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. Arrears
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.
One that may be refinanced without rewriting the mortgage.
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.
One that appears to meet the requirements for validity but would not be enforceable in court.


2. Specific performance
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
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
Land and everything permanently attached to land


3. VA-guaranteed loan
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
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
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.
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.


4. Liquidated damages
Personal property growing in the soil - requiring planting and cultivation; annual crops.
The market in which lenders sell mortgages
Money to be paid and received as compensaton for a breach of contract.
A leasehold estate that may be terminated at the desire of either party


5. Bargain and sale deed
A person appointedby an agent to assist in performing some or all of the tasks of the agency
A form of deed with or without covenants of title
Acronym denoting that a mortgage payment includes principal - interest - taxes - and insurance.
Cancellation of a contract when another party is in default


6. Location
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 economic characteristic of land having the greatest effect on value in comparison to any other characteristic
An intentional false statement of a material fact.
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


7. Real estate
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Allows the broker employed to market the seller's property for a given period of time.


8. Master deed
A report usually provided by a local municipality health department to determine the potability of water and to ascertain that the septic system is running free
An agreement that is legally binding and enforceable.
An error of material fact by both parties
The instrument that legally establishes a condominium; also called condominium declaration


9. Chain of title
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
Details rights of condominium purchasers in Michigan
Successive conveyances of title to a specific parcel of land.


10. Steering
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
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 fee paid by a realtor to a brokerage out of the area for a buyer listing


11. Seller's disclosure statement
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 wife's interest in her husband's real property
One who conveys title to trustee
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status


12. Acceptance
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
When a subsequent contract covering the same subject matter is drafted (with changes)
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
A man/woman who has died and left a valid will


13. Agent's Responsibilty to principals
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
The principle stating that when the net profit a property generates is excessive - very strong competition will result
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.


14. Deed
The use of someone else's money to enhance your own
A written instrument transferring an interest in real property when delivered to the grantee.
North-south line in the rectangular method of property description.
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.


15. Liquidity

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16. Syndication
Prohibits certain practices in trade or commece and provides for certain remedies.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
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 right of an owner to recieve the title to an co-owner's share upon death of the co-owner - as in the case of joint tenancy and tenancy by the entirety.


17. Agent's Responsibility to Third Persons

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18. Good consideration
Founded on natural duty and affection. Has no pecuniary value.
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.


19. Express agency
An agency relationship created by oral or written agreement between principal and agent
A written instrument used to pledge a title to real property to secure payment of a promissory note.
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
A hidden structural defect that would not be discovered by an ordinary inspection


20. Condition concurrent
When the parties are to exchange performances at the same time.
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
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.
Agent that has complete authority over any activity of principal; for example - power of attorney


21. Implied contract
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
Personal 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
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.


22. Highest and best use
Finds someone to lend the $
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land
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
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


23. Disintermediation

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24. Grantee
One who receives title to real property by deed
A mental or physical disability that impairs any of a person's life functions.
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
The vendor cannot do anything to jeopardize the interest of the vendee.


25. Abstract of title
A gift of personal property by will.
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
A history of title and the current status of a title based on a atitle examination
Savings banks - mutual savings banks - commercial banks


26. Sherriff's deed
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
A deed issued to the buyer of property that was sold under court order to pay off a debt.
A federal law that prohibits all discrimination on the basis of race.


27. Rural Housing Service (RHS) Direct Loan Program
Cash sales - New financing
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
The vendor cannot do anything to jeopardize the interest of the vendee.
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages


28. Covenant for further assurances
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
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.
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


29. Personal representative
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate
Master deed containing legal description of the condoinium facility - a plat of the property - plans and specifications for the building and units - a description of the common areas - and the degree of ownership in the common areas available to each
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate


30. Certificate of title opinion

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31. Recordation

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32. Michigan Person's with Disabilities CiveI Rights Act

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33. Vackage mortgage
One with full authority over one property of the principal - such as a property manager
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.
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 personal property as well as real property s pledged to secure payment of the note.


34. Escheat
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
The reversion of property to the state or county - as provide by state law - in cases where a decedent dies intestate without heirs capable of inheriting - or when the property is abandoned
The prompt and total communication to the principal by the agent of any information that is material to the transaction for which the agency is created.
Pledging property as security for the payment of a debt without giving up possession.


35. Quarter-section
One-forth of a section - containing 160 acres
A percentage of the loan amount the lender requires for making a mortgage loan
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.
Allows the broker employed to market the seller's property for a given period of time.


36. Accidental agency

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37. Michigan Uniform State Antitrust Act
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
A mortgage loan in which payments are insured by the Federal Housing Administration
Subject to being defeated by the occurrence of a certain event
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)


38. Estate at will
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.
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor
Preventing a person from making a statement contrary to a previous statement
A leasehold estate that may be terminated at the desire of either party


39. Ready willing and able
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
A man/woman who has died and left a valid will
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
A hidden structural defect that would not be discovered by an ordinary inspection


40. Granting clause
A form of co-ownership that does not include the right of survivorship.
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
Evidence that a valid debt exists
The statement in a deed containing words of conveyance


41. Michigan Condominium Act
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.
Details rights of condominium purchasers in Michigan
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
The instrument that legally establishes a condominium; also called condominium declaration


42. Fee simple absolute
Simultaneous ownership of real property by two or more people
Finds someone to lend the $
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
An inheritable estate in land providing the greatest interest of any form of title


43. Discharge of contracts

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44. Notary public
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
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
A person authorized by a state to take oaths and acknowledgments
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.


45. Elliott-Larsen Civil Rights Act
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
A form of co-ownership limited to husband and wife - with the right of survivorship
The distribution of property to legally qualified heirs of one who has died intestate
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.


46. Vartial release clause
(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.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
Finds someone to lend the $
The attribute of an asset's being readily convertible to cash.


47. Purchase Money Mortgage
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
Legal purpose.
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
The U. S. agency that insures mortgage loans to protect lending institutions.


48. Estate for years
E.g. Put on market - sell - done)
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
An agreement that is legally binding and enforceable.
A leasehold estate of definite duration


49. Trustee
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
One who holds title to property for the benefit of another called a beneficiary
The amount of money actually lost - which will be awarded by a court in case of a breached contract
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.


50. Operation of law
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
Title insurance that protects contract buyer against defects in contract seller's title.
One who holds title to property for the benefit of another called a beneficiary
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton