Answered Incorrectly

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 you got this one right!!

assignment. novation. rescission. tender offer.

Broker Larry's buyer client, Cara, makes an offer on Brandon's house, which is listed by broker Ana. If Brandon accepts the offer, who are the parties to the sales contract? a. Brandon and Ana b. Cara and Brandon c. Cara and Larry d. Cara, Brandon, Larry, and Ana

b. Cara and Brandon The sales contract is the written agreement between the buyer and the seller. The brokers are not parties to the contract.

On Tuesday morning, broker Joseph submits an offer on behalf of his buyer client to listing agent Irene, and Irene presents the offer to her seller client. Later that day, the seller accepts and signs the offer, and listing agent Irene calls Joseph to inform him of the seller's acceptance. Joseph immediately contacts the buyer with the news. On Wednesday morning, Joseph delivers a copy of the signed contract to the buyer. The offer became a binding contract when a. the seller signed the offer. b. Irene called to notify Joseph of the seller's acceptance. c. Joseph called to notify his buyer client of the seller's acceptance. d. Joseph delivered a copy of the signed contract to the buyer.

b. Irene called to notify Joseph of the seller's acceptance. The offer became a binding contract when the listing agent called the buyer's agent to notify him of the seller's acceptance. At this point, acceptance by the offeree (the seller) has been communicated to the offeror's agent.

Which is NOT an example of an encumbrance? a. a mortgage lender placing a lien for non-payment b. a neighbor's shrubs hanging over your property line c. a next-door neighbor driving across your property to get to the road d. a utility company's right to enter your property to fix a gas leak

b. a neighbor's shrubs hanging over your property line The shrub hanging over the property line is an encroachment, not an encumbrance. Liens and easements are encumbrances.

The signing of what document creates an agency relationship with a potential buyer? a. agency disclosure form b. buyer broker contract c. listing contract d. pre-qualification application

b. buyer broker contract An agency relationship is created when the buyer and the broker sign a buyer broker contract, also referred to as a buyer agency agreement.

If a lender discovers an error on the 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 15 days. 30 days. 45 days. 60 days.

60 days. The lender has 60 days after closing to issue a refund and a corrected Closing Disclosure.

All enforceable real estate contracts require consideration. True False

True All enforceable real estate contracts require consideration (i.e., the exchange of something of value between the parties).

Property manager Mike becomes an agent of property owner Leslie by signing a property agency contract. listing agreement. management contract. power of attorney.

management contract. The property management contract between a property manager and a property owner creates an agency relationship.

In a lease agreement, duties that arise because of traditional (common law) property law rules are referred to as federal and state law. privity of contract. privity of estate. freehold estate.

privity of estate. Duties that arise because of traditional (common law) property law rules are called privity of estate.

Amy is buying Jordan's house for $215,800. The excise tax is $1 for every $500 of transaction value or fraction thereof. How much must Jordan pay at settlement when he sells his house to Amy? $0; the buyer pays the excise tax $432.00 $431.60 $431.00

$432.00 Divide the transaction value by $500: $215,800 / $500 = $431.60. This is an example of the "fraction thereof," so it's necessary to round up to the next whole dollar. Seller Jordan must pay $432 at settlement in transfer or excise tax.

Jack is buying Larry's house for $245,900. He gets a loan for $198,600. What is the required excise tax due at settlement? $397.20 $398.00 $491.80 $492.00

$492.00 Transfer or excise tax is based on the sale price, the transaction value, not the loan amount. $245,900 / $500 = $491.80, rounded up to $492 that seller Larry must pay at settlement.

Laura falls in love with a house and is desperate to buy it. The asking price is $235,000. She makes an offer of $230,000 and the house appraises for $225,000. If her lender is willing to give her an 80% LTV loan, what is her required down payment if her offer is accepted? $45,000 $46,000 $47,000 $50,000

$50,000 The lender bases the loan-to-value on the lesser of the sales price or the appraised value. If Laura is paying $230,000 on a house appraised at $225,000, the lender will loan her $180,000 ($225,000 x .80). That means Laura will have to make a down payment of $50,000 ($230,000 sales price - $180,000 loan).

The closing costs shown in the Loan Estimate must be available for at least 3 business days. 7 business days. 10 business days. 14 business days.

10 business days. The estimate of the charges and terms for all settlement services, but not the interest rate, must be available for at least 10 business days from when the LE is provided.

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? 30 days 60 days 3 months 6 months

6 months If the landlord sends the refund and written itemized accounting to the last known address of the tenant and the correspondence is returned, the law requires the landlord to hold the deposit in a trust account for at least six months. It is not the landlord's property to claim.

After renting month to month, if Lewis wanted to buy a house of his own and move out, how much notice would he be required to give Mark? 7 days 15 days 30 days No notice is required.

7 days If a party to a month-to-month tenancy wants to end the tenancy, he must provide proper notice of intent to terminate at least 7 days before the end of the current rental period.

Lisa has lived in the same apartment for 17 years on a month-to-month periodic tenancy. The landlord decides that when the year is up, he will let his grandson rent the apartment. How much notice must he give Lisa? 30 days before the end of the current rental period 7 days before the end of the current rental period 2 days before the end of the current rental period None is required since the lease will terminate automatically at the end of the year.

7 days before the end of the current rental period For a month-to-month periodic tenancy, the proper notice is 7 days before the end of the current rental period.

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? $1,601.68 $2,403.02 $2,582.74 $3,333.62

$2,582.74 The FHA allows a maximum debt-to-income ratio of 43%. $1,033.30 ÷ 0.43 = $2,403.02, the minimum monthly income needed. However, Mary has to qualify for both front end and back end ratios. In this example, her front end is too high. She would therefore require a stable monthly gross income of $2,582.74 ($800.65 ÷ .31 = $2,582.74/ month) in order to qualify for both ratios.

Are funds disbursed to the proper parties during the settlement meeting? Yes No

No Funds are disbursed to the proper parties once the necessary documents have been recorded.

Which individual is NOT commonly a settlement officer? attorney lender's representative person designated as power of attorney title agent

person designated as power of attorney A settlement officer is most commonly an attorney, a representative from the lender or title company, or a broker. A person designated as a power of attorney does not conduct a settlement meeting.

What clause allows the lender to sell the property, in the event of default, to pay the debt the borrower owes without going through the courts? due on sale clause partial payment clause power of sale clause prepayment clause

power of sale clause The power of sale clause allows the lender, in the event of default, to sell the property to pay the debt the borrower owes through non-judicial foreclosure.

Becky is selling her house for $475,300. Her closing costs are $5,725. She needs to pay off a $385,500 mortgage and a $22,500 property tax lien. She agreed to a 6.75% commission. What is her seller's share? Round your answer up to the nearest dollar. a. $29,492 b. $29,879 c. $33,057 d. $57,419

a. $29,492 First, determine how much commission she paid: $475,300 x 0.0675 = $32,083. Then add the other required expenses to that: $32,083 + $5,725 + $385,500 + $22,500 = $445,808. Finally, subtract that from the sales price to find her seller's share: $475,300 - $445,808 = $29,492.

Under the CAN-SPAM Act, companies must honor a consumer's opt-out request within a. 10 business days. b. 30 calendar days. c. 45 business days. d. 3 months.

a. 10 business days. Every electronic solicitation must include some clear opportunity to opt out of future communications, and companies must honor a recipient's opt-out request within 10 business days.

Boris dies intestate. To dispose of his estate, a. his heirs must appoint an executor. b. his will must go through probate court to prove its validity. c. the estate must first escheat to the county. d. the estate must be probated.

D. The estate must be probated Because Boris died without a will, his estate must be probated.

Market value is the _____________ price of a piece of property. a. actual b. asking c. most recent selling d. theoretical

D. Theoretical The market value, or fair market value, of a property is the theoretical price that a piece of property would bring if placed on the open market for a reasonable time, with a buyer willing (but not forced) to buy, and a seller willing (but not forced) to sell.

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. True False

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.

The special information booklet required under RESPA is called Know Before You Owe. True False

False The Consumer Financial Protection Bureau's initiative known as Know Before You Owe includes the TRID Rule and the special information booklet called Your Home Loan Toolkit.

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. True False

False The right of first opportunity to purchase differs from a right of first refusal in that the owner sets the price and offers the property to the potential buyer at that price. The owner does not have to wait to get a bona fide offer from a third party.

Which is NOT part of the CFPB's Know Before You Owe initiative? Closing Disclosure Good Faith Estimate (GFE) Loan Estimate Your Home Loan Toolkit

Good Faith Estimate (GFE) The CFPB developed the Know Before You Owe initiative that implements the TRID Rule, which mandates the use of the Loan Estimate (LE) and the Closing Disclosure (CD), and the Your Home Loan Toolkit special information booklet. The GFE was the loan disclosure document required by TILA prior to the passage of the TRID rule.

Which federal entity has enforcement authority over the Real Estate Settlement Procedures Act? CFPB FEC FTC HUD

CFPB The Consumer Financial Protection Bureau (CFPB) is an independent entity within the Federal Reserve that regulates the provisions and enforcement of RESPA under the administrative rules known as Regulation X.

Who is responsible for providing a copy of the Closing Disclosure to the borrower according to TILA? creditor broker seller settlement officer

creditor Under TILA, the creditor is responsible for providing a copy of the Closing Disclosure to the borrower three business days in advance of the closing.

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 cannot sue under RESPA since she agreed to the terms. She can only sue for the amount she paid, $400. She can sue for up to two times what she paid, $800. She can sue for up to three times what she paid, $1,200.

She can sue for up to three times what she paid, $1,200. Section 9 of RESPA prohibits a seller from requiring the homebuyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.

Which is MOST LIKELY to be a bona fide reason for holding loan consummation before the waiting periods have expired? The borrower and seller agree in writing to an earlier date. The borrower has already scheduled the movers. The seller is facing a foreclosure action. There are no bona fide reasons.

The seller is facing a foreclosure action. The loan generally cannot be consummated until both waiting periods have expired with some exceptions for bona fide personal financial emergencies, such as an impending foreclosure.

The recordation of leases that will not be fully performed within three years protects which of the following? landlords against hold-overs tenants tenants' interest against third party purchasers property managers from lawsuits due to negligence purchasers from being out-bid on a property

tenants' interest against third party purchasers Leases that will not be fully performed within three years should be recorded to protect the lessee's (tenant's) interest against third parties.

The Offer to Purchase and Contract—Vacant Lot/Land is intended for unimproved real property up to 20 acres in size. over 20 acres in size. on which a new home is being constructed but is not yet complete. that the buyer does not have immediate plans to subdivide.

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

Of these, who is responsible for ensuring that the buyer receives the Closing Disclosure? the buyer's attorney the closing agent the lender the listing agent

the lender The lender is ultimately responsible for ensuring the accuracy and delivery of the Closing Disclosure, although it might be the closing agent, also called a settlement or title agent, who will prepare it.

If a revised Loan Estimate is emailed to the borrower, it is considered to be received by the borrower the day the email is sent. the next business day after the disclosure is emailed. three business days after the email is sent if receipt is not verified earlier. the seventh business day after the email is sent.

three business days after the email is sent if receipt is not verified earlier. A revised Loan Estimate is considered received by the consumer on the day it is provided if delivered in person. If it is mailed or delivered electronically (email, fax, etc.), the consumer is considered to have received it three business days after the disclosures are mailed or transmitted.

Which statement regarding an installment land contract is FALSE? The contract serves as an instrument to transfer title and as a seller financing instrument. An installment land contract is typically easier to qualify for than a bank loan. An installment land contract may also be referred to as a contract for deed. The seller is typically responsible for property taxes, property insurance, homeowner dues, and assessments.

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.

Under a right of first refusal, the potential buyer will get the opportunity to purchase the property as soon as the owner decides to sell. when the owner dies. when the owner receives a bona fide offer from another buyer. within the time period specified in the agreement.

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.

Which situation do you think is LEAST LIKELY to go through probate? a. Iris dies without a will and with heirs. b. Jack dies and leaves everything to his brother in his will. c. Kay dies and the house she shared with her husband goes to him. d. Lincoln dies intestate and without heirs.

C. Kay dies and the house she shared with her husband goes to him Probate is both the court of jurisdiction over estates and the process of proving the validity of a will. Of these, the only situation that does not require probate is when property passes to a surviving spouse.

The ______ regulates the flow of money and interest rates through its member banks by controlling reserve requirements and the discount rate and through its open market operations. Federal Home Loan Mortgage Corporation Federal Housing Administration Federal Reserve U.S. Department of Housing and Urban Development

Federal Reserve The Federal Reserve regulates the flow of money and interest rates through its member banks by controlling reserve requirements and the discount rate and through its open market operations.

Amanda hired a surveyor to create a legal description for her property. Should she expect the legal description to describe the improvements on the property? a. Yes b. No

No A legal description tells you the location, the size, and the boundaries of a parcel of land. It does not describe any of the improvements. A survey often does describe the improvements.

Through a ______________ warranty deed, the grantor warrants title against all defects that may have arisen before or during the grantor's ownership. general bargain and sale special trustee

general General warranty deeds are deeds in which a grantor warrants title against all defects that may have arisen before or during the grantor's ownership.

A(n) ______ is a loan with initial payments that are lower than later payments. adjustable-rate mortgage loan graduated payment mortgage loan growth equity mortgage loan term loan with interest-only payments

graduated payment mortgage loan A graduated payment mortgage (GPM) loan is a fixed-rate loan with initial payments that are lower than later payments. The loan includes scheduled increases in the payments in later years.

The VA provides guaranty on eligible home loans for up to ______ of the loan amount. 10% 25% 50% 100%

25% VA will guarantee 25% of the loan amount, assuming the veteran has the entitlement for the loan amount.

Conventional lenders consider a borrower's income adequate for a loan if the proposed total mortgage payment of PITI does not exceed what percent of the stable monthly gross income? 28% 34% 36% 43%

28% Conventional lenders consider a borrower's income adequate for a loan if the proposed total mortgage payment of PITI does not exceed 28% of stable monthly gross income.

If the property tax rate is $2.00 per $100 of assessed value, how would that be expressed as mills? a. 0.20 mills b. 2.0 mills c. 20 mills d. 200 mills

C. 20 mills When given a dollar amount per $100, move the decimal point one place to the right to find mills. Remember that a mill is equal to $1 per $1,000 of assessed value. In this case, this would be 20 mills.

Which of the following disclosure statements is referenced in the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T? Lead-Based Paint or Lead-Based Paint Hazard Addendum Mineral and Oil and Gas Rights Mandatory Disclosure Statement Owners' Association Disclosure Addendum Residential Property and Owners' Association Disclosure Statement

Owners' Association Disclosure Addendum In the Owners' Association(s) and Dues subparagraph, the seller indicates whether ownership of the property subjects the buyer to regulation by an owners' association. If so, the seller must provide an Owners' Association Disclosure Addendum. The other disclosure statements listed apply only to transfers of residential real property consisting of one to four dwelling units.

