Real Estate Practice Exams
Abby was working in North Carolina as a nonresident commercial broker, and was affiliated with broker-in-charge, Marcie. Abby's client gave her an earnest money check to be deposited in the firm's trust fund. How long does Abby have to get Marcie the check? Abby can wait until the sales contract is signed to get Marcie the check. Abby doesn't need to give Marcie the check; she can deposit it into the trust account herself. Abby has three banking days from the day she received the check to hand it over to Marcie. Abby must get the check to Marcie immediately.
Abby must get the check to Marcie immediately.
Which of these is NOT a likely features of a bridge loan? Amortized loan paid back over a period of no more than five years Interest-only loan Secured by the borrower's existing home Temporary, short-term loan
Amortized loan paid back over a period of no more than five years A bridge loan is usually a temporary, short-term interest-only loan secured by the borrower's existing home.
In a real estate transaction, which two parties are owed the same duties? Clients and cooperating agents Clients and customers Clients and other parties Customers and other parties
Customers and other parties Other parties in the transaction are owed the same duties as customers. Only clients receive the full offering of your duties.
After the closing, North Carolina broker Donna ensures that her client and customer both have copies of all transactional paperwork. Which duty is Donna performing? Acting competently Avoiding making false promises Delivering agency documents Properly accounting for funds
Delivering agency documents The duty of delivering agency documents includes the paperwork that's generated at closing. Donna is fulfilling that duty, which she is required to offer to both clients and customers.
For which of the following tasks would you use either the metes and bounds, lot and block, or the rectangular government survey system? Conveying land Describing land Developing land Valuing land
Describing land Metes and bounds, lot and block, and the rectangular government survey system are the three primary methods of describing land.
North Carolina brokers must present any offers received ______. Immediately, and within three days of receipt at the latest Immediately, and within two days of receipt at the latest Within 48 hours Within four days
Immediately, and within three days of receipt at the latest
Charlie rented a single-family residence from Hal and Mary. The lease specifies that Charlie can't conduct any type of business out of the property. Which clause includes this prohibition? The additional provisions clause The demising clause The prohibitions clause The use clause
The use clause The use clause in a lease outlines how a tenant may use the leased property and what activities are prohibited or allowed.
Your buyers step outside to view the backyard of a property they're touring, but then they can't get the back door closed again. You recognize that this could be a symptom of ____, and realize that if they are interested in this property, they will want to discuss this issue with a home inspector. A foundation problem An HVAC problem Constant freezing and thawing Poor general maintenance on the home
A foundation problem Misaligned doors and windows, or cracked drywall, can indicate that there are settlement problems with the foundation.
After the closing, Donna ensures that her client has keys to the property and copies of all the transaction paperwork. Which fiduciary duty is Donna performing? Accounting Confidentiality Disclosure Loyalty
Accounting The duty of accounting refers to accounting for funds, property, and paperwork related to the transaction.
When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at? Addendum Amendment Annotation Appendix
Addendum An addendum is a separate form that becomes part of the sales contract.
Which of the following documents does a North Carolina broker need to retain for three years? Agency agreement Client reviews Consumer notice Personal expense report
Agency agreement
In the following transactions, which agent would be permitted to act as a designated agent? Anita and Hayes both work for the same brokerage firm and have been assigned by their broker-in-charge to represent a seller and a buyer in the same transaction. Broker Jill listed her house for sale, and now one of her clients wants to purchase the property. Ramone assigned himself and one of the agents he supervises to be designated agents for the buyer and seller in a residential transaction. Sandra's firm is selling its office space in order to move to a new building. One of Sandra's buyer clients wants to submit an offer for the commercial property.
Anita and Hayes both work for the same brokerage firm and have been assigned by their broker-in-charge to represent a seller and a buyer in the same transaction. - A broker-in-charge may NEVER act as a designated agent when the other designated agent in the transaction is a provisional broker under her supervision. - Agents who list their own property for sale (or property belonging to their firm) should also not act as a dual agent when selling the property, as this would be an inherent conflict of interest.
All North Carolina real estate licenses expire ______ unless renewal requirements are met by the proper date. Annually on June 30 Every six months on January 1 and July 1 Every three years on December 31 Every two years on June 10
Annually on June 30
In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what? Bracketing Bridging Substituting Surrounding
Bracketing Bracketing is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject.
Before becoming a broker-in-charge, a North Carolina broker must first apply for _______ with the NCREC. Certification Eligibility In-charge status Special licensure
Eligibility An actively licensed North Carolina broker must meet certain qualifications & apply for BIC-eligible status with the NCREC. No special certifications or licensure is required.
