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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. Transaction coordinator
A licensee involved in a real estate transacton without having a relationship with the buyer or the seller
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
Cancellation of a contract when another party is in default
E.g. very accurate desc or property)

2. Agent's Responsibility to Third Persons

3. vendor's affidavit
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
Cancellation of a contract when another party is in default
A promise in a deed that the title causes no encumbrances except those set forth in the deed.

4. Good faith estimates

5. Good consideration
One in which uniform installment payments include payment of both principle and interest.
Founded on natural duty and affection. Has no pecuniary value.
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.
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

6. Uniform Vendor and Purchaser's Risk Act

7. Customer
The third party in a real estate transaction
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
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
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security

8. Agent's Responsibilty to principals
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)
An accounting of the funds received and disbursed in a real estate transaction.
A temporary mortgage used to borrow money to contruct an improvement on land
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence

9. Annual percentage rate (APR)
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
An agreement that has been fully performed.
Title insurance that protects contract buyer against defects in contract seller's title.
Written registration of an owner's title in public records to protect against subsequent claimants.

10. Quarter-section
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
Substitution of a new contract for a prior contract.
One-forth of a section - containing 160 acres
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect

11. Agent
Seller
A federal law protecting the rights of individuals with physical or mental impairments
A person authorized to act on behalf of another
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.

12. Americans with Disabilities Act (ADA)
A threshold after which a realtor keeps all commissions and the broker keeps none
An agent working for an unnamed third party buyer (usually a celebrity)
One that is free from reasonable doubt and that a court would require a purchaser to accept
A federal law protecting the rights of individuals with physical or mental impairments

13. Mortgage banks
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
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.
Actually lending the $

14. Trustee
For profit - to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race - color - religion - sex or national ori
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
One who holds title to property for the benefit of another called a beneficiary

15. Open mortgage
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
One that does not impose a prepayment penalty.
The violations and fines or penalties - which the department and the licensee have agreed upon.
An agreement that is legally binding and enforceable.

16. Personal property
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
When the parties are to exchange performances at the same time.
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
North-south line in the rectangular method of property description.

17. Grantor
One who conveys title to real property by deed
A person (or persons) employed by a fair housing organization to pose as a buyer or seller or renter of real estate to determine if the licensee or landlord is acting in compliance with the law.
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
A leasehold estate of definite duration

18. Tenancy in common
(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) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
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 form of co-ownership that does not include the right of survivorship.

19. Finance
Savings banks - mutual savings banks - commercial banks
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.
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
The outlay of money expecting income or profit or the acquisition of property expecting income or profit

20. Closing statement
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
An accounting of the funds received and disbursed in a real estate transaction.
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.
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.

21. Mortgage broker
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
Finds someone to lend the $

22. Conforming loans
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
An agreement that may be voided by the parties without legal consequences.
Paid to Cooperating Brokers Usually 50%/50%

23. Vartial release clause
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
One that is free from reasonable doubt and that a court would require a purchaser to accept
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

24. 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.
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-forth of a section - containing 160 acres
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

25. Defeasance clause
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
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 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 threshold after which a realtor keeps all commissions and the broker keeps none

26. Joint tenancy
An agent working for an unnamed third party buyer (usually a celebrity)
A form of co-ownership that includes the right of survivorship
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
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.

27. Varticipation mortgage
(a) Money paid for the use of money. (b) An ownership or right.
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
Ownership by only one person
(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.

28. 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
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
An agent working for an unnamed third party buyer (usually a celebrity)
A person appointedby an agent to assist in performing some or all of the tasks of the agency

29. Vrepaid expenses
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
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.
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
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

30. Budget mortgage
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
Execution of a contract by vrtue of all parties having fully performed all terms
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 person (or persons) employed by a fair housing organization to pose as a buyer or seller or renter of real estate to determine if the licensee or landlord is acting in compliance with the law.

31. Assignment
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
License law term that describes a type of relationship between a broker and his or her licensees
One to whom contractual rights are transferred
Transfer of legal rights and obligations by one party to another

32. Leasehold estate
One who conveys title to real property by deed
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.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
When a subsequent contract covering the same subject matter is drafted (with changes)

33. Debits
In a closing statement - an expense or money received against a credit
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
Conveyance of title to the mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure
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

34. Equitable redemption

35. Parol evidence rule
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
To pass to another (as in title)
Simultaneous ownership of real property by two or more people
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.

36. Federal Housing Administration (FHA)
The U. S. agency that insures mortgage loans to protect lending institutions.
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.
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.
Ownership by only one person

37. Deficiency judgment
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
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 court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
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)

38. Freehold estate
The largest and most prominent trade organization of real estate licensees.
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
A right of title to land
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.

39. Mortgage principal
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership
The amount of money (usually the loan amount) on which interest is either paid or recieved.
Prohibits certain practices in trade or commece and provides for certain remedies.
A mental or physical disability that impairs any of a person's life functions.

40. Title insurance
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
A tax imposed on the conveyance of title to real property by deed
A percentage of the loan amount the lender requires for making a mortgage loan
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).

41. Devisee
The recipient of a gift of real property by will
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
Necessary elements for the creation of a contract.

42. Granting clause
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
Devotion of certain settlement costs between buyer and seller.
The statement in a deed containing words of conveyance
Another term for escrow account

43. Statutory redempton
A search of the public record to determne the quality of a title to real property
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
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

44. Cooperative
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.
Anything of value - as recognized by law - offered as an inducement to contract.
An east-west line in the rectangular method of property description
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty

45. Subagent
One who receives title to real property by deed
A federal law regulating activities of lending institutions in making mortgage loans for housing.
A person appointedby an agent to assist in performing some or all of the tasks of the agency
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.

46. Chain of title
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 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
Successive conveyances of title to a specific parcel of land.
A person (or persons) employed by a fair housing organization to pose as a buyer or seller or renter of real estate to determine if the licensee or landlord is acting in compliance with the law.

47. Listing contract
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.
The duty of agents not to disclose any information about their clients.
Pledging property as security for the payment of a debt without giving up possession.
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms

48. Fraud
Devotion of certain settlement costs between buyer and seller.
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.
The inability of a party to exercise his or her free will because of fear of another party.
An intentional false statement of a material fact.

49. Vroration
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Devotion of certain settlement costs between buyer and seller.
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.
License law term that describes a type of relationship between a broker and his or her licensees

50. Covenant of warranty
A deed containing a limited warranty of title
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
The condition of death without leaving a valid will.
Anything of value agreed upon by parties to a contract. Includes a promise.