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222 Cards in this Set
- Front
- Back
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All of the following factors would affect supply, EXCEPT:
A. population B. construction costs C. government controls D. the labor force |
A. population |
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When the supply of a commodity decreases: A. prices tend to rise B. prices tend to drop C. demand tends to rise D. demand tends to drop |
A. prices tend to rise |
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All of the following are physical characteristics of land, EXCEPT:
A. indestructibility B. uniqueness C. immobility D. scarcity |
D. scarcity |
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All of the following are required of a candidate to obtain a NC Real Estate Brokers License, EXCEPT:
A. minimum age of 18 B. high school diploma C. good character D. formal background check |
B. high school diploma
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Which of the following is correct regarding the educational requirements of a provisional broker?
A. must complete 90 hours of CE in the first 3 years B. must complete 90 hours of postlicensing in the first 3 years, completing at least 30 hours every year by June 10 C. must complete 90 hours of postlicensing in the first 3 years and complete 8 hours of CE every year prior to the second renewal of their real estate license D. the renewal date for postlicensing and CE is June 10 |
C. must complete 90 hours of postlicensing in the first 3 years and complete 8 hours of CE every year prior to the second renewal of their real estate license |
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How are members of the NC Real Estate Commission chosen?
A. They are elected by the public at large B. They are appointed by the governor C. Seven are appointed by the governor and 2 are appointed by the legislature. D. Four are appointed by the legislature and 3 are appointed by the governor. |
C. Seven are appointed by the governor and 2 are appointed by the legislature. |
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It is the job of the NC Real Estate Commission to perform all of the following, EXCEPT:
A. fine licensees who violate the rules or statutes B. provide information to licensees and the public C. regulate and educate licensees D. protect the public and consumers
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A. fine licensees who violate the rules or statutes
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All of the following are economic characteristics of real property, EXCEPT:
A. scarcity B. immobility C. location D. permanence |
B. immobility |
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The fact that real estate licensees must be licensed in the state where the real estate is located and not where the client is located occurs:
A. because individual state regulatory agencies create rules that govern their licensees B. because they are subject to requirements in the national and state constitutions C. only in NC D. because of the concept of highest and best use |
A. because individual state regulatory agencies create rules that govern their licensees |
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Highest and best use would best be defined as:
A. the use that produces the highest sales price for the property B. the one use that provides the greatest return and maximizes the value of the real estate C. the categorization of the multiple ways in which a property may be utilized D. the existing and current use of the property |
B. the one use that provides the greatest return and maximizes the value of the real estate |
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In regard to real estate's role in economic cycles, which of the following statements is correct?
A. Real estate is a stable market that does not fluctuate. B. Real estate is a lagging indicator and contains periods of expansion, recession, depression and revival. C. Real estate is a leading indicator of economic cycles. D. Real estate cycles are easily predictable.
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B. Real estate is a lagging indicator and contains periods of expansion, recession, depression and revival.
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In regard to the composition of the NC Real Estate Commission, which of the following statements is correct?
A. It must be composed of at least 5 people who are real estate licensees. B. Three of the people on the commission must be laypeople. C. At least 3 of the members must be licensees and 2 must be laypeople. D. At least 3 of the members must be laypeople and 2 must be licensees.
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C. At least 3 of the members must be licensees and 2 must be laypeople.
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The North Carolina Real Estate Commission has the authority to:
A. regulate the commissions and fees charged by licensees B. discipline a REALTOR for breach of the Code of Ethics C. fine a licensee for violations of license law D. require licensees to obtain education |
D. require licensees to obtain education |
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Under the doctrine of specific performance, the party harmed by breach of a real estate contract can ask a judge to force the breaching party to carry out the terms of the contract rather than order the breaching party to pay monetary damages. Which physical characteristic of land is the basis for the doctrine of specific performance?
A. indestructibility B. uniqueness C. immobility D. permanence of investment
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B. uniqueness |
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Which of the following is considered to have the greatest impact on the value of a property?
A. area preference B. permanence of investment C. scarcity D. uniqueness |
A. area preference |
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In determining the value of a property the location is important. Factors in the community which cause businesses to relocate there and the ability to attract new businesses is known as the:
A. life cycle of the community B. the area's market value C. the zoning overlays D. the economic base
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D. the economic base |
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The concept by which land would increase automatically along a river or stream is known as:
A. accretion B. littoral rights C. avulsion D. reliction |
A. accretion |
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Which of the following is generally considered real property? A. emblements B. trade fixtures C. a shrub planted in a decorative pot D. a perennial shrub in the backyard |
D. a perennial shrub planted in the backyard |
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The phrase "bundle of legal rights": A. is part of the definition of real property B. is another name for a legal description C. refers to the legal documents used in real estate transactions D. refers to the tenant's rights in a lease |
A. is part of the definition of real property |
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A trade fixture is considered: A. a fixture B. an easement C. personalty D. a license |
C. personalty |
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Real property can become personal property by: A. severance B. purchase C. hypothecation D. attachment |
A. severance |
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A seller is under contract to sell a property using the standard offer to purchase and contract. The elegantly decorated master bedroom has vertical window blinds, hand-painted light switches and electrical outlet covers and draperies fashioned from fabric coordinated with the wallpaper. Which of the following items may the seller legally remove before the close of the transaction?
A. none of the items B. the draperies and blinds C. the hand-painted light switches and electrical outlet covers D. the draperies |
D. the draperies |
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A business owner rents an empty building to use an ice cream parlor. The tenant subsequently installs large freezer units and several service counters. These additions:
A. are considered permanent improvements to the property B. become the landlord's property once attached to the building C. can be legally removed by the tenant at the termination of the lease D. can only be removed by the tenant with the landlord's permission |
C. can be legally removed by the tenant at the termination of the lease |
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The owner of a house wants to fence the yard for a dog. When the fence is erected, the fencing materials are converted to real estate by:
A. severance B. annexation C. immobility D. indestructibility |
B. annexation |
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Which of the following has an indefinite ownership period?
A. fee simple estate B. life estate C. estate for years D. estate at will |
A. fee simple estate |
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Oil, gas and other subsurface rights are generally considered to be:
A. separate and apart from the rights or interest in the real estate B. an item which can never be separated from the real estate and must transfer with the property C. items of personalty which the owner can either include or exclude from the transfer D. be part of the real estate and it's bundle of rights and automatically transfer to a subsequent owner unless specifically reserved or excepted in the deed
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D. be part of the real estate and it's bundle of rights and automatically transfer to a subsequent owner unless specifically reserved or excepted in the deed |
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A woman wishes to donate a vacant lot that she owns in fee simple absolute to a hospital that is located next to her lot. An attorney prepares a deed that conveys the ownership of the lot to the hospital "so long as it is used for medical purposes." After the completion of the gift, the hospital will hold a:
A. pur autre vie estate B. fee simple absolute estate C. defeasible fee D. fee simple to a condition subsequent estate |
C. defeasible fee |
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The rights of the owner of a property located along the banks of a small stream are called:
A. littoral rights B. subjacent rights C. riparian rights D. hereditaments |
C. riparian rights |
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A deed conveyed ownership to a grantee "so long as the existing building on the property is not destroyed." Following the transfer, the original grantor has what type of interest?
A. life estate B. ongoing ownership in the property that lasts as long as the condition C. fee simple estate D. reversionary estate |
D. reversionary estate |
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A woman conveys a life estate to her son-in-law and stipulates that upon his death the estate will pass to her grandson. The grandson has an:
A. estate in reversion B. estate in remainder C. estate pur autre vie D. estate for the life of another |
B. estate in remainder
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A person who acquired ownership that can be inherited, with the provision "that the land must always be used for recreational purposes," has:
A. a fee simple absolute estate B. a defeasible fee C. a fee simple to a condition subsequent estate D. an estate that cannot be sold |
B. a defeasible fee |
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A brother and sister bought a commercial building and took title as joint tenants with right of survivorship. The brother died. The sister now owns the building:
A. as a joint tenant with right of survivorship with her brother's heirs B. in severalty C. as a tenant in common with her brother's heirs D. as a life tenant with her brother's heirs having remainder interests |
B. in severalty |
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A person currently has the legal right to occupy and use a certain residential structure. The interest in the property could be all of the following, EXCEPT:
A. fee simple B. remainder C. leasehold D. life estate |
B. remainder |
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Co-owners of a fee simple interest in a small office building are neither related to nor a creditor to each other. One owner dies intestate. The surviving owner would become the sole owner of the property under which of the following rights?