Which real property ownership right protects the owner from harassment or interference? Control Disposition Enjoyment Possession
Enjoyment
North Carolina broker Ted is working with a buyer client who needs to move into the property one week before settlement, if possible. Which provision of the Offer to Purchase and Contract, Standard Form 2-T, offers the option for the buyer client to request early move-in? Delay in Settlement/Closing Good Title, Legal Access Possession Risk of Loss/Condition of Property at Closing
Possession
What's the term for a requirement that all property owners in a subdivision have a six-foot privacy fence surrounding their entire property? Deed Doctrine of laches Restrictive covenant Setback
Restrictive covenant
What is the definition of a legally competent party? A minor who enters into a contract with an adult Someone who has experience writing contracts Someone who has the legal and mental capacity to enter into a contract Someone who knows how the legal system works
Someone who has the legal and mental capacity to enter into a contract
What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act? CERCLA site Hazardous Environment Community Clean-up (HECC) site Superfund site Waste Remediation Environmental Need (WREN) site
Superfund site A Superfund site is a site identified by the EPA as requiring clean-up of hazardous waste under CERCLA.
In North Carolina, which of the following must be included in all advertisements a broker creates? The broker's affiliated brokerage firm or sole proprietorship's name The broker's affiliated office address The broker's home phone number The name of the broker's affiliated broker-in-charge
The broker's affiliated brokerage firm or sole proprietorship's name
How many days does a broker-in-charge have to notify NCREC after a licensee changes firms? 10 days 14 days 60 days Seven days
10 days
Abby was working in North Carolina as a nonresident commercial broker, and was affiliated with broker-in-charge, Marcie. Abby's client gave her an earnest money check to be deposited in the firm's trust fund. How long does Abby have to get Marcie the check? Abby can wait until the sales contract is signed to get Marcie the check. Abby doesn't need to give Marcie the check; she can deposit it into the trust account herself. Abby has three banking days from the day she received the check to hand it over to Marcie. Abby must get the check to Marcie immediately.
Abby must get the check to Marcie immediately. Provisional licensees and nonresident commercial brokers may not hold trust funds any longer than absolutely necessary. Abby must get the trust money to Marcie immediately.
Michael paid $385,000 for his home, which now has an assessed value of $392,000. His tax rate is 0.51%. How much with his monthly taxes be? $163.62 $166.60 $186.52 $297.50
Annual property tax amount = assessed value × tax rate. Multiply $392,000 × 0.51% (or .0051) for a total of $1,999.20. Then, to find the monthly property tax amount, divide $1,999.20 by 12 (months in a year) = $166.60.
Which of the following is NOT a duty that North Carolina agent Pong owes his principal in a transaction? Duty to avoid any undisclosed conflict of interest Duty to disclose to the principal all material facts about which the agent knows or should have reasonably known Duty to perform an environmental hazards assessment on listed properties Duty to properly account for funds held in trust for the principal
Duty to perform an environmental hazards assessment on listed properties The agent's duties to the principal (the agent's client) include all the duties listed above, except the duty to perform an environmental hazards assessment on properties. When it comes to environmental or material facts, the agent is only obligated to disclose those facts about which the agent knows or should have reasonably known.
Licensees must complete their continuing education annually, but course providers are prohibited from offering CE courses between the dates of ______. July 1 and December 31 July 1 and June 30 June 11 and June 30 June 1 and June 30
June 11 and June 30 Course providers aren't allowed to provide CE courses between June 11 and June 30, so it's essential to complete CE requirements by June 10.
Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act? No; commercial and business loans are exempt from RESPA requirements. No; RESPA only applies to loans obtained from private lenders. Yes; all loans secured by real estate are subject to RESPA requirements. Yes; because she obtains the loan from a federally insured financial institution, the loan is subject to RESPA requirements.
No; commercial and business loans are exempt from RESPA requirements. Commercial and business loans are exempt from RESPA.
North Carolina broker Amanda meets the qualifications and wants to be designated as the broker-in-charge of her firm's branch office. What should she do? Submit an application on the BIC Eligible Status form to apply for BIC Eligible Status. Submit an oral request with the BIC of her brokerage firm's main office. Submit an oral request with the commission for BIC Eligible Status. Submit a written request with the BIC of her brokerage firm's main office.
Submit an application on the BIC Eligible Status form to apply for BIC Eligible Status. In order for a broker to be designated as a BIC for a sole proprietor, real estate firm, or branch office, the broker must submit an application on a form to apply for BIC Eligible Status.
