MI Michigan Real Estate Test

Instructions:

• Answer 50 questions in 15 minutes.
• If you are not ready to take this test, you can study here.
• Match each statement with the correct term.
• Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Mortgagee
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
One that is free from reasonable doubt and that a court would require a purchaser to accept
Selling property without consent of the owner who incurred the debt - resulting in a lien - as ordered by a court or authorized by state law - and title conveyed to purchaser by judicial deed.
One that has no participation by an agency of the federal government - Can be ether uninsured or insured


2. Police power
Any fact - the existence or occurrence of which - by agreement of the parties - operates to discharge a duty of performance after it has become absolute. (making mortgage payments)
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
The power of government to regulate the use of real property for the benefit of the public
The statement in a deed containing words of conveyance


3. Buyer Agency Agreement

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4. Pur autre vie
Must be in writing - must name a grantor - must name a grantee - property description - words of conveyance (aka granting clause or habendum clause - "...conveys and warrants...") - signed by grantor(s) - acknowledgment - stating to public officer th
A written instrument used to pledge a title to real property to secure payment of a promissory note.
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
A life estate based on the life of another


5. Contract remedies
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
Personal property


6. Arrears
The U. S. agency that insures mortgage loans to protect lending institutions.
A person - such as an agent - placed in a position of trusted in relation to the person for whose benefit the relationship is created; essentially the same as a trustee
Delinquency in maeeting an obligation; or - paid at the end of a period (e. g. - at the end of the month) for the previous period; payments in arrears include interest for using the money during the previous period.
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.


7. Option
A property map - recorded on the public record in plat books
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic


8. Vrepaid expenses
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
Costs the seller pays in advance that were not fully used up (such as utility payments or property taxes due) - shown as a credit to the seller and debit to the buyer
Must be in writing - must name a grantor - must name a grantee - property description - words of conveyance (aka granting clause or habendum clause - "...conveys and warrants...") - signed by grantor(s) - acknowledgment - stating to public officer th
A statement in a lease or condominium articles of association that provides for a lessee or an association to have the first opportunity to purchase the property before it is offered to anyone else.


9. Quarter-section
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
One-forth of a section - containing 160 acres
Legal purpose.
A form of co-ownership that includes the right of survivorship


10. Highest and best use
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
Actually lending the $
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land


11. Disclosure of information
The document setting forth the terms and conditions of the brokerage relationship with the purchaser. (expectation to act in the client's best interest - follow legitimate instructions - advocate their price and terms; keep all pertinent info confide
The prompt and total communication to the principal by the agent of any information that is material to the transaction for which the agency is created.
The act of reviewing loan documentation and evaluating borrower's ability and willingness to repay the loan and sufficiency of collateral value of the property.
An exaggeration of a property's benefits.


12. Homogeneity
Neighborhoods that are made up of similar properties
A promise in a deed that the grantor will execute further assurances that may be reasonable or necessary to perfect the title in the grantee
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
One-forth of a section - containing 160 acres


13. Trustor
One who conveys title to trustee
To perfect the claim and obtain a title to the property - the claimant must satisfy the court that he or she has fulfilled the requirements of the adverse possession statute of Michigan
The outlay of money expecting income or profit or the acquisition of property expecting income or profit
One who conveys title to real property by deed


14. Descent
A deed containing a limited warranty of title
The distribution of property to legally qualified heirs of one who has died intestate
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
A form of ownership in which the purchsaser owns the property for a certain specified time interval.


15. Negligent misrepresentation

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16. Debits
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
In a closing statement - an expense or money received against a credit
A form of co-ownership that does not include the right of survivorship.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.


17. Discharge of contracts

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18. Graduated payment adjustable mortgage
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
Requirements issued by the Federal Reserve Board iin implementing the Truth-in-Lending Law - which is a part of the Federal Consumer Credit Protection Act
A combination of the graduated payment mortgage and the variable rate mortgage
Land and everything permanently attached to land


19. Conditional sales contract
A major source of funds for financing residential real estate.
A contract of sale and a financing instrument wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called nstallment land contract contract for deed - and conditional sales contract.
A deed denoting an unlimited guarantee of title
A statement in a mortgage or deed of trust giving the borrower the right to redeem the title and have the mortgage lien released at any time prior to default by paying the debt in full


20. Michigan Uniform Securities Act
A deed denoting an unlimited guarantee of title
An organized method of sharing or pooling listings by member brokers. (electronic)
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
The power of government to regulate the use of real property for the benefit of the public


21. Devise
One-forth of a section - containing 160 acres
A gift of real property by will
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
Seller


22. Grant deed
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
An implied agency without an agency agreement
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
A life estate based on the life of another


23. Tacking
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
Necessary elements for the creation of a contract.


24. Fraud
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
An intentional false statement of a material fact.
The third party in a real estate transaction
An organized method of sharing or pooling listings by member brokers. (electronic)


25. Trade fixtures
Person or a nonperson (partnership - association - corporation - common law trust - or combination) acting as agent for others in negotiating the purchase and sale of real property or other commodities for a fee
Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)
Item that is installed by a comercial tenant and is removable upon termination of the tenancy
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.


