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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. Condition
An east-west line in the rectangular method of property description
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
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
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.

2. Option
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).
An estimate of value of a particular property - at a particular time for a specified purpose.
One-forth of a section - containing 160 acres
One that is free from reasonable doubt and that a court would require a purchaser to accept

3. Sub agent
A written instrument transferring an interest in real property when delivered to the grantee.
A licensee who is empowered to act for another broker in performing real estate brokerage tasks for a principal - and who owes the same duties to the principal as the agent of the principal.
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
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

4. Mortgage broker
One with full authority over one property of the principal - such as a property manager
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
Cancellation of a contract when another party is in default
Finds someone to lend the $

5. Defeasible
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
Subject to being defeated by the occurrence of a certain event
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
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

6. Amortizing loan
One in which uniform installment payments include payment of both principle and interest.
An accounting of the funds received and disbursed in a real estate transaction.
A form of co-ownership limited to husband and wife - with the right of survivorship
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.

7. National Fair Housing Alliance (NFHA)
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
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
Coalition of private - nonprofit fair housing groups that has joined with federal and state government fair housing enforcement agencies to substantially improve fair housing enforcement activities.
Failing to do preventative maintenance or corrective maintenance.

8. Quiet title action
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 form of mortgage wherein there is a third party - who is called a 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
E.g. very accurate desc or property)

9. VA-guaranteed loan
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
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
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages

10. Loan origination fee
A written instrument used to pledge a title to real property to secure payment of a promissory note.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Financinig charge required by the lender
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.

11. Freehold estate
A right of title to land
The third party in a real estate transaction
An agreement that may be voided by the parties without legal consequences.
A federal law protecting the rights of individuals with physical or mental impairments

12. Special agent
An agreement that may be voided by the parties without legal consequences.
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.
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
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.

13. Disability
A physical or mental impairment that substantially limits one or more of the major life activities of a person
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
One that may be refinanced without rewriting the mortgage.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages

14. Alienation clause
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
Permanent financing arranged to replace a shor-term construction loan.
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
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.

15. Bilateral contract
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
No two parcels of land are identical
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)
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

16. Dual agency

17. Federal Housing Administration (FHA)
The U. S. agency that insures mortgage loans to protect lending institutions.
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
In a closing statement - money to be recieved or credit given for money or an obligation given.
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate

18. Conforming loans
One in which uniform installment payments include payment of both principle and interest.
When the parties are to exchange performances at the same time.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
The instrument that legally establishes a condominium; also called condominium declaration

19. Investment
One in which uniform installment payments include payment of both principle and interest.
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 outlay of money expecting income or profit or the acquisition of property expecting income or profit
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.

20. Agent's Responsibilty to principals
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 percentage of the loan amount the lender requires for making a mortgage loan
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Devotion of certain settlement costs between buyer and seller.

21. punitive damages
The statement in a deed containing words of conveyance
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Permission to assume the mortgage at an interest rate prevailing at the time of assumption

22. Caveat emptor
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.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
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.

23. Right of assignment
An interest in real estate such that a court will take notice and protect the owner's rights.
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
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

24. Negligent misrepresentation

25. Testimonium clause

26. Property description
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 agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
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.
An accurate legal description of land

27. Real property
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
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
An agreement that has not been fully performed.
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.

28. Retainer
A search of the public record to determne the quality of a title to real property
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller

29. Supply and demand
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
An organized method of sharing or pooling listings by member brokers. (electronic)
Consummation of a real estate contract; also called closing.
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.

30. Shared appreciation mortgage (SAM)
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.
One in which the lender shares in the appreciation in property value in return for making the loan at a fixed rate lower than the rate in effect at the time the loan is made
One with full authority over one property of the principal - such as a property manager
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.

31. Growing equity mortgage (GEM)

32. Void contract
One that appears to meet the requirements for validity but would not be enforceable in court.
The person transferring contractual rights to another
An agreement that has no legal force or effect.
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

33. Recordation

34. Remainder
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 future interest in a life estate
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
The person transferring contractual rights to another

35. Buyer's contract
The power of government to regulate the use of real property for the benefit of the public
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
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 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

36. Good faith estimates

37. Covenant against encumbrances
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
A Missouri slave sued for his freedom - claiming that his four year stay in the northern portion of the Louisiana Territory made free land by the Missouri Compromise had made him a free man. The U.S - Supreme Court decided he couldn't sue in federal
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)

38. Location
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
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 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)

39. Annual percentage rate (APR)
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
A buyer of property who relies on the records and is unaware of an unrecorded prior document
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
A future interest in a life estate

40. Co-ownership
Title to real property held by two or more persons at the same time; also called concurrent ownership
An intentional false statement of a material fact.
The principle stating that when the net profit a property generates is excessive - very strong competition will result
The amount of the brokerage's commission that goes to the realtor

41. Michigan usury laws
A history of title and the current status of a title based on a atitle examination
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
(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.
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent

42. Mortgage banks
Execution of a contract by vrtue of all parties having fully performed all terms
Actually lending the $
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty

43. Vrepaid expenses
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
A deed issued to the buyer of property that was sold under court order to pay off a debt.
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

44. Conventional loan
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 new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
One that has no participation by an agency of the federal government - Can be ether uninsured or insured

45. Executory contract
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.
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
A federal law protecting the rights of individuals with physical or mental impairments
An agreement that has not been fully performed.

46. Promissory note
Evidence that a valid debt exists
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.

47. Essential Elements of a contract
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)
One in which two more parcels of real property are pledged to secure payment of the note
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete

48. Balloon mortgage
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 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 cannot be relocated
A federal law that prohibits all discrimination on the basis of race.

49. Master deed
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 life estate based on the life of another
An agent working for an unnamed third party buyer (usually a celebrity)
The instrument that legally establishes a condominium; also called condominium declaration

50. Estate for years
A leasehold estate of definite duration
When a subsequent contract covering the same subject matter is drafted (with changes)
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 gift of personal property by will.