Superior Exam - 3-24-23
The owner of an eight-unit apartment building has a strict set of rules for tenants. According to federal Fair Housing law, which of the following rules is enforceable? "Units may be rented only by married couples with children." "No pets allowed, including Seeing Eye dogs and support animals." "Security deposits will increase an additional $100 for each child under 16 years of age." "Handicapped tenants who modify their units must agree to restore the premises at their own expense at end of tenancy."
"Handicapped tenants who modify their units must agree to restore the premises at their own expense at end of tenancy."
Real property taxes: $3,402 and have been paid by the seller for an October 30th closing. How would the taxes appear on the day of closing? $567 Buyer Credit and $567 Seller Debit $567 Seller Credit and $567 Buyer Debit $2835 Seller Debit and $567 Buyer Credit $567 Seller Debit and $567 Buyer Debit
$2835 Seller Debit and $567 Buyer Credit
A buyer is under contract to purchase a home for $260,000 and has qualified for an 80% Loan-to-Value mortgage loan. How much will the monthly principal and interest payment be, using a loan factor of 6.65 per $1,000 borrowed? (Rounded to the nearest dollar) 1729 722 173 1383
1383
A firm is charging a 6% commission on a property listed for $820,000 and sold for 10% less than the listed price. The listing firm is offering a 50/50 split. How much will the Buyer's agent earn if they are on a 70/30 split with their broker? $22,140 $30,996 $15,498 $24,600
15498
The seller must receive $70,000 net from the sale of his house. The deed of trust payoff is $115,000. The closing costs will total $4,350, and the seller has agreed to a commission fee of 7%. What must the house sell for? 203602 189350 177142 115304
203602
A listing firm offers a 2.6% commission split on a listing of $647,500. The seller agreed to pay a 6% commission. An agent with a different firm sells the property for a contract price of $639,000. How much commission did the listing firm retain? 16614 16835 21015 21726
21726
The buyers are purchasing a property on the following terms: Purchase Price $120,000, Earnest Money $3,500, Loan to Value is 80%, Origination Fee is 1%, and Discount Points 2.5%. How much cash will the buyers need to bring to the closing table? 22900 23860 24140 27360
23860
Under North Carolina Commission rules a broker must deliver copies of all offers, contracts and transactional documents to their clients or customers and the firm or sole proprietorship with which they are affiliated, immediately, but no later than: 5 calendar days 3 calendar days 5 business days 3 business days
3 calendar days
Five days after signing a contract to purchase a new timeshare in North Carolina, the buyer cancels the timeshare contract. According to North Carolina laws, what is the time period for the developer to refund the buyer's money? 30 days from the date of purchase 30 days from the date of cancellation 30 days from the 10-day period in which these monies had to remain in the trust account 30 days from the day of first substantial contact
30 days from the date of purchase
A loan in the amount of $168,500 at 6% for 30 years closes on March 19th. The first monthly payment is due May 1st. Using a 30 day month/360 day year, what is the amount of interim interest to borrowers has to pay at settlement? 532 1179 337 1151
337
A house located within the city limits has a current market value of $495,000. The assessed value is 85% of the market value. The county tax rate is $.75 per hundred, and the city tax rate is $.40 per hundred. What is the total annual tax liability on the property, rounded to the nearest dollar? 2733 3712 5692 4838
4838
According to North Carolina Real Estate Licensing Law and Commission Rules, all of the following are valid and proper rescission times, EXCEPT: 5 days on the purchase of a timeshare 7 days on the purchase of a condominium 3 days if the buyer does not receive the property disclosure statement 3 days if the client has not received the proper agency disclosures
7 days on the purchase of a condominium
If the annual property tax bill is $1,450 and the tax rate is $1.85, what is the property's assessed value? (To the nearest dollar) 783 783783 78378 2682
783
All of the following are correct regarding a broker-in-charge under North Carolina law and rules, EXCEPT: A broker-in-charge may represent more than one brokerage so long as the brokerages are in the same physical location. Each office location must have just one broker-in-charge. A broker-in-charge who does not represent clients is exempt from continuing education requirements. A full broker may affiliate with more than one broker-in-charge with the consent of all of the BICs.
A broker-in-charge who does not represent clients is exempt from continuing education requirements.
The developer at Happy Hills Subdivision in North Carolina has recorded the declaration of restrictive covenants for the subdivision. Which statement is correct? Planning and zoning will enforce the restrictive covenants because they are recorded public documents. A homeowner who violates the restrictive covenants may be fined or may be required to remove structures that violate the restrictive covenants. Only the developer will ever have the right to enforce the restrictive covenants. The local city/county government, as well as the homeowner's association, may fine a homeowner for a violation of a restrictive covenant; moreover, if the homeowner does not pay the fine, the local city/county government and homeowner's association may place a general lien on the property.
A homeowner who violates the restrictive covenants may be fined or may be required to remove structures that violate the restrictive covenants.
In North Carolina, which of the following statements relating to subdivision streets is correct? For subdivision streets designated as "private," the developer must establish a fund in the amount of $10,000 per mile of streets to cover future maintenance costs. The streets in all subdivisions of 10 or more lots approved after January 1, 1990, will be maintained by the State of North Carolina. Any street dedicated by the subdivision developer for public use will be maintained by the State of North Carolina. A subdivision developer must provide the prospective buyer with a disclosure statement indicating if the street will be "public" or "private."