At the latest, North Carolina broker Jennifer must give her seller client Gideon a copy of the listing agreement they signed ______. Within 24 hours of its execution Within four days of its execution Within three days of its execution Within two days of its execution
Within three days of its execution
Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria's prepaid interest cost be at closing? $842.74 $871.80 $896.97 $927.90
$842.74
What pieces of information regarding compensation must be disclosed to the relevant transaction parties in order for a North Carolina broker to accept the compensation? The name of the party paying the compensation and an itemization of any fees assessed by the brokerage from the commission amount The name of the party paying the compensation and the date by which the compensation will be paid to the recipient. The name of the party paying the compensation and the type and amount of the compensation The names of individuals who will receive compensation from the transaction and the license numbers of those involved
- The name of the party paying the compensation - The type & amount of the compensation
Maci just purchased a vacation rental property in Ocean Isle Beach, and she won't be using the same rental manager from before the sale. When does she need to notify the tenants of the property transfer? 15 days after closing 20 days after closing 30 days after closing 45 days after closing
20 days after closing If the new owner of a vacation rental property in North Carolina isn't using the same rental manager/broker, the new owner must notify each tenant in writing no later than 20 days after closing.
The main floor of Kinsey's home is 1,425 square feet. The upper level is 875 square feet with one unfinished bedroom that measures 150 square feet. The finished basement is 1,425 square feet with 7.5-foot ceilings. Kinsey's MLS listing includes below-grade square footage in livable area. What's the reportable square footage for Kinsey's home? 1,425 2,150 3,575 3,725
3,575 Kinsey should exclude the 150-square-foot unfinished bedroom. This gives us a calculation of: 1,425 + (875 - 150) + 1,425, or 3,575 square feet.
North Carolina real estate broker Spencer obtained his original license on August 1, 2019. On what date will his license expire? 1/1/2020 12/31/2019 12/31/2020 6/30/2020
6/30/2020
Which of the following actions is prohibited by North Carolina real estate license law? A broker-in-charge agreed to employ and supervise both brokers and provisional brokers. A broker who was working as a sole proprietor didn't obtain a separate license for the brokerage firm. A provisional broker accepted compensation for real estate services from a broker other than the licensee's associated broker-in-charge. A provisional broker signed a listing agreement with a seller.
A provisional broker accepted compensation for real estate services from a broker other than the licensee's associated broker-in-charge.
When the commission found North Carolina licensee Phil guilty of a relatively minor infraction of real estate law, which of the listed sanctions might have been imposed on him? A reprimand Community service in the neighborhood where the infraction took place Five days of jail time License revocation
A reprimand NCREC has the power to issue reprimands or license revocation, among other disciplinary actions. *None of the discipline possibilities include jail time or community service. - A reprimand is a relatively mild form of discipline, suitable for infractions such as Phil is guilty of - License revocation is reserved for very serious violations.
Felipe purchased a foreclosed property at an auction. What type of deed is he likely to receive? A deed of gift A general warranty deed An executor's deed A sheriff's deed
A sheriff's deed
In which of the following cases can joint tenants have unequal interests in North Carolina? Anytime, provided it's clearly stated in the title. Never. If the ownership interests aren't equal, there's no joint tenancy. Only if all joint tenants orally agree to the unequal interests Only if all joint tenants sign a statement saying they agree to the unequal interests
Anytime, provided it's clearly stated in the title. In North Carolina, joint tenants can have unequal interests provided it's clearly stated in the title.
Which of the following would make the "Choose Your Neighbor" flyer an allowable strategy for finding prospective buyers? As part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers For property located in a gated community For rural properties greater than 20 acres With seller consent
As part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers The "Choose Your Neighbor" flyer would be allowed only in conjunction with other marketing strategies that make the property available to all types of buyers.
Jill's employing broker, Carolyn, recently went on sick leave for a serious illness. While she was hospitalized for treatment, her license expired. Which of the following is true? Both Jill and the licensees affiliated with her can still continue to collect compensation, as long as she renews her license within 30 days. Both the firm and the individual licensees affiliated with the firm may be required to forfeit their fee for any transactions in process. The licensees who are affiliated with Jill's brokerage can still continue to collect compensation. The licenses of all affiliated licensees at the brokerage also expire.
Both the firm and the individual licensees affiliated with the firm may be required to forfeit their fee for any transactions in process. Since listing agreements are between the brokerage and the seller, the licenses of both the licensee and the brokerage must be current and active throughout the entire time brokerage services are provided. If either becomes inactive or expires, and the firm or the licensee continue to provide services, both the firm and the individual licensee may forfeit their fee.
In North Carolina, which jurisdiction usually sets zoning regulations? City County Federal School district
City Local governments, such as the county government, take a back seat to city zoning in North Carolina, and both take a back seat to the state. Although the city may not enforce regulations contrary to state law, police power on a local level is governed by the city.
Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing? Civil Rights Act of 1866 Civil Rights Act of 1968 Equal Credit Opportunity Act of 1974 Housing and Community Development Act of 1974
Civil Rights Act of 1968 Title VIII of the Civil Rights Act of 1968 is also referred to as the Fair Housing Act of 1968, prohibits discrimination in the sale, rental, or financing of housing based on race, color, national origin, and religion.
