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. Good faith estimates


2. Agency disclosure


3. Lien foreclosure sale
An agent working for an unnamed third party buyer (usually a celebrity)
No two parcels of land are identical
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.
A person authorized to act on behalf of another


4. Cortesy


5. Land use controls
Doesn't happen anymore in this climate
Governmental restrictions on land use
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
(a) One in which two or more lenders share in making the loan. (b) One in which a lender shares in the profit produced by an income property pledged to secure the loan payment in addition to receiving interest and principal payments.


6. Convey
A deed of release that contains no warranty of title; used to remove a cloud on a title. A deed to relinquish or release a claim to real property.
To pass to another (as in title)
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 insurance policy protecting the insured from a financial loss caused by a defect in a title to real property (Buyer buys for mortgage company for amount of mortgage; seller pays for buyer on full price of property).


7. Balloon mortgage
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.
An inheritable estate in land providing the greatest interest of any form of title
A gift of personal property by will.
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.


8. Net listing


9. punitive damages
The loss of funds available to lending institutions for making mortgage loans - caused by depositors' withdrawal of funds for making investments that provide greater yields.
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
One who takes over management of a property until the foreclosure process is complete
E.g. very accurate desc or property)


10. Quitclaim deed
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
A deed of release that contains no warranty of title; used to remove a cloud on a title. A deed to relinquish or release a claim to real property.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan


11. Concurrent ownership
A person authorized by a state to take oaths and acknowledgments
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
A percentage of the loan amount the lender requires for making a mortgage loan
Simultaneous ownership of real property by two or more people


12. Escheat
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
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
An instrument transferring ownership of personal property.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines


13. Junior mortgage
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted
A person appointedby an agent to assist in performing some or all of the tasks of the agency
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.


14. Agent's Responsibilty to principals
A written instrument transferring an interest in real property when delivered to the grantee.
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
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Legal purpose.


15. Counter-offer
A physical or mental impairment that substantially limits one or more of the major life activities of a person
A new offer made by an offer or rejecting an offer.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
A federal law regulating activities of lending institutions in making mortgage loans for housing.


16. Accord and satisfaction
Prohibits certain practices in trade or commece and provides for certain remedies.
Not a type of listing but a method of establishing the listing broker's commission as all money above a specified net amount to the seller. Illegal in MI
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
The statement in a deed containing words of conveyance


17. Executor /executrix
One in which all affected parties are bound by the knowledge of a fact even though they have not been actually notified of such fact.
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
One in which the federal government does not insure or guarantee payment to the lender.
A man/woman appointed in a will to see that the terms of the will are carried out


18. Rural Housing Service (RHS) Direct Loan Program
Individual - private ownership of land
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
Land and everything permanently attached to land
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security


19. Deed
A written instrument transferring an interest in real property when delivered to the grantee.
Paid to Cooperating Brokers Usually 50%/50%
To put in effect by public announcement; to put into operation
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.


20. Vrivate mortgage insurance (PMI)
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.
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
An error of material fact by both parties
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs


21. Caveat emptor
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)
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
The loss of funds available to lending institutions for making mortgage loans - caused by depositors' withdrawal of funds for making investments that provide greater yields.
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.


22. Negligent misrepresentation


23. Acceleration clause
In a closing statement - an expense or money received against a credit
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
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
One that does not impose a prepayment penalty.


24. Unilateral contract
Lender's estimate of borrower's settlement costs - required by RESPA to be furnished to borrower at time of loan application
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.
An agreement wherein there is a promise in return for a specific action - which together supply the consideration (A deal entered into by both parties after one party has fulfilled a promise. e. g. an option)
The power of government to regulate the use of real property for the benefit of the public


25. Liquidity


26. Michigan Due on Sale Clause Act
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
Successive conveyances of title to a specific parcel of land.
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
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.


27. Homogeneity
Neighborhoods that are made up of similar properties
Consummation of a real estate contract; also called closing.
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
A search of the public record to determne the quality of a title to real property


28. Immobility
One holding a life estate
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
Land cannot be relocated
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.


29. Listing contract
An agreement that is legally binding and enforceable.
In a closing statement - an expense or money received against a credit
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms


30. Discriminatory advertising
One who receives title to real property by deed
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.
An agreement that is legally binding and enforceable.
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


31. Promulgate
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
To put in effect by public announcement; to put into operation
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.
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.


32. Innocent misrepresentation


33. Rectangular survey system
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
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.
A type of land descripton utilizing townships and sections
A form of co-ownership that includes the right of survivorship


34. Customer
The third party in a real estate transaction
A deposit a buyer makes at the time of submitting an offer - to demonstrate the true inten to purchase; also called binder - good faith deposit - escrow deposit.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate


35. Nonjudicial foreclosure
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
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


36. Highest and best use
Actually lending the $
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land
The amount of money actually lost - which will be awarded by a court in case of a breached contract
Personal property growing in the soil - requiring planting and cultivation; annual crops.


37. Vackage mortgage
The governing board for real estate licenses in MI
One in which personal property as well as real property s pledged to secure payment of the note.
A percentage of the loan amount the lender requires for making a mortgage loan
An inheritable estate in land providing the greatest interest of any form of title


38. Equitable title


39. Essential Elements of a contract
Doesn't happen anymore in this climate
A proceeding in which a court gives a mortgagor in default a specified time period in which to satisfy the debt and thereby prevent transfer to the lender of the title to the mortgaged property.
An instrument transferring ownership of personal property.
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete


40. Deed in lieu of foreclosure
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
A formal statement before an authorized official (e. g. notary public) by a person who executed a deed - contract - or other document - that s was (is) his or her free act.
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well


41. Familial status
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.
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
An intentional false statement of a material fact.
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.


42. Owner's policy
Necessary elements for the creation of a contract.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
.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.
A policy insuring an owner of real property against financial loss resulting from a title defect.


43. Transaction coordinator
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
Founded on natural duty and affection. Has no pecuniary value.
Personal property that has become real property by having been permanently attached to real property
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.


44. Premises clause
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
One that is free from reasonable doubt and that a court would require a purchaser to accept
Devotion of certain settlement costs between buyer and seller.
The introductory information on a deed


45. Devisee
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
One who takes over management of a property until the foreclosure process is complete
A person (or persons) employed by a fair housing organization to pose as a buyer or seller or renter of real estate to determine if the licensee or landlord is acting in compliance with the law.
The recipient of a gift of real property by will


46. Bona fide purchaser
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
When a subsequent contract covering the same subject matter is drafted (with changes)
A buyer of property who relies on the records and is unaware of an unrecorded prior document
A federal law regulating activities of lending institutions in making mortgage loans for housing.


47. Mortgage broker
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
A deed issued to the buyer of property that was sold under court order to pay off a debt.
Make good loans to qualified borrowers ( e. g. Rural Development loans)


48. Quarter-section
Consummation of a real estate contract; also called closing.
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
Legal purpose.
One-forth of a section - containing 160 acres


49. Ranges
The refusal of lending institutions to make loans for the purchase - construction - or repair of a dwelling because the area in which the dwelling is located is integrated or populated by minorities
Money to be paid and received as compensaton for a breach of contract.
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)


50. Principal meridians
Contract where all terms are in writing and understood by both parties.
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
North-south line in the rectangular method of property description.