A subdivision developer must provide the prospective buyer with a disclosure statement indicating if the street will be "public" or "private."
A broker is preparing a comparative market analysis (CMA) for a subject property that has a 1-car garage. A comparable property does not have a garage. If the estimated value of the 1-car garage is $12,000, the broker should: Deduct $12,000 from the subject property Add $12,000 to the comparable property $12,000 from the comparable property Add $12,000 to the subject property
Add $12,000 to the comparable property
According to the North Carolina Real Estate License Law & Commission Rules regarding agency disclosure, which of the following is correct? Buyer agency agreements must be reduced to writing prior to preparing an offer on behalf of the buyer All agents must give and review the Working with Real Estate Agents brochure at initial contact. A buyer's agent must disclose his status to the seller or seller's agent All agents must give and review the Working with Real Estate Agents brochure prior to closing. Agency disclosure is only required in residential sales transactions.
Agency disclosure is only required in residential sales transactions.
Which of the following statements is correct according to the North Carolina Real Estate Commission "Residential Square Footage Guidelines"? As an alternative to personally measuring a dwelling and calculating its square footage, an agent may rely on the square footage reported by other persons when it is reasonable under the circumstances to do so; however, the agent would not be expected to point out a "red flag" difference or error. An agent should not rely on square footage information determined by the property owner. Additionally, an agent should not rely on square footage information included in a listing appraisal report or survey prepared in connection with an earlier transaction. When measuring a bonus room over the garage, the common shared wall between the second floor and bonus room is to be included in the heated square footage for both the bonus room and the second floor. "Above grade" is defined as space on any level of a dwelling that has living area, is accessible by interior stairs, and has earth adjacent to any exterior wall on that level.
An agent should not rely on square footage information determined by the property owner. Additionally, an agent should not rely on square footage information included in a listing appraisal report or survey prepared in connection with an earlier transaction.
All of the following are correct under NC Real Estate Commission Rules regarding a broker-in-charge, EXCEPT: To be qualified as a broker-in-charge, the individual must possess two years of real estate experience in the last five years. The individual must complete a 12-hour Broker-in-Charge Course. A Broker-in-Charge can be the BIC for more than one firm if the firms are in the same location. An individual is permitted to be a Broker-in-Charge at more than one location at a time.
An individual is permitted to be a Broker-in-Charge at more than one location at a time.
Bill signed a lease with a landlord. Due to a job transfer, Bill subleased his apartment to Jennifer. Which of the following is true regarding the obligation of these tenants to the landlord? Bill is primarily responsible for the lease. Jennifer is now the one primarily responsible for the lease. Both Bill and Jennifer have equal obligations to the landlord. The execution of the sublease extinguished all of the liability on the part of Bill.
Bill is primarily responsible for the lease.
Which statement is correct regarding property management in NC? A person is required to have a real estate license even when they are managing a property they personally own. According to the NC Tenant Security Deposit Act, the final accounting of the tenant security deposit must be made to the tenant is no later than 15 days after lease expiration. Certain salaried employees of property management firms are not required to hold a real estate license in order to show properties and fill out rental agreements. Property managers in NC are required to inspect the premises every 90 days.
Certain salaried employees of property management firms are not required to hold a real estate license in order to show properties and fill out rental agreements.
Which of the following is correct according to the North Carolina Real Estate Commission residential square footage guidelines? Square footage of the second floor must have 6'4" ceiling height Measurements are taken from exterior of the house Condos are measured for the enclosed air space and must include 6 inches for each exterior wall When the ceiling is sloped, start measuring when the ceiling is at 8 feet
Condos are measured for the enclosed air space and must include 6 inches for each exterior wall
Which of the following statements has the GREATEST applicability when determining a property's value using the income approach to valuation? Depreciation is deducted as an operating expense. Operating expenses are calculated on a semi-annual basis. The benefits of deducting mortgage interest may make high leverage attractive. Effective gross income minus operating expenses equals net operating income (NOI).
Effective gross income minus operating expenses equals net operating income (NOI).
All of the following are TRUE regarding trust accounts in North Carolina, EXCEPT: They must be balanced every 30 days They may earn interest if the parties agree The broker may keep up to $100 of their own funds in the trust account, or whatever the bank requires without such funds be considered commingling Every brokerage firm is required to have a trust account
Every brokerage firm is required to have a trust account
All of the following practices are legal in North Carolina, EXCEPT: Disclosure of competing offers in a multiple offer situation to the parties is not absolute because North Carolina Real Estate Commission Rules set forth specific conditions under which disclosure of competing offers may be permitted. A licensee may share commission with his/her principal (seller or buyer) if the principal is a party to the transaction and so long as the principal is not engaging in "brokerage" activity as defined by law. A referral fee may be paid from a North Carolina broker to a broker in another state so long as the broker in the other state does not physically enter North Carolina and actively engage in brokerage activity in North Carolina. If a broker or provisional broker receives a listing referral or buyer referral from another broker, the referring broker can be "inactive" at the time the referral is made as long as the referring broker is "active" when the referral fee is paid.
If a broker or provisional broker receives a listing referral or buyer referral from another broker, the referring broker can be "inactive" at the time the referral is made as long as the referring broker is "active" when the referral fee is paid.
Which statement is INCORRECT regarding North Carolina Licensing Law & Commission Rules? A North Carolina licensee must carry a pocket card with them at all times when conducting real estate business, and the card must contain the licensee's name, type of license, expiration date, and license number. If a provisional broker fails to complete their postlicensing education, their license is expired and canceled by the North Carolina Real Estate Commission. If a provisional broker terminates their affiliation with a BIC, the broker-in-charge must notify the Commission within 10 days, and the provisional broker becomes inactive. If a licensee fails to renew their license and pay their renewal fee by June 30, their license is expired.
If a provisional broker fails to complete their postlicensing education, their license is expired and canceled by the North Carolina Real Estate Commission.
According to the NCAR/NCBA Offer to Purchase and Contract, which statement is correct? The due diligence date and the settlement date are written as "time being of the essence." The initial earnest money deposit and additional earnest money deposit are NOT written as "time being of the essence." The settlement date can be delayed up to 7 days per contract by either party and the contract is still enforceable and binding on all parties. If the buyer decides not to purchase by the due diligence date and the buyer terminates the contract prior to the due diligence date, the buyer receives a refund of both earnest money deposit and due diligence fee.
If the buyer decides not to purchase by the due diligence date and the buyer terminates the contract prior to the due diligence date, the buyer receives a refund of both earnest money deposit and due diligence fee.
What is the best way for a real estate agent to handle the area occupied by the stairs when determining the square footage of a two-story house? Include the area occupied by the stairway as part of the area for both the first floor and second floor. Include the area occupied by the stairway as part of the area for the first floor only. Include the area occupied by the stairway as part of the area for the second floor only. Do not include the area occupied by the stairway as part of the area for either the first or second floor.
Include the area occupied by the stairway as part of the area for both the first floor and second floor.
Mary Smith is broker-in-charge of Smith Realty, which has several affiliated agents. Mary is actively involved in listing and selling properties. Sue Long, a provisional broker with Smith Realty, has a buyer client who has expressed interest in one of Mary's listings. In North Carolina, which of the following agency arrangements is permissible in this situation? Mary and Sue may act as dual agents. Mary and Sue may act as designated agents. Mary and Sue may both represent the seller, treating the buyer as a customer. Mary may represent her seller, and Sue may represent her buyer.
Mary and Sue may act as dual agents.
Before closing a real estate transaction, the lender provides the buyer and seller with statements of fees and charges they may incur. By doing this, the lender is complying with which of the following federal acts? Truth in Lending Act Equal Credit Opportunity Act Community Bank Reinvestment Act Real Estate Settlement Procedures Act
Real Estate Settlement Procedures Act
Ricardo is showing a buyer a house in the capacity of seller sub-agent. Prior to being shown any houses, the buyer indicates to Ricardo that it is essential he have a fence erected around the backyard of any house he purchases. Ricardo finds the perfect house for the buyer, but it does not have a fenced backyard, nor does the listing information sheet indicate whether fences are allowed. Ricardo does not inquire of the listing agent anything about a fence. The buyer purchases the house and later learns that he cannot erect a fence. In North Carolina, which of the following statements regarding these facts is correct? The listing agent had a duty to disclose in the listing information sheet that fences were not permitted. Ricardo had duty to determine if fences were permitted even though the listing information sheet did not indicate anything regarding fences. Since Ricardo and the listing agent are acting in the capacity of seller sub-agent, they have no responsibility to determine if fences are permitted. Since the buyer did not have a buyer agent in the transaction, it is solely his responsibility to check into the permissibility of having a fence.
Ricardo had duty to determine if fences were permitted even though the listing information sheet did not indicate anything regarding fences.
On October 1, Bob Buyer made an offer to purchase a residential property using the NCAR Standard Offer to Purchase and Contract form. The offer specified that the due diligence period would extend until October 30. A home inspection was performed on October 27, and the report was provided to Bob Buyer on October 30, revealing major structural damage. At 10 p.m. on October 30, Bob Buyer notified the seller in writing that he was terminating the contract. Under these circumstances, how would the provisions of the sales contract apply to the disposition of the earnest money deposit and the due diligence fee? Seller would be entitled to the due diligence fee, but Bob Buyer would be entitled to a refund of the earnest money deposit. Bob Buyer would be entitled to a refund of both the due diligence fee and the earnest money deposit. Seller would be entitled to the earnest money deposit, but Bob Buyer would be entitled to a refund of the due diligence fee. Seller would be entitled to both the due diligence fee and the earnest money deposit.
Seller would be entitled to the due diligence fee, but Bob Buyer would be entitled to a refund of the earnest money deposit.
Which of the following is true about townhouses in North Carolina? The deed is for the enclosed air space of the unit. The common areas are owned by the HOA as tenants in common. The HOA owns the common areas in severalty. Land is not included when a townhome is purchased.
The HOA owns the common areas in severalty.
