Chapter 10 Quiz

When a seller signs this agreement, what type of deed do they promise to deliver to the buyer by the settlement date? AA general warranty deed. BA deed of trust. CA quit claim deed. DA limited warranty deed.

A general warranty deed. In item 6(g) of this contract, the seller agrees to deliver a General Warranty Deed to the buyer no later than the settlement date.

When a seller signs this agreement, what type of deed do they promise to deliver to the buyer by the settlement date? AA general warranty deed. BA deed of trust. CA quit claim deed. DA limited warranty deed.

A general warranty deed. In item 6(g) of this contract, the seller agrees to deliver a General Warranty Deed to the buyer no later than the settlement date.

Under this contract, which of these fees is NOT typically the buyer's responsibility? AConfirmed special assessments. BOwners' association charges for future use. CTitle search and title insurance fees. DIf applicable, the recording fees for the deed and mortgage

Confirmed special assessments.

Which of the following terms is another common name for an Installment Land Contract? AContract for Deed. BDeed of Trust. CShort Sale. DFHA Financing.

Contract for Deed. With an Installment Land Contract, also sometimes called a Contract for Deed or simply a Land Contract, the seller agrees to provide financing to the buyer directly, without involving a bank or mortgage company.

Which of these is not a right included with the buyer's equitable title during the term of the Installment Land Contract? AConvey the property. BOccupy the property. CEnjoy the property. DUse the property.

Convey the property. The buyer takes equitable title to the property, giving them the right to occupy, enjoy, and use it. In order to convey the property, the buyer would also need legal title.

Which of these is not a right included with the buyer's equitable title during the term of the Installment Land Contract? AConvey the property. BOccupy the property. CEnjoy the property. DUse the property.

Convey the property. The buyer takes equitable title to the property, giving them the right to occupy, enjoy, and use it. In order to convey the property, the buyer would also need legal title.

Which of these is not a common type of investigation that buyers typically complete during the due diligence period? ACriminal background investigation of the seller. BReview of documents, including bylaws, restrictive covenants, and rules. CInsurance availability and cost. DProperty condition inspection.

Criminal background investigation of the seller.

Which of the following expenses is not the buyer's responsibility after the Commencement Date? AFire and hazard insurance on the property. BUtilities. CLawn care. DTrash removal.

Fire and hazard insurance on the property. After the Commencement Date, the buyer is responsible for paying utilities, lawn care, and trash removal. The buyer is responsible for insuring their own personal property but the seller agrees to maintain fire and hazard insurance on the property until closing.

North Carolina statutes and Real Estate Commission rules prohibit licensees from providing legal advice or services. Which of the following could a licensee do without breaking the rules? AHelp a client select and complete pre-printed forms. BPreparing a real estate deed. CDrafting a sales contract to fit a client's needs. DAdvising a client as to the potential legal ramifications of a proposed contract provision.

Help a client select and complete pre-printed forms.

Potential benefits to buyers of using Installment Land Contracts include all of the following EXCEPT: AHigher interest rates. BBuy "more house" for the money. CHome ownership is more attainable for a buyer with bad credit. DFast closing and occupancy.

Higher interest rates. In addition to making home ownership more attainable for buyers with poor credit histories and offering fast closings, Installment Land Contracts can also allow buyers to qualify for "more house" than they could otherwise afford by starting with an installment contract with monthly payments and then later refinancing what they still owe the seller into an affordable traditional mortgage. However, buyers often end up paying higher interest rates with this type of financing than they would were they able to obtain mortgage loans.

Potential benefits to buyers of using Installment Land Contracts include all of the following EXCEPT: AHigher interest rates. BBuy "more house" for the money. CHome ownership is more attainable for a buyer with bad credit. DFast closing and occupancy.

Higher interest rates. In addition to making home ownership more attainable for buyers with poor credit histories and offering fast closings, Installment Land Contracts can also allow buyers to qualify for "more house" than they could otherwise afford by starting with an installment contract with monthly payments and then later refinancing what they still owe the seller into an affordable traditional mortgage. However, buyers often end up paying higher interest rates with this type of financing than they would were they able to obtain mortgage loans.

Some items are included in important contract addendums, if applicable, rather than appearing on the contract itself. Which one of the following is a separate contract addendum that's attached to the contract, if applicable? Settlement and closing dates. Details about home warranties. The due diligence period. Homeowners association information.

Homeowners association information. If applicable, contract addendums are added for lead-based paint disclosures, homeowners' association disclosures, and property condition disclosures. These addendums are attached to and become part of the sales contract.

Which of these is a true statement when it's necessary to use an attorney to prepare contract-related forms? AIf a licensee is not a real estate agent, an attorney must prepare any contract-related forms provided by the licensee to the parties if the content of the document will affect the parties' legal rights. BLicensees may prepare contract-related forms for clients even if the licensee is not a real estate agent. CA licensee who is not a real estate agent can prepare contract-related forms for clients when the content of the document could affect the parties' legal rights. DLicensees can decide, based on the situation, whether to prepare contract forms for clients or refer clients to attorneys

If a licensee is not a real estate agent, an attorney must prepare any contract-related forms provided by the licensee to the parties if the content of the document will affect the parties' legal rights. If a licensee is not a real estate professional, an attorney must prepare any contract-related forms provided by the licensee to the parties if the content of the document will affect the parties' legal rights.

If the seller intends to include personal property with the sale, such as curtains, fireplace tools, or freestanding appliances, whom does the OPC state the buyer should consult with before signing the form? AIf applicable, the buyer should consult with their lender to make sure such personal property can be included with the purchase. BThe buyer should consult with their accountant to determine if the personal property will change the property valuation. CThe buyer should consult with their attorney to evaluate the legal ramifications of purchasing such personal property. DThe buyer should consult with their real estate licensee to discuss the inclusion of the personal property.

If applicable, the buyer should consult with their lender to make sure such personal property can be included with the purchase. Item 3 of the OPC states that if the seller intends to include personal property with the sale, the buyer should consult with their lender as applicable.

Which of the following is not a true statement about due diligence fees paid by the buyer? AIf the buyer cancels the contract during the due diligence period they are entitled to a return of their due diligence fees. BDue diligence fees are funds payable to the seller as consideration, giving the buyer the right to conduct due diligence and inspections during the due diligence period. CIf the buyer cancels the contract during the due diligence period they are entitled to a return of their earnest money but not their due diligence fees. DWhen paid with a real estate contract due diligence fees must be held in trust or escrow as they are the client's funds.

If the buyer cancels the contract during the due diligence period they are entitled to a return of their due diligence fees.

Which of the following provisions, if included in a Sales Contract, would violate NC Real Estate Commission Rules? AProvision stating that earnest money will be forfeited to the listing and selling broker if the agreement is cancelled. BInformation about assessments. CThe amount of earnest money paid. DHow the buyer will make payment for the purchase.

