Practice Exam 3

A listing agreement that allows the owner to list the property for sale with multiple brokers is known as:

An open listing

According to NCAR/NCBA Standard Offer to Purchase and Contract, which of the following statements is TRUE once the contract is formed?

The due diligence fee becomes the property of the seller at the time the contract becomes effective.

A broker is managing a 4-unit rental property on behalf of an owner that occupies one of the units. Which of the following statements is true?

A landlord in not permitted to charge a pet deposit or pet rent for a service animal.

A licensee is calculating the living area of a two story home that includes a bonus room with a sloped ceiling. Which of the following statements is correct regarding the NC Square Footage Guidelines?

In order to be considered living area the space is not required to be cooled.

Which of the following is / are correct about designated agency?

It is allowed when neither agent has personal or confidential information about the other party.

A licensed broker is renting her property to a prospective tenant. She drafts language in the lease agreement that is contrary to provisions contained in the standard NCAR lease. Has the broker violated license law?

No. Since the broker is party to the lease they are permitted to draft provisions to the contract.

A newly licensed broker holds an active license or provisional status. The provisional broker begins to send marketing materials to expired listings. Which of the following would NOT be permitted under federal law or Commission rules?

Offering to perform a comparative market analysis at a discounted rate of $25 with the permission of his / her broker in charge.

Which of the following is TRUE regarding agency contracts?

Ultimately all agency agreements that result in a succesful transaction will need to be in writing.

Which of the following advertisements by a real estate agent would comply with appropriate rules and laws?

3 bedroom, 2 bath downtown condo for sale. Fantastic view of the city from this penthouse suite. Call Chris McKintock, ABC Realty 919-555-1212.

Broker A submits an offer to Broker B for a property located at 123 Main Street. Broker B reviews the offer with the client who signs the offer with a few minor changes relating to the due diligence period. Broker B texts Broker A stating, "we have a deal. Everything has been signed on our side. I will email you a scanned copy in the morning. Which of the following statements is correct?

A legally binding contract has not been formed and Broker B could be guilty of negligent misrepresentation.

All of the following statements are included in the standard NCAR / NCBA Offer to Purchase and Contract, except:

A party that is acting in good faith and with reasonable diligence in preparing for settlement is entitled to delay settlement up to 10 days

Which of the following would trigger first substantial contact, thus requiring disclosure of the Working with Real Estate Agents brochure?

A prospective buyer mentions the need to purchase a property soon as they are relocating to the area.

Which of the following would NOT be the responsibility of a provisional broker handling the sale of a property in a new unapproved subdivision as the listing agent, when the buyer has elected not to have representation?

Advising the buyers about the benefits of taking title to the property as tenancy by the entirety.

Fred Taylor with ABC Realty recently met a prospective buyer. After informal conversations, the buyer states an interest in purchasing a property in the $250,000 price range and begins to disclose his financial information. Per NCREC rule, Fred stops the buyer, reviews the Working with Real Estate Agents brochure. Which of the following statements is TRUE:

Buyer can agree to terms of buyer agency including how he will be represented and the manner of compensation, even though Fred will have only an oral buyer agency agreement.

All of the following are responsibilities of the broker in charge EXCEPT:

Direct supervision of all licenses that are affiliated with the firm.

A provisional broker on active status a buyer with locating a property that meets all of their needs and promptly goes under contract June 8, 2019 with closing scheduled on July 1, 2019. The provisional broker completes his required continuing education to regain active status on July 3, 2019. His broker in charge refused to pay the commission since the provisional broker's license was inactive when the transaction closed. Is the broker in charge accurate?

No. A broker is entitled to compensation so long as when they earned the compensation his / her license was on active status.

The broker in charge supervising a provisional broker states that a licensee is responsible for the full accuracy of the settlement statement. Is the broker in charge accurate?

No. A broker is responsible for items that they know or reasonably should have known.

A broker representing a buyer under an Exclusive Right to Represent, prepared an offer to purchase using the standard NCAR/ NCBA form. The seller agreed and the property went under contract. Ten days prior to closing, the city confirmed a $5000 special assessment for installing city water lines. The listing agent stated that the buyer is responsible to pay the assessment. Is this accurate?

No. The seller is obligated to pay confirmed assessments prior to settlement.

A provisional broker who desires to remain on inactive status must do which of the following?

Pay the renewal fee within the 45-day renewal period.

