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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. Ginnie Mae (GNMA)
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. Put on market - sell - done)
A gift of real property by will
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.

2. Covenant of warranty
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
A form of co-ownership that includes the right of survivorship
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Measure of profit

3. Breach of contract
A new offer made by an offer or rejecting an offer.
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
The duty of agents not to disclose any information about their clients.
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security

4. Junior mortgage
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).
A temporary mortgage used to borrow money to contruct an improvement on land
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
The amount of the brokerage's commission that goes to the realtor

5. Rectangular survey system
An intentional false statement of a material fact.
A form of co-ownership limited to husband and wife - with the right of survivorship
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.)
A type of land descripton utilizing townships and sections

6. 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
A gift of real property by will
A hidden structural defect that would not be discovered by an ordinary inspection
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.

7. Shared appreciation mortgage (SAM)
In a closing statement - an expense or money received against a credit
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
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 new offer made by an offer or rejecting an offer.

8. Real property
Agent that has complete authority over any activity of principal; for example - power of attorney
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
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

9. Real estate
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
Land cannot be relocated
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)

10. Land contract
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
Written registration of an owner's title in public records to protect against subsequent claimants.
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 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.

11. Elliott-Larsen Civil Rights Act
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
The market in which lenders sell mortgages
Personal property growing in the soil - requiring planting and cultivation; annual crops.
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

12. Leasehold policy

13. Personal property
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
Simultaneous ownership of real property by two or more people
Any improper or wrongful influence by one party over another whereby the will of a person is overpowered so that he or she is induced to act or prevented from acting according to free will.

14. Covenant for further assurances
One holding a life estate
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
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
(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.

15. Michigan Uniform Securities Act
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.
One that is free from reasonable doubt and that a court would require a purchaser to accept
A policy insuring an owner of real property against financial loss resulting from a title defect.
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security

16. Declaration
Master deed containing legal description of the condoinium facility - a plat of the property - plans and specifications for the building and units - a description of the common areas - and the degree of ownership in the common areas available to each
A written instrument transferring an interest in real property when delivered to the grantee.
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
One in which two more parcels of real property are pledged to secure payment of the note

17. Compensatory damages
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
The amount of money actually lost - which will be awarded by a court in case of a breached contract

18. Right of first refusal clause
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
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.
The largest and most prominent trade organization of real estate licensees.
A form of co-ownership that includes the right of survivorship

19. REALTOR*
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
Necessary elements for the creation of a contract.
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

20. Concurrent ownership
A deed issued to the buyer of property that was sold under court order to pay off a debt.
The market in which lenders sell mortgages
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
Simultaneous ownership of real property by two or more people

21. Co-ownership
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
Title to real property held by two or more persons at the same time; also called concurrent ownership
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.

22. Mortgagee
Land cannot be relocated
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
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
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.)

23. Deed of trust
A form of mortgage wherein there is a third party - who is called a trustee
Another term for escrow account
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
An agreement that has been fully performed.

24. Allodial system
One with full authority over one property of the principal - such as a property manager
Individual - private ownership of land
The attribute of an asset's being readily convertible to cash.
Ownership by only one person

25. Michigan Consumer Protection Act
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
Prohibits certain practices in trade or commece and provides for certain remedies.
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.

26. Discharge of contracts

27. Acceptance
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
An error of material fact by both parties
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
A history of title and the current status of a title based on a atitle examination

28. Balloon payment
The seller's broker makes a false statement to the buyer about the property - and the broker does not know whether the statement is true or false
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.
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) 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

29. Statutory redempton
A form of mortgage wherein there is a third party - who is called a trustee
Written registration of an owner's title in public records to protect against subsequent claimants.
An instrument transferring ownership of personal 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

30. Granting clause
Finds someone to lend the $
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.
Permanent financing arranged to replace a shor-term construction loan.
The statement in a deed containing words of conveyance

31. Caveat emptor
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
Finds someone to lend the $
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.

32. Condition
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
E.g. Put on market - sell - done)
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
A percentage of the loan amount the lender requires for making a mortgage loan

33. Michigan State Housing Development Authority (MichDA)
Devotion of certain settlement costs between buyer and seller.
One who conveys title to real property by deed
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
Make good loans to qualified borrowers ( e. g. Rural Development loans)

34. Disclosure of information
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.
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.
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
A new offer made by an offer or rejecting an offer.

35. Contract buyer's policy

36. Voidable contract
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.
An agreement that may be voided by the parties without legal consequences.
A law in effect in all states requiring certain contracts to be in writing to be valid.
Permanent financing arranged to replace a shor-term construction loan.

37. Estoppel
A gift of real property by will
Preventing a person from making a statement contrary to a previous statement
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
A form of co-ownership limited to husband and wife - with the right of survivorship

38. Tenancy in common
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
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 document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
A form of co-ownership that does not include the right of survivorship.

39. Junior Mortgage
A threshold after which a realtor keeps all commissions and the broker keeps none
Second mortgage
An agreement that may be voided by the parties without legal consequences.
Land cannot be relocated

40. Ranges
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land
A person authorized to act on behalf of another
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)

41. Cooling-off period
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 physical or mental impairment that substantially limits one or more of the major life activities of a person
Make good loans to qualified borrowers ( e. g. Rural Development loans)
A three-day right of rescission for certain loan transactions

42. punitive damages
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
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
Transfer of title to real property
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated

43. Land contract
One holding a life estate
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
Subject to being defeated by the occurrence of a certain event
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.

44. Redlining
A commission not based on a percentage of the selling price.
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
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.)
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.

45. Balloon mortgage
Financinig charge required by the lender
One with full authority over one property of the principal - such as a property manager
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.
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.

46. Term mortgage
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
Simultaneous ownership of real property by two or more people
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.

47. Contract
Substitution of a new contract for a prior contract.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
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

48. Time is of the essence
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
The third party in a real estate transaction
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 phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs

49. Debits
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 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.
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
In a closing statement - an expense or money received against a credit

50. Jones v. Mayer
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
An agent working for an unnamed third party buyer (usually a celebrity)
A property map - recorded on the public record in plat books
Savings banks - mutual savings banks - commercial banks