Practice 4 Questions
Under the standard NCAR / NCBA Offer to Purchase and Contract the buyer has how many days to delay settlement?
14 calendar days
Which of the following statements about compensation is true?
An active licensed broker in another state may be paid a referral fee when the sale of property is in NC.
A agrees to sell her house to B for $250,000 each with exclusive representation by brokers affiliated with different firms using the Standard NCAR / NCBA Offer to Purchase and Contract. The appraisal is performed and is $10,000 less than the agreed purchase price. The buyer and seller agree to reduce the purchase price. This is known as:
An amendment
A commercial broker actively licensed in good standing in a state other than NC is interested in representing buyers and sellers in the sale or lease of commercial property. Which of the following would NOT be required in order for the agent to lawfully engage in this type of brokerage activity?
Broker must pass the State portion of the licensure exam.
The fee paid by the seller which may be levied when an interest in real property is conveyed to another is known as a (an):
Excise tax
Which of the following advertisements placed by licensed brokers would comply with License Law and Commission Rules?
Fulfill your dreams or someone else. Great opportunity to own investment property while your tenant pays the mortgage. One unit rents for $1400. Large duplex for only $280,000. Call James Jones Broker XYZ Realty at 919-555-1212.
Gus is under contract using the standard NCAR / NCBA Offer to Purchase for 1412 Peppertree Lane with the payment of a $1000 due diligence fee and $1500 earnest money deposit. The due diligence period expires in 5 days. The buyer has paid for loan application, appraisal, property inspection, survey and pest inspection. Which of the following statements is FALSE?
Gus will be entitled to a refund of the earnest money deposit and due diligence fee if a major foundation issue is discovered and termination is made prior to the expiration of due dilligence period.
The listing broker is holding an open house. Which of the following statements made by a prospective buyer would require the listing broker to disclose the Working with Real Estate Agent's brochure?
I am approved for a maximum purchase price of $250,000
A brokerage would violate trust account rules:
If an affiliated broker's commission is paid from the account.
Russell is preparing to list a single family property in Chapel Hill, NC. The local multiple listing service requires Russell to report the living area of the property. Which of the following statements is FALSE regarding Commission guidelines for square footage?
The buyer's agent must verify the accuracy of Russell's calculation by measuring the home.
A broker lists a duplex property for sale that is subject to lease agreements. A buyer is interested in purchasing the property to live in one side and have a family member live in the other. Both units are currently, one that is month to month and the other has 5 months remaining. Under the current situation, the listing broker should advise the potential buyer:
The new owner may give termination notice to the tenant renting month to month however must honor the lease with 5 months remaining
A broker lists a duplex property for sale that is subject to lease agreements. A buyer is interested in purchasing the property to live in one side and have a family member live in the other. Both units are currently rented, one that is month-to-month and the other has 5 months remaining. Under the current situation the listing broker should advise the potential buyer:
The new owner may give termination notice to the tenant renting month-to-month however must honor the lease with 5 months remaining.
Bruce represents a buyer that is under contract to purchase a property listed with Suzette, another broker of his firm. A local closing attorney is handling the settlement and closing of the property. Which of the following statements is true regarding settlement and closing?
The settlement agent cannot release funds until all funds have been received from the buyer, lender or others and the deed and deed of trust have been recorded.
Which of the following statements regarding the standard NCAR / NCBA offer to purchase form 2-T is false?
The standard contract is created by the NC Real Estate Commission.
A makes an offer through her agent to buy B's house. A's agent delivers the offer to B's agent. B's agent presents the offer to B who promptly signs the offer without changes. B's agent emails A's agent of informing them of acceptance. Then B mails the offer to A's office which is received 2 days later. When was a legally binding contract formed?
When B's agent emails A's agent informing them of acceptance.
Seller's agent A lists a property for sale in a desirable location in Charlotte, NC. Buyer's agent B represents a buyer that becomes interested in the property. At which point must agent B disclose to agent A that they are acting as a buyer's agent in the transaction?
When agent B telephones agent A to schedule a showing appointment
A property that is located in the western part of NC:
Will have a higher R-value
During a continuing education class a student asks if a referral fee may be paid to a broker that is on active status however is not affiliated with a broker in charge. The instructor states that this is permitted and in addition highlights that compensation cannot be paid to a licensee that is on inactive status. Is the instructor's response correct?
Yes, as a broker that has removed provisional status may be on active status even though they are not affiliated with a BIC or obtained BIC status
A licensed broker has decided to rent an apartment in a nearby city since a large majority of his residential brokerage sales have been in that area. The owner of the property is not represented by a property manager and is leasing For Lease by Owner. The owner does not have a residential lease agreement and asks the broker to create a lease offer. Can the broker follow this request?
Yes, the broker can use a preprinted form that has been prepared by an attorney.
