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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. Discharge of contracts

2. Secondary mortgage market
The market in which lenders sell mortgages
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
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
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.

3. Covenant of quiet enjoyment

4. Cooperative
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
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.)

5. Allodial system
A federal law that prohibits all discrimination on the basis of race.
One in which personal property as well as real property s pledged to secure payment of the note.
Actually lending the $
Individual - private ownership of land

6. Open listing
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
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
License law term that describes a type of relationship between a broker and his or her licensees
A form of co-ownership that does not include the right of survivorship.

7. Tacking
A form of mortgage wherein there is a third party - who is called a trustee
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor
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.
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

8. Bill of sale
An instrument transferring ownership of personal property.
Anything of value - as recognized by law - offered as an inducement to contract.
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 who conveys title to real property by deed

9. Multiple listing service (MLS)
An organized method of sharing or pooling listings by member brokers. (electronic)
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
One who receives title to real property by deed
A new offer made by an offer or rejecting an offer.

10. Deed in lieu of foreclosure
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
An organized method of sharing or pooling listings by member brokers. (electronic)
A right of title to land

11. Rural Housing Service (RHS) Direct Loan Program
The use of someone else's money to enhance your own
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
A law in effect in all states requiring certain contracts to be in writing to be valid.

12. Deed of trust
A form of mortgage wherein there is a third party - who is called a trustee
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
The person transferring contractual rights to another
A threshold after which a realtor keeps all commissions and the broker keeps none

13. Land contract
A combination of the graduated payment mortgage and the variable rate mortgage
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 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.
Must be in writing - must name a grantor - must name a grantee - property description - words of conveyance (aka granting clause or habendum clause - "...conveys and warrants...") - signed by grantor(s) - acknowledgment - stating to public officer th

14. Essential Elements of a contract
One in which uniform installment payments include payment of both principle and interest.
Actually lending the $
Ownership by only one person
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete

15. Customer
One that imposes a prepayment penalty.
The third party in a real estate transaction
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)
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.

16. Growing equity mortgage (GEM)

17. Conforming loans
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
One that imposes a prepayment penalty.
(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) Money paid for the use of money. (b) An ownership or right.

18. Vendor
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 recipient of a gift of real property by will
Seller
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.

19. Dower

20. Assignment
Transfer of legal rights and obligations by one party to another
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
A promise in a deed that the title causes no encumbrances except those set forth in the deed.

21. Buyer's contract
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
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
One to whom contractual rights are transferred

22. Take-out loan
Permanent financing arranged to replace a shor-term construction loan.
A form of co-ownership lmited to husband and wife; does not include the right of survivorship
An inheritable estate in land providing the greatest interest of any form of title
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted

23. Breach of contract
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
One in which personal property as well as real property s pledged to secure payment of the note.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
Simultaneous ownership of real property by two or more people

24. Immobility
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
Land cannot be relocated
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
One who conveys title to real property by deed

25. Straw Dog
A three-day right of rescission for certain loan transactions
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate
An agent working for an unnamed third party buyer (usually a celebrity)
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.

26. Disclosure statement
A mortgage loan in which payments are insured by the Federal Housing Administration
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 form of deed with or without covenants of title
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

27. Condition precedent
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
MI law stating that if the property is being destroyed - is partially destroyed - or is being taken by eminent domain - the buyer may - at the buyer's option - declare the transaction null and void.
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
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

28. Owner's policy
Item that is installed by a comercial tenant and is removable upon termination of the tenancy
A policy insuring an owner of real property against financial loss resulting from a title defect.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
A relationship that meets the following criteria: (1) the broker and licensee must have a written agreement stating that the licensee is not an employee for federal and state or income tax purposes - and (2) not less than 75 percent of the licensse's

29. Open mortgage
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
An exaggeration of a property's benefits.
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
One that does not impose a prepayment penalty.

30. Listing contract
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 rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
The violations and fines or penalties - which the department and the licensee have agreed upon.
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

31. Convey
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
To pass to another (as in title)

32. Counter-offer
A new offer made by an offer or rejecting an offer.
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
Personal property
(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

33. Promissory note
The power of government to regulate the use of real property for the benefit of the public
A history of title and the current status of a title based on a atitle examination
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.
Evidence that a valid debt exists

34. Good faith estimates

35. Bilateral contract
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)
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 claim against a title to real property.
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.

36. Hypothecating
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
A major source of funds for financing residential real estate.
Pledging property as security for the payment of a debt without giving up possession.
The attribute of an asset's being readily convertible to cash.

37. Bundle of rights
An agreement that is legally binding and enforceable.
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).
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.

38. Michigan usury laws
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
A type of land descripton utilizing townships and sections
One who conveys title to real property by deed

39. Mortgage banks
(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
One that may be refinanced without rewriting the mortgage.
The use of someone else's money to enhance your own
Actually lending the $

40. Mortgage broker
A tax imposed on the conveyance of title to real property by deed
Finds someone to lend the $
A physical or mental impairment that substantially limits one or more of the major life activities of a person
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.

41. Cooling-off period
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
Execution of a contract by vrtue of all parties having fully performed all terms
A three-day right of rescission for certain loan transactions
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.

42. Baselines
An east-west line in the rectangular method of property description
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
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

43. Construction mortgage
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.
A temporary mortgage used to borrow money to contruct an improvement on land
A law in effect in all states requiring certain contracts to be in writing to be valid.
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination

44. Familial status
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).
Person or a nonperson (partnership - association - corporation - common law trust - or combination) acting as agent for others in negotiating the purchase and sale of real property or other commodities for a fee
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
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.

45. Defeasance clause
Doesn't happen anymore in this climate
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.
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
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.

46. Carryover provision

47. Indestructibility
One that does not impose a prepayment penalty.
The distribution of property to legally qualified heirs of one who has died intestate
Actually lending the $
Permanence of land--makes it an attractive long term investment

48. Reality of consent
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
Item that is installed by a comercial tenant and is removable upon termination of the tenancy
The amount of money actually lost - which will be awarded by a court in case of a breached 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.

49. Real property
Ownership by only one person
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
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
Anything of value - as recognized by law - offered as an inducement to contract.

50. Section
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
Title to real property held by two or more persons at the same time; also called concurrent ownership
A deed issued to the buyer of property that was sold under court order to pay off a debt.
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres