Those who want to pursue a career in real estate should understand the rules and requirements set by the state for getting a real estate license in Michigan.
Michigan, like many other states, has a multi-tier process for pursuing a career in real estate. A basic license is a real estate salesperson license, and we’ll talk about how to achieve this professional certification.
First, before taking the Michigan state real estate exam, applicants will need to complete 40 hours of pre-licensure education.
They will also need more education over time to maintain their license.
The state of Michigan requires applicants to use a state-approved education provider, and the Michigan Department of Licensing and Regulatory Affairs (LARA) maintains a list of providers.
However, applicants are also instructed to sign up for approved continuing education courses, and the state does not directly track those approvals anymore.
Instead, Michigan is using a partnership with CE Marketplace, which has a wide selection of resources related to licensure.
More Resources for a Michigan Real Estate License
On the LARA website, you can find all sorts of resources related to licensure and verification.
There are four links at the top of the landing page that show updates to requirements in the state of Michigan.
The first one is the new administrative rules for real estate brokers and salespersons.
This document goes over changes to licensing rules.
“The rule regarding application was rescinded because it has been added to state law,” reads licensing information dated June 18. 2018.
“Information has also been removed from the rule addressing the validity of broker and salesperson education. That rule was also amended to specify the amount of prelicensure course hours that will be granted for applicants with a bachelor’s or master’s degree in business administration or finance, and additional educational degrees to count toward prelicensure requirements were added.”
One of the other changes in this document is a provision for an applicant to use a license in another state as prelicensing credit.
“(A) new rule was added to allow an applicant for a license as a broker or associate broker to receive credits for experience gained by holding a real estate license in another state and closing real estate transactions and for managing at least 10 units located in the state of Michigan for 3 or more years,” write officials.
Another rule has to do with a broker sponsorship, which is mandatory in the state of Michigan.
According to the update, the salesperson’s license has to be suspended when the supervising broker’s license lapses or if the supervising broker passes away.
Another document on the site talks about real estate advertising, which is an important part of understanding industry requirements.
In addition, LARA also maintains a link for continuing education, and another legal change from September 2017 requiring various types of continuing education for license cycles.
Visitors can also search license types.
Under real estate salesperson or broker licenses, they find that brokers must be licensed by LARA as well, and there are particular requirements for these advanced positions.
In a PDF called “licensing information,” the department clearly outlines that 40 hours of approved pre-licensure education are required in order to sit for the exam.
This includes four hours of civil rights law and equal opportunity in housing education.
A fee for the application is $88, and the examination is provided by PSI Services for $79.
Is the Michigan Real Estate Exam Hard?
Those who have already taken the test often believe that the Michigan test is far less difficult than some exams in other states.
“I took the Michigan test just 4-6 weeks ago and I prepared by taking some sample tests (I did my course online).” Says Scott McMahon from Flint, Michigan at BiggerPockets, in a forum on state exams. “The sample tests were more difficult than the actual test. Know the protected classes, the civil rights issues, all the real estate terminology, and you should be ok.”
Multiple test-takers encourage others to study fair housing and understand the rules on protected classes.
“Very heavy on fair housing (make sure you know what year certain things became a protected class) and ethical standards,” says Brie Schmidt, the moderator of the thread.
Other areas of focus include advertising and general ethics topics.
Some suggest going over topics with a partner and utilizing a good test-taking strategy.
“The test isn’t that hard,” says Rob K. “I would recommend skipping any answers you’re not sure about and go back to those later. Take your time and relax. You will do fine.”
Test-Taking Strategy: More Tips
Many test-takers asking about test strategies for state-specific real estate online benefit from more broad-spectrum kinds of advice.
For example, we’ve seen that Michigan test takers who are advising others have told them to focus on specific topics like fair housing and ethics.
It stands to reason, then, that one of the comprehensive tips for real estate testing is to target your practice the right way.
That means selecting practice exams on an informed basis and working with them broadly, but with a progressively narrow focus, to start targeting the actual things that you think will be on the test.
“Take practice exams to see where your weaknesses are, and concentrate on improving those areas,” writes a poster at Real Estate Express. “Also, review study hacks that can help you make the most of the time you spend in your books.”
By anticipating some of the major aspects of the test, you’re not working yourself too hard trying to cover all the bases.
In fact, what many frustrated students have seen is that they simply study too hard and too broadly, instead of trying to narrow their focus a bit.
