Test your basic knowledge |

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. Secondary mortgage market
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate
(a) Money paid for the use of money. (b) An ownership or right.
The market in which lenders sell mortgages
A type of land descripton utilizing townships and sections

2. VA-guaranteed loan
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
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

3. REALTOR*
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
One who takes over management of a property until the foreclosure process is complete
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.

4. Michigan Mortgage Brokers - Lenders - Servicers and Licensing Act
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.
Consummation of a real estate contract; also called closing.
A federal law protecting the rights of individuals with physical or mental impairments

5. Revenue stamps
Tax on the conveyance of title to real property ($8.60 per 1000; $4.30 per half thousand) The $8.60 is split: $1.10 to county - $7.50 to state
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 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
A contract in which a buyer hires a broker to obtain property that he or she may purchase; the broker is the agent of the buyer - who is his or her principal

6. Highest and best use
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land
A right of title to land
A form of deed with or without covenants of title
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.

7. Conforming loans
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
Legal purpose.
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) 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.

8. Equitable title

9. Deed
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
A promise in a deed (or lese) that the grantee (or lessee) will not be distrubed in his or her use of the property because of a defect in the grantor's (or lessor's) title
A written instrument transferring an interest in real property when delivered to the grantee.
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.

10. CConventional mortgage loan
Contract where all terms are in writing and understood by both parties.
One in which the federal government does not insure or guarantee payment to the lender.
The seller's broker makes a false statement to the buyer about the property - and the broker does not know whether the statement is true or false
A deed denoting an unlimited guarantee of title

11. Devisee
The recipient of a gift of real property by will
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
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.
Agency that exists as a result of actions of the parties

12. Convey
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
Neighborhoods that are made up of similar properties
The limited warranty deed limits the potential liability of the seller and does not hold him liable for any encumbrances against the property prior to his ownership.
To pass to another (as in title)

13. Savings Banks (S&L's)
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 major source of funds for financing residential real estate.
Title insurance that protects contract buyer against defects in contract seller's title.
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.

14. Covenant for further assurances
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
A tax imposed on the conveyance of title to real property by deed
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
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.

15. Disintermediation

16. Granting clause
Land cannot be relocated
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
The statement in a deed containing words of conveyance
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.

17. Valid contract
An instrument transferring ownership of personal property.
An agreement that is legally binding and enforceable.
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
Mandates that the seller complete a disclosure form regarding the condition of the property

18. Multiple listing service (MLS)
An organized method of sharing or pooling listings by member brokers. (electronic)
An individual's being led to believe by a broker/salesperson's actions and representations that the broker/salesperson is representing (is an agent for) the individual
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
Make good loans to qualified borrowers ( e. g. Rural Development loans)

19. Cloud on a title
The violations and fines or penalties - which the department and the licensee have agreed upon.
A claim against a title to real property.
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
The introductory information on a deed

20. Property description
An accurate legal description of land
A future interest in a life estate
Transfer of title to real property
One that has no participation by an agency of the federal government - Can be ether uninsured or insured

21. Competence
The recipient of a gift of real property by will
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 principle stating that when the net profit a property generates is excessive - very strong competition will result
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property

22. Adverse possession
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
A federal law protecting the rights of individuals with physical or mental impairments
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)

23. Brokerage
A mental or physical disability that impairs any of a person's life functions.
Financinig charge required by the lender
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
Legal purpose.

24. Foreclosure
Written registration of an owner's title in public records to protect against subsequent claimants.
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.
A fee paid by a realtor to a brokerage out of the area for a buyer listing
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

25. Independent contractor

26. Doctrine of Equitable Conversion
The vendor cannot do anything to jeopardize the interest of the vendee.
An implied agency without an agency agreement
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
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.

27. Leverage

28. Transfer tax
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
A tax imposed on the conveyance of title to real property by deed
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
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)

29. Waste
One that appears to meet the requirements for validity but would not be enforceable in court.
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Failing to do preventative maintenance or corrective maintenance.
A search of the public record to determne the quality of a title to real property

30. Equal Credit Opportunity Act (ECOA)
A hidden structural defect that would not be discovered by an ordinary inspection
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
Mortgage loan for which the monthly payments increase annually - with the increased amount applied directly to the loan's principal - thus shortening the term of the loan
A federal law prohibiting discrimination in consumer loans

31. Mutual mistake
An error of material fact by both parties
The principal in a real estate transaction
A deed issued to the buyer of property that was sold under court order to pay off a debt.
Contract where all terms are in writing and understood by both parties.

32. Bill of sale
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
An agent working for an unnamed third party buyer (usually a celebrity)
An instrument transferring ownership of personal property.

33. Mortgage bankers
Preventing a person from making a statement contrary to a previous statement
Money to be paid and received as compensaton for a breach of contract.
An agreement that has been fully performed.
A form of organization that makes and services mortgage loans.

34. Separate property
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
The inability of a party to exercise his or her free will because of fear of another party.
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
A mental or physical disability that impairs any of a person's life functions.

35. Condition precedent
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
A hidden structural defect that would not be discovered by an ordinary inspection
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.

36. Assignee
One to whom contractual rights are transferred
Second mortgage
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
An organized method of sharing or pooling listings by member brokers. (electronic)

37. Michigan Uniform State Antitrust Act
A leasehold estate of definite duration
There are certain types of trade restraints that are so injurious to competition that there can be no justification for them (price fixing; boycotts or concerted refusals to deal; territorial or customer allocation; tying agreements)
A man/woman appointed in a will to see that the terms of the will are carried out
A policy insuring an owner of real property against financial loss resulting from a title defect.

38. Vendor
The attribute of an asset's being readily convertible to cash.
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
Ownership by only one person
Seller

39. Mortgage banks
Actually lending the $
Land and everything permanently attached to land
The distribution of property to legally qualified heirs of one who has died intestate
License law term that describes a type of relationship between a broker and his or her licensees

40. Mortgage broker
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 listing contract protecting the broker's commission entitlement for a specified period of time after the contract expires; also called extender clause.
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
Finds someone to lend the $

41. Buyer's contract
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
A contract in which a buyer hires a broker to obtain property that he or she may purchase; the broker is the agent of the buyer - who is his or her principal
The attribute of an asset's being readily convertible to cash.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

42. Nonjudicial foreclosure
The largest and most prominent trade organization of real estate licensees.
An accounting of the funds received and disbursed in a real estate transaction.
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
Agency that exists as a result of actions of the parties

43. Margin
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)
Measure of profit
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 report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.

44. Estate for years
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.
A leasehold estate of definite duration
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
Governmental restrictions on land use

45. Executed contract
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
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
An agreement that has been fully performed.
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)

46. Promulgate
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
The largest and most prominent trade organization of real estate licensees.
To put in effect by public announcement; to put into operation
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.

47. Fannie Mae (FNMA)
Another term for escrow account
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages

48. Caveat emptor
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
A major source of funds for financing residential real estate.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.

49. Net listing

50. Contract buyer's policy