Test Questions

Ken and Katherine purchased a home 15 years ago for $800,000 when they got married. They recently sold the property for $1,500,000. On what amount will they have to pay capital gains taxes? $200k-

They made a profit of $700,000 on the sale of the home. As a married couple, they qualify for $500,000 tax exclusion, so they will pay capital gains taxes only on the amount above that, which is $200,000.

Which of the following statements regarding deed restrictions is FALSE?-

They terminate upon the death of the grantor.

Which of these statements is NOT true regarding deed restrictions?

They terminate upon the death of the grantor.

Daphne, a victim of identity theft, cannot currently qualify for a loan but wants to buy her friend's condo for $90,000. She pays him $1,000 now, and he promises not to sell to anyone else in the next six months and to give her the opportunity to purchase the property within that time period.

This agreement is a(n)option agreement.An option to purchase real estate is a contract in which one party (the optionor) gives another party (the optionee) the right to buy property at a specified price within a limited time but without the obligation to do so.

Jerry agreed to purchase a used tractor from Tim for $15,000, and later Jerry found out that Tim was going to steal the tractor.

This contract is void

Stella is purchasing Clark's house. She will assume his outstanding mortgage of $80,000. On the Closing Disclosure, the $80,000 assumption shows up as a credit to Stella and a debit to Clark.

This is a double-entry. Since the assumed mortgage reduces Stella's cash to close and decreases Clark's net, it is a credit to buyer Stella and a debit to seller Clark.

Phil is the managing broker of Wildcat Realty. He agrees to list property owned by a favorite charity and forego any commission on the deal. Which statement is TRUE?

This is an example of a gratuitous agency. The absence of payment of compensation creates a situation known as gratuitous agency. Although compensation is not part of the agreement, Phil is not released from his statutory obligations to his client.

Broker-in-charge Andrea designates Sid, her unlicensed assistant, to make trust fund deposits and handle the bookkeeping. Which statement is TRUE?

This is fine, but Andrea is still responsible

Philippe has voluntarily removed his belongings from the rental unit after being intimidated from receiving notices from his landlord in an illegal attempt to force Philipp to move. Which of the following statements is TRUE.-

This may be abandonment and the landlord can begin can retake possession without self-help eviction or summary ejectment

Many pools have been built in Shady Acres subdivision over the last 10 years. One homeowner finally realized that pools violated a deed restriction and sued to have the neighbors' pools removed. The judge cited the doctrine of laches to allow the pools to stay.

This means the neighbor lost his right to complain because- he and other neighbors had neglected to act over the years.

Belinda's toy poodle went missing so she offered her neighbor $500 if he finds and returns her dog. This is an example of a unilateral express contract. Kyle is selling off his 200-acre farm. Neighboring farmer Beth tells Kyle she'd like to buy a 40-acre parcel that abuts her property. They shake hands. This oral contract is MOST LIKELY valid.

This oral contract would likely be unenforceable in a court of law since most states have a law requiring real estate sales contracts be in writing to be enforceable. They could still execute this contract, however, if there are no disputes. Internal Reference: Basic Contract Concepts, Terminology and Classifications; Contract Validity

Most secondary market lenders, such as Fannie Mae, require a minimum number of ________recent sales comparables for appraisals. Ideally, the sales should be within ________ months before the date of the appraisal.

Three/ six

Title VIII of the Civil Rights Act of 1968 is also called the- federal fair housing act:

Title VIII of the Civil Rights Act of 1968 is commonly called the federal Fair Housing Act

What provides the best protection against loss or damages from defects in title? Title insurance

Title insurance

A building has an effective age of 20 years, an actual age of 10 years, and a total expected life of 70 years. What is the remaining economic life of the building? 50 years-

To calculate remaining economic life, simply subtract the effective age (20 years) from the total expected life (70 years).

Tracy's had a party at the pool in her apartment complex. An uninvited guest fell and was injured. Who will most likely be financially responsible for the injury of the uninvited guest?-

Tracy's landlord: According to the North Carolina Residential Rental Agreement Act's statutory duties of a tenant, acts of third parties who are not invitees of the tenant is NOT the responsibility of the tenant. The Act states that a landlord can be held responsible if a tenant, a tenant's family, or a tenant's guest gets injured in the commons area of the leased property. However, since the guest was uninvited, this would most likely be covered under the landlord's insurance for protection against possible liability under the law of negligence.

.An easement in gross that belongs to a company may be assigned to others.

True

A bonus room is considered living area if it is heated, finished, and directly accessible from another living area and meets ceiling height requirements.

True

A statement of fact that is made to influence a person's decision to enter into a contract is referred to as a representation.

True

A written agency agreement must include the broker's license number.

True

An affiliated licensee can be either an employee or an independent contractor of a brokerage firm.

True

Buyer Elliot agrees to an agency relationship with broker Fiona. If their relationship is nonexclusive and the agreement does not bind Elliot to Fiona for a fixed period of time, they may enter into an oral agency agreement.

True

Commission rates are negotiated between the client and the brokerage.

True

Ideally, comparable properties should be part of an arm's length transaction

True

If a broker needs to incorporate specific provisions into a contract form, what would be an appropriate course of action?use the appropriate standard addendum Another name for a real estate sales contract is an earnest money contract.

True

If a buyer is involved in bankruptcy proceedings, this is considered a material fact that the buyer's agent must disclose to the seller.

True

In order to be considered an independent contractor, a licensee's compensation must be based on commissions for sales produced rather than a salary or hourly wage.

True

One of the duties of a buyer's agent is to perform a comparative market analysis before the buyer makes an offer.

True

One of the duties of a listing agent is to perform a comparative market analysis on the property.

True

Seller Jennifer is in a good position. She has four different offers on her immaculate ranch home, and now there seems to be a bidding war. Listing broker Brad wants to move the process along and ensure that his principal gets the best possible deal. Brad tells each of the buyer's agents, "just between us, this is the price to beat." Brad is in violation of the Commission rules.

True

Seller Willie has entered into a binding contract to sell his house to buyer Penny. Before the sale closes, another buyer, Brady, submits a back-up offer, which Willie accepts. In this situation, Brady may terminate the back-up contract before his back-up contract becomes the primary contract.

True

Someone who calls a phone number that is on the National Do Not Call Registry to solicit business can be fined over $40,000 per violation.

True

The Junk Fax Prevention Act requires that faxes containing unsolicited advertisements include an opt-out mechanism that allows recipients to refuse the receipt of future faxes from the business.

True

The sales comparison approach is considered the most common and useful of the three appraisal methods for residential property.

True

a. An assignment must have written consent of the insurance carrier for it to be valid.

True

licensee on inactive status may be able to accept a commission if her license was active when the commission was earned.

True

Broker Sydney provided a copy of the Working with Real Estate Agents brochure to Wesley, a prospective buyer. After reviewing its contents, they decide to enter into a nonexclusive buyer agency agreement that Wesley can terminate at any time. This agreement may be oral or written.

True Under Real Estate Commission Rules, a broker may enter into an oral agency agreement with a buyer if the relationship is nonexclusive and the agreement does not bind the buyer for a fixed period of time (buyer may terminate at any time)

If misrepresentation is used to obtain a loan that is larger than allowed by the lender's guidelines it is referred to as loan fraud.

True Loan fraud occurs if misrepresentation is used to obtain a loan that is larger than allowed by the lender's guidelines

the National Do Not Call Registry limits phone calls by political organizations and charities as well as commerce-related businesses.

True The National Do Not Call Registry applies to commerce-related phone calls, such as telemarketers and sellers who provide, offer to provide, or arrange to provide goods or services to consumers in exchange for payment. It does not apply to political groups or charities.

A broker with an open listing on Shelly's property receives a commission only if he is the procuring cause of a sale.

True.

Which statement about brokerage trust accounts is FALSE?-

Trust accounts cannot be held in an out-of-state bank

_____ is BEST defined as a security instrument placing into the hands of a disinterested third party a specific financial interest in the title to real property as security for the payment of a note.

Trust deed

§ Someone who is appointed by the court to handle the affairs of someone going through a bankruptcy is known as a(n) _____________.

Trustee: A trustee is appointed by a judge to handle the sale of real property and other aspects of bankruptcy. Trustees do not need a real estate license.

Which statement about UFFI is TRUE?

UFFI that was installed in the 1970s would most likely not pose any health risk now

Under the North Carolina Residential Rental Agreements Act, who can be held responsible if a tenant, a tenant's family, or a tenant's guest gets injured in the commons area of the leased property? The landlord

Under the North Carolina Residential Rental Agreements Act, who can be held responsible if a tenant, a tenant's family, or a tenant's guest gets injured in the commons area of the leased property? The landlord

The predominant appraisal report form you will likely see used by an appraiser hired by residential mortgage loan originator is the

Uniform Residential Appraisal Report.

When the personal belongings remain in the house but the occupants no longer physically live there for a certain period of time, insurance companies consider the building which of the following? Select all the correct responses.

Unoccupied and at risk-An insured building that is vacant or unoccupied for the period of time stated in the insurance policy is considered to be "at risk." As a result, the policy may cease to cover all or certain perils after that stated time period.

Broker Oliver's buyer client, Patricia, wants to purchase unimproved real property for personal use only. Which NCAR/NCBA offer to purchase and contract form would be most appropriate?

Vacant Lot/Land Offer to Purchase and Contract

All are EXEMPT from licensing requirements under the North Carolina Real Estate License Law EXCEPT-

Vivian, who accepts a finder's fee from time-share owners for locating buyers willing to take over their contracts.- Vivian's activities would require her to be licensed under North Carolina law—she is accepting a fee for working on behalf of another in a real estate transaction. Everyone else is exempt.

Mike and Steve enter into a contract in which Steve will buy Mike's house for $100,000. Before closing, Mike learns that Steve is 17 years old. As a result, Mike doesn't want to complete the sale. How can this contract be terminated without closing the sale?

Voidable by steve- The contract could be voidable by Steve because of a lack of legal capacity due to his age. However, Steve could choose to affirm the contract. As long as all legal requirements are in place, Mike is bound to fulfill his contract obligations and complete the sale

Agent Jordy received an earnest money deposit in the form of cash from buyer Calvin on Saturday at 1 p.m., and the buyer says he can hold it until the seller accepts the offer, which she does the following Tuesday. What is the deadline for depositing the buyer's earnest money into the brokerage trust account?-

Wednesday, since that is three banking days after he accepted the funds

Estelle is the owner of a six-unit apartment building. She decides to put together a new lease application for prospective tenants. Which question would be a potential fair housing violation?

What are the ages of any children who will live in the unit?

Tina signs a contract with Ben to find a tenant for her warehouse. He introduces her to Jake, who signs a two-year lease. Tina pays Ben a fee of $500. Tina and Ben's contract is now liquidated. False -

When all of the terms of the contract have been met, the contract is said to be discharged or terminated.

According to Commission rules, a time share salesperson must deposit monies from purchaser into the trust account ________ after receipt.

Within 3 business days

Seller Amelia has entered into an Exclusive Right to Sell Listing Agreement (NCAR Standard Form 101) with broker Wyatt at XYZ Realty. If Wyatt receives an earnest money deposit related to the sale of the property, the money will be held in

XYZ Realty's trust account until the transaction closes or terminates. Under the terms of the Exclusive Right to Sell Listing Agreement (NCAR Standard Form 101), unless otherwise indicated in a sales contract, any earnest money paid will be held in the listing firm's trust account until the transaction closes or terminates.

Broker Greg has a 120-day listing contract with Marcia to sell her house. Marcia had hoped that Greg would find her a buyer quickly so that she could avoid declaring bankruptcy, but that is not the case. With 20 days left in the listing period, Marcia declares bankruptcy. Does this terminate their agency agreement?

Yes

a Japanese American, tries to rent an apartment in a four-unit building. The real estate broker who manages the building rejects V's application because her credit rating is not very good and also because she is Japanese. Does the real estate broker's refusal violate the federal Fair Housing Act?-

Yes, because V's race was a factor in the manager's decision, even though it was not his only reason for rejecting her.

Violet, who is six months pregnant, tries to rent an apartment in a six-unit building with access to a shared swimming pool. The property manager rejects her application citing insurance liability concerns of having small children in the building. Does his refusal violate the federal Fair Housing Act?-

Yes, because discrimination based on familial status was a factor in the manager's decision.

A buyer's broker has actual knowledge of structural damage to the floorboards of a home due to termite infestation. He informs his client that there are no termites in the property. The buyer signs a contract to purchase the property. Could the broker be subject to disciplinary action by the Real Estate Commission?-

Yes, because he knowingly made a potentially untrue statement that could be seen as an inducement to buy.

A real estate broker has actual knowledge of structural damage to the floorboards of a house due to a previous termite infestation. He informs the buyer that there are no termites or termite damages in the house. The buyer signs a contract to purchase the property with an "as is" clause. Is the broker susceptible to claims of fraud?

Yes, because his untrue statements could be seen as an inducement to buy.

You are a buyer's agent for Doris, who is getting ready to make an offer on Clyde's property. A friend of yours tells you that Clyde and his wife are getting divorced. Do you think you should share this information with Doris?

Yes, this information could affect Doris's negotiating position. The fact that the seller is getting divorced could impact the seller's willingness to accept an offer. Knowing this can impact Doris's negotiating position. You would simply be promoting your client's best interest by sharing this.

Broker Ellie takes a listing for Jay's large home with a big yard and in-ground pool. It's January and the pool is empty. Ellie doesn't think to ask Jay about the pool. After buyer John and Jay agree to terms, Jay reveals that an engineer told him when he drained the pool in August that the walls are close to caving in. The sales agreement is signed. What should you do? -You should inform the buyer's agent of what you learned and let the buyer decide what to do.

You should do nothing because Jay told you this in confidence.By law, this information must be disclosed to the buyer because it is a material defect in the property.

To apply for a VA guaranteed mortgage, Edward Smith, a veteran of the Armed Forces, needs a current Certificate of Eligibility and

a DD-214.

What type of loan considers residual income in addition to total debt service ratio when qualifying borrowers?

a VA-guaranteed loan

For which property would the gross rent multiplier method be most appropriate?:

a duplex

.An unlicensed assistant to a North Carolina broker may NOT: accept

a fee for referring a brokerage client to a real estate firm in another state

A tenancy at will is best described as-

a lease that can be terminated at the will of the landlord or tenant by giving legal notice

§ Who needs a brokerage cooperation agreement and a declaration of affiliation?-

a limited nonresident commercial broker: Before the Commission will issue a limited nonresident commercial broker license, the out-of-state licensee must be associated with an active licensed North Carolina real estate broker with a written brokerage cooperation agreement and a written declaration of affiliation

Under Real Estate Commission Rules, which type of buyer agency agreement can be oral?

a nonexclusive buyer agency agreement that does not bind the buyer for a fixed period of time

When transacting a like-kind exchange, which of the following would NOT be eligible for the tax benefits?-

a personal residence for a single-family rental home: Like-kind exchange treatment now applies only to exchanges of real property that is held for use in a trade or business or for investment. A personal residence is not an investment property. Effective January 1, 2018, exchanges of personal or intangible property such as machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify as like-kind exchanges. Exchanges of mutual ditch, reservoir, or irrigation stock are still eligible.

According to the Real Estate Commission Rules,

a preprinted offer or sales contract form must include a legal description of the real property sufficient to identify and distinguish it from all other property.

Which person is NOT required to be licensed as a North Carolina broker?:

a property owner/investor who buys and sells at least four properties every month

Which person is NOT required to be licensed as a North Carolina broker?:

a property owner/investor who buys and sells at least four properties every month: Anyone who performs real estate activities for another and for compensation—or even offers to do so—must be licensed, unless exempt. Someone who is selling their own property is exempt from licensure in North Carolina, regardless of how many properties they sell.

For which situation would the sales comparison approach be best?:

a ranch house in a newer subdivision of similar homes

The primary purpose of a comparative market analysis is to determine-

a range of probable selling prices for a homeowner: The goal here is for the real estate licensee to assist the seller by providing a range of probable selling prices for the given subject home.

Buyer Ian and seller Imani have entered into a binding contract using the NCAR/NCBA Offer to Purchase and Contract. Prior to closing, the property is destroyed by a fire. If Ian decides to terminate the transaction and provides proper written notice to Imani, Ian is entitled to

a refund of the earnest money deposit only.

All of these elements appear in the Working with Real Estate Agents brochure EXCEPT-

a reminder that commission fees are set by the State Real Estate Commission.

. Which property would NOT be subject to the disclosure requirements of RESPA?

a single-family home bought for cash-The provisions of RESPA apply to federally-related mortgage transactions for any one- to four-family residential property. A cash transaction would not be subject to the disclosure requirements of RESPA.

In North Carolina, all of the following must be included in an installment land contract involving a one- to four-family dwelling EXCEPT-

a statement that if buyer defaults, the buyer is entitled to a refund of previous payments.

A debit is NOT

a sum of money that is to be received.

customer

a third party to a real state transactions

Which expense found on the Closing Disclosure would LEAST LIKELY be prorated between buyer and seller?

a title insurance policy In North Carolina, a buyer is normally responsible for getting title insurance as evidence of marketable title. This is not a prorated expense.

A seller accepted a buyer's offer, and they entered into a binding contract. If they later mutually agree to change the purchase price or other terms of the agreement, they should sign

a(n)amendment.

MONICA is interested in selling her house. She enters into an agreement to hire broker Chase but only to market the property through the local multiple listing service (MLS). Their agreement is

a(n)limited-service listing contract. Under a limited-service listing contract, a brokerage firm provides limited brokerage services, as agreed to by the client

If it can be transferred to the new owner, a homeowner's insurance policy premium would be an example of

a(n)prepaid item on a settlement statement.

Whichh of the following is NOT one of the criteria for space to be considered living area?

above-grade

In a judicial foreclosure, what clause allows a lender to declare the entire loan balance due immediately because of borrower default?

acceleration clause

Which would LEAST LIKELY be regulated by zoning?-

acceptable paint colors for doors and shutters

A buyer is responsible for hiring a home inspector and should contact a qualified licensed professional to perform the inspection immediately after the purchase agreement is

accepted and signed.

Which element is NOT required for a deed to be valid?- .

acknowledgment- A valid deed must have the names of the parties, consideration, granting clause, legal description, and execution. The acknowledgment is required only to record the deed

§ Which is NOT an act of misconduct by a broker that could lead to discipline by the Real Estate Commission?-

acting as a dual agent with the informed written consent of both parties

The city assesses a specific tax to replace the curbs and lights on Marcia's street, and she ignores the tax bill, as she has ignored all of her other bills. The city files a lien. Eventually, the bank forecloses on her mortgage. Of the four liens on Marcia's property, which is in first priority?-

ad valorem tax lien

What is the term that describes how title to land is gained by the open and notorious, hostile and adverse, exclusive and continuous use of another's land for a designated period of time, as defined by laws of the state?-

adverse possession

Under the federal Fair Housing Act, which of the following are NOT permissible? Select all correct responses.-

advertise property for sale only to a special groupalter the terms of the loan for a member of a minority group- tell an individual that an apartment has been rented when in fact it has not

Peter is the listing agent for seller Jan. Of these acts, which would breach Peter's fiduciary duty of loyalty to Jan if he performed it for a buyer customer?

advising the buyer on his best negotiation position

The Fair Credit Reporting Act provides that derogatory information regarding a discharged bankruptcy be removed

after 10 years.

A listing broker is paid his earned commission

after the deed and deed of trust are recorded.

At what point are loan funds disbursed to the proper parties?

after the necessary documents have been recorded

Loan funds may be disbursed to the proper parties

after the necessary documents have been recorded.

A property management contract creates a(n) _____________ between a property manager and a property owner.-

agency relationship

subagents

agent of an agent

Beth is ready to cash in her retirement and move south. She wants to sell her house to her son and daughter-in-law, who are unlikely to be approved for a new loan. She decides to let them assume her mortgage. If her current mortgage includes a(n) ________________ clause, Beth may be required to pay the balance in full when she transfers title to the kids.

alienation clause

When qualifying for a conventional loan, lender Mark can include which of the following as stable monthly income?

alimony received (that a borrower chooses to reveal)If the alimony payments will continue for three years, the underwriter will consider it as stable income if the borrower chooses to disclose it. The other income streams are not likely to be considered as stable and durable.

If broker Hans is a member of the local MLS, what listings would he likely be required to submit to the service?

all exclusive right to sell listings

If broker Solomon is a member of the local multiple listing service (MLS), what listings would he likely be required to submit to the service?

all exclusive right to sell listings

o Which of the following is NOT an item a homeowner can deduct as a mortgage interest expense in a given year?

all prepaid interest

Willful omission

also involves intent, but it is the failure to disclose a material fact to induce someone to act or to gain an unfair advantage.

A deductible is usually a dollar amount the insured must pay on each loss to which the deductible applies. Liability coverage is usually written without any deductible, but certain policies may include one. Dwelling and homeowner's liability policies are

always written without deductibles.

When Jack signed a listing contract with Bay Realty, he refused to authorize dual agency. A month later with no offers, his listing agent Sophie calls and asks Jack if he would allow her to show his property to her buyer client. Before showing the buyer Jack's property, Sophie should

amend the listing agreement to authorize dual agency and get Jack's signature. If a client refuses to authorize dual agency initially, the listing contract can be amended if the client later changes his mind.

Seller Dana has accepted buyer Stephen's offer to purchase her house, and they have entered into a binding contract. If they later mutually agree to change the purchase price or other terms of the agreement, they should sign a(n) .

amendment

Seller Terrence has accepted buyer Angelica's offer to purchase his house, and they have entered into a binding contract. Later, Terrence decides he wants to keep a storage shed that is attached to the property. If Angelica agrees, they should sign a(n)

amendment.

Which item is LEAST LIKELY to be an attachment?:

an above-ground children's pool: Since the pool is not actually attached to the property, it is still considered to be personal property. The key to the attic is an example of constructive annexation, which is necessary to access the attic. The island in the kitchen is a man-made attachment, and the orchard is a natural attachment.

§ Who is NOT EXEMPT from needing a real estate broker license to sell real property in North Carolina?-

an auctioneer selling property as part of an estate: A real estate broker license is required when conducting (or offering to conduct) a real estate auction, even if the property is part of an estate. The executor or administrator of the estate would not need a license, however, nor would a court-appointed guardian.

Which of the following would be considered trust money?

an earnest money deposit

Which type of buyer agency agreement limits the buyer to representation by a single brokerage firm and entitles the broker to the negotiated fee even if the buyer purchases a property through another broker?

an exclusive buyer agency agreement

For which property would you expect the cost approach method to be LEAST useful?-

an older home in a neighborhood with high turnover: The cost approach is best for properties that have little relevant market data. The sales comparison approach would probably be more useful for a home in an older neighborhood with high turnover than the cost approach.

Which of the following is NOT a test of highest and best use?

anticipated

To protect the lessee's (tenant's) interest against third parties, North Carolina law requires that

any lease that is required to be in writing and signed due to the statute of frauds must also be recorded

A homeowner finds out that a broker is marketing his property, even though he has a FSBO sign in his front yard. But the homeowner does nothing to stop the broker. What type of agency relationship may have been created, if any?

apparent agency- Allowing someone to appear to be your agent without any expressed authority is called apparent agency. Even though the "agent" would have no actual authority from the principal, they could indeed bind the principal through representations as that person's agent. A real estate agency relationship should be created by expressed written agreement.

Lisa's home was valued at $100,000 10 years ago. Today it is valued at $175,000. The increase in the dollar value of Lisa's home is due to

appreciation

Darrell bought a new house, which includes the right to drive across Lin's property to get to his own. This is an example of a(n):

appurtenant easement, where Darrell's property is the dominant tenement and Lin's property is the servient tenement.

A disabled veteran in a wheelchair wants to put a ramp up on the side of his house so he could easily go from his car, up the ramp, and into his kitchen. The ramp would be too close to the property line based on the current zoning ordinance. He will need to go to the zoning board to obtain a(n):

area variance: The zoning board can issue an area variance to reduce the setback and allow him room to build his ramp.

In a residential transaction, the brokerage fee is usually reflected in the settlement statement

as a debit to the seller. While either party can pay the brokerage fee, in residential transactions, the seller more commonly pays this fee. It is, therefore, a debit to the seller.

Mortgage brokers act

as intermediaries between borrowers and lenders.

The Real Estate Commission learns that an unlicensed individual has placed advertisements in which she promises to assist homeowners with FSBO transactions for a small fee. What can the Commission do about this situation?:

ask the court for an injunction against the individual

The Real Estate Commission learns that an unlicensed individual has placed advertisements in which she promises to assist homeowners with FSBO transactions for a small fee. What can the Commission do about this situation?

ask the court for an injunction against the individual: The Commission has the authority to investigate any activity in the state that would require a real estate license. However, the Commission cannot discipline an unlicensed individual. Instead, the Commission would have to petition the court to issue an injunction against the individual to stop the unlicensed activity.

a. Licensee Lois got a call from Vern, who wants to see one of her listed houses. Each of these practices would be recommended EXCEPT-

asking Vern if she can ride with him to the home.

The value placed on land and buildings by a city, town, or county for the purpose of levying annual real estate taxes is known as the-

assessed value

In North Carolina, the tax rate is expressed as: $1 per $100 of

assessed value.

The value placed on land and buildings by a city, town, or county assessor for use in levying annual real estate taxes is a property's-

assessed value:

A seller may assign his/her interest in a homeowner's insurance policy to the buyer effective as of the closing date through a(n)-

assignment

A lease can be terminated by any of the following methods EXCEPT:-

assignment.

Which of the following tasks can you, as a dual agent, perform on behalf of your clients? Select all correct responses.

assist with inspections disclose latent defects

Adam lives in a popular up-and-coming community and an investor has approached him about buying his home. The offer could not come at a better time as Adam had just made a decision to move to another state to help with his parents' care. Adam has an FHA loan with a great rate that the investor is not able to match in the current lending environment. Adam does not want to maintain liability for the loan. Given the situation, what is the BEST financing option? sales with

assumption An assumable loan transfers the loan to the buyer's name and legally, since the mortgage is attached to the property and the property is still security for the loan, the buyer becomes primarily liable for repayment. An FHA loan may be assumable and the financing option makes sense with interest rates currently higher than the rate on the existing loan.

Which of these situations would LEAST LIKELY trigger the need to present the Working with Real Estate Agents brochure?

at a home show when someone stops by the booth and picks up marketing materials

Which of these situations would MOST LIKELY trigger the need to present a Working with Real Estate Agents brochure?

at an initial listing appointment where you inspect the property and start to learn about the seller

Garrick of Cardinal Realty is a buyer's agent for client Tara. She's interested in a house listed by Richard of Robin Realty. When must Garrick disclose to Richard that he represents the buyer?

at first contact A buyer's agent must make this disclosure at first contact, for example, when Garrick first contacts Richard to arrange a showing for buyer client Tara.