According to the common law of agency, when a property manager enters into a written management agreement with a principal, which of the following statements is CORRECT? From a tax standpoint, the property manager becomes an employee of the principal. From a fiduciary standpoint, the property manager supports the principal's wishes over the interests of the tenants. The agreement needs to make specific reference to the law of agency, or else state laws alone will govern the enforceability of the property manager's obligations under the agreement. The agreement serves to remove the principal from legal liability for any actions of the property manager that are not directly authorized under the terms of the written agreement.
The agreement needs to make specific reference to the law of agency, or else state laws alone will govern the enforceability of the property manager's obligations under the agreement.
The North Carolina Good Funds Settlement Act requires which of the following? A brokerage must require a certified check from the buyer for all funds relating to earnest money and due diligence fees. The attorney or closing agent must disburse all funds at the time of settlement or upon the reasonable request of any party to the transaction. The attorney or closing agent may not disburse funds until after recording and must verify all funds in an amount exceeding $5,000. The seller must provide written documentation to the buyer that the sales price of the home is sufficient to satisfy all liens and judgments against the property so that the seller may deliver marketable title.
The attorney or closing agent may not disburse funds until after recording and must verify all funds in an amount exceeding $5,000.
The seller has indicated on her listing agreement with Seahawk Realty that she does not authorize dual or designated agency. A licensee with Seahawk has a buyer client who is interested in seeing the seller's home. Which of the following statements is true? The buyer's agent may show the listing because she works for the same firm. The buyer's agent must never show the listing. The buyer's agent has to get consent and authorization from both the seller and the buyer prior to writing an offer. The buyer's agent has to get consent and authorization from both the seller and the buyer prior to showing the property.
The buyer's agent has to get consent and authorization from both the seller and the buyer prior to showing the property.
A squatter has been living on and farming a small, remote section of a very large property. The property owner receives notice that the squatter wants to claim title to the cultivated section. Which of the following statements about this situation is CORRECT? The claim may transfer ownership if all the conditions of adverse possession are met. The claim will be valid if the land has been farmed for more than three growing seasons. Squatters are entitled only to the crops they have planted and cannot lay claim to the property. Squatters are entitled to bring claims for continued use under a prescriptive easement but not a claim for title.
The claim may transfer ownership if all the conditions of adverse possession are met.
A buyer and seller enter into a valid real estate contract using the preprinted Offer to Purchase and Contract (Standard Form 2T). Two weeks before the scheduled closing, the seller died. Under the general rules of contracts, without a contingency clause to the contrary, the legal status of this contract is best summarized by which of the following statements? The contract is still enforceable, and the probate court may obligate the seller's estate to perform on the contract or pay damages to the buyer. The contract is now voidable at the option of the buyer. The contract was immediately terminated upon the death of the seller. The contract is voidable at the option of the seller's heirs.
The contract is still enforceable, and the probate court may obligate the seller's estate to perform on the contract or pay damages to the buyer.
A buyer purchased a property "subject to" an existing loan. The buyer did not sign a new promissory note with the seller's lender. If the buyer defaults on the loan and the lender forecloses and does not get paid in full, which of the following options will the lender be permitted to take? The lender must pursue the seller; the buyer will have no additional liability. The lender can pursue both the seller and buyer for any balance owed. The lender will have no recourse in the event of default. The lender can only pursue the party in possession.
The lender can pursue both the seller and buyer for any balance owed.
A licensee knows of a real estate investor who wants to dispose of one of his rental properties. The licensee brings a potential buyer over to the property, and the buyer expresses an interest in purchasing the rental property. Neither the buyer nor the seller has signed any type of real estate employment agreement; however, the agent is involved in the negotiations. Under the common law of agency, which of the following is correct? There are no agency relationships because there are no signed employment agreements. An agency relationship will only get created if one of the parties agrees to pay the licensee. The licensee is only acting as an intermediary and a friend so no agency relationships are created. The licensee may be creating an implied agency relationship with both the investor and the buyer.
The licensee may be creating an implied agency relationship with both the investor and the buyer.
In sales transactions subject to the North Carolina Residential Property Disclosure Act, which of the following statements is true? The seller must discover and disclose to prospective buyers all property defects about which the seller should reasonably have known. The buyer must be given the required disclosure statement and must acknowledge receipt of the statement in writing before being shown the property. When the seller timely provides the required disclosure statement to the prospective buyers, the agents in the transaction are relieved of any responsibility to discover and disclose material facts about the property. The listing agent must advise the seller of the seller's statutory rights and obligations, provide the seller with the appropriate disclosure form and assist the seller in proper completion of the form.
The listing agent must advise the seller of the seller's statutory rights and obligations, provide the seller with the appropriate disclosure form and assist the seller in proper completion of the form.
Which of the following conditions makes an owner who is personally leasing a residential property EXEMPT from the provisions of federal Fair Housing law? The property has more than four units. The property has two to four units, and the owner occupies one of them. The owner uses a real estate broker to market the sale or lease of the property. No discriminatory advertising is used in soliciting prospective buyers or tenants.
The property has two to four units, and the owner occupies one of them.
A broker listed a property for a seller. The seller instructed the broker that they did not want the property advertised in the local paper or media. Which of the following is a true statement? The public can't restrict a broker's right to advertise. A broker cannot take a listing with restrictions. It's illegal to ask the broker to exclude advertising to the public. The seller can place any kind of legal restrictions to which the seller and broker agree.
The seller can place any kind of legal restrictions to which the seller and broker agree.
Which of the following is true about ad valorem taxes? They are based on the total square footage of the property. They must be reassessed when a property is sold to a new buyer. They are assessed according to the property's value. They determine how much the tax rate can be.
They must be reassessed when a property is sold to a new buyer.
Which of the following federal laws establishes advertising guidelines for real estate financial information? Sherman Antitrust Act Federal Fair Housing Law Equal Credit Opportunity Act Truth in Lending Act (Regulation Z)
Truth in Lending Act (Regulation Z)
A broker with AgencyOne is working for a buyer client to find a home. They find a home listed with AgencyTwo and submit an offer on Monday afternoon using the standard Offer to Purchase & Contract (Form 2T). The listing agent presents the offer to the seller on Tuesday. The seller signs the offer with no changes and returns it to the listing agent on Tuesday evening. Wednesday morning, the listing broker calls the AgencyOne broker and states the seller has signed and accepted the buyer's offer. The AgencyOne broker receives the signed documents on Thursday. On Friday morning, the AgencyOne broker meets with their buyer, informs them of the acceptance, and delivers to them the signed documents. When did the parties form a valid and binding contract? Wednesday morning, because that is the day the acceptance was communicated to the AgencyOne broker Tuesday, because that is the date on which the seller affixed their signature Tuesday evening, because that is when the seller informed the listing broker of their acceptance Friday, because that is the day on which the buyer was informed of the acceptance and received the signed documents
Wednesday morning, because that is the day the acceptance was communicated to the AgencyOne broker
A buyer gives a seller's agent an earnest money deposit and an offer stating that the out-of-town seller has ten days to respond. Seven days later, the seller has still not reviewed the offer and the buyer notifies the seller's agent that the offer is withdrawn, and the earnest money should be returned. Can the buyer do this? Why or why not? No, the offer must remain open for the full ten-day period. No, the offer must be delivered to the seller before it can be withdrawn. Yes, the buyer can withdraw the offer without penalty since it has not been accepted. Yes, the buyer can withdraw the offer and receive the earnest money, but only if the buyer has made an offer on a different property.
Yes, the buyer can withdraw the offer without penalty since it has not been accepted.
In North Carolina, which of the following is correct regarding representation of a buyer? only non-provisional brokers can represent buyers it can be oral to start but must be in writing prior to showing properties a buyer agency agreement must be in writing prior to the preparation of an offer for the buyer buyer agency agreements must be in writing at first substantial contact
a buyer agency agreement must be in writing prior to the preparation of an offer for the buyer
A buyer arranges with the seller to make monthly house payments to the seller rather than to a bank for 15 years. During that time, the seller retains legal title to the property with the understanding that it will be transferred upon full payment of the loan. Which of the following terms BEST identifies this type of property financing? sale-leaseback a blanket mortgage deed of trust (trust deed) a contract for deed (land contract)
a contract for deed (land contract)
Which of the following provisions would be included in the standard NCAR/NCBA Offer to Purchase & Contract Form 2T? a provision defining the commission splits between the listing and the selling brokerages a provision that states that the brokerages have no liability to the parties for any misrepresentation made during the transaction a provision confirming the agency relationships of the listing and selling agents a provision that acknowledges that a builder is paying additional bonus compensation to the selling brokerage
a provision confirming the agency relationships of the listing and selling agents
According to the Equal Credit Opportunity Act (ECOA), it is illegal for lenders to refuse credit to or otherwise discriminate against which of the following applicants? a single person who receives public assistance a new homebuyer who does not have a credit history an unemployed person with no identifiable source of income the parent of two children who receives public assistance and who cannot afford the monthly mortgage payments
a single person who receives public assistance
A tenant has not paid their rent. The landlord, in order to gain repossession of the premises, plans to remove the tenant from the property. The process by which the landlord must accomplish regaining possession is best referred to as: actual eviction constructive eviction writ of attachment quiet title action
actual eviction
When a borrower is required to pay a loan origination fee, the fee is intended to compensate the lender for expenses that are BEST described as credit report agency fees. recording fees for all lien-related documents. fees paid by the lender to a mortgage loan broker. administrative costs involved in processing the loan.
administrative costs involved in processing the loan.
A licensee receives their initial license on inactive status and must do which of the following to activate it? pay $45 to NCREC complete 30 hours of Post licensing within 18 months affiliate with a BIC join a REALTOR® organization
affiliate with a BIC
A loan where payments are made in installments and the entire principal is paid off gradually throughout the loan period is BEST known as which of the following types of loans? balloon straight open-end amortized
amortized
When a person signing a document does so in the presence of a formal witness, such as a notary public, who confirms the authenticity of the signer's identity, this is BEST referred to as actual notice. an acknowledgment. a document recordation. a discharge of documentary obligations.
an acknowledgment.
A real estate licensee who has a written contract with an employing broker that specifies that the licensee's entire income will be derived from sales commissions rather than hourly wages is MOST likely to be classified as a subagent. an employee. an independent contractor. an independent agent within the company.
an independent contractor.
Funds for Department of Veterans Affairs (VA) loans are MOST likely to be provided by Freddie Mac. private investors. approved lenders. the Department of Defense.
approved lenders.