All of the following activities require a license except:

Purchase of an investment property by a LLC where seller pays a commission to the LLC.

The buyer and seller enter into a legally binding purchase contract, with the buyer agreement to pay $1000 due diligence and $5000 earnest money. The buyer's agent delivers the funds to the listing agent. The buyer changes his mind and demands the listing agent return both checks. Assuming that the listing firm has a trust account, which of the following actions must the listing broker take?

Return the due diligence fee that is in the listing agent's possession.

The treated wrap that is applied to the sheathing prior to the siding being installed is known as:

Tar paper

A married couple purchase a property on June 3rd for $475,000 in Asheville, NC. No mention to how the couple will take title to the property is made in the Offer to Purchase and Contract. How will the couple take title to the property?

Tenancy by the Entirety

A provisional broker licensee is hired to represent a buyer in the purchase of a property that is listed with another agent within the licensee's office that is not the broker-in-charge. The buyer and seller have authorized both dual and designated agency and both agents are acting as designated agents. Under this scenario which of the following would violate license law and / or commission rules?

The agent designated for seller discloses that the seller is currently behind on the mortgage payments and that the foreclosure notice should be coming any time now.

A non-provisional broker failed to complete his continuing education by June 10th deadline. Which of the following statements is correct with regard to bringing his license to active status?

The broker must complete the general update and 3 elective courses before they can request for the license to be activated by the commission.

A broker fails to renew his license by June 30, 2019. He decides that he wants to bring his license back to active status. Which of the following statements is false?

The broker must pay the increased fee, take 8 hours of CE and complete 2 post license classes if they submit a new application by July 5, 2021.

A broker is representing a buyer in the purchase of a property which is being sold for sale by owner. The broker has the seller sign a protection agreement outlining that the broker represents the buyer in the transaction and the seller agrees to pay the broker 3% commission. Which of the following would violate license law?

The broker provides the seller with a copy of the protection agreement within 5 days of signing the document.

A buyer has agreed to an oral buyer agency agreement with a provisional broker. Which of the following is false?

The buyer must work exclusively with the buyer agent to locate property.

All of the following would be deemed to be a material fact which a licensee would need to disclose to a potential buyer regardless of the buyer's status as client or customer except?

The previous owner was murdered in the home.

A provisional broker enters into an Exclusive Buyer Agency Agreement in order to help a buyer locate a property in Mebane, NC. The buyer locates a property and wants to write an offer. The provisional broker is acting as a designated dual agent in the purchase of the property. Which of the following is FALSE?

The provisional broker cannot disclose personal or confidential information that they learn about the seller unless it rises to the level of material fact.

Per the standard NCAR / NCBA Offer to Purchase and Contract which party is required to pay excise tax and how is it calculated.

The seller pays excise tax based upon the sales price of the home, divided by $500 and rounded up.

Which of the following statements about property taxation in NC is FALE?

The tax value increases to the sales price when a property sells for more than the current assessed value.

A tenant files a written complaint regarding a no functioning heating system during an extraordinarily cold period in February to the property's management company. The property company is busy with negotiations regarding a new management contract and is running weeks behind in repairs. Which of the following would be a legitimate outcome given the circumstances?

The tenant may be able to move out and receive his security deposit back as well as the difference between his actual rent and fair market rent.

All of the following statements are true regarding timeshares, EXCEPT:

To list or sell timeshares a licensee must obtain a timeshare license.

Which of the following is false with regards to the disclosure of a bonus that will be paid to the selling agent by someone other than his / her principal?

When a new home builder offers a $5,000 bonus to a broker that sells 3 homes in a new subdivision, disclosed on the settlement statement.

Which of the following is correct with regards to handling funds in a real estate transaction?

When an agent receives an earnest money deposit in cash it should be deposited into the trust account immediately but no later than 3 banking days from receipt.

A buyer's agent is working under an oral buyer agency agreement. When he prepares to show a property listed by his firm, which of the following statements would apply?

With the buyer's knowledge and consent, they could enter an oral dual agency agreement prior to viewing the house.

A broker is performing a walkthrough with the seller prior to listing a home and notices some staining on the ceiling. The seller states it had been that way for awhile. The broker advises the seller to paint over it with speciality paint to block the stain without taking any further action. A buyer purchased the property without obtaining a home inspection. Is the listing broker liable?

Yes. The listing broker is responsible as they advised the seller to conceal damage to the property.