There’s also the time-honored strategy of collaboration predicated on the old saying that “two heads are better than one.”
Some suggest bouncing realistic questions and answers off of a willing partner, i.e. a spouse or somebody else who shares your interest.
Just like with other kinds of intensive testing, a partner can bombard the student with flashcards or rapid-fire questions and allow them to get real practice before the test.
In addition, all of the age-old logistical strategies apply – drinking plenty of fluids, getting enough rest and avoiding excessive caffeine. Here’s more on that from the same advice source:
“Make sure you are well rested on the day of your test. Do not go into the test tired or hungry. Get a good night’s sleep the night before, and make sure you are properly nourished when you arrive at your appointed test time. It is not recommended that you attempt any practice testing on the day of your real estate exam. Last minute cramming can cause you to tense up and over think. Concentrate on being calm and staying focused on the material in front of you, and passing your real estate exam will be a breeze.”
Fair Housing Components of the Michigan Real Estate Test
In targeting your studying for the Michigan real estate test, it makes sense to ask what the fair housing portion of the test entails.
Some of the basic aspects of fair housing are going to be integral to the Michigan real estate test, and these are things that every Michigan real estate school should cover.
First, you have the seven protected classes of fair housing:
- Family status
- National origin
Questions on the test will relate to how these classes protect individuals and families, and how a qualified real estate professional would respond to theoretical scenarios.
- Who would be covered?
- In what kinds of situations would coverage be important?
- What are the red lines of what a real estate agent should and shouldn’t say in a particular situation?
Then there are also questions related to various models of governance and proper policy.
There’s the Civil Rights Act of 1866, set up by the country’s founders to ensure fair treatment.
Then there’s another regulation, the Equal Professional Services Model, that didn’t develop until the 1980s.
The Equal Professional Services Model is not a law but an industry regulation set up by the National Association of Realtors.
Here’s what RealtorMag says:
“The Equal Professional Service Model is a set of policies and procedures designed to help its users provide the same level of service to all real estate consumers. The model involves consistent practices in making the initial contact with consumers, gathering objective information about consumers’ needs, letting consumers set their own limits, offering a variety of choices, and keeping accurate records of all of the above. The Equal Professional Service Model, a key part of NAR’s fair housing curriculum, was developed by NAR in the late 1980s. It provides a solid foundation for providing equal service in compliance with fair housing laws.”
You’ll see practical questions about these on the test.
It’s also important to have a technical grasp of how fair housing law works, and how it’s used practically within the industry.
A page from the NAR shows some of the practice questions that may help students taking the test.
Ethics Training for a Michigan Real Estate Test
Other parts of the Michigan real estate test help realtors to anticipate scenarios in which a license might be in jeopardy.
Ethics work is at the core of real estate pre-licensing courses and continuing education, in Michigan and in other states.
One resource is the Code of Ethics of the National Association of Realtors.
Some experts refer to this as the ‘code that grows’ suggesting that as a living document, the document requires real estate agents to always be updating their expectations.
“Our industry is changing,” writes Leigh York in an informative post at REALTOR Magazine, talking about the philosophy that drives this change. “Technology brings new business models and the skill set of REALTORS® keeps evolving. You might be wondering where that leaves our venerable Code of Ethics.”
Describing the history of the code, York helps those in pre-licensing to understand the trajectory that makes it a mainstay for real estate license study.
“The National Association of REALTORS® adopted its Code of Ethics in 1913, a time when there were few guidelines for those working in real estate,” York writes. “It was established to set a high, consistent standard throughout the country for REALTORS® who helped consumers buy, sell, and lease real estate. … As a living document, the Code is continuously updated, although it can be a challenge to stay ahead of the curve. While the Code typically sets a higher standard than the law requires, the Professional Standards Committee is concerned about the disconnect between some state laws and the Code and will be studying this issue in order to keep our Code relevant as state and local laws change.“
A helpful resource for Michigan realtors called “2018 Michigan Code of Ethics Case Interpretations” illustrates some of the thinking that will stand behind exam questions.
Here’s an example case involving the principle of “Fidelity to Client” (read full text on site):
“Client A complained to a Board of Realtors® that two of its members, Realtors® B and his sales associate, Realtor-Associate® C, had failed to represent the client’s interests faithfully by proposing to various prospective buyers that a price less than the listed price of a house be offered.”