Carl is Raven's unlicensed personal assistant. Which of these activities is Carl NOT allowed to perform in North Carolina? Assist Raven in assembling documents for closing. Counsel Raven's clients about their offer strategies. Record and deposit earnest money deposits as directed by the broker-in-charge. Show rental properties that Raven manages.
Counsel Raven's clients about their offer strategies.
You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients? Buyer agency Dual-license dual agency Seller agency Single-license dual agency
Dual-license dual agency You and the other licensee from your firm are in a dual-licensee dual agency relationship. The broker is the dual agent and has designated you to represent the buyer and the other licensee to represent the seller.
Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice's needs? Exclusive agency Exclusive right to sell Net Open
Exclusive agency It's easy to confuse exclusive agency and exclusive right to sell. With exclusive agency, the seller retains the right to find a buyer and avoid paying the commission, but the seller's listing will likely receive more attention from the agent than it would with an open listing.
The Real Property Marketable Title Act says, in part, that if a title's checked for 30 years back, and there aren't any claims recorded in that time, then all claims and defects against the title that date beyond that 30-year period are ______. Extinguished Invalid Likely fake Valid
Extinguished The Real Property Marketable Title Act states, in part, that if a title is checked for the previous 30 years and there are no claims recorded during that time, then all claims and defects against the title that date beyond that 30-year period are extinguished.
Farmer John has installed several pieces of farming equipment in the barn of the North Carolina property he's leased for the past 12 years. Which of the following statements is true of this situation? Equipment pieces are considered agricultural fixtures. At the end of Johns lease, he and the property owner can negotiate whether the equipment stays with the property or not. If it remains, the property owner must pay fair market value to John for it. Farming equipment is considered an agricultural fixture. Once John installed the equipment, it became real property, so it must remain with the property at the end of his lease. The equipment is John's personal property. At the end of his lease, he and the property owner can negotiate whether the equipment stays with the property or not. If it remains, the property owner must pay fair market value to John for it. This equipment is John's, so when the lease ends, he must remove the equipment at his own expense to take it with him.
Farming equipment is considered an agricultural fixture. Once John installed the equipment, it became real property, so it must remain with the property at the end of his lease. Agricultural fixtures are a special class of fixtures—those used in a farming operation—in North Carolina and are considered real property. Any farming-related equipment installed by a resident farmer during the farmer's tenancy is considered real property, so the tenant may not remove this equipment at the end of the lease.
North Carolina broker Tanner just helped his property owner client, Cal, find a tenant for his townhouse. When Cal asks Tanner to bring him a copy of the rental agreement, Tanner must do so within how long? 10 days 24 hours 72 hours Five days
Five days At the property owner's request, a broker must deliver a copy of any lease or rental agreement within five days, unless an exception to this rule applies to the specific situation.
Which of the following provisions in North Carolina's Standard Form 2-T is used to identify which items are to remain with the property? Fixtures and Personal Property Inspection Possession Property
Fixtures and Personal Property
Rico is an appraiser who is performing a valuation on a property. What's another term for what Rico is doing? Analytical exercise CMA Formal appraisal Price opinion
Formal appraisal Another term for a valuation is a formal appraisal.
Rachel is a North Carolina licensee who is planning when to take her required CE courses. She'll enroll in two separate four-hour courses in order to complete the requirement before her license expires. Which of the following schedules will work for her? Four hours of general updates on June 12, and four hours of approved electives on June 19 Four hours of general updates on June 1, and four hours of approved electives on June 28 Four hours of general updates on June 30, and four hours of approved electives on July 15 Four hours of general updates on May 31, and four hours of approved electives on June 8
Four hours of general updates on May 31, and four hours of approved electives on June 8
Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency. Capital Grants Guaranteed loans Secondary market for agricultural loans
Guaranteed loans
A North Carolina licensee who violates the State Fair Housing Act is also ______. Considered a felon Guilty of improper conduct under license law Likely to be a poor real estate agent Violating the Equal Credit Opportunity Act
Guilty of improper conduct under license law
Which of the following are North Carolina agents NOT required to identify as potential areas of concern for potential buyers? Flood damage HVAC efficiency Planned highway construction Septic and waste removal system
HVAC efficiency
North Carolina buyer Tara just signed an offer for seller Javier's house. What must Tara's agent, Jim, do next? He must deliver copies of the offer to Tara and Javier. He must send a copy to the North Carolina Real Estate Commission within three days. He must take the original signed agreement to his broker-in-charge for her signature. He must take the original signed agreement to the recorder of deeds.
He must deliver copies of the offer to Tara and Javier.
Jason's having trouble paying his monthly rent. His landlord agrees to float him the rent for the next few months with 20% interest. The deal with his landlord is in violation of the state's usury law. Which of these statements must be true? Consumers are not supposed to be charged interest on a personal loan. His state's personal loan interest rate cap is less than 20%. His state's personal loan interest rate cap is more than 20%. Landlords loaning tenants money is a violation of usury law.
His state's personal loan interest rate cap is less than 20%.
Ashish is purchasing a bank-owned property. His real estate agent tells him the bank is offering insurable, not marketable, title. What does this mean to Ashish? An insurable title has uncurable title defects, so Ashish terminate his contract. Insurable title carries a higher standard of assurance than marketable title, so Ashish shouldn't be concerned. Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy. The title company will include any easements or other title defects as exceptions on the policy, which is a concern for Ashish.
Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy. An insurable title may be acceptable to a buyer, depending on any known defects that are outlined in the policy.
What is the purpose of the total circumstances test? It determines the most recent owner of an item. It determines whether an item is a fixture or personal property. It determines whether an item is a fixture or real property. It determines whether the item is an agricultural fixture.
It determines whether an item is a fixture or personal property. - The total circumstances test: a legal test the courts apply to determine whether an item is a fixture (which means it's real property) or personal property. - The 4 parts of this test: intent, relationship of the annexing party to the property, method of annexation, and adaptability.
Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest? It's still in place because it doesn't terminate on the death or incompetence of the principal. Max has no recourse; the agency relationship is terminated and he receives no compensation. Max now owns the subdivision as a result of the principal's death or incapacity. Rufus must now pay Max the commission that he didn't get from the original listing, and the agency relationship is terminated.
It's still in place because it doesn't terminate on the death or incompetence of the principal. Agency coupled with interest is irrevocable.
North Carolina's waterway zoning standards apply mostly to _______. All land within 1,000 feet of the shoreline of all navigable bodies of water Commercial properties that border navigable waters Developed land within 300 feet of a riverbank Land within 30 to 50 feet of the water's edge
Land within 30 to 50 feet of the water's edge North Carolina's waterway zoning standards apply mostly to land within 30 to 50 feet of the water's edge.
When it comes to computer-generated CMAs and automated valuation models in North Carolina, what's the recommended best practice? Licensees should never substitute these for doing their own research. Licensees should never use automated valuation models. Licensees shouldn't use any method other than computer-generated analyses with logarithms. Licensees should only use computer-generated CMAs.
Licensees should never use automated valuation models. North Carolina doesn't permit computer-generated CMAs and AVMs to be used.
In North Carolina, liens are paid in the order they're filed. This is often referred to as "first in time, first in right," or the "pure race system" of determining lien priority. What is the exception to this rule? Consensual liens General liens Mechanics' liens Personal property tax liens
Mechanics' liens
Which of the following statements regarding North Carolina real estate brokers is TRUE? All brokers are required to be supervised by a broker-in-charge. All business entities engaging in real estate brokerage must hold a real estate firm license. Every North Carolina real estate office must have a designated provisional broker. Most brokers who don't have the broker-in-charge status elect to work for another broker or brokerage firm.
Most brokers who don't have the broker-in-charge status elect to work for another broker or brokerage firm. Although a broker is allowed to work independently, NCREC rules require most brokers operating on their own to also have a broker-in-charge license status. For that reason, most brokers who don't have the broker-in-charge status elect to work for another broker or brokerage firm.
Which agency in North Carolina enforces fair housing law? FFA NCHRC NFHA NHA
NCHRC the North Carolina Human Relations Commission
Nick, a listing agent, told a potential buyer that the property had no flooding issues, even though the seller mentioned water in the basement. Which of these statements is true? Nick committed constructive fraud. Nick didn't commit any sort of misrepresentation because the property currently shows no flooding issues. Nick is guilty of puffery. Nick isn't fulfilling his duties regarding land use because he knew his statement was false.
Nick isn't fulfilling his duties regarding land use because he knew his statement was false. North Carolina brokers have the duty to avoid misrepresentation regarding permitted land use, recognize potential land use problems, and discover and disclose any land use problems.
Derrick, who's a paralegal, helped his cousin find a house to buy, wrote up a purchase offer, and assisted in negotiating with the seller. Derrick's cousin wanted to compensate Derrick for his time. How much can he give Derrick so that Derrick could legally perform these duties without needing to have a real estate license? As much as 1% of the transaction value (the sale price) No more than $500 Nothing Only a "nominal amount," which isn't defined in North Carolina statute
Nothing Any person who offers real estate services (even if it's only one time) and is compensated for doing so must have a license. The amount of compensation is irrelevant. There's no fee or other consideration so small to make the licensure requirement not apply.
In which of the following situations must a lien agent be appointed, according to the North Carolina mechanics' lien statutes? On the Hanley Partnership's commercial construction project, where the cost is $30,000 On the Henrichs' single-family, owner-occupied residence, where the cost is $30,000 On the Parkers' residential construction project, where the cost is $25,000 On the Slater Corporation's commercial construction project, where the cost is $20,000
On the Hanley Partnership's commercial construction project, where the cost is $30,000
North Carolina broker Olivia holds an inactive license. She files a request for license activation with the commission on an approved form. At what point will Olivia's license be considered active? Once Olivia or her affiliated BIC confirm receipt of the written acknowledgement of license activation from the commission Once the commission receives the form Once the commission sends Olivia and her affiliated BIC a written acknowledgment of the license activation Once the form has been mailed or delivered to the commission
Once the form has been mailed or delivered to the commission Olivia's broker license is considered active once the license activation form has been mailed to or delivered to the commission. The commission will send a written acknowledgement of this activation to the broker and BIC. If the broker or BIC hasn't received the acknowledgement within 30 days, the broker must immediately terminate all brokerage activities.
Alvin is doing his initial review of the property the McGivneys are ready to sell. They mentioned there's a septic system on their property that was installed in 1990 when they added a third bedroom. Which of the following is NOT a concern about an existing septic system that Alvin should check with the county health department about? Current systems tied to the septic systems Percolation Septic system capacity Straight piping
Percolation Percolation (Perk) Test is The test to determine the capability of the soil to absorb liquid. The soil suitability test is performed when unimproved land is developed, not when an existing home is sold.
Maria is an unlicensed personal assistant at ABC Brokerage. She may _______. Assist the firm's clients with negotiation strategies Discuss contract terms with the firm's clients List (or offer to list) real estate for sale or rent Place for-sale or for-rent signs and lockboxes on property at a licensee's direction
Place for-sale or for-rent signs and lockboxes on property at a licensee's direction
Mike is a North Carolina real estate broker. He was disciplined by NCREC when he _______. Acted as a material witness in a case involving moral turpitude Disclosed that he received two traffic tickets in the past six months Neglected to renew his real estate license on time Pleaded guilty to a misdemeanor that showed he's unable to protect the consumer's best interests when engaging in real estate
Pleaded guilty to a misdemeanor that showed he's unable to protect the consumer's best interests when engaging in real estate
When a buyer finances a newly built home with a Federal Housing Administration loan, what does the FHA require the builder to do? Create a fund equaling 20% of the home's cost set aside to cover construction defects for the next 10 years Provide a builder-backed home warranty Provide the buyer with a 30% discount on materials and labor for home repairs Purchase a third-party home warranty to protect the buyer
Purchase a third-party home warranty to protect the buyer
In many cases, property managers must get explicit permission in order to disburse funds from a trust account. What is one common way to do so without this explicit permission? Ensure the bank has a signature card for the property manager. Give the property manager a power of attorney. Have all who supply trust funds sign waivers. Put it in the property management agreement.
Put it in the property management agreement.
When done for others and for compensation, which of the following actions may be completed by someone in North Carolina who does NOT hold a real estate license? Exchanging real estate Remodeling or constructing improvements on real estate Renting real estate Selling real estate
Remodeling or constructing improvements on real estate Selling, renting, or exchanging real estate are all activities that require a license if done for others, for compensation. Home construction and renovation require licensure, but not a real estate license.
Which zoning type is used solely for developing homes in North Carolina? Mixed-use development Office residential district Planned use development Residential district
Residential district Residential districts provide for different housing types and population densities.
North Carolina licensee Sally had a difficult time getting her real estate career off the ground. She resorted to some illegal tactics and found she was making good money. But when NCREC received a consumer complaint and investigated her actions, the commission decided to prevent her from continuing her harmful real estate practices permanently by ______. Placing a ban on her license Placing her on probation Putting her license on lifetime suspension Revoking her license
Revoking her license
Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true? Sam can revoke the license at any time. The license is a permanent privilege. The license is assignable. The license is inheritable.
Sam can revoke the license at any time. A license is temporary and at the discretion of the property owner. A license is not assignable or inheritable.
Your buyer client is interested in making an offer, but wants to make sure the property isn't in a designated special flood hazard area. Which section of the North Carolina exclusive right-to-sell listing agreement would provide this information? Home warranty Property Property inspection Seller representations
Seller representations This information can be found in the seller representation area of the North Carolina exclusive right-to-sell listing agreement.
Sophia's North Carolina listing includes a garage that has been legally converted into a living room. Can she include it in her square footage measurements? She can include it in her calculations. She can include it in her calculations if the owner provides the original permit. She can include it in her calculations only if it has a separate entrance that is not attached to the home. She can't include it in her calculations.
She can include it in her calculations if the owner provides the original permit In North Carolina garages aren't included as finished square footage, unless the garage has been legally converted into living space that is attached to the main property via finished stairways or hallways. Finished spaces are only measured if the ceiling height is at least seven feet, and they have a permanent heat source.
Quinn recently purchased a beach cottage nestled in the woodland area of Oak Island. She's looking forward to solitude while listening to the sound of the ocean and the birds chirping, which is why she doesn't want to honor any of the existing vacation rental agreements to rent her cottage after the sale. Does the North Carolina Vacation Rental Act permit her to not honor existing agreements? She doesn't have to honor any existing agreements after closing. She must honor any existing agreements that will end within 180 days from the date of her closing. She must honor any existing agreements that will end within 45 days from the date of her closing. She must honor any existing agreements that will end within 60 days from the date of her closing.
She must honor any existing agreements that will end within 180 days from the date of her closing.
North Carolina broker Meg was working with optionee Eddie. After Eddie and optionor Marilyn signed the option contract, Eddie gave Meg a check for the option fee. Which of the following is Meg's responsibility? Meg must deliver the check to her broker-in-charge immediately, and her broker-in-charge must deposit it in the appropriate trust account within two business days of the contract's acceptance. Meg must deposit the check into her trust account immediately, and then write a check for the exact same amount to Marilyn or her broker. She must safeguard the check until she delivers it to Marilyn or the designated escrow agent within three business days of the contract's acceptance. She must safeguard the check until she delivers it to Marilyn within three calendar days of the contract's acceptance.
She must safeguard the check until she delivers it to Marilyn or the designated escrow agent within three business days of the contract's acceptance.
Jean is a licensee for At Home Realty. She chooses her own schedule, sets her own sales goals, and is compensated based on commission. She must complete three training courses each quarter and the required number of CE hours to maintain her license. She must belong to the local REALTORS® association. The firm doesn't pay for employment taxes for Jean. She receives no insurance or other benefits. Which of these factors might cause the IRS to classify Jean as an employee instead of an IC? She must belong to the local REALTORS® association. She must take a required number of continuing education hours. She must take three training classes through the firm. She receives no benefits from the firm.
She must take three training classes through the firm.
All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What's the biggest reason why it's important for your buyers to know this? Public sewers have a better safety record than septic systems. Sewer installation means construction traffic. Some people prefer septic systems to having to tie into public sewers. The county will likely impose an installation fee on Elm Street residents to cover the costs.
The county will likely impose an installation fee on Elm Street residents to cover the costs.
North Carolina broker Gideon is reviewing a settlement statement that was prepared by an attorney for his seller client, Dexter. Which of the following is Gideon expected to ensure? All calculations for prorated items are correct. All charges are properly charged and all credits are properly credited. The attorney who prepared the statement correctly input the amounts due to/from third parties. The entries about which the broker has direct knowledge (such as the purchase price and earnest money) are correct.
The entries about which the broker has direct knowledge (such as the purchase price and earnest money) are correct. For attorney-prepared settlement statements, the broker must verify the accuracy of any entries about which the broker has direct knowledge (sales price, earnest money, commission, etc.). The broker can assume amounts entered by the attorney (regarding amounts due to/from third parties) are correct.
May is a North Carolina licensee. She's just had a phone call from a buyer's agent about one of the firm's listings. The buyer's agent asked if the firm were offering compensation to cooperating brokers for a particular listing. Where would may find this information? A listing contract addendum A listing contract amendment The broker's website The listing contract
The listing contract Cooperating broker compensation is documented in the Firm's Compensation section of the listing contract.
What pieces of information regarding compensation must be disclosed to the relevant transaction parties in order for a North Carolina broker to accept the compensation? The name of the party paying the compensation and an itemization of any fees assessed by the brokerage from the commission amount The name of the party paying the compensation and the date by which the compensation will be paid to the recipient. The name of the party paying the compensation and the type and amount of the compensation The names of individuals who will receive compensation from the transaction and the license numbers of those involved
The name of the party paying the compensation and the type and amount of the compensation North Carolina statute requires that full disclosure of compensation includes the type and amount of compensation, and the identity of the party who is paying the compensation.
Which of the following conditions will legally void a subdivision sales contract in North Carolina? The buyer is unhappy with other homes being built in the subdivision. The buyer's financing fell through. The per-lot cost has dropped significantly from the initial sale. The subdivision was never properly recorded with the register of deeds.
The subdivision was never properly recorded with the register of deeds.
