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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. Purchase money mortgage
A percentage of the loan amount the lender requires for making a mortgage loan
(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 mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate

2. Discharge of contracts

3. Latent defect
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 buyer of property who relies on the records and is unaware of an unrecorded prior document
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 hidden structural defect that would not be discovered by an ordinary inspection

4. Fair Housing Amendments Act of 1988
One with full authority over one property of the principal - such as a property manager
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
A type of land descripton utilizing townships and sections
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).

5. Supply and demand
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.
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor
Not a type of listing but a method of establishing the listing broker's commission as all money above a specified net amount to the seller. Illegal in MI
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.

6. Covenant against encumbrances
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
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 financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.

7. Prepayment penalty
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
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.

8. Mortgage assumption
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.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
The transfer of mortgage obligations to purchaser of the mortgaged property.
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.

9. Shelley v. Kraemer
No two parcels of land are identical
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 leasehold estate that may be terminated at the desire of either party
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.

10. Disclosure statement
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
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
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 deed denoting an unlimited guarantee of title

11. Debits
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.
In a closing statement - an expense or money received against a credit
Seller
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres

12. Fraud
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
An intentional false statement of a material fact.
One who conveys title to trustee
A buyer of property who relies on the records and is unaware of an unrecorded prior document

13. Conforming loans
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.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines

14. Confidentiality
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
The duty of agents not to disclose any information about their clients.
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security

15. CConventional mortgage loan
An estimate of value of a particular property - at a particular time for a specified purpose.
A policy insuring an owner of real property against financial loss resulting from a title defect.
One in which the federal government does not insure or guarantee payment to the lender.
To put in effect by public announcement; to put into operation

16. Bundle of rights
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
The transfer of mortgage obligations to purchaser of the mortgaged property.
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
A wife's interest in her husband's real property

17. Soil test
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
An agreement that may be voided by the parties without legal consequences.
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)

18. Realty
Land and everything permanently attached to land
One who conveys title to real property by deed
A responsibility for revealing all information that affects the agency agreement
The recipient of a gift of real property by will

19. Uniform Vendor and Purchaser's Risk Act

20. Discount points
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
A new offer made by an offer or rejecting an offer.
A percentage of the loan amount the lender requires for making a mortgage loan
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.

21. Dual agency

22. Leasehold policy

23. Reversion
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
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder
A form of deed with or without covenants of title

24. Finance
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.
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
Savings banks - mutual savings banks - commercial banks

25. Right of inheritance
To pass to another (as in title)
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
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

26. Open-end mortgage
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 that may be refinanced without rewriting the mortgage.
A person authorized by a state to take oaths and acknowledgments
The substitution of the title insurance company in the place of the insured for filing a legal action.

27. Principal
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
The market in which lenders sell mortgages
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)
(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

28. Offer and acceptance
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
One with full authority over one property of the principal - such as a property manager
Necessary elements for the creation of a contract.
Land cannot be relocated

29. Consideration
Anything of value - as recognized by law - offered as an inducement to contract.
Title to real property held by two or more persons at the same time; also called concurrent ownership
A hidden structural defect that would not be discovered by an ordinary inspection
An exaggeration of a property's benefits.

30. Promulgate
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
To put in effect by public announcement; to put into operation
Financinig charge required by the lender
The outlay of money expecting income or profit or the acquisition of property expecting income or profit

31. Junior mortgage
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
A federal law regulating activities of lending institutions in making mortgage loans for housing.
When the parties are to exchange performances at the same time.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount

32. Listing contract
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)
A form of co-ownership limited to husband and wife - with the right of survivorship
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder
The amount of money actually lost - which will be awarded by a court in case of a breached contract

33. Vrepaid expenses
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.
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 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
A temporary mortgage used to borrow money to contruct an improvement on land

34. Equitable redemption

35. Michigan Condominium Act
A right of title to land
In a closing statement - an expense or money received against a credit
Details rights of condominium purchasers in Michigan
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

36. Grantor
A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs
A form of organization that makes and services mortgage loans.
.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 who conveys title to real property by deed

37. Condition precedent
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
A mortgage loan in which payments are insured by the Federal Housing Administration
One who conveys title to trustee
A man/woman appointed in a will to see that the terms of the will are carried out

38. impound account
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
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.
Another term for escrow account
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)

39. Installment land 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.
Ownership by only one person
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.
A leasehold estate of definite duration

40. Graduated payment mortgage (GPM)
Necessary elements for the creation of a contract.
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
Not a type of listing but a method of establishing the listing broker's commission as all money above a specified net amount to the seller. Illegal in MI
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.

41. Shared appreciation mortgage (SAM)
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
Execution of a contract by vrtue of all parties having fully performed all terms
A physical or mental impairment that substantially limits one or more of the major life activities of a person
A federal law that prohibits all discrimination on the basis of race.

42. Right of first refusal
Land was owned or controlled by the King
An east-west line in the rectangular method of property description
.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 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.

43. Agency disclosure

44. Joint tenancy
A form of co-ownership that includes the right of survivorship
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 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.
In a closing statement - money to be recieved or credit given for money or an obligation given.

45. Delivery and acceptance
(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 transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
One that appears to meet the requirements for validity but would not be enforceable in court.
One that imposes a prepayment penalty.

46. Right of assignment
E.g. Put on market - sell - done)
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
An error of material fact by both parties

47. Michigan Uniform Securities Act
One insuring a lessee against defects in the lessor's title.
A responsibility for revealing all information that affects the agency agreement
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
The power of government to regulate the use of real property for the benefit of the public

48. Transfer tax
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
A tax imposed on the conveyance of title to real property by deed
An exaggeration of a property's benefits.

49. Land contract
The instrument that legally establishes a condominium; also called condominium declaration
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 federal law regulating activities of lending institutions in making mortgage loans for housing.
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent

50. Covenant of warranty
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
(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
A leasehold estate of definite duration