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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. Commission Paid to Sales Associates

2. Bill of sale
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
Neighborhoods that are made up of similar properties
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 instrument transferring ownership of personal property.

3. Tenants by the entirety
Failing to do preventative maintenance or corrective maintenance.
A form of co-ownership limited to husband and wife - with the right of survivorship
One-forth of a section - containing 160 acres
A leasehold estate that may be terminated at the desire of either party

4. Open mortgage
The inability of a party to exercise his or her free will because of fear of another party.
One that does not impose a prepayment penalty.
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 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.

5. Michigan Consumer Protection Act
A new offer made by an offer or rejecting an offer.
Title insurance that protects contract buyer against defects in contract seller's title.
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.
Prohibits certain practices in trade or commece and provides for certain remedies.

6. Negligent misrepresentation

7. Chattel
License law term that describes a type of relationship between a broker and his or her licensees
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 history of title and the current status of a title based on a atitle examination
Personal property

8. Principal meridians
North-south line in the rectangular method of property description.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
Preventing a person from making a statement contrary to a previous statement

9. Express Contract
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
A form of mortgage wherein there is a third party - who is called a trustee
Contract where all terms are in writing and understood by both parties.
Finds someone to lend the $

10. Varticipation mortgage
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
Savings banks - mutual savings banks - commercial banks
(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.
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

11. Life estate
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.
The distribution of property to legally qualified heirs of one who has died intestate
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
Neighborhoods that are made up of similar properties

12. Promissory note
Evidence that a valid debt exists
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
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

13. Customer
The third party in a real estate transaction
To pass to another (as in title)
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 economic characteristic of land having the greatest effect on value in comparison to any other characteristic

14. Alienation clause
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.
A property map - recorded on the public record in plat books
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
A form of co-ownership that does not include the right of survivorship.

15. Verc test
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
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 test of soil to determine if it is sufficiently porous for installation of a septic tank.
Necessary elements for the creation of a contract.

16. Nonfreehold estate
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
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
Allows the broker employed to market the seller's property for a given period of time.
An instrument transferring ownership of personal property.

17. Grantor
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
An agreement that may be voided by the parties without legal consequences.
One who conveys title to real property by deed

18. Defeasible
Financinig charge required by the lender
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
One in which two more parcels of real property are pledged to secure payment of the note
Subject to being defeated by the occurrence of a certain event

19. Blockbusting
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
For profit - to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race - color - religion - sex or national ori
A mental or physical disability that impairs any of a person's life functions.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)

20. Mortgage bankers
A form of organization that makes and services mortgage loans.
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
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.
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

21. Special (limited) warranty deed
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
Written registration of an owner's title in public records to protect against subsequent claimants.
A deed containing a limited warranty of title
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.

22. Time is of the essence
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
A form of organization that makes and services mortgage loans.
One who receives title to real property by deed
Anything of value - as recognized by law - offered as an inducement to contract.

23. Assignment
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 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.
Transfer of legal rights and obligations by one party to another
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate

24. Cortesy

25. Adverse possession
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
The statement in a deed containing words of conveyance
The attribute of an asset's being readily convertible to cash.
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

26. Breach of contract
A law in effect in all states requiring certain contracts to be in writing to be valid.
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
A percentage of the loan amount the lender requires for making a mortgage loan
The amount of the brokerage's commission that goes to the realtor

27. Liquidated damages
Money to be paid and received as compensaton for a breach of contract.
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
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.

28. Transfer tax
The distribution of property to legally qualified heirs of one who has died intestate
Permanence of land--makes it an attractive long term investment
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
A tax imposed on the conveyance of title to real property by deed

29. Puffing

30. Disclosure of information
An agency relationship created by oral or written agreement between principal and agent
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 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.
A new offer made by an offer or rejecting an offer.

31. Rectangular survey system
Make good loans to qualified borrowers ( e. g. Rural Development loans)
The market in which lenders sell mortgages
A type of land descripton utilizing townships and sections
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

32. vendor's affidavit
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.

33. Balloon payment
Purchaser
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
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.
Permission to assume the mortgage at an interest rate prevailing at the time of assumption

34. Voidable contract
An agreement that may be voided by the parties without legal consequences.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
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.
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages

35. Fee simple absolute
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 court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
An inheritable estate in land providing the greatest interest of any form of title
Second mortgage

36. Ranges
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
A leasehold estate of definite duration
A federal law that prohibits all discrimination on the basis of race.

37. Deed of trust
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
A person authorized by a state to take oaths and acknowledgments
A form of mortgage wherein there is a third party - who is called a trustee
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

38. Estate from year to year
When a subsequent contract covering the same subject matter is drafted (with changes)
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
One who takes over management of a property until the foreclosure process is complete
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.

39. Valid contract
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
The governing board for real estate licenses in MI
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.)
An agreement that is legally binding and enforceable.

40. Contract
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
A percentage of the loan amount the lender requires for making a mortgage loan
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

41. Bargain and sale deed
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.
A form of deed with or without covenants of title
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.

42. Bequest
A gift of personal property by will.
A person appointedby an agent to assist in performing some or all of the tasks of the agency
The statement in a deed containing words of conveyance
One who takes over management of a property until the foreclosure process is complete

43. Formal assumption
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) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Permission to assume the mortgage at an interest rate prevailing at the time of assumption

44. Shelley v. Kraemer
A tax imposed on the conveyance of title to real property by deed
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
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.
Personal property

45. Chain of title
A form of co-ownership limited to husband and wife - with the right of survivorship
Individual - private ownership of land
Another term for escrow account
Successive conveyances of title to a specific parcel of land.

46. Commission
A major source of funds for financing residential real estate.
For profit - to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race - color - religion - sex or national ori
Paid to Cooperating Brokers Usually 50%/50%
One to whom contractual rights are transferred

47. Junior Mortgage
E.g. Put on market - sell - done)
Second mortgage
One who takes over management of a property until the foreclosure process is complete
A wife's interest in her husband's real property

48. Condition
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Actually lending the $

49. Duty of disclosure
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
A responsibility for revealing all information that affects the agency agreement
An implied agency without an agency agreement

50. Executed contract
The amount of money (usually the loan amount) on which interest is either paid or recieved.
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
An agreement that has been fully performed.
Ownership by only one person