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. Notary public
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
A person authorized by a state to take oaths and acknowledgments
(a) In the law of agency - one who appoints an agent to represent him or her. (b) Amount of money on which interest is paid or received

2. Client
An agent working for an unnamed third party buyer (usually a celebrity)
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
The principal in a real estate transaction

3. Term 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)
A listing given to one or more brokers wherein the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner in the event the owner sells the property to someone who was not interested in the property by
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
Written registration of an owner's title in public records to protect against subsequent claimants.

4. Agent's Responsibility to Third Persons

5. Beneficiary
A percentage of the loan amount the lender requires for making a mortgage loan
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
Individual - private ownership of land
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.

6. Option
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).
The substitution of the title insurance company in the place of the insured for filing a legal action.
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)

7. Balloon payment
One with full authority over one property of the principal - such as a property manager
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.
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.

8. underwriting

9. Vrepayment penalty
Consummation of a real estate contract; also called closing.
A new offer made by an offer or rejecting an offer.
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.

10. Complete performance
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
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
Execution of a contract by vrtue of all parties having fully performed all terms
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate

11. Right of assignment
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
One that appears to meet the requirements for validity but would not be enforceable in court.
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.
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.

12. Leverage

13. Mortgage insurance premium (MIP)
To pass to another (as in title)
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
Purchaser

14. Joint tenancy
Second mortgage
E.g. very accurate desc or property)
License law term that describes a type of relationship between a broker and his or her licensees
A form of co-ownership that includes the right of survivorship

15. Executor /executrix
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.
One that imposes a prepayment penalty.
A man/woman appointed in a will to see that the terms of the will are carried out
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)

16. Trustee
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
One who holds title to property for the benefit of another called a beneficiary

17. Essential Elements of a contract
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.
Measure of profit
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
Cancellation of a contract when another party is in default

18. Grantor
One who conveys title to real property by deed
One insuring a lessee against defects in the lessor's title.
E.g. very accurate desc or property)
Land cannot be relocated

19. Open mortgage
A person appointedby an agent to assist in performing some or all of the tasks of the agency
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
One that does not impose a prepayment penalty.

20. Disclosure statement
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
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.
Personal property
A promise in a deed that the title causes no encumbrances except those set forth in the deed.

21. Contract
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
Financinig charge required by the lender
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.

22. Rescission
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.
Land and everything permanently attached to land
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.
Cancellation of a contract when another party is in default

23. Assignor
Successive conveyances of title to a specific parcel of land.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
The person transferring contractual rights to another

24. Equal Credit Opportunity Act (ECOA)
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
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
Personal property growing in the soil - requiring planting and cultivation; annual crops.
A federal law prohibiting discrimination in consumer loans

25. Bequest
A gift of personal property by will.
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.
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
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.

26. Undue influence
One in which two more parcels of real property are pledged to secure payment of the note
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
A threshold after which a realtor keeps all commissions and the broker keeps none
Any improper or wrongful influence by one party over another whereby the will of a person is overpowered so that he or she is induced to act or prevented from acting according to free will.

27. Flat Fee
Any improper or wrongful influence by one party over another whereby the will of a person is overpowered so that he or she is induced to act or prevented from acting according to free will.
Mandates that the seller complete a disclosure form regarding the condition of the property
A commission not based on a percentage of the selling price.
Personal property

28. Dred Scott Decision

29. Bundle of rights
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
Measure of profit
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
An agency relationship created by oral or written agreement between principal and agent

30. Term mortgage
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
To put in effect by public announcement; to put into operation
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.

31. Covenant against encumbrances
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
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.
The power of government to regulate the use of real property for the benefit of the public
Contract where all terms are in writing and understood by both parties.

32. Deed
A written instrument transferring an interest in real property when delivered to the grantee.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
Successive conveyances of title to a specific parcel of land.

33. Novation
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
One that appears to meet the requirements for validity but would not be enforceable in court.
Substitution of a new contract for a prior contract.
The U. S. agency that insures mortgage loans to protect lending institutions.

34. Michigan Person's with Disabilities CiveI Rights Act

35. Principal meridians
North-south line in the rectangular method of property description.
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
Savings banks - mutual savings banks - commercial banks
An accounting of the funds received and disbursed in a real estate transaction.

36. Executed contract
An agreement that has been fully performed.
A deed denoting an unlimited guarantee of title
An organized method of sharing or pooling listings by member brokers. (electronic)
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

37. Special (limited) Warranty Dee
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.
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.
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.
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.

38. Amortizing loan
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
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.
One in which uniform installment payments include payment of both principle and interest.
A three-day right of rescission for certain loan transactions

39. Mortgagee
Money to be paid and received as compensaton for a breach of contract.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder
A husband's interest in the real property of his wife

40. Grantee
Failing to do preventative maintenance or corrective maintenance.
One who receives title to real property by deed
A type of land descripton utilizing townships and sections
An error of material fact by both parties

41. Steering
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
A man/woman appointed in a will to see that the terms of the will are carried out
A major source of funds for financing residential real estate.
A payment for insurance to protect the lender and/or insurer against loss if default occurs.

42. Mortgage bankers
When a subsequent contract covering the same subject matter is drafted (with changes)
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.
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
A form of organization that makes and services mortgage loans.

43. Certificate of title opinion

44. Freehold estate
Permanent financing arranged to replace a shor-term construction loan.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A right of title to land
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)

45. Leasehold policy

46. Latent defect
A hidden structural defect that would not be discovered by an ordinary inspection
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
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 leasehold estate that may be terminated at the desire of either party

47. National Association of Realtors
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
The largest and most prominent trade organization of real estate licensees.
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder

48. Free market
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
To put in effect by public announcement; to put into operation
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
Permanent financing arranged to replace a shor-term construction loan.

49. Duty of disclosure
A responsibility for revealing all information that affects the agency agreement
A new offer made by an offer or rejecting an offer.
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
The amount of money actually lost - which will be awarded by a court in case of a breached contract

50. Valid contract
One that may be refinanced without rewriting the mortgage.
A combination of the graduated payment mortgage and the variable rate mortgage
An agreement that is legally binding and enforceable.
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land