Residential Builder's Salesperson EXAM
STUDY GUIDE 2026 2027 COMPLETE
QUESTIONS AND VERIFIED CORRECT DETAILED
ANSWERS || ALREADY GRADED A+
<NEWEST VERSION>
1. Residential Builder - ANSWER A person licensed to construct or alter
residential structures
2. Builder Salesperson - ANSWER Must work under a licensed residential
builder and cannot act independently
3. Michigan Occupational Code - ANSWER Law governing builders and
salespersons in Michigan
4. License Supervision - ANSWER Salesperson must be supervised by a
licensed builder
5. Independent Contracting - ANSWER A salesperson may NOT contract on
their own
6. Misrepresentation - ANSWER False or misleading statements or omission of
facts
7. False Advertising - ANSWER Advertising that deceives or misleads
consumers
8. Written Contract - ANSWER A contract required for residential construction
agreements
9. Change Order - ANSWER Written modification to an existing contract
10.Deposit - ANSWER Money given upfront toward a construction contract
,11.Improper Deposit - ANSWER Accepting or handling deposits outside legal
rules
12.Cooling-Off Period - ANSWER Time when a consumer may cancel certain
contracts
13.Express Warranty - ANSWER A written or spoken promise about the work
14.Implied Warranty - ANSWER Unwritten legal guarantee that work is done
properly
15.Disciplinary Action - ANSWER Penalties such as fines, suspension, or
revocation
16.Probation - ANSWER License remains active with restrictions
17.Fine - ANSWER Monetary penalty for violating the law
18.Square Footage - ANSWER Length multiplied by width
19.Commission Percentage - ANSWER Portion of sale paid to salesperson
In a typical construction loan, the interest rate is locked for the entire term of
the loan. - ANSWER True
20.Both company overhead and project overhead should be accounted for in a
projects estimate. - ANSWER True
21.Salespeople shall not begin selling until they receive their license and pocket
ID card. - ANSWER True
22.A material breach of contract is the most serious of contract breaches. -
ANSWER True
23.If a sale was initiated and completed by a salesperson at a person's home, the
customer has a right to cancel that contract within __________days. -
ANSWER 3
24.If a contract is negotiated on the premise of price per square foot of material
installed, this would be a ____________ - ANSWER Unit Price contract
,25.Costs that a contractor incurs such as administrative costs to service the
project while under construction are called _________ - ANSWER
Company Overhead
26.Company overhead can include - ANSWER Office expenses, facility
maintenance expense, electrical expenses
27.A complete list of all of the materials and items of work that would be
required to complete a project are ____ - ANSWER Quantity survey (take
off)
28.Can an unlicensed contractor who is required to be licensed impose a lien
against a homeowner? - ANSWER No
29.Public Act 299 provides for licensing and the right to engage in business as
_______ - ANSWER A salesperson, residential builder, and M&A
contractor
30.If a salesperson doesn't intend to renew their license after it has expired, do
they have to return it to the Department? - ANSWER Yes
31.Typically ____________________ are hired by mortgage companies and
lenders to represent their interest in closing a loan. - ANSWER Title
Companies
32.An explicit warranty made by a manufacturer or seller is an Implied
Warranty - ANSWER False
33.If a customer is listed on the National Do-Not-Call Registry, but there is an
established business relationship, a seller can still call within
_____________ months of the consumers last purchase, delivery or
payment. - ANSWER 18
34.Agent - ANSWER Someone with the authority to bind someone else by
contract- most of the salespeople you deal with are this.
35.Agent-Principal Relationship - ANSWER As long as agents do not exceed
the authority granted them by their principals, contracts they make bind their
principals as if the principals had made the contracts themselves. While
, acting on behalf of principals, agents are required to put their own interests
after those of the principal.
36.Exceeding Authority - ANSWER Under the doctrine of apparent authority,
if the person they're dealing with doesn't reasonably understand that they're
exceeding their authority, the principal may be bound by the contract
negotiated by the agent. An example of this would be an automobile
salesperson signs a contract on behalf of a car dealer which, without the
dealer's authority, gives the customer a warranty for 40,000 extra miles. In
that case, the dealer might very well be bound by the contract.
37.Contracts - ANSWER Agreements entered into voluntarily by two or more
parties who promise to exchange money, goods, or services according to a
schedule.
38.Typical rules to follow when considering a contract - ANSWER Oral
contracts are valid but often difficult to enforce.
Oral contracts are NEVER valid in Michigan for residential construction
projects.
All contracts must be entered into willingly and freely.
The contract content must be legal.
Minors, the insane, and others viewed by law as unable to care for
themselves are usually forbidden from signing contracts.
39.Clarity of Language - ANSWER One of the most important aspects of
interpreting contracts and avoiding disputes.
40.In the event of a conflict in the terms of a contract, these rules apply: -
ANSWER Specific provisions over general provisions.
Handwritten provisions over typed provisions. An ink pen is the most
powerful contract tool you own.
Typed provisions over printed provisions.
Words over numbers.
Specifications over drawings.
41.Required Contract Elements - ANSWER Offer, Acceptance, Consideration,
Competent parties, and a legal purpose.