The seller must receive the Closing Disclosure

at settlement. Although the seller generally receives the Closing Disclosure prior to settlement, there is no requirement for that. A seller simply has to be given a Closing Disclosure at settlement.

A real estate broker acting as a seller's agent may-

attempt to encourage an offer from any buyer. A broker acting as an agent of the seller is required to use his/her best effort to market the property and locate a ready, willing, and able purchaser that will meet the seller's terms and conditions

: Someone who has been given a power of attorney to act on behalf of another is known as a(n) _____________.:

attorney-in-fact

All of the following items are addressed in the Buyer's Due Diligence Process paragraph of Standard Form 12-T EXCEPT

availability and cost of insurance.

The brokers at Tip Top Realty are placing ads for their new listings. Which advertisement would MOST LIKELY be a violation of the rules of the North Carolina Real Estate Commission?-

"New-build in Elm School District. Text Broker Bob at 555-8765 to get a look at this beauty.": Any advertisement that does not indicate that it is from a broker or brokerage firm is considered to be an illegal blind ad. Even if the ad includes the contact information of the broker—whether it is a post office box number, telephone number, street address, internet web address, or e-mail address—it would still be an illegal blind ad if the name of the broker or brokerage firm is not included.

Appraiser Marla analyzes several rental properties in her town, determining their respective GRMs using gross annual rent. She determines that the annual gross rent multiplier for her subject property should be around 9.5. The property currently rents for $1,225 per month. What would be Marla's approximate estimate of value?

$ 139650- - Multiply the annual rent ($14,700) by the GRM of 9.5 to find an estimate of $139,650.

Clark and Lois bought their primary residence in 2001 for $300,000. They recently sold it for $500,000. On what amount will they owe capital gains?

$0-Their gain on the sale of the property is $200,000, which is well within the $500,000 exemption. So, they will owe no capital gains tax.

When someone is found guilty of violating federal antitrust statutes, the maximum fine that can be imposed on that individual is

$1 million

A licensee violated antitrust laws by insisting her client use a particular home inspector. If the client paid $400 more for the home inspection than she would have if she had chosen her own home inspector, she may be able to recover up to ______ in penalties, not counting attorney fees?

$1,200 Penalties in a civil lawsuit could be triple the damages claimed. In this case, it could be $1,200.

The sale of a property closes on May 10. Taxes are $3,600 per year and have not been paid. What is the seller's share of taxes, based on a 365-day year (assume it's not a leap year and the seller owns the day of closing)?

$1,281.80

Once you have the assessed value, the amount of property taxes can then be determined by applying the assessed value to the- tax rate Belinda's property has a market value of $100,000 and was assessed at 90%. The tax rate is $1.50 per $100 of assessed value. What would Belinda's annual tax amount be?-

$1,350.00

Nicole has a stable gross monthly income of $5,400; her monthly bills include a car payment of $420 with seven payments left and a student loan payment of $220. What is the maximum mortgage payment (PITI) she would qualify for under both qualifying ratios if she is getting a conventional loan?

$1,512Under the housing expense ratio, she would qualify for $1,512 ($5,400 x .28). Using a debt-to-income ratio of 36% for a conventional loan, Nicole would qualify for a total housing expense of $1,944 ($5,400 x .36). From that, however, you need to subtract her recurring debt of $220 (there are fewer than 10 payments left on the car, so it does not count as debt), resulting in a maximum housing expense of $1,724. Remember that she can only borrow the lesser amount. Remember that she must qualify under both ratios, so she will be able to borrow only the lesser of the two amounts.

Borrower Owen is getting a $200,000, fixed-rate, 30-year loan at 5% interest to purchase a condominium. The monthly payment of principal and interest is $1,073. Property taxes for this property are $3,900 per year. An annual homeowner's insurance policy is $864. The monthly condo association fee is $180. What is Owen's Housing Expense including HOA?

$1,650The monthly PITI payment for this loan is $1,650: $1,073 P&I + $325 monthly property tax ($3,900 / 12) + .$72 monthly insurance premium ($864 / 12) + $180 HOA fee.

The sale of a property closes on July 29. The unpaid tax bill is $4,626. Buyer and seller will pay their share of the taxes at closing. How will the taxes be paid at closing using a statutory year, assuming the seller owns the closing day?

$1,940.35 Debit Buyer / $2,685.65 Debit Seller First, determine the number of days the seller owned the property: Jan=30 + Feb=30 + Mar=30 + Apr=30 + May=30 + Jun=30 + Jul=29 = 209. To find the seller's share: $4,626 / 360 days = $12.85 / day. 209 days x $12.85 = $2,685.65 debit to the seller. Next, determine the number of days the buyer owned the property: July=1 + Aug=30 + Sep=30 + Oct=30 + Nov=30 + Dec=30 = 151 days. To find the buyer's share: $4,626 / 360 days = $12.85 / day. 151 days x $12.85 = $1,940.35 debit to the buyer. This represents two separate single-entry items on the Closing Disclosure.

A broker-in-charge can deposit up to _______ of business funds in his or her trust account to cover service charges imposed by the bank.:

$100

What is the maximum amount of business funds that a broker-in-charge may maintain in a trust fund to cover service charges imposed by the bank?

$100

What is the required down payment if the purchase price is $500,000 and the lender will approve a loan-to-value ratio of 80%?

$100,000-- If the loan-to-value (LTV) ratio is 80%, then the down payment is 20% of the purchase price ($500,000 x .20 = $100,000).

Peter's 30-year mortgage is for $120,000 with an interest rate of 6.5%. Every month, he will be required to pay the bank $758.48 in P&I. What is the principal balance after Peter's first payment?

$119,891.52The annual interest Peter pays is $7,800 ($120,000 x 0.065). Divide that by 12 to find $650 as the amount applied to interest with that first payment ($7,800 / 12 = $650). That means that $108.48 was applied to principal ($758.48 payment - $650.00 interest = $108.48 principal reduction). Subtract the principal reduction of $108.48 from the original balance of $120,000 to find that the balance of the loan after the first payment is $119,891.52.

Penny just sold her house for $186,000. The commission rate in the listing agreement was 6.5%. How much commission did she owe from the sale of the house?.

$12,090- When calculating a commission, multiply the sales price (Whole) by the commission percentage (Rate): $186,000 x 6.5% (0.065) = $12,090 commission

The Jones family is considering an offer on their home. They must pay off a $115,000 loan, pay closing costs of $1,000, and a survey fee of $425. Their broker is charging them a 5% commission. Determine the minimum acceptable offer.

$122,552.63 First, figure the costs: $115,000 + $1,000 + $425 = $116,425. Because the commission rate is 5%, you can now divide the costs by 95% (100% - 5%) to find the minimum acceptable offer: $116,425 / 0.95 = $122,552.63.

Marcia wants to buy a house that is selling for $160,000 and the lender has approved her for an 80% conventional loan. How much can Marcia borrow?

$128,000

You are pre-qualifying a buyer for a conventional loan on a house with the purchase price of $160,000. She states she does not want to pay PMI on the loan. In that case, what is the maximum loan amount she can receive (assuming no lender-paid PMI)?

$128,000-- A loan without PMI requires an LTV of 80% or a down payment of 20%. With a sale price of $160,000 and a loan-to-value of 80%, the loan amount will be $128,000.

James is selling his home. He needs to pay off a $96,000 first mortgage and a $12,000 second mortgage, and he wants $10,000 cash in hand for himself. If his closing costs are $3,100 and he contracts to pay a 7% commission, how much must he sell the property for? Round your answer up to the nearest dollar.

$130,216 First, add all of the expenses to find the desired net after commission: $96,000 + $12,000 + $10,000 + $3,100 = $121,100. Then determine the amount of the sales price left after commission: 100% - 7% = 93% or 0.93. Finally, divide the desired net by appropriate percent after factoring in the commission: $121,100 / 0.93 = $130,216. James must sell his home for at least $130,216 to get the desired net and pay the contracted commission.

An owner pays condominium fees of $275.50 on the first of every month to cover that month. The transaction closes on July 17. Using a 365-day year, with the buyer responsible for the day of closing, what is the appropriate proration on the settlement statement.

$133.35 Credit Seller / $133.35 Debit Buyer When condo fees are paid in advance, the buyer owes. Using a 365-day year, $275.50 / 31 days in July = $8.89 per day. If the buyer owns the days of closing, the buyer owes the seller for 15 days. 15 x $8.89 = $133.35 credit seller/debit buyer.

Paul is selling his house for $267,500. He's paying 5.75% commission. In addition to the required excise tax, he has other closing costs of $270. He owes $112,800 on his existing mortgage. He's already paid the property taxes, which are prorated for settlement at $765.62. The buyer paid a due diligence fee of $1,200. What is Paul's net cash to seller for this transaction, rounded to the nearest dollar?

$137,748 First, add up Paul's debits: Commission of $15,381.25 ($267,500 x 0.0575) + excise tax of $535 ($267,500 / $500 = $535) + $270 closing costs + $112,800 existing loan + $1,200 due diligence fee = $130,186.25 total debits. Subtract that from the sales price: $267,500 - $130,186.25 = $137,313.75. To that, add his credit for the property taxes he paid: $137,313.75 + $765.62 = $138,079.37 net cash to seller Paul.

: Appraiser Marla analyzes several rental properties in her town, determining their respective GRMs using gross annual rent. She determines that the annual gross rent multiplier for her subject property should be around 9.5. The property currently rents for $1,225 per month. What would be Marla's approximate estimate of value?

$139,650

A. allen determined that the two-unit rental property he's appraising should bring in $6,600 annually per unit in rent, and he also determined that the GMRM should be about 135. What is Allen's estimate of value?-

$148,500

A property is being sold for $132,000, and the seller's estimated closing expenses amount to $2,000. If the seller originally purchased the property for $114,000 and paid $1,000 in closing expenses, what is the seller's estimated profit on the sale?

$15,000

A buyer is interested in a house and wants to make an offer of $175,000. The buyer is willing to pay a due diligence fee of $1,000 and an earnest money deposit of $2,000. If the transaction does not involve any additional earnest money deposit, loan assumption, seller financing, or building deposit, what is entered as the balance of the purchase price on the NCAR/NCBA Offer to Purchase and Contract form?

$172,000- The balance of the purchase price must equal the total purchase price minus the amounts entered in the second through the seventh lines: $175,000 - $3,000 = $172,000

Seller Laura will pay 4% of the sales price of her home to the listing brokerage and 3% to a cooperating brokerage. ABC Brokerage earns a commission of $5,340 when its client buys Laura's house. Find the sales price of the property (rounded to the nearest dollar).

$178,000ABC was the cooperating brokerage, so it received a 3% commission, or $5,340. To find the sales price of the property, divide the commission by the rate: $5,340 (Part) / 0.03 (Rate) = $178,000 (Whole). The property sold for $178,000.

Jack is appraising a new home and determines that the lot value is $14,000 and the replacement cost is $194,500. He finds no remarkable physical deterioration, but thinks that the lack of a garage impacts the value. Cost manuals indicate that a garage would cost $30,000 to build. Using the cost approach, what might be Jack's final estimate of value?

$178500

Mary wants to obtain FHA-insured financing on her primary home. Her housing expense will be $800.65. She also has the following debt: $192.65 (auto payment) and $40 (revolving credit account). Based on qualifying ratios for an FHA loan what would Mary's required stable monthly gross income have to be to qualify?

$2,582.74

Roy is a veteran who is buying a home with a VA loan. The mortgage loan amount is $132,000. What is the maximum amount the lender can charge for the costs and services for originating the loan

$2,640 The lender can charge a flat fee of not more than 1% of the loan amount ($132,000 x 1% = $1,320).

A property is being sold for $122,000, and the seller's estimated closing expenses amount to $3,000. If the seller originally purchased the property for $97,500 and paid $1,500 in closing expenses, what is the seller's estimated profit on the sale?

$20,000 $122,000 - $3,000 = $119,000 Adjusted Sales Price; $97,500 + $1,500 = $99,000 Adjusted Purchase Price; $119,000 - $99,000 = $20,000 Net Profit.

Each of these borrowers is getting a conventional loan. Who will NOT be required to pay PMI?Buck, who is borrowing $150,000 to purchase a house for

$200,000

A. Appraiser Anna determines that the three-unit residential rental property she's appraising should take in $600 each month in rent per unit. She estimates a vacancy loss of $1,800 per year. She also determines, based on current market data, that the GRM should be about 121. What is Anna's estimate of value for the subject property?

$217800-a. $1,800 (monthly rent from the three units) x 121 (GRM) = $217,800. Vacancy loss is not considered when using the gross rent multiplier.

The sale of a property closes on May 10. HOA fees are $360 per year and paid in advance. What is the buyer's share of the fee, based on a calendar year (assume it's not a leap year and the seller owns the day of closing)?

$232.65 To find the daily rate: $360 annual HOA fee / 365 days in a year= $0.99 (rounded). The buyer owns the property for 235 days (May=21 + Jun=30 + Jul=31 + Aug=31 + Sep=30 + Oct=31 + Nov=30 + Dec=31 = 235). To find the buyer's share: 235 x $.99 daily rate = $232.65 buyer debit/seller credit.

Maggie bought a house in a subdivision, with settlement scheduled for August 31. Seller Sam paid the annual association fee of $780 at the beginning of the year. On the settlement statement, how will this fee be handled (assuming a 365-day year with the seller owning the day of closing)?

$260.70 Credit Seller / $260.70 Debit BuyerSince Sam already paid this fee, it will be a credit to Sam and a debit to Maggie. First, determine how many days Maggie owned the property: Sep=30 days + Oct=31 days + Nov=30 days + Dec=31 days = 122 days. Next, calculate the daily fee: $780 / 365 = $2.1369 per day. Finally, calculate the prorated amount: 122 x $2.1369 = $260.70. This is a debit to buyer Maggie and a credit to seller Sam.

Broker Mike listed a property for sale. He negotiated a 5% commission on the first $200,000, a 4% commission on the next $300,000, and a 6% commission on any amount over half a million dollars. The property sold for $600,000. What is Mike's commission?

$28,000 It breaks down this way: 5% of $200,000 = $10,000; 4% of $300,000 = $12,000; and 6% of $100,000 = $6,000. Add them together to get $28,000.

Joe buys a house for $150,000, making a $30,000 down payment and paying three discount points to buy down the interest rate. What is the total cost of the discount points?

$3,600.A point is 1% of the loan amount. Since Joe made a $30,000 down payment, the loan amount is $120,000. One point on this loan equals $1,200 ($120,000 x 0.01), so three points is $3,600.

Luther makes an offer of $105,000 on a house that was appraised for $112,000. If the seller accepts his offer, what is the minimum down payment to get an FHA-insured loan?

$3,675 Most FHA-insured loans require a down payment of at least 3.5% of the home's purchase price or appraised value, whichever is less. So if the purchase price is $105,000, Luther would have to make a down payment $3,675 ($105,000 x .035).

A buyer purchases a property in Mt. Airy for $152,000, getting a new mortgage loan for $135,000. What amount must be paid for the excise tax, and who pays?

$304 paid by the seller First, divide the sale price by $500: $152,000 / $500 = $304. This is the amount of excise or transfer tax, and it is a debit to the seller.

The replacement cost of a dwelling has been estimated at $193,500. The dwelling, determined to have an economic life of 75 years, is estimated to have an effective age of 15 years. What is the amount of depreciation?:

$38,700

Bonnie sold her condo for $105,000. She paid off the $58,000 owed on her mortgage, 7% commission, attorney fees of $200, prorated interest of $345, and prorated association fees of $157. How much did she net on the deal?

$38,948 Bonnie paid $7,350 in commission ($105,000 x 0.07). Add that to the other expenses to find total expenses of $66,052. Subtract that amount from the sales price to find a net to seller of $38,948.

Buyer Belva is purchasing a property for $187,000, with settlement scheduled for May 7. She has been approved for an 80% loan-to-value conventional loan. Her lender is charging a total of 2.5 points for all mortgage-related fees. She has to purchase an annual homeowner's insurance policy for $852, and the lender requires her to deposit two months of the insurance premiums into an escrow account for reserve. Annual property taxes for the property are expected to be $2,652, and they have not been paid. The lender requires Belva to deposit four months of property taxes into the escrow account for reserve. Her other closing costs total $1,740. Belva paid a $3,000 earnest money deposit and a $1,800 due diligence fee. For these prorations, use a 360-day statutory year and assume that the seller owns the day of closing. What is Belva's necessary cash to close this transaction, rounded to the nearest dollar?

$39,906 Let's start with the secondary calculations necessary to total the buyer's debits. Belva's getting a loan for $149,600 ($187,000 x 0.80). The loan fees are $3,740 ($149,600 x 0.025). The escrow reserves for homeowner's insurance is $142 ($852 / 12 x 2). The escrow reserves for property tax is $884 ($2,652 / 12 x 4). Total the debits: $3,740 + $852 + $142 + $884 + $1,740 = $7,358. Add the debits to the sale price: $187,000 + $7,358 = $194,358. Now let's do the secondary calculation necessary to total Belva's credits. Since the property tax has not been paid, she will have to pay that when it's due, and the seller owes her for the time the seller owned the property. First, determine the daily rate of the taxes: $2,652 / 360 = $7.3667. Next, determine how many days the seller owned the property if settlement is May 7: Jan=30 days + Feb=30 days + Mar=30 days + Apr=30 days + May=7 days = 127 days. Multiply that by the daily rate: 127 x $7.3667 = $935.57. Now add up Belva's credits: $149,600 (loan amount) + $3,000 (earnest money) + $1,800 (due diligence fee) + $935.57 (prorated taxes) = $155,335.57. Subtract that from the total due: $194,358 - $155,335.57 = $39,022.43, rounded to $39,022 cash from buyer Belva.

Ed is appraising a 60-year-old duplex. He estimates that such a structure should have an economic life of 100 years, but its condition is good, so he puts the effective age at 40. He determines the replacement cost for such a structure is $460,000 and the value of the site is $120,000. Using the cost approach formula, what is the most likely opinion of value?

$396000- First, determine the accrued depreciation using the age-life ratio: 40 / 100 = .40. If the cost is $460,000, the depreciation is $184,000 ($460,000 x .40). Subtract depreciation from cost to find value of the structure: $460,000 - $184,000 = $276,000. Finally, add in the site value to find the final opinion of value: $276,000 + $120,000 = $396,000.

A property has a market value of $360,000 and was assessed at 100%. The tax rate is 12 mills of assessed value. What is the annual tax amount?-

$4,320: Convert mills for the purpose of tax calculation by moving the decimal point three places to the left: 12 mills = 0.012. Then multiply by the assessed value to find annual taxes: 0.012 x $360,000 = $4,320.

Abner and Estelle own a house within the city limits of Anytown, North Carolina. An appraiser has recently determined that their house has a current market value of $400,000. The last assessment from the county valued the property at $385,000. The county's tax rate is $.92 per $100. Anytown's tax rate is $.25 per $100. How much do Abner and Estelle owe in property taxes annually (rounded)?-

$4,504. Add the county and city tax rates together: $0.92 + $0.25 = $1.17. Convert that by moving the decimal point two places to the left: $1.17 = 0.0117. Then, multiply that by the assessed value: 0.0117 x $385,000 = $4,504.

James sells his property to Moira for $235,600. She gets a loan for $187,500. How much is the excise tax on this transaction and who pays it?

$472 paid by James

Lakeview Church has a replacement cost of $495,000 and the site value is $110,000. If the building has an effective age of 10 years and an economic life of 50 years, what is the property value?:

$506,000

Lakeview Church has a replacement cost of $495,000 and the site value is $110,000. If the building has an effective age of 10 years and an economic life of 50 years, what is the property value?

$506k- First, determine the accrued depreciation using the age-life ratio: 10 / 50 = .20. The depreciation is $99,000 ($495,000 x .20). Subtract the depreciation from the cost to find the value of the structure: $495,000 - $99,000 = $396,000. Finally, add in the site value for the final opinion of value: $396,000 + $110,000 = $506,000.

Tori is selling her property for $468,400. She has an outstanding mortgage balance of $376,950. Annual property taxes are $12,640. Closing is set for August 27. Tori and buyer Bob will pay their share of the annual $6,336 property tax bill at closing. Tori has agreed to pay 3.5% commission to the listing broker and 3% commission to the seller's subagent. She also owes the required excise tax. Tori agreed to purchase a home warranty for the buyer at a cost of $365. The buyer paid an earnest money deposit of $12,000 and a due diligence fee of $2,400. Tori's other closing costs total $490. Assume a statutory year and that the seller owns the day of closing. What is the net cash to seller Tori on this transaction?

$52,641

A house is rented for $980 a month, paid on the first day of each month. The house sells and closes escrow April 15. Using a statutory year and buyer owning the day of closing, what is the proration?

$522.72 Debit Seller / $522.72 Credit Buyer When rents are paid in advance, the seller owes. Using a statutory year, $980 / 30 days = $32.67 per day. If the buyer owns the day of closing, the seller owes the buyer for 16 days. 16 x $32.67 = $522.72 debit seller/credit buyer.

What is the required down payment if the purchase price is $268,000 and the lender will approve a loan-to-value ratio of 80%?

$53,600 If the loan-to-value ratio is 80%, then the down payment is 20% of the purchase price (268,000 x .20 = $53,600).

A property sells for $236,400. The affiliated licensee involved in the transaction receives 40% of the employing brokerage firm's 7% commission. How much money did the licensee receive?

$6,619.20

A single-family home rents for $1,500 per month, with the rent due on the first of the month. If the owner sells the property, closing on December 18, how will the rent be prorated (assume a statutory year and that the day of closing belongs to the seller)?

$600 Debit Seller / $600.00 Credit Buyer

Paul is taking out a $158,000 loan to purchase a house for $195,000. He's paying a 5% interest for a 30-year loan. Settlement is June 27. How will the prorated interim mortgage interest show up on the settlement statement? For this example, assume a statutory year and that the seller owns the day of closing?

$65.83 Debit Buyer To find the annual interest rate, multiply the loan amount by the interest rate ($158,000 x 0.05 = $7,900.). Divide that by 360 to find the daily interest rate ($7,900 / 360 = $21.9444). Since the seller owns the day of closing in this example, and we're using a statutory year, there are three affected days (June 28, 29, 30) for which interest from the buyer is due, so multiply the daily interest rate by 3 days ($21.9444 x 3 = $65.8332, rounded to $65.83). This appears only as a debit to the buyer.

If Cindy pays $500 for P&I every month for 30 years on her $110,000 loan, how much interest will she pay over the life of the loan?

$70,000 Cindy will pay $70,000 in interest for that 30-year loan (500 x 12 months x 30 years = $180,000 total payment - $110,000 principal = $70,000 interest).

Mark agrees to buy Sharon's duplex for $246,000. Closing day is June 14. Both tenants paid rent of $975 on June 1. Mark is getting a loan for $170,000. He's paying 2 points in fees. The annual property taxes on the property are $3,456 and have not been paid. Mark paid the seller a $1,600 due diligence fee and gave the broker a $3,000 earnest money deposit check. Closing costs are $2,680. The lender requires 4 months of property taxes to be deposited in the escrow account, in addition to 2 months of property insurance in escrow. The annual property insurance premium is $810 and must be paid at closing. For the prorations, use a 360-day statutory year and assume that the seller owns the day of closing. What is Mark's necessary cash to close this transaction, rounded to the nearest dollar?

$74,863Let's start with the debit calculations. Mark's loan fees are $3,400 ($170,000 x 0.02). The escrow for taxes is $1,152 ($3,456 / 12 x 4). The escrow for property insurance is $135 ($810 / 12 x 2). So all debits total $8,177: $3,400 (loan fees) + $1,152 (tax escrow) + $810 (annual insurance) + $135 (insurance escrow) + $2,680 (closing costs) = $8,177. Total owed is $254,177. Next, let's do the credit proration calculations. The rent paid is $1,950, or $65 per day, and Mark should get a credit for 16 days, so $1,040. The property tax is $9.60 per day ($3,456 / 360), and Mark should get a credit for 164 days (Jan=30 + Feb=30 + Mar=30 + Apr=30 + May=30 + Jun=14), so $1,574. Total credits are $177,214: $170,000 (loan) + $1,040 (rent proration) + $1,574 (tax proration) + $1,600 (due diligence fee) + $3,000 (earnest money deposit) = $177,214. Subtract that from the total owed to find cash to close: $254,177 - $177,214 = $76,963.

A borrower has a stable monthly gross income of $3,200 and recurring monthly debts of $370. What is the maximum amount of money available to him for monthly housing expenses to qualify for an 80% conventional loan?

$782 Under the first ratio, the borrower would qualify for $896 ($3,200 x .28). Under the second ratio, the borrower would qualify for $782 ($3,200 x .36 = $1,152; $1,152 -$370 = $782). The borrower must accept whichever is lower.

The rent for each unit of a 10-unit strip mall is $1,000 per month. The annual vacancy rate averages 5%. The expenses for the property come to $30,000 per year with debt service of $15,000. What is the net operating income?

$84k

David bought a condominium, with settlement set for July 18. Seller Grace paid the annual condo association fee of $1,965 at the beginning of the year. On the settlement statement, how will this fee be handled (assume a 360-day year; seller owns the day of closing)?

$884.24 Credit Seller / $884.24 Debit Buyer

Hank takes out a $200,000 loan at 4.5%. What is the annual interest?

$9,000

In addition to HO-1 Basic Form, which homeowner's policy is the least written in North Carolina?

- HO-5

Which of the following is NOT an element of a valid lease: the lease must be in writing

- The parties must be legally competent.The property must be dearly identified (legal description or address).The terms of the tenancy must be contained in the agreement. Are all valid leases

To accept a CMA/BPO assignment, a North Carolina broker needs all of the following EXCEPT.

- direct request from a qualified mortgage lender or bank for a refinance

Which homes should an appraiser consider when finding comps?

- homes that have sold recently in the subject's area: When an appraiser is looking for comps, he or she will look only at homes that have sold recently.

Who is contractually responsible for providing the replacement battery for smoke detectors and carbon monoxide alarms during the tenancy?

- jack the tenant: The initial battery is provided by the landlord; however, subsequent battery replacement is the responsibility of the tenant.

What is the first day of the fiscal year for North Carolina counties and municipalities?

- july 1

Who has the burden in the event of an ambiguous phrase or provision in an insurance policy contract?

- the insurer

You sign a contract agreeing to buy a car from Brian, but the title to the car is in Brian's wife's name. This contract is

- void

Your investor client is interested in looking at commercial property. An available strip mall has an effective gross income of $112,000 and a net operating income of $84,000. The capitalization rate in the area for similar properties is 12%. What is the likely asking price for the property

-? $700k Using the IRV formula to find value, you start with Income (NOI = $84,000) and divide by the Rate (cap rate = 12%) to find Value. $84,000 / .12 = $700,000.

Which federal entity has enforcement authority over the Real Estate Settlement Procedures Act?

-CFPB

A woman renting a room in the house in which she lives can legally discriminate against men. true

-Fair housing laws do not apply to the rental of a room in the owner's personal residence as long as no real estate broker is used.

When property escheats, the title

-reverts to the state.

The earliest that a mortgage loan may close is __________ days after a borrower receives the Loan Estimate

. 7 business days

On Tuesday morning, broker Isaac submits an offer on behalf of his client to listing agent Juanita, and Juanita presents the offer to her seller client. Later that day, the seller accepts and signs the offer, and listing agent Juanita calls Isaac to inform him of the seller's acceptance. Isaac immediately contacts the buyer with the news. On Wednesday morning, Isaac delivers a copy of the signed contract to the buyer

. The offer became a binding contract when Juanita called to notify Isaac of the seller's acceptance

Licensees Rob and Ronnie, who are affiliated with different brokerage firms, are having dinner when Ronnie mentions she's having trouble getting listings in a particular part of town. Rob says he's happy to handle all the listings in that neighborhood if she agrees to quit trying to land clients there. In exchange, he'll send prospective clients her way if they live closer to her business

. This is an example of territory allocation.

The North Carolina Uniform Residential Building Code requires insulation with R-value ____ in walls, R-value 30 in ceilings, and R-value 19 in floors

.13

For lender LuAnn to meet the conforming loan standards of Fannie Mae/Freddie Mac, the loans she submits need to meet which of the following qualifying ratios? Select all correct responses

.28% total housing expense ratio 36% total debt-to-income ratio

The standardized Closing Disclosure must be given to the borrower in the transaction at least _________ prior to closing

.3 business days

The standardized Closing Disclosure must be given to the buyer in the transaction at least _________ prior to settlement

.3 business days

Listing brokerage firm Rapid Realty receives a commission check of $28,700 from the sale of client Dan's residential property. The property sold for $410,000. Calculate the commission rate

.7%

§ Martha is an unlicensed assistant at ABC Brokerage. What tasks may Martha perform in her role as a paid employee? Select all correct responses

.contact a buyer client to set up an appointment for a showing and respond to a consumer's question about the published list price of a property

The ______ is a commitment guaranteed by lender Sue that an interest rate will not change on borrower Wade's mortgage loan for a specific period of time

.lock-in agreement

Buyer Caleb and broker Mona have entered into a buyer agency agreement. According to the terms of the agreement, Caleb can enter into buyer agency agreements with other firms, and Mona will earn the negotiated fee only if she is the procuring cause of the sale. This agreement is a(n)

.nonexclusive buyer agency agreement.

TILA requires the disclosure of the Loan Estimate to borrowers within _____ business days of a completed application

.three

Dina is the listing broker for Butch's home, and she receives three offers. To encourage the buyers to submit their best offers, she discloses the terms of the best offer to the other potential buyers. Dina's actions would be considered a violation of the North Carolina Real Estate Commission Rules

/True

Josh and Reva have a fixed-term lease for 1 year with the Gables Luxury Apartments. What is the minimum period that they must give the notice to vacate if this fact is not stipulated in the lease agreement?

1 month

Which of the following terms is acceptable to describe a prestigious community location of a listed property gated Gianna called landlord Steve about an advertised apartment. He told her it was rented. A week later, the sign was still up. Gianna believes Steve did not show her the apartment because she was a woman and she had a strong accent. If Gianna decides to file a complaint against Steve, she must do so within _______ of the incident.-

1 year

§ What is the term of office for the chairperson of the Real Estate Commission?

1 year

Juan, who speaks with a strong accent, calls the number on a "To Let" sign on a large apartment building in North Carolina. The broker tells him that the unit is rented, but she has not had time to remove the sign. A week later, Juan sees that the sign is still up. His wife Ida, who has no accent, calls and is told the unit is available. If Juan decides to file a complaint the North Carolina Human Relations Commission, he must do so within-

1 year.

The listing broker is offering to pay a buyer's agent 2% of the 6% commission. Gail's contract with Fred's employing broker promises a 3% commission. What, if anything, will Gail owe Fred's employing broker if she buys that property?

1% Gail would then only have to pay 1%, assuming that provision was included in the agreement. If the buyer agency agreement did not specifically credit the buyer for commission paid by the seller, Gail might be obligated to pay her buyer's broker 3%. A discussion of this is included in the Working with Real Estate Agents brochure.

Someone buys a time share for $14,000, but the developer didn't provide a public offering statement until 10 days after the contract was signed. The developer must pay the purchaser-

1,400 (10%)

Donna sells her property to Amy, with settlement taking place on July 31. Donna has NOT yet paid the taxes, which are $4,384. Since they are due on September 1, Donna will pay her share and Amy will pay her share at settlement. How will the taxes be paid at closing using a statutory year, assuming the seller owns the closing day?$

1,826.67 Debit Buyer / $2,557.34 Debit Seller

Assuming that a time share buyer does not cancel the transaction, the deposit she makes when signing the purchase contract must remain in the brokerage escrow account forAssuming that a time share buyer does not cancel the transaction, the deposit she makes when signing the purchase contract must remain in the brokerage escrow account for:

10 days.

If a time share developer fails to deliver the public offering statement before a contract is signed, the purchaser may be entitled to ______ of the sales price from the developer.

10%

With the U.S. Department of Agriculture (USDA) Rural Development Loan program, if applicant Annie meets the income eligibility and her house is in an approved area, she may receive ____ financing based on the appraised value or acquisition cost, whichever is less

100%

o Shankar has a signed contract to sell his apartment building and would like to reinvest the money into a strip-mall without paying taxes when the property sells. Which tax code permits him to do this?

1031 Exchange

Spencer financed the purchase of an office building with a $100,000 down payment and a $500,000 loan. His NOI is $56,000 and his debt service is $44,000. What is his cash-on-cash return?

12%His cash flow is $12,000, which makes the cash-on-cash return 12% (12,000 / 100,000 = .12).

An investor buys a vacant lot for $64,500. He splits it into two lots and sells them for $37,200 each. What is his percent of profit?

15.3% Remember "what he made divided by what he paid." He made a profit of $9,900 ($37,200 + $37,200 = $74,400; $74,400 - $64,500 = $9,900). Therefore, $9,900 / $64,500 = 0.153 or 15.3% profit.

You can contact a former client for up to ___________ months after a transaction closes even if that client is on the National Do Not Call Registry.

18

What is the minimum age required to apply for a North Carolina real estate license?-

18 years

: Once you complete your prelicensing education and the Commission approves your application, you have ______ to pass both portions of the state licensing examination.

180 days

If a time share instrument is not recorded within _______ of the contract of sale, all funds paid by the purchaser must be returned to the purchaser.-

180 days

Once you complete your prelicensing education and the Commission approves your application, you have ______ to pass both portions of the state licensing examination.

180 days

If the developer hands over monies paid by a purchaser to an independent escrow agent, what is the deadline for recording the time share instrument?

180 days after the contract is signed

The North Carolina Uniform Residential Building Code requires insulation with R-value 13 in walls, R-value 30 in ceilings, and R-value ____ in floors.

19

The Lead-Based Paint or Lead-Based Paint Hazard Addendum is used for sales involving homes built before

1978

Comp #3 has three bathrooms; the subject property has four bathrooms. A bathroom in that neighborhood is valued at $4,000. Comp #3 does not have a fireplace; the subject does. A fireplace is valued at $6,000. Comp #3 has a pool; the subject does not. A pool is valued at $12,000. Comp #3 sold for $200,000. What is the comp's adjusted value?-

198k

ABC Brokerage in Durham has 20 affiliated brokers. When seller Susan signs a listing contract, broker-in-charge Dan appoints Gloria as Susan's designated agent. How many people represent Susan?

2 people: Gloria and Dan

How many years must a person use a property to qualify for adverse possession in North Carolina?

20

Sue is appraising a 20-year-old bank building. Based on her research and analysis on the quality of the construction and the local conditions, she determines that the building should have an economic life of 50 years. She also concludes that the building has not been well maintained and has an effective age of 30. What is its remaining economic life?

20 years Reason: The remaining economic life is 20 years. This is found by subtracting the effective age (30) from the expected economic life (50).

Borrower Bob has a gross monthly income of $5,000 and total housing expenses of $1,000. What is Bob's housing debt-to-income ratio?

20%

Fannie Mae and Freddie Mac require mortgage insurance on home loans with less than what percentage down

20%

Investor Gary purchases land for $50,000. He divides it into three lots that are sold for $20,000 each. What is his percent of profit?

20%

Conventional lenders consider a borrower's income adequate for a loan if the proposed total mortgage payment of PITI does not exceed _____ of stable monthly gross income.

28%

Borrowers have a right to a copy of the appraisal report used in the decision process promptly upon completion of the appraisal or no later than ____business days before consummation for closed-end credit or account opening for open-end credit, whichever is earlier.

3

Paul is doing an appraisal for Fannie Mae. What is the minimum number of comps he needs to consider when using the sales comparison approach?

3 comps

A real estate broker must retain a signed Working with Real Estate Agents brochure for how long after the transaction closes or the agency relationship ends, whichever is later.

3 years

In order to be enforceable in a North Carolina court, leases of real property must be in writing and signed by the parties if the lease is longer than-

3 years

What is the term of office for a member of the Real Estate Commission?-

3 years

A North Carolina brokerage must retain the files from any transaction for ___________ after all trust funds are disbursed at closing.

3 yrs

How long does a landlord initially have to account for a tenant's security deposit (or remaining balance of the funds) at the end of the tenancy?

30 days

How many days after a prospective borrower submits a completed loan application must the lender provide a credit decision?

30 days

To comply with provisions of the CAN-SPAM Act, a business must process any opt-out request it receives for at least ________ after the email is sent.

30 days Any opt-out mechanism must be able to process opt-out requests for at least 30 days after the message has been sent. Once a request is made, it must be honored within 10 business days.

Olive and Paul make a $1,000 deposit to reserve a time share in a new beachfront development. They send written notice to the developer that they have changed their mind. Under Commission rules, the developer must return their full deposit within ________ after the execution of the contract.

30 days- Any monies paid by the purchaser must be refunded "immediately," which by Commission rule is 30 days after execution of the contact.

After closing, cancellation of the seller's liens that were paid at closing may take

30-60 days.

To qualify for an FHA loan, a borrower should have a maximum housing expense ratio of _____and a total debt-to-income ratio of

31%; 43%.According to the 4155.1, FHA's underwriting manual, the debt-to-income ratios for an FHA insured loan are 31% for the housing ratio and 43% for the total debt-to-income ratio.

How many days are there in a statutory year?

360 days

Jan borrowed $300,000 and made a down payment of $50,000 to buy a warehouse. She has an effective gross income of $68,000, expenses of $8,000, and an annual debt service of $22,000. What is her cash flow?

38k (68k-22-8)

The presence of radon over EPA's recommended maximum level of _____ picocuries is considered a material fact in North Carolina, meaning it must be disclosed.

4.0

Jenny takes out a $230,000 loan. The annual interest is $10,350. What is the interest rate on this loan?

4.5% (10350/230000)

A time share purchaser can cancel a purchase contract without penalty within ________ after the execution of the contract.

5 days - The contract of sale is voidable by the purchaser for five days after the execution of the contract without penalty.

Jim buys a four-unit apartment building. He put 10% down on a purchase price of $500,000. Based on his financing terms, the monthly principal and interest is approximately $2,700. The NOI is $35,000 annually. What is the cash-on-cash return?

5.2%

Under Section 121 of the Internal Revenue Code, a change in employment can exclude a homeowner from the capital gains tax if the location of the new place of employment is at least ____ miles farther from the old residence than that residence was from the former job.

50

A criminal records report submitted with an application for licensure can be NO more than ______ old.

6 months

How long must a landlord hold a tenant's security deposit (or remaining balance of the funds) in a trust account at the end of the tenancy after attempting to send this information to the tenant's last known address and it was returned?

6 months

If a lender discovers an error on Closing Disclosure that resulted in the borrower paying more than necessary, the lender must issue a corrected CD and send a refund to the borrower within

60 days.

Violet has qualified for a North Carolina Homestead Exclusion based on her age. This means she is at least-

65 YEARS

Marty's brother Jake is temporarily renting Marty's daughter's room while she is away at college. Jake pays rent once a month, even though there is no lease agreement. Marty's daughter will be returning home from college soon and wants her room back. How much notice must Marty give Jake to terminate the tenancy?

7 days

lisa has lived in the same apartment for 17 years on a month-to-month tenancy at-will basis. The landlord decides that when the year is up, he will let his grandson rent the apartment. How much notice must he give Lisa?-

7 days before the beginning of the next rental period

Gerald is trying to determine an appropriate cap rate for the property he's appraising. When looking at a comparable property, he learns that the NOI is $14,400, and the property sold for $200,000. What is the capitalization rate?

7.2%

A borrower offers to purchase a home for $120,000. His first mortgage amount is $90,000 and the seller is providing a second mortgage of 15% of the sale price. The borrower provides the balance as a cash down payment. What are the LTV and CLTV?

75% / 90%

The Homeowner's Protection Act requires a mortgage lender to cancel PMI when the loan-to-value reaches ____ of the original value and the borrower is current.

78%

A buyer can make a maximum cash down payment of $35,000. The sale price of the property is $170,000, so the buyer wants to borrow $130,000. The property was appraised at $160,000, and the lender requires an 80% loan-to-value ratio. What is the loan-to-value ratio (LTV) for this transaction?

81% The LTV is calculated as $130,000 (mortgage loan amount) divided by $160,000 (appraised value) =.81 or 81%. Remember that LTV is calculated on the lower of the sale price or the appraised value. The lender would not make this loan.

A buyer is paying $200,000 for a house. He makes a $30,000 down payment, gets a first mortgage for $160,000, and a second mortgage to cover the balance. What is his CLTV?

85%

The North Carolina Real Estate Commission consists of how many members?

9 members

Which of the following is an essential lease provision but is not required for residential leases?

: A legal description is best but a street address will also suffice for single-family dwellings.

A landowner's bundle of rights includes all of the following EXCEPT the right of:

: ENROACHMENT

§ Glen is negotiating a real estate transaction. What are the conditions that generally point to his needing a real estate license? Select all correct responses.

: He is being paid for his efforts. He is working on behalf of someone else.

A temporary insurance contract formed by oral or written agreement between the customer and the insurance company is called

: a binder

Brady's house has two bedrooms and one bathroom, which is accessible only by entering through one of the bedrooms. This is an example of

: functional obsolescence

Fiona is appraising a home that was built in 1875. Because of its unique architecture, it is on the National Register of Historic Places. Which cost estimate is Fiona more likely to need?

: the reproduction cost: reason: In this case, Fiona would most likely want to consider the reproduction costs in order to build an exact replica of this historic building.

NC law now permits an actively licensed non-provisional broker to perform a CMA/BPO outside of a transaction for a fee. All of the other answer choices are true.

?

The gross rent multiplier is considered the more accurate application of the income approach than the capitalization rate as it considers expenses.: A duplex recently sold for $200,000. It brings in monthly rental income of $900 per unit. The expenses for this property run $8,000 per year. What is the GRM for this property

? $111.11

Borrower Brett is getting a $100,000, fixed-rate, 30-year mortgage loan at 5% interest to purchase a house. The monthly payment of principal and interest is $700. Property taxes are $1,500 per year and the annual insurance premium is $480. What is Brett's monthly PITI payment

?$865 The monthly PITI payment for this loan is $865: $700 P&I + $125 monthly property tax ($1,500 / 12) + $40 monthly insurance premium ($480 / 12).

Larry sells his property with closing set for March 29. The property taxes for the year are estimated to be $3,756 and have NOT been paid. How will the taxes appear on the Closing Disclosure, assuming a statutory year and that seller owns the closing day

?$928.56 Credit Buyer / $928.56 Debit Seller

Which entity is responsible for setting the country's monetary policy and thereby affecting interest rates on mortgage loans

?- Federal Reserve

Which statement about VA-guaranteed loans is FALSE?

A 3.5% minimum down payment is required.

Which statement about a comparative market analysis is FALSE?:

A CMA should evaluate only currently listed competing properties

:An example of an easement in gross is

A GAS COMPANY DIGGING UP PART OF YOUR BACKYARD TO FIX A LEAK; Utility companies often have easements in gross to access lines or pipes. A neighbor using part of your driveway to get to the main road is an example of an appurtenant easement. A neighbor walking across your yard without asking permission is not an easement but a trespass.

In an explanation of mortgages and lien position, which statement is FALSE?

A HELOC is an example of a mortgage that is typically in the highest senior position. A second mortgage is a junior mortgage to a first mortgage, but a second mortgage is a senior mortgage to a third mortgage. A HELOC is a type of second mortgage thus it is usually in a lower position to a mortgage in a higher lien position.

The Real Estate License Law was: passed by the General Assembly and signed into law by the Governor.-

A bill does not become a law until it is approved by a vote of the General Assembly and has the signature of the Governor. The North Carolina General Statutes, therefore, contain the laws passed by the legislature and signed by the Governor.

Which statements are TRUE? Select all correct responses.

A borrower can likely get a lower initial interest rate on an ARM than on a fixed-rate mortgage.With a fully amortizing loan, the borrower owes nothing at the end of the loan term. ARMs shift the risk of interest rate fluctuations to the borrower, and because of that, lenders normally charge a lower rate for an ARM than for a fixed-rate loan. A fully amortizing loan is self-liquidating. The payments are structured so that the loan is completely repaid at the end of the loan's term. Equity represents a property owner's unencumbered interest in his or her property. As he pays down the principal balance on the loan, his equity increases. To determine a current ARM interest rate, the lender designates an index, which is a statistical report that is a generally reliable indicator of the approximate cost of money and adds to that its margin, which is the lender's profit.

Who would be considered exempt under the Civil Rights Act of 1866?There are no exemptions.

A broker moves a minority person into a neighborhood with the intent of buying other houses in the neighborhood at a greatly reduced price.

Which situation is NOT an example of misconduct by a licensed broker that could result in administrative discipline by the Real Estate Commission?-

A broker pays her unlicensed assistant a salary for the clerical work he does.- A broker may pay an unlicensed assistant as long as his pay is not based on real estate transactions and he is not performing any activities that require a license. The other choices, however, are examples of misconduct that could be investigated by the Real Estate Commission and result in some sort of discipline.

The Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T would be appropriate for which of these transactions?

A buyer is purchasing unimproved real property for personal use and does not have any plans to subdivide.

Which statement about the Residential Property and Owners' Association Disclosure Statement is TRUE?

A buyer must receive a copy of the disclosure on or before making an offer to purchase.

Sean has a designated parking space at his condo. This is an example of a(n) limited common area:

A limited common area is owned by everyone in the complex but only used by one person.

Which situation would LEAST LIKELY be considered a material fact that a broker must disclose to a customer?

A listing broker does not disclose to the buyer customer that the seller is getting transferred out of state.A licensee has no obligation to disclose personal information about a seller client to a buyer customer that could impact his negotiating position. The other situations, however, are considered to be material facts that a broker must disclose to a customer.

a. Which statement about lockboxes is TRUE?-

A lockbox can restrict hours of access. Most lockboxes have settings that can restrict operation to certain hours, even by authorized persons. The other statements are false.

Which statement is TRUE?

A point is 1% of the loan amount, which is generally the sales price minus any down payment

Which of the following are duties Patricia should expect to have responsibility for as the new property manager for the Governor's Square apartment complex? Select all correct responses

A property manager is not likely to have responsibilities for an owner's property/income taxes and it is illegal for a licensee to draft a contract. A property manager will be responsible for collecting and depositing rent payments, interviewing tenants, and negotiating leases.--- depositing rent payments into the owner's account interviewing tenants, negotiating leases between the owner and tenant, Collecting rent from tenants

Which of these is a common example of personal property that is included in an agreement of sale?

A refrigerator The chandelier and the pool are real property. While furniture may sometimes sold with a house, it's very common to include appliances.

In an explanation of mortgages and lien position, which statement is FALSE?

A second mortgage is always in the second lien position.

Which is an example of liquidated damages?-

A seller keeps the earnest money deposit when the buyer backs out.

Which statement about the Closing Disclosure is TRUE?

A seller-only Closing Disclosure may be prepared that excludes the buyer's loan details. The lender or closing agent could decide to prepare a seller version of the CD. The Closing Disclosure must be given to a borrower at least three business days prior to close. It shows the actual closing costs and loan costs. Only a few changes would require an additional waiting period; most changes do not.

Pedro has a six-month lease. This is a(n) ________ leasehold and Pedro ________ terminate the lease early.- tenancy for years / cannot-

A tenancy for years can be for any length of time, as long as there is a specific ending date. This type of lease terminates only at the end of the lease period unless both parties mutually agree. Further, this lease does not require either party to give notice.

Which statement about time share licensing in North Carolina is TRUE?-

A time share salesperson is not required to be licensed if he is a salaried employee of the developer

Trust accounts cannot be held in an out-of-state bank.-

A trust account must be maintained in an insured financial institution authorized to do business in the State of North Carolina. It could be out of state if all required conditions are met. It must be a demand deposit account, and it could be an interest-bearing account

Which is LEAST LIKELY to be an example of an illegal kickback under RESPA?:

ABC Brokerage allows Fox Title to use its downtown offices to conduct closings as a convenience to downtown clients.— There's no implication that the arrangement between Fox Title and ABC Brokerage includes any kickback for referrals. The other examples are more likely to be violations of Section 8 of RESPA since they involve the payment of some form of compensation in exchange for the referral.

Chris has an easement to harvest the final soybean crop on the land he sold. Just before harvest, Chris inherits $8 million. He calls the new owner and tells her that he is moving to St. Croix and that she can do whatever she wants with the soybeans. What's the MOST LIKELY way his easement will be terminated?

Abandonment

§ Of the following, who would need a real estate license? Select all correct responses.: Dan, who negotiates the sale of his mother's property, for which his mother gave him a car-

Abby, who is paid a commission for negotiating the lease of a warehouse

A buyer's agent is preparing an offer using a preprinted offer to purchase and contract form.

According to the Real Estate Commission Rules, the preprinted form must includean identification of the brokers and the party each represents. According to the Real Estate Commission Rules, a broker must not use a preprinted offer to purchase and contract form unless the form describes or specifically requires the entry of certain information including, but not limited to, the identities of the real estate agents and firms involved in the transaction and the party each agent and firm represents. Although the brokers are identified in the offer to purchase and contract, they do not sign the contract.

During the due diligence period, buyer Darius had the property inspected. Which addendum is used to identify any repairs that the seller agrees to complete?

Additional Provisions Addendum

Broker Adele's buyer client, Alex, wants to make an offer on Monique's house. If Adele is NOT a member of the North Carolina Association of REALTORS®,

Adele may usea contract form drafted by an attorney.Real estate brokers are not permitted to draft real estate contracts. A broker may fill in or complete preprinted contract forms that have been drafted by an attorney. The Real Estate Commission does not publish standard contract forms, and only members of the North Carolina Association of REALTORS® may use standard forms that include the REALTORS® logo.

Where are the rules of the Real Estate Commission published?-

Administrative Code- Since the Real Estate Commission is an administrative entity, their regulations related to real estate licensees are found in the North Carolina Administrative Code, specifically in Title 21 Occupational Licensing Boards and Commissions, Chapter 58 Real Estate Commission.

Alan is a seller's agent. Before showing the property to a potential buyer, the seller reminds him to say that the basement has never had water. However, Alan remembers that the seller once told him that there was water in the basement whenever there was a severe rainstorm.

Alan should- tell the buyer because he is obligated to disclose known material facts to the buyer. A broker must disclose all material facts that he knows or reasonably should have known

Which situation is LEAST LIKELY to represent a prohibited conflict of interest?:

Alex is a disclosed dual agent, representing both buyer and seller. Dual agency is not a conflict of interest if it is disclosed. Alex is obligated to remain completely neutral in this transaction, however. If undisclosed, however, it is a violation of the license law and would be grounds for discipline

Vincent is tasked with deriving the value for a large, custom home that was constructed nine months ago on a secluded 10-acre lot. Which approach could be considered the most reliable for valuation?

All are equally reliable. The cost approach is an objective method to provide an accurate estimate of value for replacing or reproducing buildings, especially new or nearly new buildings with few comparable sales.

Cara is sitting an open house at one of her listed properties. Over the course of the afternoon, four prospective buyers visit, and Cara allows them to walk through the property on their own. Two buyers leave their name and contact information on her sign-in sheet. What is Cara's relationship to her visitors?

All four are customers.- Generally speaking, visitors to an open house are simply customers. No agency relationship has been formed, until the conversation turns serious and leads to representation.

Which of the following costs is a landlord prohibited from paying out of a tenant's security deposit funds?- burned-out range heating elements: A burned-out range heating element is an example of normal wear and tear and may NOT be paid for with security deposit funds.

All of the other costs are considered beyond normal wear and tear. Therefore, the repair costs can be deducted from the tenant's security deposit.

Which of the following is NOT an item a homeowner can deduct as a mortgage interest expense in a given year?

All prepaid interest

§ Trust account inspections may be conducted _______________ without the consent of the broker-in-charge. AT ANY TIME-

All trust account records must be made available to the Commission or its authorized representative for inspection and reproduction without prior notice.

If a homeowner wants insurance protection to cover the structure and contents her beachfront condo from falling water, she should purchase: homeowners insurance:

Although property insurance may be written to cover damage from falling water (a leak), it does not cover damage caused by the peril of flood.

According to North Carolina law, which of the following statements about a CMA/BPO is FALSE?:

An actively licensed non-provisional broker may NOT perform a CMA/BPO outside of a transaction for a fee

Which statement is TRUE?

An alienation clause requires the borrower to repay the entire loan if he sells the property. In a lien theory state, the lender has only a lien against the property and would have to initiate a judicial foreclosure proceeding, which can be a long process; it's generally easier to foreclose on property in a title theory state. The concept of hypothecation means that a borrower pledges his or her real property as collateral for the debt while maintaining possession of it. An occupancy clause would stipulate requirements for occupancy; the defeasance clause cancels the lender's interest when the debt is repaid.

Which of the following best describes a real estate appraisal? Estimate of value:

An appraisal is an estimate or opinion of value. In real estate, an appraisal is a written estimate of value as performed by a licensed, professional appraiser.

An offer to purchase that states the offer will remain open for 72 hours: may be withdrawn by the offeror at any time before the offer is accepted.-

An offer is just an offer. It does not become a contract until it is accepted. Thus, even if the offer said it would remain open for 72 hours, it is not binding upon either party.

Which statement about an offer is TRUE?.

An offer may be withdrawn or revoked by the offeror at any time before the offer is accepted.

Which statement about an option to purchase is FALSE?

An option fee is refundable if the optionee does not exercise the option. The option fee is not refundable. All of the other statements are true.

Andy is selling a parcel of vacant land, which is listed by broker Carmen. Buyer Fran submits an offer using the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T. If Andy accepts the offer, who is responsible for clearing the portion of the property required by the county to perform tests, inspections, or evaluations to determine the suitability of the property for a sewage system and/or private drinking water well?

Andy The Access to Property subparagraph of the Seller Obligations states that the seller is responsible for clearing the portion of the property required by the county to perform tests, inspections, or evaluations to determine the suitability of the property for a sewage system and/or private drinking water well.

Angelica is looking for someone to sell her property, and she speaks to several brokers. What event will create a seller's agency relationship between Angelica and one of the brokers?

Angelica signs a listing contract.

Of these, which document is MOST LIKELY to be given to a consumer AFTER settlement?-

Annual Escrow Statement

Who can perform an appraisal in North Carolina? Jill, a certified North Carolina appraiser Which of the following statements about a CMA/BPO is TRUE?

Any CMA/BPO must specifically state that it is NOT an appraisal. And Any estimate of a property's value or worth is considered to be an appraisal. And An appraisal must only be performed by a licensed or certified real estate appraiser.

AJ, the broker-in-charge at For You Realty, is reviewing copy for advertisements from the four provisional brokers in the office. He sends three of the ads back to correct because they violate Commission rules. Which ad would meet with AJ's approval

Any advertisement that does not include the name of the brokerage firm or sole proprietorship to indicate that it is from a real estate broker or brokerage firm is considered to be an illegal blind ad. Of these, only Lisa’s ad for the lease is compliant- “For Lease. See Lisa at For You Realty, 104 Sycamore Road, to apply

Individuals may NOT file a lawsuit for antitrust violations against a business, only administrative agencies or the government may do that. False

Anyone whose business or property has been injured by anyone violating antitrust laws may file a private civil lawsuit in state or federal court.

The due diligence period specified in the purchase contract expired before buyer Brooke could secure financing.

As Brooke has no other means to purchase the property, she will surrender her earnest money to the seller.If the buyer fails to get financing (or other funds) to purchase the property, and the due diligence period expires, the buyer would have to surrender her earnest money to the seller as liquidated damages.

Brad and George are an unmarried couple who decide to buy a vacation home together. Brad puts up 60% of the money, and George puts up 40%. At closing, the deed simply lists Brad and George as the new owners. How did they take title, and what is their ownership interest?

As tenants in common, with 50% for brad and 50% for george

Per Regulation Z, advertisement requires full disclosure of credit terms by a mortgage lender?"

Assume loan at 6% interest" Regulation Z requires that once a lender states any type of credit terms in advertising, such as 6% interest, he must disclose all finance charges and total annual percentage rate (APR).

Someone who has been given a power of attorney to act on behalf of another is known as a(n) _____________.

Attorney in fact

Buyer Barbara, who is represented by XYZ Realty, makes an offer on Cody's house, which is listed by ABC Realty. If Cody accepts the offer, who are the parties to the sales contract?

Barbara and CodyThe sales contract is the written agreement between the buyer and the seller. The brokers are not parties to the contract

Which of these estates is NOT inheritable?

Bart is the life tenant of a conventional life estate. Of these, Bart's conventional life estate is not inheritable since the estate ends at his death. He is both the life tenant and the measuring life.

Who is obligated to complete a Residential Property and Owners' Association Disclosure Statement?

Bob, who is selling a property he owns to a co-worker The Disclosure Statement is not required for residential dwellings of more than four units, transfers between co-owners or close family members, or transfers as part of an estate. Selling to a co-worker is not an exempted transaction.

Which statements are FALSE when a bond is used in lieu of a mortgage note as a promise to pay? Select all correct responses.

Bonds are apt to be less complex than notes. The bond holder is not entitled to a repayment of a mortgage loan. The bond holder, like the note holder, is entitled to a repayment of a mortgage loan. A bond used as a promise to pay tends to have a longer term until maturity than a mortgage note. Bonds are apt to be more complex than notes and tend to only be issued by sizable borrowers.

Buyers Brenda and Bruce are interested in buying a home on 123 Main Street. Olive is the sole owner of the property, although she is married to Ogden. Who should sign the Offer to Purchase and Contract?

Brenda, Bruce, Olive, and Ogden

Which situation describes unlawful blockbusting?

Broker Bob moves a minority person into a neighborhood with the intent of buying other houses in the neighborhood at a greatly reduced price- Blockbusting is defined as "inducing or attempting to induce, for profit, any person to sell or rent property based on representations made regarding entry into the neighborhood of persons of a particular race, color, religion, sex, or national origin." Blockbusting is also referred to as panic selling or panic peddling.

§ Which of these situations would LEAST LIKELY be considered an example of willful misrepresentation or willful omission?-

Broker Brent did not disclose that his seller clients were getting divorced.- Broker Brent is not allowed to disclose confidential information about his clients. Keeping such information secret is not an example of willful omission. The other activities could be willful misrepresentation or omission.

Each of these brokers is receiving a referral fee. Which would LEAST LIKELY be considered a kickback prohibited by RESPA?-

Broker Cat gets a fee for referring her seller client to a landscaping company.The Real Estate Settlement Procedures Act prohibits giving or accepting a fee, kickback, or anything of value in exchange for referrals of settlement service business. Of these, a landscaping company would not be a settlement service. The others would. Nonetheless, if Cat gets a referral fee, she must disclose that to her seller principal.

According to NC law, the analysis of sales of similar recently sold properties in order to derive an indication of the probable sales price of a particular property by a licensed real estate broker defines which of the following? Select all the correct answers.

Broker Price Opinion and Competitive Market Analysis

§ Which of the following is a license issued by the North Carolina Real Estate Commission?

Broker- There is only one real estate license in North Carolina, the broker license. The broker-in-charge designation and the provisional broker designation is simply a category or status of the general broker license.

What is the timeframe for maintaining confidential information received from a client?

Brokers must never disclose confidential information without permission or a court order. Even if the relationship ends, the duty to keep confidential information to yourself does not end.

Which statement about the Working with Real Estate Agents brochure is TRUE?

Brokers must retain the acknowledgement panel. Brokers must retain the acknowledgement panel of the WWREA brochure in a transaction file for three years after the termination of the agency relationship or the close of the transaction, whichever is later. The other statements are false.

Buyer Heidi has entered into an Offer to Purchase and Contract. Closing is scheduled for February 3, but the sale of Heidi's current residence is scheduled to close on January 31. If the seller agrees to allow Heidi to take possession of the property on January 25, what addendum could they use?

Buyer Possession Before Closing Agreement

Carlos is the listing broker for Nicole, whose home is listed for $375,000. After Carlos submits an offer to Nicole, he mustpresent additional offers upon receipt

Carlos is obligated to submit all offers. If there are multiple offers, it would not be considered a material fact that the listing broker must disclose to the buyers.

____________ result from judicial decisions.-

Case law: The administrative agencies of the Executive branch promulgate administrative regulations. Case law is a result of judicial decisions. Legislatures enact statutory laws.

North Carolina Broker Tim is being sued buyer Betty $20,000 for deliberately concealing a material fact about a serious defect in the property she purchased. Where would this case by handled?-

Circuit Court

Under TILA, the creditor is responsible for providing a copy of which document to the borrower?

Closing Disclosure

When a Loan Estimate is provided to a borrower, it is considered to be provided in good faith when the actual closing costs are lower than those shown on the

Closing Disclosure-document that the actual settlement service provider charges are provided. When the closing costs disclosed to the borrower on the Loan Estimate are lower than the costs provided on the Closing Disclosure, the loan originator is considered to have acted in good faith.

Which is NOT required to be given to consumers within three business days of a loan application?-

Closing Disclosure: The Closing Disclosure must be made available to a borrower three business days prior to closing. The other documents must be given to consumers within three business days of a completed loan application.

Buyer Moe and broker Collette, with ABC Realty, have entered into an exclusive buyer agency agreement. This agreement would be terminated by all of the following EXCEPT

Collette's license is revoked. A buyer agency contract terminates if the brokerage firm loses its license. If an affiliated licensee loses her license, the agency relationship with the brokerage firm remains intact.

Which type of eviction results from Jerry the landlord failing to keep the HVAC systems operable in his rental unit?

Constructive eviction

The _______ was created by Title X of the Dodd-Frank Act as an independent entity within the Federal Reserve.

Consumer Financial Protection Bureau

Title X of the Dodd-Frank Act created the ________ as an independent entity within the Federal Reserve.

Consumer Financial Protection Bureau

The person who benefits from the coverage of an insurance policy is called the insured. In order to purchase a property insurance policy, the insured must have a legitimate financial interest, called an insurable interest, in the subject property. The insured, the buyer, the seller, and the lender all have an insurable interest in real estate property being conveyed.

Consumers who want flood insurance coverage need to purchase a separate flood insurance policy from the National Flood Insurance Program (NFIP) or from an insurer participating in the Write Your Own

North Carolina's Machinery Act provides for listing, assessing, and appraisal of property—as well as the levy and collection of taxes on property—by-

Counties and municipalities

The buyers signed an offer on December 1. The next day, their agent delivered the offer to the listing agent. On December 4, the sellers accepted and signed the offer. Later that day, the listing agent called to notify the buyers' agent of the sellers' acceptance. On December 5, the buyers' agent delivered a copy of the signed contract to the buyers. What is the effective date of the contract?

December 4

What are the two primary private land use controls that owners can place on their real property?

Deed restrictions and CC&Rs

Diane is trying to decide between paying for a new home with cash by either obtaining a mortgage loan or using funds from a cash inheritance. Which of the following are disadvantages of paying with cash from her inheritance versus cash from a mortgage loan that Diane should consider in her decision? Select all correct responses.

Diane will not be provided legal protections by a lender. A property appraisal will not be completed to confirm the home's value. In cases where a buyer can pay cash on hand (without taking out a mortgage), the benefit to both buyer and seller is that the home buying process is faster. Additionally, from a legal standpoint, the parties involved do not need to abide by lender rules or loan requirements associated with a mortgage transaction. However, a buyer loses the legal protections that come with having a lender involved in the purchase transaction including no property appraisals, inspections, titles search, required insurance, etc.

Why are real estate instruments recorded in the county in which the property is located?-to give constructive notice of an interest in a particular parcel of real estate-

Documents are recorded to give the world constructive notice of legal transactions involving property. The public can gain actual notice by going to the county courthouse and seeing the records.

For which of these properties would the gross rent multiplier method be MOST appropriate?

Duplex

Licensee Rodney is representing buyer Mindy. Regarding verification of Mindy's intended land use and prohibited or allowed uses for the land she is interested in buying, Rodney is responsible to perform all the following responsibilities

EXCEPT:giving Mindy his opinion about permitted land uses for the property she is interested in.

Ethel has lived in a house on the lot behind Terry's property for 30 years, driving across Terry's vacant front property to get to the road without an easement. When Terry finally decides to build, she puts a fence all around her property, blocking Ethel from the road. Other than an easement by necessity, what option might Ethel have to travel from her property to the road?

Easement by prescription

Which category of forces that influence property value have powers associated with interest rates, and real estate property tax levels?

Economic

Which building(s) are exempt under Title III of the American with Disabilities Act? Select all correct responses.

Elks Club- Historical buildings at Colonial Williamsburg- Presbyterian church

The government sends you a notice stating that the houses on your road will be demolished to build a new landfill. You are paid fairly for your home and move. The act of demolishing your home is- condemnation.-

Eminent domain is the government's constitutional power to appropriate private property for public use. The actual act of taking private property for public use is known as appropriation or condemnation.

_____ is the right of a debtor to redeem the property from foreclosure proceedings prior to a confirmation of sale.

Equitable right of redemption

At a local convention of real estate licensees, broker Quinn mentioned that he was going to have to raise his commission rates or close his office. Quinn could be found guilty ofprice-fixing.

Even the appearance of discussing fees could be considered an example of illegal price-fixing.

Property tax on a cooperative building is levied against individual unit owners.

FALSE

Which statement about a seller's completion of the Residential Property and Owners' Association Disclosure Statement is

FALSE? A seller who responds with "No Representation" to a question about a known defect is guilty of fraud. Sellers have the option of checking "No Representation," even if they do have actual knowledge about, or should have known about, a particular issue. This would not be considered fraud. The other statements are true.

Which source can provide flood hazard information on a particular property

FEMA Flood Map Service Center

Which statement is FALSE as it relates to an FHA-insured loan?

FHA loans are targeted to lower-income borrowers or first-time homebuyers only.A common misconception about FHA loans is that they are targeted to lower-income borrowers or first-time homebuyers only, but this is not the case. The FHA does not have income limits to determine who is eligible for their loans.

Racial discrimination is prohibited by the federal Fair Housing Act and the Civil Rights Act of 1866.

Failure to comply constitutes an unlawful act, so it's likely that the employing broker will refuse to take the listing.

Which of the following laws protect tenants from discrimination based on race, color, sex, religion, national origin, familial status, and handicap?

Fair Housing Law

At the end of the year, an independent contractor will receive a W-2 form that details his compensation for the year.

Fals eAn independent contractor receives a 1099-MISC form detailing any commission-based income.

A broker's buyer client is interested in a property that is for sale by owner. Because the seller is not represented by a broker, the buyer's broker is NOT obligated to disclose her agency status.

False

Anyone who sells, or offers to sell, an interest in a time share must have a time share salesperson license.

False

The Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T is used for transactions involving vacant land that the buyer plans to subdivide.

False

URAR dictates the standards, rules, and guidelines that licensed appraisers must follow when completing an appraisal report.

False

The Real Estate Commission publishes preprinted, standard contract forms that may be used by brokers who are not members of the North Carolina Association of REALTORS®.

False An exhibit that may be attached to and made part of a contract to cover provisions that are not in the standard contract is referred to as a(n) addendum.

An option contract does NOT need to be recorded in the public records.

False Stella has a right of first refusal on Stan's house. Diane offers to buy Stan's house for $200,000. In order for Stella to purchase the house, she must be willing to beat Diane's offer.False- Once Stan gets a bona fide offer, he must make the property available first to Stella at the same terms as the offer. Stella does not have to beat Diane's offer.

Broker Vincent works for PDQ Realty, and Vincent's buyer client is interested in property that is listed with TLC Realty. TLC is offering a commission of 2.5% to any cooperating broker. Vincent's client thinks he has done an excellent job finding just the right property, so the client tells Vincent to include a provision in the preprinted offer to purchase and contract stipulating that TLC will pay PDQ a commission of 3%. Vincent is permitted to include this provision because he was instructed to do so by his client.

False A broker is prohibited from including in a preprinted offer or sales contract form any provisions related to compensation, even if instructed to do so by his buyer client.

The earnings of a person who is working as an independent contractor are subject to Social Security tax withholding through the employer.

False A brokerage firm is not required to pay into Social Security for compensation that is paid to independent contractors. Instead, independent contractors are responsible for paying their own Social Security taxes.

Antitrust laws are in place to ensure that licensees have a minimum level of education and training to protect the public. .

False Antitrust laws, the first being the Sherman Antitrust Act, were enacted to ensure that there are no restraints on trade

A licensee who tells homeowners that property values are declining because the ethnic or racial makeup of the neighborhood is changing could be found guilty of an antitrust violation.

False Blockbusting is attempting to induce, for profit, someone to sell or rent property based on the entry into the neighborhood of persons in a protected class. Though not specifically an antitrust violation, it would be considered an unfair practice under the Federal Trade Commission Act, in addition to being a violation of fair housing laws.

The Mineral and Oil and Gas Rights Mandatory Disclosure Statement applies to transfers involving vacant land.

False The Mineral and Oil and Gas Rights Mandatory Disclosure Statement applies only to transfers of residential real property consisting of one to four dwelling units.

A group boycott is illegal only if its intention is to drive a competitor out of business.

False- A boycott intended to compel a firm to abandon its current marketing strategies, for example, is also illegal.

A time share is the right to occupy a unit or any of several units during three or more separated time periods over a period of at least three years.

False: A time share is the right to occupy a unit or any of several units during five or more separated time periods over a period of at least five years.

Before marketing a time share, the time share developer must be licensed by the North Carolina Real Estate Commission.

False: Before marketing a time share, the time share developer must obtain a certificate of registration for the project from the North Carolina Real Estate Commission.

. Borrower Bradley decides that the closing costs are too high, and he's not sure he'll have enough to close the loan. He can lower the amount of cash he has to bring to closing if he's willing to pay discount points.

False: Bradley could choose to pay a yield spread premium to lower his upfront closing costs, although it would increase the interest rate he pays over the life of the loan. Any YSP Bradley pays would show up as a credit to him on the Loan Estimate.

Broker Lara gets the listing on Matt's house. She recommends that he do some work on the flower beds and lawn to improve the curb appeal of the property and recommends Ace Landscaping. Matt calls them and they do a great job, which makes Lara's job easier. To thank her for the business, the owner of Ace Landscaping gives Lara a $50 gift card. This is an example of an illegal kickback.

False: RESPA's prohibition against kickbacks applies to settlement services. Landscaping to improve the appeal of the property is not a settlement service, so such a referral fee would not be an illegal kickback. Of course, Lara would have to disclose to client Matt that she gets referral fees from Ace Landscaping, however.

Sue creates a life estate for her brother Dave. When Dave dies, the estate will go to Sue's sister Tina. Dave is known as the "remainderman.":

False: Tina is the remainderman. When life tenant Dave dies, the remainder of the estate goes to her.

When adjusting properties using the sales comparison approach, if a comparable is inferior to the subject, the appraiser subtracts from the comp to make it equal.

False: When adjusting properties, if a comparable is inferior is to the subject, the appraiser adds to the comp to make it equal.

The Civil Rights Act of 1866 was the first major legislation to address equal rights in housing by prohibiting discrimination based on color and religion.

False: While this was the first major act to address discrimination in housing, the Civil Rights Act of 1866 addressed only racial discrimination. It did not address religion.

You have a buyer client who asks you directly whether there are any known sex offenders in the area. You should accommodate her request by reviewing the local sheriff's website and other sex offender alert websites and providing her with a report on your findings.

FalseYou should instead direct her to do the research herself. Try to be the source of the source of information to protect yourself and your brokerage from liability.

The Real Estate Commission must give extra scrutiny to a real estate candidate whose background check reveals a potential character or fitness issue. If the Commission's Regulatory Affairs Division conducts an investigation, what are they LEAST LIKELY to examine?

Family issues

What entity manages the National Do Not Call Registry?

Federal Trade Commission

Maria gives a four-acre parcel of land to her church with the caveat that if the church ever puts a parking lot on it, Maria's heirs will regain title. What kind of estate does the church have for this property?:

Fee simple defeasible

a. What feature of a comparable is considered in a sales comparison appraisal that is NOT generally considered in a comparative market analysis?

Financing concession

Potential borrower Nicky has asked lender Victor to describe the features of a TRADITIONAL conventional mortgage loan. Select a feature that should be included in Victor's description

Fixed-rate

Brian and Melissa are married and file federal taxes jointly. They closed on a mortgage loan to finance the purchase of their new home in May of 2019. This year, they can deduct home mortgage interest on their mortgage loan up to: $750k-

For qualifying debt taken out after December 15, 2017, a homeowner can only deduct home mortgage interest on up to $750,000 of that debt. If homeowners are married but file separately, the limit is $375,000.

Which of the following is NOT an element of the definition of a short sale?

Foreclosure proceedings have been initiated.

Kayla purchased a property in North Carolina, but the seller isn't a resident of the state. Which document should Kayla use to report the sale of real property by nonresidents?

Form 1099NRS

Tim is a property manager of a residential rental property in North Carolina. As a property manager, he is most likely to be considered a ____________ agent.

General

When is a borrower more likely to consider an adjustable-rate mortgage (ARM)? when interest rates are high

Generally, as interest rates rise, so does the popularity of ARMs. Commercial banks=originate loans and offer checking accounts. Mortgage banker=originate/service loans for large investors. Credit unions=serve groups such as employees of a company. Mortgage brokers=bring together borrowers and lenders.

When using the income approach to value, the income capitalization method is seen as more accurate than the gross rent multiplier because it: considers expenses:

Gross rent multiplier is held to be not as reliable as the capitalization rate method to perform an income approach appraisal for a property because the monthly GRM does not take into account expenses and losses.

Traci just signed a lease on her first apartment. She needs an insurance policy that will cover her personal property from damage in the event of a fire, water, or other perils. Which policy should Traci purchase?

HIO-4 : The HO-4 Renters or Tenants Form provides contents, liability, and loss of use coverage for the insured who does not own the premises they inhabit.

Which of the following are the most popular coverages form and is the minimum coverage required by mortgage lenders

HO-3

Which homeowner's policy is a modified form designed for older homes?

HO-8

Who is NOT required to have a North Carolina real estate license if being paid for their work?-

Helen, who sets an appointment with her employing broker's client to view a property

In addition to HO-1 Basic Form, which homeowner's policy is the least written in North Carolina?

Ho-5- HO-1 and HO-5 are not written much in North Carolina.

Which paragraph in Standard Form 2-T is omitted from Standard Form 12-T because it does not apply?

Home Warranty Because the property being transferred is unimproved, the Home Warranty paragraph does not apply.

Lucy went to listing agent Jake's open house but declined to enter into an agency relationship with him. What duty does Jake owe to buyer customer Lucy?

Honesty

Jess is looking for a house and calls agent Guy about a listing she saw on a yard sign. At this point, Jess just wants to learn a little bit about the property. Which question from Jess would MOST LIKELY trigger the need to present a Working with Real Estate Agents brochure?

How quickly do you think I might be able to close?

These statements are all potential expressions of steering EXCEPT

I hope you'll like this house as it seems to have all the amenities you requested.": This hopeful statement is perfectly acceptable. The other choices are all examples of steering.

According to the terms of Paul's adjustable-rate mortgage (ARM), his interest rate may be adjusted every year based on a standard index, but his payment adjustment option guarantees his payments will remain the same for five years.

If interest rates go up, the risk of this option for Paul isthat negative amortization may occur. If the interest rate goes up every year but Paul's payment remains fixed for five years, less of the monthly payment will go to the principal and his payment may not be enough to cover his interest expense, which would cause negative amortization to occur.

A situation in which the cost to repair or replace damaged property exceeds the limit of the insurance policy is called a(n): total loss:

In a total loss situation, the policy limit is paid out and the claim is closed.

a. for income properties (more than a 5-unit residential property or a commercial property), which approach to value should a broker use? Select all the correct answers.

Income and sales comparisons

What is the purpose of the Mineral and Oil and Gas Rights Mandatory Disclosure Statement?

It indicates whether any mineral, oil, or gas rights have been severed.It discloses whether any mineral, oil, or gas rights have been severed, if those rights were severed by a previous owner, or if the seller intends to sever those rights prior to the sale of the property.

Which statement about license surrender is FALSE?-

It is an admission that the evidence against the licensee is overwhelming.: When a licensee voluntarily surrenders his or her license, they neither admit nor deny the allegations against them. The other statements are true.

Which statement is TRUE about the Working with Real Estate Agents brochure?

It is required for residential and commercial transactions.- The Working with Real Estate Agents brochure must be presented for all sales transactions, residential or commercial, and it must be presented to all buyers and sellers. The other statements are false as well.

Which statement about the Working with Real Estate Agents brochure is FALSE?

It must be signed by the consumer or the agent cannot continue discussions.

Buddy makes an offer to buy Wally's home. The offer contained a provision limiting the time for acceptance to 48 hours. Wally immediately rejected the offer as inadequate. After thinking about it overnight, Wally called his agent and said, "I've changed my mind. I'll take the offer." What is the status of Buddy's offer?

It was terminated when Wally first rejected it

Who is the covered insured for an HO-4 Renters policy?

JEANNE, THE TENANT

Which type of lien can be either voluntary or involuntary?:

JUDGMENT LIEN

Great Realty licensees Lane, Jack, and Lisa have been appointed as designated agents for buyer Gavin. Gavin tells Lane that he hit the lottery and has an unlimited budget. With whom can Lane share this information?

Jack, Lisa, and the broker-in-charge

Jane and Paul are affiliated brokers working for employing broker Evan. Buyer Maggie has no buyer broker contract. Jane shows a property to Maggie, then submits Maggie's offer to purchase to Paul, who is the designated agent for the seller. Which of these statements is TRUE?

Jane is not obligated to assist Maggie during contract negotiations. If Maggie didn't sign a buyer broker contract, she is simply a customer. No one in Evan's agency has any obligation to provide Maggie with the fiduciary duties due to a client, such as assisting in negotiations.

Jason, a real estate broker, also owns the mortgage company his buyer chooses. Which of the following is TRUE under RESPA?-

Jason may refer the buyer to his mortgage company as long as he discloses his interest in the company to the buyer.

Which of the following North Carolina real estate professionals can use the North Carolina REALTORS® Residential Rental Contract Standard Form (410-T) for their rental brokerage business?-

Jill, a member of the North Carolina REALTORS®

Joe's real estate brokerage practices dual agency. Broker Sara brings Joe a listing agreement with a seller. Broker Ben brings Joe a buyer broker contract with the buyer for that property. Who is a dual agent in this scenario?

Joe, Ben, Sara, and all other affiliated licensees

Ellen's offer to buy Eric's house does not indicate how acceptance must be communicated. Eric calls his agent, Jon, and tells him to communicate his acceptance. It's late in the day and Jon decides to call Ellen the next day. That night, Ellen leaves a message on Jon's phone revoking her offer. What now?-

Jon did not communicate the acceptance, so Ellen can still revoke her offer

Josh owns a bike shop in an area that is zoned commercial. After he has been there a few years, the zoning authorities rezone the area residential.

Josh- has a noncomofroming use so he can keep his shop open: He has a nonconforming use since he already had the shop there before the rezoning took place.

What is the deadline for license renewal in North Carolina?

June 30

Karen is selling her property and contracts with Yvonne to be her broker. What fact is Yvonne prohibited by law from disclosing to a potential buyer or buyer's representative?

Karen's husband died of AIDS.

Katherine is Brad's listing agent. Her buyer client, Joe, is interested in Brad's property. Which statement is FALSE?

Katherine can share confidential information if it helps to move the transaction along.

Which situation do you think is LEAST LIKELY to go through probate?- .

Kay dies and the house she shared with her husband goes to him

What is NOT a recommended practice related to safety as you're walking to your car and preparing to drive away?-

Keep your keys in your pocket or purse until you need to unlock the door.

Broker Larry's buyer client, Cara, wants to make an offer on Brandon's house. If Larry is NOT a member of the North Carolina Association of REALTORS®,

Larry would be permitted to use electronic equipment to prepare and store offer forms.A broker may use electronic, computer, or word processing equipment to complete, print, and store preprinted offer forms [Rule A.0111]. A broker may not draft legal documents, and only members of the North Carolina Association of REALTORS® may use standard forms that include the REALTORS® logo.

A real estate transaction includes buyer Tiana, lender representative Ajay, seller Jeff, and escrow agent Laura. Of these individuals, who must be present at the escrow closing?

Laura

Charlene is selling her home, which was built in 1968. Charlene's listing agent should make sure that any NCAR/NCBA Offer to Purchase and Contract includes the

Lead-Based Paint or Lead-Based Paint Hazard Addendum.

a. Which type of transaction is eligible to have a CMA/BPO performed by a real estate broker?

Lease of residential property

Evan and Kenneth have an agreement that Evan is permitted to hunt on Kenneth's property during hunting season. This agreement is a(n)

License

George is a licensee at Lisa Dawn Realty. He brings in a buyer-broker agreement with buyer Darlene, who just made an offer on Gavin's property, which is listed with John Tucker Realty. The agency relationship between Lisa Dawn Realty and Darlene can be terminated legally without recourse when which party dies?

Lisa dawn

_________________ can be found on page 1 of the Closing Disclosure.

Loan terms and projected paymentsTransaction Details, Loan Terms, Projected Payments=Page 1; Closing Cost Details=Page 2; Cash to Close, Summaries of Transactions=Page 3; Additional Information about the Loan=Page 4; Loan Calculations, Other Disclosures, Contact Information=Page 5

Each of these borrowers is getting a conventional loan. Who will NOT be required to pay PMI?

Lori, who is borrowing $150,000 to purchase a house for $200,000

The buyers signed an offer on March 2. The next day, their agent delivered the offer to the listing agent. On March 5, the sellers accepted and signed the offer. Later that day, the listing agent called to notify the buyers' agent of the sellers' acceptance. On March 7, the buyers' agent delivered a copy of the signed contract to the buyers. The effective date of the contract is

March 5.

______________ is the most probable price that a property should sell for in a fair sale within a competitive and open market.

Market value

Buyer Charles and broker Martin, with PDQ Realty, have entered into an exclusive buyer agency agreement. This agreement would be terminated by all of the following EXCEPT-

Martin's license is revoked.

Pam at ABC Realty is the listing broker for Brian's property. ABC Realty extends an offer of subagency to ROB Realty. Mary sees the property on ROB Realty's website and calls Greg, a broker for employing broker Rob, to see if he'll show her the house. Mary does not sign a buyer broker contract with ROB Realty. Greg does NOT have a fiduciary relationship with

Mary, his customer.

Lisa applied for a loan with XYZ Bank on May 1. XYZ Bank must send Lisa a written explanation of its decision by

May 30.

Which type of factory-built home is automatically considered real property once it is constructed onsite?

Modular hosing

Karen applies for a loan on Wednesday, June 13. The lender mails her the Loan Estimate the next day. On Monday, June 18, the lender emails Karen the Closing Disclosure. What is the earliest this loan may close?

Monday, June 25 The earliest a loan may close is the seventh business day after the initial Loan Estimate is provided to the borrower. But borrower Karen must receive the Closing Disclosure at least three business days before the loan closes. If the lender emails the CD, she is considered to have received it three business days after it was mailed, which in this case would be Thursday, June 21. The loan can close three business days later, which is Monday, June 25

John is gathering up his paperwork to complete his income taxes. His home expenses include:

Mortgage interest / month = $520; property taxes = $3,280; new deck = $5,300. What is the total deduction John can take for the year? $9520=John can deduct the entire interest paid on his mortgage. At $520 each month, he paid $6,240 in interest for the year. Add to that the property taxes that he paid, and John determines that he can deduct $9,520 on his income tax returns. The new deck is not deductible.

Which is TRUE about asbestos?

Most products made today do not contain asbestos.- Most products made today do not contain asbestos and those that do contain asbestos must be labeled; however, many building products and insulation materials used in homes until the 1970s contained asbestos, which is a known carcinogen. Internal reference: Asbestos

Jack and friend Jill buy a $250,000 house together as tenants in common. Jack puts up $200,000, and Jill puts up $50,000. The deed indicates that Jack owns 80% interest, and Jill owns 20% interest. How much of that property can Jill occupy 100%?

N/A

Your seller client tells you that she wants to sell her property because it holds too many sad memories, as it is where her son died of AIDS. You keep this information to yourself. Later, the buyer files a complaint against you for not disclosing this fact. Is this complaint valid?

No

How many years of active real estate experience must a licensee have prior to being appointed to the Real Estate Commission?-

No experience is necessary. There is no experience requirement for licensee members of the Real Estate Commission

How much notice must the Real Estate Commission give a broker-in-charge before inspecting the firm's trust account records?-

No notice is required

How much notice must the Real Estate Commission give a broker-in-charge before inspecting the firm trust account records?

No notice is required: All trust account records must be made available to the Commission or its authorized representative for inspection and reproduction without prior notice

Sadie represented seller Stan when she listed his property. He told her he was willing to accept $5,000 less than the listing price, but he did not accept any offers before the listing agreement expired. He listed with a different brokerage firm. Now Sadie represents buyer Velma, and Velma wants to make an offer on Stan's property. Can Sadie tell Velma that Stan would accept $5,000 below list? Why or why not?

No, Sadie's negotiations with her former seller client are confidential. The details of client Sadie's negotiations with former seller client Stan are confidential. That fiduciary obligation never ends unless Stan gives Sadie permission to divulge that.

How can a prospective property buyer prevent liability for hazardous waste?Obtain proof that she followed a process of due diligence, such as an environmental audit, prior to entering into a contract.

Obtain proof that she followed a process of due diligence, such as an environmental audit, prior to entering into a contract.

Maggie is an unlicensed assistant for broker Baxter, which means that she can: pick up the keys from a homeowner fro an upcoming open house:

Of these activities, the only one that Maggie could perform as an unlicensed assistant is to pick up the keys from a homeowner for an open house.

Which of these descriptions would LEAST LIKELY be construed as discriminatory if used in an online listing? Mother in law suite

Of these, "mother-in-law suite" is a somewhat generic term used to describe a small, separate living quarter within a dwelling. It does not imply that it's suitable or available only for mothers-in-law. The other choices make reference to religion and familial status and, therefore, would most likely be considered discriminatory.

When evaluating a Loan Estimate, which of the following expenses is subject to a 10% tolerance? services the borrower can shop for

Of these, the only charges that are subject to a 10% cumulative tolerance are third-party charges that the borrower is allowed to choose

Which Offer to Purchase and Contract form includes sewage system and private drinking water well permits in the Seller Representations paragraph?

Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T

Which of the following would not suffer from depreciation?- UNIMPROVED LAND:

Only improvements are depreciated, not land.

Which of the following standard addenda is identified in Standard Form 12-T as one that may be attached and made a part of the contract?

Owners' Association Disclosure and Condominium Resale Statement Addendum Standard Form 2A12-T

Buyer's agent Alan B. Clark with ABC Realty is completing an offer for a property located at 123 First Street. The listing agent is Philip D. Quinn at PDQ Realty. If the earnest money deposit will be held by the listing broker, how should broker Alan identify the escrow agent in the Offer to Purchase and Contract?

PDQ Realty

Which of the following is a force or factor that influences property value? Select all the correct answers.

PEGS- physical, economical, governmental, social

Peter is selling his property, and his agent gives him the Residential Property and Owners' Association Disclosure Statement to complete. Which statement is TRUE?

Peter should complete the form to the best of his knowledge.

Soil conditions and climate are examples of which category of factors that influence property value?

Physical

Which statement about pre-approval of a buyer is TRUE?

Pre-approval can improve a buyer's negotiating position.

Mortgage bankers typically make loans in the

Primary markey- The primary market consists of lenders making mortgage loans directly to borrowers, such as commercial banks, savings and loans (S&Ls), savings and mutual savings banks, and mortgage bankers.

Which of the following is NOT the duty of a landlord?-

Properly dispose of ashes, rubbish, garbage, and other waste.

Which is an example of unlawful steering

Property manager Amy suggests Jake would be happier in a more diverse building.

Homeowner Harry is behind in his mortgage and the lender attaches a lien. He has other liens on his property as well, including a mechanic's lien and a judgment lien. Just before the lender forecloses on his house, the county takes action against Harry for being delinquent on his property taxes. When his house is sold at auction, which lien will be paid first?

Property tax lien

o Which item is tax-deductible for homeowners?

Property taxes: One of the advantages of owning a home is the ability to deduct property taxes paid from one's income tax.

Which of these paragraphs appears in both the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T and the Offer to Purchase and Contract Standard Form 2-T?

Prorations and Adjustments The Fixtures and Exclusions, Home Warranty, and Personal Property paragraphs do not apply to transactions involving unimproved property.

Beach Time Development is preparing to market its new time share condominium building on Oak Island. What is the disclosure document that Beach Time must provide to prospective buyers?

Public offering statement- Beach Time Development must provide the public offering statement that conspicuously discloses key facts about the time share project to prospective purchasers before the transfer of the time share and no later than the date of any contract of sale.

Which of the following deeds is most preferential from the point of view of the grantor?.

Quitclaim deed: A grantor or seller wishes to give a deed that has absolutely no warranties in it, so the seller is subject to the least liability. That would be the quitclaim deed. The grantee, on the other hand, would prefer a general warranty deed

Danita, a licensed real estate broker, receives a fee for every client she refers to a title agency in her town. Is this permitted?- No, this is not permitted under RESPA.-

RESPA prohibits a real estate broker from receiving anything of value, such as a fee or commission, for referring business to a settlement service provider.

Broker Sebastian receives a fee for every client he refers to a mortgage company that results in a loan. Is this permitted?- No, this would be considered an illegal kickback under RESPA.-

RESPA prohibits a real estate broker or agent from receiving anything of value, such as a fee or commission, for referring business to a settlement service provider.

: Using appraiser Maria's notations, determine the final estimate of value using the cost approach:

Replacement cost=$465,000; Deterioration=20%; Site value=$85,000: $357k - First, determine the depreciation: $465,000 x .20 = $93,000. Then apply the formula for determining value using the cost approach: Reproduction/Replacement Cost - Accrued Depreciation + Site Value = Property Value. So, the answer is: $465,000 - $93,000 + $85,000 = $457,000.

In North Carolina, a seller must provide specific documentation to a potential purchaser regarding the condition of the seller's property prior to entering into a contract. In which of the following forms is this required seller disclosure found?

Residential Property and Owners' Association Disclosure Statement

Which is a FALSE statement regarding restrictive covenants?

Restrictive covenants are considered encumbrances.

Pam, a broker at Rob Realty, is the designated agent for Brian's property. Mary sees the property on Rob's website and calls Greg, another broker for Rob, to see if he'll show her the property. At this point, who does Greg have an agency relationship with?

Rob, his broker

Broker Rory has a buyer agency contract with Bev. She agrees to ensure that he earns a 2% commission if he finds her the property she ultimately purchases. Rory identifies three properties in the Raleigh neighborhood preferred by Bev that are in her price range. All three listing brokers are offering 3% of the commission to a selling agent, but one seller is also offering a $1,000 gift card to the agent who brings in the buyer. Which statement is TRUE?-

Rory does not have to disclose to the seller the commission terms of his agreement with Bev. · A buyer's agent is not obligated to disclose the terms of his agreement with his buyer principal with anyone else. The other statements are false. Broker Rory is obligated to disclose to principal Bev any compensation—whether cash or otherwise—he may receive from someone else before she makes an offer though not before he shows the property, whether it's a bonus or a commission split.

Ruth is disappointed when her 21-year-old daughter Beth drops out of college. She and Beth sign a contract that states Beth promises to go back to school and graduate, and in exchange,

Ruth will give her a new SUV on the day she gets her diploma. This contract is best described as Unlitaeral and valid There's nothing to suggest that the contract would not be valid. It's unilateral because it's simply an inducement to get Beth back in school. The contract does not require Beth to graduate, but she would have to graduate before Ruth's promise is binding.

Ted offers to buy Sal's house for $415,000, with settlement to take place on April 1. Sal crosses out the settlement date, changes it to April 15, initials and dates the change, signs the offer, and returns it to Ted. Which of the following statements is TRUE?

Sal has rejected the original offer and made a counteroffer.

a. Which approach to value must a broker use when completing a CMA/BPO for a residential 1-4 family unit property?

Sales comparison

Buyer Scott and seller Maria have entered into a binding contract using the NCAR/NCBA Offer to Purchase and Contract. During the due diligence period, Scott is notified by the lender that his loan was not approved. If Scott decides to terminate the transaction and provides proper written notice to Maria before the due diligence period expires,

Scott is entitled to a refund ofthe earnest money deposit only.If a buyer provides a written termination notice by the date and time specified, any earnest money deposit is refunded to the buyer. The due diligence fee is not refunded

The covenant of __________ is a guarantee that the grantor has the right to convey the property.

Seizin

Seller Gino was just informed that the new house he is having built will not be ready for occupancy until February 7. However, closing on the sale of his existing house is scheduled for February 1. If the buyer agrees to let Gino remain at the property for seven days after closing, what standard addendum would be appropriate to use for this situation?

Seller Possession After Closing Agreement

The NCAR/NCBA standard addendum that calls for the seller to maintain the property and make a nonrefundable rent payment when the seller stays in possession of the property after the deed is recorded is the

Seller Possession After Closing Agreement.

You meet Ivy on June 1 to discuss listing her property and she signed a Working with Real Estate Agents brochure. You sign a listing contract on June 12. Ivy signed a purchase contract on September 1, and the transaction closes on September 29. What is the soonest that you discard Ivy's signed WWREA brochure?

September 29, three years after closing- Generally, you have to retain all documents related to the transaction for three years from the termination of the agency contract or the settlement date, whichever comes latest.

Digging up knock-out rose bushes from a flower garden and planting them in pots is an example of:

Severance

Seller Stu refused to sign a sales contract unless buyer Beth agreed to use Stu & Associates Title Company. Beth really wanted that house and so agreed. The fee for the title insurance was $400. If she later chooses to sue Stu for violating RESPA, how much can she ask for?-

She can sue for up to three times what she paid, $1,200.

§ According to the Commission, when should broker Stephanie give a signed copy of the listing agreement to seller client Clara?:

She should deliver a copy of the listing agreement to Clara immediately when she signs it.

What is the roofing material installed during the framing process that serves as a base layer for the final roof covering?

Sheathing: Sheathing is a layer of plywood or particleboard applied to the rafters to protect against the elements, strengthen the structure, and serve as a base for the shingles or other covering.

1.Which of the following describes a township tier?-

Six-mile strip of land running east and west parallel to a baseline

In North Carolina, _________ is the legal practice of zoning a single tract of land in a manner that is incompatible with the surrounding area and incompatible with the city's zoning regulation and comprehensive plan.

Spot zoning

Stan is purchasing his first home. He plans to take early possession of a home before closing. Which of the following statements is TRUE? Select all the correct responses.:

Stan should purchase a renter's insurance policy before the closing. Stan should purchase a landlord liability policy before the closing.

To find the net cash to seller, subtract debits from the sales price and add credits.

Start with the sales price, subtract the debits and add the credits to find the net cash to the seller.

A broker must maintain signed and initialed copies of the Residential Property and Owners' Association Disclosure

Statement for three years after the transaction closes.

The purpose of the settlement statement is to

Summarize the financial aspects of a real estate transaction.

______________ is the expectation of future benefits.Anticipation _____________ implies that for all products, goods, and services, when supply exceeds demand, prices will fall and when demand exceeds supply, prices rise.

Supply and Demand

A binder is a(n)

TEMPORARY CONTRACT

After the value of a structure is determined, site value is the last element to be considered before arriving at a final opinion of value.-

TRUE

Prospective buyer Vera sends an email to broker Tammy after looking at available properties on her website. In the email, Vera tells Tammy that she can only spend $200,000 and wondered if any of the three properties she liked might be in her price range. Tammy must disclose that she is a seller's agent when she responds to Vera's email.

TRUE- When the first substantial contact is not face-to-face, the broker must immediately disclose agency relationships.

At an appointment with a prospective seller client, broker Frieda does a quick inspection of the property. She should present the Working with Real Estate Agents brochure before sitting down to discuss some marketing strategies and a possible listing price.

TRUE: Ideally, Frieda would disclose agency options, duties, and services in writing before the seller can disclose any confidential or personal information, which could include discussions about listing prices and marketing strategies.

When a person dies with a will, it is considered __________. When a person dies without a will it is called __________.

Testate /intstate

Gary and his brother Steve buy a comic book store as joint tenants, accepting the deed at closing.

That deed LEAST LIKELY represents the unity of: Person

As long as broker Bridget includes a link to the Working with Real Estate Agents brochure on her website and in every email to a prospective client, she has met the requirements for proper agency disclosure.

The Commission rules indicate that a broker must not only present the WWREA brochure but must also review the brochure with the prospective client. Simply presenting the brochure does not meet the requirement.

Which statement about the North Carolina Real Estate Commission is FALSE?-

The Governor appoints the chairperson of the NCREC.- The members of the Commission elect their own chairperson. The other statements are true.

Who does NOT have the authority to appoint a member of the Real Estate Commission? The sect of state:

The President Pro Tempore of the Senate and the Speaker of the House each appoint one member of the Commission. The Governor appoints the other seven members. The Secretary of State has no authority in this matter.

Broker Grace, who is NOT a member of the North Carolina Association of REALTORS®, is using a preprinted form to prepare an offer for her buyer client. The preprinted offer Grace uses must require the entry of certain information including a legal description of the property, the purchase price, and the manner of payment.

The Real Estate Commission does not publish preprinted contract forms, and only members of the North Carolina Association of REALTORS® may use standard forms that include the REALTORS® logo. According to the Real Estate Commission Rules, a broker must not use a preprinted offer or sales contract form unless the form describes or specifically requires the entry of certain information including, but not limited to, a legal description of the property, the purchase price, and the manner of payment. The form may not contain any provision that attempts to disclaim liability for any representations made by the broker in connection with the transaction

Which is NOT a duty with which the North Carolina Real Estate Commission is tasked?- set fair commission structures-

The Real Estate Commission does not set commission structures. To do so would be a violation of federal antitrust laws. The Commission does have the authority to perform the other indicated tasks.

The NCAR/NCBA contract that is intended for unimproved real property that the buyer will purchase for personal use only is the Vacant Lot/Land Offer to Purchase and Contract.

The Vacant Lot/Land Offer to Purchase and Contract is intended for unimproved real property that the buyer will purchase for personal use only and does not have immediate plans to subdivide.

Broker Anabelle will be entering into an agreement to provide brokerage services to a seller. Which statement about this agreement is TRUE?

The agreement must be in writing

Which information obtained from the client CANNOT be kept confidential from a buyer customer? .

The boundary line of the property subject to the transaction is in dispute. A boundary line dispute is a physical condition of the property, and therefore, a material fact that must be disclosed

After listing a property that the designated agent believes is overpriced, the broker returns to the office and complains to a fellow broker at his firm that the property will never sell at that price.

The broker has breached the duty of confidentiality. The designated agent has breached his duty of confidentiality to his client. Other licensees of the firm do not have a relationship with his designated client.

§ Which statements about a broker-in-charge are TRUE? Select all correct responses.

The broker operating as a sole proprietorship is, with rare exception, the designated BIC. and A broker-in-charge must supervise all of the provisional brokers in the office.

A broker is helping her mother find a new home. Which of the following statements is TRUE?

The broker should disclose her interest in the transaction to the seller.

Broker Brenda has been working with buyer client Ben to negotiate an agreement to buy Lisa's property. A day before closing, Ben tells Brenda that his mortgage lender approved him for a loan at 1% higher than he expected. He's not sure if he will be able to afford the monthly payments at that rate and asks Brenda to keep it to herself for now. Brenda agrees, which could be an example of willful omission.

The buyer's financial situation could jeopardize the entire transaction and is a material fact that Brenda has willfully omitted, even though she has a duty to disclose this to the seller customer.

ABC Company was charged with violating federal antitrust laws. ABC Company agreed to a consent decree. Which statement is FALSE?.

The consent decree was issued by an administrative agency.

Which of the following statements regarding installment land contracts is TRUE?

The contract serves as an instrument to transfer title and as a seller financing instrument. An installment land contract is typically more difficult to qualify for than a bank loan. An installment land contract may also be referred to as a right of first opportunity to purchase. The seller is typically responsible for property taxes and property insurance during the contract period.

Which of these do you think would LEAST LIKELY be considered a material fact that must be disclosed to a buyer?

The current owner believes the house is haunted.

In the absence of any agreement, the day of closing traditionally belongs to theseller.

The day of closing is normally allocated to the seller unless the parties have agreed otherwise in the purchase and sale contract.

Which situation describes the government's right of eminent domain?-

The government acquires private property for public use by condemnation. Government regulations that specify minimum construction and building standards to safeguard health, safety, and welfare of the public are known as: building codes

The lender miscalculated the final Cash to Close on a buyer's Closing Disclosure although all of the listed expenses were correct. Which statement is TRUE?

The lender must issue an updated Closing Disclosure; no additional waiting period is required

An apartment rents for $800 for a month-to-month tenancy. What is the maximum amount of the security deposit can a landlord charge?1,200-

The maximum amount of security deposit allowed by law for a month-to-month tenancy is one & one-half month's rent. Had this lease term was month-to-month for 1 year, the maximum amount of security deposit would be two months' rent or $1,600.

a. Who is required to maintain adequate homeowner's insurance on a property?

The mortgagee- The mortgagee has an insurable interest (a legitimate financial interest) in the property and will usually require the borrower (mortgagor) to maintain adequate hazard insurance on the property.

Which of the following statements about the pet fee provision of the North Carolina Tenant Security Deposit Act is FALSE?-

The pet fee also covers service animals.

Doris owns a four-unit apartment building. The rent on each unit is $500 a month. She averages 5% vacancy and collects $600 a year from the coin-operated washer and dryer in the building's basement. What is the potential gross monthly income for Doris's building that an appraiser would use to calculate a gross rent multiplier?- $2k:

The potential gross monthly income is simply the total of the rent that could be collected. Miscellaneous income and vacancy rate would not be included for the purposes of calculating a gross rent multiplier.

a. When determining a listing price, the value of an improvement is equal to: what it a tually contributes in value to that piece of real estate:

The principle of contribution says that a particular item or feature of a property is only worth what it actually contributes in value to that piece of real estate.

Jenny is preparing an appraisal for a vacant land lot. Which is the most appropriate approach to value should she use?- sales comparison because

The sales comparison approach is the most common appraisal approach for single-family residential property and always used for vacant land appraisals.

When using the sales comparison approach to arrive at an opinion of value, an appraiser- looks into the recent past to analyze similar sales.-

The sales comparison approach looks at past sales that are similar to the subject property and that have recently sold in the area.10.The term "amenities," in reference to real property valuation, refers to the features, both tangible and intangible, that enhance the desirability of real estate..

Which statements regarding an installment land contract is FALSE?

The seller is typically responsible for property taxes, property insurance, homeowner dues, and assessments.The buyer is typically responsible for property taxes, property insurance, homeowner dues, and assessments. All of the other statements are true

What happens if a buyer defaults on payments under a land contract?

The seller may reclaim the property.

Which statement best describes a tenancy at sufferance?-

The tenant remained in possession after the expiration of a lease.

What information would probably NOT be considered confidential? the town in which a buyer wants to look-

The town in which a buyer chooses to house hunt is not likely to be confidential. The other information, on the other hand, could have an impact on the bargaining position of a buyer or seller and would, therefore, be considered confidential.

Which statement about trust accounts in North Carolina is not TRUE?

The trust account must be in a North Carolina bank.

§ Carl needs a real estate license if he-accepts a referral fee for bringing a buyer and seller together.:

The two key parameters are that Carl accepted consideration for working on behalf of someone else in a non-exempt situation. He can receive compensation for selling his own property and for reviewing a contract as an attorney.

Which of the following actions by a group of brokers would be considered boycotting?

They decided to avoid showing clients homes listed by Easy Realty.

Ad valorem refers to a tax that is-

based on the assessed value of property

If Ed buys a home, the _____ is the cost of the purchase including the down payment amount and the amount of debt assumed.

basis

David is a paralegal who often prepares documents and coordinates closings. In this role, Davidmust

be under the direct supervision of the closing attorney.

At what point should a seller give the Residential Property and Owners' Association Disclosure Statement to a buyer?

before the buyer makes an offer Sellers must provide a completed Residential Property and Owners' Association Disclosure Statement to prospective buyers no later than the time a buyer makes an offer to purchase.

A listing broker will lose the right to a commission if she was not licensed when the seller entered into a

binding sales contract.

All of the following are examples of steering EXCEPT a licensee persuades homeowners to sell their homes by suggesting that people of a particular protected characteristic are moving into the neighborhood Persuading homeowners to sell their homes by suggesting that people of a particular protected characteristic are about to move into the neighborhood is

blockbusting. The other situations presented are examples of steering.

a. Detailed building plans used to evaluate design, determine feasibility, and guide construction of a structure are called

blueprints

Which method of closing does an attorney typically attend?

both closing methods

A party's failure to fulfill their end of the bargain under a contract, or prohibit the other party from performing the terms of the contract, is known as-

breach of contract.

A real estate sales contract may be referred to as any of the following EXCEPT

brokerage agreement.

Ordinances and regulations that specify minimum construction and building standards to safeguard the health, safety, and welfare of the public are known as

building codes

a. Electrical wiring for a structure must meet minimum standards imposed by the local jurisdiction as set forth in the

building codes

The process whereby state or local government authorities ensure compliance with building codes is called

building inspection.

A buyer and seller have entered into a binding contract using the standard NCAR/NCBA Offer to Purchase and Contract. Closing is scheduled for December 7, but the buyer's current lease ends on November 30. The seller agrees to allow the buyer to take possession of the property on November 30, and they sign a Buyer Possession Before Closing Agreement. Under this agreement, who is responsible for maintaining the property?

buyer

In most residential real estate transactions, who typically chooses the closing attorney?

buyer

who typically chooses the closing attorney?

buyer

Broker Hans is a member of the local MLS. When Hans submits a property listing to the service, he is offering to cooperate with all other MLS member brokers, including

buyer's agents and seller's subagents.

Debts that are considered as part of a borrower's obligations when qualifying for a loan include

car payments.

A mortgage is a real estate financing form called a(n')

cash sale

Investor Fiona can divide before tax cash flow by a property's out of pocket acquisition costs to find her ______ for an investment property.

cash-on-cash return

The ratio of income generated by the property to the cash investment (down payment and settlement costs) in the property is called

cash-on-cash return.

Johanna wants to get a loan to buy a house. When evaluating her credit obligations, which would a lender LEAST LIKELY consider as debt?

cell phone service payment

Which document indicates the status of the title as of the day it is issued?-

certificate o title

The ______________ is the final step of a real estate transaction.

closing

The type of zoning that allows developers to provide a varied selection of lot sizes and housing choices within a single area, often in a planned unit development, is called-

cluster zoning

Which is NOT a fiduciary duty that a broker licensee owes to a buyer client?

comment on the quality of schools in the area

§ The mixing of brokerage operating funds with contract deposit funds is known as-

commingling

Which is LEAST LIKELY to be put into a brokerage trust account?

commission

A sales contract will likely serve all of the following purposes EXCEPT as the

compensation agreement between the seller and the listing broker.

Lester signs a contract to buy Kathy's house. The contract is conditional on Kathy installing new carpet throughout. Kathy installed the carpet at a cost of $12,500. Before closing, Lester tells Kathy that he does not want to buy the house. Kathy sues Lester for $12,500 and wins. The court awarded her-

compensatory damages.

Which of these circumstances is NOT cause for eviction?-

complaining to the local housing authority about the plumbing

The attorney who conducted the settlement meeting updates the title by

conducting another title search.

Under the NCAR/NCBA Offer to Purchase and Contract, the seller is responsible for which of the following financial obligations?

confirmed special assessments

Property uses that complement each other are evidence of the theory of .

conformity

Licensee Dennis is hosting an open house when prospects Bob and Betty Byers arrive. Dennis asks the Byers if they have someone helping them find a home. The Byers reply that licensee Sam has taken them to several homes, but they aren't sure if they have an exclusive agreement with Sam. What is the best action for Dennis to take?

contact Sam and ask him the nature and terms of any agreement he has with the Byers Because the Byers aren't sure if they signed an exclusive agreement with Sam, Dennis may call Sam to find out.

A clause in a sales contract states that the agreement is dependent on the property appraising at or above the purchase price. This is called a(n)

contingency.

A clause in a sales contract states that the agreement is dependent on the property passing a radon test. This is called a(n)

contingency.

To account for any new defects or clouds, a(n) ____________ should be brought to closing to itemize any changes in a property's title since the preliminary title report was issued.

continuation A continuation, or continuance, is used to bring down the title report from its preliminary issuance to the current date of the settlement to account for any new defects or clouds.

Harvey owns a large home in a nice neighborhood. His house, impeccably maintained, is at the upper limit of its value. After he retired, Harvey spent $28,000 building a new deck and greenhouse on the back of his property. Although he enjoyed the new features, they did not add anything to the value of his home. This is an example of the principle of-

contribution.

Which type of mortgage is NOT insured or guaranteed by the government?

conventional mortgage

§ Broker-in-charge Sue deposits a client's earnest money check into her personal account to cover some short-term expenses. She plans to move the money into the office escrow account when she gets her commission on a deal that's about to close. Her actions could be considered an example of:

conversion: Conversion is stealing funds or converting funds to one's own personal use.

The amount invested in a property in order to develop, produce or build is called-

cost

A listing broker receives two offers on the same property, which she presents to the seller. In this situation, the seller can do all of the following EXCEPT

counter both offers.In a multiple-offer situation, the seller may decide to accept one offer and consider entering into a back-up contract, accept one offer and reject all other offers, counter one offer and reject all other offers, or reject all offers. A seller cannot accept or counter both offers; doing so may obligate the seller to sell the property to two different buyers

Sam's house is on the market for $160,000. Taylor offers to buy it for $150,000. Sam is eager to sell, but wants to get at least $155,000, so he notes that in the agreement of sale and returns it to Taylor. This is an example of a(n)-

counteroffer

A buyer's agent submits an offer to the listing agent. The listing agent reviews the offer with the seller, and the seller decides to change the amount of the earnest money deposit. The seller marks and initials the change and signs the offer. The listing agent emails the signed offer to the buyer's agent who forwards it to the buyer. The buyer initials and dates the change and emails it back to the buyer's agent. The buyer's agent calls to inform the listing agent that the buyer accepted and initialed the change, and the listing agent calls the seller. Copies of the final document are delivered to the listing agent and the seller. A binding contract was created when the buyer's agent informed the listing agent that the buyer accepted and initialed the change

counteroffer. The counteroffer became a binding contract when the buyer's agent called to notify the listing agent of the buyer's acceptance of the counteroffer. At this point, acceptance by the offeree (the buyer) was communicated to the offeror's agent.

James offers Emily $195,000 to buy her house. She looks at his offer, but will not take less than $198,000. She makes the appropriate correction to the offer and her broker returns the offer to James's agent. Emily is the

counterofferor.

On a settlement statement, the buyer's mortgage is a

credit to the buyer.People often think of a mortgage as a debit, but on the settlement statement it is actually a credit to the buyer; it reduces the amount of money that the buyer must bring to settlement.

Who is responsible for providing a copy of the Closing Disclosure to the borrower according to TILA?

creditor

Felicia is a buyer's agent for Kevin. She sees a "For Sale By Owner" sign in front of Ron's house that indicates a 3% commission would be paid to any broker who procures a buyer. If Kevin makes an offer on that property through Felicia, what is seller Ron's relationship to Felicia?

customer

Jack has a pet in his rental unit and pays a pet fee as contained in his lease agreement. If Jack's dog damages the wall, how can the landlord collect

damages from Jack for this repair to the wall?- security deposit

Ten years ago, Daniel bought a 20-acre farm and orchard. He put up a small building from which to sell produce. Now the area is zoned residential and many exclusive homes are built. Daniel's farm stop is very popular and brings a lot of traffic to the area. If the neighbors sue to have the farm stand removed, why might the court rule in Daniel's favor?-

daniels farm stop is a noncofmoring use and is grandfathered in the zoning

When calculating prorations on a Closing Disclosure, unpaid real estate taxes are entered as a ______ to the seller and a _____ to the buyer.

debit / credit Since property taxes are paid in arrears, the buyer will pay for the time during which the seller occupied the property. Therefore, property taxes are usually prorated as debits to the seller and credits to the buyer.

Lenny would have received $120,000 from the sale of his house, however, he agreed to pay the buyer an allowance of $700 to have the house painted. How will that $700 show up on a settlement statement?

debit to Lenny and credit to the buyer A settlement statement provides a financial accounting of a buyer's and sellers' settlement costs.

Lenny would have received $120,000 from the sale of his house, however, he agreed to pay the buyer an allowance of $700 to have the house painted. How will that $700 show up on a settlement statement?.

debit to Lenny and credit to the buyer This is an example of a double-entry on a settlement statement. Lenny is paying out $700. It is debited from his side of the balance sheet and credited to the buyer's side, but it is NOT a proration

Investor Doug can subtract annual ______ from net operating income to find the cash flow of his investment.

debt service

If the landlord fails to perform her duty, the tenant can NOT

decide by himself to stop paying rent.If the landlord fails to perform her duties under the rental agreement, even in the case of constructive eviction, the tenant is never allowed to unilaterally withhold rent payments without a court order. The tenant can sue for damages (including back rent payment refunds), abandon the property, or terminate the lease in this case, however

Which action by a group of real estate licensees who are affiliated with different firms would be considered illegal boycotting?

deciding to avoid showing clients homes listed by Discount Dan

The dollar amount the insured must pay out-of-pocket on each loss is the:

deductible

A bank notifies a homeowner that she is delinquent on her mortgage and threatens foreclosure. The homeowner offers to give the property to the bank if the bank will NOT file the foreclosure suit against her. This is known as

deed in lieu of foreclosure. With a deed in lieu of foreclosure, the deed to the property is given by a borrower to the lender to satisfy the debt and avoid foreclosure (also called voluntary conveyance).

Which is an example of a private land restriction?

deed restriction : Deed restrictions are private land restrictions. Common public restrictions are zoning, building codes, subdivision regulations, and environmental laws.

Becca owes $145,000 on her mortgage loan and back property taxes of $5,400. The bank foreclosed on the property, selling it for $140,000 at a sheriff's sale. The costs associated with the proceeding were $1,200. If the bank wants to recover the balance of what Becca owes, it can seek a

deficiency judgment against Becca.

When a changed circumstance has occurred to the loan product after the Closing Disclosure has been delivered to the borrower, the loan originator must

deliver a revised Closing Disclosure and apply a new three-day waiting period before loan consummation.

If a broker receives an option fee that is paid in cash, the broker must .

deposit it in the firm's trust account within three banking days of receipt.

Which of the following is an activity that typically results in a decrease in the original basis amount?-

depreciation allowed if home is used for rental purposes

An appraiser used various cost manuals and regional multipliers, as well as her own experience, to determine that it would cost $69 per square foot to replace the subject property. At 2,880 square feet, she determines it would cost $198,720 to rebuild the house. To find the value of the subject property, she must also factor in-

depreciation and land value.

Frank is a real estate broker with Top Realty. Frank would NOT have an agency relationship to all of Top Realty's clients if it practices

designated dual agency.

Based on the Residential Lead-based Paint Hazard Reduction Act, what must a seller do?

disclose any known lead-based paint hazards

In a buyer agency contract, broker Martina's buyer client Barry agrees to pay her a 1% bonus regardless of whatever commission split is offered by the listing broker if she finds him a property in less than 30 days. Barry makes an offer on a property two weeks later where the listing broker is offering 3% to the selling agent. Martina must- A buyer's agent is not obligated to disclose the terms of his agreement with his buyer principal with anyone else. The other statements are false.-

disclose to client Barry the 3% commission offered by the listing broker.

In a buyer agency contract, broker Martina's buyer client Barry agrees to pay her a 1% bonus regardless of whatever commission split is offered by the listing broker if she finds him a property in less than 30 days. Barry makes an offer on a property two weeks later where the listing broker is offering 3% to the selling agent. Martina must:

disclose to client Barry the 3% commission offered by the listing broker.

For which action might a North Carolina broker be subject to administrative discipline from the Real Estate Commission?-

drafting a contingency to a sales contract so the seller can remain in the house for two weeks after closing— A broker cannot draft any real estate contracts, even a contingency to a contract. Instead, the broker must use the approved contracts on which the broker can fill in the blanks. The other situations do not represent prohibited conduct.

What action by a real estate broker would likely be considered the unauthorized practice of law?

drafting an offer

Which type of agency relationship can create an inherent conflict of interest?

dual agency

A mortgage clause that permits the lender to call the outstanding balance due and payable should the property be sold by the borrower is a(n).

due on sale clause. A due on sale clause, also called an alienation clause, gives a lender certain rights when a borrower transfers property

A(n) __________is a right to use another person's real property for a particular purpose.

easement

A thunderstorm knocks down power lines on John's property. Big City Electric enters John's property without his permission to fix the lines. This is an example of

easement in gross. An easement in gross burdens one parcel of land for the benefit of an individual or a corporation.

Which best describes the due diligence period in a purchase contract?

effective date through 5:00 p.m. on the date indicated in the contract

The annual percentage rate (APR) is also referred to as

effective rate of interest.

Jeremy must give the lender a valid reason for his short sale request. Which is LEAST LIKELY to be considered a valid reason by the lender?

enormous credit card debt- Enormous credit card debt indicates the seller is careless about money management, which will likely cause the lender to reject a short sale application.

The right of a debtor to redeem the property from foreclosure proceedings prior to a confirmation of sale is called

equitable right of redemption.

Under an installment land contract, the buyer holds

equitable title.

Every month, borrower Steve pays an additional $385 to his lender to cover the costs of his property taxes and homeowners insurance. The lender must maintain these funds in a(n)-

escrow account.

In an escrow closing, which party is usually present?

escrow agent

Which closing method is handled by a neutral third party who may be an escrow agent or an attorney?

escrow closing method

Which estate does NOT include legal title to real property?-

estate for years

You find out that the house you grew up in is for sale. The seller tells you that there's a $5,000 lien on the property that he has no interest in paying, but he'll sell you the house with the lien. The title insurance company will treat that lien as a/an-

exception: A known defect will be treated as an exception to title insurance coverage.

Jonah lists his home with PDQ Realty, allowing them to put a sign in the yard, list it in the local multiple listing service, and advertise it in the local newspaper. During the listing period, Jonah sells the home to his brother and is not obligated to pay PDQ any commission. What type of listing did Jonah have with PDQ?

exclusive agency

Seller Nicholas signed a contract that stipulates the broker will be compensated only if someone other than Nicholas finds the buyer. What type of agreement is this?

exclusive agency agreement

The seller lists her house with New Age Realty. The next day, the seller goes to work and mentions listing her house. A coworker expresses interest in the listing. Which listing would entitle the broker to a commission if the coworker makes an acceptable offer to the seller?

exclusive right to sell

Which provision is included in the Additional Provisions Addendum Standard Form 2A11-T?

expiration of offer The addendum includes a provision that addresses the expiration of the offer. The other items listed are addressed in separate addenda.

If a buyer wants the seller to make repairs, the buyer's agent should write a request for repairs and provide it to the seller prior to the

expiration of the due diligence period.

Which of the following activities could NOT be performed by an unlicensed personal assistant of a real estate broker?-

explain the terms of an offer to a seller- Unlicensed assistants are limited in their interactions with prospective parties to a real estate transaction and could not explain the terms of an offer to a seller. They can, however, work with other licensees and perform many administrative tasks within the brokerage. Of course, even permitted tasks must be done under the supervision of a licensee and, often, with the consent of the client.

Licensee Lee signs a contract with seller Hannah indicating that she will pay Lee a 6.5% commission if he finds a willing and able buyer for her house. Which option best describes this agreement at this time?

express and executory

Broker Bill is hired by seller Sue and buyer Ben to assist them with their real estate deal. They are not looking for representation, just administrative help to navigate the process. Bill MOST LIKELY is a

facilitator

A licensee may be subject to disciplinary action for drafting conflicting and ambiguous terms in an agreement.

false

After entering into a binding contract, buyer Claire asked seller Alex if he would leave the window air conditioning units and include them with the purchase price. Alex agreed orally to do so, but they never documented their agreement in writing. Alex is legally obligated to include the air conditioning units with the sale

false

An option to purchase is a bilateral contract because one party promises to buy and another party promises to sell.

false

Ella has a right of first opportunity to purchase Paul's house. Before Paul can offer to sell to Ella, he must have a bona fide offer from a third party

false

Seller Willie has entered into a binding contract to sell his house to buyer Penny. Before the sale closes, another buyer, Brady, submits a back-up offer, which Willie accepts. In this situation, Brady is entitled to have access to Willie's original contract with Penny.

false

The developer must designate a time share registrar for every project to actively supervise all salespersons.-

false

Transactional brokerage is acceptable in North Carolina with the informed written consent of both parties to the real estate transaction.

false

When property being sold is unimproved land, the process of buyer's due diligence does not apply.

false

broker-in-charge CANNOT earn interest on the money kept in the brokerage trust account.

false

Real estate brokers may assist buyers and sellers with contract language if the parties mutually agree to enter into an installment land contract.

false Buyers and sellers should be referred to an attorney for preparation of an installment land contract, option contract, right of first refusal, or right of first opportunity to purchase and for advice regarding these documents. Drafting of such documents by a broker constitutes the unlawful practice of law.

GRM is a simple calculation that does not consider expenses or vacancy/collection losses

false:

It is legal for a landlord of a suburban apartment complex to ask a 57-year-old prospective tenant: "Does your grandson live with you?"

false: That would be discrimination based on familial status. The apartment complex must meet the specific criteria highlighted regarding older persons for the familial status exception to apply.

When qualifying prospective tenants, a property manager is prohibited from using which of the following?-

familial statues

The Federal Fair Housing Act prohibits discrimination against-

families with children

As the property manager for owner Ross, Monica is held to high standards of good faith and loyalty, known as:

fiduciary obligations

Property manager Chandler's _______ to property owner Phoebe include obedience, loyalty, disclosure, confidentiality, accountability, and reasonable care.-

fiduciary obligations

When creating an operating budget, a property manager will include property taxes and insurance in what category?

fixed expenses

The underground base that supports a foundation is called a

footer

Most homes today are heated using

forced-air furnaces

o Which of the following tax, specific to real estate, is NOT deductible as an expense when calculating federal income taxes?

foreign taxes paid on real estate

Which of the following tax, specific to real estate, is NOT deductible as an expense when calculating federal income taxes?

foreign taxes paid on real estateA homeowner cannot deduct foreign taxes paid on real estate. The other taxes listed can be deducted.

All of these are duties of a settlement agent EXCEPT

forexecuting loan documents

Joseph wants to sell his property, so he invites agents from four different brokerage firms to interview before selecting the listing agent who suggests the highest listing price. How many copies of the Working with Real Estate Agents brochure should he have?

four copies

A(n) ________ loan is repaid with periodic payments of both principal and interest so that the entire loan amount is paid in full at the end of the loan term.

fully amortizing

The second bedroom of a house must be accessed through the first bedroom. This is an example of-

functional obsolescence

#9: The second bedroom of a house must be accessed through the first bedroom. This is an example of:

functional obsolescence.

Brady's house has two bedrooms and one bathroom, which is accessible only by entering through one of the bedrooms. This is an example of:

functional obsolescence.

a. When preparing to show a listed property at an open house, an agent should ask the homeowner to remove all of the following EXCEPT-

furniture.

Through a ______________ warranty deed, the grantor warrants title against all defects that may have arisen before or during the grantor's ownership.-

general

Lou is an employing broker. He contracts with licensee Ed to work for him as an affiliated real estate broker. What level of agency authority does Ed have?

general agent

Which type of agent is a property manager usually considered to be?

general agent

The primary purpose of licensing law is to protect the-

general public.- Although license laws certainly benefit everyone, their primary purpose is to protect the public interest by ensuring a consistent level of competence, ethics, and professionalism.

Stedman granted a deed to Michelle using these words: "I, Stedman, hereby convey and warrant 12 acres of my estate to Michelle, to have and to hold forever." In all likelihood, what type of deed did Michelle receive?-

general warrant deed

Which deed guarantees title against all encumbrances occurring during any previous ownership, usually with the phrase "convey and warrant forever"?-

general warrant deed

Lucy leases a storefront for her candy business. The rent for the first six months was $500 and is set to increase 10% every month for the next 18 months as the business takes off. Lucy has what kind of lease?-

graduated lease: A graduated lease will spell out step-by-step rent increases. It has rent increases stipulated in certain amounts at specified times during the term of the lease, generally paid in installments.

A(n) ______ includes a plan in which payment subsidies in the early years keep payments low, but payments increase each year until they're sufficient to fully amortize the loan.

graduated payment mortgage

The type of lease in which the landowner pays all property expenses is called a(n):

gross lease:

Homeowner's insurance is sometimes called:

hazard insurance

§ Broker Damian is holding the earnest money deposit for buyer Julie. A week before closing, the seller rescinds the contract and Julie asks for her earnest money back. The seller does not agree, and the contract specifies that both parties have to agree on earnest money disbursement. Under what circumstances could Damian disburse the earnest money? Select all correct responses.

he receives a court order providing for disbursement., He receives written direction from buyer and seller agreeing to disbursement., He turns the funds over to the Clerk of Superior Court.

§ Margaret has been transferred from Charlotte to Dallas and she must move before she's able to complete the sale of her property. She would like her sister Martha to go to the closing table and handle any last-minute contingencies from the contract. In exchange for her services, she intends to pay Martha a fee. To accomplish this task legally, Margaret must name Martha:

her attorney-in-fact

The most effective insulation has a

high R-value.

A modest house is listed for sale but the advertisements emphasize the value of the land in the newly commercial-rezoned area, rather than the home and its features. This rationale applies to which principle of value?

highest and best use While not as important for homes located in the middle of residential neighborhoods, highest and best use becomes a vital consideration when examining vacant land or land that has changed zoning since the original structure on it was built.

There are several economic philosophies of highest and best use that are foundational to an appraiser's highest and best use determination. One philosophy is that

highest and best use- allocates land resources efficiently, maximizing economic return.

To whom does a broker owe fiduciary duties?

his client only A broker is an agent of his employing broker as well as a subagent of his client. As such, there is a fiduciary relationship with both the client and the employing broker.

Reproduction cost, as opposed to replacement cost, is typically considered for which type of structure?-

historical buildings

Which of the following are the most popular coverages form and is the minimum coverage required by mortgage lenders?-

ho-3

Larry bought a house on an installment land contract. Under this contract, he

holds equitable title to the property.

Which of these settlement costs would LEAST LIKELY be considered an expense required by the lender?

home inspection A lender would not usually require a home inspection; it's an optional expense to a buyer. To get a mortgage loan, however, the lender will most likely require an appraisal, a credit report, and a pest inspection

Which would most likely NOT be considered functional obsolescence?-

home with crumbling roof- Functional obsolescence is a problem with the design of the structure itself. A roof can be replaced relatively easily; it's an example of physical deterioration

Of these, which expense would be a debit to the seller and a credit to a buyer

homeowners association fees not yet paid If the buyer has to pay HOA fees for the month of closing, the buyer is credited and the seller is debited. These other prorated expenses would be a debit to the buyer and a credit to the seller.

If you use this calculation when evaluating income—PITI / Gross Monthly Income—you have just determined what?

housing expense ratio

One purpose of a comprehensive plan is to manage a community's-

housing needs

a. Which homes should a real estate licensee consider when performing a CMA? Select all correct answers.

i.homes currently listed for sale in the market ii.homes that have sold recently in the market and area where the subject is located iii.homes where the listing agreements have expired iv.homes that were taken off the market

A real estate sales contract may be referred to as a(n) offer to purchase and contract. Broker Grace's buyer client is interested in purchasing a house that is listed by broker Keith. What information must be included in the offer if Grace uses a preprinted offer to purchase and contract form?

identification of the brokers, Grace and Keith, their firms, and the party each represents

Broker Frank has been trying for several months to sell Sandra's home. When Frank contacts Sandra to renew the listing, Sandra informs him that she just signed a listing agreement with REALTOR® Jim that becomes effective one day after the current listing expires. Jim has violated the Code of Ethics

if he initiated the contact with Sandra. If Sandra initiated contact with Jim to arrange a new contract when the old contract expired, there would be no violation.

What is the main concern with zoning ordinances of a seller's property?

if it's appropriate for a buyer's planned use and no zoning violations exist

Broker Dylan's buyer client intends to purchase a home using an FHA loan. Dylan completes the FHA/VA Financing Addendum, which allows the buyer to back out of the contract without penalty-

if the value of the property is less than the purchase price.

At what point should a buyer contact a home inspector?

immediately after the purchase agreement is accepted and signed

Melissa went to the dry cleaner and dropped off her good wool coat to be cleaned. When the clerk accepted the coat, Melissa and the dry-cleaning operation had just entered into what type of contract?

implied

A broker has a duty to treat all parties to a transaction honestly and fairly

in all transactions.

Jane works as a clerical assistant for a brokerage company. Under the North Carolina Real Estate License Law, Jane's broker-

in-charge could be subject to disciplinary action if Jane: offers to negotiate the details of a buyer client's purchase contract.

What is the description and the status of a license issued to someone who meets the requirement for licensure and just passed the licensing exam?-

inactive broker license with provisional designation- An applicant who meets all requirements will be issued an inactive broker license with a provisional broker designation. The new licensee must affiliate with a qualifying broker and the broker-in-charge must file a License Activation and Broker Affiliation form with the Commission to activate the license.

Jillian is conducting an opinion of value for a condo that will be used as an investment property. Which is the best approach of value might she use for this?

income approach The income approach (also called the capitalization approach) is most relied upon in appraising investment properties, when income data for comparable properties is available.

Insurance agents who sell products from several different companies and are paid a commission from each are called:

independent agents

Which individual is NOT protected under the disability clause of the federal Fair Housing Act?-

individual who is addicted to illegal drugs

Which individual is NOT protected under the disability clause of the federal Fair Housing Act?-

individual who is addicted to illegal drugs Individuals who are illegally addicted or have been convicted of manufacturing or distributing a controlled substance are not protected under the federal Fair Housing Act.

A(n) _____note calls for payments of principal and/or interest at designated intervals.

installment

An ______ sale is a sale of property in which the seller receives at least one payment after the tax year of the sale.

installment

Carol and Leslie enter into a contract stating that Carol will pay property owner Leslie $650 per month for the next 20 years. Carol will live in the house and pay all expenses including property taxes, insurance, and maintenance costs. Leslie will continue to hold legal title until the property is paid off. What kind of contract do they have?

installment land contract

To purchase a property insurance policy, the insured must have a legitimate financial interest in the subject property, called-

insurable interest: To purchase a property insurance policy, the insured must have a legitimate financial interest, called an insurable interest, in the subject property.

insurance policies are usually assignable only with the written consent of the-

insurer

Corbin is selling a home that has an $80,000 mortgage loan that needs to be satisfied as part of the purchase transaction. All of the following would help Corbin use an assumable loan as a marketing tool EXCEPT

interest rates are falling.

When comparing the charges on a Loan Estimate and a Closing Disclosure, which of these charges could legitimately change by any amount?

interim mortgage interest Depending on what day the closing takes place, the interim mortgage interest owed by the borrower could be different from what was shown on the Loan Estimate. The other charges may not change or may not change above a certain tolerance.

According to RESPA, all of the following would be considered settlement service providers EXCEPT-

interior design companies

An independent contractor

is not subject to withholding requirements. An independent contractor is responsible for her own taxes. Her employer does not withhold anything

Buyer Dan purchases a residential property with the intention of using it for his commercial landscaping business. Later, Dan finds out that the property isn't zoned for commercial use and he isn't permitted to use it for his business. Most likely, Dan-

is stuck with the property since this is a valid executed contract.- T here is nothing to suggest that this is anything but a valid executed contract. Dan is mostly likely stuck with the property and cannot use it for his commercial landscaping business.

negligent omission

is the unintentional failure to disclose.

The governmental agency that oversees the activities of real estate licensees, including offers and sales contracts,

is theNorth Carolina Real Estate Commission.

A sherifs deed:

is used in sheriff's sale at foreclosure to satisfy a judgment to recover a debt.

Building codes are primarily enforced by-

issuance of permits

Which statement is TRUE about the Working with Real Estate Agents brochure?

it does not create an agency relationship between the broker and the consumer.

If someone does not pay their property taxes on time, on which date does interest begin accruing?-

january 6 of the following year- If someone does not pay their property taxes on time, on which date does interest begin accruing?

Which are liens (involuntary liens) placed on property

judgment lien mechanic's lien property tax lien

In a lien theory state, what foreclosure process generally must be followed?

judicial foreclosure

A lease agreement creates a: leasehold estate for the lessee. The lease agreement itself creates both a nonfreehold estate and a freehold estate in the real property simultaneously. The

landlord/lessor owns the property (freehold) but has conveyed possession to the tenant/lessee (nonfreehold or leasehold).