Charlie is selling his home, but the proceeds will not be sufficient to cover the amount he owes on his existing loan. Charlie's listing agent should make sure that any standard NCAR/NCBA Offer to Purchase and Contract includes the Additional Provisions Addendum. Existing Lender/Lienholder Addendum. Foreclosure Addendum. Short Sale Addendum.

Short Sale Addendum. A short sale is a lender-approved sale in which the proceeds are not sufficient to cover the loan amount(s). The Short Sale Addendum is used to address the unique conditions of a short sale.

Which of the following disclosure statements is referenced in the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T? a. Lead-Based Paint or Lead-Based Paint Hazard Addendum b. Mineral and Oil and Gas Rights Mandatory Disclosure Statement c. Owners' Association Disclosure Addendum d. Residential Property and Owners' Association Disclosure Statement

c. Owners' Association Disclosure Addendum In the Owners' Association(s) and Dues subparagraph, the seller indicates whether ownership of the property subjects the buyer to regulation by an owners' association. If so, the seller must provide an Owners' Association Disclosure Addendum. The other disclosure statements listed apply only to transfers of residential real property consisting of one to four dwelling units.

A real estate sales contract may be referred to as any of the following EXCEPT earnest money contract. offer to purchase and contract. option contract. purchase contract.

option contract. A real estate sales contract may also be referred to as an offer to purchase and contract, purchase agreement, purchase and sale agreement, purchase contract, earnest money contract, or another similar name.

The standardized Closing Disclosure must be given to the borrower in the transaction at least _________ prior to closing. 1 calendar day 3 business days 3 calendar days 5 business days

3 business days The loan can close three business days after the borrower receives the Closing Disclosure.

The Fair Credit Reporting Act provides that derogatory information regarding a discharged bankruptcy be removed after ____ years. five seven ten twelve

ten The Fair Credit Reporting Act provides that derogatory information regarding a discharged bankruptcy be removed after 10 years.

With regard to property insurance coverage included with a mortgage loan, which statement is FALSE? A lender should provide a new homeowner with the lender requirements for property insurance at the loan closing. Homeowner's insurance will most likely have a deductible amount that the borrower must first pay in the event of any loss. The borrower is free to choose a home insurance company of his choice, but the company must meet the lender requirements. New homeowners may receive a discount for insuring their automobile and other articles with the hazard insurance provider.

A lender should provide a new homeowner with the lender requirements for property insurance at the loan closing. It is a good idea to provide the new homeowner, especially a first-time buyer, with the lender requirements for property insurance early in the loan process so there will be no confusion at closing.

Which statement about an option to purchase is FALSE? An option fee is refundable if the optionee does not exercise the option. An option is a unilateral contract. An option requires consideration to be enforceable. The optionor is obligated to sell if the optionee exercises the option.

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.

Of these, which document is MOST LIKELY to be given to a consumer AFTER settlement? Affiliated Business Arrangement Disclosure Statement Annual Escrow Statement Mortgage Servicing Disclosure Statement Your Home Loan Toolkit

Annual Escrow Statement After the loan closes, servicers must provide borrowers with an Annual Escrow Statement for as long as the impound account is required.

In North Carolina, the _______________ requires that real estate contracts be in writing to be enforceable. Connor Act Marketable Title Act Statute of Frauds Torrens Act

Connor Act For a deed to be valid and enforceable in most states, including North Carolina, it must be in writing and contain necessary information on its face. This is required under the Statute of Frauds.

An option to purchase is a bilateral contract because one party promises to buy and another party promises to sell. True False

False An option is a unilateral contract because only one party is obligated to act. The optionor is obligated to sell if the optionee exercises the option, but the optionee is not obligated to buy the property.

Cancellation of the seller's liens that were paid at closing may take up to 90 days post-closing. True False

False Cancellation of the seller's liens that were paid at closing may take 30-60 days post-closing.

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

False In North Carolina, the Conner Act requires that an option contract be recorded in the office of the register of deeds in the county in which the property is located [General Statutes Chapter 47-18].

An escrow closing is one in which all parties to the transaction are present. True False

False In an escrow closing, a neutral third party handles the closing, and the buyer and seller typically do not attend.

Title VIII of the Civil Rights Act of 1968 is also called the Equal Opportunity in Housing Act. Federal Fair Housing Act. HUD Equal Housing Act. U.S. Civil Rights Law.

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

Doug owns several properties in North Carolina but he lives in New York. Doug sold one of the properties to Jessica. In the state of North Carolina, Jessica is required to report the purchase within 15 days of the closing date using Form 1099NR. Form 1099NRS. Form 1009-S. Form 1099-SNR.

Form 1099NRS. The buyer uses Form NC-1099NRS (Report of Sale of Real Property by Nonresidents), which must be filed within 15 days of the closing date of the sale.

Jason, a real estate broker, also owns the mortgage company his buyer chooses. Which of the following is TRUE under RESPA? Jason must advise his buyer to select a different mortgage company. Jason may refer the buyer to his mortgage company as long as he discloses his interest in the company to the buyer. Jason may not refer buyers to his mortgage company, but if the buyer chooses the company independently, this is permitted, as long as Jason discloses his interest in the company. Jason may not refer buyers to his mortgage company, but if the buyer chooses the company independently, Jason has no obligation to disclose his interest in the company.

Jason may refer the buyer to his mortgage company as long as he discloses his interest in the company to the buyer. Real estate brokers and mortgage companies may have an interest in another company so long as they disclose their affiliation when they refer a customer to it.

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? Jackie, a property manager Jessie, a real estate broker Jill, a member of the North Carolina Association of REALTORS® Julian, a commercial lender

Jill, a member of the North Carolina Association of REALTORS® In practice, only members of the North Carolina Association of REALTORS® may use this form. Real estate brokers who are not REALTORS® may not use this form. It is recommended that brokers hire an attorney to create a compliant standard residential rental form for use in their brokerage activity.

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? Thursday, June 21 Friday, June 22 Monday, June 25 Tuesday, June 26

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.

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? Yes No

No The option fee is not refundable.

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. Yes, it's permitted if she discloses the fee arrangement to the client when she makes the referral. Yes, it's permitted if she discloses the fee arrangement to the client before the sale is finalized. Yes, it's permitted as long as she does not require the client to use that title company.

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.

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.

The contract serves as an instrument to transfer title and as a seller financing instrument. An installment land contract serves two purposes—as a contract to transfer title from the seller to the buyer and as a seller financing instrument.

Philippe has voluntarily removed his belongings from the rental unit after receiving notices from his landlord in an illegal attempt to force Philippe to move. Which of the following statements is TRUE? Philippe's landlord can evict him based on self-help eviction. Philippe's landlord can change the locks on the unit and file self-help eviction proceedings. This is considered retaliatory eviction on the part of the landlord. The landlord can retake possession without self-help eviction or summary ejectment.

The landlord can retake possession without self-help eviction or summary ejectment. Any tenant who is subject to illegal self-help eviction can file suit against the landlord. If the tenant has voluntarily moved his possessions from the leased unit or has otherwise not complied with the terms of the lease, the protection from self-help eviction does not apply.

A short sale may take additional time to close because the seller's lender must approve the sale. False True

True A short sale may take additional time to close because the seller's lenders/lienholders must approve the sale and agree to accept less than the loan balance.

