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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. Right of survivorship

2. Accidental agency

3. Negative amortization
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
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
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Money to be paid and received as compensaton for a breach of contract.

4. Heterogeneity
A percentage of the loan amount the lender requires for making a mortgage loan
The transfer of mortgage obligations to purchaser of the mortgaged property.
The condition of death without leaving a valid will.
No two parcels of land are identical

5. Right of first refusal
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
A federal law that prohibits all discrimination on the basis of race.
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.
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

6. Lien foreclosure sale
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.
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
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 deed denoting an unlimited guarantee of title

7. Adjustable rate mortgage (ARM)
A gift of real property by will
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
One in which the interest rate changes according to changes in a predetermined index.
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.

8. Deed in lieu of foreclosure
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
Written registration of an owner's title in public records to protect against subsequent claimants.
A policy insuring an owner of real property against financial loss resulting from a title defect.
To put in effect by public announcement; to put into operation

9. Trustee
One who holds title to property for the benefit of another called a beneficiary
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
Contract where all terms are in writing and understood by both parties.
A buyer of property who relies on the records and is unaware of an unrecorded prior document

10. Open mortgage
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
Personal property
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)
One that does not impose a prepayment penalty.

11. Seller agency

12. Board of Real Estate Brokers and Salespersons
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 wife's interest in her husband's real property
The governing board for real estate licenses in MI
A form of co-ownership that does not include the right of survivorship.

13. Undue influence
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
A one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
One who takes over management of a property until the foreclosure process is complete
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. Mortgage insurance premium (MIP)
Permanence of land--makes it an attractive long term investment
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)
A payment for insurance to protect the lender and/or insurer against loss if default occurs.

15. Disability
A physical or mental impairment that substantially limits one or more of the major life activities of a person
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)
Regulates the licensing and registration of persons who make - broker - or service one- to four-family residential first mortgage loans secured by Michigan property.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.

16. Mortgagee
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
A federal law regulating activities of lending institutions in making mortgage loans for housing.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

17. Ready willing and able
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
One in which the federal government does not insure or guarantee payment to the lender.
The distribution of property to legally qualified heirs of one who has died intestate
An agreement that has not been fully performed.

18. Freehold estate
The duty of agents not to disclose any information about their clients.
A right of title to land
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
The inability of a party to exercise his or her free will because of fear of another party.

19. Michigan usury laws
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.
An inheritable estate in land providing the greatest interest of any form of title
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent

20. Conforming loans
An agreement that is legally binding and enforceable.
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder

21. Real Estate Settlement Procedures Act (RESPA)
A federal law regulating activities of lending institutions in making mortgage loans for housing.
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
Written registration of an owner's title in public records to protect against subsequent claimants.

22. Association of Real Estate License Law Officials (ARELLO)
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
An agreement that is legally binding and enforceable.
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
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.

23. Jones v. Mayer
A form of co-ownership that does not include the right of survivorship.
Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
One in which the federal government does not insure or guarantee payment to the lender.

24. Negligent misrepresentation

25. Americans with Disabilities Act (ADA)
A form of deed with or without covenants of title
Any fact - the existence or occurrence of which - by agreement of the parties - operates to discharge a duty of performance after it has become absolute. (making mortgage payments)
A federal law protecting the rights of individuals with physical or mental impairments
Written registration of an owner's title in public records to protect against subsequent claimants.

26. Land contract
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.
Mandates that the seller complete a disclosure form regarding the condition of the property
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
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.

27. Listing contract
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
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
Paid to Cooperating Brokers Usually 50%/50%
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms

28. Accrued expenses
The market in which lenders sell mortgages
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)
A deed issued to the buyer of property that was sold under court order to pay off a debt.

29. Michigan Person's with Disabilities CiveI Rights Act

30. Tenants by the entirety
A form of co-ownership limited to husband and wife - with 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
An area of land defined by the rectangular survey system of land description (e. g. 6 square miles)
Neighborhoods that are made up of similar properties

31. Agent's Responsibility to Third Persons

32. Truth-in-Lending Simplification and Reform Act (TILSRA)
One who holds title to property for the benefit of another called a beneficiary
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
The principle stating that when the net profit a property generates is excessive - very strong competition will result
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

33. Constructive notice
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder
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
One in which all affected parties are bound by the knowledge of a fact even though they have not been actually notified of such fact.
An accurate legal description of land

34. Compensatory damages
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
The amount of money actually lost - which will be awarded by a court in case of a breached contract
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.
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.

35. Buyer Agency Agreement

36. Listing contract
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand

37. Strict foreclosure
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.
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract

38. Voidable contract
Anything of value agreed upon by parties to a contract. Includes a promise.
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
One who conveys title to real property by deed
An agreement that may be voided by the parties without legal consequences.

39. Mortgage assumption
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
The transfer of mortgage obligations to purchaser of the mortgaged property.
One who receives title to real property by deed

40. Credit
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
In a closing statement - money to be recieved or credit given for money or an obligation given.
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.

41. VA-guaranteed loan
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
A written instrument used to pledge a title to real property to secure payment of a promissory note.
A man/woman who has died and left a valid will
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.

42. Personal representative
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate
One who conveys title to real property by deed
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
Land was owned or controlled by the King

43. Employ
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
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.)
License law term that describes a type of relationship between a broker and his or her licensees
An east-west line in the rectangular method of property description

44. Waste
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
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.)
Failing to do preventative maintenance or corrective maintenance.

45. Rescission
Cancellation of a contract when another party is in default
(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 loss of funds available to lending institutions for making mortgage loans - caused by depositors' withdrawal of funds for making investments that provide greater yields.
Paid to Cooperating Brokers Usually 50%/50%

46. Blanket mortgage
A combination of the graduated payment mortgage and the variable rate mortgage
One in which two more parcels of real property are pledged to secure payment of the note
.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.
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate

47. Deficiency judgment
An estimate of value of a particular property - at a particular time for a specified purpose.
The amount of money actually lost - which will be awarded by a court in case of a breached contract
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
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.

48. Special (limited) warranty deed
License law term that describes a type of relationship between a broker and his or her licensees
A written instrument transferring an interest in real property when delivered to the grantee.
A deed containing a limited warranty of title
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).

49. Discharge of contracts

50. Michigan Uniform State Antitrust 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
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
There are certain types of trade restraints that are so injurious to competition that there can be no justification for them (price fixing; boycotts or concerted refusals to deal; territorial or customer allocation; tying agreements)