All of these disclosures are included in the Vacation Rental Addendum EXCEPT

lead-based paint hazards.

Under an installment land contract, the seller holds

legal title as security.

Which branch(s) of government enact statutory laws?-

legislative

The higher the capitalization rate expected by an investor, the:

less value a property would have.

Lyle leases his property to Shawn. Lyle is the _________ and Shawn is the __________:

lessor / lessee.

An important part of the relationship between a brokerage firm and an affiliated licensee who is an independent contractor is that the

licensee earns commissions based on the results of his work efforts.An independent contractor is paid commissions for sales or other output, rather than the number of hours worked.

Jim made an earnest money deposit of $2,000 when entering into a contract to buy Allen's house. The contract indicated that Allen would get the earnest money in the event of a breach by Jim. The day before settlement, Jim backs out of the contract, citing health issues, and Allen gets a check for $2,000. This is an example of

liquidated damages.

Jane consults a plat map to confirm the legal description for a piece of property she is preparing to purchase. What type of legal description is being used for this property?-

lot and block

Property manager Mike becomes an agent of property owner Leslie by signing a property-

management contract

The Federal Reserve (or the Fed) is responsible for

managing the supply of money

Mark is the broker-in-charge at an agency that practices designated dual agency. Broker Glenn brings Mark a listing contract with a seller. Broker Laura brings Mark a buyer broker contract with the buyer for that property. Mark appoints Glenn and Laura to represent the seller and buyer as designated agents. Who, if anyone, would be considered a dual agent in this scenario?

mark only- In North Carolina, a designated agent is appointed to the exclusion of all other affiliated licensees. Only BIC Mark would be considered a dual agent.

A title that is free and clear from undisclosed encumbrances or other defects that would expose a purchaser to litigation or impede a purchaser's ability to enjoy the property or to later sell the property easily is considered-

marketable title

Which of the following circumstance is NOT an exception to the two-year provision of Section 121 of the Taxpayer Relief Act of 1997?

marriage

What is a written document created by a planning board that identifies goals, objectives, principles, guidelines, policies, standards, and strategies for growth and development of a community?-

masterplan

A short sale

may take additional time to close because the seller's lender must approve the sale

A broker's buyer client wants to make an offer on a property. If the broker is NOT a member of the North Carolina Association of REALTORS®, the broker

may use a contract form that is drafted by an attorney. Real estate brokers are not permitted to draft real estate contracts. A broker may fill in or complete preprinted contract forms that have been drafted by an attorney. The Real Estate Commission does not publish standard contract forms, and only members of the North Carolina Association of REALTORS® may use standard forms that include the REALTORS® logo.

Joe surrendered his license to the Real Estate Commission 18 months ago. To reinstate it, he is NOT required to-

meet the requirements for original licensure, including the education

Which list of items is tax-deductible for a primary residence?-

mortgage interest, property taxes, in-home office

Which list of items is tax-deductible for a primary residence?:

mortgage interest, property taxes, in-home office-Any maintenance expenses, such as a new roof, are not deductible on a primary residence. Mortgage interest, property taxes, interest on a home equity loan, casualty losses not covered by insurance, and in-home office use are deductible on a first and second home.

Which of these liens is NOT an involuntary lien placed on property?

mortgage lien

Which statement is FALSE when a bond is used in lieu of a mortgage note as a promise to pay? The bond holder is not entitled to a repayment of a

mortgage loan.

The document that creates a lien against real property as security for the promise to repay a loan is called a(n)

mortgage.

A lender typically requires title insurance to cover the-

mortgagee-The lender requires insurance only to protect itself, the mortgagee. It may be advisable, or even customary, for insurance to be purchased for the borrower (the mortgagor), but usually it is not required.

A _____ is the borrower who pledges property to a lender as collateral.

mortgagor

The borrower who pledges property to a lender as collateral is referred to as the

mortgagor.

§ Trust accounts:

must be FDIC-insured

You buy a two-year old house in a development and receive a copy of the declaration of covenants, conditions, and restrictions (CC&Rs). Five months after you move in, you start to paint your house bright purple. You receive a notice to stop. You:

must comply with the CC&Rs, since it specifies what colors are appropriate for homes in the development.

The provision of the North Carolina Residential Rental Agreement Act that holds that if a party to a lease fails to act or hold up his end of the agreement, the other party is relieved of her respective responsibility is referred to as

mutually dependent.

June owns a florist shop on the outskirts of town. As the town grows, more homes are built and the area where her shop is gets rezoned residential. What specific exception would allow June to still operate her shop?-

nONCOMFORTING USE- A nonconforming use occurs when land use does not conform to current zoning laws but is legally allowed because the land use was established before the new zoning laws were enacted.

Broker Sara has sold many houses in Happy Acres subdivision. She tells prospective buyer Ann that her kids would be really happy at Buckeye Elementary School, one of the best schools in the district. Sara did not realize that the house Ann is looking at is one of four properties on a cul de sac in Happy Acres where children go to Acorn Elementary School. This is MOST LIKELY an example of-

negligent misrepresentation

Broker Betty relied on her seller client's word about the age of the roof on the house, and so indicated in the MLS that is was two years old, when, in fact, it was 12 years old. Betty could be guilty of-

negligent misrepresentation.

Broker Mike relied on his seller client's word about the age of the furnace, and so indicated in the MLS that is was two years old, when, in fact, it was 12 years old. Mike could be guilty of

negligent misrepresentation.

Broker Julie is showing a listed property when a buyer customer asks about the condition of the roof. Julie replies that, to the best of her knowledge, the roof is in good shape. In fact, the roof has a leak that her seller client never told her about. This could be an example of

negligent misrepresentation. Broker Julie has misrepresented the condition of the property and is therefore negligent. While she may not have intentionally misrepresented the condition of the roof, she should have exercised reasonable care and at least inquired about the roof before making any statements concerning its condition.

§ Briana is the unlicensed office manager of a large apartment complex, employed by Gateway, Inc., a licensed property management broker. When prospective tenant Tony comes into the office to inquire about renting an apartment, Briana CANNOT-

negotiate the amount of the security deposit Tony will pay.

A seller calls you to list his home. He says he wants $75,000 in his pocket at closing, and you can keep the rest for your commission. What type of listing would this be?

net listing

Seller Sam calls a real estate agent to list his home. Sam tells the agent that he wants $156,000 in his pocket at closing and the agent can have the rest for the commission. What type of listing would this be?

net listing

An optionee pays an option fee of $10,000. If he does NOT exercise his option to buy the property during the specified time period, does he get his $10,000 back?

no

Buyer Phyllis spends an entire Sunday going from open house to open house. She walks away with a dozen Working with Real Estate Agents brochures. Does she now have a dozen buyer's agents representing her?

no

If an advertisement discloses only the APR, what additional disclosures must a lender include in her advertisement?

no additional disclosures are required When only the APR is advertised, no additional disclosures are required, according to TILA

The lender must issue an updated Closing Disclosure;

no additional waiting period is required.

The NCAR/NCBA Offer to Purchase and Contract includes

no contingencies for appraisals, financing, or inspections.

Sandra is selling a parcel of vacant land, which is listed by broker Frank. Buyer Karen submits an offer using the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T. If Sandra accepts the offer, who is responsible for obtaining a home warranty?

no one

Dave and Sue are affiliated licensees for #1 Realty. Over lunch one day, they discuss the new Save-a-Lot Brokerage in town that charges a flat $2,000 fee instead of a commission rate. They decide that they will not show Save-a-Lot's listings to prospective buyers. What type of violation might this situation be considered, if any?

no violation Because they are affiliates of the same brokerage firm and did not involve licensees from other firms in their decision, they are not guilty of violating antitrust laws.

Ken and Joe are out at a bar drinking. During the evening, Ken writes a note on a cocktail napkin agreeing to sell his car to Joe for $500. After they both sign it, Ken pockets the money and hands the keys over. The next day, Ken has no idea where his car is and how he came to have $500 in his wallet. Was this a valid contract?

no, because Ken was incapacitated If he was intoxicated, Ken lacked the contractual capacity to enter into a valid contract. Under other circumstances, a contract written on a napkin could be valid. Internal Reference: Basic Contract Concepts, Terminology and Classifications; Contractual Capacity

Question Agent Kelly, eager to get her first listing, talks her elderly neighbor, Ann, into signing an agreement that would pay Kelly a 10% commission if she finds a buyer. Kelly finds a buyer and the sale concludes. Kelly wants her commission, but Ann's family contests, saying Ann, diagnosed with dementia, was coerced. Is Kelly likely to get her 10% commission?

no, because the listing agreement is voidable by Ann

§ Brian has been appointed the administrator of his grandfather's will. One of his responsibilities will be to sell his grandfather's 25 properties so that he can distribute the funds to Grandpa Joe's many heirs. Assuming he does not want to use a broker, does Brian need to have a real estate license to sell the properties?-

no, if he does not receive commission on the property sales: Since Brian is acting in his capacity as a court-appointed personal representative, he is not required to have a real estate license to sell his grandfather's properties, no matter how many properties he sells, as long as he is compensated only with an administrator's fee for his services and not a real estate commission.

Broker Emory's buyer client has made an offer on Wesley's house, which is listed by broker Jennifer. While Wesley is signing the offer, Emory calls Jennifer to inform her that the buyer has withdrawn the offer. Is there a binding contract?

no, the offer was revoked before acceptance was communicated to the offeror

Sean was arrested for fraud 12 years ago but the charges were dropped for lack of evidence. Sean decided that the Commission did not need to know about an arrest, so he left that off his license application. Would this be grounds for discipline?

no. As long as the charges were dropped or Sean was found not guilty, he does not have to report the arrest. But if he was convicted or pled no contest to the charge, Sean obtained his license through false or fraudulent representation and could be subject to administrative discipline.

In North Carolina, a CMA/BPO may be prepared for compensation by: a non-provisional broker for a

non-client

Tony works as a barber in the shop his grandfather built 50 years ago on the street in front of the family home. If the area was zoned residential 25 years ago, the barbershop is best described as a/an-

noncofming use

Fred owns a gas station on the edge of town. As the town grows, more homes are built and the area where his gas station is gets rezoned residential. What specific exception would allow Fred to still operate the gas station?-

noncomforing use

Jack knows that his neighbor Peg's brother is moving to town. He tells Peg that if she gets her brother to buy his house, he'll give her a 5% commission, even though she's not a real estate licensee. Peg's brother buys the house, and Jack doesn't pay her a dime. What can Peg do to get her commission?

nothing; she is not a licensee and is, therefore, not entitled to a commission

Which sequence of events BEST represents the steps in a judicial foreclosure?

notice of foreclosure; reinstatement period; foreclosure action; redemption period; sheriff's sale With a judicial foreclosure, the lender must first record and then serve a notice of foreclosure when the borrower defaults. After the reinstatement period expires, a foreclosure action may be filed in court. After the redemption period expires, a sheriff's sale is held.

Ned has a signed agreement to buy Tim's car. The day before the title transfer, Ned calls Tim and says that he has changed his mind, but his sister Fay would like to buy the car on the same terms. Tim substitutes Fay's name for Ned's on the agreement. This is an example of

novation.

What does an agent owe to a client that he does NOT owe to a customer?

obedience

What duty would require an agent to list a property for more than the agent believes its worth because the seller insists?

obedience

When qualifying for a conventional mortgage loan, which would a lender LEAST LIKELY count as allowable income?

occasional overtimeIncome should be stable and durable. Occasional income would likely not be allowed when determining a borrower's qualifications for a loan.

Sally was interested in renting a unit in an owner-

occupied duplex. She called a broker about it who told her that the owner, his client, does not allow children. Who, if anyone, could be held liable for violating fair housing laws in this situation?- both the broker and the owner

Negligent misrepresentation

occurs when false statements are made unintentionally. Here, the false statement is the result of a lack of actual knowledge, carelessness, or incompetence, rather than intent to deceive. This is sometimes referred to as "constructive fraud."

Buyer Sean and seller Sarah have entered into a binding contract using the NCAR/NCBA Offer to Purchase and Contract. During the due diligence period, Sean discovers that the property is located in a Special Flood Hazard Area. If Sean decides to terminate the transaction and provides proper written notice to Sarah before the due diligence period expires, Sean is entitled to a refund

ofthe earnest money deposit only. If a buyer provides a written termination notice by the date and time specified, any earnest money deposit is refunded to the buyer. The due diligence fee is not refunded.

RESPA applies to:

one- to four-family residences.

In an option to purchase real estate, the potential buyer is the

optionee.

The Comprehensive Loss Underwriting Exchange (CLUE) report contains high claim history on a property or policyholder from the

past 7 years

Which unity is NOT required for joint tenancy?:

person

principle

person who gives authority to act on behalf

Under the Offer to Purchase and Contract Standard Form 2-T, if a buyer pays an additional earnest money deposit more than five days after the effective date of the contract, it may be paid in the form of any of the following EXCEPT

personal check.

rise of the roof in inches divided by the space of the roof in feet defines its.... and The degree of a roof's slope is

pitch

In which type of framing is a house constructed one story at a time, with each story serving as a base for the next?

platform

What is the clause that allows the lender to sell the property, in the event of default, to pay the debt the borrower owes without going through the courts?

power of sale clause

The simple process of asking prospective clients general questions about income, expenses, and debts is known as

pre-qualification.

Homeowners insurance rates are not based on:

premum payments

Dan moves into a quiet residential neighborhood with several open acres across the street. A church buys the property and puts up a large building that attracts 3,000 people every Sunday. When Dan contacts the zoning authority, he is told that this was allowed because of a- conditional use- North Carolina's Conservation and Historic Preservation Agreements Act is legislation with which goal?-

preserving and protecting valuable resources such as historic buildings and natural areas

Each of these has the authority to appoint at least one member of the Real Estate Commission EXCEPT the-

president of the north Carolina realtors association

Another word for client

principal

At what point should the buyer consult with his lender with regard to the buyer's loan?

prior to signing the purchase contract

Eric found the perfect house and is eager to make an offer. At what point should Eric consult with his lender with regard to his loan?

prior to signing the purchase contract

A _____agreement is a written agreement between lienholders on a property that changes the priority of mortgages, judgments, and other liens.

priority

a. Flood insurance policies are typically purchased from-

privet insurance companies- Consumers who want coverage for this peril need to purchase a separate flood insurance policy from the National Flood Insurance Program (NFIP) or from a private insurer participating in the Write Your Own program, which, in essence, provides the same coverage as the policy sold by the federal program.

In a lease agreement, duties that arise because of the express contractual promises of the lease contract are referred to as-

privity of contract.

In a lease agreement, duties that arise because of traditional (common law) property law rules are referred to as-

privity of estate.

A real estate appraisal can BEST be described as a(n)-

professional estimate or opinion of the value of a piece of property as of a specific date.

Based on the economic principle of conformity, when the value of inferior properties is affected positively by other properties around it, this is referred to

progression.

Which document is evidence of debt, showing who owes what to whom?

promissory note

Broker Clarabelle will be entering into an agreement to provide brokerage services to a landlord. This type of agency agreement is called a

property management agreement

The contract that would create an agency relationship between property owner Penelope and property manager Polly is a lease. True The contract between a property owner and a property manager is called a

property management agreement

When completing the sales comparison approach, which is considered first in the sequence of adjustments?-

property rights conveyed

In North Carolina, the lien on real estate that takes priority over all other liens is areal

property tax lien.

A title insurance policy:

protects the property owner against losses resulting from undiscovered title defects and encumbrances on the property.

buyer's agent is preparing an offer using a preprinted offer to purchase and contract form. According to the Real Estate Commission Rules, the preprinted form must include all of the following EXCEPT-

provision disclaiming liability for any representations made by the broker in connection with the transaction.

Which of the following is NOT one of the main legal remedies for breach of contract lawsuits?-

punitive damages.

The document that stipulates which party pays which expense in a settlement is the

purchase contract.

With a __________, the seller takes the role of the lender in offering the money to buy the home.

purchase money mortgage

Quiet enjoyment refers to a tenant's requirement to adhere to county noise levels ordinances. False:

quiet enjoyment does not refer to noise levels. It provides that the tenant has a right to undisturbed possession of the property during the lease term.

Of these types of deeds, which would most likely be used to clear a cloud on a title, such as a misspelled name?-

quitclaim deed Sally died testate. She has no spouse, no children, and no surviving siblings. Who would inherit Sally's estate?- her alma mater, to which she left everything in her will. -

A broker must conduct all brokerage activities under an agency agreement without regard to the parties'

race, color, religion, sex, national origin, handicap, or familial status.

Bart manages a building with 30 units. No one has moved in about five years. What should Bart, as property manager, recommend to the owner?-

raise the rent

Which is the best example of a special agent?

real estate licensee

In North Carolina, which of the following lien on real estate takes priority over all other liens?

real property tax lien

You are a dual agent in a real estate transaction. What are you NOT allowed to share with your clients?

recommended offer price

To protect the lessee's (tenant's) interest against third parties, North Carolina law requires that any lease that is required to be in writing and signed due to the statute of frauds must also be:

recorded

A property described by lot and block number is part of a-

recorded plat.

Arnold owns a property that is described by lot and block number. This means the number is part of a:

recorded plate

Which is the first step in dealing with a mold problem?

reduce the moisture level that promotes mold growth

On the seller's settlement statement, a debit ______ the amount received. On the buyer's settlement statement, a debit ______ the amount owed.

reduces / increases

Cathy has a mortgage with an alienation clause. She deeds her property to her brother John and he assumes her mortgage. The alienation clause does NOT give the lender the right to

refuse to let Cathy give away the property.Upon sale of, or even a transfer of significant interest in the property, the lender has certain rights, but it cannot keep Cathy from selling or transferring ownership

Steve and Jana bought an empty lot on a quiet street of small, 40-year-old ranch homes. On the lot, they built a luxurious two-story, 3,500 square foot home. A year later when they put their home on the market, its value will likely be held down by the other homes in the neighborhood. This is an example of

regression

Which type of agreement might a North Carolina broker be allowed to retain on the client's behalf in lieu of giving a copy to the client?-

rental agreement: A broker could be relieved from the duty of delivering leases or rental agreements to a property owner within three days if the property owner provides prior written authority allowing the broker to retain the agreements on the owner's behalf.

Which of the following is an improvement that will NOT cause an increase in a home's basis?

replacing lighting fixtures throughout the home

With regard to a homeowner's hazard insurance policy, the lender does NOT

require the policy to protect the property from floods

The concept of escheat means that property-

reverts to the state when a person dies without a will, an heir, or a creditor.

What must be included in an option to purchase agreement?

sales price to be paid for the property if the optionee exercises the option

A licensee is on a listing appointment with the prospective seller client who states that he wishes to sell only to members of a particular race. Of these options, what do you think would be the licensee's best response?

say he must consult with his employing broker before making a decision about taking the listing-

All of these are examples of things that might be paid for with a special assessment tax EXCEPT

school operating costs.

Which of the following is LEAST likely to be a primary obligation of a property manager

secure financing for capital improvements

(n) ______________ helps a landlord ensure compliance with a lease.:

security deposit

Of these, which is MOST LIKEY to help a landlord ensure compliance with a lease?-

security deposits

Broker Ethan is a seller's subagent working with buyer Caitlyn. In this situation, Ethan represents-

seller

Stu lists his property with ABC Realty. The buyer is not represented by a brokerage. ABC Realty has what form of agency?

seller's agency

If a buyer pays a due diligence fee by check, the check should be payable to the

seller. The due diligence fee is an agreed-upon amount that the buyer pays to the seller. If the due diligence fee is paid by check, the check should be payable to the seller.

When are Walter's ad valorem property taxes due for his home in North Carolina?-

september 1 of the current tax year

Utility companies often have easements in gross that allow them to access lines or pipes. In such a case, if the gas company digs up a lawn to get to a pipe, the homeowner's property would be the:

servient tenement

An earnest money deposit held in escrow is reflected at

settlement as acredit to the buyer.

A real estate broker must ensure the accuracy of the debits and credits on the

settlement statement.

Of these projects, which is MOST LIKELY to be funded with a special assessment?:

sewer repair

All of the following information must be included in an offer to purchase and contract EXCEPT-

signatures of the brokers.

Marriage/divorce rates, birth/death rates, population growth, and cultural activities are examples of which of the following factors that influence property value? Select all the correct answers.

social

When seller Sue takes part of the purchase price as a mortgage to help the sale, it is known as a(n)

soft money loan.

agents

someone authorize to rep a client

A buyer's agent is preparing an offer using a preprinted offer to purchase and contract form. According to the Real Estate Commission Rules, the preprinted form must include all of the following EXCEPT

source of compensation to the brokerage firms.

The city determines that new sewer systems need to be put in your neighborhood. If you don't pay your share of the bill, a lien will be put on your property. Of these choices, what type of lien would this be considered?:

special assessment: Special assessments are taxes on specific properties for improvements that benefit just that property, such as sewers, street lights, etc

When a court orders someone who has breached a contract to perform as agreed, rather than paying damages, it is known as.

specific performance.

All of the following items are fixtures that would convey to the buyer when real property is sold EXCEPT

stand-alone refrigerators.Stand-alone refrigerators are considered personal property. The other items are fixtures because they are physically attached to the real property.

2Which entities lead the effort to clarify for consumers who real estate licensees do and do not represent in their real estate transactions?

state real estate regulatory agencies

In North Carolina, the _______________ requires that real estate contract be in writing to be enforceable.-

statue of frauds

Your broker-in-charge tells you to look up something in G.S. Chapter 93A. What kind of information is he most likely asking you to look for?-

statutes related to real estate licensing and brokerage

A promissory note calling only for payment of interest during its term is a(n)

straight note.

A partial transfer of lease rights and obligations is called a(n)

sublease

partial transfer of lease rights and obligations is called a(n):

sublease

Broker Bill, who represents a seller, receives two offers for the seller's property at the same time: One for the full asking price and the second for significantly less than the full price. Bill is also aware that a broker from another firm will be showing the property the following day. What should Bill do?

submit the two offers at the same time

when a buyer will not pay more for something than its cost, the buyer is influenced by .

substitution

Comp #3 has five bedrooms; the subject property has four bedrooms. Through matched pair analysis, the appraiser has determined that a bedroom in that neighborhood is worth $7,500. What is the appropriate way to apply this information when performing the sales comparison approach to valuation?

subtract $7,500 from Comp #3 value

The purpose of the Closing Disclosure is to

summarize the financial aspects of a real estate transaction.

Landlord Jaime has initiated a suit in small claims court against his tenant for breaching the lease agreement. Which type of eviction does this best describe?

summary ejectment

Which of the following is NOT evidence of a marketable title?

survey

Of these, which is NOT a typical seller debit?

survey fee

An IRS tax lien is an involuntary, general lien.:

tRUE: A lien for unpaid income tax is an involuntary, general lien.

Which of these is NOT an example of police powers?-

taking property to build a highway through eminent domain: While eminent domain is a constitutional government right, it is NOT a police power. Zoning, building codes, and environmental protection are all examples of the government's police power to make laws and regulations.

When Jake purchases a house, he gets a mortgage. The mortgage is recorded on May 1. Jake builds a deck in July and then goes to Hawaii for several months. He doesn't pay the contractor or his property taxes. His property goes to foreclosure. Generally speaking, in what order will the liens be paid?

tax lien, mortgage lien, mechanic's lien: Property tax liens are always paid first. Then liens are generally paid in the order in which they were filed.

Which elements of a borrower's monthly mortgage payment are maintained by a lender in an escrow account?

taxes and insurance

The interest rate of a fixed-rate loan.remains constant for the duration of the loan. The Fair Credit Reporting Act provides that derogatory information regarding a discharged bankruptcy be removed after ____ years.

ten

After the termination of Steve's lease, he continued to remain in his apartment without the permission of his landlord. Steve's tenant status is;

tenancy at sufferance.

The recordation of leases that will not be fully performed within three years protects which of the following?-

tenants' interest against third party purchasers

In a transaction involving a back-up contract, the back-up contract is contingent upon the

termination of the primary contract.

SellerJose is entering into an Exclusive Right to Sell Listing Agreement (NCAR Standard Form 101) with brokerage firm ABC Realty. Jose would be required to disclose all of the following EXCEPT

the amount of the earnest money deposit.

A written buyer agency agreement must include-

the broker's license number.

A written buyer agency agreement must include all of the following EXCEPT

the county in which the buyer is interested in purchasing property.

Which of these do you think would LEAST LIKELY be considered a material fact that must be disclosed to a buyer customer?

the current homeowner of the listed property has lost his job and must sell quickly. Information about the seller client's motivation for selling would not be a material fact that the listing agent is obligated to share with a buyer customer.

§ After the due diligence period has passed, the deal between seller Albert and buyer Vicky falls through when she finds a property that she likes better. Listing broker Harry distributes Vicky's earnest money to Albert as specified in the purchase contract. Harry's firm must retain the transaction records for three years after which event?:

the day the earnest money was disbursed- Brokers must retain records for three years after the conclusion of the transaction or the termination of the agency agreement or the disbursement of all funds held by the broker, whichever occurs later. In this case, that would be three years after the earnest money was disbursed.

Olive signs a buyer agency contract with broker Glenn of Blue Heron Realty and works with him to put together an offer on Fiona's property. Olive gives Glenn an earnest money deposit, which goes into the brokerage trust account. After some back-and-forth negotiation, Fiona and Olive sign a purchase agreement. After all contingencies clear, they go to settlement, where the earnest money is counted as a credit to seller Fiona. Blue Heron must retain the transaction files for three years from which event?-

the day the transaction closes

Broker Nina emails an electronically signed offer on behalf of her buyer client to listing broker Parker. After reviewing the offer, Parker emails the offer to his seller client. They discuss the terms of the offer, and the seller decides to accept. The seller electronically signs the offer and emails it back to Parker. Parker forwards the signed offer to Nina who, in turn, forwards it to the buyer. The offer became a binding contract when theemail containing the offer, signed by the seller, was received by broker Nina's email server. The offer became a binding contract when

the email containing the offer, signed by the seller, was received by the email server of the buyer's agent. At this point, acceptance by the offeree (the seller) was communicated to the offeror's agent.

Bill is buying a house from Susan and Rob. Who must sign the deed at settlement?-

the grantor

Of these, who is responsible for ensuring that the buyer receives the Closing Disclosure?

the lender

Private mortgage insurance is NOT required on a conventional loan when

the loan has been paid down to 78% or less of the property's current value .PMI is no longer required and will be automatically canceled when the loan has been paid down to 78% or less of the property's current value. A borrower can also request the removal of PMI once he has paid the loan down to 80% LTV.

