Michigan Real Estate Broker Examination — Information & Free Practice
US-MI · Examination information
202 free questions · Answer explanations · No signup required
Michigan Real Estate Broker Examination
- Provider
- PSI Services LLC
- Format
- Computer-administered examination
- Exam questions
- 115 scored questions, 120 points; additional unscored experimental items may be administered
- Time limit
- 210 minutes
- Passing score
- 75%; 90 of 120 points
- Exam fee
- $79
Examination outline
I. Property Ownership (Broker 10% of general-practice outline)
- A. Real and personal property; conveyances
- B. Land characteristics and legal descriptions
- 1. Metes and bounds method of legal property description
- 2. Lot and block (recorded plat) method of legal property description
- 3. Government survey (rectangular survey) method of legal property description
- 4. Measuring structures (linear and square footage)
- 5. Land measurement
- C. Encumbrances and effects on property ownership
- 1. Types of liens and their effect on the title and value of real property
- 2. Easements, rights of way and licenses, including their effect on the title, value and use of real property
- 3. Encroachments and their effect on the title, value and use of real property
- 4. Potential encumbrances on title, such as probate, leases, or adverse possession
- 5. Property rights that may be conveyed separately from use of the land surface, such as mineral and other subsurface rights, air rights, or water rights
- D. Types of ownership
- 1. Ownership in severalty/sole ownership
- 2. Implications of ownership as tenants in common
- 3. Implications of ownership in joint tenancy
- 4. Forms of common-interest ownership, such as Timeshares, Condominiums and Co-ops
- 5. Property ownership held in a trust or by an estate
- 6. Ownership by business entities
- 7. Life Estate ownership
II. Land use Controls (Broker 5% of general-practice outline)
- A. Government rights in land
- 1. Government rights to impose property taxes and special assessments
- 2. Government rights to acquire land through eminent domain, condemnation and escheat
- B. Government controls on land use
- C. Private controls
- 1. Deed conditions or restrictions on property use
- 2. Subdivision covenants, conditions and restrictions (CC&Rs) on property use
- 3. Condominium and owners’ associations regulations or bylaws on property use
III. Valuation (Broker 8% of general-practice outline)
- A. Appraisals
- 1. Appraisals for valuation of real property
- 2. Situations which require appraisal by a licensed or certified appraiser and brokerage-related actions that constitute unauthorized appraisal practice
- 3. General steps in appraisal process
- B. Estimating Value
- 1. Economic principles and property characteristics that affect value of real property
- 2. Sales or market comparison approach to property valuation and appropriate uses
- 3. Cost approach to property valuation and appropriate uses
- 4. Income analysis approach to property valuation and appropriate uses
- C. Comparative Market Analysis (CMA)
- 1. Competitive/Comparative Market Analysis (CMA), BPO or equivalent
- 2. Automated Valuation Method (AVM), appraisal valuation and Comparative Market Analysis (CMA)
IV. Financing (Broker 9% of general-practice outline)
- A. Basic Concepts and Terminology
- 1. Loan financing (for example, points, LTV, PMI, interest, PITI)
- 2. General underwriting process (e.g., debt ratios, credit scoring and history)
- 3. Standard mortgage/deed of trust clauses and conditions
- 4. Essential elements of a promissory note
- B. Types of Loans
- 1. Conventional loans
- 2. Amortized loans, partially amortized (balloon) loans, interest-only loans
- 3. Adjustable-rate mortgage (ARM) loans
- 4. Government Loans
- a. FHA insured loans
- b. VA guaranteed loans
- c. USDA/Rural Development loan programs
- 5. Owner financing (for example, installment or land contract/contract for deed)
- 6. Reverse-mortgage loans
- 7. Home equity loans and lines of credit
- 8. Construction loans
- 9. Rehab loans
- 10. Bridge loans
- C. Financing and Lending
- 1. Real Estate Settlement Procedures Act (RESPA), including kickbacks
- 2. Truth-in-Lending Act (Regulation Z), including advertising
- 3. Requirements and time frames of TRID (TILARESPA Integrated Disclosures)
- 4. Equal Credit Opportunity Act
- 5. Lending Process (application through loan closing)
- 6. Risky loan features, such as prepayment penalties and balloon payments
V. Contracts (Broker 19% of general-practice outline)
- A. General Contract Law
- 1. General principles of contract law
- 2. Elements necessary for a contract to be valid
