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. Secondary mortgage market
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
A man/woman who has died and left a valid will
Successive conveyances of title to a specific parcel of land.
The market in which lenders sell mortgages


2. Misrepresentation
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
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
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract


3. Listing 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.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
A man/woman appointed in a will to see that the terms of the will are carried out


4. Mortgage assumption

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5. Term mortgage
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 listing given to one or more brokers wherein the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner in the event the owner sells the property to someone who was not interested in the property by
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
A wife's interest in her husband's real property


6. PITI ppayment
A property map - recorded on the public record in plat books
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.
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
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)


7. Michigan Condominium Act
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
Investigates alleged discrimination and secures the equal protection of civil rights.
One who holds title to property for the benefit of another called a beneficiary
Details rights of condominium purchasers in Michigan


8. Immobility
Land cannot be relocated
A federal law protecting the rights of individuals with physical or mental impairments
A search of the public record to determne the quality of a title to real property
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.


9. VA-guaranteed loan
Prohibits certain practices in trade or commece and provides for certain remedies.
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
Evidence that a valid debt exists
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


10. Baselines
An east-west line in the rectangular method of property description
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 history of title and the current status of a title based on a atitle examination
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.


11. Premises clause
Subject to being defeated by the occurrence of a certain event
The introductory information on a deed
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.


12. Acknowledgment
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder
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.
North-south line in the rectangular method of property description.
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.


13. Vrivate mortgage insurance (PMI)
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.
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.
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect
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


14. 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.
An interest in real estate such that a court will take notice and protect the owner's rights.
A written instrument transferring an interest in real property when delivered to the grantee.
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate


15. Buyer's contract
A person authorized by a state to take oaths and acknowledgments
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.
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
Contract where all terms are in writing and understood by both parties.


16. Executed contract
An agreement that has been fully performed.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
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.
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect


17. Competence
Personal property that has become real property by having been permanently attached to real property
In a closing statement - an expense or money received against a credit
The principle stating that when the net profit a property generates is excessive - very strong competition will result
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


18. Commission Paid to Sales Associates

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19. FHA-insured loans
Finds someone to lend the $
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.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
A mortgage loan in which payments are insured by the Federal Housing Administration


20. Covenant of seisin and right to convey
(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 mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
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 promise in ta deed assuring the grantee that the grantor has the title being conveyed.


21. Vrepaid expenses
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
One in which the interest rate changes according to changes in a predetermined index.
The largest and most prominent trade organization of real estate licensees.
Execution of a contract by vrtue of all parties having fully performed all terms


22. Take-out loan
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
Permanent financing arranged to replace a shor-term construction loan.
(a) Money paid for the use of money. (b) An ownership or right.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).


23. Customer
The third party in a real estate transaction
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
A percentage of the loan amount the lender requires for making a mortgage loan
A wife's interest in her husband's real property


24. Referral Fees
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.)
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
A deed issued to the buyer of property that was sold under court order to pay off a debt.
A fee paid by a realtor to a brokerage out of the area for a buyer listing


25. Cap
A threshold after which a realtor keeps all commissions and the broker keeps none
A gift of personal property by will.
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
Mandates that the seller complete a disclosure form regarding the condition of the property


26. Disintermediation

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27. Ready willing and able
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
One who receives title to real property by deed
(a) Money paid for the use of money. (b) An ownership or right.


28. 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 type of land descripton utilizing townships and sections
A leasehold estate of definite duration
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.


29. Michigan Uniform Securities Act
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.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
A deed issued to the buyer of property that was sold under court order to pay off a debt.
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security


30. Conforming loans
A form of organization that makes and services mortgage loans.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines


31. Accord and satisfaction
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
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
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.


32. Designated agency
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
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.
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.)
An agreement that has not been fully performed.


33. Soil test
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
Consummation of a real estate contract; also called closing.


34. Constructive condition
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.
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)
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
Person or a nonperson (partnership - association - corporation - common law trust - or combination) acting as agent for others in negotiating the purchase and sale of real property or other commodities for a fee


35. Life tenant
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
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)
One holding a life estate
One in which the interest rate changes according to changes in a predetermined index.


36. Liquidated damages
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
Money to be paid and received as compensaton for a breach of contract.
The third party in a real estate transaction
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.


37. Closed mortgage
Pledging property as security for the payment of a debt without giving up possession.
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.
One that does not impose a prepayment penalty.
One that imposes a prepayment penalty.


38. Deed in lieu of foreclosure
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.
The attribute of an asset's being readily convertible to cash.
Title insurance that protects contract buyer against defects in contract seller's title.
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure


39. Handicap

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40. CConventional mortgage loan
One in which the federal government does not insure or guarantee payment to the lender.
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.
Permanence of land--makes it an attractive long term investment
Mandates that the seller complete a disclosure form regarding the condition of the property


41. Ranges
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
The outlay of money expecting income or profit or the acquisition of property expecting income or profit
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 interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership


42. Good consideration
One in which two more parcels of real property are pledged to secure payment of the note
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
Founded on natural duty and affection. Has no pecuniary value.
One who arranges a mortgage loan betwen a lender and a borrower for a fee.


43. Dual agency

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44. Rural Housing Service (RHS) Direct Loan Program
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
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.
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
The instrument that legally establishes a condominium; also called condominium declaration


45. Real estate
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
A future interest in a life estate


46. vendor's affidavit
Transfer of legal rights and obligations by one party to another
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
The amount of the brokerage's commission that goes to the realtor
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.


47. Stipulation
A form of deed with or without covenants of title
The violations and fines or penalties - which the department and the licensee have agreed upon.
Transfer of title to real property
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.


48. Intestate
A combination of the graduated payment mortgage and the variable rate mortgage
The condition of death without leaving a valid will.
Agent that has complete authority over any activity of principal; for example - power of attorney
E.g. Put on market - sell - done)


49. Defeasance clause
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
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 statement in a deed containing words of conveyance
An exaggeration of a property's benefits.


50. Express agency
.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.
The recipient of a gift of real property by will
An agency relationship created by oral or written agreement between principal and agent
Cash sales - New financing