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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. Valuable consideration
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
Anything of value agreed upon by parties to a contract. Includes a promise.
Second mortgage
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)

2. Master deed
Title insurance that protects contract buyer against defects in contract seller's title.
A federal law prohibiting discrimination in consumer loans
An agreement that has been fully performed.
The instrument that legally establishes a condominium; also called condominium declaration

3. Devise
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
A gift of real property by will
A responsibility for revealing all information that affects the agency agreement
The introductory information on a deed

4. Disintermediation

5. Devisee
The recipient of a gift of real property by will
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)
Details rights of condominium purchasers in Michigan
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence

6. National Fair Housing Alliance (NFHA)
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 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
Coalition of private - nonprofit fair housing groups that has joined with federal and state government fair housing enforcement agencies to substantially improve fair housing enforcement activities.
An agreement that has no legal force or effect.

7. Regulation Z
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.
Cash sales - New financing
When the parties are to exchange performances at the same time.
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

8. Joint tenancy
The person transferring contractual rights to another
No: misrepresentation of fact; negligent misrepresentation; innocent misrepresentaton. MI law says seller's broker is not liable for statments made to buyer/customer regarding condition of property.
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.
A form of co-ownership that includes the right of survivorship

9. Michigan State Housing Development Authority (MichDA)
Make good loans to qualified borrowers ( e. g. Rural Development loans)
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
Coalition of private - nonprofit fair housing groups that has joined with federal and state government fair housing enforcement agencies to substantially improve fair housing enforcement activities.
The duty of agents not to disclose any information about their clients.

10. Employ
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
One in which the interest rate changes according to changes in a predetermined index.
License law term that describes a type of relationship between a broker and his or her licensees
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.

11. Statute of Frauds
The use of someone else's money to enhance your own
A law in effect in all states requiring certain contracts to be in writing to be valid.
To put in effect by public announcement; to put into operation
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.

12. Michigan Due on Sale Clause Act
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 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
A responsibility for revealing all information that affects the agency agreement
One-forth of a section - containing 160 acres

13. Margin
A leasehold estate that may be terminated at the desire of either party
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.
Personal property
Measure of profit

14. Mortgagee's policy
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
The market in which lenders sell mortgages
Actually lending the $

15. Merger
When a subsequent contract covering the same subject matter is drafted (with changes)
One holding a life estate
.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 form of co-ownership that includes the right of survivorship

16. Assignee
A federal law prohibiting discrimination in consumer 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
One to whom contractual rights are transferred
A federal law that prohibits all discrimination on the basis of race.

17. Tester
A person authorized to act on behalf of another
When the parties are to exchange performances at the same time.
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.
Second mortgage

18. Fair Housing Act of 1968
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
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 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.

19. Receiver
Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)
Mandates that the seller complete a disclosure form regarding the condition of the property
One who takes over management of a property until the foreclosure process is complete
A buyer of property who relies on the records and is unaware of an unrecorded prior document

20. Innocent misrepresentation

21. Varticipation mortgage
(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.
Title insurance that protects contract buyer against defects in contract seller's title.
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
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

22. Good faith estimates

23. Plat
A property map - recorded on the public record in plat books
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 federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
When a subsequent contract covering the same subject matter is drafted (with changes)

24. Principal meridians
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veterans Affairs.
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.
North-south line in the rectangular method of property description.
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.

25. Site condominium
One that does not impose a prepayment penalty.
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.
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
Personal property that has become real property by having been permanently attached to real property

26. Familial status
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.
Devotion of certain settlement costs between buyer and seller.
A husband's interest in the real property of his wife
No: misrepresentation of fact; negligent misrepresentation; innocent misrepresentaton. MI law says seller's broker is not liable for statments made to buyer/customer regarding condition of property.

27. Executor /executrix
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract.
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)
A man/woman appointed in a will to see that the terms of the will are carried out
A combination of the graduated payment mortgage and the variable rate mortgage

28. Equitable title

29. Foreclosure
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
Necessary elements for the creation of a contract.
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.
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

30. Trustor
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
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 conveys title to trustee
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

31. Mortgage
Second mortgage
A written instrument used to pledge a title to real property to secure payment of a promissory note.
The statement in a deed containing words of conveyance
A wife's interest in her husband's real property

32. Annual percentage rate (APR)
E.g. very accurate desc or property)
Transfer of title to real property
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate
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.

33. Installment land contract
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
A policy insuring an owner of real property against financial loss resulting from a title defect.
.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.
One that is free from reasonable doubt and that a court would require a purchaser to accept

34. Defeasible
A threshold after which a realtor keeps all commissions and the broker keeps none
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
Subject to being defeated by the occurrence of a certain event
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.

35. Real Estate Settlement Procedures Act (RESPA)
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
A federal law regulating activities of lending institutions in making mortgage loans for housing.
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.
An agreement that may be voided by the parties without legal consequences.

36. REALTOR*
A law in effect in all states requiring certain contracts to be in writing to be valid.
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
Pledging property as security for the payment of a debt without giving up possession.
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.

37. Right of assignment
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.
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
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.
A responsibility for revealing all information that affects the agency agreement

38. Grant deed
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 statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.

39. Specific performance
A responsibility for revealing all information that affects the agency agreement
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 type of land descripton utilizing townships and sections
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.

40. Estoppel
The introductory information on a deed
The amount of money actually lost - which will be awarded by a court in case of a breached contract
Preventing a person from making a statement contrary to a previous statement
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms

41. Balloon mortgage
Execution of a contract by vrtue of all parties having fully performed all terms
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.
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
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

42. Estate from year to year
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
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)
Land cannot be relocated
An accurate legal description of land

43. Operation of law
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) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
Measure of profit

44. Statutory redempton
The introductory information on a deed
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
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

45. 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.
The statement in a deed containing words of conveyance
Contract where all terms are in writing and understood by both parties.
Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor

46. Vrivate mortgage insurance (PMI)
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.
A threshold after which a realtor keeps all commissions and the broker keeps none
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.
One who arranges a mortgage loan betwen a lender and a borrower for a fee.

47. Open mortgage
Land cannot be relocated
One that does not impose a prepayment penalty.
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.
A new offer made by an offer or rejecting an offer.

48. Straw Dog
Second mortgage
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
An agent working for an unnamed third party buyer (usually a celebrity)
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

49. Good consideration
The recipient of a gift of real property by will
Founded on natural duty and affection. Has no pecuniary value.
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
The violations and fines or penalties - which the department and the licensee have agreed upon.

50. Parol evidence rule
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
E.g. very accurate desc or property)
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.
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