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. Vartial release clause
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
An inheritable estate in land providing the greatest interest of any form of title
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
One in which uniform installment payments include payment of both principle and interest.


2. Vendor
No: misrepresentation of fact; negligent misrepresentation; innocent misrepresentaton. MI law says seller's broker is not liable for statments made to buyer/customer regarding condition of property.
A right of title to land
Personal property that has become real property by having been permanently attached to real property
Seller


3. Subrogation of rights
A form of co-ownership limited to husband and wife - with the right of survivorship
The substitution of the title insurance company in the place of the insured for filing a legal action.
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
A form of insurance coverage required in high loan-to-value ratio conventional loans to protect the lender in case the borrower defaults in loan payment.


4. Declaration
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
Master deed containing legal description of the condoinium facility - a plat of the property - plans and specifications for the building and units - a description of the common areas - and the degree of ownership in the common areas available to each
One in which personal property as well as real property s pledged to secure payment of the note.
A form of co-ownership that does not include the right of survivorship.


5. Disability
An error of material fact by both parties
A physical or mental impairment that substantially limits one or more of the major life activities of a person
A white couple enters a racially restrictive covenant with a neighborhood. A black family - moved into this neighborhood. The white family brought it to court to enforce the contract and kept winning. Shelley appealed up to the Supreme Court. Raciall
Assures the absence of hazardous materials or problems relating to regulations of the EPA.


6. Vackage mortgage
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
One in which personal property as well as real property s pledged to secure payment of the note.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
Assures the absence of hazardous materials or problems relating to regulations of the EPA.


7. Nonjudicial foreclosure
Finds someone to lend the $
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
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 responsibility for revealing all information that affects the agency agreement


8. Bargain and sale deed
One that imposes a prepayment penalty.
A form of deed with or without covenants of title
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.


9. Open-end mortgage
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
One that may be refinanced without rewriting the mortgage.
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
A statement in a mortgage or deed of trust entitling the lender to declare the entire principal balance of the debt iimmediatley due and payable if the borrower sells the property during the mortgage term. Also known as due on-sale-clause.


10. Bundle of rights
Preventing a person from making a statement contrary to a previous statement
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
Any advertising that states or indicates a preference - limitation - or discrimination on the basis of race - color - religion - sex - national origin - handicap - or familial status in offering housing for sale or rent.
Land and everything permanently attached to land


11. Remainder
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
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 property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
A future interest in a life estate


12. Homogeneity
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
Neighborhoods that are made up of similar properties
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)


13. Michigan Condominium Act
Details rights of condominium purchasers in Michigan
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.
One in which the federal government does not insure or guarantee payment to the lender.
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.


14. Bequest
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
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
A leasehold estate that automatically renews itself for consecutive periods until terminated by notice by either party; also called estate from period to period or periodic tenancy
A gift of personal property by will.


15. Negative amortization
The borrower's right to redeem the title pledged or conveyed in a mortgage or deed of trust after default and prior to a foreclosure sale by paying the debt in full - accrued interest - and lender's costs.
When the loan payment amount is not sufficient to cover interest due - the shortfall added back into principal - causing principal to grow larger after payment is made
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
A temporary mortgage used to borrow money to contruct an improvement on land


16. Buyer Agency Agreement

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17. Estate at sufferance
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
The statement in a deed containing words of conveyance
Transfer of title to real property
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate


18. Michigan Due on Sale Clause Act
An accounting of all financial aspects of a mortgage loan required of lenders to borrowers in residential mortgage loans by Regulation Z of the Federal Reserve Board.
The amount of money (usually the loan amount) on which interest is either paid or recieved.
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
One in which the interest rate changes according to changes in a predetermined index.


19. Implied contract
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
The fiduciary relationship between a principal and an agent (in the form of a piece of paper that says who's acting on behalf of whom. e. g. buyer's agent - seller's agent - dual agent - etc.)
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
The largest and most prominent trade organization of real estate licensees.


20. Deficiency judgment
The attribute of an asset's being readily convertible to cash.
An intentional false statement of a material fact.
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.


21. Option
A search of the public record to determne the quality of a title to real property
A history of title and the current status of a title based on a atitle examination
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).
The use of someone else's money to enhance your own


22. Testator/testatrix
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
A combination of the graduated payment mortgage and the variable rate mortgage
A man/woman who has died and left a valid will
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty


23. Vrivate mortgage insurance (PMI)
One in which the interest rate changes according to changes in a predetermined index.
A history of title and the current status of a title based on a atitle examination
Paid to Cooperating Brokers Usually 50%/50%
A form of insurance coverage required in high loan-to-value ratio conventional loans to protect the lender in case the borrower defaults in loan payment.


