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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. Quarter-section
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 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.
One-forth of a section - containing 160 acres
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

2. Defeasance clause
Title to real property held by two or more persons at the same time; also called concurrent ownership
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
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
A broker/salesperson's representing both buyer and seller in the same transaction (Mention at each of the first meetings with buyer and seller)

3. Timesharing
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.
License law term that describes a type of relationship between a broker and his or her licensees

4. Formal assumption
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
In a closing statement - money to be recieved or credit given for money or an obligation given.
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
An intentional false statement of a material fact.

5. Negative amortization
E.g. Bankruptcy - foreclosure - eminent domain - condemnaton
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
One that may be refinanced without rewriting the mortgage.
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.

6. Marketable (merchantable) title
One that is free from reasonable doubt and that a court would require a purchaser to accept
Anything of value - as recognized by law - offered as an inducement to contract.
An accurate legal description of land
Successive conveyances of title to a specific parcel of land.

7. Estoppel
Preventing a person from making a statement contrary to a previous statement
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 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)
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.

8. Voidable contract
One in which the interest rate changes according to changes in a predetermined index.
An agreement that may be voided by the parties without legal consequences.
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) Money paid for the use of money. (b) An ownership or right.

9. Seller's disclosure statement
Lender's estimate of borrower's settlement costs - required by RESPA to be furnished to borrower at time of loan application
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
Personal property growing in the soil - requiring planting and cultivation; annual crops.
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.

10. Disclosure of information
Savings banks - mutual savings banks - commercial banks
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.
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 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.

11. Strict foreclosure
A proceeding in which a court gives a mortgagor in default a specified time period in which to satisfy the debt and thereby prevent transfer to the lender of the title to the mortgaged property.
In a closing statement - money to be recieved or credit given for money or an obligation given.
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.
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

12. Michigan State Housing Development Authority (MichDA)
Make good loans to qualified borrowers ( e. g. Rural Development loans)
Founded on natural duty and affection. Has no pecuniary value.
One-forth of a section - containing 160 acres
Anything of value agreed upon by parties to a contract. Includes a promise.

13. Deed - what makes it valid
Financinig charge required by the lender
An inheritable estate in land providing the greatest interest of any form of title
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
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.

14. Conforming loans
The shortened name for the Federal National Mortgage Association (FNMA) - a privately owned corporation that purchases FHA - VA - and conventional mortgages
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.
Those processed on uniform loan forms and according to FNMA/FHLMC guidlines
The vendor cannot do anything to jeopardize the interest of the vendee.

15. Reverse annuity mortgage (RAM)
Pledging property as security for the payment of a debt without giving up possession.
Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses.
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination
A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.

16. Metes and bounds
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
E.g. very accurate desc or property)
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
One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

17. Joint tenancy
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 form of co-ownership that includes the right of survivorship
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 estimate of value of a particular property - at a particular time for a specified purpose.

18. Civil Rights Act of 1866
A federal law that prohibits all discrimination on the basis of race.
One that imposes a prepayment penalty.
A hidden structural defect that would not be discovered by an ordinary inspection
A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.

19. Adjustable rate mortgage (ARM)
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.
One in which the interest rate changes according to changes in a predetermined index.
A proceeding in which a court gives a mortgagor in default a specified time period in which to satisfy the debt and thereby prevent transfer to the lender of the title to the mortgaged property.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.

20. Deficiency judgment
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
An accounting of the funds received and disbursed in a real estate transaction.
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.
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.

21. Equitable redemption

22. Freddie Mac (FHLMC)
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.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
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.
A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well

23. Competence
A history of title and the current status of a title based on a atitle examination
A person authorized to act on behalf of another
The principle stating that when the net profit a property generates is excessive - very strong competition will result
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)

24. Sub agent
The introductory information on a deed
One that is free from reasonable doubt and that a court would require a purchaser to accept
A deed containing a limited warranty of title
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.

