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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. Graduated payment mortgage (GPM)
The amount of the brokerage's commission that goes to the realtor
A fee paid by a realtor to a brokerage out of the area for a buyer listing
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
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.

2. Defeasible
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
Neighborhoods that are made up of similar properties
Subject to being defeated by the occurrence of a certain event
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.

3. Escheat
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
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
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount

4. Fiduciary
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
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 grantor will guarantee and defend the title against lawful claimants.
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)

5. Covenant of quiet enjoyment

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6. Cortesy

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7. Interest
(a) Money paid for the use of money. (b) An ownership or right.
An organized method of sharing or pooling listings by member brokers. (electronic)
Title to real property held by two or more persons at the same time; also called concurrent ownership
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

8. Voidable contract
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.
An agreement that may be voided by the parties without legal consequences.
The largest and most prominent trade organization of real estate licensees.
A federal law that prohibits all discrimination on the basis of race.

9. Acknowledgment
A claim against a title to real property.
The market in which lenders sell mortgages
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 document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.

10. Abstract of title
A history of title and the current status of a title based on a atitle examination
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
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.

11. 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.
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
An exaggeration of a property's benefits.

12. Misrepresentation
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
Successive conveyances of title to a specific parcel of land.
(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 that may be refinanced without rewriting the mortgage.

13. Baselines
A three-day right of rescission for certain loan transactions
An east-west line in the rectangular method of property description
Execution of a contract by vrtue of all parties having fully performed all terms
A new offer made by an offer or rejecting an offer.

14. Take-out loan
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
Permanent financing arranged to replace a shor-term construction loan.
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
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

15. Express Contract
Contract where all terms are in writing and understood by both parties.
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
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.
An exaggeration of a property's benefits.

16. Merger
When a subsequent contract covering the same subject matter is drafted (with changes)
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
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 gift of real property by will

17. Retainer
Cancellation of a contract when another party is in default
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
Pledging property as security for the payment of a debt without giving up possession.
One who holds title to property for the benefit of another called a beneficiary

18. Agent
Failing to do preventative maintenance or corrective maintenance.
A deed denoting an unlimited guarantee of title
A person authorized to act on behalf of another
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.

19. Adverse possession
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
One who conveys title to real property by 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.
Actually lending the $

20. Habendum clause
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
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 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.
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted

21. Supply and demand
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.
Anything of value agreed upon by parties to a contract. Includes a promise.
A form of co-ownership limited to husband and wife - with the right of survivorship
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land

22. Covenant for further assurances
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
An east-west line in the rectangular method of property description
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

23. Implied 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.
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
Details rights of condominium purchasers in Michigan

24. Devisee
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
The recipient of a gift of real property by will
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.

25. Hypothecating
Pledging property as security for the payment of a debt without giving up possession.
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
An interest in real estate such that a court will take notice and protect the owner's rights.
Anything of value agreed upon by parties to a contract. Includes a promise.

26. Straw Dog
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
An agent working for an unnamed third party buyer (usually a celebrity)
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property

27. Premises clause
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).
Allows the broker employed to market the seller's property for a given period of time.
The introductory information on a 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.

28. Beneficiary
Anything of value - as recognized by law - offered as an inducement to contract.
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
A mental or physical disability that impairs any of a person's life functions.
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate

29. Familial status
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 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.
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.
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.

30. Commission
Paid to Cooperating Brokers Usually 50%/50%
One to whom contractual rights are transferred
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.
The borrower is granted the right to pay the debt plus accrued interst and costs in full after the foreclosure sale - and thereby recover the property

31. Credit
A combination of the graduated payment mortgage and the variable rate mortgage
In a closing statement - money to be recieved or credit given for money or an obligation given.
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 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.

32. Multiple listing service (MLS)
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
An organized method of sharing or pooling listings by member brokers. (electronic)
An inheritable estate in land providing the greatest interest of any form of title
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.

33. Covenant against encumbrances
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
Purchaser
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.

34. Certificate of title opinion

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35. Compensatory damages
Subject to being defeated by the occurrence of a certain event
An exaggeration of a property's benefits.
The amount of money actually lost - which will be awarded by a court in case of a breached contract
A mortgage loan in which payments are insured by the Federal Housing Administration

36. Personal property
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
A right of title to land
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

37. Listing contract
The introductory information on a deed
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
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.

38. Transaction coordinator
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
The amount of the brokerage's commission that goes to the realtor
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller

39. Shelley v. Kraemer
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
Individual - private ownership of land
A physical or mental impairment that substantially limits one or more of the major life activities of a person
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.

40. Specific performance
A form of mortgage wherein there is a third party - who is called a trustee
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
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 financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.

41. Master deed
The statement in a deed containing words of conveyance
The instrument that legally establishes a condominium; also called condominium declaration
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 deed denoting an unlimited guarantee of title

42. Recordation

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43. Condominium
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
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.
The use of someone else's money to enhance your own
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

44. vendor's affidavit
An error of material fact by both parties
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
Agency that exists as a result of actions of the parties
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.

45. Testator/testatrix
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
A man/woman who has died and left a valid will
Individual - private ownership of land
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional

46. Conventional loan
One with full authority over one property of the principal - such as a property manager
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
E.g. very accurate desc or property)

47. Reverse annuity mortgage (RAM)
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
Investigates alleged discrimination and secures the equal protection of civil rights.
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)

48. Americans with Disabilities Act (ADA)
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
A form of co-ownership lmited to husband and wife; does not include the right of survivorship
A federal law protecting the rights of individuals with physical or mental impairments
Purchaser

49. Real property
Neighborhoods that are made up of similar properties
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)
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security

50. Loan origination fee
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 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.
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Financinig charge required by the lender