North Carolina broker Jason and buyer Elle have been working under an oral agency agreement. Jason suggests he could devote more time and energy to finding Elle the right property if they had an exclusive agency agreement. After he explains what that means, she agrees to it. Which of the following is true of this situation? This agreement must be put into writing and signed by the parties before Elle closes on the property she buys. This agreement must be put into writing and signed by the parties before Elle makes an offer on a property. This agreement must be put into writing and signed by the parties immediately. This agreement must be put into writing and signed by the parties within 14 days.
This agreement must be put into writing and signed by the parties immediately. A buyer or tenant agency agreement that restricts the buyer's right to work with other agents (or forbids the buyer from working with other agents), or that binds the buyer to the broker for a specific time period must be put in writing and signed by the parties as soon as the agreement is formed.
North Carolina broker Timothy's buyer client just signed an offer for her potential dream house. How long does Timothy have to get the offer delivered to the seller and his listing agent? 24 hours Five days It must happen immediately. Three days
Three days North Carolina brokers are expected to deliver instruments like contracts and offers within three days of receiving the signed document.
What is the purpose of a protection agreement in a North Carolina? To establish the broker's commission To protect the buyer from premature termination To protect the buyer from shoddy service To protect the seller
To establish the broker's commission The protection agreement establishes an agreement with the seller to pay a commission fee when the broker procures the cause in a FSBO sale.
The NCREC defines ______ as "all moneys received by a broker acting in his or her fiduciary capacity." Down payments Earnest money deposits Fiduciary funds Trust money
Trust money Trust money is defined in the commission rules as "all moneys received by a broker acting in his or her fiduciary capacity." Some of the most common types of trust money include earnest money deposits, down payments, rents, and tenant security deposits.
Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________. Area variance Moratorium Special use permit Use variance
Use variance This is a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.
A North Carolina licensee whose conduct is improper, fraudulent, or dishonest is ______. Acting unethically but not illegally Not violating in the state's license law Violating antitrust laws, which is punishable as a felony under federal law Violating license laws, and will be disciplined by NCREC
Violating license laws, and will be disciplined by NCREC
Rex needs to handle some money he acquired during an "unsavory" business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business dealing. What kind of contract do Rex and Ben have? Executed Executory Void Voidable
Void A contract for an illegal purpose is void!
As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this? Implied Incomplete Valid Voidable
Voidable A voidable contract can be cancelled by one or more parties because it's missing an essential element. In this situation, Melanie, the buyer, has the right to cancel the contract and have her earnest money refunded.
When should North Carolina broker Brody use Standard Form 340-T, Response to Buyer's Offer, for his client Caroline? When Caroline wants him to make an inquiry as to whether the buyer is willing to accept a possible counter When Caroline wishes to accept an offer When Caroline wishes to counter an offer When Caroline wishes to reject an offer
When Caroline wishes to reject an offer Standard Form 340-T, Response to Buyer's Offer, expressly states that it is a rejection of the offer, so brokers should NOT use this form when making a simple inquiry about the buyer's willingness to accept a possible counter.
What is the most common way that asbestos enters the body? Asbestos coating in water pipes can contaminate drinking water, which is then ingested. Asbestos in paint can be released into the air as the paint peels, which is then inhaled or ingested. When asbestos fibers decay or are disturbed, the friable particles can be inhaled. When rocks and soil decay, asbestos gas is released, which is then inhaled.
When asbestos fibers decay or are disturbed, the friable particles can be inhaled. Asbestos is a fibrous material found in certain types of tile, insulation, and siding. The fiber particles become friable and can damage the lungs if inhaled.
When is the Assumption contingency used in North Carolina form 580-T? When the buyer must obtain financing When the buyer reserves the right to terminate if financing can't be arranged When the seller reserves the right to terminate if the buyer can't obtain financing When the seller's current loan will remain in place
When the seller's current loan will remain in place The Assumption contingency is used when the buyer is assuming the seller's existing loan.
North Carolina property manager Virgil has an arrangement with Lindsay, the owner of the property he manages, wherein he enters into the rental agreements on her behalf. He has Lindsay's written consent to use pre-printed forms that she's already approved, and, rather than sending her every agreement, he sends her summaries of the relevant information. According to statute, under such an arrangement, what is the deadline by which Virgil must send Lindsay such a summary of information? Any time before the termination of tenancy Within 45 days of the agreement's execution Within the first month of tenancy Within three days of the agreement's execution
Within 45 days of the agreement's execution North Carolina property managers who have their property owner's written consent to forego sending every agreement to them within three days of receipt must instead send the owner a summary of the relevant information (identifying the property, the name, phone number, and home address of each tenant, and the rental rates) within 45 days of the execution.
Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid? No, the contract is missing a legal object. No, the contract is missing offer and acceptance. No, the contract is void. Yes, the contract is valid.
Yes, the contract is valid. While legal capacity includes whether or not all parties are of legal age, contracts signed by minors are valid but voidable by the minor.
