Before you read
Test yourself first: 5 questions
Question 1 of 5
A Michigan purchase agreement names a fixed dollar amount the buyer deposits to show good faith. This deposit is commonly called the:
Answer: B. Earnest money is the good-faith deposit a buyer makes with an offer in a Michigan transaction. It is typically held in trust and applied to the purchase price at closing, subject to the contract's terms.
Question 2 of 5
May a Michigan real estate salesperson accept a commission or compensation directly from the buyer or seller in a transaction?
Answer: B. A Michigan salesperson may be compensated only by the broker under whom the salesperson is licensed. Accepting commission or a fee directly from a buyer, seller, or another licensee outside the employing broker is prohibited.
Question 3 of 5
A Michigan licensee refuses to show homes in a particular neighborhood to a buyer because of the buyer's race. This conduct violates:
Answer: B. Refusing service or steering based on race is illegal discrimination under the federal Fair Housing Act and Michigan's Elliott-Larsen Civil Rights Act, which prohibits discrimination in real estate transactions based on protected characteristics.
Question 4 of 5
Which of the following is typically EXEMPT from the requirement to hold a Michigan real estate license?
Answer: D. Attorneys acting within the scope of their professional practice are recognized as exempt. Anyone negotiating others' transactions for compensation, including rental leasing for clients, requires a license.
Question 5 of 5
When parties to a Michigan transaction dispute who is entitled to the earnest-money deposit and the broker is unsure of the rightful recipient, the most appropriate action for the broker is to:
Answer: A. When entitlement to an earnest-money deposit is disputed, the broker should retain the funds in the trust account and disburse only upon written agreement of the parties, a court order, or proper interpleader. Unilaterally releasing or keeping the funds exposes the broker to liability.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
Sellers of residential property generally must deliver a Seller's Disclosure Statement to the buyer, and the agency relationship must be disclosed as required by Michigan law. Earnest money and other client funds tied to a transaction must be placed in the broker's trust or escrow account and may not be commingled with the broker's own funds. Because Michigan is not a community property state, ownership and conveyance of marital property follow Michigan's common-law and statutory rules rather than community property principles.
Michigan Contract & Transaction Specifics: FAQs
Is Michigan Contract & Transaction Specifics on the real estate exam?
Yes. State License Law is a scored domain on the Michigan real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Michigan test this differently?
Michigan applies its own license law on top of the national portion. This page covers the Michigan rules specifically, which is what the state section of your exam tests.
