Michigan Real Estate Practice Exam
(Free Questions & Answers)
The Michigan real estate exam is administered by LARA (Department of Licensing and Regulatory Affairs) and places significant emphasis on Michigan's mandatory Seller Disclosure Act — sellers of residential property must complete a specific disclosure statement, with defined exceptions for foreclosures, probate sales, and new construction. Michigan's environmental disclosure requirements under MERA (Michigan Environmental Response Act) are also tested. The state portion covers Michigan's specific buyer agency agreement requirements and the Michigan Consumer Protection Act as it applies to real estate.
Administered by: Michigan Department of Licensing and Regulatory Affairs (LARA) · 115 questions · Passing score: 70%
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Updated May 2026 · Michigan Department of Licensing and Regulatory Affairs (LARA) exam outline
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Free Michigan Real Estate Practice Exam Questions
Test your knowledge with these Michigan real estate practice questions. Each question is based on topics from the Michigan Department of Licensing and Regulatory Affairs (LARA) exam and includes detailed explanations.
Q1. Which agency oversees real estate licensing in Michigan?
Explanation
The Michigan Department of Licensing and Regulatory Affairs (LARA), through the Bureau of Professional Licensing, regulates real estate licensees in Michigan.
Q2. Michigan law requires that a disclosure of agency relationship be provided to consumers:
Explanation
Michigan requires licensees to disclose their agency relationship in writing before or at the time a brokerage relationship is established, so consumers understand who represents their interests.
Q3. A Michigan purchase agreement becomes a binding contract when:
Explanation
A contract is formed when there is a valid offer and acceptance, and the acceptance is communicated back to the offeror. Signature alone, without communication of acceptance, does not complete contract formation.
Q4. A Michigan buyer borrows $280,000 at a 7% annual interest rate. What is the approximate monthly interest for the first payment?
Explanation
Monthly interest = $280,000 × (7% ÷ 12) = $280,000 × 0.005833 = $1,633.24. This is the interest-only portion of the first month's payment.
Q5. In Michigan, tenancy in common differs from joint tenancy in that tenants in common:
Explanation
Tenants in common may hold unequal shares in a property and there is no right of survivorship — each owner's share passes to their heirs upon death. Joint tenancy requires equal shares and includes right of survivorship.
Q6. The income capitalization approach is most commonly used to appraise:
Explanation
The income capitalization approach converts income into a value estimate and is most appropriate for income-producing properties such as apartment buildings, office buildings, and shopping centers.
Q7. The Elliott-Larsen Civil Rights Act in Michigan provides additional fair housing protection for which class NOT covered by federal law?
Explanation
Michigan's Elliott-Larsen Civil Rights Act adds marital status, height, weight, and other classes to the protected categories beyond the federal Fair Housing Act, providing broader state-level protections.
Q8. In Michigan, which document transfers ownership of real property?
Explanation
A deed is the legal instrument used to transfer ownership (title) of real property from one person (grantor) to another (grantee).
Q9. A Michigan home sold for $310,000. The seller agreed to pay a 5.5% commission. How much was the total commission?
Explanation
Commission = $310,000 × 5.5% = $310,000 × 0.055 = $17,050. To solve this, multiply the relevant values: $310,000 at 5.5%.. The correct answer is $17,050.. This is a common calculation on the Michigan real estate exam.
Q10. In Michigan, the term 'brownfield' refers to:
Explanation
A brownfield is a property that has been previously developed for industrial or commercial purposes and may have actual or potential contamination from hazardous substances, pollutants, or contaminants.
Q11. In Michigan, a nonconforming use is best described as:
Explanation
A nonconforming use is a use that was lawfully established before current zoning requirements were enacted and is allowed to continue, but typically cannot be expanded or rebuilt if destroyed beyond a certain percentage.
Q12. Under Michigan law, a security deposit for a residential tenant cannot exceed:
Explanation
Michigan's Security Deposit Act (Act 348 of 1972) limits security deposits to a maximum of one and one-half months' rent for residential tenancies.
Q13. How many hours of pre-license education are required for a Michigan real estate salesperson license?
Explanation
Michigan requires 40 hours of pre-license education for a salesperson license, which must be completed before taking the licensing examination.
Q14. In Michigan, a buyer's agent owes which duty to the buyer client?
Explanation
A buyer's agent in Michigan owes full fiduciary duties to the buyer client: loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting.
