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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. Abstract of title
A leasehold estate that may be terminated at the desire of either party
MI law stating that if the property is being destroyed - is partially destroyed - or is being taken by eminent domain - the buyer may - at the buyer's option - declare the transaction null and void.
A right of title to land
A history of title and the current status of a title based on a atitle examination

2. Fair Housing Amendments Act of 1988
The amount of the brokerage's commission that goes to the realtor
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.
An accounting of the funds received and disbursed in a real estate transaction.
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status

3. Doctrine of Equitable Conversion
The vendor cannot do anything to jeopardize the interest of the vendee.
Financinig charge required by the lender
An agreement that may be voided by the parties without legal consequences.
(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.

4. Independent contractor

5. Investment
Personal property growing in the soil - requiring planting and cultivation; annual crops.
An agreement that is legally binding and enforceable.
The outlay of money expecting income or profit or the acquisition of property expecting income or profit
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.

6. Joint tenancy
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.
A form of co-ownership that includes the right of survivorship
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)
A policy insuring an owner of real property against financial loss resulting from a title defect.

7. Michigan Mortgage Brokers - Lenders - Servicers and Licensing Act
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.
A deed issued to the buyer of property that was sold under court order to pay off a debt.
The recipient of a gift of real property by will
Contract where all terms are in writing and understood by both parties.

8. Latent defect
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
A hidden structural defect that would not be discovered by an ordinary inspection
An insurance policy protecting the insured from a financial loss caused by a defect in a title to real property (Buyer buys for mortgage company for amount of mortgage; seller pays for buyer on full price of property).
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

9. Disability
A physical or mental impairment that substantially limits one or more of the major life activities of a person
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 deed denoting an unlimited guarantee of title
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination

10. Deed of trust
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
A form of mortgage wherein there is a third party - who is called a trustee
A deed of release that contains no warranty of title; used to remove a cloud on a title. A deed to relinquish or release a claim to real property.

11. Commission
Mandates that the seller complete a disclosure form regarding the condition of the property
A percentage of the loan amount the lender requires for making a mortgage loan
Paid to Cooperating Brokers Usually 50%/50%
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

12. Well and septic report
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
Requires that an owner or any other person engaging in a real estate transaction - a real estate broker - or a real estate salesperson shall not - on the basis of a disability that is unrelated to the individua's ability to acquire - rent or maintain
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
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.

13. Vendee
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
Purchaser
The vendor cannot do anything to jeopardize the interest of the vendee.

14. Parol evidence rule
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.
Actually lending the $
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan

15. Timesharing
The transfer of mortgage obligations to purchaser of the mortgaged property.
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
One that may be refinanced without rewriting the mortgage.
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence

16. Nonjudicial foreclosure
A combination of the graduated payment mortgage and the variable rate mortgage
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
Land and everything permanently attached to land
Money to be paid and received as compensaton for a breach of contract.

17. Land use controls
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.
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
Item that is installed by a comercial tenant and is removable upon termination of the tenancy
Governmental restrictions on land use

18. Acceptance
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 combination of the graduated payment mortgage and the variable rate mortgage
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.

19. Alienation clause
Personal property
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.
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
Actually lending the $

20. Listing contract
Doesn't happen anymore in this climate
A law in effect in all states requiring certain contracts to be in writing to be valid.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.

21. Notary public
A person authorized by a state to take oaths and acknowledgments
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.
Devotion of certain settlement costs between buyer and seller.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

22. Vrepayment penalty
The vendor cannot do anything to jeopardize the interest of the vendee.
To pass to another (as in title)
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

23. Formal assumption
No two parcels of land are identical
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
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.
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

24. Open-end mortgage
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.
An agreement that is legally binding and enforceable.
One that may be refinanced without rewriting the mortgage.
Second mortgage

25. Margin
A nickname for Federal Home Load Mortgage Corporation - (FHLMC) - a corporation wholly owned by the Federal Home Loan Bank System that purchases FHA - VA - and conventional mortgages.
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.
Measure of profit
A type of land descripton utilizing townships and sections

26. Land contract
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
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.
Failing to do preventative maintenance or corrective maintenance.
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.

27. Supply and demand
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
Permission to assume the mortgage at an interest rate prevailing at the time of 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.
The inability of a party to exercise his or her free will because of fear of another party.

28. Principal
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)
(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
Purchaser
One in which two more parcels of real property are pledged to secure payment of the note

29. REITs
A history of title and the current status of a title based on a atitle examination
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)
The person transferring contractual rights to another
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)

30. Accrued expenses
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.

31. Flat Fee
A commission not based on a percentage of the selling price.
The condition of death without leaving a valid will.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
Permission to assume the mortgage at an interest rate prevailing at the time of assumption

32. Grant deed
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
Permanent financing arranged to replace a shor-term construction loan.
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
A form of co-ownership limited to husband and wife - with the right of survivorship

33. Mortgage banks
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
Actually lending the $
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
The condition of death without leaving a valid will.

34. Cooperative
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
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
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)

35. Debits
One who conveys title to real property by deed
In a closing statement - an expense or money received against a credit
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
One who arranges a mortgage loan betwen a lender and a borrower for a fee.

36. Innocent misrepresentation

37. Appraisal
An estimate of value of a particular property - at a particular time for a specified purpose.
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
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
The loss of funds available to lending institutions for making mortgage loans - caused by depositors' withdrawal of funds for making investments that provide greater yields.

38. Stipulation
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
The violations and fines or penalties - which the department and the licensee have agreed upon.
Finds someone to lend the $
A fee paid by a realtor to a brokerage out of the area for a buyer listing

39. Annual percentage rate (APR)
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.
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
The U. S. agency that insures mortgage loans to protect lending institutions.

40. Novation
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.
An error of material fact by both parties
Substitution of a new contract for a prior contract.
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.

41. Condominium
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 federal law protecting the rights of individuals with physical or mental impairments
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
An implied agency without an agency agreement

42. Regulation Z
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 federal law prohibiting discrimination in consumer loans
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.
Paid to Cooperating Brokers Usually 50%/50%

43. Vartial release clause
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
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

44. Agent's Responsibilty to principals
The market in which lenders sell mortgages
An inheritable estate in land providing the greatest interest of any form of title
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Legal purpose.

45. Estate at will
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
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 leasehold estate that may be terminated at the desire of either party
To pass to another (as in title)

46. Free market
A percentage of the loan amount the lender requires for making a mortgage loan
A deed issued to the buyer of property that was sold under court order to pay off a debt.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
One who conveys title to trustee

47. Familial status
Evidence that a valid debt exists
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.
Investigates alleged discrimination and secures the equal protection of civil rights.
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.

48. Chattel
Necessary elements for the creation of a contract.
No: misrepresentation of fact; negligent misrepresentation; innocent misrepresentaton. MI law says seller's broker is not liable for statments made to buyer/customer regarding condition of property.
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
Personal property

49. Consideration
Anything of value - as recognized by law - offered as an inducement to contract.
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
Governmental restrictions on land use
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.

50. National Association of Realtors
Permanent financing arranged to replace a shor-term construction loan.
The largest and most prominent trade organization of real estate licensees.
Land was owned or controlled by the King
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.