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. National Fair Housing Alliance (NFHA)
A federal law regulating activities of lending institutions in making mortgage loans for housing.
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.
One insuring a lessee against defects in the lessor's title.
A mental or physical disability that impairs any of a person's life functions.


2. Quiet title action
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 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
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
One in which personal property as well as real property s pledged to secure payment of the note.


3. Mortgage
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
A written instrument used to pledge a title to real property to secure payment of a promissory note.
Allows the broker employed to market the seller's property for a given period of time.
Assures the absence of hazardous materials or problems relating to regulations of the EPA.


4. Valuable consideration
The governing board for real estate licenses in MI
The attribute of an asset's being readily convertible to cash.
Anything of value agreed upon by parties to a contract. Includes a promise.
A fee paid by a realtor to a brokerage out of the area for a buyer listing


5. Innocent misrepresentation

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6. Due on sales clause
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
One in which the federal government does not insure or guarantee payment to the lender.
A statment in amortgage or deed of trust entitling the lender to declare the entire principal balance of the debt immediately due and payable if the borrower sells the property during the mortgage term. Also known as due on sale clause.
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.


7. Metes and bounds
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.
E.g. very accurate desc or property)
A claim against a title to real property.
(a) Money paid for the use of money. (b) An ownership or right.


8. Merger
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 policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
When a subsequent contract covering the same subject matter is drafted (with changes)
One in which uniform installment payments include payment of both principle and interest.


9. 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 leasehold estate of definite duration
Anything of value agreed upon by parties to a contract. Includes a promise.
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.


10. Right of survivorship

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11. Subagent
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
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 person appointedby an agent to assist in performing some or all of the tasks of the agency
A form of ownership in which the purchsaser owns the property for a certain specified time interval.


12. Equitable redemption

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13. Real property
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
When a subsequent contract covering the same subject matter is drafted (with changes)
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)
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


14. Site condominium
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
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
The instrument that legally establishes a condominium; also called condominium declaration
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty


15. Settlement
Substitution of a new contract for a prior contract.
Consummation of a real estate contract; also called closing.
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)


16. Bargain and sale deed
A form of deed with or without covenants of title
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
Cancellation of a contract when another party is in default
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate


17. Latent defect
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 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.
A hidden structural defect that would not be discovered by an ordinary inspection
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.


18. Owner's policy
Written registration of an owner's title in public records to protect against subsequent claimants.
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
A policy insuring an owner of real property against financial loss resulting from a title defect.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency


19. Unities of ownership
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect
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.
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.


20. Immobility
Land cannot be relocated
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)


21. Scarcity
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
Details rights of condominium purchasers in Michigan


22. Stipulation
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
The violations and fines or penalties - which the department and the licensee have agreed upon.
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 deed with or without covenants of title


23. Testimonium clause

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24. Leasehold policy

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25. Redlining
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.
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
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
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. Closed mortgage
One insuring a lessee against defects in the lessor's title.
Personal property
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
One that imposes a prepayment penalty.


27. Allodial system
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
Individual - private ownership of land
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.


28. Installment land contract
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.
.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.
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.


29. Co-ownership
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
Title to real property held by two or more persons at the same time; also called concurrent ownership
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect


30. Competence
The principle stating that when the net profit a property generates is excessive - very strong competition will result
The borrower's right to redeem the title pledged or conveyed in a mortgage or deed of trust after default and prior to a foreclosure sale by paying the debt in full - accrued interest - and lender's costs.
Seller
The instrument that legally establishes a condominium; also called condominium declaration


31. Freehold estate
A combination of the graduated payment mortgage and the variable rate mortgage
A right of title to land
(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
The use of someone else's money to enhance your own


32. Special (limited) warranty deed
A deed containing a limited warranty of title
A form of organization that makes and services mortgage loans.
One insuring a lessee against defects in the lessor's title.
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.


33. Leverage

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34. Community property
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 form of co-ownership lmited to husband and wife; does not include the right of survivorship
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
Transfer of legal rights and obligations by one party to another


35. Handicap

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36. Receiver
One who takes over management of a property until the foreclosure process is complete
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
The introductory information on a deed
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.


37. Acknowledgment
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.
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.)
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
An interest in real estate such that a court will take notice and protect the owner's rights.


38. Fannie Mae (FNMA)
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.)
Anything of value agreed upon by parties to a contract. Includes a promise.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
A physical or mental impairment that substantially limits one or more of the major life activities of a person


39. Mortgagee's policy
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
The attribute of an asset's being readily convertible to cash.
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
An implied agency without an agency agreement


40. Joint tenancy
The market in which lenders sell mortgages
The inability of a party to exercise his or her free will because of fear of another party.
A form of co-ownership that includes the right of survivorship
Substitution of a new contract for a prior contract.


41. Amortizing loan
One in which uniform installment payments include payment of both principle and interest.
A type of land descripton utilizing townships and sections
A form of co-ownership that includes the right of survivorship
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin


42. Budget mortgage
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
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 right for property to descend to the heirs of the owner as set out by will or by intestate succession.
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.


43. Loan origination fee
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
Personal property growing in the soil - requiring planting and cultivation; annual crops.
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.
Financinig charge required by the lender


44. Realty
The vendor cannot do anything to jeopardize the interest of the vendee.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
Land and everything permanently attached to land
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres


45. Defeasance clause
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
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
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
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


46. Graduated payment mortgage (GPM)
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.


47. Cap
Legal purpose.
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 law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
A threshold after which a realtor keeps all commissions and the broker keeps none


48. Contract
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Another term for escrow account
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
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


49. Mortgage insurance premium (MIP)
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
A deed containing a limited warranty of title
The largest and most prominent trade organization of real estate licensees.


50. Doctrine of Equitable Conversion
An exaggeration of a property's benefits.
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 form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
The vendor cannot do anything to jeopardize the interest of the vendee.