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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. Marketable (merchantable) title
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
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
Land and everything permanently attached to land
One that is free from reasonable doubt and that a court would require a purchaser to accept

2. Civil Rights Act of 1968
A future interest in a life estate
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin

3. Right of first refusal
The principle stating that when the net profit a property generates is excessive - very strong competition will result
Another term for escrow account
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.
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

4. Deficiency judgment
Actually lending the $
License law term that describes a type of relationship between a broker and his or her licensees
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 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.

5. Fair Housing Amendments Act of 1988
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
A written instrument used to pledge a title to real property to secure payment of a promissory note.
A search of the public record to determne the quality of a title to real property

6. Disability
A physical or mental impairment that substantially limits one or more of the major life activities of a person
Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)
The U. S. agency that insures mortgage loans to protect lending institutions.

7. Habendum clause
Evidence that a valid debt exists
An intentional false statement of a material fact.
The outlay of money expecting income or profit or the acquisition of property expecting income or profit
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted

8. Loan-to-value ratio

9. Net listing

10. Grant deed
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
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
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.

11. Discount points
Execution of a contract by vrtue of all parties having fully performed all terms
A percentage of the loan amount the lender requires for making a mortgage loan
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.

12. Prepayment penalty
Seller
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 financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.
Financinig charge required by the lender

13. Express agency
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
An agency relationship created by oral or written agreement between principal and agent
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 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.

14. Discriminatory advertising
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.
The attribute of an asset's being readily convertible to cash.
Details rights of condominium purchasers in Michigan
A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.

15. Estate at sufferance
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
The distribution of property to legally qualified heirs of one who has died intestate
Allows the broker employed to market the seller's property for a given period of time.
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate

16. Leasehold estate
Describes a buyer who is ready to buy - willing to buy - and financially able to pay the asking price.
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.
A leasehold estate of definite duration
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.

17. Fraud
An intentional false statement of a material fact.
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
Permanence of land--makes it an attractive long term investment
A deposit a buyer makes at the time of submitting an offer - to demonstrate the true inten to purchase; also called binder - good faith deposit - escrow deposit.

18. Free market
Contract where all terms are in writing and understood by both parties.
Provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency
A formal statement before an authorized official (e. g. notary public) by a person who executed a deed - contract - or other document - that s was (is) his or her free act.
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.

19. Dual agency

20. Land contract
The power of government to regulate the use of real property for the benefit of the public
The statement in a deed containing words of conveyance
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 promise in a deed that the grantor will guarantee and defend the title against lawful claimants.

21. Estate for years
A leasehold estate of definite duration
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
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 percentage of the loan amount the lender requires for making a mortgage loan

22. Novation
Another term for escrow account
Substitution of a new contract for a prior contract.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin

23. Hypothecating
Cash sales - New financing
An east-west line in the rectangular method of property description
Pledging property as security for the payment of a debt without giving up possession.
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.

24. Personal property
A mortgage loan in which payments are insured by the Federal Housing Administration
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
Nonfreehold estate; of limited duration - providing the right of possession and control but not title.
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

25. Revenue stamps
A threshold after which a realtor keeps all commissions and the broker keeps none
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
Second mortgage
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

26. Rural Housing Service (RHS) Direct Loan Program
Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.
Organization established in 1929 by license law officials on the state commissions to assist one another in creating - administering - and enforcing license laws.
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 life estate based on the life of another

27. Latent defect
Doesn't happen anymore in this climate
A responsibility for revealing all information that affects the agency agreement
A hidden structural defect that would not be discovered by an ordinary inspection
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate

28. Listing contract
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
A property owner employs a real estate firm to market a property for a prescribed period of time at a prescribed price and terms
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
One who takes over management of a property until the foreclosure process is complete

29. Acceptance
An instrument transferring ownership of personal property.
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)
A policy insuring an owner of real property against financial loss resulting from a title defect.
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional

30. Contract for deed
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
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 error of material fact by both parties
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton

31. Alienation
Transfer of title to real property
Pledging property as security for the payment of a debt without giving up possession.
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 major source of funds for financing residential real estate.

32. Life tenant
A deed issued to the buyer of property that was sold under court order to pay off a debt.
One in which two more parcels of real property are pledged to secure payment of the note
One holding a life estate
Prohibits certain practices in trade or commece and provides for certain remedies.

33. Contract buyer's policy

34. Misrepresentation
In Michigan - a person appointed by a court to distrbute the property of a person dying intestate
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines

35. Master deed
The violations and fines or penalties - which the department and the licensee have agreed upon.
A tax imposed on the conveyance of title to real property by deed
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
The instrument that legally establishes a condominium; also called condominium declaration

36. Specific performance
A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer - a refund would be issued.
One-forth of a section - containing 160 acres
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
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

37. Cooling-off period
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
A three-day right of rescission for certain loan transactions
One with full authority over one property of the principal - such as a property manager
One who conveys title to trustee

38. General agent
The market in which lenders sell mortgages
One with full authority over one property of the principal - such as a property manager
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.

39. Notary public
A person authorized by a state to take oaths and acknowledgments
A form of co-ownership that includes the right of survivorship
A search of the public record to determne the quality of a title to real property
One that imposes a prepayment penalty.

40. Credit
A nickname for the Government National Mortgage Association (GNCMA) - a U. /S. government agency that purchaes FHA and VA mortgages.
In a closing statement - money to be recieved or credit given for money or an obligation given.
An exaggeration of a property's benefits.
The condition of death without leaving a valid will.

41. Open-end mortgage
One that may be refinanced without rewriting the mortgage.
E.g. very accurate desc or property)
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
Allows the broker employed to market the seller's property for a given period of time.

42. Michigan Person's with Disabilities CiveI Rights Act

43. Graduated payment mortgage (GPM)
A form of co-ownership that includes the right of survivorship
One who takes over management of a property until the foreclosure process is complete
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.

44. Chattel
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
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
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

45. Flat Fee
A formal statement before an authorized official (e. g. notary public) by a person who executed a deed - contract - or other document - that s was (is) his or her free act.
A contract whereby aproperty owner employs a real estate broker to market the property described in the contract
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 commission not based on a percentage of the selling price.

46. Elliott-Larsen Civil Rights Act
Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale - rental - or lease of housing accommodation.
One in which personal property as well as real property s pledged to secure payment of the note.
One who receives title to real property by 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.

47. Recordation

48. Assignee
Agent that has complete authority over any activity of principal; for example - power of attorney
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
One to whom contractual rights are transferred

49. Certificate of title opinion

50. Plat
(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.
A life estate based on the life of another
A property map - recorded on the public record in plat books
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.