42.Where should all licenses be displayed in a contractor's office? - ANSWER
On the office wall in a conspicuous place
STUDY GUIDE 2026 2027 COMPLETE
QUESTIONS AND VERIFIED CORRECT DETAILED
ANSWERS || ALREADY GRADED A+
<NEWEST VERSION>
1. Residential Builder - ANSWER A person licensed to construct or alter
residential structures
2. Builder Salesperson - ANSWER Must work under a licensed residential
builder and cannot act independently
3. Michigan Occupational Code - ANSWER Law governing builders and
salespersons in Michigan
4. License Supervision - ANSWER Salesperson must be supervised by a
licensed builder
5. Independent Contracting - ANSWER A salesperson may NOT contract on
their own
6. Misrepresentation - ANSWER False or misleading statements or omission of
facts
7. False Advertising - ANSWER Advertising that deceives or misleads
consumers
8. Written Contract - ANSWER A contract required for residential construction
agreements
9. Change Order - ANSWER Written modification to an existing contract
10.Deposit - ANSWER Money given upfront toward a construction contract
,11.Improper Deposit - ANSWER Accepting or handling deposits outside legal
rules
12.Cooling-Off Period - ANSWER Time when a consumer may cancel certain
contracts
13.Express Warranty - ANSWER A written or spoken promise about the work
14.Implied Warranty - ANSWER Unwritten legal guarantee that work is done
properly
15.Disciplinary Action - ANSWER Penalties such as fines, suspension, or
revocation
16.Probation - ANSWER License remains active with restrictions
17.Fine - ANSWER Monetary penalty for violating the law
18.Square Footage - ANSWER Length multiplied by width
19.Commission Percentage - ANSWER Portion of sale paid to salesperson
In a typical construction loan, the interest rate is locked for the entire term of
the loan. - ANSWER True
20.Both company overhead and project overhead should be accounted for in a
projects estimate. - ANSWER True
21.Salespeople shall not begin selling until they receive their license and pocket
ID card. - ANSWER True
22.A material breach of contract is the most serious of contract breaches. -
ANSWER True
23.If a sale was initiated and completed by a salesperson at a person's home, the
customer has a right to cancel that contract within __________days. -
ANSWER 3
24.If a contract is negotiated on the premise of price per square foot of material
installed, this would be a ____________ - ANSWER Unit Price contract
,25.Costs that a contractor incurs such as administrative costs to service the
project while under construction are called _________ - ANSWER
Company Overhead
26.Company overhead can include - ANSWER Office expenses, facility
maintenance expense, electrical expenses
27.A complete list of all of the materials and items of work that would be
required to complete a project are ____ - ANSWER Quantity survey (take
off)
28.Can an unlicensed contractor who is required to be licensed impose a lien
against a homeowner? - ANSWER No
29.Public Act 299 provides for licensing and the right to engage in business as
_______ - ANSWER A salesperson, residential builder, and M&A
contractor
30.If a salesperson doesn't intend to renew their license after it has expired, do
they have to return it to the Department? - ANSWER Yes
31.Typically ____________________ are hired by mortgage companies and
lenders to represent their interest in closing a loan. - ANSWER Title
Companies
32.An explicit warranty made by a manufacturer or seller is an Implied
Warranty - ANSWER False
33.If a customer is listed on the National Do-Not-Call Registry, but there is an
established business relationship, a seller can still call within
_____________ months of the consumers last purchase, delivery or
payment. - ANSWER 18
34.Agent - ANSWER Someone with the authority to bind someone else by
contract- most of the salespeople you deal with are this.
35.Agent-Principal Relationship - ANSWER As long as agents do not exceed
the authority granted them by their principals, contracts they make bind their
principals as if the principals had made the contracts themselves. While
, acting on behalf of principals, agents are required to put their own interests
after those of the principal.
36.Exceeding Authority - ANSWER Under the doctrine of apparent authority,
if the person they're dealing with doesn't reasonably understand that they're
exceeding their authority, the principal may be bound by the contract
negotiated by the agent. An example of this would be an automobile
salesperson signs a contract on behalf of a car dealer which, without the
dealer's authority, gives the customer a warranty for 40,000 extra miles. In
that case, the dealer might very well be bound by the contract.
37.Contracts - ANSWER Agreements entered into voluntarily by two or more
parties who promise to exchange money, goods, or services according to a
schedule.
38.Typical rules to follow when considering a contract - ANSWER Oral
contracts are valid but often difficult to enforce.
Oral contracts are NEVER valid in Michigan for residential construction
projects.
All contracts must be entered into willingly and freely.
The contract content must be legal.
Minors, the insane, and others viewed by law as unable to care for
themselves are usually forbidden from signing contracts.
39.Clarity of Language - ANSWER One of the most important aspects of
interpreting contracts and avoiding disputes.
40.In the event of a conflict in the terms of a contract, these rules apply: -
ANSWER Specific provisions over general provisions.
Handwritten provisions over typed provisions. An ink pen is the most
powerful contract tool you own.
Typed provisions over printed provisions.
Words over numbers.
Specifications over drawings.
41.Required Contract Elements - ANSWER Offer, Acceptance, Consideration,
Competent parties, and a legal purpose.
42.Where should all licenses be displayed in a contractor's office? - ANSWER
On the office wall in a conspicuous place