26. Testator/testatrix
Execution of a contract by vrtue of all parties having fully performed all terms
The client (buyer or seller) has an agency relationship with only those persons named in the listing contract or buyer agency contract. (Other agents within the same brokerage would not be dual agents in this instance.)
A man/woman who has died and left a valid will
A mortgage loan in which payments are insured by the Federal Housing Administration


27. Junior Mortgage
Paid to Cooperating Brokers Usually 50%/50%
Second mortgage
A deed denoting an unlimited guarantee of title
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.


28. Equitable redemption

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29. FHA-insured loans
A report usually provided by a local municipality health department to determine the potability of water and to ascertain that the septic system is running free
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
A mortgage loan in which payments are insured by the Federal Housing Administration
Cash sales - New financing


30. Fiduciary
The act of reviewing loan documentation and evaluating borrower's ability and willingness to repay the loan and sufficiency of collateral value of the property.
A person - such as an agent - placed in a position of trusted in relation to the person for whose benefit the relationship is created; essentially the same as a trustee
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)
A wife's interest in her husband's real property


31. Unities of ownership
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
A right of title to land
A condition in a contract imposed by a court. (e. g. court orders payback on agreed upon amount because of incomplete fulfillment of contract...38 acres instead of 40 sold)
A federal prohibition of discrimination in sale - rental - financing - or appraisal of housing on the basis of race - color - religion - sex - national origin - handicap - or familial status.


32. Acceleration clause
Requirements issued by the Federal Reserve Board iin implementing the Truth-in-Lending Law - which is a part of the Federal Consumer Credit Protection Act
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
A provision iin a mortgage or deed of trust that permits the lender to declare the entire principal balance of the debt immediately due and payable if the burrower is in default
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency


33. Dual agency

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34. Covenant of seisin and right to convey
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.


35. Civil Rights Act of 1968
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
A contract of sale and a financing instrument wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called installment land contract - contract for deed - and conditional sales contract.
The borrower is granted the right to pay the debt plus accrued interst and costs in full after the foreclosure sale - and thereby recover the property
The vendor cannot do anything to jeopardize the interest of the vendee.


36. Immobility
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
Investigates alleged discrimination and secures the equal protection of civil rights.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
Land cannot be relocated


37. Life tenant
A court instruction requiring a defaulting party to a contract to buy and sell real property to specifically perform his or her obligations under the contract
An agreement that has not been fully performed.
A fee paid by a realtor to a brokerage out of the area for a buyer listing
One holding a life estate


38. Bargain and sale deed
A relationship that meets the following criteria: (1) the broker and licensee must have a written agreement stating that the licensee is not an employee for federal and state or income tax purposes - and (2) not less than 75 percent of the licensse's
A man/woman who has died and left a valid will
A form of deed with or without covenants of title
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.


39. VA-guaranteed loan
An implied agency without an agency agreement
One that is free from reasonable doubt and that a court would require a purchaser to accept
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
The amount of the brokerage's commission that goes to the realtor


40. Certificate of reasonable value (CRV)
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
An accurate legal description of land
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
The governing board for real estate licenses in MI


41. Estate in real property
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.
One that does not impose a prepayment penalty.


42. vendor's affidavit
Delinquency in maeeting an obligation; or - paid at the end of a period (e. g. - at the end of the month) for the previous period; payments in arrears include interest for using the money during the previous period.
The use of someone else's money to enhance your own
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.


43. Budget mortgage
The lender requires one-twelfth of the estimated cost of the annual property taxes and hazards insurance on the mortgaged property in addition to paying monthly priincipal and interest
The form the seller completes to reveal any defects in the property (delivered within 72 hours of presentation of purchase agreement or 120 hours over a weekend). Good idea to leave a copy in the house with seller agent business card.
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
Founded on natural duty and affection. Has no pecuniary value.


44. Breach of contract
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
The transfer of mortgage obligations to purchaser of the mortgaged property.
An agency relationship created by oral or written agreement between principal and agent
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.


45. Multiple listing service (MLS)
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
Savings banks - mutual savings banks - commercial banks
The relatonship between the amont of a mortgage loan and the lender's opinion of the value of the property pledged to secure payment of the loan.
An organized method of sharing or pooling listings by member brokers. (electronic)


46. Receiver
A federal law prohibiting discrimination in consumer loans
Second mortgage
One who takes over management of a property until the foreclosure process is complete
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)


47. Accidental or Ostensible Agency
An implied agency without an agency agreement
A condition in a contract imposed by a court. (e. g. court orders payback on agreed upon amount because of incomplete fulfillment of contract...38 acres instead of 40 sold)
The use of someone else's money to enhance your own
When the parties are to exchange performances at the same time.


48. Novation
Substitution of a new contract for a prior contract.
One in which the scheduled payment will not fully amortize the loan over the morgage term; therefore - to fully satisfy the debt - it requires a final payment called a balloon payment - larger than the uniform payments.
Doesn't happen anymore in this climate
Money to be paid and received as compensaton for a breach of contract.


49. Promulgate
A deed issued to the buyer of property that was sold under court order to pay off a debt.
A buyer of property who relies on the records and is unaware of an unrecorded prior document
To put in effect by public announcement; to put into operation
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms


50. Legality of object
License law term that describes a type of relationship between a broker and his or her licensees
Legal purpose.
A hidden structural defect that would not be discovered by an ordinary inspection
Provides that if the lender amends the loan contract and blends the rate for the buyers assuming the loan - the seller still retains liability on the note and the mortgage. It applies to Michigan state-chartered lenders only