Both the buyer and seller have exclusive representation by provisional brokers under respective buyer agency and listing agreements. The listing firm has offered 3.5% commission to be paid to the selling firm. Upon closing, the listing firm pays both the buyer and seller agent his / her compensation directly. Does this violate license law?
Yes. Compensation cannot be paid directly to the buyer agent.
A licensed broker is purchasing a property from a For Sale by Owner. The seller has signed a protection agreement that provides 3% commission to the broker. The broker writes up an offer adding a condition that property must be approved for rezoning in order for him to be required to purchase. Are the broker's actions permitted?
Yes. The broker is party to the contract therefore is eligible for compensation and can draft provisions.
A buyer is considering the purchase of a property that was used as a gas station 20 years ago. They intend to rehab the building to operate a restaurant. What should the agent recommend to the buyer?
The buyer should hire an environmental engineer to perform testing.
Which of the following instances would require a brokerage to have multiple trust accounts?
The brokerage provides property management services and holds trust funds for rental properties owned by clients and affiliated brokers.
A broker is working with a buyer as a seller's subagent in the purchase of a resale property that is located outside the city limits built in 1998. The roads in the subdivision are deteriorating and the buyers asks if roads are publicly or privately maintained. The broker informs the buyer that all subdivisions built after 10/1/75 require the subdivision developer to establish a fund for road maintenance when roads are private. What if anything is the agent guilty of?
Negligent misrepresentation
A buyer is moving to NC from a state that does not practice caveat emptor. The broker explains that a seller is only required to disclose material facts that they know or reasonably should have known. Was the broker accurate?
No the seller is not required to disclose all material facts, only items required by NC law.
An agent is working with a buyer in the purchase of a property located in a subdivision that has experienced well and septic issues. Recently the city has decided to extend service to the subdivision, which will substantially increase the value of the home. The agent fails to disclose this fact to the seller, however does disclose this to the buyer. Has the agent acted properly?
No, the agent has a duty to disclose material facts relating to the property to both parties regardless of the party that is represented.
A new provisional broker with ABC Realty is holding an open house with the permission of a top producing listing agent in his office. A potential buyer begins to ask questions beyond facts that relate to the property. The provisional broker stops the conversation and explains the Working With Real Estate Agents Brochure (WWREAB). The provisional broker informs the potential buyer that he can act as an exclusive buyer's agent should the buyer be interested in purchasing the property. Is this a correct statement?
No, the provisional broker may not act as an exclusive agent since the firm already represents the seller.
A buyer is moving the NC from a state that does not practice caveat emptor. The broker explains that a seller is only required to disclose material facts that they know or reasonably should have known. Was the broker accurate?
No, the seller is not required to disclose all material facts only items required by NC law.
A broker, not on provisional status, forgets to renew his license, discovering the error eight months after the renewal deadline. His BIC informs him that he will need to pay an increased fee of $90 with no additional requirements. Is the BIC correct?
No, when a license expires beyond 6 months but less than 2 years the non-provisional broker will be required to submit an application with current background check and will need to meet additional conditions set by the Commission.
The buyer's agent forgets to include the refrigerator offered on the MLS in the purchase contract. As a result, is the seller required to leave the refrigerator?
No. Since it was not included in the offer, the seller can keep the refrigerator.
Annette is purchasing a large tract of land to build a home, farm organic vegetables and raise chickens. The lot does not have access to public water, sewer or cable tv. Her buyer agent has obtained a copy of restrictive / protective covenants to review with her. To determine if the lot is suitable for a 4-bedroom house, which of the following should the broker recommend?
Obtain a perc (soil suitability) test which may be performed by the county.
CJ owns a property that she is selling For Sale by Owner. CJ is not a licensed real estate agent. All of the following are permitted by an unlicensed owner except:
Offering $2,000 to anyone that refers the buyer that ultimately purchases the home.
A broker is contacted by a potential buyer to see her listing located at 12 Elm Street. The broker explains the Working with Real Estate Agents brochure and the buyer agrees to buyer agency, authorizing both dual and designated agency. When must the agreement be in writing?
The buyer must enter a written agency agreement no later than the time that the buyer seeks to make an offer on the property.
A seller has allowed the buyer to move in 2 months prior to closing. The listing broker should:
Recommend that the seller contact his / her insurance agent to confirm proper coverage.
The seller lacks funds to fully clear the current debt against the property. A prudent buyer's agent will include which addendum in the offer to purchase?
Short sale
Charlotte Jones is managing a residential rental property located at 401 Shepherd Lane for Bob Johnson. All the following statements are accurate regarding renting property in NC except?
Should the tenant damage the property during the lease term Charlotte can pay invoices from the tenant security deposit and the tenant must replace the funds within 30 days.
A property is listed with a brokerage using the standard NCAR Exclusive Right to Sell Listing Agreement. The listing agent will act as:
Sub-agent of the seller
