Missed Practice-Exam Questions

How many acres are in a parcel described as, "The NE 1/4 SW 1/4 Section 3, Township 4S, Range 2W of the 6th PM"?

40 4 x 4 = 16 640acres / 16 = 40 acres

Elaina and Allen just purchased a home using a deed of trust. Who will hold title until the loan is paid off?

A trustee will hold title until the loan is paid.

North Carolina defines trust funds as _____.

Monies received by a broker who's acting in a fiduciary capacity

In North Carolina's FHA/VA Financing Addendum, the VA Notice to Buyer states that the parties agree that the purchaser will NOT incur a penalty for forfeiting an earnest money deposit, nor will the buyer be obligated to purchase the property under the contract if the contract purchase price or cost exceeds the property's ______.

Resonable contract

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______.

Willing to pay Scott's commission anyway

A hurricane is approaching, and North Carolina's governor has issued a mandatory evacuation order. Is Delores required to offer a full refund to the tenant currently staying in the property?

Yes, if the tenant complied with the evacuation order and didn't already purchase or refuse to purchase insurance that would compensate for losses. The owner/property manager isn't required to issue a refund to the tenant under a mandatory evacuation order if prior to taking possession of the property the tenant refused the offered insurance that would have compensated them for losses or damages due to a mandatory evacuation order, or If the tenant purchased insurance that the property owner or real estate broker offered and the tenant is compensated for losses by the insurance company.

_______ is a standardized measure for interest rates and other costs of the loan.

Annual percentage rate

What does the Federal Trade Commission consider to be an unfair ad?

Any ad or business practice that causes or is likely to cause injury

Broker Bert was given an earnest money check to hold for a prospective buyer. Which of the following is true?

Bert has been entrusted with money, and therefore has a fiduciary responsibility to account for it. A broker who is entrusted with trust funds has a fiduciary responsibility to account for and follow established legal rules for handling it.

Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment?

Lenore's offer is $270,750 which is 95% of the list price ($285,000 x .95 = $270,750 ). Her total down payment is 20% of her accepted offer of $270,750, which is $54,150 (or $270,750 x .2) and earnest money of 10% of the sales price which is 27,075 is included in that down payment

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 the form has been mailed or delivered to the commission

Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?

Prior appropriation

What's the purpose of the fixed/adjustable rate note?

To convert the interest rate from fixed to adjustable

What's the meaning of "good faith" in relation to contract law?

"Good faith" has generally been defined as honesty in a person's conduct during the agreement.

Shondra doesn't have her house on the market yet, but she has a friend coming over to see it—and the potential buyer sounds very eager. Shondra asks her agent, Kim, "When should I provide the North Carolina disclosure forms?" What should Kim's answer be?

"When this potential buyer makes an offer." Shondra should give the required disclosures (the Residential Property and Owners' Association Disclosure Statement and the Mineral and Oil and Gas Rights Disclosure) when a potential buyer makes an offer.

A local buyer is purchasing a property for $120,000. What will the seller pay in transfer tax if the rate is $.37 per $100?

$.37 / 100 = .0037 .0037 x $120,000 = $444

Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the purchase price in closing costs. How much money should he bring to closing?

$106,250 Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs $106,250 to close ([$125,000 - $50,000] + $31,250).

Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18' x 6'. The kitchen is 20' x 30'. The living room is 25' x 45'. Two bedrooms are 12' x 16', and the master bedroom is 14' x 20'. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?

$17,404.09 First, find the area of each room and add them together to get the total square footage. 108 + 600 + 1125 + 192 + 192 + 280 = 2,497 square feet. The total cost of the flooring per sq. ft. is $5.48 + $1.49 = $6.97. 2,497 x $6.97 = $17, 404.09.

Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller, which will be applied to her down payment. She's financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing?

$2,300 Helen must bring $2,300 to closing to pay the total amount due. She owed a total of $4,800 minus the earnest money she already paid ($2,500). That leaves her with $2,300 still to pay. This is the amount she still has to pay.

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

$250,000

A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?

$276,596 To calculate this, start with 100% minus a 6% commission, which is 94% or .94. Take $250,000 plus $10,000 and divide this amount by .94.

If the attorney general instigates a lawsuit and the defendant is found to have knowingly violated the Unfair or Deceptive Trade Practices Act, the court may choose to impose a civil penalty of as much as ______ for each violation.

$5,000 When a broker is proven to have knowingly violated the Unfair or Deceptive Trade Practices Act, the court has the authority to impose a civil penalty of as much as $5,000 per violation.

A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what's the list price for this parcel?

$763,560 Area = length x width. One mile = 5,280 feet. The area of this parcel is 7,920,000 s.f. ([5,280 ÷ 2] x 3,000). One acre = 43,560 s.f. The parcel is 181.8 acres (7,920,000 ÷ 43,560). So, the list price is $763,560 ($4,200 x 181.8).

Alison and Brent are financing their house purchase of $232,500 with an FHA loan. Their credit score qualifies them for the minimum down payment. What do they need to put down?

$8,137.50 The minimum down payment for an FHA loan is 3.5%, so Alison and Brent's down payment needs to be $8,137.50 ($232,500 x 0.035).

On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month.

$800

Alistair bought a townhouse for $285,900. He got a 90% loan and the lender charged him 3-1/2 discount points. How much did Alistair pay in discount points?

$9,005.85 Because $285,900 x .90 = $257,310 $257,310 x .03 discount points = $7,719.30 257,310 x .015 half of a discount point = $1,286.55 $1286.55 + $7,719.30 = $9,005.85

Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax.

$962.50 A mortgage recording tax is based on the loan amount. Phyllis will pay a mortgage tax amount of $962.50 on her loan amount ($275,000 x .0035).

The Slathertons are looking at buying a $300,000 property with a 20-year loan at a 6% interest rate. Using the amortization chart factor of 7.16431, how much would their monthly principal and interest payment amount be?

(Loan am / 1,000) x amor factor ($300,000 / 1,000) x 7.16431 300 x 7.164431 = $2,1449.30

Sandra retired from a career in the Navy and is ready to buy her first home—a small bungalow in a quiet neighborhood—for $169,900. Her military service qualifies her for a VA-guaranteed loan. What's her required down payment?

0% because the VA loan program was part of the G.I. Bill of 1944, and it offers financing with no down payment.

When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should: 1. have short deadlines .2. be discouraged by the broker. 3. be stated as briefly as possible. 4. be limited to mortgage arrangements.

1. have short deadlines

How long are ad valorem tax liens valid in North Carolina?

10 years in north carolina In North Carolina, ad valorem tax liens and special assessment tax liens are both valid for 10 years.

After North Carolina tenant Savannah made a good faith complaint to a government agency about her landlord, Robert, accusing him of violating a health and safety law, Robert can't evict her for ______ for asserting her legal rights to safe, sanitary housing.

12 months

Under the terms of the North Carolina Vacation Rental Act, certain provisions apply to the voluntary transfer of property if it's used as a vacation rental. One such provision says that if a planned vacation rental agreement ends more than ______ days after closing, the tenants have no rights to enforce the agreements unless the buyer agrees in writing to honor them.

180 days

In the property condition disclosure form under "Asbestos", a broker reviewing a sales associate?s listing sees that the property owner reported that the asbestos siding on his building was not removed but was professionally encapsulated ten years ago. Documentation of this professionally applied process is attached. The broker should: 1. be satisfied that the asbestos problem, if any, has been handled. 2. instruct the salesperson to request the owner to have the siding re-inspected. 3. immediately call a licensed and bonded asbestos inspector to re-inspect the property. 4. compliment the listing salesperson for having the foresight to include the documentation in the listing folder.

2. instruct the salesperson to request the owner to have the siding re-inspected.

How many acres are in a parcel described as, "The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM"?

20 acreas This legal description defines half of a quarter-quarter section. A quarter-quarter section is 40 acres; half of a quarter-quarter section is 20 acres. Alternatively, multiply the three fractions' denominators (2 × 4 × 4) and divide into 640 (640 ÷ 32 = 20).

Under the terms of the North Carolina Vacation Rental Act, the buyer or buyer's agent must notify each tenant in writing of the property transfer, the buyer's name and address, and the date the buyer's interest was recorded no later than _______ days after closing.

20 days This must occur no later than 20 days after closing. In addition, the buyer or buyer's agent must also, no later than 20 days after closing, advise each tenant regarding the tenant's right to occupy the property under the terms of the agreement and the North Carolina Vacation Rental Act.

Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. Assuming every transaction for the month was shared with a cooperating brokerage, what is Jared's brokerage's commission rate?

6.5% Jared was paid $12,239.50, which is 70% of the amount paid to his broker as commission. That makes his firm's commission $12,239.50 ÷ .70 = $17,485. Multiply that by two for the total commission the firm grossed, since it's shared 50/50 with a cooperating brokerage (the brokerage that brings the buyer to the sale), giving you $34,970. Then divide by the total sales amount for the brokerage's commission rate: $34,970 ÷ $538,000 = 0.065, or 6.5%.

Cory is a North Carolina licensee. He's required to complete ______ hours of continuing education every year.

8

How many members make up the North Carolina Real Estate Commission?

9 The North Carolina Real Estate Commission is made up of nine members. Seven members must be appointed by the governor, one by the General Assembly on the Senate president pro tempore's recommendation, and one by the General Assembly on the speaker of the House of Representative's recommendation.

The North Carolina Vacation Rental Act applies specifically to vacation rentals or leases of fewer than _______.

90 days

Sondra, a buyer, signs all the required mortgage documentation, and promises to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it is going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?

A "lien theory state" In a lien theory state, the mortgage becomes a lien on the property, but title remains with the buyer. Foreclosure proceedings in a lien theory state may be more difficult for the lender due to the fact that the buyer is holding title to the land and not the lender.

Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion, she'll need to buy a new house in her new city before her current one is sold. So, she won't have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?

A Bridge Loan Sometimes there is a delay between the sale of a property and the purchase of another, and the bridge loan allows the homeowner the ability to pay for two homes at the same time.

Each physical brokerage office in North Carolina must have a _____.

A Broker-In-Charge

A North Carolina protection agreement is commonly between which two parties?

A FSBO seller and the buyer's broker\ A protection agreement is made between the unrepresented seller and the buyer's broker. Otherwise, the buyer's broker wouldn't collect a fee for the transaction.

Jackie was sued in civil court by one of her creditors. As a result of the judgment against her, her house, car, and art collection are all subject to sale in order to pay the creditor. What type of lien is this?

A General Lien This is the type of lien against Jackie's property, as it's against her real AND her personal property.

What type of commercial lease allows the landlord to set an initial rental price, then increase rent based in changes to the property's appraised value?

A Graduated Lease Graduated leases permit an increase (or decrease) in rent during the lease period. The increase can be based on a number of factors, such as changes to appraised value, index, or time.

Lawrence is a buyer closing on a home for which he's obtaining financing. Which document will give Lawrence an estimate of the costs he'll likely pay at closing?

A Loan Estimate

In eight years, Margot will inherit a sizable chunk of money from her grandmother. Margot wishes to purchase a home now and qualifies for a 10-year loan with regular, affordable monthly payments. At the end of the loan's term, she'll owe the entire principal balance at once, which she's prepared to pay with some of Grandma's money. What kind of loan will Margot be using?

A balloon loan allows borrowers to make regular amortized payments, then make a "balloon," or lump sum, payment at the maturity date. A lender can amortize the loan over a 30-year period with a balloon payment at the end of 10 years.

Who is responsible for verifying the accuracy of a North Carolina settlement statement that's been prepared by an attorney?

A broker A broker may adopt a settlement statement that was prepared by an attorney or lawful settlement agent for this purpose, but the broker must verify its accuracy and notify all parties to the closing of any errors within the statement.

In general, what is the term for a person who's been placed in a position of loyalty and trust?

A fiduciary A fiduciary is someone has been placed in a position of loyalty and trust. A real estate licensee who's working with a client is a fiduciary; mortgage lenders and attorneys-in-fact are also fiduciaries.

When does a lease need to be recorded in NC?

A lease of more than three years

A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor?

A license

A couple are moving to a new city. They have decided to rent temporarily before buying a house to see which part of the city they would like to live in. What type of lease would BEST suit the couple's needs? 1.lease option 2.rental lease 3.month-to-month lease 4.lease purchase

A month to month lease

Mick focuses on originating mortgage loans. He works at a company that has in-house loan processors and underwriters. The options he offers consumers are limited to the products offered by his company. What's Mick's position?

A mortgage banker Mortgage bankers actually do the lending. They have in-house loan processors and underwriters and tend to limit product offerings. Wells Fargo Mortgage is an example.

Jerrica is set to close on the property she's buying on Friday. Because of other delays in the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing?

A new Closing Disclosure must be issued at least three days before the closing date. Any interest rate change of more than 1/8 of a percent requires a new Closing Disclosure, triggering a new three-day waiting period.

Dutton was previously a licensee. He's selling his home, and he wants Wanda to just assist him with the paperwork. What is this an example of?

A non-agency relationship which is when the agent can perform only limited tasks. The consumer is a customer and isn't represented by the agent, so the agent is generally prohibited from performing any tasks of a fiduciary nature, including advising, interpreting, or analyzing. The agent can perform ministerial or clerical tasks.

When reporting a sales or lease price, North Carolina law says you can report it as a single figure or as _______.

A probable range

While Martha's paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item?

A promissory note A promissory note is the borrower's promise to repay the loan. When the loan is paid in full, the note is marked as paid in full and returned to the borrower.

North Carolina broker Teddy was representing buyer Jamaal, and was getting ready to complete an Offer to Purchase and Contract form for him. Which of the following provisions is prohibited in this form?

A provision addressing payment of broker compensation or commission, including the forfeit of any earnest money A broker who's acting as an agent in a transaction is prohibited from using a preprinted offer or sales contract form that includes a provision regarding payment of broker or firm compensation or commission, including forfeiture of any earnest money. Preprinted contracts also may not include a disclaimer about the broker's liability for any statements the broker made regarding the transaction.

A sale in which the purchase price may not be enough for the seller to pay the costs of the sale, the seller may not have sufficient liquid assets to pay the costs of the sale, and the lienholders agree to release or discharge their liens upon paying an amount less than the amount secured by their liens, with or without the seller being released from any further liability, is known as ______.

A short sale In North Carolina, licensees who are members of NCAR or another REALTOR® association can use the Short Sale Addendum, Standard Form 2A14-T, with the offer to purchase forms.

New sidewalks installed only on one particular street will probably be paid for by

A special assessment

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

A use variance This is a use variance. In contrast, an applicant for a special use permit doesn't have to show hardship. He must simply show that the proposed use meets the conditions already contained in the ordinance (e.g., change in setback).

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?

A void contract Because a contract for an illegal purpose is considered void

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

A voidable contract appears to be valid, but one or both parties have the right to rescind the contract.... and Sylvia is only 15 and not legally able to sign a contract.

After getting into a fender bender, Parker had to buy a new car. To make the down payment on the car, he had to skip a couple of his mortgage payments. He received a notice from his lender indicating the remaining amount of his loan is due immediately and in full. What clause in his mortgage stipulates this?

Acceleration

Janice is extremely excited to have purchased her first home. She was able to lock in her monthly payment at a very low rate for the first five years. In year six, Janice's payments will become significantly higher based on the going market rates. What type of loan does Janice have?

Adjustable Rate Mortgage (ARM) Janice has a 5/1 adjustable rate mortgage (ARM) where the payment and interest rate are locked for the first five years, then the interest rate is adjusted based on the behavior of the economic index it's associated with and changes each year.

When does a lease have to be recorded?

All North Carolina leases exceeding three years must be recorded to protect the lessee if the property is sold. T

Harold's clients signed the real-estate contract a couple of days ago, but the seller wishes to change the amount they are going to contribute to closing. What type of contract addition will likely be used to convey the change?

Amendment

Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn't ready in time. What can their listing agent do?

Amendment Once a contract is signed, the document to use to alter the terms is a contract amendment.

The guidelines for the construction of multi-family housing, commercial, and public buildings to be accessible to individuals with disabilities are established by the _______.

Americans with Disabilities Act

Which act sets guidelines for public and common use areas at housing developments?

Americans with Disabilities Act

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.

Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?

An easement in gross

An example of a contract terminated due to inability to perform would be one in which the

An example of a contract terminated due to inability to perform would be one in which the

How might the lengthy purchase process for a short sale or foreclosure impact a buyer's financing

An existing interest rate lock may expire before the transaction is ready to close.

Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can't reach her. At this point what does Casey have?

An offer. Until the terms are negotiated and the contract is signed by both parties, acceptance hasn't occurred and the sales contract is considered an offer.

A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of

Anticipation

What does the FTC consider to be a deceptive ad?

Any ad likely to mislead consumers acting reasonably under the circumstances

NC real estate broker license applicant Penelope completed her required pre-licensing education on April 1, 2020. Based on this, Penelope must apply for her license before ______ or her pre-licensing education credit will expire.

April 1, 2023 To obtain a North Carolina real estate license, the applicant must satisfactorily complete the state's 75-hour broker pre-licensing course at a commission-approved school within three years preceding the date the application is made.

Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?

Arbitration

Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?

Arbitration An arbitration clause in a contract specifies that any contract disputes will be settled through arbitration, rather than through the court system.

Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City's property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?

As a property manager, Marissa owes fiduciary duties to her client and the apartment community.

Margot and Steve owned several rental properties at the time of their divorce. The divorce decree gave ownership to Margot in return for a cash payment by Steve. Fast forward six years, and Margot is ready to sell the properties. She soon discovers, though, that Steve's name is still on the title. What's her best course of action?

Ask Steve to generate quit-claim deeds on the properties.

In North Carolina, how long must a residential tenant's security deposit be held in a trust account?

At least until the end of tenancy

For a buyer, a DISADVANTAGE of a partially amortized or balloon payment loan is that

At the end of the term, all remaining principal must be paid in a single large payment

Will was sued for damages related to a car accident in which he was involved last year. As part of the proceedings, the court placed a lien against his primary residence. What type of lien is this?

Attachment

Tristan's offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.

Binding acceptance

When considering loan risk, which two items will lenders consider in equal measure?

Borrower and property The property's value (as underlying collateral) and the borrower's ability to repay the loan will be equal considerations for the lender.

Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.

Bracketing Bracketing determines a probable range of property values by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison such as age and transaction price.

What is the acronym that stands for the name of North Carolina's laws that are designed to protect the state's coastal zones?

CAMA The North Carolina Coastal Area Management Act is North Carolina's permanent coastal zone management law.

SARA is an amendment to which environmental act?

CERCLA

Cambridge Apartments provides an open parking lot for their residents. There is adequate parking and all spaces are available on a "first-come, first-served" basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?

Cambridge must allow an exception to the first-come, first-served policy for Alton.

Myra is preparing a monthly report pursuant to the terms of a property management agreement. This report details actual income received from rent and other fees, along with actual expenses paid. What report is she preparing?

Cash flow report

A(n) ______ states the attorney's opinion—after the attorney has examined the title—about whether or not fee simple marketable title exists.

Certificate of title A certificate of title (aka an opinion of title) states the attorney's opinion—after the attorney has examined the title—about whether or not fee simple marketable title exists.

Which act was the first to prohibit any exceptions for discrimination based on race or color?

Civil Rights Act of 1866

In North Carolina, the completion of the legal process that results in the title being transferred from the seller to the buyer is called the ______.

Closing In North Carolina, closing includes a few steps, including settlement, completion of satisfactory title update to the property following settlement, the closing attorney's receipt of authorization to disburse all necessary funds, and, finally, recordation of the deed and deed of trust, if any, in the appropriate county registry.

What is a "budget mortgage?"

Combined PITI remains the same for the life of the loan

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it?

Compare it to the Loan Estimate.

Gary just received a provisional broker license. What must he do to remove the provisional status?

Complete 90 hours of post-licensing education within the next 18 months. Within 18 months of receiving his license, Gary must complete 90 hours of post-licensing education from an approved provider. Once the post-licensing education is completed successfully, the education provider reports the completion to the commission. The provisional status is then automatically removed.

Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step?

Complete a loan application

What type of loan is neither guaranteed nor insured by government agencies?

Conventional Loans

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

Correlation Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she's current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue's closing statement?

Credit of $721.50 Since she already prepaid the property taxes, first determine the tax daily rate: $1,350 ÷ 365 = $3.70. Next, determine how many days from closing until the end of the year which is 195 days. Next, multiply the daily rate you calculated in the first step, $3.70 by how many days from closing, 195. $3.70 X 195 = a $721.50 seller credit. Any prepaid seller's homeowners insurance will be refunded to the seller outside of closing, so this doesn't appear on the closing statements.

What factors does the underwriter consider in reviewing a mortgage loan application?

Credit, capacity, and collateral

North Carolina broker Marian's buyer client Dan hired Stowaway Title Company (of which Marian is a part owner) to conduct his closing. As a result, Marion received a small referral fee from the company. Who must consent to this fee being paid?

Dan

Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent, Jenner, tells them that the builder must provide a one-year home warranty. What loan are they likely acquiring?

Darren and Natalie are using an FHA-insured loan.

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?

Debit seller $300; credit buyer $300.

Prudence just finished paying off the debt on her loan, so the lender released the property's title to her. What clause in her mortgage stipulates this?

Defeasance

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?

Delivering Agency Documents

Dennis is a business broker who's helping his client purchase a fast food franchise. The location includes transfer of a lease for the real estate where the business is located. What's true about this situation?

Dennis can't handle the real estate lease negotiations or transfer himself unless he has a real estate license.

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. What is the status of Marios title?

Depending on his state's laws, Mario may have a marketable title. In North Carolina, the chain of title only has to be unbroken for 30 years prior. If a link in the chain of title is broken, the attorney performing the search will branch out from public records to try to mend the link. State laws dictate how far back the chain must be unbroken for a title to be marketable.

Net operating income is determined by subtracting total operating expenses from the ______.

Effective Gross Income

The doctrine of laches refers to the _________ of restrictive covenants/deed restrictions

Enforcement

Gregory and Dianne are American citizens of Cuban origin, and when they're denied a home loan, they suspect discrimination. Which of the following acts prohibits lender discrimination on the basis of the protected class of national origin?

Equal Credit Opportunity Act The Equal Credit Opportunity Act prohibits lender discrimination on the basis of an applicant's protected class status, such as national origin.

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

Which of these federal exemptions to federal fair housing law is NOT included in the North Carolina state fair housing law exemptions? An investor owns and rents out five duplexes. A non-profit owns 20 properties that it only rents to Caucasian families. Discrimination in advertising if the owner occupies one of the units in a 4 unit or less dwelling. Exemption of owners in both the sale and lease of property being sold without a broker, and there is no intent expressed, either published or orally to do so.

Exemption of owners in both the sale and lease of property being sold without a broker, and there is no intent expressed, either published or orally to do so. Federal fair housing exempts property owners in the sale and lease of property, while state fair housing law doesn't allow this exemption for the sale of property, only leasing.

A North Carolina broker who fails to provide accurate closing statements to a buyer or seller is ______.

Exhibiting incompetence for which NCREC can impose discipline North Carolina licensees must provide accurate closing statements to the parties in a transaction. Failure to do so is an example of incompetence, which is a violation of license law.

Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?

FHA, VA, or conventional

This act added familial status and disability (both physical and mental) to the existing federally protected classes.

Fair Housing Amendment Act

Mike's been friends with Tim since college. They often work together: Mike flips houses and Tim's an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they're engaging?

Falsely inflating appraisals

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?

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.

Farmer John installed several pieces of farming equipment in and around the barn on the North Carolina property he's leased for the past 12 years. What is true about this situation?

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.

Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?

Fee simple determinable A fee simple determinable has limitations as to what can or can't be done with a property. It uses phrases such as "so long as," "while," or "during" to describe the required condition.

What is the appraisal adjustment sequential order?

First come transactional adjustments, followed by market condition adjustments, location adjustments and finally physical elements of comparison

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?

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 from the Offer to Purchase and Contract, Standard Form 2-T are NOT included in the Offer to Purchase and Contract - Vacant Lot/Land, Standard Form 12-T? Fixtures and Exclusions Owners' Association Disclosure and Condominium Resale Statement Addendum Private Drinking Water Well Permit Sewage System Permit

Fixtures and Exclusions The Offer to Purchase and Contract - Vacant Lot/Land, Standard Form 12-T, does NOT contain the following provisions: Fixtures and Exclusions, Personal Property, Repair/Improvement Negotiations/Agreement, Residential Property and Owners' Association Disclosure Statement, Mineral and Oil and Gas Rights, Mandatory Disclosure Statement, Lead-Based Paint, Taxes on Personal Property, and Home Warranty.

The North Carolina protection agreement is used for a __________ real estate transaction.

For Sale by Owner when an owner is unrepresented

When the sellers are lending part of the purchase price, they may secure the debt either with a deed of trust or a mortgage. For the seller, one benefit of the deed of trust is that

Foreclosure is usually simpler and faster

Another term for a valuation is ______.

Formal Appriasal

A few weeks ago, licensee Gary received a phone call from Alfred Moody, who said he planned to sell his house sometime in the near future and also asked some basic questions about the market. Gary planned to follow up with Alfred, but as he checked the Do Not Call Registry, he saw Alfred's phone number listed. Can/why can he call Alfred?

Gary can call Alfred for up to three months after his inquiry.

Kenneth, an appraiser, is driving around the area where the subject property is located. Which step in the appraisal process does this represent?

Gather and analyze data.

Brittany has a small office in a professional building. She has a set monthly lease payment that has been calculated to include maintenance of the common areas in the building, such as the restroom and small kitchen, and all nets, utilities, and janitorial charges for her space. The payment also includes taxes and insurance. The landlord takes these payments and pays the individual expenses himself. What type of lease does Brittany have?

Gross Lease

North Carolina brokerage firm Harrison Homes is acting as a dual agent in a sales transaction. The firm's dual agency policy is to appoint designated agents for each party. The firm has one broker-in-charge (Harrison), three brokers, and one provisional broker. The provisional broker will be acting as one of the designated agents. Which of the following is true of this situation?

Harrison can NOT be one of the designated agents because he's supervising the provisional broker who's a designated agent for the other party to the transaction.

Howard is a North Carolina real estate broker. He didn't get his required CE done in time, and now his license has expired. What's true about his situation?

He can reinstate his license if he completes the process within six months.

A lender will make an 80% loan-to-value loan on a property that is appraised for $72,250 and sells for $73,500. If the buyer has saved $14,450 for a down payment, how much more (if any) will he need in order to make the down payment required under the terms of this loan?

He needs an additional $1,250 in order to make the down payment. LTV: 80% AV: $72,250 $72,250 - $57,800 = $14,450 $73,500 - $72,250 = $1,250

North Carolina broker Evan will hold disputed trust funds in his trust account until _____.

He receives a written release from both parties or a court order detailing disbursement instructions

Juan has finalized his comparables and is ready to determine a property's appraised value. How does he do this?

He reviews his process and places more weight on the most similar comparables that he believes to be the most valid. The reconciliation (correlation) step requires Juan to use his best professional data analysis and judgment to determine the property's value. He'll give the most weight to one or two of the comparables that best match the subject property.

You represent Ember as her listing agent. Ashley is the buyer, and Trinity represents her. What duties do you owe Trinity?

Honesty and fairness While agents don't owe fiduciary duties to customers or third parties, they owe all parties to the transaction the duties of honesty, fairness, integrity, disclosure, and accounting. Agents are required to disclose material facts to both clients and customers and must properly account for all parties' property, documents, and funds. Agents must also cooperate to permit showings, etc.

In North Carolina, each piece of real property undergoes a reappraisal every eight years. However, sometimes reappraisals are conducted more frequently. What is the term for the changes in the values of certain property types, or when properties in a certain area are uniformly changed in the fourth year after a reappraisal?

Horizontal adjustment

Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this?

Idemnification Indemnifying one of the contract parties releases that party from all liability or loss.

Greg and Neha are interested in buying a ranch-style home in a suburban family neighborhood. The sellers have only lived there for 19 months, so they have no information about the addition that was put on 20 or 30 years ago. Why does it matter whether the owners at the time got permits to do the addition?

If the addition WAS NOT permitted, it may need to be inspected to ensure it meets code and perhaps even be taken down. If permits for the work weren't obtained when the addition went up, the city or county may require inspections and/or removal of the addition.

What must happen in order for joint tenants have unequal interests in North Carolina?

In North Carolina, Joint Tenants can have unequal interests as long as it's clearly stated in the title.

North Carolina resident Frank's property was reappraised in 2019. When can he expect the property to likely be reappraised next?

In North Carolina, each piece of real property undergoes octennial reappraisal—a reappraisal every eight years. However, sometimes reappraisals are conducted more frequently than every eighth year.

When can joint tenants have unequal interests in North Carolina?

In North Carolina, joint tenants can have unequal interests provided it's clearly stated in the title.

The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this?

Incentive zoning Incentive zoning occurs when a municipality allows a property owner to proceed with an otherwise-prohibited type of construction in return for improvements that will benefit the community.

North Carolina licensee Jeannie is preparing an exclusive right-to-sell agreement. According to state law, all real estate contracts must be in writing, include the signatures of all parties, be for a definite period of time, and ________.

Include specific nondiscriminatory language

Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this?

Indemnification

When buyer Jay signed the North Carolina Offer to Purchase and Contract, Standard Form 2-T, he agreed to hold the seller harmless for any damage that Jay's contractors caused on the property during their property inspection. Under which provision is this covered?

Indemnity Under this provision, buyers agree to indemnify and hold the seller harmless for any loss, damage, claims, lawsuits, or costs that arise out of any contract, agreement, or injury to any person or property as a result of the buyer's, buyer's agent's, or contractors' activities on the property.

Which of the following is considered unauthorized practice of law? Explaining a clause in a contract to a client Interpreting the legal consequences of a client's actions Using existing forms an attorney has reviewed Using standard language for addenda

Interpreting the legal consequences of a client's actions

What does a municipality do to verify that new construction meets building codes?

Issue building permits.

What does a balloon payment represent at the end of a loan term?

It means that some principal remains at the end of the loan term. A balloon payment is due at the end of a balloon loan, because the loan has only been partially amortized, which means that some of the principal remains at the end of the loan term.

Melissa has agreed to share her brokerage fee with her buyer client. In North Carolina, which of the following is true?

It must be disclosed to the buyer's lender and included on the settlement statement. A buyer's agent can share her brokerage fee with a buyer client, if it is disclosed to the buyer's lender and included on the settlement statement.

What will happen to North Carolina broker Hailey's BIC Eligible Status when her broker's license is revoked by the commission?

It must be terminated. A North Carolina broker's BIC Eligible Status terminates if the broker's license wasn't renewed, or the broker's license has been suspended, revoked, or surrendered. BIC Eligible Status also terminates if the broker made false statements or presented false, incomplete, or incorrect information regarding an application, or failed to complete the required BIC course(s).

When is the Owners' Association Disclosure Addendum used?

It should be used in the following situations: By the parties' agreement, when the Residential Property and Owners' Association Disclosure Statement isn't required—for example, with new construction or vacant lot/land contracts.

The should the Owners Association Disclosure and Condominium Resale Statement Addendum be used?

It should be used in the following situations: For condo resales, by the parties' agreement, and when the Residential Property and Owners Association Disclosure Statement isn't required—for example, with new construction or vacant lot/land contracts. This addendum should NOT be used in conjunction with the Residential Property and Owners Association Disclosures Statement.

NCREC has determined through an investigation that Gayle has been practicing real estate without a license. Since the commission doesn't have authority over unlicensed people, how will it handle the situation to prevent Gayle from continuing her unlawful practice of real estate?

It will seek injunctive relief in a superior court. Injunctive relief is a request for a court order demanding that a party cease performing a specific action or actions. This is something the commission does when an unlicensed person engages in real estate activity.

North Carolina broker Greg is helping his seller client Kali sell her condo. He's including the Owners' Association Disclosure Addendum with the Offer to Purchase and Contract form. Based on this information, what do we know about this transaction?

It's either exempt from the usual Residential Property and Owners' Association Disclosure Statement, or the parties have agreed to the provision of the addendum.

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.

North Carolina landowner Jeff lives within a county's territorial jurisdiction where a subdivision ordinance has been adopted. When Jeff sells land by referring to a plat that shows a subdivision of land before the plat has been approved under the ordinance and recorded with the county's register of deeds, what has Jeff just committed?

Jeff has committed a Class 1 misdemeanor. Jeff would also be guilty of a Class 1 misdemeanor if he subdivided that land in violation of the ordinance, or if he transferred or sold land using or otherwise referring to a plat showing a subdivision of the land before the plat is approved under the ordinance and recorded in the office of the applicable register of deeds.

Jennifer plans to sell her rental property to Eliot, a buyer. What obligation, if any, do Jennifer and Eliot have to the tenants of the property?

Jennifer must notify the tenants of the change in ownership.

Jerry wants to buy a property that borders a flood zone. Flood insurance isn't required, but Jerry wants to play it safe. What information should he rely on?

Jerry should rely on the advice of his broker, who should have checked into the issue. Jerry's broker should investigate further and verify that an up-to-date FEMA map was checked. Brokers have the duty to avoid misrepresentation regarding permitted land use, recognize potential land use problems, and discover and disclose any land use problems.

Luci's client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?

Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren't likely to lock in an interest rate for more than 90 days before closing. Because lenders won't lock in an interest rate for more than 90 days before closing, Kaden needs to plan for the possibility of a 1% interest rate increase between now and closing, or risk not qualifying for the loan when the time comes.

Kevin signed a lease agreement that contains a Proposed Use provision. What does this mean for Kevin?

Kevin is only allowed to do certain things in and around the property. The Proposed Use provision describes how the tenant will use the property, including allowable activities.

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?

Lenders use the lesser of the sales price or appraised value. This results in an LTV ratio of 75% ($300,000 ÷ $400,000)

Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non-discriminatory in its effect?

Listing the property on the MLS

Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non-discriminatory in its effect? 1) Ensuring that the letter was given to neighbors on both sides of the street 2) Giving the letter to at least 20 neighbors 3) Listing the property on the MLS 4) Providing the letter in multiple languages for non-English speakers

Listing the property on the MLS If the "Choose Your Neighbor" letter is used as one part of a complete marketing campaign, its effect is not restrictive.

Dean's new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a _______ lease for the office space.

Loft Lease A loft lease is usually for a large open space that may have few amenities.

Lonnie's client was looking for a property with at least 2,500 finished square feet. Lonnie found a 2,200-square-foot property with all the other features his client was looking for, and purposely failed to mention the square footage. His client agreed to look at the property, fell in love, and made an offer. Which of the following statements accurately represents Lonnie's level of misrepresentation in this situation?

Lonnie knew about the square footage and intentionally didn't mention it. He's guilty of willful misrepresentation.

What could be a sign of a plumbing problem?

Low water pressure

Which individuals are not protected under federal law but are protected by the North Carolina Fair Housing Act?

Low-income individuals

What attracts borrowers to adjustable rate mortgages?

Lower initial interest rate

What is the mnemonic you can use for determining whether something is a fixture?

MARIA The five tests are: method of annexation, adaptability of item, relationship of the parties, intention in item placement, and agreement of the parties.

The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be cancelled?

Maybe, but they'll have to petition their lender Cancellation of PMI happens once the borrower reaches a 22% equity position. This is determined by loan-to-value ratio at the time of the purchase. Unless loan-to-value ratio is now 78% or lower, the Bransons would have to petition to get PMI cancelled.

New Day Corporation's application to build a new mixed-income housing development was denied, because the town of Springfield has halted all new development until after city elections. What did Springfield enact?

Moratorium

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

Mortgage loan interest, local property taxes, mortgage loan origination fees.

How would you calculate a transfer tax of .04% on a $350,000 property?

Multiply 350,000 by .0004

Murphey's farm has been in his family for generations, since his great-great-great-grandfather received it as a land grant in 1862. What's the beginning point of this property's chain of title?

Murphey who is the current owner (and then it works backward)

Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do with clients?

Never leave clients unattended in the office

North Carolina broker-in-charge Edison was getting ready to disburse trust funds for a transaction that was set to close. During what time frame may Edison disburse the funds?

No more than 10 days before the settlement date

North Carolina broker Drake was acting as the buyer's agent in a real estate transaction. Under state regulations, Drake may only use a preprinted offer or sales contract form when that form specific information be entered on it. Is a provision that addresses the payment of the broker's compensation required information on this contract?

No, a provision that addresses payment of the broker's compensation should not be a clause on the contract. A broker who's acting as an agent in a transaction is prohibited from using any preprinted offer or sales contract form that includes a provision regarding payment of the broker's compensation or commission.

A salesperson qualified a minority couple with two children and defined their price range as between $110,000 and $120,000 for the three-bedroom house they wanted. They asked to look at two listings in a nonminority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and had only two small bedrooms. Did the salesperson act appropriately and why or why not?

No, because it is appropriate to show any property for which the buyer is qualified.

Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James's property. What kind of ownership rights does Elaine have of the driveway that runs through James's property?

Non-possesory

Bo's real estate ad states: "Custom homes for sale with scenic mountain views. Easy financing and low down payments." What else must be included in the ad in order for it to comply with TILA?

Nothing. Under TILA, ads that mention general financing terms, such as "low down payment" or "easy financing," do not require additional disclosure. If Bo had gotten more specific (e.g., "10-year loan with 0% down") he would need to include more information.

What would happen if you bought a house and later found out that there were unpaid liens against the property

Nothing. The former owner owes the money on the liens. The lien claimants would lose their liens against your property.

Tristan refuses to let Marla list his property on the MLS, even though Marla knows that more exposure to the property will generate more potential buyers. Which two fiduciary duties are at odds in this situation?

Obedience and reasonable skill and care

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 The North Carolina mechanics' lien statutes require all residential or commercial construction projects where the cost equals or exceeds $30,000 to appoint a lien agent. Owner-occupied single-family residences are exempt.

In North Carolina, the county may require only a plat for recordation to divide a parcel of land in single ownership provided several provisions apply, what are they?

One provision states that the parcel's entire area must be more than five acres. Another provision states that no part of the parcel to be divided must have been divided in the 10 years prior to the current proposed division.

In North Carolina, when disputed trust funds have been handed over to a clerk of the superior court in the county where the property is located, how long does a disputing party have to file a court proceeding to attempt to recover the funds?

One year When disputed funds have been turned over to a clerk of the superior court, the disputing parties may attempt to recover the funds from the clerk by filing a special proceeding with the court. It will be up to the clerk to determine rightful ownership. If neither party files a special proceeding within one year, the disputed funds are considered unclaimed and go to the state treasurer.

How many BICs can supervise a North Carolina provisional broker?

One, unless the provisional broker is a member of a team entity. Prior to July 2020, a provisional broker was supervised by only a single BIC at any given time. However, to accommodate teams within a firm, the rule was changed to allow two BICs to supervise a provisional broker. A provisional broker can be supervised by the team entity BIC and the firm BIC.

Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that's 225 square feet. The 1,200-square-foot basement is finished. Bonnie's MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials?

Only finished above-ground space should be counted in Bonnie's MLS listing. That means the square footage of the upper floor plus the main floor (minus the unfinished laundry area). Bonnie should report 1,425 square feet (450 + 1,200 - 225).

On what type of listing (or listings) may a net listing be used in states where they are legal?

Open, exclusive agency, or exclusive right-to-sell listings

Angelo's aging mother needs a place to live out her remaining years. Angelo conveys a home to her, but only for her lifetime. This is an example of what type of life estate?

Ordinary

Guy and his wife Clara were reading through the North Carolina Buyer Agency Agreement. As they read down the form, their broker explained what each section meant. In which section can information be found regarding seeking other professional advice about the homebuying process?

Other Professional Advice

Tiers in the rectangular government survey system are formed by ______.

Parallel township lines East-west lines of a survey, which are parallel to the baseline, are called township lines. Township lines form strips of land known as tiers, and townships fall within these tiers.

What does the lot and block system use to develop a property's legal description?

Plat refrences

Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here?

Plottage

Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land's value, he jumped at the opportunity. What's this an example of?

Plottage is the economic principle that the joining or assemblage of two neighboring land parcels increases the property value.

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy?

Preliminary report Title insurance companies issue a preliminary report with the current title history and any liens or encumbrances. It outlines what the insurance company will or won't cover on its forthcoming insurance policy if the title is found to be acceptable.

Lauren has a one-year lease with Cameron, who owns the cottage that she lives in. What is this an example of?

Privity of estate is when two or more parties hold an interest in the same real property

Under which provision of the North Carolina Standard Form 2-T would you find information that includes the property's lot, block, and subdivision name?

Property

Who is responsible for ensuring accessibility requirements for a commercial property are met?

Property owners and property managers Ensuring the accessibility of a commercial property is the responsibility of the property owner and property manager.

In North Carolina, a tenant or household member who is a victim of domestic violence, sexual assault, or stalking, and for whom special accommodations must be made, is known as a(n) ______.

Protected tenant This describes a protected tenant. A landlord must not terminate a tenancy, fail to renew a tenancy, refuse to enter into a rental agreement, or otherwise retaliate in the rental of a dwelling based substantially on one's status as a protected tenant.

A broker is showing a buyer one of his residential listings. The buyer says he wants to establish a day care center for seniors in the property. The property has been used as a day care center for no more than five children. How should the broker advise this buyer?

Provide the buyer with contact information for the local planning and zoning office to confirm the zoning and determine whether it permits his use.

You were helping your client Hal complete North Carolina's Offer to Purchase and Contract, Standard Form 2-T. You needed to use the Additional Provisions Addendum because it includes one provision you need to add to the contract. Which of the following statements about this addendum is true?

Provisions that don't apply in this addendum should be marked with "N/A."

Kristin has been unable to make her mortgage payments. Her property went to auction, but the lender didn't accept the high bid. What stage of the foreclosure process is this property now in?

Real estate owned If a foreclosed property goes to auction and doesn't sell, title goes back to the lender, and the property is considered real estate owned by that lender.

What's the best definition of real property?

Real estate, plus all of the interests, benefits, and rights included in ownership

The North Carolina Response to Buyer's Offer permits the seller to _______.

Recommend changes to the buyer's offer Without nullifying the offer that's on the table, the seller may make recommendations to make the offer worthy of being accepted.

Which of these Federal laws regulates the advertisement of a lender's credit terms (rates, payment, etc.)?

Regulation Z

A real estate brokerage company has developed standardized policies regarding the inventory of properties to be shown to prospective buyers, the company's standards for qualifying buyers, and documentation of all conversations and showings. These policies can help the firm defend itself in the event of an accusation of discrimination, but only if the policies

Require all licensees to follow them consistently

The purpose of the Truth in Lending Act (TILA) is to ______.

Require lenders to make disclosures that allow consumers to compare the costs of making a purchase using credit from different lenders, and to compare those with the cost of using cash The Truth in Lending Act requires lenders to provide credit applicants with disclosures that allow credit offer comparisons.

A requirement that all property owners in a subdivision have a six-foot privacy fence surrounding their entire property is an example of a ______.

Restrictive covenant

Morrison lives in a predominantly Latino neighborhood. He applied for a mortgage loan to purchase a house in this neighborhood, and later discovered that the lender charged him a higher interest rate than similarly qualified borrowers buying homes in non-Latino neighborhoods were charged. This might be the practice of ______.

Reverse redlining which is the practice of charging higher interest rates or fees to nonwhite borrowers.

You are hosting an open house. Mr. and Mrs. Charles Martin come into the house. You greet them and show them the house. The Martins tell you the house is exactly what they are looking for and they are very interested in purchasing it. You then give them information showing the various types of financing available with down payment options and projected payments. Mr. Martin tells you they have been working with Mary Hempstead of XX Realty, a competing real estate company. Before leaving, you thank them for coming and give them your business card.The first thing on Monday morning, Mrs. Martin calls and indicates they have tried to reach Mary and cannot. They indicate they have a written buyer's agent agreement with Mary's broker. They are afraid someone else is going to buy the house. Which of the following should you do?Select the best answer.1. 1. Seek advice from your supervising broker. 2. Tell them to come to your office. 3. Ask them to bring the buyer's agency agreement to you for your interpretation. 4. Tell them to be patient and continue trying to reach Mary. 5. Tell them to call Mary's supervising broker or branch manager. 6. Tell them you are really sorry, but there is nothing you can do.

Seek advise from your supervising broker

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?

Seller representations This information can be found in the seller representation area of the North Carolina exclusive right-to-sell listing agreement.

What item is found in a North Carolina residential sale agreement but not in a commercial sales agreement?

Seller responsibilities regarding disclosures about property condition The law requires sellers to make disclosures about the condition of the property in a residential transaction. Those disclosures aren't required in a commercial transaction, so the contract doesn't address them.

As part of due diligence, the buyer may obtain from the county health department an improvement permit or written evaluation for a ground absorption sewage system in the home. This is covered under the ______ provision of the Additional Provisions Addendum in North Carolina.

Septic System Installation/Modification

Real property can be converted to personal property by

Severance

Which of the following tasks that North Carolina broker Jen performs does NOT represent the duty of accounting to all parties? She avoids commingling trust funds with her firm's operating funds. She discloses the terms of the listing agent's compensation to her client. She meticulously manages all transactional paperwork. She properly records and safeguards the earnest money her buyer client gave her.

She discloses the terms of the listing agent's compensation to her client.

Because Joy, a protected tenant, lives with her abuser, which of the following is true of her situation?

She may give the landlord oral or written notice she's a victim of domestic violence, request the locks be changed, and provide landlord with court order ordering the abuser to stay away. When a protected tenant lives with the perpetrator, the tenant must—before the locks can be changed—provide the landlord with a copy of the court order ordering the perpetrator to stay away from the unit. Unless a court order allows the perpetrator to return to the unit to get personal belongings, the landlord doesn't have to give the restricted party access or keys to the unit.

North Carolina tenant Jamie lives in a residential property with fewer than 15 rental units that's being sold under a foreclosure proceeding. What rights does she have in this situation?

She must give the landlord written notice of lease termination effective on the notice's date, provided that the date is between 10 and 90 days after the sale date After the termination, the tenant remains liable for the rent normally due, prorated to the termination's effective date and payable at the regular time.

North Carolina tenant Jamie lives in a residential property with fewer than 15 rental units that's being sold during a foreclosure proceeding. What rights does she have in this situation?

She must give the landlord written notice of termination effective on the notice's date, provided that the date is between 10 and 90 days after the sale date. A tenant must first give the landlord written notice of termination effective on the notice's date. This date must be between 10 and 90 days after the sale date. After the termination, the tenant remains liable for the rent normally due, prorated to the termination's effective date and payable at the regular time.

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 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. What is Meg's responsibility?

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.

The listing broker is showing a home to a buyer whom she is not representing. The buyer asks about the condition of the roof. How should the broker respond?

She should advise the buyer to retain the services of an inspector to determine the integrity of the roof.

Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?

Sign the note, mark it "paid in full," and return it to Travis. When the note has been paid off, the holder must sign the note, mark it as paid in full, and return it to the maker. The satisfaction of mortgage is recorded with the county land office, removing the associated lien from the property.

Rhonda purchased an existing pet store in her neighborhood, and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities?

Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.

In North Carolina, which of the following individuals would be required to include their license status in their advertising?

Sophie, an out-of-state licensee who works as a nonresidential commercial broker rokers who are licensed as a limited nonresident commercial broker who don't live in the state must also identify their license type within their advertising, in addition to following all the other rules.

Adamsburg, a bedroom community outside the city, is growing by leaps and bounds. There's been a boom in the number of children under age 12. Mia wants to open an in-home daycare, but she lives in a neighborhood that isn't zoned for home occupations. She applied for a/n _________ and, after a public hearing, was granted one to operate the daycare.

Special Use Permit

Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

Spot zoning

The appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent?

State the problem The first step in the appraisal process is to state the problem. This includes a description of the rights associated with the property.

On Feb. 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing. Use a 360 day year and 30-day month. The answer is $288.

Step 1: The annual property tax paid was $1,140 / 360 days (the calendar year the question gave you)= $3.17 / day (rounded) Step 2: 91 days (sellers ownership) x $3.17 / day = $288.47 (rounded) NOTE: There's a drafting error in this question (a mistake); correct answer is marked as 91 days, which is the seller's term of ownership that they owe taxes for (January, February, March + April 1 = 91 days), not the term they are owed a credit for. However, the answer is still $288. *Correct answer should be: $1,140 - $288.47 = $851.53 (seller's paid taxes for the term they do not own the property)

On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month.

Step 1: The annual property tax paid was $960 / 360 days (the calendar year the question gave you)= $2.67 / day (rounded) Step 2: January 1st - February "30th" = 60 days = seller's ownership and therefore what they "owe" for property taxes Step 3: $2.67 x 60 days (seller ownership) = $160.20 Step 4: $960 total bill already paid - $160.20 seller's ownership = $799.80 owed to seller as a credit (round up to $800).

Stewart, a North Carolina real estate agent, is selling a piece of commercial property in which he has a 15% interest. Can he represent a buyer, if so what must he do?

Stewart can only represent potential buyers if he discloses his ownership interest in writing, and the buyers agree.

What is a "straight mortgage?"

Straight mortgages involve interest-only payments until the end of the loan term, when the entire principal balance comes due.

Latrell purchased an old warehouse intending to create shared studio space for artists. However, he didn't perform due diligence before the purchase and it turns out that there are hazardous materials present that need to be cleaned up first. Latrell took the previous owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?

Strict Liability

Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend's neighborhood. It's listed for $400,000. However, just down the street, another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here?

Substitution

Allentown sits on the river, and many of its bridges are in need of repair. Which police power is Allentown administration likely to use in order to fund improvements to its bridges?

Taxation

Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are

Tenants at sufferance

North Carolina buyer Tessa and seller Charles signed the Offer to Purchase and Contract, Standard Form 2-T. Charles materially breached the contract after the due diligence period had passed. Which option best describes what would happen next in this situation?

Tessa has the right to terminate the contract and receive her earnest money and due diligence fees back. Charles must also reimburse her for costs incurred conducting due diligence, and any related court/lawyer fees if she prevails in a court case.

Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. What disclosure/if any does a seller who is financing have to provide borrowers?

The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction. In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren't required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.

A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes maintenance of value over profitability? (Specialty Area 54)

The Department of Housing and Urban Development

What does the Effect of Agreement section communicate on the North Carolina Exclusive Right to Represent Buyer Agency Agreement?

The Effect of Agreement section indicates whether the buyer will allow dual agency.

Who or what entity enforces the Telephone Consumer Protection Act?

The Federal Trade Commission

Charles has been removed from the North Carolina Real Estate Commission for misconduct. Which party is responsible for removing him from the commission?

The Governor

North Carolina buyer Jenn needed to obtain a mortgage loan to pay for the property she found. Which of the following applies under the Buyer's Due Diligence paragraph of Standard Form 2-T in this situation?

The Loan paragraph notes the buyer is entitled to apply for a mortgage loan. This paragraph is NOT a contingency. If Jenn isn't approved and doesn't find out until after the due diligence period ends, she'll lose her earnest money.

Which entity sets the minimum requirements for development that occurs near waterways in North Carolina?

The North Carolina Coastal Resources Commission

Which of the following North Carolina laws governs townhouse projects of more than 20 units that were created on or after January 1, 1999?

The North Carolina Planned Community Act The North Carolina Planned Community Act governs townhouse projects of more than 20 units that were created on or after January 1, 1999 in North Carolina.

What type of property must a lien agent be appointed, according to the North Carolina mechanics' lien statutes?

The North Carolina mechanics' lien statutes require all residential or commercial construction projects where the cost equals or exceeds $30,000 to appoint a lien agent. Owner-occupied, single-family residences are exempt.

When must leases be written and signed by parties in North Carolina?

The North Carolina statute of frauds doesn't require leases of less than three years to be written or signed to be enforceable.

Which law requires developers to make sure subdivision streets comply with the North Carolina Department of Transportation's minimum standards?

The North Carolina subdivision streets disclosure The North Carolina subdivision streets disclosure requires that before entering into an agreement or conveyance with a prospective buyer, the developer and seller must prepare, sign, and deliver a subdivision disclosure statement for the buyer that fully discloses the public or private status of the street upon which the house or lot fronts.

Harini had a lease with an option to buy on her condo since she wasn't financially stable enough to purchase the condo when she first signed the lease. Two years later Harini was in great financial shape, but she found out that the owner legally sold the condo to another buyer. Harini has to move out next month. What must have happened?

The Option to Buy Expired Because options are unilateral contracts, they leave a seller hanging until the optionee exercises the option. Thus, they typically have an end date. If the optionee doesn't exercise the option before the expiration date, the owner is free to sell.