25. Investment
The outlay of money expecting income or profit or the acquisition of property expecting income or profit
Continuing to occupy property after lawful authorizatio has expired; a form of leasehold estate
The fiduciary relationship between a principal and an agent (in the form of a piece of paper that says who's acting on behalf of whom. e. g. buyer's agent - seller's agent - dual agent - etc.)
One to whom contractual rights are transferred

26. Mortgagee
The vendor cannot do anything to jeopardize the interest of the vendee.
Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
An agent working for an unnamed third party buyer (usually a celebrity)

27. Take-out loan
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
A type of land descripton utilizing townships and sections
A man/woman who has died and left a valid will
Permanent financing arranged to replace a shor-term construction loan.

28. Accidental or Ostensible Agency
Substitution of a new contract for a prior contract.
An implied agency without an agency agreement
One-forth of a section - containing 160 acres
Land was owned or controlled by the King

29. Location
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
The person transferring contractual rights to another
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
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.

30. Civil Rights Act of 1968
A federal prohibition on discrimination in the sle - rental - or financing of housing on the basis of race - color - religion - sex - or national origin
An agreement between competent parties upon legal consideration (e. g. money - property - promise - etc. ) to do - or abstain from doing - some legal act.
A federal law prohibiting discrimination in consumer loans
One in which uniform installment payments include payment of both principle and interest.

31. REALTOR*
The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
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.
A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.

32. Devisee
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.
The recipient of a gift of real property by will
An exaggeration of a property's benefits.
To pass to another (as in title)

33. Margin
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
One-forth of a section - containing 160 acres
The statement in a deed beginning with the words "to have and to hold" and describing the estate granted
Measure of profit

34. Listing contract
Title to real property held by two or more persons at the same time; also called concurrent ownership
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
A contract whereby a property owner employs a real estate broker to market the property described in the contract. (contract to make a fee)
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

35. Secondary mortgage market
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
The inability of a party to exercise his or her free will because of fear of another party.
The market in which lenders sell mortgages
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.

36. Dual agency

37. Void contract
An agreement that has no legal force or effect.
Use of land that will preserve the dand utility - provide the greatest income - and result in the greatest present value of the land
Should an individual borrower default on a loan - the Rural Housing Service will pay the private financier for the loan
One with full authority over one property of the principal - such as a property manager

38. Agent's Responsibilty to principals
Allows the broker employed to market the seller's property for a given period of time.
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
Necessary elements for the creation of a contract.

39. Life estate
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate
A fee paid by a realtor to a brokerage out of the area for a buyer listing
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
A buyer of property who relies on the records and is unaware of an unrecorded prior document

40. Arrears
A husband's interest in the real property of his wife
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.
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
Transfer of title to real property

41. Syndication
An agreement that is legally binding and enforceable.
A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
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.

42. Dower

43. Owner's policy
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
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
Title to real property held by two or more persons at the same time; also called concurrent ownership
A policy insuring an owner of real property against financial loss resulting from a title defect.

44. Alienation clause
The governing board for real estate licenses in MI
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
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.
One that does not impose a prepayment penalty.

45. Hypothecating
An accurate legal description of land
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
Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination

46. Remainder
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.
A future interest in a life estate
One in which two more parcels of real property are pledged to secure payment of the note
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).

47. Blanket mortgage
Transfer of legal rights and obligations by one party to another
A future interest in a life estate
One in which two more parcels of real property are pledged to secure payment of the note
An east-west line in the rectangular method of property description

48. CConventional mortgage loan
One in which the federal government does not insure or guarantee payment to the lender.
A form of deed with or without covenants of title
An implied agency without an agency agreement
Make good loans to qualified borrowers ( e. g. Rural Development loans)

49. Michigan's Seller Disclosure Act
Mandates that the seller complete a disclosure form regarding the condition of the property
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.
A report - based on a title examination - setting forth the examiner's opinion of the quality of a title to real property.
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.

50. Merger
When a subsequent contract covering the same subject matter is drafted (with changes)
Second mortgage
One to whom contractual rights are transferred
Title insurance that protects contract buyer against defects in contract seller's title.