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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. Executory contract
An agreement that has not been fully performed.
(a) Money paid for the use of money. (b) An ownership or right.
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.)
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.

3. Abstract of title
An implied agency without an agency agreement
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
The use of someone else's money to enhance your own
A history of title and the current status of a title based on a atitle examination

4. Allodial system
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
Individual - private ownership of land
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.

5. Waste
Financinig charge required by the lender
An inheritable estate in land providing the greatest interest of any form of title
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.
Failing to do preventative maintenance or corrective maintenance.

6. Severalty
Preventing a person from making a statement contrary to a previous statement
Land was owned or controlled by the King
Anything of value agreed upon by parties to a contract. Includes a promise.
Ownership by only one person

7. Truth-in-Lending Simplification and Reform Act (TILSRA)
A deed issued to the buyer of property that was sold under court order to pay off a debt.
Substitution of a new contract for a prior contract.
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
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

8. Community property
A form of co-ownership lmited to husband and wife; does not include the right of survivorship
Cash sales - New financing
One who conveys title to real property by deed
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)

9. Beneficiary
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
Investigates alleged discrimination and secures the equal protection of civil rights.
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.
An agreement that has been fully performed.

10. Pur autre vie
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)
The statement in a deed containing words of conveyance
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
A life estate based on the life of another

11. Take-out loan
Permanent financing arranged to replace a shor-term construction loan.
In a closing statement - an expense or money received against a credit
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
No two parcels of land are identical

12. Open-end mortgage
Substitution of a new contract for a prior contract.
One that may be refinanced without rewriting the mortgage.
A percentage of the loan amount the lender requires for making a mortgage loan
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

13. Revenue stamps
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
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
A leasehold estate of definite duration

14. Conforming loans
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
One in which the federal government does not insure or guarantee payment to the lender.
A percentage of the loan amount the lender requires for making a mortgage loan
A payment for insurance to protect the lender and/or insurer against loss if default occurs.

15. Plat
A form of co-ownership lmited to husband and wife; does not include the right of survivorship
Personal property
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 property map - recorded on the public record in plat books

16. Subagent
A deed issued to the buyer of property that was sold under court order to pay off a debt.
A three-day right of rescission for certain loan transactions
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
A person appointedby an agent to assist in performing some or all of the tasks of the agency

17. Defeasible
Subject to being defeated by the occurrence of a certain event
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
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.
Make good loans to qualified borrowers ( e. g. Rural Development loans)

18. Principal meridians
North-south line in the rectangular method of property description.
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
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership

19. Cortesy

20. Grant deed
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
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)
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
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. VA-guaranteed loan
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.
One that is free from reasonable doubt and that a court would require a purchaser to accept
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.

22. Michigan Person's with Disabilities CiveI Rights Act

23. Leasehold mortgage
Paid to Cooperating Brokers Usually 50%/50%
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
When the parties are to exchange performances at the same time.
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.

24. Special (limited) Warranty Dee
One-forth of a section - containing 160 acres
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
The limited warranty deed limits the potential liability of the seller and does not hold him liable for any encumbrances against the property prior to his ownership.
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect

25. CConventional mortgage loan
One in which the federal government does not insure or guarantee payment to the lender.
Permanent financing arranged to replace a shor-term construction loan.
A commission not based on a percentage of the selling price.
The statement in a deed containing words of conveyance

26. Board of Real Estate Brokers and Salespersons
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
A type of land descripton utilizing townships and sections
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
The governing board for real estate licenses in MI

27. Trustor
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.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
One who conveys title to trustee
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.

28. Life tenant
A man/woman who has died and left a valid will
A claim against a title to real property.
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
One holding a life estate

29. Deed
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.
Lender's estimate of borrower's settlement costs - required by RESPA to be furnished to borrower at time of loan application
A written instrument transferring an interest in real property when delivered to the grantee.
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.

30. Site condominium
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
The distribution of property to legally qualified heirs of one who has died intestate
One in which personal property as well as real property s pledged to secure payment of the note.
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership

31. Fraud
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
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.
A type of land descripton utilizing townships and sections
An intentional false statement of a material fact.

32. Specific performance
In a closing statement - money to be recieved or credit given for money or an obligation given.
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.)
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 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

33. Open mortgage
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
Agency that exists as a result of actions of the parties
One that does not impose a prepayment penalty.
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

34. Convey
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
To pass to another (as in title)
Agency that exists as a result of actions of the parties
The principal in a real estate transaction

35. Estate in real property
One in which personal property as well as real property s pledged to secure payment of the note.
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
Cancellation of a contract when another party is in default
License law term that describes a type of relationship between a broker and his or her licensees

36. Varticipation mortgage
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
(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 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
A person authorized by a state to take oaths and acknowledgments

37. Earnest money
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.
One who conveys title to trustee
A gift of personal property by will.
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.

38. Metes and bounds
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.
E.g. very accurate desc or property)
No two parcels of land are identical
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

39. Title insurance
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).
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.
Title insurance that protects contract buyer against defects in contract seller's title.
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.

40. Agency disclosure

41. Feudal system
A physical or mental impairment that substantially limits one or more of the major life activities of a person
Financinig charge required by the lender
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.
Land was owned or controlled by the King

42. Rescission
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
Cancellation of a contract when another party is in default

43. Special agent
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
A law in effect in all states requiring certain contracts to be in writing to be valid.
One who conveys title to real property by deed
An error of material fact by both parties

44. Contract for deed
One insuring a lessee against defects in the lessor's title.
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 U. S. agency that insures mortgage loans to protect lending institutions.
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

45. Verc test
A form of co-ownership that includes the right of survivorship
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
Money to be paid and received as compensaton for a breach of contract.
A new offer made by an offer or rejecting an offer.

46. Offer and acceptance
A temporary mortgage used to borrow money to contruct an improvement on land
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)
Personal property
Necessary elements for the creation of a contract.

47. Estate from year to year
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 in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
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

48. Closing statement
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
An accounting of the funds received and disbursed in a real estate transaction.
A form of co-ownership that includes the right of survivorship
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.

49. Client
A fee paid by a realtor to a brokerage out of the area for a buyer listing
A property map - recorded on the public record in plat books
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
The principal in a real estate transaction

50. Receiver
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.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
Simultaneous ownership of real property by two or more people
One who takes over management of a property until the foreclosure process is complete