- 3. Effect of the Statute of Frauds
- 4. Offer and a contract
- 5. Enforceability of contracts
- 6. Void, voidable and unenforceable contracts
- 7. Bilateral and unilateral contracts
- 8. Nature and use of option agreements
- 9. Notice, delivery, acceptance and execution of contracts
- 10. Appropriate use, risks, and advantages of electronic signatures and paperless transactions
- 11. Rights and obligations of the parties to a contract
- 12. Possible remedies for breach or nonperformance of contract
- 13. Termination, rescission and cancellation of contracts
- B. Purchase and Lease Contracts
- 1. Addenda and amendments to contracts
- 2. Purchase agreements
- 3. Contract contingencies and methods for satisfying them
- 4. Leases and rental agreements
- 5. Lease-purchase agreements
- 6. Types of leases
- C. Proper handling of multiple offers and counteroffers
VI. Agency (Broker 13% of general-practice outline)
- A. Agency and non-agency relationships
- 1. Agency relationships and how they are established
- 2. Types of listing contracts
- 3. Buyer brokerage/tenant representation contracts
- 4. Other brokerage relationships, including transaction brokers and facilitators
- 5. Powers of attorney and other assignments of authority
- 6. Conditions for termination of agency or brokerage service agreements
- B. Agent Duties
- 1. Fiduciary duties of agents
- 2. Agent's duties to customers/non-clients, including honesty and good faith
- C. Agency Disclosures
- 1. Disclosure of agency/representation
- 2. Disclosure of possible conflict of interest or selfinterest
VII. Property Disclosures (Broker 7% of general-practice outline)
- A. Property Condition
- 1. Seller's property condition disclosure requirements
- 2. Property conditions that may warrant inspections or a survey
- 3. Red flags that warrant investigation of public or private land use controls
- B. Environmental and Government Disclosures
- 1. Environmental issues requiring disclosure
- 2. Federal, state, or local disclosure requirements regarding the property
- C. Disclosure of material facts and material defects
VIII. Property Management (Broker 5% of general-practice outline)
- A. Duties and Responsibilities
- 1. Procurement and qualification of prospective tenants
- 2. Fair housing and ADA compliance specific to property management
- 3. How to complete a market analysis to identify factors in setting rents or lease rates
- 4. Property manager responsibility for maintenance, improvements, reporting and risk management (BROKER ONLY)
- 5. Handling landlord and tenant funds; trust accounts, reports and disbursements (BROKER ONLY)
- 6. Provisions of property management contracts (BROKER ONLY)
- B. Landlord and tenant rights and obligations
IX. Transfer of Title (Broker 6% of general-practice outline)
- A. Types of deeds
- B. Title Insurance and Searches
- 1. Title insurance policies and title searches
- 2. Potential title problems and resolutions
- 3. Marketable and insurable title
- C. Closing Process
- 1. When transfer of ownership becomes effective
- 2. Process and importance of recordation
- 3. Settlement procedures (closing) and parties involved
- 4. Home and new construction warranties
- D. Special Processes
- 1. Special issues in transferring foreclosed properties
- 2. Special issues in short sale transactions
- 3. Special issues in probate transactions
X. Practice of Real Estate (Broker 12% of general-practice outline)
- A. Antidiscrimination
- 1. Federal Fair Housing Act general principles and exemptions
- 2. Protected classes under Federal Fair Housing Act
- 3. Protections against discrimination based on gender identity and sexual orientation
- 4. Prohibited conduct under Federal Fair Housing Act (Redlining, Blockbusting, Steering, Disparate Treatment)
- 5. Fair housing advertising rules
- 6. Americans with Disabilities Act (ADA) obligations pertaining to accessibility and reasonable accommodations
- B. Legislation and Regulations
- 1. Licensees’ status as employees or independent contractors
- 2. Antitrust laws and types of violations, fines and penalties
- 3. Do-Not-Call List rule compliance
- 4. Proper use of Social Media and Internet communication and advertising
- C. Duties and Responsibilities
- 1. Protection of confidential personal information (written, verbal or electronic)
- 2. Duties when handling funds of others in transactions
- 3. Licensee responsibility for due diligence in real estate transactions
- D. Supervisory Responsibilities (BROKER ONLY)
- 1. Broker's supervisory responsibilities (licensees, teams and unlicensed assistants and employees) (BROKER ONLY)
- 2. Broker relationship with licensees (employees or independent contractors and governing rules) (BROKER ONLY)