A. adverse possession B. reversionary interest C. survivorship D. foreclosure |
C. survivorship |
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Three joint tenants with rights of survivorship own a parcel of land. One owner sells his interest to a long-time friend. After the conveyance, the remaining original owners:
A. become tenants in common with each other B. become tenants in common with each other and the newest owner C. become joint tenants with the newest owner D. remain joint tenants with each other |
D. remain joint tenants with each other |
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One of two owners holds an undivided 60% interest and the other holds an undivided 40% interest. The two owners probably hold their interest as:
A. cooperative owners B. tenants by entireties C. community property owners D. tenants in common |
D. tenants in common |
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The owner of a condominium unit learns that a neighbor has failed to pay his condominium association dues. If the neighbor does NOT pay the dues:
A. a lien can be filed against the condominium complex B. a lien can be filed against the neighbor's unit C. a lien can only be filed against the common areas of the condominium D. the taxing authority can order the condominium be dissolved |
B. a lien can be filed against the neighbor's unit |
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In order to create a joint tenancy relationship in the ownership of real estate, there must be unities of:
A. grantees, ownership, claim of right and possession B. title, interest, encumbrance and survivorship C. time, title, interest and possession D. ownership, possession, heirs and title |
C. time, title, interest and possession |
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The severalty owner of a parcel of land sells it. The buyer insists that the owner's wife also sign the deed. The purpose of obtaining the wife's signature is to:
A. terminate any rights the wife may have in the property B. defeat any curtsey rights C. provide evidence that the owner is married D. subordinate the wife's signature to the buyer |
A. terminate any rights the wife many have to the property |
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Which item(s) listed below would be considered part of the "total circumstances test" to determine whether or not an item is a fixture?
I. The value II. The size A. I only B. II only C. Both I and II D. Neither I nor II |
D. Neither I nor II |
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Chrissy owns property that borders a large, navigable lake that has tides. Her property ends:
A. at the mean high-water mark of the lake B. at the lake border C. at the center of the lake D. five feet before the lake |
A. at the mean high-water mark of the lake |
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In North Carolina, what is the rescission period for the purchase of a new condominium?
A. 3 calendar days B. 5 calendar days C. 7 calendar days D. 10 calendar days |
C. 7 calendar days |
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In North Carolina, what is the rescission period for the purchase of a new timeshare?
A. 5 calendar days B. 5 business days C. 7 calendar days D. 7 business days |
A. 5 calendar days |
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Jack is not married and buys a vacant lot as his sole and separate property. Jack later married Jill and they buy a house together. How is the ownership of the vacant lot now classified?
A. Jack and Jill own the lot as tenancy by the entirety. B. Jack and Jill own the lot as joint tenants. C. Jack owns the lot in severalty. D. They both own the lot and house as tenants in common. |
C. Jack owns the lot in severalty. |
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With regard to a tenancy in common, which of the following is true?
l. Each tenant in common has an equal right to possession and use of the land. ll. The interest of all of the tenants in common must be equal. A. I only B. II only C. Both l and ll D. Neither l nor ll |
A. I only |
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Vonda Lee and William purchased a home together in 2003 with the deed simply listing both of them as “grantees” without specifying how they were to hold title. They married each other in early 2004. How do they now likely hold title to the house purchased in 2003 if they have not made any other adjustments to their deed?
A. tenancy by the entirety B. tenancy in severalty C. joint tenancy D. tenancy in common |
D. tenancy in common |
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When two people who own property under tenancy by the entirety sign a formal separation agreement, which of the following statements is correct?
A. The ownership changes immediately to tenancy in common. B. The ownership changes immediately to joint tenancy. C. The ownership must be determined by a court of law. D. There is no change in the form of ownership at this time. |
D. There is no change in the form of ownership at this time. |
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Which of the following statement(s) is/are true regarding timeshares in NC?
I. The NC Real Estate Commission can fine a timeshare broker for violations of the NC Timeshare Act. II. If there are violations of the NC Timeshare Act, the fine per violation is $1,000. A. I only B. II only C. Both I and II D. Neither I nor II |
D. Neither I nor II |
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Which of the following statements is true?I. A life estate is a freehold estate.
II. It is possible to have a freehold estate and a non-freehold estate on the same property at the same time. A. I only B. II only C. Both I and II D. Neither I nor II |
C. Both I and II |
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The right to occupy a property for five or more periods of time involving five or more years is considered a:
l. Timeshare ll. Interest in real property A. l only B. ll only C. Both l and lI D. Neither I nor II |
C. Both I and II |
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Five days after signing a contract to purchase a new timeshare, the buyer backs out of the deal. How long does the developer have to refund the purchaser’s money?
A. He has no obligation to return it, as there is a contract. B. Thirty days from the date of purchase contract. C. Thirty days from the date of cancellation. D.Thirty days from the ten-day period in which these monies had to remain in the trust account. |
B. Thirty days from the date of purchase contract. |
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Which of the following would be considered real property?
I. Electrical switch plate covers II. Gas logs attached to a fireplace A. I only B. II only C. Both I and II D. Neither I nor II |
C. Both I and II |
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Which of the following best defines the ownership in a condominium?
A. divided fee simple interest in the unit and an undivided tenant in common interest in the common areas B. a divided interest in the unit and a divided interest in the common areas C. shared ownership rights of both the unit and the common area as tenants in common D. separate interest in the unit with the association holding title to the common area |
A. divided fee simple interest in the unit and an undivided tenant in common interest in the common areas
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Jason's property is adjacent to a navigable river in North Carolina and Jason wants to sell his property. Which of the following statements is true?
A. Jason can restrict the public from using that portion of the river that is next to his property B. An owner can sell the property and retain his rights to access the river once it is sold C. Jason's land ends at the center of the waterway D. If Jason obtains proper permits and builds a dock on the river, the dock will automatically become owned by the public |
B. An owner can sell the property and retain his rights to access the river once it is sold
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A homeowner objected when a local utility company dug up his garden to install a natural gas line. The company claimed it had a valid easement supported by the county records. The homeowner claimed the easement was not valid because he was unaware of its existence. The easement was:
A. a valid easement in gross even though the owner did not know about it B. a valid appurtenant easement owned by the utility company C. not valid because the owner did not authorize the easement D. not valid because the owner was not informed of its existence when he purchased the property |
A. a valid easement in gross even though the owner did not know about it
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The owner of two acres of land sold one acre but retained an appurtenant easement over that land for ingress and egress to his retained lot. The retained lot:
A. is the dominant tenement B. serves as the servient tenement C. can be cleared of the easement when it is sold to a third party D. is subject to an easement in gross |
A. is the dominant tenement
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The current market value of a property is $135,000. For tax purposes, it is assessed at 60% of market value. The tax rate is $2.45 per $100 of assessed value. What is the annual tax liability?
A. $1,190.40 B. $1,323.75 C. $1,984.50 D. $3,307.25 |
C. $1,984.50 |
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Which of the following liens generally holds first priority?
A. mortgage lien B. purchase money lien C. ad valorem real estate tax lien D. federal income tax lien |
C. ad valorem real estate tax lien |
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What will be the amount of tax payable when the property's original assessed value is $185,000 then a 10% horizontal adjustment is made to all assessed values and the tax rate is 40 mills in a community?
A. $4,625 B. $5,087 C. $7,400 D. $8,140 |
D. $8,140 |
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Charges levied on a property owner and limited to those living in a particular neighborhood to pay for the installation of sewer and water lines are:
A. ad valorem taxes B. general property taxes C.special excise taxes D. special assessments |
D. special assessments
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The ad valorem property tax rates may be adjusted every: A. year B. two years C. four years D. eight years |
A. year |
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Jack bought a home for $125,000 with an ad valorem tax assessed value of $130,000. The following year, a horizontal adjustment of a 15% increase in assessed value occurred. If the new tax rate is $1.678 per $100 of assessed value, what are the annual taxes?
A. $2,097.60 B. $2,508.61 C. $2,181.40 D. $2,412.13 |
B. $2,508.61 |
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What is the monthly tax liability on a property assessed at $133,000 if the published tax rate is $1.50 per $100 of assessed value? The sales price of the property was $150,500. The vacancy rate in the area is 6%. The market capitalization rate is 8%.
A. $1,995 B. $166.25 C. $1,950 D. $3,234 |
B. $166.24 |
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What is the assessed value of a house if the tax rate is $1.30 per $100 of value and the owner's annual taxes are $1,599?
A. $12,300 B. $32,000 C. $123,000 D. $132,000 |
C. $123,000
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A home with a market value of $190,000 is located in a city where the assessed value is 80% of market value. The county tax rate last year was 0.75 per $100 and the city tax rate last year was 0.85 per $100. The tax rate increased 10% this year. What is the new property tax on this house?
A. $2,432 B. $2,675.20 C. $2,150 D. $3,344 |
B. $2,675.20 |
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When the real estate property taxes have been paid by the owner and the property is sold before the end of the year, what is the appropriate entry for the accounting of the taxes on the HUD-1 settlement statement?
A. debit the buyer and credit the seller B. credit the buyer and debit the seller C. credit the buyer and the seller D. debit the buyer and the seller |
A. debit the buyer and credit the seller |
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Title to real estate passes when a valid deed is:
A. signed and recorded B. signed, delivered and accepted C. filed and microfilmed D. executed and mailed |
B. signed, delivered and accepted |
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Title to real estate inherited from a person who died testate is referred to as a:
A. legacy B. bequest C. devise D. descent |
C. devise |
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Which of the following is an essential element of a valid North Carolina deed?
A. a seal B. recordation C. the signature of the grantee D. words of conveyance |
D. words of conveyance
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When the grantor does NOT wish to convey certain property rights:
A. exceptions must be noted in a separate document B. the deed must convey the property with all rights intact C. exceptions may be noted in the deed of conveyance D. the grantor must convey the entire premises and have the grantee reconvey the rights to be retained by the grantor |
C. exceptions may be noted in the deed of conveyance |
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A trespasser built a log cabin in a remote area of a national park and occupied the structure for more than 25 years. That person will never be able to claim the property under adverse possession statutes because:
A. the possession was not notorious B. the possession was not open C. the property was not privately owned D. the property was not properly fenced |
C. the property was not privately owned |
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The seller conveyed a quitclaim deed to the buyer. Upon receipt of the deed, the buyer may be certain that:
A. the seller owned the property B. there are no encumbrances against the property C. the buyer now owns the property subject to certain claims of the seller D. any and all of the seller's interests in the property belong to the buyer |
D. any and all of the seller's interests in the property belong to the buyer
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Which of the following statements about North Carolina deeds is correct?
A. A general warranty deed is the best way for the buyer to receive title. B. A special warranty deed gives the seller the greatest degree of liability. C. A bargain and sale deed is very much like the special warranty deed. D. A gift deed must be recorded within 30 days to remain valid. |
A. A general warranty deed is the best way for the buyer to receive title. |
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Which of the following is TRUE regarding a special warranty deed?
A. A grantor makes additional warranties beyond those given in a general warranty deed. B. The grantor retains an ownership interest in the property. C. The grantor is warranting that no undisclosed encumbrances exist against the property. D. The grantor's warranties are limited to the time the grantor owned the property. |
D. The grantor's warranties are limited to the time the grantor owned the property. |
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Regarding title recordation, which of the following statement(s) is/are true?
l. Physically taking possession of the property is constructive notice. ll. Public notice of recording documents is actual notice. A. l only B. ll only C. Both l and ll D. Neither l nor ll |
D. Neither I nor II |
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Which of the following would be considered an essential element of a valid deed in North Carolina?
I. Acknowledgement II. Witnessed A. I only B. II only C. Both I and II D. Neither I nor II |
D. Neither I nor II |
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All of the following may be discovered in a title search, EXCEPT:
A. the legal description of the property B. liens and judgments C. easements D. encroachments |
D. encroachments |
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Which of the following is TRUE?
A. The grantor under a special warranty deed warrants that the grantee's title will be defended and protected against any claims whatsoever. B. The grantor under a general warranty deed promises that the grantee's title will be defended and protected only against claims resulting from the grantor's ownership. C. The grantor under a quitclaim deed only conveys any interest the grantor may have in the property. D. A minor will convey absolute ownership interest in a property as long as the signature is obtained in the presence of a parent. |
C. The grantor under a quitclaim deed only conveys any interest the grantor may have in the property. |
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The recording of a deed:
A. is required in order to fully transfer the title of the real estate B. makes the deed enforceable C. ensures the grantee's interest in a parcel of real estate D. warrants the grantee's title to real property |
B. makes the deed enforceable |
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The recordation of a warranty deed:
A. guarantees ownership B. protects the interests of the grantee C. prevents claims of parties in possession D. provides defense against adverse possession |
B. protects the interests of the grantee
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Don, a real estate broker, has agreed to prepare a deed for the seller in a transaction in which he is the listing agent. If he does not charge the seller a separate fee for this service:
A. He has done nothing illegal since he did not charge a separate fee for his service. B. He may have his license suspended or revoked by the North Carolina Real Estate Commission. C. He has not violated any rules or laws as long as he obtains consent from both parties prior to engaging in this act. D. There is no violation as long as he has a broker’s license. |
B. He may have his license suspended or revoked by the North Carolina Real Estate Commission. |
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When the seller of the property gives a deed to a buyer “by, through, or during” the current ownership period of time, what type of deed is given?
A. General warranty deed B. Special warranty deed C. Quitclaim deed D. Trustees deed |
B. Special warranty deed |
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Under the North Carolina Conner Act, all the following documents must be recorded to be enforceable against third parties, EXCEPT:
A. an easement B. a deed of trust C. a purchase contract D. a set of restrictive covenants |
C. a purchase contract |
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Determine the excise tax to be paid on a house that sells for $268,210 if the buyer makes a $25,000 down payment and the seller takes back a second mortgage for $50,000?
A. $536.42 B. $537.00 C. $533.00 D. $538.00 |
B. $537.00 |
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Deed restrictions can be created by all of the following, EXCEPT:
A. deeds B. statutes C. written agreements D. general plans of a subdivision |
B. statutes |
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The primary intent of a zoning ordinance is to: A. ensure the health, safety and welfare of the community B. generate revenue for the issuance of building permits C. limit the amount and types of businesses in a given area D. limit encroachments created on adjacent properties |
A. ensure the health, safety and welfare of the community |
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Julie and Janelle Enterprises just purchased a vacant lot next to their dress shop. The new owners want to expand their business and hired an architect to draw up plans for the expansion. The plans extend the addition two feet beyond the setback requirements for that location. To construct the building legally, the owners must obtain a:
A. nonconforming use permit B. license C. variance D. permit issued by state |
C. variance |
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Which of the following statements is correct regarding the Interstate Land Sales Full Disclosure Act? l. This act applies to the sale and lease of unimproved land. ll. If a development contains 25 or more lots, the developer must furnish to a prospective buyer a property report. IIl. The property report must be given to the prospective purchaser prior to signing a lease or sales contract.
A. I and II B. III only C. I, II and III D. None of the above |
C. I, II and III |
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A tire company has a manufacturing plant located in an area that has just been rezoned for residential use. The company is allowed to continue operating the plant under the new zoning classification. This would be an example of:
A. legal nonconforming use B. conforming use C. illegal use D. application of spot zoning |
A. legal nonconforming use |
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Aesthetic zoning would be an example of: A. illegal use of police power B. a greenway C. spot zoning D. conditional use |
B. a greenway |
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A city issued a building permit to a homeowner for the addition of a family room and additional bedroom with a full bath. Before the addition can be used as part of a dwelling:
A. no further permission from the city is needed B. the adjacent neighbors must give written consent for the addition C. the municipality must issue and occupancy permit D. the municipality must finalize a special-use permit |
C. the municipality must issue and occupancy permit
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Which of the following is true regarding "streets" in a subdivision? I. Real estate agents must disclose to buyers whether new subdivision streets will be public prior to the selling or conveying of a lot pursuant to NC disclosure laws. II. Purchasers must be informed of who has responsibility for maintaining the streets.
A. I only B. II only C. Both I and II D. Neither I nor II |
C. Both I and II |
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The enforcement of zoning requirements occurs by:
A. local homeowners' associations B. local municipalities through the Enabling Act C. NC Department of Transportation D. local homeowners' association |
B. local municipalities through the Enabling Act |
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A comprehensive municipal master plan addresses all of the following items, EXCEPT:
A. zoning B. public facilities C. restrictive covenants D. transportation and conservation |
C. restrictive covenants |
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Cluster zoning that creates mixed-use areas has the primary benefit of:
A. allowing areas to expand rapidly B. maximizing open space within developments C. controlling the growth of neighborhoods D. keeping all like properties in similar areas |
B. maximizing open space within developments
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A manufactured home park is located in an area that has been rezoned in a manner that now prohibits such use of the land. Which of the following best describes the status of the manufactured home park after the rezoning?
A. It will have to be removed since it now constitutes an illegal use. B. It may be allowed to remain in existence as a non-conforming illegal use. C. It may be allowed to remain in existence as a grandfathered use. D. The municipality can now remove the park as a "nuisance". |
C. It may be allowed to remain in existence as a grandfathered use. |
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Devin is considering buying a property that is located near a major intercoastal waterway. The area has never been flooded, and the seller of the property has informed Devin that they have never had to obtain flood insurance on the property. The BEST course of action for Devin during the process of purchasing the property would be to:
A. Research the property's history with the NC Department of Natural Resources. B. Obtain a formal flood certification from FEMA based on the Army Corps of Engineers maps. C. Get written verification from the seller regarding the property's history. D. Rely on the advice of his insurance professional regarding any flooding hazards. |
B. Obtain a formal flood certification from FEMA based on the Army Corps of Engineers maps. |
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In regulations regarding lead-based paints, HUD requires that:
A. All owners of properties built prior to 1978 test for its presence B. paint must be removed from surfaces before selling C. known paint hazards must be disclosed D. only licensed contractors may engage in removal of any lead-based paint |
C. known paint hazards must be disclosed
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The real estate broker's fiduciary responsibility to keep the principal informed of all facts, including property condition and issues that affect a seller's willingness to sell and a buyer's willingness to buy, is the duty of: A. Skill, Care Diligence B. Disclosure C. Obedience D. Accounting |
B. Disclosure |
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Designated agency in North Carolina is considered: I. A form of dual agency II. Mandatory if you practice dual agency A. I ONLY B. II ONLY C. BOTH I AND II D. NEITHER I NOR II |
I only
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Designated agency can be practiced:
I. Between two firms II. Between a broker-in-charge and a provisional broker licensee in their office A. I only B. II only C. Both I and II D. Neither I nor II |
Neither I nor II
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An agent must have the buyer sign a written agency agreement by what specific point in time?
l. At the time of first substantial contact ll. Prior to the submission of an offer on the buyer’s behalf lll. At the time the agent attempts to limit the buyer’s ability to work with another agent A. I only B. I and II only C. II and III only D. I, II, and III |
ll and lll only
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Under the general principles of agency, when a licensee is acting on behalf of a client and acts improperly who is liable for the acts of the licensee?
A. only the client B. only the licensee and the broker-in-charge C. only the client and the licensee D. the client, the licensee, the firm and or the broker-in-charge |
D. the client, the licensee, the firm and or the broker-in-charge |
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A disclosure of agency status should be made by a buyer’s agent to the seller:
l. With a written confirmation in the offer to purchase and contract ll. At the initial contact with the seller’s agent, orally or in writing A. I only B. II only C. Both I and II D. Neither I nor II |
Both I and II |
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Iris, a subagent of the seller who is working with a buyer customer, is told by the buyer customer that he wants to offer a low price on a property. The buyer customer says to Iris, “I want to offer $85,000 initially; however, I’ll go as high as $90,000 to get the property.” Iris wrote the offer and delivered the offer to the listing agent, Lucy. Iris told Listing Agent Lucy that the buyer customer is offering $85,000 initially, but he will go as high as $90,000 to get the property. Listing Agent Lucy did not tell the seller the buyer would be willing to go for a higher price. The seller accepted the buyer's offer of $85,000. Who violated the Law of Agency?
I. Lucy II. Iris A. I only B. II only C. Both I and II D. Neither I nor II |
I only |
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The amount of compensation due to a licensee from the brokerage firm is determined by:
A. state real estate regulators to ensure the public the most protection from incompetent licensees B.local real estate board's minimum wage guarantee to agents C.in-house employment contracts D.listing agreements |
C. in house employment contracts |
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Which of the following would be dual agency? A. a broker in charge assisting a buyer client in the purchase of property that was listed by a provisional broker of another firm. B. a provisional broker and a broker licensee from firms that are cooperating in a transaction. C. a firm that represents buyers and seller D. a broker having a buyer client for a property the broker personally listed. |
D. a broker having a a buyer client for a property the broker personally listed. |
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A real estate broker was responsible for a chain of events that resulted in the sale of one of his client's properties. This is referred to as:
A. chain of title B. procuring cause C. private offering D. ready, willing and able buyer |
B. procuring cause |
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A parcel of vacant land 80 feet wide and 200 feet deep was sold for $200 per front foot. How much money would an individual agent receive for a 60% share of the 10% commission earned?
A. $640 B. $960 C. $1,600 D. $2,400
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B. $960 |
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All of the following could legally be considered fraudulent, EXCEPT:
A. deceitful or dishonest practices B. generalized exaggerated opinions about the property C. omitted statements of material fact D. misstatements about the property. |
B. generalized exaggerated opinions about the property. |
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A seller has listed a home with a broker for $90,000, and the broker suggests to a prospective buyer-customer that they submit a low offer because of the seller's urgent need to sell. The buyer offers $85,000, and the seller accepts it. In this situation:
A. the broker has violated his agency relationship with the seller B. the broker's action was acceptable since the seller accepted the offer C. the broker acted properly to obtain a quick offer on the property D. any broker is encouraged to solicit such bids for the property |
A. the broker has violated his agency relationship with the seller |
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Upon discovering a latent defect in the property, the listing agent should discuss the problem with the seller, and then:
A. inform the seller that the defect must be repaired B. arrange for the repairs himself or herself as required by the terms of a typical listing contract C. inform any prospective buyers of the defect D. contact the city building inspector about the defect |
C. inform any prospective buyers of the defect
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A provisional broker sells another firm's listing for $150,000. The commission is 6.5% of the sales price. Of this amount, 55% goes to the listing broker and the remaining 45% belongs to the cooperating broker. If the provisional broker receives 60% of any commission that he generates for the office, he is entitled to receive:
A. $2,632.50 B. $3,217.50 C. $4,387.50 D. $5,850
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A. $2,632.50 |
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Which of the following BEST describes the common law of agency?
A. the disclosure requirement by the agent to third parties no later than first substantial contact B. case law establishing the responsibilities of a person who acts for another C. the Code of Ethics prescribed by the local trade association D. state license laws and statutes |
B. case law establishing the responsibilities of a person who acts for another
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A buyer-client has instructed the agent to show only properties where the seller is willing to pay the buyer agent's commission. The agent contacts an owner selling a property without the assistance of a real estate agent with the hope that the seller would be willing to pay her commission if the buyer decided to purchase the seller's property. In order to comply with North Carolina Real Estate Commission Rules, the agent must do all of the following, EXCEPT:
A. obtain permission from her buyer-client in order to obtain compensation from the seller B. disclose her agency status to the seller at initial contact C. convince the seller to list with her and authorize dual agency D. provide the Working with Real Estate Agents brochure to the seller |
C. convince the seller to list with her and authorize dual agency
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The listing broker tells a prospective buyer that the seller is on the verge of bankruptcy. The broker's actions are: A. acceptable since they may promote an offer from the buyer B. acceptable as long as the broker does not disclose any additional specific financial information concerning his client's credit history C. unacceptable unless there are multiple offers on the property D. unacceptable unless the seller has authorized the broker to share the information with potential buyers |
D.unacceptable unless the seller has authorized the broker to share the information with potential buyers
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A listing agent is showing a house to a prospective buyer customer. The seller told the listing agent that during the past 10 winters, they have been unable to rid the house of rodents. The seller has hidden rodent damage by the strategic placement of a large sofa. Which of the following statements is TRUE?
A. This information may be withheld since the agent never saw any evidence of infestation or damage. B.Disclosing the information could create a fiduciary relationship with the buyer and, thereby, create an unauthorized dual agency situation. C. Withholding the information prevents the disclosure of a material fact. D. Disclosing the information violates the agency duties with the seller. |
C. Withholding the information prevents the disclosure of a material fact. |
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Which of the following BEST describes a designated agency transaction? A. the listing firm appointing an agent to represent the seller B.the selling firm appointing an agent to represent the buyer C. some agents in the same firm representing buyers exclusively and other agents in the same firm representing sellers exclusively D.a broker-in-charge appointing one agent to exclusively represent the seller as the client and appointing a different agent to exclusively represent the buyer as a client while the firm remains in dual agency |
D.a broker-in-charge appointing one agent to exclusively represent the seller as the client and appointing a different agent to exclusively represent the buyer as a client while the firm remains in dual agency |
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If the broker-in-charge (BIC) is to act as one of the designated agents on a North Carolina in-house transaction, which of the following may be appointed as a designated agent for the other party to the transaction? A. an actively licensed provisional broker within the firm, so long as disclosure is made to both clients B.a full broker within the firm who has no prior confidential knowledge of the party that the BIC will represent C.a broker-in-charge cannot be appointed as a designated agent D. a licensed broker who has prior confidential knowledge about the party that the BIC will represent |
B.a full broker within the firm who has no prior confidential knowledge of the party that the BIC will represent |
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Which of the following describes designated agency in North Carolina? A.designated agency is optional, not mandatory B. designated agency does not eliminate dual agency C.designated agents cannot have prior confidential knowledge of the other party to the transaction D.all of the above |
D.all of the above
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The North Carolina Working With Real Estate Agents brochure must be given:
A. to property owners upon initial contact B.to all consumers prior to first substantial contact C.only to buyers in a real estate transaction D.to all consumers in a sales transaction no later than first substantial contact |
D.to all consumers in a sales transaction no later than first substantial contact
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All of the following situations will terminate a listing, EXCEPT:
A.mutual agreement by the parties B. breach by either party C. death of the individual listing licensee D. bankruptcy of the firm |
C. death of the individual listing licensee |
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A licensee is an actively licensed real estate broker who has a written contract with his firm that specifies that he will not be treated like an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee will be treated by the IRS as: A. a real estate assistant B.an employee C.a subagent D.an independent contractor |
D.an independent contractor |
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All of the following are TRUE regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT: A. the consumer is not required to sign the brochure B. if the first substantial contact is by phone, the brochure must be provided within 3 calendar days C. the brochure's use is mandatory in all real estate transactions, including residential sales, commercial transactions and property management D. the brochure must be given in all sales transactions at first substantial contact |
C. the brochure's use is mandatory in all real estate transactions, including residential sales, commercial transactions and property management
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Jack is a NC real estate licensee. He has decided to sell his own house which he is doing outside of his brokerage as a For Sale by Owner. Jill, a prospective buyer has approached Jack at one of his open houses and has expressed an interest in buying the home. Which of the following is a proper course of action for Jack?
A. Exclusively represent Jill, but only after full disclosure of his interest in the property. B. Enter in a dual agency relationship where Jack represents himself as the seller and also represents Jill as the buyer. C. Fully disclose his interest in the property and treat Jill as a customer. D. Represent Jill, but do so only on a non-exclusive basis since he has an interest in the property. |
C. Fully disclose his interest in the property and treat Jill as a customer. |
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Rite Stuff Realty is a NC real estate firm that buys and flips homes. All of the homes that Rite Stuff handles are owned by the firm entity. In regard to the listing and sale of these homes, which of the following is a correct statement? A. Rite Stuff may offer exclusive buyer representation, dual agency or designated agency to prospective purchasers of their homes B.Rite Stuff must act as dual agents in the sale of their homes because they are the owners C. None of the agents of Rite Stuff may act as representatives of buyers and must treat all buyers as customers since the firm owns the properties D. The North Carolina Real Estate Commission is not concerned with whom Rite Stuff represents so long as agency is properly disclosed |
C. None of the agents of Rite Stuff may act as representatives of buyers and must treat all buyers as customers since the firm owns the properties
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A valid listing agreement may be terminated for any of the following reasons, EXCEPT: A. sale of the property B.expiration of the individual listing agent's license C.agreement of the parties D.destruction of the premises |
B.expiration of the individual listing agent's license |
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According to North Carolina Real Estate Commission Rules, all of the following are required to be part of a listing agreement, EXCEPT:
A. signature of all parties B. the licensee's license number C. a definite termination date D. an automatic renewal clause |
D. an automatic renewal clause
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By entering into an exclusive agency listing agreement with a seller, a real estate brokerage firm:
A.is not entitled to receive a commission if another agency finds a buyer for the property B. has become the seller's designated agent C.has become the exclusive agent of the seller, but is not entitled to receive a commission if the seller finds a buyer for the property D. has agreed to renegotiate the commission with the seller should another agency offer a lower commission rate |
C. has become the exclusive agent of the seller, but is not entitled to receive a commission if the seller finds a buyer for the property
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If a seller needs to net $50,000 after the sale of a property, what is the minimum acceptable sales price if the selling expenses include a 7% commission and $1,200 in additional expenses?
A. $53,763.44 B.$54,784.00 C. $55,053.76 D. $55,633.25 |
C. $55,053.76
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A property owner lists a property for sale with a broker. The owner told the broker during the listing negotiations that he wanted $138,000 for the property, and anything above that amount the broker could keep as commission. The listing with this type of provision is known as:
A. gross listing B. net listing C. open listing D. nonexclusive listing |
B. net listing
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The fact that the NC listing agreement and buyer agency agreement must be in writing is required by:
A. Statute of Frauds B. Commission Rule C. Conner Act D. Contract law |
B. Commission Rule
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A licensee has just discovered a major roofing leak in one of his current listings even though the seller has indicated “no representation” on the Residential Property Disclosure Statement. The listing agent does not inform the selling agent of the defect and since the defect, is hidden, the selling agent does not discover or disclose the problem to the buyer. According to the North Carolina Real Estate Commission, who is held responsible for this nondisclosure?
A. the listing agent B. the listing broker and the selling broker C. the seller and the listing agent D. the seller |
A. the listing agent
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Ricardo is showing the buyer a house in the capacity of seller sub-agent. Prior to being shown any house, the buyer indicates to Ricardo that it is essential he have a fence erected around the backyard of any house he purchases. Ricardo finds the perfect house for the buyer but it does not have a fenced in backyard nor does the listing information sheet indicate whether fences are allowed or not. Ricardo does not inquire of the listing agent anything about a fence. The buyer purchases the house and later learns that he cannot erect a fence. Which of the following statements regarding these facts are true?
A. The listing agent had a duty to disclose in the listing information sheet that fences were not permitted. B. Ricardo had a duty to determine if fences were permitted even though the listing information sheet did not indicate anything regarding fences. C. Since Ricardo and the listing agent are acting in the capacity of seller sub-agent, they have no responsibility to determine if fences are permitted. D. Since the buyer did not have a buyer agent in the transaction, it is solely his responsibility to check into the permissibly of having a fence. |
B. Ricardo had a duty to determine if fences were permitted even though the listing information sheet did not indicate anything regarding fences.
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Which of the following is TRUE about the North Carolina Residential Property Disclosure Act?
A. All agents in the transaction should facilitate the timely delivery of the property disclosure report to the buyer. B. The property owner should disclose the condition of the listed property of be subject to a 3-day rescission period on any contract formed. C. All residential sellers are exempt from this act unless a broker is not involved in the transaction. D. Buyers must received the completed disclosure report no later than the beginning of the due diligence period. |
A. All agents in the transaction should facilitate the timely delivery of the property disclosure report to the buyer.
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The seller wants to net $165,000 after paying the broker fee of 6% of the sales price. What is the minimum acceptable gross sales price to the nearest dollar?
A. $169,850 B. $174,900 C. $175,532 D. $178,745 |
C. $175,532
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A seller and a broker are engaged in a dispute over a forfeited earnest money deposit. The seller feels that he does not owe this broker a commission. In fact, the seller has no reasonable basis for refusing to allow the broker to return the earnest money to the buyer who cancelled within their due diligence period. According to the North Carolina Real Estate Commission, what should the broker do about the earnest money?
A. wait for a signed release from the buyer. B. try to obtain mutual consent from all parties as to the disposition of the earnest money and if that is not possible then the funds can not be released and may be paid into the clerk of courts with proper notice. C. inform the buyer that the seller is being unreasonable and explain that the broker must release the earnest money to the seller D. disperse the money according to the terms of the Offer to Purchase and Contract |
B. try to obtain mutual consent from all parties as to the disposition of the earnest money and if that is not possible then the funds can not be released and may be paid into the clerk of courts with proper notice.
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Anti-trust laws prohibit all of the following, EXCEPT:
A. property management companies all agreeing to charge standardized management fees B. three different brokerage firms allocating markets based on the value of homes C. real estate companies agreeing not to cooperate with a broker because of the fees that broker charges D.a broker requiring all the agents of his firm to join the local listing service |
D.a broker requiring all the agents of his firm to join the local listing service
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Earnest money deposits, when paid in the form of a personal check given on an Offer to Purchase and Contract, must be deposited in an escrow account:
A. no later than three banking days after acceptance of contract B. no later than 72 hours after receipt of money C. no later than three business days after receipt of the money C. no later than 72 hours after acceptance of contract |
A. no later than three banking days after acceptance of contract
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If a seller and a listing firm have a commission dispute prior to the closing, the listing firm:
A. is not allowed to release any earnest money being held until the commission dispute is settled. B. is to hold up the closing until the disputed is settled. C. must allow the transaction to close. D. cannot release any earnest money until there is a signed release between the seller and buyer. |
C. must allow the transaction to close.
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Which of the following statement(s) is/are true regarding death of a seller?
l. If a seller dies after signing a listing agreement, the listing agreement is terminated. ll. If a seller signs a sales contract and dies before the closing of the property, the sales contract is terminated A. I only B. II only C. Both I and II D. Neither I nor II |
A. I only
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A buyer paid $45,000 for a home. Five years later, she put the home on the market for 20% more than she originally paid. The home eventually sold for 10% less than the asking price. At what price was the home sold?
A. $49,500 B. $54,000 C. $44,000 D. $48,600 |
D. $48,600
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Two brokers split a 6% commission equally on a $73,000 home. The selling provisional broker, Joe, was paid 70% of his broker’s share. The listing provisional broker, Janice, was paid 30% of her broker’s share. How much did Janice receive?
A. $657 B. $1,314 c. $1,533 D. $4,380
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A. $657
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All of the following are essential to the formation of a contract, EXCEPT:
A. offer B. acceptance C. consideration D. signatures |
D. signatures
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Which of the following statement(s) is/are true?
l. In a breach of a sales contract, the earnest money deposit is considered liquidated damages. ll. In a breach of a sales contract, liquidated damages are an agreed upon amount of money the parties agree to accept in the event of breach. A. l only B. ll only C. Both l and ll D. Neither I nor II |
C. Both I and II |
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Which of the following document(s) would be covered by the NC Statute of Frauds?
l. Listing agreement ll. Buyer agency agreement A. l only B. ll only C. Both l and ll D. Neither l nor ll |
D. Neither I nor II |
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Which of the following documents must be written under the Statute of Frauds in order to be enforceable in a court of law?
A. Offer to purchase and contract B. Exclusive right to sell listing agreement C. Exclusive right to represent buyer D. Short-term leases of less than three years |
A. Offer to purchase and contract
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A listing broker schedules an appointment to present a purchase offer to the seller. The seller has serious health problems and her son is attending to her health care. When the broker arrives, he finds the seller's son and daughter-in-law present. In the broker's presence, both persistently urge the seller to accept the offer. The seller is reluctant to accept since the offer is substantially less than the list price. If the seller accepts the offer under these circumstances, she may later claim that:
A. the broker should not have brought such a low offer for her property B. she was under undue influence from her son and daughter-in-law, and therefore, the contract is voidable C. the broker defrauded her by allowing her son and his wife to see the offer he brought to her D. her consumer protection rights under anti-trust laws were violated by her son and daughter-in-law |
B. she was under undue influence from her son and daughter-in-law, and therefore, the contract is voidable
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A man has posted a $100 reward for anyone who returns his missing dog. This is an example of:
A. a unilateral contract B. a bilateral contract C. an implied contract D. an executed contract |
A. a unilateral contract |
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The seller unintentionally misrepresented that the soil of a lot was suitable for the construction of a building at the time the buyer was negotiating the purchase of the lot for the site of a new home. After entering into a contract to purchase, the buyer learned that contrary to the seller's statement, the soil was unsuitable for construction. This is an example of a contract that is probably:
A. binding on the buyer due to the doctrine of caveat emptor B. voidable by the buyer because of the seller's mistake C. voidable by the seller because of the mistake D. voidable by neither party because this was a harmless error |
B. voidable by the buyer because of the seller's mistake |
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The law requiring real estate contracts to be in writing in order to be enforceable is the:
A. writ of attachment B. statute of frauds C. statute of limitations D. parol evidence rule |
B. statute of frauds |
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The legal remedy to enforce the terms of a contract is known as: A. an injunction B. a lis pendent C. a writ of attachment D. specific performance |
D. specific performance |
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The term "rescission" is best defined as: A. change B. nullification C. substitution D. subordination |
B. nullification |
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An executory contract is one in which:
A. all of the terms and conditions have been performed B. one or more of the parties is in breach of the agreement C. there are still essential elements to be performed D. the contract has expired |
C. there are still essential elements to be performed |
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A buyer makes an offer to purchase a home and states in the offer that the offer will remain open for the seller's acceptance until April 6th. On April 4th the buyer changes their mind and notifies the seller that they are withdrawing their offer. On April 5th the seller accepts the original offer. Which of the following statements is correct?
A. The buyer is bound because they stated that the offer would remain open until April 6th. B. The buyer is not bound because they withdrew their offer prior to being notified of the seller's acceptance. C. The acceptance by the seller on April 5th created a binding and enforceable contract. D. Once an offer is made it cannot be withdrawn. |
B. The buyer is not bound because they withdrew their offer prior to being notified of the seller's acceptance. |
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Mary made an offer to purchase John's property for $295,000. John replied in writing to Mary that he would sell the property for $300,000. Mary refused to pay the $300,000 and did not respond to John. After reconsidering, John notified Mary that he was accepting the $295,000 offer. Which of the following is correct.
A. John's response of $300,000 constituted a counteroffer which terminated Mary's original offer and therefore there is no agreement between the parties. B. Mary and John have a valid and binding contract for $295,000. C. Because Mary failed to take any action regarding John's initial reply her original offer remained open. D. Mary's offer remains open indefinitely and can always be accepted by John unless she included a deadline for acceptance in her offer. |
A. John's response of $300,000 constituted a counteroffer which terminated Mary's original offer and therefore there is no agreement between the parties.
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A North Carolina provisional broker obtained an offer for a property listed with his firm along with a check for earnest money. The provisional broker should:
A. give the earnest money check to the sellers within three banking days of their acceptance of the offer B. hold the check until the settlement meeting C. deposit the check into his trust account within three days of acceptance D. immediately turn the check over to his broker-in-charge |
D. immediately turn the check over to his broker-in-charge
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A prospective buyer makes a written purchase offer through a buyer's agent at ABC Realty. The seller accepts the offer as written. The seller communicates to a listing agent at XYZ Realty that the offer was signed. At this point in time, the:
A. seller is contractually bound B. buyer is contractually bound C. both parties are contractually bound D. buyer can still withdraw the offer |
D. buyer can still withdraw the offer
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On Monday, the seller receives a written offer on his vacant lot for $52,000. On Tuesday, the seller counteroffers to sell for $54,500. On Friday, the seller withdraws the counteroffer and accepts the original offer of $52,000. Under these circumstances:
A. there is a valid agreement because the seller accepted the buyer's offer exactly as it was originally made B. there is no valid agreement because the seller's counteroffer was a rejection of the buyer's original offer C. there is no valid agreement because the seller accepted the offer before the buyer withdrew the original offer D. there is no valid agreement because the buyer's original offer was not accepted within 72 hours |
B. there is no valid agreement because the seller's counteroffer was a rejection of the buyer's original offer
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A broker has an exclusive right to sell listing on a building. An offer to purchase the building is received while the owner is out of town. The offer requires a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances, the:
A. broker may create a binding agreement on behalf of the seller B. broker may collect a commission even if the transaction falls through because of the seller's absence from the city C. buyer is obligated to keep the offer open until the seller returns D. broker must obtain the signature of the seller to effect a contract |
D. broker must obtain the signature of the seller to effect a contract
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A real estate Offer to Purchase and Contract becomes valid when:
A. the written offer has been signed by both the offeror and offeree B. communication of acceptance is given to the offeror or the offeror's agent C. communication of acceptance is given to the offeree or the offeree's agent D. earnest money has been deposited into the escrow agent's trust account |
B. communication of acceptance is given to the offeror or the offeror's agent
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The listing agent received a full price offer that she faxed to the out-of-town seller. The seller signed the faxed copy, and faxed the signed copy back to the listing agent. The agent faxed the signed offer to the buyer's agent. Has a contract been formed?
