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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. Emblements
Personal property growing in the soil - requiring planting and cultivation; annual crops.
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
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 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.

2. Competence
The instrument that legally establishes a condominium; also called condominium declaration
The principle stating that when the net profit a property generates is excessive - very strong competition will result
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
Financinig charge required by the lender

3. Principal
The act of reviewing loan documentation and evaluating borrower's ability and willingness to repay the loan and sufficiency of collateral value of the property.
Investigates alleged discrimination and secures the equal protection of civil rights.
(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
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.

4. Redlining
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.)
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.
A proceeding in which a court gives a mortgagor in default a specified time period in which to satisfy the debt and thereby prevent transfer to the lender of the title to the mortgaged property.

5. Homogeneity
Neighborhoods that are made up of similar properties
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
A new offer made by an offer or rejecting an offer.
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.

6. Michigan Consumer Protection Act
Prohibits certain practices in trade or commece and provides for certain remedies.
A form of co-ownership limited to husband and wife - with the right of survivorship
A hidden structural defect that would not be discovered by an ordinary inspection
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination

7. Vrivate mortgage insurance (PMI)
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
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.
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)

8. Civil Rights Act of 1866
A Missouri slave sued for his freedom - claiming that his four year stay in the northern portion of the Louisiana Territory made free land by the Missouri Compromise had made him a free man. The U.S - Supreme Court decided he couldn't sue in federal
A form of mortgage wherein there is a third party - who is called a trustee
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 federal law that prohibits all discrimination on the basis of race.

9. Mortgage broker
An east-west line in the rectangular method of property description
Finds someone to lend the $
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton

10. Carryover provision

11. Feudal system
Land was owned or controlled by the King
Finds someone to lend the $
Financinig charge required by the lender
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

12. Title insurance
A commission not based on a percentage of the selling price.
Subject to being defeated by the occurrence of a certain event
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
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).

13. Option
Paid to Cooperating Brokers Usually 50%/50%
A tax imposed on the conveyance of title to real property by deed
A man/woman appointed in a will to see that the terms of the will are carried out
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).

14. Novation
A temporary mortgage used to borrow money to contruct an improvement on land
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
Title to real property held by two or more persons at the same time; also called concurrent ownership
Substitution of a new contract for a prior contract.

15. Loan-to-value ratio

16. Federal Housing Administration (FHA)
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
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
The U. S. agency that insures mortgage loans to protect lending institutions.
Agency that exists as a result of actions of the parties

17. Commission
An accounting of the funds received and disbursed in a real estate transaction.
An implied agency without an agency agreement
One that appears to meet the requirements for validity but would not be enforceable in court.
Paid to Cooperating Brokers Usually 50%/50%

18. Multiple listing service (MLS)
An organized method of sharing or pooling listings by member brokers. (electronic)
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
A person appointedby an agent to assist in performing some or all of the tasks of the agency
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

19. underwriting

20. Chain of title
Devotion of certain settlement costs between buyer and seller.
Personal property growing in the soil - requiring planting and cultivation; annual crops.
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
Successive conveyances of title to a specific parcel of land.

21. Personal property
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
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.
One in which two more parcels of real property are pledged to secure payment of the note
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.

22. Vendor
Governmental restrictions on land use
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
Seller

23. Joint tenancy
A form of co-ownership that includes the right of survivorship
A federal law that prohibits all discrimination on the basis of race.
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
Seller

24. Unilateral contract
One who holds title to property for the benefit of another called a beneficiary
A man/woman appointed in a will to see that the terms of the will are carried out
An agreement wherein there is a promise in return for a specific action - which together supply the consideration (A deal entered into by both parties after one party has fulfilled a promise. e. g. an option)
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.

25. Alienation clause
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.
Mandates that the seller complete a disclosure form regarding the condition of the property
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 gift of personal property by will.

26. Vackage mortgage
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.
One in which personal property as well as real property s pledged to secure payment of the note.
Evidence that a valid debt exists
The loss of funds available to lending institutions for making mortgage loans - caused by depositors' withdrawal of funds for making investments that provide greater yields.

27. Buyer Agency Agreement

28. Open-end mortgage
One that may be refinanced without rewriting the mortgage.
The distribution of property to legally qualified heirs of one who has died intestate
An implied agency without an agency agreement
Investigates alleged discrimination and secures the equal protection of civil rights.

29. Caveat emptor
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
The largest and most prominent trade organization of real estate licensees.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.

30. 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
One that may be refinanced without rewriting the mortgage.
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
The principle stating that when the net profit a property generates is excessive - very strong competition will result

31. Sales Transactions
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
The recipient of a gift of real property by will
Cash sales - New financing

32. Take-out loan
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.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
Permanent financing arranged to replace a shor-term construction loan.
The power of government to regulate the use of real property for the benefit of the public

33. General agent
One with full authority over one property of the principal - such as a property manager
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.
Anything of value - as recognized by law - offered as an inducement to contract.
A deed containing a limited warranty of title

34. Adjustable rate mortgage (ARM)
One in which the interest rate changes according to changes in a predetermined index.
One who conveys title to trustee
The principal in a real estate transaction
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.

35. Purchase Money Mortgage
The inability of a party to exercise his or her free will because of fear of another party.
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
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
A husband's interest in the real property of his wife

36. Equitable title

37. Unities of ownership
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
When a subsequent contract covering the same subject matter is drafted (with changes)
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.

38. Cap
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
A threshold after which a realtor keeps all commissions and the broker keeps none
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.
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

39. Baselines
An instrument transferring ownership of personal property.
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.
An east-west line in the rectangular method of property description
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.

40. Estoppel
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect
Preventing a person from making a statement contrary to a previous statement
The relatonship between the amont of a mortgage loan and the lender's opinion of the value of the property pledged to secure payment of the loan.

41. Mortgage bankers
A form of organization that makes and services mortgage loans.
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.
Failure - wthout legal excuse - to perform any proise that forms the whole or part of a contract.
A form of co-ownership limited to husband and wife - with the right of survivorship

42. Vroration
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
The largest and most prominent trade organization of real estate licensees.
One who takes over management of a property until the foreclosure process is complete
Devotion of certain settlement costs between buyer and seller.

43. 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
Consummation of a real estate contract; also called closing.
Financinig charge required by the lender
A person authorized by a state to take oaths and acknowledgments

44. Discount points
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
A percentage of the loan amount the lender requires for making a mortgage loan
Failing to do preventative maintenance or corrective maintenance.
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.

45. Guaranteed Loan Program
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.
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
A major source of funds for financing residential real estate.
An accounting of the funds received and disbursed in a real estate transaction.

46. Principal meridians
North-south line in the rectangular method of property description.
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
One that requires the mortgagor to pay interest only during the mortgage term - with the principal due at the end of the term.
A deed issued to the buyer of property that was sold under court order to pay off a debt.

47. Debits
The distribution of property to legally qualified heirs of one who has died intestate
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
In a closing statement - an expense or money received against a credit
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted

48. Loan origination fee
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
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.
Financinig charge required by the lender

49. Vartial release clause
An agency relationship created by oral or written agreement between principal and agent
A person authorized to act on behalf of another
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
The instrument that legally establishes a condominium; also called condominium declaration

50. Sherriff's deed
Measure of profit
A deed issued to the buyer of property that was sold under court order to pay off a debt.
Investigates alleged discrimination and secures the equal protection of civil rights.
Devotion of certain settlement costs between buyer and seller.