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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. Seller's disclosure statement
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
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.
A deed containing a limited warranty of title

2. Separate property
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
Individual - private ownership of land
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
A combination of the graduated payment mortgage and the variable rate mortgage

3. Interest
(a) Money paid for the use of money. (b) An ownership or right.
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
Purchaser
A law in effect in all states requiring certain contracts to be in writing to be valid.

4. Negligent misrepresentation

5. Remainder
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
A future interest in a life estate
An agreement that may be voided by the parties without legal consequences.
Financinig charge required by the lender

6. Condition concurrent
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
When the parties are to exchange performances at the same time.
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
A person authorized to act on behalf of another

7. Covenant against encumbrances
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
A tax imposed on the conveyance of title to real property by deed
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
An inheritable estate in land providing the greatest interest of any form of title

8. Deed in lieu of foreclosure
The inability of a party to exercise his or her free will because of fear of another party.
A fee paid by a realtor to a brokerage out of the area for a buyer listing
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin

9. Debits
Consummation of a real estate contract; also called closing.
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.
In a closing statement - an expense or money received against a credit
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.

10. Property description
An accurate legal description of land
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
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.

11. Estate in real property
To perfect the claim and obtain a title to the property - the claimant must satisfy the court that he or she has fulfilled the requirements of the adverse possession statute of Michigan
A form of deed with or without covenants of title
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
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership

12. Varticipation mortgage
One insuring a lessee against defects in the lessor's title.
Personal property
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
(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.

13. Parol evidence rule
A percentage of the loan amount the lender requires for making a mortgage loan
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
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
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.

14. Conditional sales contract
Finds someone to lend the $
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
Devotion of certain settlement costs between buyer and seller.
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.

15. Broker
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.
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
The governing board for real estate licenses in MI
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency

16. Misrepresentation
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
One in which the interest rate changes according to changes in a predetermined index.
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.)
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.

17. Federal Housing Administration (FHA)
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect
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 deed containing a limited warranty of title
The U. S. agency that insures mortgage loans to protect lending institutions.

18. Closing statement
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
An accounting of the funds received and disbursed in a real estate transaction.
An agreement that may be voided by the parties without legal consequences.
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted

19. Ranges
Prohibits certain practices in trade or commece and provides for certain remedies.
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted
License law term that describes a type of relationship between a broker and his or her licensees

20. Acceptance
Actually lending the $
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
Assures the absence of hazardous materials or problems relating to regulations of the EPA.

21. Junior Mortgage
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
Second mortgage
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) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.

22. Void contract
A claim against a title to real property.
An agreement that has no legal force or effect.
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.

23. Recordation

24. Agent's Responsibility to Third Persons

25. Freddie Mac (FHLMC)
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.
1. offer - 2. acceptance - 3. consideration - 4. legal capacity of the parties - 5. reality of consent - 6. legality of object - 7. possibility to complete
Allows the broker employed to market the seller's property for a given period of time.
The governing board for real estate licenses in MI

26. Scarcity
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
An implied agency without an agency agreement
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
North-south line in the rectangular method of property description.

27. Implied contract
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
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 licensee involved in a real estate transacton without having a relationship with the buyer or the seller
An agreement that is legally binding and enforceable.

28. Take-out loan
Permanent financing arranged to replace a shor-term construction loan.
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
The instrument that legally establishes a condominium; also called condominium declaration
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres

29. impound account
Another term for escrow account
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 agreement that has not been fully performed.
A gift of personal property by will.

30. Budget mortgage
Personal property that has become real property by having been permanently attached to real property
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
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
When the parties are to exchange performances at the same time.

31. Community property
A physical or mental impairment that substantially limits one or more of the major life activities of a person
A form of co-ownership lmited to husband and wife; does not include the right of survivorship
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
No two parcels of land are identical

32. Trade fixtures
The vendor cannot do anything to jeopardize the interest of the vendee.
Item that is installed by a comercial tenant and is removable upon termination of the tenancy
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.

33. Accrued expenses
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
The principal in a real estate transaction
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)

34. Reverse annuity mortgage (RAM)
A history of title and the current status of a title based on a atitle examination
A new offer made by an offer or rejecting an offer.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.

35. Michigan State Housing Development Authority (MichDA)
Make good loans to qualified borrowers ( e. g. Rural Development loans)
A tax imposed on the conveyance of title to real property by deed
The instrument that legally establishes a condominium; also called condominium declaration
A hidden structural defect that would not be discovered by an ordinary inspection

36. Grant deed
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
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 statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.

37. Prepayment penalty
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
The condition of death without leaving a valid will.
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).

38. Constructive condition
Title to real property held by two or more persons at the same time; also called concurrent ownership
An agreement that may be voided by the parties without legal consequences.
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
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)

39. Fannie Mae (FNMA)
(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.
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
An individual's being led to believe by a broker/salesperson's actions and representations that the broker/salesperson is representing (is an agent for) the individual
Consummation of a real estate contract; also called closing.

40. Fair Housing Act of 1968
A commission not based on a percentage of the selling price.
A federal prohibition of discrimination in sale - rental - financing - or appraisal of housing on the basis of race - color - religion - sex - national origin - handicap - or familial status.
The principle stating that when the net profit a property generates is excessive - very strong competition will result
A leasehold estate of definite duration

41. Confidentiality
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
The duty of agents not to disclose any information about their clients.
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms

42. Hypothecating
Pledging property as security for the payment of a debt without giving up possession.
One that imposes a prepayment penalty.
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.

43. Alienation clause
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.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
A person authorized by a state to take oaths and acknowledgments
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.

44. Open mortgage
A form of organization that makes and services mortgage loans.
One that does not impose a prepayment penalty.
The market in which lenders sell mortgages
North-south line in the rectangular method of property description.

45. Cortesy

46. Immobility
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Land cannot be relocated
When the parties are to exchange performances at the same time.
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

47. Good faith estimates

48. Cooling-off period
An agency relationship created by oral or written agreement between principal and agent
The violations and fines or penalties - which the department and the licensee have agreed upon.
A three-day right of rescission for certain loan transactions
Provides that if the lender amends the loan contract and blends the rate for the buyers assuming the loan - the seller still retains liability on the note and the mortgage. It applies to Michigan state-chartered lenders only

49. Certificate of title opinion

50. Arrears
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
The document setting forth the terms and conditions of the brokerage relationship with the purchaser. (expectation to act in the client's best interest - follow legitimate instructions - advocate their price and terms; keep all pertinent info confide
Written registration of an owner's title in public records to protect against subsequent claimants.
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.