Dan is buying a vacant lot where he intends to break ground for a new house within three months. This transaction is subject to the provisions of the Real Estate Settlement Procedures Act. True False

True Loans to purchase vacant or unimproved property on which a dwelling will be constructed or moved onto the property within two years are subject to RESPA.

Katrina is applying for a home equity line of credit using her current home as collateral for the loan. This transaction is subject to the provisions of the Real Estate Settlement Procedures Act. True False

True RESPA is applicable for most types of loans on residential property, including home equity lines of credit.

Which document provides a summary of a property's entire title history? abstract deed survey title report

abstract An abstract shows every title-related event in the public record for a particular piece of property.

The title search results in the creation of a(n) __________, which is a complete historical summary of title to a piece of property. abstract of title chain of title marketable title cloudless title

abstract of title The title search starts with the chain of title and results in the creation of an abstract of title, which is a complete historical summary of title to a piece of property.

Gary and Tom have a contract. Gary gives consideration that is comparable in value to Tom's consideration. This is considered adequate consideration. good consideration. lawful consideration. valuable consideration.

adequate consideration.

Which provision is included in the NCAR/NCBA Additional Provisions Addendum? agreed-upon repairs and/or improvements FHA/VA financing short sales vacation rentals

agreed-upon repairs and/or improvements The Additional Provisions Addendum includes a provision that addresses agreed-upon repairs and/or improvements. The other items listed are addressed in separate addendum forms.

Under a right of first opportunity to purchase, the potential buyer will get the opportunity to purchase the property as soon as the owner decides to sell. when the owner dies. when the owner receives a bona fide offer from another buyer. within the time period specified in the agreement.

as soon as the owner decides to sell. The right of first opportunity to purchase gives someone the right to have the first opportunity to buy a property if the owner decides to sell it in the future. Unlike a right of first refusal, the owner does not have to wait to get a bona fide offer from a third party.

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. abstract of title chain of title continuation title policy

continuation A continuation, or continuance, is used to bring down the title report from its preliminary issuance to the current date of closing to account for any new defects or clouds.

The ______________ is the final step of a real estate transaction. acceptance closing reporting the seller's proceeds to the IRS settlement

closing The final step in a real estate transaction is the closing.

Linus is buying Lucy's home, which was built in 1968. Lucy must do all of the following EXCEPT conduct tests for lead paint hazards in the home. disclose any known lead-based paint hazards in the home. give Linus a 10-day period (or other mutually agreed on time) to conduct a lead paint inspection. give Linus any reports available from prior lead tests.

conduct tests for lead paint hazards in the home. Sellers are not required to test for or remove lead paint and/or other lead hazards.

The settlement agent draws up a final title opinion after canceling the seller's liens. conducting another title search of the same records. disbursing funds from the trust account. recording the deed and deed of trust.

conducting another title search of the same records. The attorney draws up a "final" title opinion stating the deed recording information after conducting another title search of the same records used in the initial title search.

All of the following items are addressed in the Buyer's Due Diligence Process paragraph of Standard Form 12-T EXCEPT negotiations for repairs. utilities and access. soil and environmental reports. streets and roads investigation.

negotiations for repairs. Negotiations for repairs do not apply to unimproved property.

When a changed circumstance has occurred to the loan product after the Closing Disclosure has been delivered to the borrower, the loan originator must call the borrower and inform him of the fee change. complete a valid changed circumstance form and have the borrower sign it. deliver a revised Closing Disclosure and apply a new three-day waiting period before loan consummation. deliver a revised Closing Disclosure at settlement.

deliver a revised Closing Disclosure and apply a new three-day waiting period before loan consummation. If the Closing Disclosure has changed because of the loan's APR, product change, or if a pre-payment penalty has been added, the borrower must receive a new Closing Disclosure and be given a new three-day waiting period prior to loan consummation.

Seller Dino's property is listed with broker Kim. Kim receives an offer along with a check for the earnest money deposit made payable to Kim's real estate firm. According to the Real Estate Commission Rules, Kim must deposit the check into the trust account no later than three banking days following receipt of the check. deposit the check into the trust account no later than three banking days following acceptance of the offer. turn the check over to the seller no later than three banking days following receipt of the check. turn the check over to the seller no later than three banking days following acceptance of the offer.

deposit the check into the trust account no later than three banking days following 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.

Betty signs a listing agreement with Lots-O-Wealth Real Estate Company. They sell her house and she pays them the promised commission. Therefore, all terms of the contract have been met. This contract is now discharged. liquidated. mitigated. rescinded.

discharged One way in which a contract is discharged or terminated is when all of the terms have been met. Internal Reference: Other Contract-Related Concepts, Discharge of Contracts

Which closing method is handled by a neutral third party? escrow closing method both closing methods neither closing method settlement meeting method

escrow closing method The escrow closing method is handled by a neutral third party.

The settlement agent does NOT conduct settlement proceedings. collect and disburse funds. execute loan documents. prepare the settlement statement.

execute loan documents. The settlement agent's duties include conducting settlement proceedings, collecting and disbursing all funds to the appropriate parties, and preparing the settlement statement.

In a conflict regarding the rights and duties of parties to a lease contract, which of these governs and determines the residential tenant's rights and protections? common law federal and state law privity of contract privity of estate

federal and state law A lease creates two sets of rights and duties between the parties, privity of estate (common law) and privity of contract (expressed contractual promises). If either of these conflicts with provisions of federal and state laws that protect the rights of tenants, the law governs and determines the residential tenant's rights and protections.

Broker Brigette's buyer client intends to purchase a home using a VA loan. Brigette completes the FHA/VA Financing Addendum, which will allow the buyer to back out of the contract without penalty for any or no reason within the specified time. if the buyer fails to qualify for the loan. if the property is destroyed or materially damaged. if the value of the property is less than the purchase price.

if the value of the property is less than the purchase price. This addendum includes a clause that allows the buyer to back out of the contract without penalty if the VA does not provide a written statement setting the value of the property at or above the purchase price stated in the purchase agreement.

A lease agreement creates a freehold estate for the lessee. leasehold estate for the lessee. freehold estate for the tenant. nonfreehold estate for the lessor.

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).

Which of the following is NOT an essential element of a residential lease? consideration legal description legal purpose mutual agreement

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

A buyer submits an offer to his agent, who gives it to the listing agent for delivery to the sellers. The sellers like the offer and sign their acceptance. They then hand the accepted offer to their agent with instructions to deliver the accepted contract back to the buyer. Has a binding contract been created? yes, because the listing agent has possession of the accepted offer yes, because the offer has been delivered to the buyer yes, because the offer was accepted no, because the sellers' acceptance has not been communicated to the buyer

no, because the sellers' acceptance has not been communicated to the buyer The offer does not become a binding contract until the sellers' acceptance is communicated to the offeror (the buyer) or the offeror's agent.

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 assignment. novation. rescission. tender offer.

novation. Novation substitutes one contract for another or one party to the contract for another. Internal Reference: Other Contract-Related Concepts, Assignment and Novation of Contracts

When putting together a property management plan to propose to an owner, Sue should include which of the following items? Select all correct responses. six-month expense projection one-year operating budget one-year stabilizing budget plan five-year employment contract five-year stabilizing budget plan market analysis property value analysis

one-year operating budget five-year stabilizing budget plan market analysis A typical management plan should include a one-year operating budget, five-year stabilizing budget plan, and a market analysis of the region, neighborhood, and property.

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 after signing the purchase contract. prior to the expiration of the due diligence period. prior to signing the purchase contract. once the closing has been scheduled.

prior to the expiration of the due diligence period. The buyer is advised to make any repair/improvement requests in sufficient time to allow negotiations to be concluded prior to the expiration of the due diligence period.

In a lease agreement, duties that arise because of the express contractual promises of the lease contract are referred to as federal and state law. privity of contract. privity of estate. freehold estate.

privity of contract. Duties that arise because of the contract itself or the express contractual promises of the lease are called privity of contract.

Albert is buying Eve's land. They sign a contract. He gives her a check for $12,000, and she signs the deed. When the check bounces, which is not a possible remedy open to Eve for Albert's breach of contract? cancellation compensatory damages punitive damages specific performance

punitive damages There are many remedies available to a party to a contract that has been breached, but Eve cannot sue for punitive damages. Internal Reference: Other Contract-Related Concepts, Contract Remedies: Money Damages

Which provision is included in the NCAR/NCBA Additional Provisions Addendum? FHA/VA financing rental property short sales vacation rentals

rental property The addendum includes a provision that addresses rental property. The other items listed are addressed in separate addendum forms.

A statement of fact that is made to influence a person's decision to enter into a contract is referred to as a(n) amendment. contingency. disclaimer. representation.

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

What must be included in an option to purchase agreement? earnest money deposit obligation of the buyer to meet the price of a bona fide offer refundable option fee sales price to be paid for the property if the optionee exercises the option

sales price to be paid for the property if the optionee exercises the option The option contract must include the sales price and all other terms and provisions of the sale that will apply if the optionee exercises the option. The option fee is not refundable.

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 money from Jack for repairs? legal action monthly rent pet fee security deposit

security deposit If a pet causes damage to the walls of the rental unit, the landlord may only deduct repair fees from the tenant's security deposit--not from the pet fee. The landlord may take legal action against the tenant if the damage caused by the pet exceeds the security deposit being held by the landlord.

When evaluating a Loan Estimate, which of the following expenses is subject to a 10% tolerance? flood insurance premiums processing charges paid to the lender services the borrower can shop for transfer taxes

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.

When a court orders someone who has breached a contract to perform as agreed, rather than paying damages, it is known as full performance. novation. reformation. specific performance.

specific performance. This is known as specific performance, which occurs most often when the non-breaching party to a contract cannot be compensated for harm that resulted from the other's breach. Internal Reference: Other Contract-Related Concepts, Contract Remedies: Specific Performance

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? fuel tank inspections inspections of the condition of improvements negotiations for repairs to the property streets and roads investigation

streets and roads investigation The buyer of vacant land should conduct an investigation to determine the status of the street/road on which the property fronts and whether any streets/roads used to access the property are public or private and the responsibility for maintenance. The other items listed do not apply to unimproved property.

Broker Sampson is the listing agent for seller Baxter, whose property is listed for $399,000. While Baxter is considering an offer for $395,000, Sampson receives an offer from another buyer for $375,000. Sampson should hold the offer until Baxter makes a decision on the original offer. inform the new offeror that the seller is currently considering an offer for $395,000. reject the offer. submit the offer to Baxter.

submit the offer to Baxter. A broker does not have authority to independently accept or reject offers. A broker has a duty to disclose to a seller client all offers to purchase even if an offer seems unacceptable. Also, according to Commission Rules, a broker must not disclose the price or other material terms of a party's offer to purchase to a competing party without the express authority of the offering party.

Steve finally lands a job in another state, so Mark is now ready to find a tenant for his duplex. After advertising, he finds a nice, quiet computer programmer, Lewis, to rent it. Mark and Lewis sign a 12-month lease with a definite expiration date. What does this situation represent? tenancy at sufferance tenancy at will tenancy for years periodic tenancy

tenancy for years A tenancy for years is any leasehold estate for a fixed period with a definite expiration date. Despite the name, the term doesn't have to be years. The occupancy can last for 10 days, 10 months, or 10 years.

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 monthly PITI payment? $1,073 $1,398 $1,470 $1,650

$1,650 The 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.

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? a. governmental survey b. lot and block c. metes and bounds d. rectangular survey

B. Lot and Block Lot and block is the system of legal description used for platted property.

What is the MOST LIKELY method for a North Carolina town to pay for the installation of new sidewalks in an older residential neighborhood? a. charge each owner an annexation fee b. impose a special assessment c. levy a special use tax d. pass an appropriation bill

B. Impose a special assessment Special assessments are taxes that pay for public improvements such as new sewers, streetlights, sidewalks, or curbs in a neighborhood and are paid for by the property owners who benefit.

In the metes and bounds system, the description always ends at the a. fixed monument. b. intersection of range lines and baselines. c. point of beginning. d. primary deviation.

C. Point of beginning Metes and bounds descriptions always start and end at the point of origin or point of beginning.

Lisa forgot to pay her property taxes by the September 1 due date. On which date will interest begin accruing on her unpaid property taxes? a. September 2 of the current tax year b. October 1 of the current year c. January 1 of the following year d. January 6 of the following year

D. January 6 of the following year January 5 of the following year is the last day that property taxes can be paid before taxes are considered delinquent. In addition to possible enforcement actions, interest begins accruing on January 6.

Which paragraph is omitted from the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T because it does not apply? Addenda Home Warranty Possession Seller Obligations

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

Which of the following statements regarding the handling of a due diligence fee is TRUE? If a broker is given cash for the fee, it should be immediately turned over to the seller. If the broker receives a check for the fee, it should be immediately deposited into the broker's trust account. If the broker receives a check for the fee, it should be deposited into the broker's trust account when a binding contract is created. If the broker receives a check for the fee, it should be delivered to the seller when a binding contract is created.

If the broker receives a check for the fee, it should be delivered to the seller when a binding contract is created. Due diligence fees are not trust money and should not be deposited into a broker's trust or escrow account, unless a fee is paid in cash. If a broker receives a check for the due diligence fee with the offer, the broker may hold the check until the offer becomes a binding contract, at which point the check should be delivered to the seller as soon as possible.

___________ describes the flow of deposits into lending institutions, creating a mortgage money supply. Disintermediation Economics Hypothecation Intermediation

Intermediation Intermediation describes the flow of deposits into lending institutions, creating a mortgage money supply.

Louise, a potential home buyer, is chatting with a broker. Of the information Louise shares with the broker, which is LEAST LIKELY to be considered confidential information? a. her current address b. her reason for house hunting c. the price range she's looking at d. the terms of her divorce

This is an example of not reading the question correctly!! Read it!! a. her current address All of the other choices besides her current address could be considered confidential information since they could at the very least hint at Louise's financial situation and motivation, besides, Louise's current address is likely to be a matter of public record.

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? a. $172,000 b. $173,000 c. $174,000 d. $175,000

a. $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.

Which statement about the Residential Property and Owners' Association Disclosure Statement is TRUE? a. A buyer must receive a copy of the disclosure on or before making an offer to purchase. b. Only visible structural defects need to be disclosed to the buyer, not material facts about appliances. c. The seller has a duty to disclose death by natural causes or suicide that occurred on the property. d. Sellers of multi-family residential property of 5 or fewer dwelling units must provide the disclosure to a buyer.