XI. Real Estate Calculations (Broker 6% of general-practice outline)
- A. Calculations for Transactions
- 1. Seller’s net proceeds
- 2. Buyer funds needed at closing
- 3. Real property tax and other prorations
- 4. Real property transfer fees
- 5. PITI (Principal, Interest, Taxes and Insurance) payments estimate given loan rate and term
- B. General Concepts
- 1. Equity
- 2. Rate of return/Capitalization rate
- 3. Loan-to-Value ratio
- 4. Discount points and loan origination fees
Duties and Powers of the Department and the State Board of Real Estate (Broker-3 Items)
- General powers
- Investigations, conferences, hearings, and exemptions
- Penalties
Licensing Requirements (Broker-4 Items)
- Activities requiring a license and exemptions
- Types of licenses
- Eligibility for licensing
- License renewal, including continuing education
- Transfer or change in license
Statutory Requirements Governing the Activities of Licenses (Broker-15 Items)
- Advertising
- Commissions and Specific Services for Which Fees may be charged
- Disclosure/conflict of interest
- Handling of contracts, documents, listing and recommendations
- Handling of monies and trust accounts
- Place of business/branch office requirements (Broker Only)
- Record keeping
- Inducements
- Alternative Dispute Resolution vs. Arbitration (Broker only)
- No disclosure duty attaches to stigmatized property
- Closing responsibilities
Contractual Relationships (Broker – 5 Items)
- Agency relationships available in MI
- Transaction coordinator
- Designated agency
- Dual agency
- Agency disclosures
- Broker/Salesperson relationships
- Service Provision Agreements (Listings, Buyer Broker)
Additional State Topics (Broker-13 Items)
- Land Division Act - Public Act 591 (Disclosure of Private Road)
- Michigan fair housing
- Elliott-Larsen Civil Rights Act
- Persons with Disabilities Civil Rights Act
- Landlord Tenant Relationship Act, Truth in Renting Act
- Usury laws (Broker only)
- State Transfer Tax
- Michigan Condominium Act
- Michigan State Housing Development Authority (MSHDA)
- Uniform State Anti-trust Act
- Michigan Right to Farm Act (Seller’s Disclosure Required)
- Changes in the Land Contract Laws (Dodd Frank Law-federal)
Examination sources
- PSI Michigan Real Estate Candidate Information Bulletin
Page 11, complete published outline statement
- PSI Michigan Real Estate Candidate Information Bulletin
Page 11, general-practice heading Property Ownership
- PSI Michigan Real Estate Candidate Information Bulletin
Page 11, general-practice heading Land use Controls
- PSI Michigan Real Estate Candidate Information Bulletin
Page 11, general-practice heading Valuation
- PSI Michigan Real Estate Candidate Information Bulletin
Page 11, general-practice heading Financing
- PSI Michigan Real Estate Candidate Information Bulletin
Page 12, general-practice heading Contracts
- PSI Michigan Real Estate Candidate Information Bulletin
Page 12, general-practice heading Agency
- PSI Michigan Real Estate Candidate Information Bulletin
Page 12, general-practice heading Property Disclosures
- PSI Michigan Real Estate Candidate Information Bulletin
Page 12, general-practice heading Property Management
- PSI Michigan Real Estate Candidate Information Bulletin
Page 12, general-practice heading Transfer of Title
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, general-practice heading Practice of Real Estate
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, general-practice heading Real Estate Calculations
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, Michigan-specific heading
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, duties outline
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, licensing outline
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, statutory outline
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, contractual-relationship outline
- PSI Michigan Real Estate Candidate Information Bulletin
Page 13, additional-state-topics outline
- PSI Michigan Real Estate Candidate Information Bulletin
Page 14, concluding state topic
- PSI Michigan Real Estate Candidate Information Bulletin
Page 9, computer administration
- PSI Michigan Real Estate Candidate Information Bulletin
Page 9, score reporting
- PSI Michigan Real Estate Candidate Information Bulletin
Page 10, examination summary table, broker row and national-question scoring note
- PSI Michigan Real Estate Candidate Information Bulletin
Page 2, broker registration before application
Related license preparation
This examination may be required or accepted as an alternative, depending on the license and application pathway.