Michigan Real Estate Exam Practice-
Questions & Answers
The purpose of requiring an earnest money deposit in a real estate sales contract is to Correct
Ans-provide evidence of the buyer's intention to carry out the contract.
A prospective buyer made an offer to purchase a property. The owner responded with a
counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer.
The owner can accept the second offer if Correct Ans-the owner withdraws the counteroffer
before it is accepted.
Prospective buyers made an offer on a property. The seller did NOT accept, but made a
counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered
their acceptance to the seller. In the interim, the same buyers had found another house that they
liked better and made an offer on it, which was accepted. Which of the following is TRUE?
Correct Ans-Both contracts are valid.
MOST closed real estate transactions should be reported to the IRS. REQUIRED information
includes seller name(s) and social security number(s) and what? Correct Ans-the sale price.
At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which
the monthly interest charge is currently $600. The seller has made the payment due on June 1.
Assuming a VA mortgage, what is the adjustment made at closing? Correct Ans-Debit seller
$300; credit buyer $300.
, For Federal income tax purposes, which of the following are costs of homeownership that may
be deducted from gross income? Correct Ans-Mortgage loan interest, local property taxes,
mortgage loan origination fees.
The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is
the adjustment made at closing? Correct Ans-Credit buyer $110,000; debit seller $110,000.
What is NOT usually prorated at closing? Correct Ans-Special tax assessments.
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually
examined the record or not, have been given what? Correct Ans-constructive notice.
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually
examined the record or not, have been given Correct Ans-
When someone has living heirs but dies without leaving a will, the estate is distributed according
to what? Correct Ans-that statute of descent.
A managing broker can be held responsible for what? Correct Ans-all real estate activities of
salespersons.
Errors and Omissions insurance covers the broker for what? Correct Ans-unintentional
misrepresentations.
Questions & Answers
The purpose of requiring an earnest money deposit in a real estate sales contract is to Correct
Ans-provide evidence of the buyer's intention to carry out the contract.
A prospective buyer made an offer to purchase a property. The owner responded with a
counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer.
The owner can accept the second offer if Correct Ans-the owner withdraws the counteroffer
before it is accepted.
Prospective buyers made an offer on a property. The seller did NOT accept, but made a
counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered
their acceptance to the seller. In the interim, the same buyers had found another house that they
liked better and made an offer on it, which was accepted. Which of the following is TRUE?
Correct Ans-Both contracts are valid.
MOST closed real estate transactions should be reported to the IRS. REQUIRED information
includes seller name(s) and social security number(s) and what? Correct Ans-the sale price.
At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which
the monthly interest charge is currently $600. The seller has made the payment due on June 1.
Assuming a VA mortgage, what is the adjustment made at closing? Correct Ans-Debit seller
$300; credit buyer $300.
, For Federal income tax purposes, which of the following are costs of homeownership that may
be deducted from gross income? Correct Ans-Mortgage loan interest, local property taxes,
mortgage loan origination fees.
The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is
the adjustment made at closing? Correct Ans-Credit buyer $110,000; debit seller $110,000.
What is NOT usually prorated at closing? Correct Ans-Special tax assessments.
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually
examined the record or not, have been given what? Correct Ans-constructive notice.
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually
examined the record or not, have been given Correct Ans-
When someone has living heirs but dies without leaving a will, the estate is distributed according
to what? Correct Ans-that statute of descent.
A managing broker can be held responsible for what? Correct Ans-all real estate activities of
salespersons.
Errors and Omissions insurance covers the broker for what? Correct Ans-unintentional
misrepresentations.