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

Which statement regarding the handling of a due diligence fee is TRUE? a. If a broker is given cash for the fee, it should be deposited into the broker's trust account. b. If a broker is given cash for the fee, it should be immediately turned over to the seller. c. If the broker receives a check for the fee, it should be immediately deposited into the broker's trust account. d. If the broker receives a check for the fee, it should be deposited into the broker's trust account when a binding contract is created.

a. If a broker is given cash for the fee, it should be deposited into the broker's trust account. Due diligence fees are not trust money and should not be deposited into a broker's trust or escrow account, unless a fee is paid in cash. A due diligence fee paid in cash must be deposited within three banking days of receipt. If the offer becomes a binding offer, the broker writes a check from the trust account payable to the seller.

A minimum bid and seller's confirmation would NOT be associated with what type of sales transaction? a. absolute auction b. buyer's choice auction c. sealed-bid d. with reserve auction

a. absolute auction At an absolute auction, the property is sold to the highest qualified bidder without a minimum bid or a right of confirmation. Internal Reference: Essential Elements of a Contract, Auction Sales and Statute of Frauds; Two Primary Types of Auctions

A preemptive right refers to the right to a. buy or lease property before others. b. reclaim property before a foreclosure sale. c. reclaim property when a vendee defaults on a land contract. d. take possession of property belonging to others.

a. buy or lease property before others. A preemptive right refers to the right to buy or lease property before others.

Jill tells Rick that she will walk his dog for $40 a week, and they shake on the deal. This oral contract is a. express and valid. b. implied and valid. c. unenforceable. d. void.

a. express and valid. An oral contract such as this is valid, and since Jill and Rick explicitly described the terms, it is an express contract.

Which of the following is NOT a characteristic of a real property tax lien? a. general b. statutory c. specific d. involuntary

a. 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.

Judgment liens are liens against a person's property through court action. This means they are usually a. involuntary (equitable) general liens. b. involuntary (statutory) specific liens. c. voluntary (statutory) general liens. d. voluntary (equitable) specific liens.

a. involuntary (equitable) general liens. Judgment liens are usually involuntary (equitable) general liens. A statutory lien is a result of a law, ordinance, or regulation, as opposed to court action.

All of the following are examples of specific liens EXCEPT a. judgment liens. b. mechanic's liens. c. property tax liens. d. special assessments

a. judgment liens. Judgment liens are general; they can attach to any property a debtor owns.

All of the following items are addressed in the Buyer's Due Diligence Process paragraph of Standard Form 12-T EXCEPT a. negotiations for repairs. b. utilities and access. c. soil and environmental reports. d. streets and roads investigation.

a. negotiations for repairs. Negotiations for repairs do not apply to unimproved property.

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 a. unenforceable. b. valid. c. void. d. voidable.

a. unenforceable. This oral contract would likely be unenforceable in a court of law since the 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.

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 a. counterofferee. b. counterofferor. c. offeree. d. offeror.

b. counterofferor. Homeowner Emily, originally the offeree, is now the counterofferor. James, the original offeror, is now the counterofferee. Internal Reference: Essential Elements of a Contract, Auction Sales and Statute of Frauds; Counteroffer

Seller Stephanie's property is listed with broker Dwayne. Dwayne receives an offer along with a check for the earnest money deposit made payable to Dwayne's real estate firm. According to the Real Estate Commission Rules, Dwayne must a. deposit the check into the trust account immediately. b. deposit the check into the trust account within three banking days following acceptance of the offer. c. turn the check over to the seller immediately. d. turn the check over to the seller within three banking days following acceptance of the offer.

b. deposit the check into the trust account within 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.

Harold and Joanne have been neighbors for years. Until recently, Harold has used Joanne's drive as the only way to get to his garage. Harold buys the lot behind his house, tears down the old garage and builds a new one with his own driveway from the street behind his house. How is this easement being terminated? a. destruction b. failure of purpose c. merger d. This easement is not terminated.

b. failure of purpose Harold no longer needs the easement since he has a new garage and driveway, so it would be terminated by a failure of purpose.

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) a. co-listing agreement. b. limited-service listing contract. c. open listing contract. d. protection agency agreement.

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

Timothy is a tax assessor, which means that he is MOST LIKELY a _____________ official. a. federal government b. local government c. non-governmental d. state government

b. local government Generally, a tax assessor is a local government official who has either been elected or appointed to estimate the value of real property within the boundaries of a specific municipal entity that has the authority to tax real property.

Walter is selling his beautiful old home on Elm St. The Lead-Based Paint Hazard Addendum indicates that the prospective buyer, Wanda be given a. a due diligence period to remediate a known lead-based paint hazard. b. the EPA pamphlet titled Protect Your Family From Lead in Your Home. c. a risk assessment paid for by the seller, if the house was built prior to 1978. d. twenty days to get an EPA inspection for lead-based paint.

b. the EPA pamphlet titled Protect Your Family From Lead in Your Home. Sellers do not have to conduct lead tests, however, if any prior lead tests have been done, sellers must provide the results of those tests. Internal reference: Title X Key Points; Title X Disclosure

Buyer Justin and seller Juanita have entered into a binding contract using the NCAR/NCBA Offer to Purchase and Contract. During the due diligence period, Justin discovers that he will be unable to obtain financing to purchase the property. If Justin decides to terminate the transaction and provides proper written notice to Juanita before the due diligence period expires, Justin is entitled to a refund of a. the due diligence fee only. b. the earnest money deposit only. c. the due diligence fee and the earnest money deposit. d. neither the due diligence fee nor the earnest money deposit.

b. the 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.

A preemptive right refers to the right to buy or lease property before others. reclaim property before a foreclosure sale. reclaim property when a vendee defaults on a land contract. take possession of property belonging to others.

buy or lease property before others. A preemptive right refers to the right to buy or lease property before others.

Which statements regarding an installment land contract is FALSE? a. The buyer is typically responsible for property taxes, property insurance, homeowner dues, and assessments. b. The contract serves as an instrument to transfer title and as a seller financing instrument. c. An installment land contract is typically more difficult to qualify for than a bank loan. d. An installment land contract may also be referred to as a contract for deed.

c. An installment land contract is typically more difficult to qualify for than a bank loan. An installment land contract is typically easier to qualify for than a bank loan. All of the other statements are true.

During a listing appointment, the sellers confide that their 15-year-old son accidentally hanged himself in his bedroom. The sellers instruct you not to tell any buyer about the accident. What should you do? a. If you take the listing, you must include this information in the MLS entry as it is a material fact. b. If you take the listing, you must inform the sellers that if a buyer specifically asks, you must tell them about it. c. If you take the listing, you should assure the sellers that you will not disclose this information. d. You should refuse the listing since the sellers are asking you to do something illegal.

c. If you take the listing, you should assure the sellers that you will not disclose this information. This information is not considered to be material to the condition of the property; therefore, you are not required to disclose. If you take this listing, you must keep this information confidential. If asked specifically, however, if you choose to discuss the situation, you must be truthful.

Joan is selling her home. She needs to pay off a $65,000 first mortgage and a $15,000 second mortgage, and she wants $10,000 in cash for herself. If her closing costs will total $1,200 and she must pay a 7% commission, how much must she sell the property for? a. $84,816 b. $85,887.85 c. $97,584 d. $98,064.52

d. $98,064.52 First, determine how much she needs to cover her costs and desired cash: $65,000 + $15,000 + $10,000 + $1,200 = $91,200. Because she's paying a 7% commission, you next divide the costs by 93% to find the minimum selling price: $91,200 / 0.93 = $98,064.52.

Which of the following standard addenda is identified in the Offer to Purchase and Contract—Vacant Lot/Land Standard Form 12-T as one that may be attached and made a part of the contract? a. FHA/VA Financing Addendum Standard Form 2A4-T b. Lead-Based Paint or Lead-Based Paint Hazard Addendum Standard Form 2A9-T c. Owners' Association Disclosure Addendum Standard Form 2A12-T d. Seller Possession After Closing Agreement Standard Form 2A8-T

c. Owners' Association Disclosure Addendum Standard Form 2A12-T If the property subjects the buyer to regulation by an owners' association, the seller provides an Owners' Association Disclosure Addendum. The other addenda listed here do not apply to a transfer of a vacant lot or vacant land.

In North Carolina, a real estate broker who works for the seller must present the Working with Real Estate Agents Disclosure to a prospective buyer a. after first receiving confidential information. b. after the first property showing. c. at the first substantive contact. d. at the time the buyer wishes to make an offer on the property.

c. at the first substantive contact. The WWREA Disclosure must be presented and reviewed at first substantial contact before any personal or confidential information is shared.

Peter signs a listing contract with ABC Realty to sell his property. Unless the listing agreement designates a specific agent, all affiliated licensees at ABC are considered to a. be designated agents. b. be dual agents. c. be seller's agents. d. have no agency relationship.

c. be seller's agents. In North Carolina, all affiliated licensees are considered to have the same relationship with the client as the firm unless the broker-in-charge appoints a specifically designated agent. In this case, all licensees are seller's agents.

Agent Sally enters into a buyer brokerage agreement with buyer Brad. Sally reads an ad placed by an FSBO seller, offering 3.5% commission to the broker who brings the buyer. What is the seller considered to be to Sally if Brad makes an offer on the property? a. agent b. client c. customer d. principal

c. customer In this relationship, the agent, Sally, exclusively represents the buyer. The seller is representing himself and is Sally's customer.

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? a. complete b. express c. implied d. unilateral

c. implied An implied contract is one that has not been explicitly expressed, but the terms of which are implied by the actions of the parties. Melissa expects her coat to be professionally cleaned in a timely manner, and the dry cleaner expects to be paid for their services.

Broker Edith works for Top Notch Realty, and her buyer client is interested in property that is listed with another firm. The listing firm is offering a commission of 3% to any cooperating broker. Edith's client thinks she has done an excellent job finding just the right property, so the client tells Edith to include a provision in the preprinted offer to purchase and contract stipulating that the listing firm will pay Top Notch Realty a commission of 3.5%. Is Edith permitted to include this provision in the offer? a. yes, because the compensation arrangement must be addressed in the written offer b. yes, because Edith was instructed to do so by her client c. no, Edith is prohibited from including any provision related to compensation in a preprinted offer d. no, only the listing broker can include a provision related to compensation in a preprinted offer

c. no, Edith is prohibited from including any provision related to compensation in a preprinted offer 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 her buyer client.

To establish the value of a property for a VA-guaranteed loan, the required documentation is a broker price opinion. certificate of eligibility. certificate of reasonable value or notice of value. competitive market analysis.

certificate of reasonable value or notice of value. For VA-guaranteed loans, a certificate of reasonable value or notice of value is required.

The attorney who conducted the settlement meeting updates the title by changing the date on the title. conducting another title search. recording the title. revising the title insurance policy.

conducting another title search. Updating the title involves another title search from the settlement agent/attorney to ensure the title is still clean (no recent recordings) since the prior title search.

What should be brought to closing to itemize any changes in a property's title since the preliminary title report was issued? abstract of title chain of title continuation title policy

continuation A continuation, or continuance, is used to bring down the title report from its preliminary issuance to the current date of closing to account for any new defects or clouds.

Joe needs to pay an estimated $2,000 in closing costs and $150,000 on his current mortgage, and he wants $58,000 in cash for a down payment on another house. His listing agreement obligates him to pay a 7% commission to the brokerage. What is the minimum selling price he can accept? Round your answer up to the nearest dollar. a. $197,400 b. $218,400 c. $222,600 d. $225,807

d. $225,807 First, add all of the expenses to find the desired net after the commission: $2,000 + $150,000 + $58,000 = $210,100. Then determine the amount of the sales price left after commission: 100% - 7% = 93% or 0.93. Finally, divide the desired net by the sales price after commission: $210,000 / 0.93 = $225,807. Joe must sell his home for at least $225,807 to get the desired net and pay the contracted commission and other expenses.

A-Squared Brokerage in Wilmington, which practices traditional agency, has 10 affiliated brokers and a qualifying broker who also serves as the broker-in-charge. Seller Susan meets with agent Lucy and signs a listing contract. How many people represent Susan? a. 1 b. 2 c. 10 d. 11

d. 11 In this scenario, every licensee at A-Squared has the same relationship with the client as the firm. There are 10 affiliated brokers and the qualifying broker. Therefore, 11 people represent Susan

A broker has an established business relationship with a former client for up to ___________ after a transaction closes. This allows the broker to solicit business over the phone even if that consumer is on the National Do Not Call Registry. a. 90 days b. 6 months c. 1 year d. 18 months

d. 18 months A broker may call a consumer with whom it has an established business relationship (EBR) for up to 18 months after the consumer's last purchase, delivery, or payment, even if the consumer's number is on the National Do Not Call Registry.

Martin offers to buy Aaron's house for $125,000, with settlement to take place on March 1. Aaron crosses out the settlement date, changes it to March 15, initials and dates the change, signs the offer, and returns it to Martin. Which of the following statements is FALSE? a. Aaron has made a counteroffer. b. Aaron has rejected the original offer. c. Aaron is now the offeror. d. Because Aaron changed only the settlement date and not the price, the offer has been accepted.

d. Because Aaron changed only the settlement date and not the price, the offer has been accepted. A counteroffer is a response to an offer to enter into a contract, changing some of the terms of the original offer. A counteroffer is a rejection of the original offer (not a form of acceptance) and does not create a binding contract.

Lisa forgot to pay her property taxes by the September 1 due date. On which date will interest begin accruing on her unpaid property taxes? a. September 2 of the current tax year b. October 1 of the current year c. January 1 of the following year d. January 6 of the following year

d. January 6 of the following year January 5 of the following year is the last day that property taxes can be paid before taxes are considered delinquent. In addition to possible enforcement actions, interest begins accruing on January 6.

Who are the parties to an auction real estate purchase contract? a. auctioneer and buyer b. auctioneer and ringman c. auctioneer and seller d. buyer and seller

d. buyer and seller The auctioneer's "sold!" represents a meeting of the minds between the buyer and the seller, creating an oral contract that is then executed with a purchase agreement. The seller has authorized the auctioneer to act on his behalf (as his agent) to find a buyer, and procure this contract. Internal Reference: Essential Elements of a Contract, Auction Sales and Statute of Frauds; The Auctioneer: Forming a Contract

Joel and Andy work for Blue Roof Realty. Joel has listed 1776 Constitution Road and Andy has an interested buyer. If Joel and Andy put this deal together, then it will a. allow Joel and Andy to take advantage of what each other knows about the seller and buyer. b. be an in-house deal where each client must be represented individually as designated agents. c. be illegal because in-house transactions are prohibited in North Carolina. d. create a dual agency situation that requires written consent from buyer and seller.

d. create a dual agency situation that requires written consent from buyer and seller. It will be a perfectly legal in-house deal, as long as the brokerage allows it and both buyer and seller provide informed written consent for dual agency. If the firm allows designated dual agency, then the broker-in-charge of Blue Roof could appoint Joel and Andy to represent their respective clients, but it's not a requirement.

If a firm acts as a seller's agent, who represents the buyer? a. If a firm acts as a seller's agent, who represents the buyer? b. any affiliated broker who shows the property to the buyer c. the broker-in-charge d. no one

d. no one In this scenario, no one represents the best interests of the buyer, who is simply a customer. The buyer would need to sign a buyer brokerage agreement with a broker to create a buyer's agency relationship.

A buyer submits an offer to his agent, who gives it to the listing agent for delivery to the sellers. The sellers like the offer and sign their acceptance. They then hand the accepted offer to their agent with instructions to deliver the accepted contract back to the buyer. Has a binding contract been created? a. yes, because the listing agent has possession of the accepted offer b. yes, because the offer has been delivered to the buyer c. yes, because the offer was accepted d. no, because the sellers' acceptance has not been communicated to the buyer

d. no, because the sellers' acceptance has not been communicated to the buyer The offer does not become a binding contract until the sellers' acceptance is communicated to the offeror (the buyer) or the offeror's agent.

Mallory signs a piece of paper promising to clean her mother's house. This is a. an express bilateral contract. b. an express unilateral contract. c. an implied bilateral contract. d. not a contract.

d. not a contract. If Mom does not offer something in return for Mallory's promise to clean the house, this is not a contract. Internal Reference: Basic Contract Concepts, Terminology and Classifications; Bilateral/Unilateral

Which of these is NOT an example of police powers? a. declaring a stretch of river along a scenic waterway, thus preventing development b. putting zoning laws in place to prohibit nude dance clubs within a mile of a school c. requiring all homes with livable basement areas to have an escape window d. taking property to build a highway through eminent domain

d. 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.

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? a. general agency b. limited agency c. special agency d. universal agency

d. universal agency Iggy is a universal agent. He is authorized to do anything and everything that can be lawfully delegated to a representative.

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? a. general agency b. limited agency c. special agency d. universal agency

d. universal agency Joan is a universal agent. She is authorized to do anything and everything that can be lawfully delegated to a representative.

Because of the MLS and the growing availability of buyer's agency, subagency as a business relationship is less common. To hasten its demise is the fact of a. agency. b. caveat emptor. c. E & O insurance. d. vicarious liability.

d. vicarious liability. Subagency creates additional liability for the listing firm. In an agency relationship, the principal can be liable for wrongful acts of the agent. In a subagency situation, the listing firm (the principal) may be held liable for the actions of the subagent. This is referred to as vicarious liability.

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) a. judgment lien. b. lis penden. c. restrictive covenant. d. writ of attachment.

d. writ of attachment. The writ of attachment is 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.

If a broker receives an option fee that is paid in cash, the broker must deposit it in the firm's trust account when a binding option contract has been created. deposit it in the firm's trust account within three banking days of receipt. turn it over to the property owner within three banking days of receipt. turn it over to the property owner when a binding option contract has been created.

deposit it in the firm's trust account within three banking days of receipt. Option fees are not trust money and should not be deposited into a broker's trust or escrow account, unless a fee is paid in cash. Cash must always be deposited within three banking days of receipt.

Agent Lenny and his client Hannah have just signed an open listing agreement that will pay Lenny a 6.5% commission only if he finds a willing and able buyer for her house, while he has no specific obligation to do so. Which option best describes this agreement at this time? express, bilateral, executed express, bilateral, executory express, unilateral, executory implied, bilateral, executed

express, unilateral, executory The contract is express because it is written, unilateral because only Hannah has made a binding promise, and executory because both parties have yet to perform the obligations of the agreement.

Who is ultimately responsible for ensuring the Closing Disclosure is available for the buyer's inspection? attorney lender person designated as power of attorney settlement officer

lender The lender is ultimately responsible for ensuring that the Closing Disclosure is available for the borrower's inspection.

The time period for enforcement of a contract is established by the statute of frauds. lis pendens. limitations. parol evidence.

limitations. The statute of limitations provides time limits within which parties are allowed to bring legal action to enforce their rights under a contract. Internal Reference: Other Contract-Related Concepts, Contract Remedies

Tom agrees to buy Gary's house with a contingency that he put in new kitchen appliances. Tom puts down a $5,000 earnest money deposit, and Gary installs the new kitchen appliances. Tom backs out of the deal. There was a clause in their contract stating, "If the buyer breaches the contract, he forfeits the earnest money deposit." This is compensatory damages. liquidated damages. rescission. specific performance.

liquidated damages. Forfeiture of the earnest money deposit as specifically noted in the sales agreement is an example of liquidated damages. Internal Reference: Other Contract-Related Concepts, Contract Remedies: Money Damages

A sum of money that the parties to a contract agree in advance will serve as compensation in the event of a contract breach is referred to as collateral damages. compensatory damages. liquidated damages. punitive damages.

liquidated damages. Liquidated damages would be the amount of money that the parties to a contract agree in advance will serve as compensation in the event of a contract breach. An offer to purchase and contract often includes a clause calling for forfeiture of the earnest money deposit to the seller if the buyer breaches.

David is a paralegal who often prepares documents and coordinates closings. In this role, David may execute documents on the buyer's behalf. may serve in the same capacity as an attorney. must be a neutral third party. must be under the direct supervision of the closing attorney.

must be under the direct supervision of the closing attorney. Non-attorney parties, such as a paralegal or an assistant, may be involved with the preparation of documents and coordinating the closing, but must be under the direct supervision of the closing attorney.

The phrase "meeting of the minds" refers to consideration. legal intent. offer and acceptance. two or more parties.

offer and acceptance. In order for a contract to be valid, there must be offer and acceptance, which is also referred to as a meeting of the minds. Internal Reference: Essential Elements of a Contract, Auction Sales and Statute of Frauds; Mutual Assent (Offer and Acceptance)

If a broker who is not an attorney drafts a real estate sales contract, it is referred to as the unauthorized practice of law. practice of real estate. procedure of law. professional practice.

practice of law. Real estate brokers are not permitted to draft real estate sales contracts. To do so would be considered the unauthorized practice of law.

Marcy is behind on her mortgage loan payments and wants to sell her home as a short sale. In order for Marcy's lender to consider a short sale, she must have a good credit score. have some equity in the home. hire an agent to negotiate the deal with the lender. prove financial hardship.

prove financial hardship. One qualification of a short sale is the homeowner must prove financial hardship to the lender.

Jenny was evicted by her landlord for organizing a tenants' rights organization in the rental property. Which type of eviction is this? constructive eviction judicial ejectment retaliatory eviction self-help eviction

retaliatory eviction Retaliatory eviction, the eviction of a tenant by a landlord in response to the tenant for making complaints about the condition of the rental unit or becoming involved in a tenants' rights organization (all in good faith), is prohibited under North Carolina law.

Mary Ann wants to avoid foreclosure, so she asks the lender to accept a purchase price that is less than the amount owed on her property. This type of arrangement is a deed in lieu of foreclosure. deficiency agreement. fiduciary deed. short sale.

short sale. A short sale occurs when the lender is willing to accept less than what is owed on the property as a purchase price to avoid the foreclosure process.

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 bilateral express contract. bilateral implied contract. unilateral express contract. unilateral implied contract.

unilateral express contract. The contract is a unilateral express contract since one party makes a binding promise in words to the other party to act, even though there is no obligation for the second party to act. Internal Reference: Basic Contract Concepts, Terminology and Classifications; Bilateral/Unilateral

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 invalid. unenforceable. void. voidable.

void. The contract is void since the agreement was based on an illegal exchange Internal Reference: Basic Contract Concepts, Terminology and Classifications; Contract Validity