Q15. In Michigan, an exclusive right-to-sell listing agreement means:
Explanation
Under an exclusive right-to-sell listing, the broker is entitled to a commission if the property sells during the listing period, regardless of who finds the buyer — including the seller themselves.
Q16. Under RESPA, a kickback or fee-splitting arrangement between a lender and a settlement service provider is:
Explanation
RESPA Section 8 prohibits kickbacks and fee-splitting among settlement service providers in federally related mortgage transactions, regardless of disclosure. Violations carry civil and criminal penalties.
Q17. A deed restriction (restrictive covenant) in Michigan is enforceable by:
Explanation
Deed restrictions that run with the land can be enforced by neighboring property owners who benefit from the restriction, as well as the original grantor's successors.
Q18. A property generates a net operating income (NOI) of $45,000 annually. Using a capitalization rate of 7.5%, what is the estimated value?
Explanation
Value = NOI ÷ Cap rate = $45,000 ÷ 0.075 = $600,000. The capitalization rate converts income into a value estimate.
Q19. Blockbusting is best described as:
Explanation
Blockbusting (panic peddling) is the illegal practice of inducing property owners to sell or rent by making representations about the entry or prospective entry of persons of a protected class into the neighborhood.
Q20. Michigan uses a title recording system based on:
Explanation
Michigan follows a race-notice recording statute: a subsequent purchaser who records first and has no notice of a prior unrecorded interest takes priority over the prior interest.
Q21. A property is assessed at 50% of its market value of $260,000. The millage rate is 42 mills. What is the annual property tax?
Explanation
Assessed value = $260,000 × 50% = $130,000. Annual tax = $130,000 × (42 ÷ 1,000) = $130,000 × 0.042 = $5,460.
Q22. Michigan's Part 201 of the Natural Resources and Environmental Protection Act (NREPA) addresses:
Explanation
Part 201 of NREPA governs the cleanup of contaminated sites (including brownfields) in Michigan, establishing environmental liability standards and remediation requirements.
Q23. A Michigan property owner seeks a variance. A variance is:
Explanation
A variance grants relief from specific zoning requirements (such as setbacks or height restrictions) when strict application would create an undue hardship unique to the property.
Q24. In Michigan, a landlord must return a tenant's security deposit within how many days after the tenancy ends?
Explanation
Michigan's Security Deposit Act requires landlords to return the security deposit, or provide an itemized written statement of deductions, within 30 days after the tenant vacates the rental unit.
Q25. The Michigan real estate salesperson licensing exam contains how many questions?
Explanation
The Michigan real estate salesperson exam contains 115 questions. Candidates must score at least 70% to pass.
1,500+ questions · Timed mock exams · Detailed explanations
Michigan Real Estate Exam — What to Expect
What Is On The Michigan Real Estate Exam?
The Michigan real estate salesperson exam is administered by the Michigan Department of Licensing and Regulatory Affairs (LARA) and tests both national real estate principles and Michigan-specific laws and regulations. The exam contains 115 multiple-choice questions, and you must score at least 70% to pass.
The national portion covers topics that apply in every state: property ownership, land use controls, valuation and market analysis, financing, agency law, contracts, leasing and property management, transfer of title, fair housing laws, and real estate calculations. The state portion tests knowledge specific to Michigan — including regulations set by the Michigan Department of Licensing and Regulatory Affairs (LARA), Michigan agency disclosure requirements, and state-specific contract and closing practices.
Topics covered on the Michigan exam include: Property Ownership, Agency Law, Contracts, Finance, Michigan License Law, Fair Housing. Candidates who struggle on the MI exam typically underestimate the state-specific portion — the national content is well-covered by most study materials, but Michigan law questions require targeted preparation.
Official Michigan Exam Content Areas
Source: Michigan Department of Licensing and Regulatory Affairs (LARA) · Updated June 2026
| Content Area | Questions |
|---|---|
| National Section (11 PSI topic areas) | 80 |
| Michigan State Section (LARA/Real Estate Board, licensing requirements, statutory requirements, contractual relationships) | 35 |
- ▸Must score 70% on each section — 56/80 national, 24/35 state; sections scored independently
- ▸Michigan is administered by LARA (Department of Licensing and Regulatory Affairs) — the Real Estate Board is under LARA's Bureau of Professional Licensing
- ▸Michigan state section covers LARA/Real Estate Board structure, licensing requirements, statutory requirements governing licensee activities, and contractual relationships
- ▸Source: Michigan LARA and PSI Candidate Bulletin (November 2024)
Practice Michigan questions by topic — start with Michigan License Law, Agency, and Contracts to build your foundation, then work through remaining topics.