To whom must North Carolina broker Ed provide copies of the offer to purchase form after it's been signed by all transaction parties?

The Owner's Association Disclosure Addendum is used when the Residential Property and Owners' Association Disclosure Statement is not required or by agreement of the parties.

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

The Seller

A "homes for sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Is is in compliance with TILA?

The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms. The APR can be included in an ad without requiring disclosure of all credit terms. APR figures allow consumers to make an informed comparison between loans, which is TILA's goal.

North Carolina buyer's agent Sal was helping his client Mary complete the NC Standard Form 2-T Offer to Purchase and Contract form for property owned by Carl Hoyt, whose agent is Lila. Unfortunately, the contract was ambiguous in a couple of areas. How will it be interpreted?

The ambiguities will be interpreted against Mary.

A fire destroyed Meredith's house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn't fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?

The amount is would cost to completely replace her home Insurance companies reimburse based on a property's replacement cost, or what it would cost to recreate that property if it had to be completely rebuilt.

North Carolina broker Sam is trying to choose the right contract for his client. Neither he nor his broker-in-charge is a member of any REALTOR® organization. Which of the following options must Sam choose?

The appropriate contract provided by NCBA (North Carolina Bar Association)

How are changes typically made to an offer in order to create a counter-offer in North Carolina?

The broker handwrites any alterations directly onto the original offer form, and the seller initials and dates those changes.

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?

The buyer may sue the seller for specific performance.

In North Carolina, when does the buyer receive the deed?

The buyer receives the deed at closing In North Carolina, the buyer receives the deed at closing. North Carolina real estate transactions are considered closed as soon as the deed is recorded.

What is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?

The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms. Depending upon the contract's terms, a potential disadvantage for a buyer who enters into a lease with an option to buy is that he could lose any funds credited to the purchase price if he breaches the terms of the lease.

Moira has delivered a counter-offer to some potential buyers for her property. Which of these best states the time frame for the buyers' acceptance?

The buyers must respond by the time and date specified in the counter-offer.

Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?

The condo owners

What's the final step to take in order for a North Carolina limited service agreement to be considered executed?

The consumer signs the agreement. Consumers must sign an LSA form to execute the contract and begin an agency relationship with the broker.

In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?

The consumers lender

Marcus and Lucinda decided to play a round of golf on a beautiful new course in their neighborhood. As they're making the rounds, they notice vent pipes extending from the ground in various places. What might this signify?

The course is built on a capped landfill and the vent pipes are used to disperse the gasses naturally created as the waste decomposes.

Katelyn wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency will document which of the following?

The date by which all inspection issues must be addressed An inspection contingency typically documents the date by which inspection issues must be cleared. The amount of money the sellers will spend or the issues that Katelyn will overlook won't be known until the inspection itself is complete.

Reuben purchased a property from a seller who gave him a general warranty deed. What's true of Reuben's deed to this property?

The deed provides the greatest protection available from a grantor to a grantee.

Licensee Kennie Mae's neighbor, Buzz, wants to sell his house but doesn't want to sign an agency agreement. Kennie Mae works with Buzz to list and show the property and negotiate offers. After the property sells, Buzz discovers that Kennie Mae didn't present all offers to him, and he sues Kennie Mae. Kennie Mae claims that because she didn't have an agency agreement with Buzz, she wasn't required to perform all fiduciary duties. What legal principle applies here?

The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz. The doctrine of estoppel prohibits an individual from making an assertion that's in opposition to actions or to a previous statement. Kennie Mae acted as if she was Buzz's agent, so she can't later disavow that behavior.

What's the best definition of land?

The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

North Carolina broker Olivia is helping her client, Lewis, complete the Offer to Purchase and Contract, Standard Form 2-T. Under this contract, the due diligence check will be cashed on the ______.

The effective date In the North Carolina Offer to Purchase and Contract, Standard Form 2-T, the effective date is the date that the last party signs or initials the offer or the final counter-offer (if applicable), and when that final signing or initialing is communicated to the party who made that offer or counter-offer. This is the date the due diligence check is cashed.

When using North Carolina Offer to Purchase and Contract, Standard Form 2-T, what has occurred after the last party to the contract has signed or initialed the offer or the final counter-offer and that information has been communicated to the party who made the offer or final counter-offer?

The effective date has been reached. The effective date occurs when the contract becomes legally binding upon both parties.

Which statement regarding fee simple defeasible estates is true?

The estate includes the full bundle of legal rights, but ownership is based on a condition.

A disabled tenant has requested reasonable accommodations be made inside his unit to improve his ability to move around and enjoy the unit. Under ADA, what actions MUST the landlord take?

The landlord must permit the tenant to make the reasonable accommodations and can require the tenant to pay for the changes and return the unit to its original condition when vacating.

A disabled tenant has requested reasonable accommodations be made inside his unit to improve his ability to move around and enjoy the unit. Under ADA, which of these actions MUST the landlord take?

The landlord must permit the tenant to make the reasonable accommodations and can require the tenant to pay for the changes and return the unit to its original condition when vacating.

Carly's closing on an REO property was suddenly delayed due to an internal audit. What does this mean?

The lender has requested a title audit to ensure that the foreclosure was properly handled.

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?

The listing contract

Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing they did when they surveyed the new neighborhood was to reference what type of description first?

The lot and block survey system always uses one of two things as a beginning reference: a rectangular government survey or a metes and bounds description.

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 the type and amount of the compensation

North Carolina broker Sam is a dual agent representing seller Lucy and buyer Kim. Kim makes an offer on Lucy's house, and Lucy signs, accepting that offer. Lucy tells Sam that she's accepted Kim's offer. In a duel agency situation, when is the offer considered accepted and a legally binding contract is in place?

The offer was considered accepted and became a legally binding contract once Lucy tells Sam she's accepted the offer. In a dual agency arrangement, acceptance is considered communicated as soon as one of the parties tells the dual agent that party accepts the other's offer.

A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?

The property will need to sell for $276,596 for the sellers to net $10,000 after paying what they still own on the loan and the commission fee to the broker. To calculate this, start with 100% minus a 6% commission, which is 94% (.94). Then take the loan balance of $250,000 plus the $10,000 they want to net ($260,000) and divide this amount by .94 ($260,000 ÷ .94 = $276,596).

What is a unique fact about joint tenancy in North Carolina?

The right of survivorship not automatic with joint tenancy in North Carolina as it commonly is in other states. North Carolina doesn't favor the right of survivorship for joint tenancy. The right of survivorship can be created, but only if the deed is worded precisely in compliance with court decisions to make it clear that the right of survivorship is intended. If the deed isn't worded exactly right, the joint tenancy will still be created, but without the right of survivorship.

Robin, the appraiser of the Birkenstock's property, wants to make sure her computations of adjustments on their home are valid. She's using the sales comparison approach, so if what order will she prioritize the elements of comparibles?

The sales comparison approach compares a property to other properties with similar characteristics that have been recently sold. The elements considered in the sales comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics

North Carolina broker-in-charge Ken was preparing to disburse trust funds for a transaction that was underway. Unless otherwise directed by the parties involved, Ken may only disburse trust funds to _____.

The settlement agent

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 use clause The use clause in a lease outlines how a tenant may use the leased property and what activities are prohibited or allowed.

If there is some kind of defect on a property's title, what effect does this level of transferability have on the property's value?

The value falls

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that

There is no dollar limit of damages paid with a Federal court hearing

North Carolina broker Addie had a client who wanted to enter into an option contract. How should she do this?

There's no standard option contract in North Carolina. There is NO standard option contract form available in North Carolina. Because option contracts are legally complex and their contents vary widely, brokers should advise anyone who wants to become involved in an option contract to consult an experienced real estate attorney regarding an individualized option to purchase contract.

North Carolina broker Chen has just received a $5 gift card to a local coffee shop from a mortgage company. The accompanying note said it was a thank you for referring one of her buyer clients there. What is true about this situation?

This is an example of a gift with nominal value, so she doesn't have to disclose it.

Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

Title VIII of the 1968 Act is also known as the Fair Housing Act.

Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

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.

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy?

Title insurance companies issue a preliminary report with the current title history and any liens or encumbrances. It outlines what the insurance company will or won't cover on its forthcoming insurance policy if the title is found to be acceptable.

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?

To detail the costs jenny will owe at closing

A seller client received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. If the property was 400' deep, what was the price per front foot of the property?

To find the solution to this, you'll need to perform a couple of different calculations. You probably recall that front (or frontage) foot refers to the width of a lot, measured at the front. You may also remember (since we reminded you to memorize this number for your exam) that one acre is equal to 43,560 square feet. First, we need to calculate the square footage of the lot. Your client sold 5.5 acres. Multiply 5.5 (acres) × 43,560 (square feet) = 239,580 square feet. We know that area is length times width, and we know that the parcel is 400' deep. Our total area is 239,580, so we divide that by the depth to get the width (which happens to be our frontage). 239,580 ÷ 400' = 598.95'. Finally we know that the client sold this parcel for $800,000. Divide that by the frontage we just calculated to arrive at the price per frontage foot: $800,000 ÷ 598.95' = $1,335.67.