A. No, because there is not one copy that has ink signatures of both parties. B. No, because the buyer has not been notified of the acceptance yet. C. Yes, because the Uniform Electronic Transaction Act states that faxed signatures are as binding as ink signatures. D. Yes, because faxed signatures are binding for 48 hours until ink signatures can be obtained. |
C. Yes, because the Uniform Electronic Transaction Act states that faxed signatures are as binding as ink signatures.
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The optionee in an option to purchase real estate:
A. has no obligation to purchase the property B. must purchase the property at any time within the option period C. must be willing to renegotiate contract terms during the option period D. is the prospective seller of the property |
A. has no obligation to purchase the property
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During the due diligence period in the North Carolina standard offer to purchase and contract, the buyer who was attempting to obtain a conventional loan did not receive final loan approval, but chose not to terminate the contract based on favorable communications from the lender. A week before closing, the buyer's loan application is denied. If the buyer terminates the contract at this point, the buyer:
A. will forfeit the earnest money deposit and due diligence fee because it would be a buyer breach B. will receive a refund of the earnest money, since the termination was related to financing C. can be sued by the seller for specific performance D. will receive a refund of the earnest money and the due diligence fee |
A. will forfeit the earnest money deposit and due diligence fee because it would be a buyer breach
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Carl and Hannah enter into a real estate sales contract. Under the contract terms, Carl will pay Hannah $500 a month for 10 years. Hannah will continue to hold the legal title to the property. Carl will live on the property and pay all real estate taxes, insurance premiums and regular upkeep costs. What kind of contract do Carl and Hannah have?
A. option to purchase B. contract contract for mortgage C. unilateral contract D. installment land contract |
D. installment land contract |
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Under an installment land contract, which title does the buyer hold during the repayment period? I. Legal title II. Equitable title A. I only B. II only C. Both I and II D. Neither I nor II |
B. II only |
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Under North Carolina licensing law, a licensee may disclose the content of multiple offers on the property: A. only with the consent of the seller B. only with the consent of the buyers who have made the offers and the agreement of their seller C. a broker may never disclose the content of multiple offers D. only if the broker determines that disclosure would be in the best interest of his client |
B. only with the consent of the buyers who have made the offers and the agreement of their seller |
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All of the following are contained in the standard NCBA/NCAR Offer to Purchase & Contract Form 2T, EXCEPT:
A. A confirmation of agency status of the licensees B. A disclaimer of liability for actions of the brokerage C. Buyer representations and warranties D. Possible delays in settlement date |
B. A disclaimer of liability for actions of the brokerage |
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Janice wrote a full price offer on a property and her buyer's representative submitted the offer to the seller. The next day Janice changed her mind and wanted to withdraw her offer. Which of the following is correct?
A. Janice cannot withdraw an offer that has already been submitted to the seller B. Janice may withdraw her offer, but she will forfeit her due diligence fee C. Janice is entitled to withdraw her offer at any time prior to acceptance and will receive a refund of both her due diligence fee and her earnest money D. Janice can only withdraw her offer after she has given the seller notice of her intentions and provides the seller a reasonable time to act |
C. Janice is entitled to withdraw her offer at any time prior to acceptance and will receive a refund of both her due diligence fee and her earnest money |
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Harold, a real estate licensee took a listing on a property. Later one of Harold's buyers wanted to make an offer on the property. Harold obtained the proper dual agency disclosure and consent from the buyer and seller. Harold emailed the offer to the seller who signed and initialed it without any changes and returned the accepted offer to Harold. Is there a binding contract in this situation?
A. No, there cannot be a binding contract until the acceptance is communicated to the buyer B. No, because Harold does yet have the contract with the original signatures on it C. Yes, because once a seller signs and initials the offer is becomes a contract D. Yes, because Harold is a dual agent and communication of the acceptance to the agent is the same as communication to the buyer client |
D. Yes, because Harold is a dual agent and communication of the acceptance to the agent is the same as communication to the buyer client
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When should parties to a purchase contract in NC utilize the NCBA/NCAR Contingent Sale Addendum?
A. When there are multiple offers pending in a short sale transaction B. When the buyer wants to make multiple offers on several properties at the same time C.When the buyer conditions their offer upon the sale of another property that they currently own D. When the seller is also purchasing a property and needs that property to close before they can sell and transfer a current property to a buyer |
B. When the buyer conditions their offer upon the sale of another property that they currently own |
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If the lender is not paid according to the terms of a promissory note and they hold a security interest in the property through a mortgage or trust deed, which of the following options may the lender pursue?
I. Renegotiate the terms and conditions of the promissory note with the borrower II. Foreclose on the property III. File for a deficiency judgment after the foreclosure if state law permits A. l only B. ll only C. Both l and ll D. I, II and III |
D. I, II and III
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Which of the following statements is/are true if a buyer purchases property subject to the seller’s loan and then defaults on the loan?
l. The buyer is personally liable for the underlying debt. ll. The seller remains personally liable for the underlying debt. A. l only B. ll only C. Both l and ll D. Neither l nor ll |
B. II only |
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The borrower utilizing a mortgage document is known as the:
A. vendee B. mortgagee C. mortgagor D. beneficiary |
C. mortgagor |
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Gary bought a house for $180,000 with an 85% LTV ratio. The term of the loan is 30 years at a 7% rate of interest. It will take a loan factor of 6.65 per 1,000 to amortize the loan. The annual real property taxes are estimated to be $996. The annual premium for the homeowner’s policy is estimated to be $480.What is the monthly PITI?
A. $1,017.45 B. $1,100.45 C. $1,140.45 D. $1,320.00 |
C. $1,140.45 |
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How many discount points would the lender need to charge if the lender wishes to increase the yield on the loan from 9% to 10.25%?
A. Two points B. Eight points C. Six points D. Ten points |
D. Ten points |
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A lender is charging a borrower 6% fixed interest rate and 4 discount points. What is the yield to the investor?
A. 6¼% B. 6½% C. 5½% D. 5¾% |
B. 6½% |
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Bill and Betty just received $25,000 profit from the sale of their home. They are in the process of buying a new home for $185,500 with an 80% LTV ratio. The lender is charging the normal loan origination fee and is lending the money at 1.5 discount points. Bill and Betty pay an attorney $400 to handle the closing, and they must also pay for the excise tax. How much money will the lender be paid in fees?
A. $1,484 B. $2,226 C. $3,710 D. $41,581 |
C. $3,710 |
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Andy purchased a new home for $180,000. He paid 20% down and financed the balance at 9% for 30 years. Two discount points are charged. How much money will Andy actually pay at closing for the two discount points?
A. $2,880 B. $3,600 C. $1,800 D. $3,100 |
A. $2,880 |
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The lender is willing to make an 80% loan on the purchase of a home. The home is listed at $190,000. The purchase price is $175,000, and the appraised value of the home is $180,000. How much is the buyer's down payment?
A. $36,000 B. $40,000 C. $35,000 D. $38,000 |
C. $35,000 |
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Under a contract for deed, the title to the property is held by the:
A. vendor B. vendee C. truster D. trustee |
A. vendor |
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A mortgagor is the one who:
A. gives the mortgage B. holds the mortgage C. provides the mortgage funds D. forecloses on the mortgage |
A. gives the mortgage |
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A contract for deed provides for the:
A. sale of unimproved land only B. sale of real property under an option agreement C. conveyance of legal title at a future date D. immediate transfer of reversionary interests |
C. conveyance of legal title at a future date
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A homebuyer recently financed his first home with a fixed-rate conventional loan. The type of interest he will pay over the life of the loan is probably:
A. simple interest B. variable interest C. compound interest D. discounted interest |
A. simple interest |
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The loan amount expressed as a percentage of the value of the real estate offered as collateral is the:
A. amortization ratio B. loan-to-value ratio C. debt-to-equity ratio D. capitalization rate |
B. loan-to-value ratio |
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A homebuyer financed his home five years ago with a high loan-to-value, fixed-rate loan. Due to a job transfer, the owner must move, but his home has suffered significant depreciation in value since purchase. Which of the following would be the least acceptable contractual obligation to handle the disposition of the property?
A. ask the lien holder to participate in a short sale transaction B. utilize other assets to make up the shortfall between the outstanding mortgage loan balance and the proceeds C. abandon the house and stop making the payments D. convert the house into a rental property and use the rent to make the mortgage payments |
C. abandon the house and stop making the payments
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An existing mortgage loan can have its lien priority lowered through the use of a:
A. hypothecation agreement B. satisfaction of mortgage C. subordination agreement D. reconveyance of mortgage |
C. subordination agreement |
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If the monthly interest payment at 6% is $1,050, the principal amount of the loan is:
A. $63,000 B. $75,600 C. $126,000 D. $210,000 |
D. $210,000 |
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The purpose of a mortgage is to:
A. provide security for the loan B. convey title of the property to the lender C. restrict the borrower's use of the property D. create a lien on the property |
A. provide security for the loan |
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The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default by the borrower is the:
A. alienation clause B. escalator clause C. forfeiture clause D. acceleration clause |
D. acceleration clause |
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A building was sold for $115,000. Down payment was made in the amount of $15,000 and deposited in escrow. The buyer obtained a new loan for the balance of the purchase price. The lender charged two discount points. What was the total amount charged to the buyer for points in this purchase?