How Many Questions Are On The Michigan Exam?
The Michigan real estate salesperson exam has 115 multiple-choice questions. The exam is divided into a national section covering general real estate principles and a state section covering Michigan-specific laws administered by the Michigan Department of Licensing and Regulatory Affairs (LARA). You have 3 hours to complete the exam.
Michigan Real Estate Exam Passing Score
You need a 70% to pass the Michigan real estate exam. The first-time pass rate in Michigan is approximately 57%, which means preparation is essential — most candidates who fail do so because they focused on national content and underestimated the MI-specific portion. Our Michigan practice exam is built specifically around the Michigan Department of Licensing and Regulatory Affairs (LARA) exam outline.
Read our complete Michigan exam study guide — state-specific topics, 5-week study plan, and what to focus on before exam day.
Most Difficult Topics On The Michigan Exam
These are the areas where Michigan candidates most commonly lose points — and a key reason why some states produce harder real estate exams than others.
Michigan's mandatory Seller Disclosure Act requires a specific disclosure statement with defined exemptions for foreclosures, probate, and new construction. The exemptions and buyer's remedies for non-disclosure are frequently tested.
Michigan LARA's specific licensing requirements, broker supervision rules, and continuing education mandates are tested on the state portion. Michigan's license categories and renewal procedures have state-specific rules.
Michigan's Environmental Response Act (MERA) governs contamination disclosure and liability. Questions on when MERA requires disclosure and the parties' responsibilities are Michigan-specific topics that appear on the state exam.
Michigan's requirements for buyer agency agreements — what must be included, when the agreement must be signed, and compensation disclosure requirements — differ from national norms and are tested on the state exam.
Michigan Real Estate Math
The Michigan real estate exam includes math questions covering commission calculations, loan-to-value (LTV) ratios, property tax prorations, area and volume, and appreciation/depreciation. A common example: if a property sells for $350,000 and the total commission is 6%, split equally between listing and buyer's broker, each side earns $10,500. Proration questions — such as calculating how many days of property taxes a seller owes at closing — are also common. On the MI exam, you will not need a calculator for most math questions, but you do need to understand the formulas. Practice the "T-bar" method for commission splits and the 360-day banker's year for prorations.
🧮 See all exam math formulas →How To Get Your Michigan Real Estate License
- 1Complete 40 hours of state-approved pre-license education covering topics required by the Michigan Department of Licensing and Regulatory Affairs (LARA).
- 2Submit your application to the Michigan Department of Licensing and Regulatory Affairs (LARA) and pay the required fees (exam fee: $88).
- 3Pass the Michigan real estate salesperson exam (115 questions, 70% to pass).
- 4Complete a background check and fingerprinting as required by Michigan law.
- 5Find a licensed sponsoring/employing broker to activate your license.
- 6Complete any required post-licensing education within the timeframe set by the Michigan Department of Licensing and Regulatory Affairs (LARA).
Best Study Strategy For The Michigan Exam
Start with Michigan license law first. State-specific regulations administered by the Michigan Department of Licensing and Regulatory Affairs (LARA) make up a significant portion of the MI exam and are not covered in most national study materials.
Master the math early. The Michigan real estate exam includes questions on commission calculations, prorations, loan-to-value ratios, and area calculations. Set aside dedicated math practice sessions — don't leave it until the last week.
Take timed practice exams. The Michigan exam has 115 questions within a 3 hours time limit. Simulate exam conditions to build stamina and identify weak topics before exam day.
Focus heavily on agency law. Agency relationships, disclosure requirements, and fiduciary duties are consistently among the most-tested topics on the MI exam. Understand the difference between seller's agent, buyer's agent, dual agent, and transaction broker in the context of Michigan law.
Review Fair Housing thoroughly. Federal Fair Housing Act protections apply in all states, but Michigan may have additional protected classes. Know both federal and Michigan-specific protections cold — this topic appears on virtually every exam.
Use active recall, not passive reading. Instead of re-reading notes, quiz yourself. Use flashcards or practice questions to test retention. Research shows active recall improves long-term retention significantly compared to passive review.
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