Which of the following discussions would MOST LIKELY be considered substantial contact between an agent and prospective buyer?

the maximum mortgage amount the buyer can afford

Who elects the chairperson of the Real Estate Commission?-

the members of the Commission

§ Generally speaking, who is the beneficiary of earnest money deposited in a brokerage's trust account?:

the seller

The Residential Property and Owners' Association Disclosure Statement must be completed by the seller.

the seller's attorney

The Residential Property and Owners' Association Disclosure Statement does NOT ask the seller to comment on

the square footage of the lot

The time period for enforcement of a contract is established by

the statute of limitations.

An employment contract between a brokerage firm and an affiliated licensee who is an independent contractor should address all of the following EXCEPT

the time that a contractor should report to the office each day.

An employment contract between a brokerage firm and an affiliated licensee who is an independent contractor should address all of the following EXCEPT

the time that a contractor should report to the office each day. An employment contract with an independent contractor licensee should define the contractor's status as an independent contractor and identify the contractor's duties, compensation, expenses, and insurance. Typically, a brokerage firm cannot require a specific time for an independent contractor to report to the office each day.

A buyer's agent emails an offer to the listing agent. The listing agent reviews the offer with the seller, and the seller decides to change the date of settlement. The seller marks and initials the change and signs the offer. The listing agent emails the signed offer to the buyer's agent who personally delivers it to the buyer. The buyer initials and dates the change. The buyer's agent calls to inform the listing agent, and the listing agent calls the seller. Copies of the final document are emailed to the listing agent and the seller. A binding contract was created when

thebuyer's agent informed the listing agent that the buyer accepted and initialed the change. This situation illustrates a counteroffer. The counteroffer became a binding contract when the buyer's agent called to notify the listing agent of the buyer's acceptance of the counteroffer. At this point, acceptance by the offeree (the buyer) was communicated to the offeror's agent.

Duplexes have been built in a neighborhood of single-family homes over the last ten years. One homeowner finally realized that duplexes violated a deed restriction and took the matter to court as a developer prepared to build another duplex. The judge cited the doctrine of laches to allow the new construction. This means the neighbors lost their right to complain because:

they had neglected to act over the years

Prior to closing, a property being sold by the Browns to the Blacks is materially damaged during a storm. According to the terms of the standard Offer to Purchase and Contract, if the Blacks decide to proceed with the transaction,

they will be entitled tothe relevant insurance proceeds. If the property is destroyed or materially damaged prior to closing, the buyers may terminate the contract and would be entitled to a refund of any earnest money deposit. However, if they do not terminate the contract, they will be entitled to relevant insurance proceeds.

The Loan Estimate must be given no later than ____ business days after lender Luther receives a consumer's completed application.

three

The Loan Estimate must be given no later than how many business days after the creditor receives the consumer's completed application?

three

Seller Edward's property is listed with broker Warren. Warren receives an offer along with a check for the earnest money deposit made payable to Warren's real estate firm. The check must be deposited no later than.

three banking days following acceptance of the offer. An earnest money deposit received with a pending offer must be deposited no later than three banking days following acceptance of the offer, unless the deposit is paid in cash.

A borrower must be provided with a Closing Disclosure from the lender. How long before loan consummation must this occur?

three business days

How long before closing must the lender provide the Closing Disclosure to the buyer?

three business days

If a revised Loan Estimate is emailed to the borrower, it is considered to be received by the borrower

three business days after the email is sent if receipt is not verified earlier.

Broker Ruth's buyer client made an offer on a house. The sellers sign the offer, and the listing broker provides a copy to Ruth. Ruth must deliver a copy of the signed contract to her buyer client within

three days after Ruth's receipt of the executed contract.

What possible antitrust violation could be avoided by giving a client an affiliate disclosure form?

tie-in agreement

The North Carolina Real Estate Commission has oversight of the activities of the state's real estate brokers as well as activities related to:

time share: The Commission also regulates time share activities in the state.

What provides the best protection against loss or damages from defects in title?

title insurance

Stephan buys a house from Joanne. Several documents show up before and during the settlement process. Which provides the best evidence that Joanne is passing marketable title to Stephan?

title insurance policy

Buyer Greg and seller Gretchen have entered into a binding contract using the NCAR/NCBA Offer to Purchase and Contract. After the due diligence period expires, Greg discovers that his loan was denied, and he will be unable to close. Greg is entitled

to a refund of neither the due diligence fee nor the earnest money deposit.

Why are real estate instruments recorded in the county in which the property is located?-

to give constructive notice of an interest in a particular parcel of real estate

A seller instructs a listing agent NOT to disclose a defect hidden behind a paneled wall. The listing agent has a duty

to not follow the instruction of the principal in this matter. A real estate listing agent is obligated to follow only the lawful instructions of the principal, owing the duty of disclosure of material facts to third parties in the transaction. Being instructed not to disclose a hidden defect would be an illegal request, which the listing agent should not follow. The broker-in-charge might even consider terminating the listing.

Broker Larry's buyer client wants to make an offer on a house. If Larry is NOT a member of the North Carolina Association of REALTORS®, Larry is permitted

to purchase and fill in the blanks of an Offer to Purchase and Contract form that include only the logo of the North Carolina Bar Association.

Which of these settlement costs would NOT be prorated between buyer and seller?

transfer tax

All of these would be a credit to a buyer on a Closing Disclosure EXCEPT

transfer tax.

Which is LEAST LIKELY to be a red flag indicating that a squatter may be living on vacant property?-

trash piled up in the alley

A broker-in-charge is holding disputed trust funds. The buyer and seller take the matter to court. The BIC must disburse the funds as directed by a court order

true

A building deposit is an amount paid to a seller (builder) for the completion of minor additional improvements to a newly constructed dwelling.

true

A person will be charged with a Class 2 misdemeanor if he is a lessor of a residential property found guilty of sexually harassing a prospective lessee of the property.

true

According to the Real Estate Commission Rules, a preprinted offer or sales contract form must include a legal description of the real property sufficient to identify and distinguish it from all other property.

true

All enforceable real estate contracts require consideration.

true

If a broker receives a due diligence fee that is paid in cash, it should be deposited into the broker's trust account

true

In North Carolina, state building code requirements are located in the North Carolina Uniform Residential Building Code.

true

On September 7, Randall submits a written offer to purchase Jill's property. Randall's offer will expire on September 10. Randall dies on September 9, before Jill accepts the offer. In this situation, the offer is terminated.

true

The Civil Rights Act of 1866 prohibits racial discrimination in all property transactions.

true

When a condo unit is sold, an undivided interest in common areas and membership in the owners association are automatically transferred to the new owner.:

true

a. When taking a listing for a home that is vacant or unoccupied, real estate brokers should remind their clients to reach out to the insurance company to verify continued coverage of the unoccupied listed property.

true

you can contact a former client for up to 18 months after a transaction closes even if that client is on the National Do Not Call Registry.

true

A distinguishing characteristic of trust deeds is that the _____ has the authority under the terms of the trust to commence non-judicial foreclosure action when the loan has gone into default.

trustee

The _____ holds legal title to the security property described in the deed of trust, subject to the terms of the trust for the benefit of the lender.

trustee

With the exception of specific circumstantial exclusions, for Section 121 of the Internal Code to apply to the taxation of capital gain, a taxpayer must have owned and used the property as a principal residence for at least _____ of the last five years prior to the date of sale.

two

The URLA requires the borrower to provide details about all current and previous employment over a(n)

two-year period.

Justin represents both the buyer and the seller in a real estate transaction. What do his clients give up when he represents them both as a dual agent?

undivided loyalty

Iggy is granted a power of attorney to care for all aspects of his elderly mother's life. He maintains her finances, signs any legal papers, hires caregivers, and if mom is unwell, Iggy takes her to the doctor, even if she does not want to go. Which type of agency does this represent?

universal agency

Joan has been given a power of attorney to care for all aspects of her sister's life while her sister is serving in the military overseas. She handles her bills, signs legal papers, and even took on the task of selling her sister's property. Which type of agency does this represent?

universal agency

Which type of agent has the greatest authority?

universal agent

Title insurance protects against

unknown future claims.

Someone working at a brokerage firm in the role of an affiliated agent may be any of the following EXCEPT

unlicensed. A real estate agent can be either an employee or an independent contractor of a brokerage firm, and he must have a real estate license.

Charging interest rates in excess of the state maximum allowed is known as

usury.

Which of the following items is addressed in the Buyer's Due Diligence Process paragraph of the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T?

utilities and access

A deed is NOT required to be recordedto be a

valid deed.

___________ is the amount a property is worth and will be worth in the future; it is rendered as an opinion or estimate.

value

All of these are considered when determining whether an item is a fixture or personal property EXCEPT:

value of the annexed item: The value of the item is not considered. Most often, the item is valuable. Intention and manner of annexation are the most heavily weighted factors.

The amount a property is worth and will be worth in the future, rendered as an opinion or estimate is called

values

When performing the sales comparison approach, comparable sales should be:

very similar in most respects

Which property would be LEAST LIKELY to be eligible for property tax exemption?

veterinary hospital

Buyer Lawrence sent an electronic offer to seller Jackson, and Jackson used a digital signature to sign the offer. When did the offer become a binding contract?

when Lawrence received the electronic document with the digital signature and key. Acceptance must be communicated to the offeror. In this case, the document signed with the digital signature was received by the offeror (buyer) when the offeree (seller) sent the digitally signed offer along with the public key.

Under an exclusive right to sell listing, when is a broker's commission typically EARNED?

when a ready, willing, and able buyer is found on terms acceptable to the seller Compensation is typically EARNED when a ready, willing, and able buyer is found (by the firm, a cooperating firm, the seller, or anyone else) at a price and on terms acceptable to the seller.

Generally speaking, a listing broker has earned his commission

when a ready, willing, and able buyer is found on terms acceptable to the seller.

Lydia is selling a home that has a $90,000 mortgage loan that needs to be satisfied as part of the purchase transaction. All of the following are buyer benefits that may help Lydia use a purchase subject to seller's existing mortgage as a marketing tool for the sale of her home, EXCEPT

when interest rates are falling

Under a right of first refusal, the potential buyer will get the opportunity to purchase the property

when the owner receives a bona fide offer from another buyer.A buyer cannot exercise a right of first refusal until the owner gets a bona fide offer from a third party.

A certificate of occupancy is required in which of these instances? Select all correct responses.- for all work that requires a building permit and whenever the general occupant classification for a building is changed-A certificate of occupancy is required in which of these instances? Select all correct responses.-

whenever the general occupancy classification for a building is changed a. for all work that requires a building permit b. A certificate of occupancy is required for all work that requires a building permit and whenever the general occupancy classification for a building is changed.

Ofthese, which is LEAST LIKELY to be negotiable in a listing agreement?

whether there is an end date Every written agreement for brokerage services in a real estate transaction must be for a definite period of time. The other items are negotiable.

Willful misrepresentation

which is sometimes referred to as "actual fraud," is a deliberate act with the intent to deceive or with reckless indifference to the truth. It is any form of deceit, trickery, or breach of confidence by which one party attempts to gain some unfair or dishonest advantage over another through their words or actions. According to the Real Estate Commission, willful misrepresentation could involve a licensee with "actual knowledge" of a material fact who deliberately misinforms another party. But willful misrepresentation could also involve a licensee who provides incorrect information "without regard for the actual truth of the matter."

A real estate broker from ABC Realty working with a buyer client accidentally overhears the seller tell his listing agent from XYZ Realty that he would take $10,000 below list just to get the house sold. If the broker withholds this information from his buyer client, he could be accused of-

willful omission The buyer's broker is obligated to disclosure information to his principal that could affect the principal's negotiating position. Failure to do so would be willful omission. The buyer's broker has no duty of confidentiality to the seller, who is not his client not a client of his brokerage firm.

Which of the following items are considered personal property?

window air conditioning units Window air conditioning units are considered personal property. The other items are fixtures because they are physically attached to the real property.

Broker Roy's buyer client made an offer on a house. The sellers sign the offer, and the listing broker provides a copy to Roy. Roy must deliver a copy of the signed contract to his buyer client

within three days after Roy's receipt of the executed contract.

A North Carolina broker would be subject to administrative discipline from the Real Estate Commission if he fails to-deliver a copy of a signed purchase agreement to his brokerage firm

within three days of receipt.

After a broker receives an executed contract, she must deliver it to her client

within three days.

A pre-judgment right to a creditor to ensure that the debtor's property will be available to satisfy the debt once the judgment is finalized is called a(n):

write of attachment

An agency relationship should be created by which of the following methods?

written agreement An agency agreement should be created by expressed written agreement. The term estoppel refers to apparent agency, which is created when a person allows an agent to appear to be the agent of that person without any actual authority. Ratification is the acceptance of an agent after the performance of the act and a real estate agent should have expressed authority before performing any acts for a principal. Implication is a term that is used to create an agency relationship by a party's conduct where no expressed agreement exists.

§ Broker Bennie told the neighbors of a property he had listed that someone from another country was moving in and they needed to get their properties listed and sold before property values dropped. Would this be grounds for discipline under the North Carolina license law?

yes

You are driving through a suburb of a city and notice that all of the fast-food signs are close to the ground. This is a result of-

zoning ordiances

An ordinance in Anytown, North Carolina, has zoned a single tract of land in a manner that's incompatible with the surrounding area as well as with the city's zoning regulation and comprehensive plan. This is referred to as _________

zoning.- spot: In North Carolina, spot zoning is the legal practice of zoning a single tract of land in a manner that is incompatible with the surrounding area and incompatible with the city's zoning regulation and comprehensive plan. This is not to be confused with contract zoning, which is illegal. Contract zoning is rezoning that is based on one specific development project instead of being based on permissible uses.

§ Broker Brad accepts an earnest money deposit in cash when buyer Betty makes an offer to purchase Bill's property. She asks him to hang on to it until their negotiations are complete and Bill signs the contract. What is Brad's deadline for depositing Betty's earnest money into the brokerage trust account?-

§ 3 banking days after receiving it- If an earnest money deposit is made in cash, it must be deposited in the brokerage trust account within three banking days of receipt, even if the offer has not yet been accepted

§ Which situation would LEAST LIKELY be considered misconduct that could result in administrative discipline by the Real Estate Commission?-

§ A listing broker does not disclose that the seller is being transferred out of state.

§ Broker Bryn lists her sister's property. She has been accused of conflict of interest by working with buyer client Jack without disclosing her relationship. What could lead to an investigation by the Real Estate Commission? Select all correct responses.

§ a. Bryn's sister files a complaint against her.

§ A real estate broker could be guilty of the unauthorized practice of law if she drafts which of the following contracts?

§ i. a residential lease § ii. an offer to purchase § iii. a sales contract

§ Which is NOT an administrative discipline that the Real Estate Commission could impose on a licensee for violations of license law or Commission rules?

§ injunction

What are the requirements to initially gain the BIC Eligible status? Select all correct responses.:

· The broker must have a license in active status. And The broker must complete the 12-hour Broker-in-Charge course offered by the Commission.

Who is responsible for ensuring that all time share instruments have been recorded with the Register of Deeds-

 the time share registrar

Which statement about brokerage trust accounts is FALSE

Â- Trust accounts cannot be held in an out-of-state bank

A North Carolina county has a tax rate of $1.85 per $100. What is the annual tax amount if the assessed value of the property is $362,000 (rounded)?

- $6,697

Under the provisions of the Machinery Act, North Carolina counties must reassess property values at least once every

- 8 years

Which is LEAST LIKELY to be a factor on which special assessment rates are calculated?- income of the property owner

- income of the property owner

Tamara and her friend Josie buy a house together. The deed indicates that Tamara owns an 80% interest, and Josie owns a 20% interest. Tamara sells half of her interest to Henry. Henry has the right to live in how much of the house?:

100%- reason;They are all tenants in common. As co-owners, they have an undivided interest by the entire property, so Henry, Tamara, and Josie legally own the entire house and can live in all of it.

Of these, which is an example of fee simple subject to condition precedent?

Jodi will transfer title to a property to her granddaughter, Mindy, if and when Mindy graduates from college. Fee simple subject to condition precedent is when the grantor retains title to the estate until such time that a specific condition occurs. Jodi will own the property until Mindy graduates from college. If Mindy never graduates, Jodi will retain possession until she sells it, gives it away, loses it to foreclosure, or dies.

Owner-occupants of a high-rise condominium unit have an air lot.

TRUE

When Dave and Lucy get married, they decide to sell each of their homes and buy one house together. Lucy's house sells for $700,000; Dave's house sells for $300,000, and they're going to buy a $1 million house. If Lucy wants a 70% interest in the new house, what form of ownership must they take?

Tenancy by the entirety: Tenancy in common is the only form of co-ownership that does not require the unity of interest, meaning an unequal fractional interest is possible.

When Dave and Lucy get married, they decide to sell each of their homes and buy one house together. Lucy's house sells for $700,000; Dave's house sells for $300,000, and they're going to buy a $1 million house. If Lucy wants a 70% interest in the new house, what form of ownership must they take? Tenancy in common:

Tenancy in common is the only form of co-ownership that does not require the unity of interest, meaning an unequal fractional interest is possible.

Brett bought a farm and also wanted to separately purchase two tractors the seller owned. What would MOST LIKELY be required at the settlement to transfer ownership of those tractors?:

bill of Sale:

Which element CANNOT be separated from real property?:

bundle of rights:

Which of the situations described would LEAST LIKELY be an example of a license?;

carly's deed gives her access to the beach; If it's a deed to provide access over someone else's property, it's more likely to be an easement, not a license. The other choices could more reasonably be called licenses.

Which types of ownership are evident in a condominium community?

co-tenancy and fee simple

Matilda wants to know that her granddaughter Rose will inherit her house when she dies. So, she deeds her house to her granddaughter but creates a situation where Matilda can still live in the house until she dies. When Matilda dies, Rose will own the house. What kind of estate is this?

conventional life estate: Matilda is creating a life estate for herself where she is both a life tenant and a measuring life. Rose is the remainderman.

Jean gives 20 acres to the city of Edgewood but stipulates that the city can use it only to create a nature preserve and park. If the city uses the land for any other purpose, it will revert to Jean's heirs. What kind of estate has Jean created?

defeasible fee simple

Common areas in a condominium are owned by all owner-residents as joint tenants.:

fALSE: each condo co-owner has a separate interest in an individual unit and owns common areas with other residents as tenants in common.

which of the following is an example of real property?

An in-ground swimming pool: Real property is land, all rights associated with the property, and the things attached to it. Thus, the inground swimming pool is real property because it is permanently attached to the land. The fire pit and truck can be moved and are personal property. Annuals must be planted each year and are also considered personal property.

A landowner needs water. His land contains no available water source. However, the landowner is given the right to cross over his next-door neighbor's property to run a pipeline from a river to his land. Which right grants this permission?

Appropriative (Reason:Appropriative rights are permits granted by the government, allowing an individual to use water from land he or she does not own. Eminent domain is the right of the government to take private property for public use. Littoral and riparian refer to the rights of landowners to use either flowing or lake water on their own property for their own use.)

"Judgment liens are liens against a person's property through court action. This means they are usually

INVOLU EQUITABLE GENERAL LIENS

Which is the best example of an involuntary, general lien?:

IRS TAX LIEN

Frank allows Rich to use his ice fishing shack while he's in Florida for the winter. This is MOST LIKELY an example of a(n):

license: A license is permission to enter another person's land for a particular purpose.

A "notice of pending litigation" to inform potential homebuyers that a property is in a pending lawsuit that will affect title to the property is called a(n):

lis pendens

You live in a house on the shores of Lake Michigan. You are a ________ owner, which means that you ________ own the land under the water.:

littoral/dont

Which is a voluntary, specific lien? Income tax lien (Correct answer: Involuntary (statutory), general) Property tax lien: (Correct answer: Involuntary (statutory), specific) Mortgage lien: Voluntary, specific Judgment lien:Involuntary (EQITABLE), general

mORTGAGE LIEN:

Which project would LEAST LIKELY justify a special assessment?

new siding on an individual property owner's home

Of these, which is LEAST LIKELY to be paid for with a special assessment?-

new sports stadium

Which lien would be paid first in the event of a foreclosure sale?

property tax lien

Property taxes create a(n)- involuntary specific lien- Property tax creates an involuntary specific lien, which means the lien is on the specific property only, not any other assets of the property owner. Which real estate lien takes priority over all other liens?-

real property tax lien

Brian has an appurtenant easement that allows him to cross over his neighbor's land to get to the lake. When the neighbor sells this land to Brian, the easement is terminated through: merger:

reason; ince the two properties have been combined under one owner, the easement is terminated by a merger.

Which transaction does NOT represent an example of an appurtenance?-

selling the fructus industriales grown on your land: (Reason: Fructus industriales is personal property. An appurtenance is a right that's related to real property, such as air, subsurface, and surface rights.)

Pam and Jim are getting divorced and decide to sell their house. Before the house sells, however, the divorce is finalized, and the judge awards the house to Jim as part of the divorce settlement. What is his interest in the house?

tenant in severalty

Lois and Clark are married and decide to buy some investment property together. Lois wants to make sure that if she dies, her daughter from a previous marriage will be able to inherit her interest in the property. Hw should Lois and Clark take title to the property?

tenants in common: Tenancy in common allows one co-owner to transfer his or her share of the property to others by deed or devise.

Julie is applying to live in Hoity Toity Tower. Assuming no illegal discrimination, she could be rejected if-

the co-op board decides not ot approve her application

Which item is LEAST LIKELY to be a fixture?:

the curio cabinet in the living room that matches the room's decore

Which is LEAST LIKELY to be a taxing unit in the State of North Carolina under the provisions of the Machinery Act?-

the state : The Machinery Act gives the authority for the listing, assessing, and appraisal of property and the levy and collection of ad valorem taxes on real property to local government entities. The state cannot levy real property tax.

.Which of the situations would LEAST likely be an example of a license?

Carl gets access to cross his neighbor's lawn to get to the lake when he bought his house.This situation most likely describes an easement, since it appears to have been conveyed with the property; licenses do not run with the land.

Encroachment refers to a physical intrusion of land by another person without any lawful right to enter it.

FALSE

Ownership of land involves only the surface and the dirt below, NOT the air above it.

False

Glen, Ryan, and Pierce co-own property as joint tenants. Pierce sells his share to Grace. What form of co-ownership is this?:

Glen and Ryan are joint tenants; grace is a tenant in common.

Grandpa owned property in fee simple. He granted a life estate to his brother Zach and a remainder estate to his son Joel. The life estate is based on Zach's life. What can Zach NOT do with his life estate?:

He can will the life estate to his daughter.Zach's life estate is a present estate. He can live on the property, he can sell the life estate, or he can give the life estate away, but he cannot will the life estate since the estate will terminate at his death.

Rachel wants to make sure that her disabled son, Earle, has a place to live when she dies. She also wants to give the property to her daughter, Jane, after her son passes away. Who will own the property when Rachel dies and what is that person called?

The owner of the property will be Jane, and she is the remainderman.

Cynthia is renting a storefront in order to open a hair salon. She hires a plumber to install five hair washing stations in the space. The sinks would be considered fixtures, making them real property. FALSE:

When something is attached to real estate for the benefit of a business, it is a trade fixture, not a fixture.

Lizzy and Emma buy a $100,000 vacation cottage together. Lizzy makes a $25,000 down payment, and Emma takes out a $75,000 mortgage. The deed simply states the ownership as "Lizzy D. and Emma K. as tenants in common." What is Emma's interest in the house?

50%

Oscar is looking to buy a low maintenance residence. Which option will NOT give Oscar ownership of real property?

Cooperative: A cooperative sells shares in the co-op, which are personal property. Oscar would have a proprietary lease, but he would not own real property.

Jon is granted an easement by necessity across Eric's property to get to the road. Jon's property is the: DOMINANT TENEMENT

DOMINANT TENEMEN

Gareth inherits a plot of land from Jessie. A year later, he sells half of the property to Kim. A year later, she gives her half to Alex, who sells the mineral rights. This series of events best represents the legal property right of:

Disposition:

.Jared has an easement to drive across his neighbor Vicky's property to get to his barn. Jared's property is known as the ______________ tenement.

Dominant

John owns property on a small pond, which gives him-

Littoral Rights: (Reason: Littoral rights are for those who own property adjacent to a body of non-flowing water.)

Harvey owns a small commercial building that he rents to Lucy, who opens a ceramics shop. Lucy installs a kiln. Four years later, Harvey sells the property to Ann, who wants to start her own pottery business. When Lucy's lease is up, who owns the kiln?

Lucy because Lucy, the tenant, installed the kiln for her business. It's a trade fixture, and it's her personal property. Lucy would have to remove it when her lease is up, or she could sell the kiln to Ann, if they can agree to terms.

Tess has an appurtenant easement that allows her to cross over her neighbor's land to get to her house. When the neighbor sells his land to Tess, the easement is terminated through:

MERGER

Lenny and Eileen just got married, and she moves into the house Lenny owned in severalty prior to the wedding. Which of these unities is present concerning the ownership of the house?

N/A

Tenancy in common requires ONLY the unity of:

Possession

Which of these unities is required for there to be a tenancy in common?

Possession

Lot size, minimum square footage, and the architectural design of a single-family residential housing unit are examples of;

RESTRICTIVE COVENANTS;

Tori has a proprietary lease on an individual unit in the prestigious Triumphant Estates. Most likely, what does Tori own?

Shares a coop unit

Albert conveys a life estate to his daughter Charlotte for as long as she lives, and then to his son David. Who is David, and what does he own?: reaminderman, future estate-

The estate will belong to David when the measuring life/life tenant Charlotte is dead. David is the remainderman, and he has a future interest in the estate.

Ned is a co-owner of a property in Orlando. He is permitted to stay there only in the first week of December and the third week of June every year. Ned MOST LIKELY owns a:

Time share

Your property sits on a large navigable river. Which statement is FALSE?.

You can stop people from boating in front of your home. (Reason: When your land borders a large, navigable river, you can stop people from standing on the bank by your house since you own the land to the high-water mark. However, you cannot stop people from boating in front of your home since you don't own the water or the riverbed.)

Which is an example of a negative easement?

Your neighbor is unable to add a second story to his house if it blocks your sunlight. A negative easement prevents the servient tenant from using his or her own land in a certain way.

Which statement about liens is FALSE?:

a lien is a possessory internist

An irrigation system installed by Joe on his leased peach orchid ranch is considered-

a trade fixture and remains the property of Joe at the end of the lease.

Which of the following is NOT a characteristic of a real property tax lien?:

gENERAL : A property tax lien is involuntary and statutory, as it's attached by law, and it's specific because it attaches to real property only.

According to the North Carolina tax timetable, property owners should expect to get their tax bills shortly after-

july 1