A. $2,000 B. $2,300 C. $3,000 D. $14,375 |
A. $2,000 |
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When a mortgage loan has been paid in full, it is important for the borrower to be sure that:
A. the paid note is placed in a safe deposit box B. a deed of partial reconveyance is obtained C. the paid mortgage is returned to the seller D. the satisfaction of mortgage is recorded |
D. the satisfaction of mortgage is recorded
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The right a grantor has to regain property ownership by paying the debt after a foreclosure sale is called:
A. equity right of redemption B. statutory right of redemption C. reversion D. recapture |
B. statutory right of redemption |
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The defeasance clause in a deed of trust requires the trustee in a specified situation to execute:
A. an assignment of mortgage B. a deed of reconveyance C. a satisfaction of mortgage D. a partial release agreement |
B. a deed of reconveyance
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Pledging property as security for repayment of a loan without giving up possession is known as:
A. hypothecation B. defeasance C. amortization D. alienation |
A. hypothecation |
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When a borrower makes regular interest payments to the lender in a construction loan and at the end of the loan must repay the entire loan balance, the term that best describes this type of a loan is:
A. amortized B. term C. blanket D. negative amortization
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B. term |
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The primary obligation of a borrower under a promissory note that is signed in regard to real property is to:
A. keep the property insured B. obtain permission from the lender prior to any improvements C. pay the debt D. follow certain procedures regarding the collateral in the event of default |
C. pay the debt |
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The borrower utilizing a trust deed is best referred to as the:
A. beneficiary B. truster C. trustee D. mortgagor |
B. trustor
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In a title state, what is the process for initiating a foreclosure?
A. the filing of a lawsuit by the mortgagee B. the filing of a lawsuit by the trustee C. the beneficiary instructing the trustee to deliver proper notices and set a sale date D. the trustee instructing the beneficiary to deliver proper notices and set a sale date |
C. the beneficiary instructing the trustee to deliver proper notices and set a sale date
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An eligible veteran made an offer of $52,000 to purchase a home contingent upon his obtaining a 100% VA-guaranteed loan. Four weeks after the offer was accepted, a CRV for $50,000 was issued, and the veteran was found to be qualified for a VA loan. In this case,
l. The veteran may withdraw from the transaction without penalty. ll. The veteran may purchase property by making a $2,000 down payment. A. l only B. ll only C. Both l and ll D. Neither I nor II |
C. Both l and ll
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Fannie Mae:
A. originates FHA loans in the primary mortgage market B. purchases FHA loans in the secondary mortgage market C. provides farm loans D. provides funds for FHA loans |
B. purchases FHA loans in the secondary mortgage market
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The type of real estate loan that allows the borrower to increase the outstanding balance of a loan up to a predetermined sum set by the lender and receive periodic additional funds is referred to as what type of financing?
A. subordinate B. open-end C. growing equity D. graduated payment |
B. open-end
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The Truth in Lending Act sets forth requirements regarding real estate loans to individuals for all of the following purposes, EXCEPT:
A. equity lines of credit B. commercial purposes C. additions to residential properties D. installation of a backyard swimming pool |
B. commercial purposes |
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Which of the following statements is TRUE?
A. The priority of a mortgage is determined by the execution date. B. A mortgage document contains no covenants on the part of the borrower. C. A deed of trust is typically conveyed by the trustor to the beneficiary. D. A promissory note has to be in writing to be enforceable, but it is not normally recorded. |
D. A promissory note has to be in writing to be enforceable, but it is not normally recorded.
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A borrower obtained a $7,000 second mortgage loan for five years at 6% interest per annum. Monthly debt service payments were $41.97 on a 30 year loan. The final payment included the remaining outstanding principal balance. What type of loan is this?
A. a fully amortized loan B. a straight loan C. a partially amortized loan D. an accelerated loan |
A. a fully amortized loan |
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A loan from the seller to a buyer that allows the buyer to complete the transaction is called a:
A. growing equity mortgage B. purchase money mortgage C. package mortgage D. blanket mortgage |
B. purchase money mortgage |
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Presume the interest rate on an FHA-insured mortgage loan to be 6.5% with a current monthly interest payment of $846. What would be the current principal?
A. $65,988.39 B. $147,339.48 C. $156,184.62 D. $164,97.82 |
C. $156,184.62 |
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Which of the following is NOT a required chief disclosure for compliance with the Truth in Lending Act?
A. loan-to-value ratio B. annual percentage rate C. total of all finance charges D. total amount financed |
A. loan-to-value ration |
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Regulation Z applies to:
A. all cash transactions B.credit transactions secured by a residence C. loans in excess of $25,000 secured by commercial properties D. the sale of vacant land financed with a purchase money mortgage |
B.credit transactions secured by a residence
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Using the 28/36 ratios, how much annual income must the borrower have to qualify for a $98,000 loan at 8% for 30 years if the proposed P&I payments will be $719.32, taxes and insurance will be $135 per month and the borrower's other monthly recurring debts total $500?
A. $28,478.32 B. $36,613.71 C. $45,144.00 D. 58,042.00 |
C. $45,144.00 |
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The Federal Home Loan Mortgage Corporation was established as a secondary mortgage market entity to assist the:
A. Federal Housing Administration B. Federal National Mortgage Association C. the Wall Street derivatives market D. federal banks in selling mortgage obligations |
D. federal banks in selling mortgage obligations
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A buyer obtained a 30-year fixed rate loan for $72,000 at a 5% annual interest rate. If the monthly debt service payment is $386.64, how much interest rounded to the nearest dollar would the buyer pay over the lifetime of the loan?
A. $31,190 B. $67,190 C. $98,380 D. $108,000 |
B. $67,190
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Last month's debt service payment included $412.50 interest on a $60,000 loan balance. What is the annual rate of interest? A. 7.5% B. 7.75% C. 8.25% D. 8.5% |
C. 8.25%
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A lender is charging a below market interest rate of 6.5% with 6 discount points. What is the lender's effective rate of interest?
A. 7.25% B. 7.125% C. 5.75% D. 6.25% |
A. 7.25%
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Bill & Betty received $19,000 from the sale of their house to apply to a new townhome costing $90,000. They assumed an existing mortgage of $49,500 and borrowed $24,000 at 12% to be secured by a second mortgage. The lender charged them a 1/2% assumption fee, a 2% origination fee on the second mortgage and 5.5 points on the new loan. How much was the lender paid in fees?
A. $2,226.00 B. $3,092.00 C. $2047.50 D. $2,470.00 |
C. $2047.50
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The type of loan that will most likely have the highest loan-to-value ratio is a:
A. VA loan B. FHA loan C. assumption loan D. conventional loan |
A. VA loan |
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Which of the following terms may appear in an advertisement for a real estate loan without triggering Regulation Z full disclosure requirements?
A. "$499 monthly payments" B. "only one penny down" C. "8% interest rate or lower" D. "assumable mortgages available" |
D. "assumable mortgages available" |
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A developer had a mortgage loan on an entire development. When a lot was sold to the buyer, the developer was able to deliver title to that lot free of the mortgage lien by utilizing a partial release. What type of loan did the developer have?
A. blanket mortgage B. purchase money mortgage C. package mortgage D. open-end mortgage |
A. blanket mortgage
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In a title theory state, a borrower's default could result in the collateral property being sold at auction as part of a:
A. judicial foreclosure B. non-judicial foreclosure C. deed in lieu of foreclosure D. strict foreclosure |
B. non-judicial foreclosure
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What type of loan includes the financing of both real and personal property?
A. package B. blanket C. term D. RAM |
A. package |
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James earns $46,000 per year and his wife Judy earns $60,000 per year. Recurring obligations include monthly credit card payments of $800 and automobile loan payments of $650. The couple has a monthly grocery bill of approximately $400 and monthly medical expenses that average $200. What is the maximum monthly mortgage payment (principal and interest) that this couple can qualify for using an expense-to-income ratio of 28% of gross income for housing and 36% for housing expenses plus recurring obligations?
A. $2,473.33 B. $1,729.88 C. $1,130.00 D. $2,325.00 |
B. $1,729.88
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Using the 28/36 ratios, how much annual income must the borrower have to qualify for a $98,000 loan at 8% if the proposed P&I payments will be $719.32, taxes and insurance will be $135 per month, and the borrower's other monthly recurring debts total $500?
A. $28,478.32 B. $36,613.71 C. $45,144.00 D. $58,042.00 |
C. $45,144.00
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