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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. Chain of title
Successive conveyances of title to a specific parcel of land.
A search of the public record to determne the quality of a title to real property
Substitution of a new contract for a prior contract.
A wife's interest in her husband's real property

2. 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
The instrument that legally establishes a condominium; also called condominium declaration
(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 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.

3. Covenant of seisin and right to convey
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
E.g. very accurate desc or property)
A form of deed with or without covenants of title
One with full authority over one property of the principal - such as a property manager

4. Misrepresentation
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
Anything of value - as recognized by law - offered as an inducement to contract.
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.

5. Fannie Mae (FNMA)
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
The attribute of an asset's being readily convertible to cash.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.

6. Fraud
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
One in which all affected parties are bound by the knowledge of a fact even though they have not been actually notified of such fact.
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
An intentional false statement of a material fact.

7. Alienation clause
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
Selling property without consent of the owner who incurred the debt - resulting in a lien - as ordered by a court or authorized by state law - and title conveyed to purchaser by judicial deed.
An interest in real estate such that a court will take notice and protect the owner's rights.
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.

8. Annual percentage rate (APR)
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
Legal purpose.
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.

9. Section
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
A temporary mortgage used to borrow money to contruct an improvement on land
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
An exaggeration of a property's benefits.

10. Multiple listing service (MLS)
Prohibits certain practices in trade or commece and provides for certain remedies.
One who holds title to property for the benefit of another called a beneficiary
An organized method of sharing or pooling listings by member brokers. (electronic)
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)

11. Familial status
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
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 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.
Founded on natural duty and affection. Has no pecuniary value.

12. Merger
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.
When a subsequent contract covering the same subject matter is drafted (with changes)
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 leasehold estate that may be terminated at the desire of either party

13. Misrepresentation
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
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
Land was owned or controlled by the King
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.

14. Time is of the essence
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
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
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

15. Covenant for further assurances
A promise in a deed that the grantor will execute further assurances that may be reasonable or necessary to perfect the title in the grantee
One to whom contractual rights are transferred
A man/woman appointed in a will to see that the terms of the will are carried out
A husband's interest in the real property of his wife

16. Discriminatory advertising
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 transfer of mortgage obligations to purchaser of the mortgaged property.
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.
The vendor cannot do anything to jeopardize the interest of the vendee.

17. Cloud on a title
The U. S. agency that insures mortgage loans to protect lending institutions.
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
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
A claim against a title to real property.

18. Redlining
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
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 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
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

19. PITI ppayment
An agreement that has no legal force or effect.
One who conveys title to trustee
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
Permanent financing arranged to replace a shor-term construction loan.

20. Deed of trust
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.
Personal property that has become real property by having been permanently attached to real property
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
A form of mortgage wherein there is a third party - who is called a trustee

21. National Fair Housing Alliance (NFHA)
A type of land descripton utilizing townships and sections
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.
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
Written registration of an owner's title in public records to protect against subsequent claimants.

22. Scarcity
An agreement that is legally binding and enforceable.
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
One in which two more parcels of real property are pledged to secure payment of the note
Execution of a contract by vrtue of all parties having fully performed all terms

23. Disclosure of information
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
When the parties are to exchange performances at the same time.
A federal law protecting the rights of individuals with physical or mental impairments
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.

24. Certificate of reasonable value (CRV)
The amount of the brokerage's commission that goes to the realtor
Another term for escrow account
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence

25. Trustor
The amount of money actually lost - which will be awarded by a court in case of a breached contract
One who conveys title to trustee
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)
Individual - private ownership of land

26. Tenants by the entirety
The outlay of money expecting income or profit or the acquisition of property expecting income or profit
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 form of co-ownership limited to husband and wife - with the right of survivorship
(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

27. Marketable (merchantable) title
One that is free from reasonable doubt and that a court would require a purchaser to accept
The largest and most prominent trade organization of real estate licensees.
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
Item that is installed by a comercial tenant and is removable upon termination of the tenancy

28. Condition precedent
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
Evidence that a valid debt exists
A major source of funds for financing residential real estate.
A form of co-ownership lmited to husband and wife; does not include the right of survivorship

29. Involuntary alienation
Money to be paid and received as compensaton for a breach of contract.
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
A tax imposed on the conveyance of title to real property by deed

30. Joint tenancy
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
Cancellation of a contract when another party is in default
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
A form of co-ownership that includes the right of survivorship

31. Freehold estate
The transfer of mortgage obligations to purchaser of the mortgaged property.
Transfer of title to real property
One that does not impose a prepayment penalty.
A right of title to land

32. Mortgagor
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
(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.
Savings banks - mutual savings banks - commercial banks
A payment for insurance to protect the lender and/or insurer against loss if default occurs.

33. Michigan Person's with Disabilities CiveI Rights Act

34. Dred Scott Decision

35. Promulgate
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
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.
Another term for escrow account
To put in effect by public announcement; to put into operation

36. Acceptance
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
A form of mortgage wherein there is a third party - who is called a trustee
A right of title to land
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional

37. Vartial release clause
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
In a closing statement - an expense or money received against a credit
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.

38. Negligent misrepresentation

39. Cap
An agency relationship created by oral or written agreement between principal and agent
A threshold after which a realtor keeps all commissions and the broker keeps none
E.g. very accurate desc or property)
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.

40. Growing equity mortgage (GEM)

41. Closed mortgage
The recipient of a gift of real property by will
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
One that imposes a prepayment penalty.
A leasehold estate that may be terminated at the desire of either party

42. Fixture
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.
An agreement that may be voided by the parties without legal consequences.
Personal property that has become real property by having been permanently attached to real property
The violations and fines or penalties - which the department and the licensee have agreed upon.

43. Cooperative
Mandates that the seller complete a disclosure form regarding the condition of the property
The inability of a party to exercise his or her free will because of fear of another party.
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
Money to be paid and received as compensaton for a breach of contract.

44. Contract remedies
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
One insuring a lessee against defects in the lessor's title.
Execution of a contract by vrtue of all parties having fully performed all terms

45. Emblements
Personal property growing in the soil - requiring planting and cultivation; annual crops.
Money to be paid and received as compensaton for a breach of contract.
A temporary mortgage used to borrow money to contruct an improvement on land
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

46. Michigan Civil Rights Commission
Investigates alleged discrimination and secures the equal protection of civil rights.
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
A physical or mental impairment that substantially limits one or more of the major life activities of a person
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

47. Special (limited) Warranty Dee
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.
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
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 form of deed with or without covenants of title

48. Steering
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
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
One that does not impose a prepayment penalty.
A law in effect in all states requiring certain contracts to be in writing to be valid.

49. Realty
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)
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
Land and everything permanently attached to land

50. Assignor
(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 legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.
The person transferring contractual rights to another
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.

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