According to the common law of agency, a real estate licensee acting as a subagent of an employing broker MUST be loyal to the interest of the broker's principal. prepare documents required for the smooth transfer of title. obey all reasonable instructions from third parties concerning the transaction. disclose all facts concerning the sale to the broker, principal, and interested third parties.
be loyal to the interest of the broker's principal.
To be enforceable in court, a contract MUST include which of the following elements? competent parties a witness's signature a notarization an earnest money deposit
competent parties
If a landlord ignores the repair requests of a tenant, the tenant has the right to move out of the property and pay rent until the last day of occupancy under which legal concept? constructive eviction self-help eviction summary ejectment eviction retaliatory eviction
constructive eviction
Under which of the following circumstances is an agency relationship created through a listing agreement terminated without liability for either party? contract neglect contract expiration unilateral revocation by the principal a title search discovers the seller has unmarketable title
contract expiration
A buyer makes an offer of $485,000 for property with an earnest money deposit of $10,000. The earnest money is given to the listing broker. The buyer withdraws her offer before the seller takes any action on the offer. In North Carolina, the listing broker is responsible for disposing of the earnest money by returning it to the buyer. deducting the agreed-upon brokerage commission and giving the balance to the seller. turning it over to the seller. depositing it in a trust account within three banking days of receipt and holding it until both parties sign a written release.
depositing it in a trust account within three banking days of receipt and holding it until both parties sign a written release.
A real estate licensee properly explained agency relationships to a prospective buyer who entered into a written buyer brokerage agreement. The buyer did not authorize dual agency. After viewing several homes listed by other firms, the buyer asked to see a home listed by the licensee with whom the buyer had signed a buyer brokerage agreement. The required course of action for the licensee would be to: disclose the existence of dual agency and get the oral consent of the buyer before showing the property. disclose the existence of dual agency to both the buyer and seller and obtain the written consent of both the buyer and seller before showing the property. show the property but obtain the written consent of the buyer to dual agency before writing an offer on the property. show the buyer the property; no consent to dual agency is required if the buyer knows that the licensee also represents the seller.
disclose the existence of dual agency to both the buyer and seller and obtain the written consent of both the buyer and seller before showing the property.
A market analysis conducted by a property manager for the owner would MOST likely contain which of the following information? detailed budget of the property to determine its net operating income long-term capital improvement projects for the property list of services and fees that the property manager will charge the owner economic trends and competitive rents for the surrounding area
economic trends and competitive rents for the surrounding area
The main purpose of the Americans with Disabilities Act (ADA) as applied to real property is to prevent discrimination against persons with disabilities in the sale or rental of residential property. prevent discrimination against persons with disabilities in the sale or rental of commercial property. ensure adequate access for persons with disabilities to residential properties. ensure adequate access for persons with disabilities to commercial property and places of public accommodation.
ensure adequate access for persons with disabilities to commercial property and places of public accommodation.
Which of the following terms is defined as the difference between a property's market value and the total of all liens against the property? equity leverage assessed value loan to value ratio
equity
A CORRECT statement about compensation arrangements in listing agreements is that they are fixed by local convention. established by negotiation between the seller and the listing broker. reviewed and adjusted periodically by the closest Board of Realtors. subject to change if the local housing market fluctuates dramatically during the agreement period.
established by negotiation between the seller and the listing broker.
The standard method for determining the area of a detached single-family residence is to measure the exterior dimensions. exterior dimensions less wall thickness. finished-out living areas and total them. interior dimensions of all heated spaces and total them.
exterior dimensions.
After a buyer has failed to make their payments to the lender on the home, the lender forecloses. At the foreclosure sale, the property sells for substantially less than the lender is owed. The lender will MOST likely take what legal action against the borrower? initiate an acceleration action make a claim for attachment pursue the owner for liquidated damages file for a deficiency judgment
file for a deficiency judgment
Which of the following terms describes personal property that has become real estate through its attachment to real property? fixture personalty appurtenance fructus industriales
fixture
A licensee who has just qualified to be a broker-in-charge (BIC) is considering opening an office as a BIC. Which of the following types of business ownership for a real estate operation provides the LEAST protection against the licensee's personal assets being subject to professional liability claims? corporation limited partnership general partnership limited liability corporation (LLC)
general partnership
The purchaser executes a deed of trust/mortgage and a promissory note at closing. Which statement BEST describes what the PURCHASER has done? given the note as security for the property pledged the property as security and collateral to support the promissory note secured the property with the debt promised not to sell the property
given the note as security for the property
A non-provisional broker may affiliate with more than one BIC when? never if they have a firm license if the BIC's consent only if they are limited non-resident commercial brokers
if the BIC's consent
According to the North Carolina Real Estate Commission Rules, earnest money checks received by a brokerage firm which maintains a trust account in connection with a real estate transaction must be deposited into the trust account within how many days? immediately, but no later than 5 banking days from receipt within 3 business days of the date of closing immediately, but no later than 3 calendar days immediately, but no later than 3 banking days from acceptance of contract
immediately, but no later than 3 banking days from acceptance of contract
The status of a provisional broker license if not renewed by June 30th is? inactive expired unaffiliated revoked
inactive
An older home surrounded by industrial and commercial buildings is MOST likely to suffer from which of the following types of depreciation? curable functional obsolescence incurable functional obsolescence curable external (economic) obsolescence incurable external (economic) obsolescence
incurable external (economic) obsolescence
A licensee takes a listing on a large property with irregular boundary lines. While showing the property to prospective buyers, the licensee begins to suspect that the parcel is not as large as the seller said it is and that a fence along the back may encroach on the next parcel. The licensee's obligation regarding these suspicions is to require the seller to have a survey done to verify the boundaries and acreage. inform both the seller and prospective buyers that there may be some survey problems. disclose nothing about these suspicions because they are mere suspicions and unsupported by actual evidence. disclose nothing about these suspicions to prospective buyers because doing so could harm the seller's chances of a sale, which would be a breach of the licensee's fiduciary duty.
inform both the seller and prospective buyers that there may be some survey problems.
A North Carolina licensee has his own personal property for sale through his affiliated firm. Which of the following would be the MOST appropriate response to a potential buyer? ask the buyer for permission to represent them inform the buyer they cannot represent them as a client obtain consent and disclose the act as a dual agent disclose their status as a licensee before having a buyer sign a buyer agency agreement
inform the buyer they cannot represent them as a client
A licensee must disclose their agency status to other agents and consumers when? first substantial contact prior to presenting an offer initial contact no later than showing the property
initial contact
Condemnation and escheat are examples of which of the following types of property transfer? voluntary alienation involuntary alienation transfer of title by descent transfer of title through foreclosure
involuntary alienation
Without an agreement to the contrary, when a leased property is sold, the lease is binding on the new owner. is in breach and can be voided by the tenant. is canceled effective the date of title transfer. may be terminated at the discretion of the new owner.
is binding on the new owner.
Though state-specific differences may apply, which of the following types of ownership is commonly characterized by the "four unities" of title, time, interest, and possession? joint tenancy tenancy in severalty tenancy in common tenancy at sufferance
joint tenancy
The Real Estate Settlement Procedures Act (RESPA) specifically prohibits which of the following practices in the course of financing real estate transactions that are governed by RESPA? redlining kickbacks seller carrybacks dual agency representation
kickbacks
Which of the following documents transfers possession and use of real property without transferring ownership? deed lien lease certificate of estoppel
lease
A nonprofit old age home run by a synagogue for people of the Jewish faith is refusing admittance to a Baptist senior citizen. According to federal Fair Housing law, is this act legal or illegal? Why or why not? illegal, since it is religious discrimination B illegal, since no discrimination of protected classes is ever allowed by law legal, since there are no federal laws regarding religious discrimination legal, since this home is exempt under federal law and may restrict tenancy based on religion only
legal, since this home is exempt under federal law and may restrict tenancy based on religion only
The type of legal description that is MOST likely to be used for a property in a subdivision is lot and block. metes and bounds. government rectangular system. horizontal property act description.
lot and block.
Which of the following activities is prohibited under the federal Sherman Antitrust Law? blockbusting market allocation racial discrimination nondisclosure of material defects
market allocation
Which appraisal approach is an appraiser MOST likely to use when appraising a 20-year-old home in a residential neighborhood? capitalization approach market data approach income approach cost approach
market data approach
According to basic contract law, which of the following statements BEST identifies what "consideration" in a real estate sales contract means? agreement between parties money or anything of value the terms and conditions included legally acceptable use of the property
money or anything of value
The term "redlining" identifies an illegal practice within which of the following real estate related professions? property sales residential rentals mortgage lending commercial development
mortgage lending
All of the following are components of a home's roofing construction system, EXCEPT: eaves fascia soffit muntin
muntin
A CORRECT statement about a lender's title insurance policy is that it provides coverage for how much of the buyer's equity in the property? none half all the amount negotiated between the buyer and insurer
none
A tenant has entered into a written agreement with their landlord that provides the tenant with a contractual right to purchase the property at an agreed-upon price at some future date. What is the term that best describes this agreement? option to purchase agreement right of first refusal sale leaseback land installment contract
option to purchase agreement
The MOST important component in the preparation of a management plan for a rental property is the owner's objectives. net operating income. determination of cash flow. scheduling of required safety inspections.
owner's objectives.
Which of the following is considered a material fact by law in North Carolina? death or serious illness of a previous property occupant convicted sex offender occupying or residing near a property pending foreclosure of a property at the time the trustee filed the foreclosure papers the sellers of a listed property tell their listing agent that they are 12 months behind on their house payments
pending foreclosure of a property at the time the trustee filed the foreclosure papers
According to federal Fair Housing law, which of the following would be considered to be a member of a protected class? married couple pregnant woman 19-year-old students 62-year-old couple living in a retirement community
pregnant woman
The PRIMARY reason for the requirements of the statute of frauds regarding real estate contracts is to protect the buyer from unscrupulous licensees. protect the general public from fraud due to unrecorded deeds. prevent the buyer from defrauding the seller through bad credit. prevent perjury and fraudulent proof of a fictitious oral contract.
prevent perjury and fraudulent proof of a fictitious oral contract.
A property manager has an arrangement with a handyman company to spend a few days per month doing touch-up painting and general property up-keep. This type of maintenance work is BEST categorized by which of the following terms? deferred corrective preventive construction
preventive
Agent A was recently licensed as a provisional real estate broker, and he began working at XYZ Realty. Agent A promptly enrolled in his first 30-hour postlicensing course. As a condition of renewing their real estate license on active status, Agent A must satisfy the North Carolina Real Estate Commission's continuing education requirement the first anniversary date of his license. the second anniversary date of his license. the first renewal of his license. prior to the second renewal of his license.
prior to the second renewal of his license.
A prospective buyer made an offer to purchase a house at less than the listing price. The seller has the listing licensee present a counteroffer, which the prospective buyer did not accept. This prompts the seller to reconsider the first offer, which the seller accepted, signed, and had delivered to the prospective buyer. A CORRECT statement about this situation is that the prospective buyer is now legally bound to complete the sale. listing licensee has met the standards for procuring cause and has earned a commission. prospective buyer was released from the original offer's terms once the seller made the counteroffer. seller will be able to collect damages from the listing licensee based on poor representation if the prospective buyer refuses to act on the offer.
prospective buyer was released from the original offer's terms once the seller made the counteroffer.
An exclusive right-to-sell listing contract differs from an exclusive agency listing contract in that the exclusive right-to-sell specifies the time period during which the property must be sold. appoints only one broker as the sole agent to represent the seller and the property. grants the broker a commission only if someone other than the owner sells the property. provides for a commission to the broker even if the owner sells the property.
provides for a commission to the broker even if the owner sells the property.
A CORRECT statement about the Civil Rights Act of 1866 is that it has been replaced by subsequent Fair Housing laws. has been enforced by the National Guard since becoming law. provides no exceptions to the illegality of racial discrimination in housing. provided protections for immigrants, religious organizations, and ethnic groups alike.
provides no exceptions to the illegality of racial discrimination in housing.
A CORRECT statement about the Federal National Mortgage Association (FNMA) is that it insures mortgages funded by government-backed banks. purchases mortgages in the secondary mortgage market. provides funding directly to homeowners for low-income properties. is a source of housing funds for approved community development and rejuvenation plans.
purchases mortgages in the secondary mortgage market.
Of all the deeds a buyer can receive from a seller, which one provides the LEAST amount of protection to the buyer? special warranty deed quit-claim deed general warranty deed mineral deed
quit-claim deed
Which of the following tasks represents a property manager's MOST important responsibility to an owner? keep the building 100% occupied prevent the owner from suffering any losses report immediately all cost allocations to the owner realize the highest profit consistent with the owner's instructions
realize the highest profit consistent with the owner's instructions
When performing an appraisal report, what is the very last step taken by the appraiser when bringing different appraisal approaches together in order to reach a final opinion of value? contribution substitution reconciliation adjustment
reconciliation
A university receives a gift of real property from an individual who reserves a life estate for a family member's use. In this arrangement, the university is BEST identified as a proxy. testator. remainderman. reversionary party.
remainderman.
Which of the following terms BEST identifies a parcel of ground over which an easement runs? dedicated land servient tenement dominant tenement landlocked property
servient tenement
Which of the following type of agency is MOST likely to apply to a broker who has listed a property for an owner? special agency general agency universal agency ostensible agency
special agency
Which of the following terms BEST describes a court order that forces the parties to fulfill obligations they promised in a real estate contract? subpoena lis pendens constructive notice specific performance
specific performance
When showing prospective buyers some properties, a buyer-agent deliberately avoids certain ethnic neighborhoods even though they include properties that meet the buyers' requirements. Under federal Fair Housing law, this practice is referred to as steering. redlining. blockbusting. panic peddling.
steering.
When a developer submits a residential subdivision plat map for recording, local authorities are MOST likely to review it for compliance with which of the following concerns? health codes building codes economic impact subdivision regulations
subdivision regulations
Three siblings inherited a property as equal-share tenants in common, and two of them wanted to force the sale of the property in order to cash out their respective one-third interest. Which of the following terms identifies the legal action that would accomplish this? probate suit for partition suit to quiet title eminent domain proceeding
suit for partition
A listing broker is aware of a significant hidden defect in a property he/she listed, but the seller checked "No Representation" on the Residential Property Disclosure Statement. The listing broker does not describe the defect in the listing data and does not tell a selling broker who is working with a prospective buyer. The selling broker does not discover the hidden defect and, therefore, does not disclose the defect to the prospective buyer. Under North Carolina Real Estate License Law, who is responsible for nondisclosure to the purchaser? the seller only the listing broker only the listing broker and selling broker the seller and the listing broker
the listing broker only
In North Carolina when a joint tenant dies, their interest in real property passes to which of the following? the remaining joint tenants the spouse of the deceased their heirs the children, if married
their heirs
A buyer and seller enter into a real estate sales contract in which one of them inserted the statement that "time is of the essence." This condition is BEST understood to mean that there can be no extensions to the contract. all terms of the contract must be performed quickly. time periods for contract terms will be strictly enforced. damages will be collected for any breach of contract or delay in closing.
time periods for contract terms will be strictly enforced.
An appraisal report on a home shows a deduction due to curable physical depreciation under the cost approach. Which of the following conditions is MOST likely to cause this deduction? 12-foot-high ceilings weathered paint and siding a severely cracked foundation cracked roof trusses due to snow
weathered paint and siding