Dale is purchasing a property that has an assessed value of $35,190. If the tax rate is 5%, what will he likely pay annually in property taxes?

To find the tax amount, multiply the assessed value by the tax rate ($35,190 × 0.05).

For which of the following purposes is the North Carolina Standard Form 340-T, Response to Buyer's Offer, used?

To reject the buyer's 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 primary purpose of the Superfund Amendments and Reauthorization Act (SARA)?

To release homeowners from the responsibility of cleaning up hazardous substances if the homeowner didn't know they existed SARA says landowners aren't responsible if they didn't know the property was contaminated when purchased, if they did their due diligence when investigating the property, and if they acted responsibly when the contamination was discovered

North Carolina broker Bertrand was helping his client Ernesto with purchasing a time share. How long after Ernesto gave Bertrand his earnest money check must the check be deposited?

Trust funds for a time share need to be deposited into the trust or escrow account immediately. A 10-day period follows in which the funds belong to the purchaser rather than to the developer. During that time period, the funds remain in the account and the purchaser has the option to cancel.

North Carolina broker Grace is helping buyers Frank and Ella Carson complete the Offer to Purchase and Contract, Standard Form 2-T for a house they found on Manor Drive. The Carsons have to sell their current home before they can complete the purchase of the Manor Drive property. Where should Grace indicate this in the contract?

Under the Other Property provision The need to sell an existing property before being able to complete the purchase of a new home should be indicted under the Other Property provision. However, this provision does NOT make the purchase of the property (on which the offer's being made) contingent on the sale of the existing property.

Joel found the house of his dreams in Raleigh. While touring the home with his agent, Kelly, he fell in love with the rolltop desk in the upstairs office. Where in the North Carolina Offer to Purchase and Contract, Standard Form 2-T, should Kelly indicate Joel would like this desk to remain with the property?

Under the Personal Property provision

In North Carolina, the Vacation Rental Act provides what kind of exception regarding compensation for real estate brokerage activities to travel agents?

Under this act, a travel agent who does not hold an active real estate license may accept a referral fee for referring a tenant to a broker for a vacation rental if certain provisions are met.

North Carolina broker-in-charge Angela has a properly designated trust fund in North Carolina. She has funds from five separate clients in it. Under the Federal Deposit Insurance Corporation (FDIC), this account is insured for how much?

Up to $250,000 per each of the five individuals

Your brokerage firm uses pre-printed sales contract forms, but your seller, Marcus, wants to add some language about staying in the house and renting from the buyer for a month after closing. What should you use to add this information?

Using an addendum

Which factor that influences value considers the property's function?

Utility

How many days does a broker-in-charge have to notify NCREC after a licensee changes firms?

When a broker changes firms, the broker-in-charge must notify the commission no later than 10 days after the change goes into effect.

When a licensee is working with a property located near a Superfund site, what does that mean?

When a licensee is working with a property located near a Superfund site, what does that mean?

When the buyer and seller use the Back-Up Contract Addendum, they can complete and sign the standard Offer to Purchase and Contract, Standard Form 2-T, and then attach the addendum to that contract. When does the back-up contract stop being in the secondary position?

When the primary contract is terminated or performed The back-up contract is submitted with the understanding that it must remain in a secondary position until the primary contract is either terminated or performed. If the primary contract is performed, the secondary contract automatically becomes null and void. If the primary contract is terminated, the seller must promptly send the secondary buyer the Notice of Primary Status, along with written evidence of the primary contract's termination.

When is the Assumption contingency used in North Carolina form 580-T?

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?

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.

Mary is a property manager for a small apartment complex in Greensboro. If no exceptions are agreed upon between Mary and Charlotte, the property owner, within what time frame would Mary need to deliver any rental agreements or leases to Charlotte?

Within three days of Mary's receipt of the signed document

You are hosting an open house. Mr. and Mrs. Charles Martin come into the house. You greet them and show them the house. The Martins tell you the house is exactly what they are looking for and they are very interested in purchasing it. You then give them information showing the various types of financing available with down payment options and projected payments. Mr. Martin tells you they have been working with Mary Hempstead of XX Realty, a competing real estate company. Before leaving, you thank them for coming and give them your business card. The Martins come to your office and explain that neither Mary nor her supervising broker are available. They insist you immediately write an offer for the house. How should you proceed?

Write the offer after trying to contact Mary's broker

Can brokers complete a legally binding document pre-drafted by an attorney

Yes

Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?

Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.

The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be cancelled?

Yes, because their equity is over 20%

Diego, a North Carolina licensee, filled in the blanks on a standard legal form that was being used by his brokerage firm. Is this okay?

Yes, licensees can use standard pre-printed forms that were originally created or approved by an attorney.

Mary's broker is completing a vacation rental agreement for new clients who will be renting her beach villa in Kure Beach. Should he include a statement in the vacation rental agreement that details the penalties if the clients cancel?

Yes. It's not a required element of a North Carolina vacation rental agreement, but it's a good idea. It's not a required element of a valid North Carolina vacation rental agreement, but it's a good idea to add the consequences of cancellation to a vacation rental agreement. It should outline the cancellation policy and describe any reasonable fees that will be charged as a result of the cancellation.

Steven and his wife and two kids planned a vacation to the Carolina coast, but now he'll have to cancel it because he received orders to deploy the week prior to the rental period outlined in his vacation rental agreement. Is he eligible for early termination and a refund of the moneys he's already paid?

Yes. Military personnel who receive orders for deployment for a period overlapping with the rental period may terminate the agreement and are entitled to a full refund minus moneys already paid to third parties.

A broker did NOT have a written independent contractor agreement with his salesperson. While showing homes to a family, the salesperson was involved in a car accident in which a child in her car was injured. Could the broker be held liable in this situation, and why?

Yes; the lack of an independent contractor agreement may classify the salesperson an employee and an employer may be held liable for the torts of an employee.

Victor bought a property from Yolanda for $200,000. Under the terms of a land contract, Victor agreed to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title?

Yolanda

Who are zoning powers given by?

Zoning powers are given to municipalities by North Carolina's Agricultural Development and Farmland Preservation Enabling Act.

Which of the following real estate contracts is a service contract? 1. a purchase agreement 2. a listing agreement 3. an option contract 4. a mortgage

a listing agreement

A broker is teaching newly hired salespersons the correct way to complete a listing agreement form. The broker is attempting to show the value of putting the correct property address on the listing. The BEST visual aid to help them learn how to do so accurately would be

a subdivision plat

A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have?

a tenancy at will

After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?

after the life estate holder dies the property reverts to the original owner (reversion), or ownership rights are transfer to another person that the original owner has named (remainder man). at the end of a life estate, the revisionary owner or remainder man hold a fee simple estate?

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

agency coupled with interest

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is

an agent to the broker and a subagent to the principal

The FHA functions MOST like

an insurance company

What is the duration of a home warranty's coverage?

as disclosed in the contract that offers the warranty

Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income is

commission sales

If leased premises become unusable for the purpose state in the lease, the tenant may have the right to abandon the premises. This action is called

constructive eviction

An exception to title insurance coverage is:

defects that clearly appear in the title search.

A broker learns that one of the licensees under his supervision, and the owners of a listed property, have worked out a scheme to withdraw a property from the market whenever a showing is requested by any buyer who seems to be from a foreign country. What is the most important action for the broker to take in this situation?

develop stringent policies for the firm, establishing the criteria that may be used to determine which properties are shown to prospects.

Even with title insurance, the policyholder may still suffer losses arising from

land use change due to zoning ordinances

A formal appraisal will ALWAYS be REQUIRED when the

lender wants to sell the mortgage to the secondary market.

Failure of a real estate agent to comply with Fair Housing practices is punishable by

license revocation and criminal prosecution.

Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?

loan flipping

In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT

more variety of loan programs available

To be valid, every deed must

must be executed by the grantor

A gross lease can be best defined as one where the tenant pays, as a part of the rent,

no operating expenses of the leased space.

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

prepayment penalties and rebates.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA,

require the buyer to acknowledge disclosure of the presence of any known lead paint

MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and

sale's price

An example of a contract terminated due to inability to perform would be one in which the

seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.

A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should

tell the seller that the buyer will pay more.

A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with 1. the builder. 2. the buyers. 3. the builder and the buyers. 4. neither the builder nor the buyers.

the builder

An exclusive right to sell listing obtained by a broker associate belongs to

the employing broker only

A distinguishing characteristic of owning property by land trust is that

the identity of the legal owner is kept confidential

What is novation?

the replacement of a contract with a new contract that's essentially the same, but may substitute one party for another or one obligation for another. The other terms of the contract are the same.

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker ha earned his commission when__________________.

the seller accepts the offer

Why would buyers want to know whether a property is currently experiencing a tax abatement?

their taxes are likely to increase when abatement period ends

When a home is purchased using an ARM, the monthly loan payment on the mortgage will

vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced.