MICHIGAN REAL ESTATE UPDATED EXAM SCRIPT
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Encapsulation - ✔✔If they find asbestos in a public building, what would be the
safest method of removal?
✔✔Lead is found in paint, piping, and soil - ✔✔NOT in insulation
✔✔Radon - ✔✔Colorless, odorless radioactive gas resulting from decay of natural
radioactive substances
✔✔deed restrictions - ✔✔Private control on land use includes
✔✔covenant - ✔✔A requirement that all structures have an attached garage that
measures 30x33 is
✔✔An appraisal - ✔✔is a written opinion that is provided by a licensed appraiser. The
appraisal is not a guarantee or a determination as to what the selling price will be in an
open market.
✔✔principal of regression - ✔✔If you have a buyer that's interested in buying a newly
remodeled home that's located near ugly properties, they may lose value due to
✔✔Desirability, Utility, Scarcity, Transferability - ✔✔What are economic characteristics
that affect value?
✔✔Sales/Market Comparison Approach - ✔✔Value is estimated by using other
comparable property that has been recently sold in the same general area
✔✔Which is true about the COST APPROACH - ✔✔The cost of reconstructing the
building as a new unit is estimated. *Careful! Don't pick an answer that makes you
calculate the assessed value + land. (Assessed has to do with tax)*
✔✔When you're trying to value an older building, use the - ✔✔replacement cost
✔✔An outdated floor plan would be an example of - ✔✔Functional obsolescence
✔✔A property located next to a noisy airport would be an example - ✔✔external
obsolescence
✔✔Another name for a market analysis = CMA - ✔✔Competitive or Comparative Market
Analysis
, ✔✔What is the biggest benefit of a FHA loan? - ✔✔Low down payments of
approximately 3.5%.
✔✔No down payment is required for - ✔✔VA LOANS
✔✔What is a disadvantage of a partially amortized loan? - ✔✔It involves a lump sum
due at the end of loan term
✔✔The purpose of a reverse mortgage is to supplement the mortgagors' income. -
✔✔An elderly couple may use this type of loan
✔✔Installment sales contract or Contract for deed. - ✔✔What's another name for a land
contract?
✔✔What is the primary purpose of the secondary mortgage market? - ✔✔A lender that
receives more demand for loans than funds available may decide to sell its interest in
past loans and mortgages to the secondary market thus receiving more funds to
generate more lending transactions.
✔✔Alienation Clause - ✔✔Provides that if the mortgagor transfers ownership to another
person, the amount owed to the lender is immediately due in full.
✔✔Mortgage Discharge (Release/Satisfaction): - ✔✔Issued and recorded by the lender
as evidence of releasing the lien that the mortgage created at the time of financing the
property.
✔✔Truth In Lending is associated with REGULATION Z - ✔✔
✔✔Lenders may use the APR when advertising - ✔✔
✔✔RESPA - ✔✔involving "settlement service providers" such as lenders, real estate
agents, title insurance services, appraisals, credit reports, inspections, surveys, and
legal services.
✔✔DEED IN LIEU OF FORECLOSURE: - ✔✔Upon default, lender agrees not to go
through foreclosure and accepts a deed from mortgagor surrendering property to lender
in full satisfaction of debt.
✔✔SHORT SALE: - ✔✔:A sale of distressed property that is approved by a lender who
is willing to discharge the mortgage by accepting less than the loan balance owed.
✔✔At a property auction, unpaid property taxes always get paid FIRST! - ✔✔
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Encapsulation - ✔✔If they find asbestos in a public building, what would be the
safest method of removal?
✔✔Lead is found in paint, piping, and soil - ✔✔NOT in insulation
✔✔Radon - ✔✔Colorless, odorless radioactive gas resulting from decay of natural
radioactive substances
✔✔deed restrictions - ✔✔Private control on land use includes
✔✔covenant - ✔✔A requirement that all structures have an attached garage that
measures 30x33 is
✔✔An appraisal - ✔✔is a written opinion that is provided by a licensed appraiser. The
appraisal is not a guarantee or a determination as to what the selling price will be in an
open market.
✔✔principal of regression - ✔✔If you have a buyer that's interested in buying a newly
remodeled home that's located near ugly properties, they may lose value due to
✔✔Desirability, Utility, Scarcity, Transferability - ✔✔What are economic characteristics
that affect value?
✔✔Sales/Market Comparison Approach - ✔✔Value is estimated by using other
comparable property that has been recently sold in the same general area
✔✔Which is true about the COST APPROACH - ✔✔The cost of reconstructing the
building as a new unit is estimated. *Careful! Don't pick an answer that makes you
calculate the assessed value + land. (Assessed has to do with tax)*
✔✔When you're trying to value an older building, use the - ✔✔replacement cost
✔✔An outdated floor plan would be an example of - ✔✔Functional obsolescence
✔✔A property located next to a noisy airport would be an example - ✔✔external
obsolescence
✔✔Another name for a market analysis = CMA - ✔✔Competitive or Comparative Market
Analysis
, ✔✔What is the biggest benefit of a FHA loan? - ✔✔Low down payments of
approximately 3.5%.
✔✔No down payment is required for - ✔✔VA LOANS
✔✔What is a disadvantage of a partially amortized loan? - ✔✔It involves a lump sum
due at the end of loan term
✔✔The purpose of a reverse mortgage is to supplement the mortgagors' income. -
✔✔An elderly couple may use this type of loan
✔✔Installment sales contract or Contract for deed. - ✔✔What's another name for a land
contract?
✔✔What is the primary purpose of the secondary mortgage market? - ✔✔A lender that
receives more demand for loans than funds available may decide to sell its interest in
past loans and mortgages to the secondary market thus receiving more funds to
generate more lending transactions.
✔✔Alienation Clause - ✔✔Provides that if the mortgagor transfers ownership to another
person, the amount owed to the lender is immediately due in full.
✔✔Mortgage Discharge (Release/Satisfaction): - ✔✔Issued and recorded by the lender
as evidence of releasing the lien that the mortgage created at the time of financing the
property.
✔✔Truth In Lending is associated with REGULATION Z - ✔✔
✔✔Lenders may use the APR when advertising - ✔✔
✔✔RESPA - ✔✔involving "settlement service providers" such as lenders, real estate
agents, title insurance services, appraisals, credit reports, inspections, surveys, and
legal services.
✔✔DEED IN LIEU OF FORECLOSURE: - ✔✔Upon default, lender agrees not to go
through foreclosure and accepts a deed from mortgagor surrendering property to lender
in full satisfaction of debt.
✔✔SHORT SALE: - ✔✔:A sale of distressed property that is approved by a lender who
is willing to discharge the mortgage by accepting less than the loan balance owed.
✔✔At a property auction, unpaid property taxes always get paid FIRST! - ✔✔