24. Association of Real Estate License Law Officials (ARELLO)
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 written instrument transferring an interest in real property when delivered to the grantee.
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.


25. Indestructibility
One who holds title to property for the benefit of another called a beneficiary
Permanence of land--makes it an attractive long term investment
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.


26. Heterogeneity
Any advertising that states or indicates a preference - limitation - or discrimination on the basis of race - color - religion - sex - national origin - handicap - or familial status in offering housing for sale or rent.
No two parcels of land are identical
Personal property that has become real property by having been permanently attached to real property
Cash sales - New financing


27. Contract buyer's policy

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28. Listing contract
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
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
Savings banks - mutual savings banks - commercial banks
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)


29. Nonfreehold estate
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A claim against a title to real property.
One who holds title to property for the benefit of another called a beneficiary
A law in effect in all states requiring certain contracts to be in writing to be valid.


30. Rural Housing Service (RHS) Direct Loan Program
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
An adult with children under 18 - a person who s pregnant - one who has legal custody of a child or who is in the process of obtaining such custody.


31. Leasehold mortgage
The fiduciary relationship between a principal and an agent (in the form of a piece of paper that says who's acting on behalf of whom. e. g. buyer's agent - seller's agent - dual agent - etc.)
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
A right of title to land
A fee paid by a realtor to a brokerage out of the area for a buyer listing


32. Adverse possession
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Paid to Cooperating Brokers Usually 50%/50%
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
A percentage of the loan amount the lender requires for making a mortgage loan


33. Supply and demand
A form of insurance coverage required in high loan-to-value ratio conventional loans to protect the lender in case the borrower defaults in loan payment.
The principle statiing that the greater the supply of any commodity in comparison to demand - the lower the value; conversely - the smaller the supply and the greater the demand - the higher the value.
Investigates alleged discrimination and secures the equal protection of civil rights.
A gift of personal property by will.


34. Mutual mistake
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
An error of material fact by both parties
The vendor cannot do anything to jeopardize the interest of the vendee.
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.


35. Agent's Responsibility to Third Persons

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36. Interest
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
Title to real property held by two or more persons at the same time; also called concurrent ownership
(a) Money paid for the use of money. (b) An ownership or right.


37. Open mortgage
Doesn't happen anymore in this climate
One that does not impose a prepayment penalty.
A person authorized by a state to take oaths and acknowledgments
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect


38. Title examination
A search of the public record to determne the quality of a title to real property
Another term for escrow account
Measure of profit
North-south line in the rectangular method of property description.


39. Escheat
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
Financinig charge required by the lender
A form of co-ownership lmited to husband and wife; does not include the right of survivorship
The reversion of property to the state or county - as provide by state law - in cases where a decedent dies intestate without heirs capable of inheriting - or when the property is abandoned


40. Habendum clause
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
The right of an owner to recieve the title to an co-owner's share upon death of the co-owner - as in the case of joint tenancy and tenancy by the entirety.
No two parcels of land are identical


41. Truth-in-Lending Simplification and Reform Act (TILSRA)
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
.A contract of sale and a financing insturment 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.
Contract where all terms are in writing and understood by both parties.
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


42. Well and septic report
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
An accounting of the funds received and disbursed in a real estate transaction.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
One in which two more parcels of real property are pledged to secure payment of the note


43. underwriting

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44. Mortgage
A written instrument used to pledge a title to real property to secure payment of a promissory note.
The inability of a party to exercise his or her free will because of fear of another party.
An inheritable estate in land providing the greatest interest of any form of title
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.


45. Recordation

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46. Graduated payment mortgage (GPM)
Purchaser
Requires that an owner or any other person engaging in a real estate transaction - a real estate broker - or a real estate salesperson shall not - on the basis of a disability that is unrelated to the individua's ability to acquire - rent or maintain
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
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.


47. Negligent misrepresentation

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48. Tenancy in common
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.
A form of co-ownership that does not include the right of survivorship.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
A form of ownership of real property - recognized in all states - consisting of individual ownership of some aspects and co-ownership in other aspects of that property.


49. Void contract
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.
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
An agreement that has no legal force or effect.
The distribution of property to legally qualified heirs of one who has died intestate


50. Real estate
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
A written instrument transferring an interest in real property when delivered to the grantee.
One that appears to meet the requirements for validity but would not be enforceable in court.
Land was owned or controlled by the King