Think about this scenario: here, a lack of trust leads to a question about potentially unethical behavior.
This highlights how the ethical rules and standards required to keep a Michigan state license relate to the agent-seller relationship (or, alternately, the agent-buyer relationship.)
Learning About Real Estate Contracts
You can’t really talk about real estate training without talking about understanding contracts.
Real estate agents are in the business of connecting buyers and sellers and walking parties through to a successful deal.
So you can imagine that a lot of contract language and content is going to be on the Michigan real estate exam.
For an inside look at what this might resemble, there is a set of documents related to questions posed on a Michigan real estate hotline.
One category of such questions involves buy and sell agreements.
Experts are advising real estate agents and others on scenarios like these:
- A buyer entered into a sale purchase with a 15-day inspection contingency and found defects – and wants to compel the seller to fix things
- The buyer submitted a high offer and was told there were other offers without being able to view the other offer amounts
- A buyer’s offer was not accepted, and they want to see the other offers to see if they were discriminated against
In each of these cases, Michigan real estate law provides guidance and instruction for real estate agents and salespersons.
Here’s another quite detailed question that poses a significant puzzle to real estate salespeople:
“I represent a buyer who has made an offer of $150,000 on a house listed at $180,000. The listing agent called and told me that the sellers were rejecting the offer and that the sellers would take no less than $170,000. My buyer then submitted an offer for $170,000, which the sellers promptly accepted. Although everyone in this transaction is happy, my broker believes that the listing agent breached a fiduciary duty owed to the sellers by telling me the bottom line price the sellers were willing to accept. Is my broker correct?”
The answer? “Potentially, YES.”
Here, the idea of fiduciary duty is pretty involved. The answer states that the agent must get permission from the seller to divulge lowest price information.
What if the agent says he or she was given permission, and the seller denies it?
Again, a real estate training school will help prepare pre-licensing students to handle these types of issues.
Guidelines such as those mentioned above will provide a framework.
Applicable laws will provide general guidance.
But in reality, the real estate community works on a very sophisticated network of experts and institutions.
Those who are preparing to take the Michigan real estate exam are well served by understanding this network.
A school can start to show the major players.
The school can also provide students with resources like:
- Documents and fact sheets showing what an institution recommends for a particular scenario
- Glossaries or language appendices that help students learn key terms
- Case study or case law that reflects on aspects of the real estate industry
- Excerpts from books by experts or experienced real estate agents
- First-hand advice from real estate brokers
- Detailed information about broker mentorship programs that are required in the state of Michigan
In addition to having the right experience and passion for real estate, the real estate school leadership has to have resources in hand.
Students can ask questions up-front about how they will learn these industry guidelines.
They can ask to see:
- Examples of curriculum
- Characterizations of practice tests available
- Orientation materials for exam prep
- Fact sheets and monetary amounts for applications and tests, etc.
- A real estate school in Michigan isn’t required to have all of these things, but the best schools typically will.
They will provide students with a comprehensive approach to passing the real estate exam and getting a real estate license in Michigan.
The Knowns and the Unknowns
In addition to all of the scenarios outlined above, there are many other areas for real estate pre-licensing students to study.
They need to know about the entire inspection and appraisal process.
They need to know what’s on the seller disclosure form in Michigan, and what is not included.
They need to know what kinds of environmental hazard inspections or contingencies can delay or break a deal.
Real estate is truly in many ways ‘the art of the deal,’ and it’s also a people-centric industry.
Successful real estate agents will need soft skills related to time management and excellent customer service for clients.
They will need to work with title companies, inspectors, appraisers, and others to satisfy the deal process.
That’s another thing that real estate schools can help them work toward.
All of the above helps a student studying for real estate license in Michigan.
It gives a kind of overall roadmap for finding the best real estate school online or getting live class instruction support.
Many schools offer both, with blended learning approaches available.
Final Notes on Getting Your Real Estate License in Michigan
In some ways, a Michigan license process is like any other across the nation.
In other ways, it is unique.
It always pays to select a real estate training school based on your state of residence, and where you want to practice.
When schools invest in state-specific training resources, they are supporting their students as they progress toward licensing.
By reading some of the comments in the forums above, you can see that preparing to pass a Michigan state real estate license exam can be a trying time.
Get the best support available by doing your homework on Michigan online real estate training schools and getting the best support for your future career.
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