Test your basic knowledge |

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. Compensatory damages
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
The amount of money actually lost - which will be awarded by a court in case of a breached contract
North-south line in the rectangular method of property description.
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.

2. Beneficiary
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
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well
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

3. Devisee
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
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

4. Jones v. Mayer
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
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.
To put in effect by public announcement; to put into operation
Evidence that a valid debt exists

5. Reverse annuity mortgage (RAM)
A three-day right of rescission for certain loan transactions
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
The substitution of the title insurance company in the place of the insured for filing a legal action.
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

6. Fiduciary
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
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

7. Executor /executrix
Cash sales - New financing
A promise in ta deed assuring the grantee that the grantor has the title being conveyed.
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
A man/woman appointed in a will to see that the terms of the will are carried out

8. Contract remedies
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages
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
Simultaneous ownership of real property by two or more people
Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect

9. Life tenant
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
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 holding a life estate
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.

10. Shared appreciation mortgage (SAM)
Agency that exists as a result of actions of the parties
Paid to Cooperating Brokers Usually 50%/50%
One in which the lender shares in the appreciation in property value in return for making the loan at a fixed rate lower than the rate in effect at the time the loan is made
One insuring a lessee against defects in the lessor's title.

11. FHA-insured loans
Successive conveyances of title to a specific parcel of land.
A mortgage loan in which payments are insured by the Federal Housing Administration
Pledging property as security for the payment of a debt without giving up possession.
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.

12. Hypothecating
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
A form of co-ownership that does not include the right of survivorship.
A future interest in a life estate
Pledging property as security for the payment of a debt without giving up possession.

13. Freehold estate
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
A right of title to land
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
The governing board for real estate licenses in MI

14. Debits
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
Land was owned or controlled by the King
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
In a closing statement - an expense or money received against a credit

15. Right of inheritance
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 right for property to descend to the heirs of the owner as set out by will or by intestate succession.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
An agreement that has been fully performed.

16. Counter-offer
A buyer of property who relies on the records and is unaware of an unrecorded prior document
A law in effect in all states requiring certain contracts to be in writing to be valid.
A form of co-ownership that includes the right of survivorship
A new offer made by an offer or rejecting an offer.

17. Bill of sale
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
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).
An instrument transferring ownership of personal property.
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

18. Land contract
North-south line in the rectangular method of property description.
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
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.
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.)

19. Disintermediation

20. Escheat
The recipient of a gift of real property by will
Transfer of legal rights and obligations by one party to another
Land cannot be relocated
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

21. 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 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.
Make good loans to qualified borrowers ( e. g. Rural Development loans)
Cash sales - New financing

22. General agent
One-forth of a section - containing 160 acres
An error of material fact by both parties
One with full authority over one property of the principal - such as a property manager
Title to real property held by two or more persons at the same time; also called concurrent ownership

23. Accrued expenses
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)
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 mental or physical disability that impairs any of a person's life functions.
The person transferring contractual rights to another

24. Indestructibility
Permanence of land--makes it an attractive long term investment
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
A deed containing a limited warranty of title
The introductory information on a deed

25. Prepayment penalty
One who conveys title to real property by deed
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.

26. Voidable contract
An agreement that may be voided by the parties without legal consequences.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
A federal law protecting the rights of individuals with physical or mental impairments
Transfer of legal rights and obligations by one party to another

27. Agent's Responsibility to Third Persons

28. Quarter-section
A history of title and the current status of a title based on a atitle examination
To pass to another (as in title)
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
One-forth of a section - containing 160 acres

29. Constructive notice
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.
Seller
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
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.

30. Discriminatory advertising
The inability of a party to exercise his or her free will because of fear of another party.
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
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.
Any advertising that states or indicates a preference - limitation - or discrimination on the basis of race - color - religion - sex - national origin - handicap - or familial status in offering housing for sale or rent.

31. Estate in real property
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 one-mile-square area of land described by the rectangular survey system - consisting of 640 acres
Personal property that has become real property by having been permanently attached to real property
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership

32. Title examination
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 search of the public record to determne the quality of a title to real property
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
A federal law regulating activities of lending institutions in making mortgage loans for housing.

33. Disclosure statement
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.
The largest and most prominent trade organization of real estate licensees.
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee.
Requires that an owner or any other person engaging in a real estate transaction - a real estate broker - or a real estate salesperson shall not - on the basis of a disability that is unrelated to the individua's ability to acquire - rent or maintain

34. Buyer Agency Agreement

35. Vartial release clause
Allows the broker employed to market the seller's property for a given period of time.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.

36. General warranty deed
Transfer of title to real property
A deed denoting an unlimited guarantee of title
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
A three-day right of rescission for certain loan transactions

37. Verc test
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
A form of co-ownership that does not include the right of survivorship.
A form of deed with or without covenants of title
A test of soil to determine if it is sufficiently porous for installation of a septic tank.

38. Conforming loans
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
One that may be refinanced without rewriting the mortgage.
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.

39. Mortgage broker
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
Successive conveyances of title to a specific parcel of land.
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
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.

40. Secondary mortgage market
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
The market in which lenders sell mortgages
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan

41. National Fair Housing Alliance (NFHA)
A deed containing a limited warranty of title
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.
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.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines

42. Closed mortgage
An estimate of value of a particular property - at a particular time for a specified purpose.
A contract whereby a property owner (optioner) sells a right to purchase his or her property to a prospective buyer (optionee).
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.
One that imposes a prepayment penalty.

43. Realty
Land and everything permanently attached to land
E.g. very accurate desc or property)
The limited warranty deed limits the potential liability of the seller and does not hold him liable for any encumbrances against the property prior to his ownership.
Successive conveyances of title to a specific parcel of land.

44. Timesharing
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)

45. Closing statement
E.g. Put on market - sell - done)
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
An accounting of the funds received and disbursed in a real estate transaction.
The third party in a real estate transaction

46. Innocent misrepresentation

47. Trustor
The vendor cannot do anything to jeopardize the interest of the vendee.
A future interest in a life estate
One who conveys title to trustee
An interest sufficient to provide the right to use - possession - and control of land; establishes the degree and duration of ownership

48. Unenforceable contract
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
One that appears to meet the requirements for validity but would not be enforceable in court.
Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)
A future interest in a life estate

49. Allodial system
A written instrument transferring an interest in real property when delivered to the grantee.
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
Individual - private ownership of land
(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

50. Condition
Any act or event that - if it occurs or fails to occur - automatically creates or extinguishes a legal obligation.
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
A type of land descripton utilizing townships and sections
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.