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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. Competence
Preventing a person from making a statement contrary to a previous statement
A form of co-ownership limited to husband and wife - with the right of survivorship
The principle stating that when the net profit a property generates is excessive - very strong competition will result
Neighborhoods that are made up of similar properties

2. Alienation clause
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
Financinig charge required by the lender
A search of the public record to determne the quality of a title to real 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.

3. Ready willing and able
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 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
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
An agency relationship created by oral or written agreement between principal and agent

4. 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
One-forth of a section - containing 160 acres
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
Allows the broker employed to market the seller's property for a given period of time.

5. Rectangular survey system
A type of land descripton utilizing townships and sections
The attribute of an asset's being readily convertible to cash.
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.
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

6. Credit
An accurate legal description of land
In a closing statement - money to be recieved or credit given for money or an obligation given.
A wife's interest in her husband's real property
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin

7. Bona fide purchaser
A buyer of property who relies on the records and is unaware of an unrecorded prior document
A man/woman appointed in a will to see that the terms of the will are carried out
One insuring a lessee against defects in the lessor's title.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan

8. Misrepresentation
Governmental restrictions on land use
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.
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract

9. Right of assignment
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
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
Delinquency in maeeting an obligation; or - paid at the end of a period (e. g. - at the end of the month) for the previous period; payments in arrears include interest for using the money during the previous period.
A man/woman appointed in a will to see that the terms of the will are carried out

10. Concurrent ownership
Simultaneous ownership of real property by two or more people
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
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.
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)

11. Timesharing
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
Anything of value agreed upon by parties to a contract. Includes a promise.
Governmental restrictions on land use
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.

12. Transfer tax
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.
Actually lending the $
A tax imposed on the conveyance of title to real property by deed
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.

13. Nonjudicial foreclosure
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
A property map - recorded on the public record in plat books
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)

14. Estate from year to year
Ownership by only one person
Personal property
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
Substitution of a new contract for a prior contract.

15. Listing contract
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
A person appointedby an agent to assist in performing some or all of the tasks of the agency
Ownership by only one person
(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.

16. Mortgage broker
Finds someone to lend the $
The third party in a real estate transaction
Devotion of certain settlement costs between buyer and seller.
Founded on natural duty and affection. Has no pecuniary value.

17. Debits
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 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.
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
In a closing statement - an expense or money received against a credit

18. Notary public
The amount of the brokerage's commission that goes to the realtor
A person authorized by a state to take oaths and acknowledgments
The inability of a party to exercise his or her free will because of fear of another party.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property

19. Estate for years
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.
A leasehold estate of definite duration
Ownership by only one person
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate

20. Unilateral contract
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 threshold after which a realtor keeps all commissions and the broker keeps none
Second mortgage
One who holds title to property for the benefit of another called a beneficiary

21. Appraisal
A federal law prohibiting discrimination in consumer loans
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
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
An estimate of value of a particular property - at a particular time for a specified purpose.

22. Discount points
An agency relationship created by oral or written agreement between principal and agent
A percentage of the loan amount the lender requires for making a mortgage loan
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.
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.

23. Soil test
An agreement that has not been fully performed.
(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 mental or physical disability that impairs any of a person's life functions.
Assures the absence of hazardous materials or problems relating to regulations of the EPA.

24. Parol evidence rule
The instrument that legally establishes a condominium; also called condominium declaration
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
An implied agency without an agency agreement

25. Severalty
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
Ownership by only one person
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
No two parcels of land are identical

26. VA-guaranteed loan
One in which two more parcels of real property are pledged to secure payment of the note
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
A federal law protecting the rights of individuals with physical or mental impairments
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.

27. Baselines
Anything of value - as recognized by law - offered as an inducement to contract.
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
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
An east-west line in the rectangular method of property description

28. Flat Fee
The principal in a real estate transaction
A gift of personal property by will.
A commission not based on a percentage of the selling price.
One who receives title to real property by deed

29. Leasehold estate
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
Pledging property as security for the payment of a debt without giving up possession.
A buyer of property who relies on the records and is unaware of an unrecorded prior document
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.

30. Recordation

31. Complete performance
Item that is installed by a comercial tenant and is removable upon termination of the tenancy
(a) Money paid for the use of money. (b) An ownership or right.
Execution of a contract by vrtue of all parties having fully performed all terms
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

32. Michigan Uniform Securities Act
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton

33. Unities of ownership
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
One in which two more parcels of real property are pledged to secure payment of the note
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.
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

34. Accidental or Ostensible Agency
A major source of funds for financing residential real estate.
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.
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
An implied agency without an agency agreement

35. Principal meridians
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
North-south line in the rectangular method of property description.
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.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages

36. Michigan's Seller Disclosure Act
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.
Pledging property as security for the payment of a debt without giving up possession.
A fee paid by a realtor to a brokerage out of the area for a buyer listing
Mandates that the seller complete a disclosure form regarding the condition of the property

37. Settlement
Permanence of land--makes it an attractive long term investment
A physical or mental impairment that substantially limits one or more of the major life activities of a person
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).
Consummation of a real estate contract; also called closing.

38. Elliott-Larsen Civil Rights Act
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
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
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.

39. 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
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
Cash sales - New financing
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.

40. Property description
An accurate legal description of 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 governing board for real estate licenses in MI
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).

41. Delivery and acceptance
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
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.
Allows the broker employed to market the seller's property for a given period of time.
A wife's interest in her husband's real property

42. Tester
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.
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
Mortgage loan for which the monthly payments increase annually - with the increased amount applied directly to the loan's principal - thus shortening the term of the loan
A combination of the graduated payment mortgage and the variable rate mortgage

43. Essential Elements of a contract
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
There are certain types of trade restraints that are so injurious to competition that there can be no justification for them (price fixing; boycotts or concerted refusals to deal; territorial or customer allocation; tying agreements)
One in which the interest rate changes according to changes in a predetermined index.
One who holds title to property for the benefit of another called a beneficiary

44. Good faith estimates

45. Description by reference
An east-west line in the rectangular method of property description
One in which the federal government does not insure or guarantee payment to the lender.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
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

46. Contract for deed
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.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A physical or mental impairment that substantially limits one or more of the major life activities of a person
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.

47. Junior Mortgage
Personal property
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
The substitution of the title insurance company in the place of the insured for filing a legal action.
Second mortgage

48. Location
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) 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.
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic

49. Secondary mortgage market
(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
Agency that exists as a result of actions of the parties
The market in which lenders sell mortgages
Prohibits certain practices in trade or commece and provides for certain remedies.

50. Michigan Mortgage Brokers - Lenders - Servicers and Licensing Act
Personal property growing in the soil - requiring planting and cultivation; annual crops.
A life estate based on the life of another
An implied agency without an agency agreement
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.