Michigan Real Estate Exam Math Practice

Math questions account for approximately 10% of the national section of the Michigan exam. Michigan also tests transfer tax calculations in the state section — using a per-$500 format that requires a different approach than percentage-based taxes.

Essential Formulas

Commission Commission = Sale Price × Rate 6% on $280,000: $280,000 × 0.06 = $16,800

Commission Split 50/50 split between listing and buyer's broker: $16,800 × 0.50 = $8,400 each Listing agent receives 65% from broker: $8,400 × 0.65 = $5,460

Michigan Transfer Tax Michigan transfer tax is expressed per $500 of sale price (or fraction thereof). State rate: $3.75 per $500 County rate: $0.55 per $500 Combined: $4.30 per $500

Formula: Number of $500 increments = Sale Price ÷ 500 Transfer Tax = Number of increments × Rate per $500

Example: Sale price $250,000 Number of increments: $250,000 ÷ $500 = 500 increments State tax: 500 × $3.75 = $1,875 County tax: 500 × $0.55 = $275 Total transfer tax: $1,875 + $275 = $2,150

Note: If the sale price is not exactly divisible by $500, round up to the next $500.

Proration Daily rate = Annual amount ÷ 360 (or 365 if specified) Seller's share = Daily rate × Days seller owned property through closing

Example: Annual taxes $3,600. Closing November 5. Days Jan 1 through Nov 5: 10 months × 30 + 5 = 305 days Daily rate: $3,600 ÷ 360 = $10/day Seller owes: $10 × 305 = $3,050

Down Payment and LTV LTV = Loan ÷ Appraised Value Down payment = Sale Price × Down Payment %

25% down on $320,000: $320,000 × 0.25 = $80,000 down Loan: $320,000 − $80,000 = $240,000 LTV: $240,000 ÷ $320,000 = 75%

Gross Rent Multiplier GRM = Sale Price ÷ Monthly Rent $210,000 sale price, $1,500/month rent: $210,000 ÷ $1,500 = GRM of 140

Practice Problems

Problem 1: A home in Grand Rapids sells for $375,000. What is the total Michigan transfer tax (state + county)? Number of increments: $375,000 ÷ $500 = 750 State tax: 750 × $3.75 = $2,812.50 County tax: 750 × $0.55 = $412.50 Total: $2,812.50 + $412.50 = $3,225

Problem 2: The listing broker charges 5.5% commission on a $290,000 sale. The broker splits 50/50 with the buyer's broker. The listing agent earns 55% of the listing broker's share. What does the listing agent earn? Total commission: $290,000 × 0.055 = $15,950 Listing broker's share: $15,950 × 0.50 = $7,975 Listing agent: $7,975 × 0.55 = $4,386.25

Problem 3: Annual property taxes are $2,880. Closing is June 10. Using a 360-day year, how much does the seller owe? Days Jan 1 through June 10: 5 months × 30 + 10 = 160 days Daily rate: $2,880 ÷ 360 = $8/day Seller owes: $8 × 160 = $1,280

Michigan Transfer Tax Tip

Michigan's per-$500 format is unusual. Practice it multiple times before exam day. The most common mistake is dividing by 1,000 or using a percentage — neither is correct for Michigan's system.

More Michigan Math Practice

[CARealestate.com/states/michigan](https://carealestate.com/states/michigan) includes Michigan transfer tax and commission math practice questions. 5 free questions — no signup needed.

Michigan Real Estate Exam Math Practice