an unlicensed person is:
Answer: C. Prohibited and grounds for disciplinary action
Michigan license law bars licensees from paying commissions or valuable consideration for licensed real estate activity to anyone not properly licensed. This protects the public and is grounds for discipline regardless of the dollar amount, seller knowledge, or property type.
A Michigan broker takes a client's earnest-money deposit held in the trust account and uses it to pay the brokerage's monthly rent. This act is best described as:
Answer: B. Conversion, an unlawful use of trust funds for the broker's own purposes
Conversion is the unauthorized use of trust funds for the broker's own benefit. Using clients' escrowed deposits to pay business expenses is conversion, a serious violation that can lead to license discipline and criminal liability. It goes beyond commingling because the funds are actually taken and spent.
Under Michigan's Seller Disclosure Act, which type of seller is primarily required to deliver a Seller's Disclosure Statement to a buyer of residential property?
Answer: B. A seller transferring residential real property of one to four dwelling units
Michigan's Seller Disclosure Act applies to the transfer of residential real property of one to four dwelling units, requiring the seller to give the buyer a written Seller's Disclosure Statement about the property's condition. Certain transfers, such as some estate or court-ordered transfers, are exempt.
In Michigan, a licensee who assists the parties in a transaction but does NOT represent either as a client is generally acting in what capacity?
Answer: B. Transaction coordinator (transactional licensee)
Michigan recognizes a transaction coordinator (transactional) role, in which the licensee facilitates the transaction without representing either party as a client. This non-agency relationship must still be disclosed to the consumers involved.
Which form of co-ownership is available in Michigan to married couples and includes a right of survivorship plus protection from the individual creditors of one spouse?
Answer: C. Tenancy by the entirety
Michigan recognizes tenancy by the entirety, which is available only to married couples. It carries a right of survivorship and generally shields the property from a creditor of only one spouse, since neither spouse can unilaterally sever the estate.
In Michigan, a 'transaction coordinator' (transactional licensee who assists parties without representing either as a client) owes the parties primarily:
Answer: B. Honesty and the ministerial/clerical duties to facilitate the transaction without client-level representation
A transaction coordinator (transaction-facilitator) assists both parties with paperwork and process but does not represent either as a client. The licensee owes honesty and reasonable care in the ministerial duties, not full fiduciary loyalty.
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