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. Master deed
Successive conveyances of title to a specific parcel of land.
Anything of value - as recognized by law - offered as an inducement to contract.
The instrument that legally establishes a condominium; also called condominium declaration
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


2. Real property
One that has no participation by an agency of the federal government - Can be ether uninsured or insured
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 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.
The aggregate of rights - powers - and priveleges conveyed with ownership of real estate


3. Acceleration clause
The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.
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
one that is subordinate to a subsequent mortgage (e. g. - a second mortgage)
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract


4. Formal assumption
Permission to assume the mortgage at an interest rate prevailing at the time of assumption
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.
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate
Contract where all terms are in writing and understood by both parties.


5. Open listing
Time - title - interest - and possession; concurrent ownerships require at least one unity between co-owners.
The duty of agents not to disclose any information about their clients.
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
The transfer of mortgage obligations to purchaser of the mortgaged property.


6. Caveat emptor
A registered trademark of the National Associaton of REALTORS*; its use is limited to members only.
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Personal property
Permanence of land--makes it an attractive long term investment


7. Deed of trust
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 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
A form of mortgage wherein there is a third party - who is called a trustee
An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)


8. Redlining
Interest only loan (e. g. - construction loan--you are only paying interest - no principal)
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
Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
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


9. Discriminatory advertising
The statement in a deed containing words of conveyance
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
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.
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


10. Testimonium clause

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11. Right of survivorship

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12. Fixture
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
An agreement that may be voided by the parties without legal consequences.
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
Personal property that has become real property by having been permanently attached to real property


13. Location
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
One in which two more parcels of real property are pledged to secure payment of the note
An economic characteristic of land having the greatest effect on value in comparison to any other characteristic
A husband's interest in the real property of his wife


14. Executed contract
An agreement that has been fully performed.
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.
An agent working for an unnamed third party buyer (usually a celebrity)


15. Special agent
An error of material fact by both parties
A claim against a title to real property.
Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages - sort of)
Agent with limited authority to act on behalf of the principal - such as created by a listing (realtors acting for realtors???)


16. Lien foreclosure sale
A law in effect in all states requiring certain contracts to be in writing to be valid.
One who conveys title to trustee
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.
Allows the broker employed to market the seller's property for a given period of time.


17. Cortesy

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18. Scarcity
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.
(a) An economic characteristic of real property. (b) In appraisal - supply of property in relation to effective demand
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
A written instrument transferring an interest in real property when delivered to the grantee.


19. Bona fide purchaser
A buyer of property who relies on the records and is unaware of an unrecorded prior document
Founded on natural duty and affection. Has no pecuniary value.
Seller
An exaggeration of a property's benefits.


20. Description by reference
Transfer of title to real property
Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property
The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).
1. Specific performance - 2. Rescission - 3. Compensatory Damages 4. Liquidated Damages


21. Syndication
Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent
An agreement that has been fully performed.
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)
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.


22. Promulgate
To put in effect by public announcement; to put into operation
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
Failing to do preventative maintenance or corrective maintenance.
A mortgage loan in which payments are insured by the Federal Housing Administration


23. 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.
The principle statiing that the greater the supply of any commodity in comparison to demand - the lower the value; conversely - the smaller the supply and the greater the demand - the higher the value.
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 lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).


24. Mortgage assumption

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25. Earnest money
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.
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.
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
Finds someone to lend the $


26. Quiet title action
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
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 form of co-ownership limited to husband and wife - with the right of survivorship
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.


27. Mortgagee'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
A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.
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
A federal law that prohibits all discrimination on the basis of race.


28. Vendee
A written instrument transferring an interest in real property when delivered to the grantee.
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
Evidence that a valid debt exists
Purchaser


29. Receiver
A property map - recorded on the public record in plat books
One who arranges a mortgage loan betwen a lender and a borrower for a fee.
One who takes over management of a property until the foreclosure process is complete
Return of title to the holder of a future interest - such as the grantor in a life estate not in remainder


30. Conditional sales contract
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
Cash sales - New financing
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.
To put in effect by public announcement; to put into operation


31. Right of inheritance
A form of ownership in which the purchsaser owns the property for a certain specified time interval.
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status
Devotion of certain settlement costs between buyer and seller.
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.


32. Michigan Uniform Securities Act
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)
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.
An accurate legal description of land
Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security


33. Devisee
Another term for escrow account
An accurate legal description of land
The violations and fines or penalties - which the department and the licensee have agreed upon.
The recipient of a gift of real property by will


34. Deed
An exaggeration of a property's benefits.
A written instrument transferring an interest in real property when delivered to the grantee.
Land was owned or controlled by the King
One in which the federal government does not insure or guarantee payment to the lender.


35. Estate at will
A gift of real property by will
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.
A leasehold estate that may be terminated at the desire of either party
Multiple joint participation in a real estate investment. May be a real estate trust - corporation - or partnership.


36. Adverse possession
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
E g. if someone has used property for 15 years - judge will award title if actual - visible - hostile - open - continuous use can be proven)
(a) Money paid for the use of money. (b) An ownership or right.
One in which the interest rate changes according to changes in a predetermined index.


37. Mortgagee
The lender in a mortgage loan - who receives a mortgage from the borrower (mortgagor).
A policy insuring an owner of real property against financial loss resulting from a title defect.
Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract


38. Waste
The use of someone else's money to enhance your own
Actually lending the $
Failing to do preventative maintenance or corrective maintenance.
Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.


39. Michigan Consumer Protection Act
One who holds title to property for the benefit of another called a beneficiary
Prohibits certain practices in trade or commece and provides for certain remedies.
Transfer of title to real property
The person transferring contractual rights to another


40. Deed - what makes it valid
Assures the absence of hazardous materials or problems relating to regulations of the EPA.
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.
Legal purpose.
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


41. Police power
The power of government to regulate the use of real property for the benefit of the public
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
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
Allows the broker employed to market the seller's property for a given period of time.


42. Equitable redemption

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43. Good consideration
Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.
Any fact - the existence or occurrence of which - by agreement of the parties - operates to discharge a duty of performance after it has become absolute. (making mortgage payments)
One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level.
Founded on natural duty and affection. Has no pecuniary value.


44. Trustor
E.g. very accurate desc or property)
A form of co-ownership that does not include the right of survivorship.
Permanence of land--makes it an attractive long term investment
One who conveys title to trustee


45. Covenant against encumbrances
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
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.
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)


46. Counter-offer
Pledging property as security for the payment of a debt without giving up possession.
A major source of funds for financing residential real estate.
A new offer made by an offer or rejecting an offer.
(a) A false statement or omission of a material fact. (b) In real estate - making an unintentionally false statement to induce someone to contract


47. Liquidated damages
Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.
Money to be paid and received as compensaton for a breach of contract.
The attribute of an asset's being readily convertible to cash.
(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.


48. Co-ownership
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
One who receives title to real property by deed
OLD CAR Obedience - Loyalty - Disclosure of info - Confidentiality - Accounting - Reasonable xxx? - care - and diligence
Title to real property held by two or more persons at the same time; also called concurrent ownership


49. Michigan State Housing Development Authority (MichDA)
Make good loans to qualified borrowers ( e. g. Rural Development loans)
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
A new offer made by an offer or rejecting an offer.
Contract where all terms are in writing and understood by both parties.


50. Bundle of rights
The rights of an owner of a freehold estate to possession - enjoyment - control - and disposition of real property.
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 type of land descripton utilizing townships and sections
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress - fraud - undue influence - and misrepresentation.