Provision stating that earnest money will be forfeited to the listing and selling broker if the agreement is cancelled. Brokers may not use pre-printed forms that include provisions about brokerage compensation, including the forfeiture of earnest money to any broker or firm. In addition, pre-printed forms may not include provisions that attempt to disclaim the broker's liability related to his or her representation.

What is the term used in the OPC to describe government charges against the property in addition to "regular" real estate taxes and fees or charges levied by a homeowners' association in addition to regular dues? ASpecial assessments. BDue diligence fees. CClosing costs. DEscrow Fees

Special assessments. Section 1(n) of the OPC defines the term "special assessments" as a government charge against the property in addition to "regular" real estate taxes and fees or fees levied by a homeowner's association in addition to regular dues. The OPC form makes a distinction between proposed special assessments, which are under consideration but not yet approved, and confirmed special assessments, which have been confirmed prior to the settlement date.

When signing this contract, the seller agrees to provide certain information. Which of these statements is NOT information that the seller is obligated to provide under the contract? ALoan payment history. BEvidence of title. CWritten payoff statement of the seller's loan. DA non-foreign status affidavit.

Loan payment history.

What kind of down payment requirement might a borrower expect when purchasing property under an Installment Land Contract? ALower compared to traditional financing. BHigher compared to traditional financing. CAbout the same as compared to traditional financing. DThere is never a down payment required for an Installment Land Contract.

Lower compared to traditional financing. Buyers considering Installment Land Contracts can generally expect a lower down payment requirement than what they would pay if using traditional financing channels. In fact, some sellers are willing to completely eliminate any down payment requirements.

Which of the following is a true statement? ANeither the North Carolina Association of Realtors nor the North Carolina Bar Association makes any representation as to the legal validity of the OPC. BThe North Carolina Association of Realtors and the North Carolina Bar Association both approve of and represent the legal validity of the OPC. CThe North Carolina Association of Realtors, not the North Carolina Bar Association, represents the legal validity of the OPC. DThe North Carolina Bar Association, not the North Carolina Association of Realtors, represents the legal validity of the OPC

Neither the North Carolina Association of Realtors nor the North Carolina Bar Association makes any representation as to the legal validity of the OPC. The OPC includes a disclaimer stating that the North Carolina Association of Realtors and the North Carolina Bar Association make no representations about the legal validity or adequacy of any information contained in the agreement. The parties are advised to seek legal counsel and advice specific to their situations before they sign the agreement.

How long is the term of an options contract? AOptions periods can differ, but they may be between 30 days and 90 days or multi-year periods. B30 days. COne year. D90 days.

Options periods can differ, but they may be between 30 days and 90 days or multi-year periods. Options periods can differ, but they may run between 30 days and 90 days or could be multi-year periods.

Which of the following best describes the Buyer Possession Before Closing Agreement? AAn addendum to the OPC designed to address short-term occupancy by the buyer. BA standalone legal contract designed to address short-term occupancy by the buyer. CAn addendum to the OPC designed to address long-term occupancy by the buyer. DA standalone legal contract designed to address long-term occupancy by the buyer.

An addendum to the OPC designed to address short-term occupancy by the buyer.

Which of the following is not listed as a risk of lead poisoning for children in the italicized warning statement? AAn increased risk of cancer. BPermanent neurological damage. CImpaired memory. DA potential to develop learning disabilities.

An increased risk of cancer.

What is one important difference between preemptive rights and options to purchase real estate? AAn option to purchase real estate gives the holder an equitable interest in the property. BA preemptive right gives the holder an equitable interest in the property. CA preemptive right gives the holder the right to force a sale. DAn option to purchase may only be exercised if the property owner decides to sell during the option term.

An option to purchase real estate gives the holder an equitable interest in the property.

What is another common name for the right of first opportunity to purchase? ARight of first offer. BRight of first refusal. COption to purchase. DPurchase agreement right.

Right of first offer. Another common name for the right of first opportunity to purchase is the right of first offer

Which of these is not something that's normally included in a standard North Carolina residential sales contract? ASpecific repairs to be made as the result of the buyer's due diligence. BItems to be included in the sale, such as appliances and fixtures. CClosing costs. DThe due diligence period and fee.

Specific repairs to be made as the result of the buyer's due diligence.

Which of these is NOT a characteristic of rights of first refusal? ASpringing right, triggered when the property owner decides to sell. BSpringing right, triggered when the property owner receives another offer. CWhen triggered, the right is exercisable for a limited duration. DNo equitable interest in the underlying property.

Springing right, triggered when the property owner decides to sell. Both the right of first refusal and the right of first opportunity to purchase are springing rights, but the right of first refusal is not triggered until the owner receives an offer from a third party

What happens if there is a conflict between the terms of the Additional Provisions Addendum and the OPC, related to one of the specific provisions numbers 1-5? The OPC controls. The parties agree in this Addendum that the conflict will be resolved in favor of the buyer. The Addendum controls. This type of conflict is not contemplated on the Addendum, so the parties must litigate their dispute.

The Addendum controls. The Additional Provisions Addendum includes a notice in all caps, documenting that the parties agree that if there is any conflict between this Addendum and the OPC, the Addendum will control except if the conflict relates to the property description or the identity of the parties. In that case, the OPC will control.

Liza Licensee is helping Sam Seller review offers. Sam wants to accept an offer with a slight modification to the proposed terms. Which of the following is true? ASam must create a counteroffer with his proposed changes to the original offer. BSam can write in his changes and initial them before signing to accept the offer. CIf the buyer's agent indicated that the buyer is open to changes, Sam can sign the offer as written, and the parties can verbally agree to change the terms. DIf Sam creates and signs a counteroffer with the new terms, the parties automatically have a binding agreement.

Sam must create a counteroffer with his proposed changes to the original offer. Sam cannot simply make changes to the form and sign it. If he signs the offer as-is, he is accepting the terms of the written offer ‒ regardless of any verbal agreement. If he counters the original offer, he has effectively rejected the original offer. The buyer may choose to accept the counteroffer or reject it. The parties don't have a binding agreement until all the parties have agreed to the terms and signed the contract.

An Installment Land Contract is: ASeller financing. BFHA financing through HUD. CVA financing through the Department of Veterans Affairs. DA type of traditional mortgage company financing option.

Seller financing. An Installment Land Contract is a seller-financed arrangement.

Why must the seller provide the buyer with an affidavit and indemnification agreement that states that anyone providing material or labor within 120 days of settlement was paid in full? ASo the buyer, their lender, and insurer are not responsible for the seller's non-payment of these obligations. BThis is not a requirement under the contract. CThe buyer must provide the seller with this affidavit. DThis is required under North Carolina statutes and Real Estate Commission rules.

So the buyer, their lender, and insurer are not responsible for the seller's non-payment of these obligations.

Which of these is not a common scenario for sellers and buyers to come to an agreement for a sale? AProperty is left in a mother's will to her adult son who decides to keep it after her death. BA seller and buyer enter into an agreement through their respective real estate professionals. CNeighbors come to an agreement for one of them to buy the other's property. DA parent and child agree that one of them will purchase the other's home.

Property is left in a mother's will to her adult son who decides to keep it after her death.

Section 1(d) of the OPC lists the purchase price. Which of the following is not included in this section? AProposed and confirmed assessments. BInitial earnest money. CDue diligence fee. DBuilding deposit.

Proposed and confirmed assessments.

Section 1(d) of the OPC lists the purchase price. Which of the following is not included in this section? AProposed and confirmed assessments. BInitial earnest money. CDue diligence fee. DBuilding deposit.

Proposed and confirmed assessments. Section 1(d) of the OPC includes the total purchase price, due diligence fee, initial earnest money, additional earnest money, loan assumption, seller financing, building deposit, and balance due from the buyer. Assessments are covered later in the form.

If the parties don't specify otherwise, what is the default settlement date for this Addendum? AThe 30th day following the seller's notification to the buyer of the approval of the short sale. BThe 20th day following the seller's notification to the buyer of the approval of the short sale. CThere is no default settlement date in this Addendum; the parties must specify the settlement date. DThe 10th day following the seller's notification to the buyer of the approval of the short sale.

The 30th day following the seller's notification to the buyer of the approval of the short sale.

The Buyer Possession Before Closing Agreement identifies the Commencement Date, with the buyer taking occupancy at 8 AM on that date. When does the agreement terminate? AAt closing. BAt settlement. COn a date the parties specify in the agreement. DNo later than 90 days after the Commencement Date.

At closing. Paragraph 1 of this contract Addendum identifies when the buyer may take possession of the property, called the Commencement Date. Possession begins at 8 AM on a day the parties specify on this form. Because the buyer will be the legal owner after the transaction closes, this agreement terminates at that point.

Which of these is a potential risk buyers should know about before signing an Installment Land Contract? ABuyers typically do not have the foreclosure protection available when the property is financed using a mortgage or deed of trust. BPotential tax advantages for sellers. CLower down payment requirement. DQuick time to close and take possession of the home.

Buyers typically do not have the foreclosure protection available when the property is financed using a mortgage or deed of trust.

Which of the following is NOT a true statement regarding Item 1 of the Additional Provisions Addendum, used to document the date and time the offer will expire? ABy default, the expiration date is 10 business days from the date of the written offer. BThe seller can unconditionally accept the offer prior to this date. CThe buyer can withdraw an unaccepted offer prior to this date. DThere are checkboxes to include whether the expiration time is AM or PM.

By default, the expiration date is 10 business days from the date of the written offer.

How should the due diligence period be identified in the Back-Up Contract? ABy using a number of days, with the time period starting on the day after the seller notifies the buyer that the primary contract was cancelled. BBy using a specific date. CThere is no additional due diligence period under a Back-Up Contract because the buyer can conduct due diligence while the contract is still in the secondary position. DThe due diligence period under the Back-Up Contract is automatically 15 days.

By using a number of days, with the time period starting on the day after the seller notifies the buyer that the primary contract was cancelled.

Which of the following is not a typical source for licensees to find pre-printed real estate contracts and forms? AThe North Carolina Real Estate Commission's website. BThe licensee's real estate brokerage. CNorth Carolina Realtors Association forms library. DOnline forms providers.

The North Carolina Real Estate Commission's website Most licensees obtain sales contracts and related forms from their brokerages, the North Carolina Realtors Association, or online forms providers. The North Carolina Real Estate Commission offers some consumer-related forms, including complaint forms, but it's not a provider of sales contract forms.

The Vacation Rental Addendum, NC Standard form 2A13-T, should be used when the property is subject to one or more existing vacation rental agreements as defined by what state law? AThe Vacation Rental Act. BThe Vacation Owners Act. CThe Rental Property Fairness Act. DThe Vacationers Rights Act.

The Vacation Rental Act. This Addendum should be used when the property is subject to one or more existing vacation rental agreements, as defined by the NC Vacation Rental Act.

A buyer's agent wants to include additional information regarding one of the contract provisions as an Addendum. Which of the following is a correct statement? AThe agent may use a pre-printed addendum, or the client can retain an attorney to draft new language. BThe agent may use a pre-printed addendum or draft new language. The prohibition against agents' drafting contracts does not extend to addenda. CAddendums may not be added to the contract. All information must be specified within the document. DThe buyer's agent should advise the buyer to simply write up a separate statement to provide to the seller. There is no need to formalize the additional information as an addendum.

The agent may use a pre-printed addendum, or the client can retain an attorney to draft new language. Several addenda could potentially apply and become part of this contract. Section 15 of the OPC includes a list of addenda with checkboxes for each as well as a space to write in any addenda not already listed. When helping a client with the OPC, check all the applicable addenda. Brokers should take note of the reminder on the contract stating that real estate brokers are not allowed to draft addenda. Just like the sales contract itself, brokers may help clients using pre-printed addenda and other forms.

Under which of these circumstances would the buyer NOT be entitled to a return of their earnest money? AThe buyer breaches the contract. BThe seller breaches the contract. CThe buyer cancels the contract within the due diligence period. DThe seller does not accept the contract.

The buyer breaches the contract. In limited circumstances, the earnest money can be refunded to the buyer, including: breach of contract by the seller, cancellation during the due diligence period, or when the offer is simply not accepted by the buyer.

What happens if the buyer's earnest money check isn't honored or the buyer doesn't pay the earnest money as agreed upon in some other way? AThe buyer has one business day to deliver the funds via cash, official check, electronic transfer, or wire transfer. BThe buyer has three business days to deliver the funds via cash, official check, electronic transfer, or wire transfer. CThe contract is automatically cancelled. DThe buyer must make payment within one business day, and he or she must pay an additional penalty to the seller.

The buyer has one business day to deliver the funds via cash, official check, electronic transfer, or wire transfer. If the initial earnest money is not paid as agreed upon or the payment is not honored, the buyer has one business day to make payment. If they don't do so, the seller can terminate the contract.

Which of these statements is true regarding the buyer's due diligence rights under this Vacation Rental Addendum? AThe buyer has the right to review copies of existing rental agreements and to terminate the contract without penalty during the due diligence period. BThe buyer does not have the right to review existing rental agreements during the due diligence period because the seller must furnish copies of the agreements after closing. CThe buyer has the right to review copies of existing rental agreements during the due diligence period, but may not terminate the contract based on such review. DThe buyer does not have the right to review existing rental agreements during the due diligence period but does have 10 days after closing in which to cancel the contract based on a post-closing review of the agreements.

The buyer has the right to review copies of existing rental agreements and to terminate the contract without penalty during the due diligence period. Although this agreement requires the seller to provide the buyer with copies of vacation rental agreements within 10 days after closing, the buyer still has the right during the due diligence period to review copies of rental agreements and to terminate the contract during that period. It is recommended that buyers who want to exercise their right to review agreements before closing obtain copies of them early enough to complete their reviews during the due diligence period.

Who typically signs the sales contract first? AThe offeror (buyer) signs the contract first, listing the terms of their offer, before submitting it to the seller for review. BThe seller signs the sales contract first, specifying the terms they want potential buyers to accept. CThe buyer and seller typically sign the sales contract together at closing. DThe buyer's and seller's agents usually sign the sales contract before their clients sign.

The offeror (buyer) signs the contract first, listing the terms of their offer, before submitting it to the seller for review

What does it mean to "exercise" an options contract? AThe option holder notifies the property owner that they intend to purchase the property under the terms the parties agreed to in the options contract. BThe property owner notifies the option holder that they are cancelling the options contract. CThe option holder notifies the property owner that they want to extend the term of the option agreement. DThe property owner notifies the option holder that they have sold the property to another buyer during the term of the option contract.

The option holder notifies the property owner that they intend to purchase the property under the terms the parties agreed to in the options contract.

Which type of preemptive right would you have if the owner of the burdened real estate must notify you if they intend to sell their property, before they accept offers from other potential buyers? AThe right of first opportunity. BThe right of first refusal. CAn option to purchase the property. DThe right to enter into a contract.

The right of first opportunity.

What happens if the contractual time period for a right of first opportunity expires without the rights holder making an offer? AThe rights holder loses the opportunity to make the first offer and the owner may solicit and accept other offers. BThere is no contractual time period for a right of first opportunity. CThe property owner must notify the rights holder in writing that the owner intends to solicit other offers, giving the rights holder one more business day to make the first offer. DThe property owner must notify the rights holder in writing that the owner intends to solicit other offers, giving the rights holder five more business days to make the first offer.

The rights holder loses the opportunity to make the first offer and the owner may solicit and accept other offers. Once the contractual time period has expired, the property owner can sell without having to first offer the property to anyone else.

What does the "Contingency" clause in the Short Sale Addendum state? AThe sale is contingent on obtaining written approval from all the lienholders. BThe sale is contingent on the sale of the buyer's existing home. CThe sale is contingent on the buyer obtaining mortgage approval. DThe sale is contingent on the approval of the parties to any existing vacation rental contracts for the property.

The sale is contingent on obtaining written approval from all the lienholders.

What does the "Contingency" clause in the Short Sale Addendum state? AThe sale is contingent on obtaining written approval from all the lienholders. BThe sale is contingent on the sale of the buyer's existing home. CThe sale is contingent on the buyer obtaining mortgage approval. DThe sale is contingent on the approval of the parties to any existing vacation rental contracts for the property.

The sale is contingent on obtaining written approval from all the lienholders. The contingency clause states that the sale is contingent on obtaining written approval from all lienholders. Once those approvals have been obtained, the transaction can close, and the seller can convey the title to the buyer.

If the seller tells the buyer under the Back-Up Contract that the primary contract was cancelled when it actually wasn't, and the buyer incurs expenses as a result, who is liable? AThe seller. BThe primary buyer. CThe buyer under the Back-Up Contract. DResponsibility depends on the facts and circumstances. All parties involved may share some financial and legal liability.

The seller.

If the seller tells the buyer under the Back-Up Contract that the primary contract was cancelled when it actually wasn't, and the buyer incurs expenses as a result, who is liable? The primary buyer. Responsibility depends on the facts and circumstances. All parties involved may share some financial and legal liability. The seller. The buyer under the Back-Up Contract.

The seller.

If the seller tells the buyer under the Back-Up Contract that the primary contract was cancelled when it actually wasn't, and the buyer incurs expenses as a result, who is liable? AThe seller. BThe primary buyer. CThe buyer under the Back-Up Contract. DResponsibility depends on the facts and circumstances. All parties involved may share some financial and legal liability.

The seller. Item 3 of the Back-Up Contract Addendum includes the seller's agreement to hold the buyer harmless and to indemnify them against claims, damages, or costs the buyer incurs in reliance on wrongful or ineffective termination of the Primary Contract.

Who bears the risk of loss or damage by fire or other casualty before closing? AThe seller. BThe buyer. CThe buyer and seller share the risk. DThe parties must negotiate this risk as part of the OPC.

The seller. In item 12 of the OPC, the parties agree that the seller bears the risk of loss or damage by fire or other casualty before closing.

If the seller tells the buyer under the Back-Up Contract that the primary contract was cancelled when it actually wasn't, and the buyer incurs expenses as a result, who is liable? AThe seller. BThe primary buyer. CThe buyer under the Back-Up Contract. DResponsibility depends on the facts and circumstances. All parties involved may share some financial and legal liability.

The seller. Item 3 of the Back-Up Contract Addendum includes the seller's agreement to hold the buyer harmless and to indemnify them against claims, damages, or costs the buyer incurs in reliance on wrongful or ineffective termination of the Primary Contract.

If the property includes one or more manufactured homes, the home(s) should be identified in Item 5 of the Additional Provisions Addendum. Which of the following are acceptable ways to identify each mobile home? AVIN number or, if unknown, a description including the year and model. BVIN number is the only acceptable identifier. CPhotographs of the interior and exterior of each home. DThe Property ID numbers for each mobile home, as recorded with the Register of Deeds

VIN number or, if unknown, a description including the year and model.

Which of these is not one of the forms that options to purchase real estate can take? AVacation rental addendum. BStandard purchase agreement. CRent-to-own arrangement in a residential lease agreement. DRent-to-own arrangement in a commercial lease agreement.

Vacation rental addendum.

Which of these is not one of the forms that options to purchase real estate can take? AVacation rental addendum. BStandard purchase agreement. CRent-to-own arrangement in a residential lease agreement. DRent-to-own arrangement in a commercial lease agreement.

Vacation rental addendum. Property owners are locked into options contracts for the term of the agreement, and they may not be able to sell their property at all during that period. If the option holder decides to exercise their rights, the property owner must sell at the agreed-u

Barbara bought a beach house from Sam and closing occurred May 1. Victoria had a rental agreement with Sam scheduled to begin December 15. Which of the following is NOT a true statement about Victoria's and Barbara's rights? AVictoria can compel Barbara to honor the existing rental, since it was made before closing. BBarbara may choose to, but is not required to, honor the rental agreement with Victoria. CIf Barbara chooses not to honor Victoria's rental agreement, she must refund any payments already made by Victoria. DSince Victoria's rental is more than 180 days after closing, she does not have the legal right to compel performance of the rental contract.

Victoria can compel Barbara to honor the existing rental, since it was made before closing.

How is an option to purchase real estate different from preemptive rights? AWith preemptive rights, the holder cannot exercise their rights until and unless the property owner decides to sell. BWith an option to purchase real estate, the option holder cannot exercise their rights until and unless the property owner decides to sell. CWith preemptive rights, the holder can force a sale even if the property owner doesn't want to sell. DWith an option to purchase real estate, the option holder is legally obligated to purchase the property if the owner decides to sell.

With preemptive rights, the holder cannot exercise their rights until and unless the property owner decides to sell An option to purchase is more powerful than preemptive rights like a right of first refusal or a right of first offer. With those types of rights, the holder cannot exercise the rights until and unless the property owner decides to sell the property. With an option to purchase, the option holder can decide to exercise the option at any point during the contractually-specified time period, effectively forcing a sale - even if the seller does not want to sell at that moment in time. While the option holder has the right to purchase, they are not legally obligated to do so.

The section addressing FHA loans is identified as what type of clause in this addendum? Aan amendatory clause Ban additional clause Ca restrictive clause Da subsidiary clause

an amendatory clause

The section addressing FHA loans is identified as what type of clause in this addendum? Aan amendatory clause Ban additional clause Ca restrictive clause Da subsidiary clause

an amendatory clause The section about FHA financing is actually an "amendatory clause" to the OPC. This clause documents the parties' understanding and agreement that the buyer will not be obligated to complete the sale. He will also not incur financial penalties or forfeit earnest money for terminating the agreement if the appraised value of the property comes in below a specified amount.

Which of these documents would not be covered by the delivery of instruments rule? Ainspection reports Bagency agreements Cleases Dcontracts

inspection reports

Which of these is not a type of inspection the DVA may require when a buyer applies for financing through the VA? well/water inspection lead-based paint inspection septic/sewer inspection wood-destroying insects inspection

lead-based paint inspection

How many days do brokers have to deposit a client's earnest money into a trust or escrow account? Ano later than three days after acceptance of the offer to purchase or lease property Bno later than five days after acceptance of the offer to purchase or lease property Cno later than three days after the buyer submits the offer to purchase or lease property regardless of whether the seller has accepted it Dno later than five days after the buyer submits the offer to purchase or lease property regardless of whether the seller has accepted it.

no later than three days after acceptance of the offer to purchase or lease property Brokers who are in receipt of a client's earnest money must deposit the funds into a trust or escrow account no later than three days after acceptance of the offer to purchase or lease property. The rules allow brokers to hold and safeguard earnest money checks until the contract has been accepted and executed by all parties. However, if earnest money is paid in cash the broker must immediately deposit it into the trust or escrow account.

Who is legally and financially responsible for liability claims, lawsuits, costs and expenses related to property damage, personal injury or death that may occur as the result of the seller's occupancy after the closing date? Athe buyer, although the seller agrees to indemnify and hold the buyer harmless Bthe seller, although the buyer agrees to indemnify and hold the seller harmless CThe buyer and seller share this responsibility during the term of the agreement. DThe buyer bears all legal and financial responsibility as the property owner and cannot mitigate responsibility through indemnification agreements.

the buyer, although the seller agrees to indemnify and hold the buyer harmless Paragraph 9 of the addendum addresses the seller's obligation and agreement to indemnify and hold the buyer harmless against liability claims, lawsuits, costs and expenses related to property damage, personal injury or death that may occur as the result of the seller's occupancy after the closing date. This is important because without this provision the buyer would be legally and financially responsible for such loss occurring after the closing date.

Who in a brokerage firm is responsible for real estate brokerage trust accounts? Athe firm's broker-in-charge Bthe agent designated by the broker-in-charge Cthe agent with the longest tenure at the firm DBrokerage firms may not maintain real estate brokerage trust accounts. These must be maintained by escrow agents.

the firm's broker-in-charge For real estate brokerage trust accounts, North Carolina real estate commission rules put responsibility on the firm's broker-in-charge.

How long do brokers have to present their clients with required documents under the delivery of instruments rule, North Carolina real estate commission rule A.0106(a)? Athree days Bone day Cfive days Dten days

three days

What is required by NC Statutes and NC Real Estate Commission Rule A.0106(a)? AAgents must deliver to their clients all executed offers, within three days of the broker's receipt of such offers. BAgents must deliver to their clients all executed offers, within five days of the broker's receipt of such offers. CAgents must deliver to their clients all executed offers, within one day of the broker's receipt of such offers. DAgents must deliver to their clients executed offers for more than asking price but may withhold lower offers.

Agents must deliver to their clients all executed offers, within three days of the broker's receipt of such offers. North Carolina statutes and Real Estate Commission Rule A.0106(a) require agents to deliver to their clients all executed offers, within three days of the broker's receipt of such offers. It is important to note that the three-day time period mentioned in the rule does not mean a broker can sit on an offer for three days before providing it to the seller. Agents must present offers as soon as possible, but in no circumstances later than three days from receipt.

When does the due diligence period start? AOn the contract effective date. BWhen the buyer submits the offer. COne day after the parties have signed the agreement. DOn the date that the buyer's check for the due diligence fee clears.

On the contract effective date. Item 1(j) of this offer form defines the due diligence period, the period during which the buyer has the right to investigate the property and terminate the contract without penalty. The period begins on the contract effective date. When helping a client with this form, enter the desired end date for the due diligence period.

When does the due diligence period start? AOn the contract effective date. BWhen the buyer submits the offer. COne day after the parties have signed the agreement. DOn the date that the buyer's check for the due diligence fee clears.

On the contract effective date. Item 1(j) of this offer form defines the due diligence period, the period during which the buyer has the right to investigate the property and terminate the contract without penalty. The period begins on the contract effective date. When helping a client with this form, enter the desired end date for the due diligence period

At what point does the Back-Up Contract automatically terminate if the seller has not notified the buyer that the primary contract was cancelled and if the buyer has not exercised their right to terminate the agreement? AOn the date specified in item 11 of the Back-Up Contract Addendum. B30 days after the effective date of the Back-Up Contract. C60 days after the effective date of the Back-Up Contract. D15 days after the effective date of the Back-Up Contract.

On the date specified in item 11 of the Back-Up Contract Addendum.

Which of these is NOT included when completing item 1(d) of the agreement (purchase price)? ASurvey fee. BDue diligence fee. CEarnest money. DSeller financing amount.

Survey fee

Which of these is NOT included when completing item 1(d) of the agreement (purchase price)? ASurvey fee. BDue diligence fee. CEarnest money. DSeller financing amount.

Survey fee.

For which of these properties would you use the "Offer to Purchase and Contract - Vacant Lot/Land" form? AUnimproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it. BImproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it. CUnimproved real property that the buyer is purchasing for commercial use with immediate plans to subdivide it. DImproved real property that the buyer is purchasing for commercial use with immediate plans to subdivide it.

Unimproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it. Use the "Offer to Purchase Vacant Lot/Land" form when the transaction involves unimproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it.

For which of these properties would you use the "Offer to Purchase and Contract - Vacant Lot/Land" form? AUnimproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it. BImproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it. CUnimproved real property that the buyer is purchasing for commercial use with immediate plans to subdivide it. DImproved real property that the buyer is purchasing for commercial use with immediate plans to subdivide it.

Unimproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it. Use the "Offer to Purchase Vacant Lot/Land" form when the transaction involves unimproved real property that the buyer is purchasing for personal use with no immediate plans to subdivide it.

How are costs like real estate taxes, personal property taxes, rents, and owners' association dues handled in the OPC? AUnless agreed upon is some other manner by the parties, these expenses are prorated, and the seller is responsible for paying them until closing. BThese expenses are not addressed in the OPC. CThe seller is always solely responsible for these costs and must pay in full all bills prior to closing. DFrom the effective date of the contract, the buyer is always responsible for these costs.

Unless agreed upon is some other manner by the parties, these expenses are prorated, and the seller is responsible for paying them until closing. Item 9 of the OPC documents that unless the parties agree to otherwise, these costs are prorated to the buyer and seller through the settlement date.

Who is responsible for paying real estate taxes, rents, and dues? AUnless agreed upon otherwise, the seller is responsible for these expenses through closing, at which point the buyer becomes responsible. BUnless agreed to otherwise, the buyer is responsible for these expenses from the effective date of this contract. CUnless agreed upon otherwise, the seller is responsible for these fees until 10 days after closing. DIn the contract, the parties must agree who will bear the responsibility for these expenses.

Unless agreed upon otherwise, the seller is responsible for these expenses through closing, at which point the buyer becomes responsible. Section 7 of this contract covers the prorations and any necessary adjustments for real estate taxes, rents, and dues. Unless otherwise agreed, the seller is responsible for these costs through closing, and after that, the responsibility becomes the buyer's.

The OPC includes the seller's agreement and authorization to disclose certain information related to their owners' association, if applicable. Which of the following is not something that the buyer is entitled to receive and review? AA list of names and biographical details about neighbors. BBylaws. CRestrictions and limitations on association members. DThe amount of regular assessments and dues.

A list of names and biographical details about neighbors. If the property is subject to owners' association rules and dues, item 7(d) authorizes and directs the release of related documents, statements, declarations, bylaws, restrictions, financial statements, and other information. Blank lines appear on the form to capture information about each applicable owners' association, including the amount of regular assessments or dues. Buyers are not entitled to receive information about the seller's current neighbors.

Which of these is not a true statement about rights of first opportunity? AA right of first opportunity is an irrevocable right, and the owner must agree to sell the property under the terms both parties agreed to when entering into the options contract. BThe right of first opportunity can make the first offer when notified that the property owner wants to sell. CRights of first opportunity have specified time periods for execution. DThe holder of a right of first opportunity is not required to make an offer. If made, the property owner is not required to accept the right holder's offer.

A right of first opportunity is an irrevocable right, and the owner must agree to sell the property under the terms both parties agreed to when entering into the options contract. A right of first opportunity gives the holder the right to make the first offer when notified that the owner wants to sell. An option to purchase would be an irrevocable right, compelling the property owner to sell under previously-agreed upon terms if the option was exercised.

Which of these is not a true statement about rights of first opportunity?

A right of first opportunity is an irrevocable right, and the owner must agree to sell the property under the terms both parties agreed to when entering into the options contract. A right of first opportunity gives the holder the right to make the first offer when notified that the owner wants to sell. An option to purchase would be an irrevocable right, compelling the property owner to sell under previously-agreed upon terms if the option was exercised.

Which of these items is NOT an acceptable way to identify the property subject to this agreement? AA seller-provided map with the property outlined. BThe PIN or PID for the property. CThe lot or unit number, block or section number, and the subdivision or condominium name. DA metes and bounds description prepared by a licensed attorney.

A seller-provided map with the property outlined.

Which of these would NOT be an offer to purchase property that would trigger a right of first refusal? AA verbal offer made in a phone call. BA signed purchase agreement. CA letter of intent. DA term sheet.

A verbal offer made in a phone call. The right of first refusal springs into being when the property owner has received, and would like to accept, an offer from a third party to buy the property. That offer could come in the form of a signed purchase agreement, a letter of intent, or a term sheet. A verbal offer is not a legally-binding offer.

Which of these is NOT a potential benefit to the seller of using an Installment Land Contract? AAccess to lump-sum sales proceeds at closing. BLower closing costs. CSell the property quickly on favorable terms. DCreate a regular revenue stream.

Access to lump-sum sales proceeds at closing. Benefits for sellers include lower closing costs, the ability to sell the property quickly and on favorable terms, and the creation of a regular revenue stream. However, sellers will not receive a lump sum payment at closing like they would if the buyer used traditional financing avenues or paid cash.

Which of these is NOT a potential benefit to the seller of using an Installment Land Contract? AAccess to lump-sum sales proceeds at closing. BLower closing costs. CSell the property quickly on favorable terms. DCreate a regular revenue stream.

Access to lump-sum sales proceeds at closing. Benefits for sellers include lower closing costs, the ability to sell the property quickly and on favorable terms, and the creation of a regular revenue stream. However, sellers will not receive a lump sum payment at closing like they would if the buyer used traditional financing avenues or paid cash.

Which of these is NOT a true statement regarding inspections and due diligence when a contract includes the Lead-Based Paint Addendum? Buyers automatically waive their right to conduct independent inspections when signing the Lead-Based Paint Addendum. Buyers have the opportunity to conduct risk assessments or investigations related to lead-based paint. Buyers have the option of waiving their right to conduct inspections or assessments. Buyers are strongly encouraged to conduct investigations and assessments.

Buyers automatically waive their right to conduct independent inspections when signing the Lead-Based Paint Addendum.

What is one thing the buyer and seller can do to protect themselves against becoming victims of wire fraud in a real estate transaction? ABefore wiring money, contact the closing attorney's office at a number obtained independently to verify the legitimacy of the arrangement. BContact the closing attorney before wiring money, using the contact information provided by the other party to verify the legitimacy of the transaction. CWire fraud is not a concern in real estate transactions, so the parties have nothing special to do. DWire the funds as requested and then contact the closing attorney's office to verify the wire was received.

Before wiring money, contact the closing attorney's office at a number obtained independently to verify the legitimacy of the arrangement. Both buyers and sellers can be the target of fraudulent real estate schemes, so they must take care before wiring any funds. The parties are advised to contact the closing attorney's office at a number obtained independently to verify the legitimacy of the arrangement.

What type of agreements are real estate contracts? ABilateral agreements BUnilateral agreements CNon-binding agreements DImplied agreements

Bilateral agreements Real estate contracts are generally what is referred to as "bilateral" contracts, with both parties promising to do something in exchange for the other party's action. In the context of a real estate contract, the purchaser promises to pay an agreed-upon sum of money in exchange for title to the seller's property.

How should the due diligence period be identified in the Back-Up Contract? ABy using a number of days, with the time period starting on the day after the seller notifies the buyer that the primary contract was cancelled. BBy using a specific date. CThere is no additional due diligence period under a Back-Up Contract because the buyer can conduct due diligence while the contract is still in the secondary position. DThe due diligence period under the Back-Up Contract is automatically 15 days.

By using a number of days, with the time period starting on the day after the seller notifies the buyer that the primary contract was cancelled. The due diligence period for the Back-Up Contract, specified in item 9(b), should be identified by using a number of days rather than a specified date. That's because the due diligence period does not begin until the Back-Up Contract moves to the primary position. As with any Sales Contract, the parties are free to determine and agree on their own due diligence period.

Which of the following expenses is not the buyer's responsibility after the Commencement Date? AFire and hazard insurance on the property. BUtilities. CLawn care. DTrash removal.

Fire and hazard insurance on the property After the Commencement Date, the buyer is responsible for paying utilities, lawn care, and trash removal. The buyer is responsible for insuring their own personal property but the seller agrees to maintain fire and hazard insurance on the property until closing.

How are "days" calculated under the OPC? ADays means consecutive calendar days, including weekends and holidays. BDays means consecutive weekdays, but not weekends or holidays. CDays means consecutive calendar days, including weekends but not holidays. DDays means consecutive calendar days, including holidays, but not weekends.

Days means consecutive calendar days, including weekends and holidays. Section 23 of the OPC specifically defines the term "days" to state that the word "days" means consecutive calendar days, including weekends and holidays. The count begins on the day following the day on which an act or notice was required. References to time are to the time in the state of North Carolina.

Which of these is a true statement about the buyer's due diligence rights? ADuring the due diligence period, buyers may conduct investigations at their own expense. If a buyer decides to cancel the contract during this period, they may do so. Their earnest money will be returned to them. BIf a buyer decides to cancel the contract during the due diligence period, they split the earnest money with the seller. CIf due diligence investigations reveal the need for repairs, the seller is obligated to make them. DIf a buyer's loan application is denied after the expiration of the due diligence period, the buyer can still cancel the agreement without penalty.

During the due diligence period, buyers may conduct investigations at their own expense. If a buyer decides to cancel the contract during this period, they may do so. Their earnest money will be returned to them. The due diligence period essentially gives the buyer the right to back out of the contract for any reason and receive a return of the earnest money paid, as long as they do so during the due diligence period. The parties may separately negotiate repairs for items revealed during due diligence.

Which of these is a true statement about the buyer's due diligence rights? ADuring the due diligence period, buyers may conduct investigations at their own expense. If a buyer decides to cancel the contract during this period, they may do so. Their earnest money will be returned to them. BIf a buyer decides to cancel the contract during the due diligence period, they split the earnest money with the seller. CIf due diligence investigations reveal the need for repairs, the seller is obligated to make them. DIf a buyer's loan application is denied after the expiration of the due diligence period, the buyer can still cancel the agreement without penalty.

During the due diligence period, buyers may conduct investigations at their own expense. If a buyer decides to cancel the contract during this period, they may do so. Their earnest money will be returned to them. The due diligence period essentially gives the buyer the right to back out of the contract for any reason and receive a return of the earnest money paid, as long as they do so during the due diligence period. The parties may separately negotiate repairs for items revealed during due diligence.

Which of these is a true statement regarding earnest money? AEarnest money is not required to create a valid sales contract in North Carolina. BEarnest money is a requirement of a valid sales contract in North Carolina. CEarnest money must always be at least 10% (Percent) of the asking price. DThe seller gets to keep earnest money if the buyer cancels the sales contract during the due diligence period.

Earnest money is not required to create a valid sales contract in North Carolina

Which of these is a true statement regarding earnest money? AEarnest money is not required to create a valid sales contract in North Carolina. BEarnest money is a requirement of a valid sales contract in North Carolina. CEarnest money must always be at least 10% (Percent) of the asking price. DThe seller gets to keep earnest money if the buyer cancels the sales contract during the due diligence period.

Earnest money is not required to create a valid sales contract in North Carolina.

Are due diligence and earnest money payments refundable to a buyer who cancels the sales contract during the due diligence period? AEarnest money is refundable under these circumstances but due diligence payments are not refundable. BYes, the buyer is entitled to a return of both the due diligence fee and the earnest money paid. CNo, the buyer is not entitled to receive a return of either their due diligence fees or earnest money. DDue diligence fees are refundable under these circumstances but earnest money paid is not refundable.

Earnest money is refundable under these circumstances but due diligence payments are not refundable. While due diligence payments are the seller's property and are not refundable to the buyer unless the seller breaches the contract, earnest money can be refunded to the buyer if they choose to cancel the contract within the due diligence period and under certain other circumstances as specified in the agreement.

Are due diligence and earnest money payments refundable to a buyer who cancels the sales contract during the due diligence period? AEarnest money is refundable under these circumstances but due diligence payments are not refundable. BYes, the buyer is entitled to a return of both the due diligence fee and the earnest money paid. CNo, the buyer is not entitled to receive a return of either their due diligence fees or earnest money. DDue diligence fees are refundable under these circumstances but earnest money paid is not refundable.

Earnest money is refundable under these circumstances but due diligence payments are not refundable. While due diligence payments are the seller's property and are not refundable to the buyer unless the seller breaches the contract, earnest money can be refunded to the buyer if they choose to cancel the contract within the due diligence period and under certain other circumstances as specified in the agreement.

Which of these is not a true statement regarding the cancellation of a Short Sale contract? AEither party may terminate the contract until the buyer provides the seller with notice of the lienholder's acceptance. BEither party may terminate the contract until the seller provides the buyer with notice of the lienholder's acceptance. CIf the contract is terminated before the lienholder's approval is received and communicated, the buyer is entitled to a refund of the earnest money paid. DIf he chooses to exercise it, the buyer's Due Diligence period begins when he's notified that the lienholder has approved the short sale. During the Due Diligence period, the buyer may terminate the contract for any reason.

Either party may terminate the contract until the buyer provides the seller with notice of the lienholder's acceptance. When signing this Addendum, the seller agrees to provide the buyer with notice of the lienholder's acceptance promptly when received. Up to that point, however, either party may terminate the contract. If it's terminated, the buyer's earnest money will be refunded. The buyer may also cancel the contract without penalty during the Due Diligence period.

Which of these is NOT a true statement regarding the buyer's rights to cancel the Back-Up Contract? AIf the buyer terminates the contract after it becomes the primary contract and after the expiration of the due diligence period, they are only entitled to receive a refund of one-half of their earnest money. BThe buyer can terminate without liability by giving the seller written notice at any point up until the Back-Up Contract becomes the primary contract. CAfter the Back-Up Contract becomes the primary contract, the buyer can still terminate without penalty as long as they do so during the due diligence period. DIf the buyer terminates the agreement while it is still in a secondary position, or while it is the primary contract but within the due diligence period, the buyer is entitled to a return of their earnest money.

If the buyer terminates the contract after it becomes the primary contract and after the expiration of the due diligence period, they are only entitled to receive a refund of one-half of their earnest money. Items 9 and 10 address the buyer's right to cancel the contract during the due diligence period and while the contract is in the secondary position, respectively. In either case, the buyer is entitled to a refund of all of the earnest money paid.

Which of these is NOT a true statement regarding the buyer's rights to cancel the Back-Up Contract? AIf the buyer terminates the contract after it becomes the primary contract and after the expiration of the due diligence period, they are only entitled to receive a refund of one-half of their earnest money. BThe buyer can terminate without liability by giving the seller written notice at any point up until the Back-Up Contract becomes the primary contract. CAfter the Back-Up Contract becomes the primary contract, the buyer can still terminate without penalty as long as they do so during the due diligence period. DIf the buyer terminates the agreement while it is still in a secondary position, or while it is the primary contract but within the due diligence period, the buyer is entitled to a return of their earnest money.

If the buyer terminates the contract after it becomes the primary contract and after the expiration of the due diligence period, they are only entitled to receive a refund of one-half of their earnest money. tems 9 and 10 address the buyer's right to cancel the contract during the due diligence period and while the contract is in the secondary position, respectively. In either case, the buyer is entitled to a refund of all of the earnest money paid.

Which of these is NOT a true statement regarding the buyer's rights to cancel the Back-Up Contract? AIf the buyer terminates the contract after it becomes the primary contract and after the expiration of the due diligence period, they are only entitled to receive a refund of one-half of their earnest money. BThe buyer can terminate without liability by giving the seller written notice at any point up until the Back-Up Contract becomes the primary contract. CAfter the Back-Up Contract becomes the primary contract, the buyer can still terminate without penalty as long as they do so during the due diligence period. DIf the buyer terminates the agreement while it is still in a secondary position, or while it is the primary contract but within the due diligence period, the buyer is entitled to a return of their earnest money.

If the buyer terminates the contract after it becomes the primary contract and after the expiration of the due diligence period, they are only entitled to receive a refund of one-half of their earnest money. tems 9 and 10 address the buyer's right to cancel the contract during the due diligence period and while the contract is in the secondary position, respectively. In either case, the buyer is entitled to a refund of all of the earnest money paid.

How does foreclosure during the short sale process impact the parties? AIf the property is foreclosed on before the end of the short sale process, the seller loses all rights, the contract becomes null and void, and the earnest money will be returned to the buyer. BIf a foreclosure action is filed during the process, the seller is under no obligation to notify the buyer. COnce a short sale has been initiated, the property cannot be foreclosed on. DIf a foreclosure action is filed during the process, the contract remains in full force and effect.

If the property is foreclosed on before the end of the short sale process, the seller loses all rights, the contract becomes null and void, and the earnest money will be returned to the buyer.

How does foreclosure during the short sale process impact the parties? AIf the property is foreclosed on before the end of the short sale process, the seller loses all rights, the contract becomes null and void, and the earnest money will be returned to the buyer. BIf a foreclosure action is filed during the process, the seller is under no obligation to notify the buyer. COnce a short sale has been initiated, the property cannot be foreclosed on. DIf a foreclosure action is filed during the process, the contract remains in full force and effect.

If the property is foreclosed on before the end of the short sale process, the seller loses all rights, the contract becomes null and void, and the earnest money will be returned to the buyer. Item 7 of the Addendum addresses foreclosure and includes checkboxes for the seller to indicate whether a foreclosure proceeding has been filed. If it's filed subsequently during the short sale process, the seller agrees to notify the buyer. Furthermore, the parties acknowledge that if the property is foreclosed on before the end of the short sale process, the seller loses all rights, the contract becomes null and void, and the earnest money will be returned to the buyer.

In addition to the parties' names and the property description, which of the following must be included for a pre-printed Offer and Sales Contract to be valid, according to North Carolina Real Estate Commission Rules? AItemized list of personal property included in the sale. BHistory detailing and identifying all previous property owners. CDisclosure if deaths occurred on the premises. DThe type of paint used for both the interior and exterior of the property.

Itemized list of personal property included in the sale. North Carolina Real Estate Commission Rule A.0112 provides a list of 20 required components for valid pre-printed Offer and Sales Contract forms, including an itemized list of personal property to be included in the sale. There is no requirement to identify previous owners, disclose whether deaths occurred on-site, or document paint types on the sales contract.

Which of the following is an acceptable way to identify the sellers, John and Ann Smith? AJohn A. Smith and Ann C. Smith. BMr. and Mrs. Smith. CJ.A. and A.C. Smith. DThe Smiths.

John A. Smith and Ann C. Smith. When identifying the buyers or sellers on any real estate form, use their full names rather than abbreviations or initials.

Which of the following is a true statement? ANeither the North Carolina Association of Realtors nor the North Carolina Bar Association makes any representation as to the legal validity of the OPC. BThe North Carolina Association of Realtors and the North Carolina Bar Association both approve of and represent the legal validity of the OPC. CThe North Carolina Association of Realtors, not the North Carolina Bar Association, represents the legal validity of the OPC. DThe North Carolina Bar Association, not the North Carolina Association of Realtors, represents the legal validity of the OPC.

Neither the North Carolina Association of Realtors nor the North Carolina Bar Association makes any representation as to the legal validity of the OPC. The OPC includes a disclaimer stating that the North Carolina Association of Realtors and the North Carolina Bar Association make no representations about the legal validity or adequacy of any information contained in the agreement. The parties are advised to seek legal counsel and advice specific to their situations before they sign the agreement.

If a residential dwelling was designed in 1977 and erected in 1979, would the Lead-Based Paint Addendum be necessary for the contract? ANo, the addendum is only required if the dwelling was constructed before 1978. BNo, the addendum is required only for buildings which have been proven to have a higher risk of lead poisoning. CYes. As the building was designed while lead-based paint was permitted, the risk of lead poisoning is still present. DYes, as this addendum is required in all real estate contracts, regardless of the property's construction date.

No, the addendum is required only for buildings which have been proven to have a higher risk of lead poisoning.

Does the buyer under a Back-Up Contract have the right to examine the primary contract? ANo, the buyer may not review or examine the primary contract unless the seller and primary buyer agree. BYes, the buyer has an automatic and unlimited right to review and examine the primary contract. CYes, the buyer has the right to review and examine the primary contract, exercisable within five days of the Back-Up Contract's effective date. DThe buyer has a limited right to examine the primary contract, but only if they agree to allow the primary buyer to also examine the Back-Up Contract.

No, the buyer may not review or examine the primary contract unless the seller and primary buyer agree. Item 5 of the Back-up Contract Addendum states the parties' agreement and understanding that the buyer has no right to examine the primary contract unless the seller and primary buyer agree to such examination.

When a seller makes a counteroffer, is there automatically a valid agreement between the parties? ANo. A counteroffer is, in effect, a rejection and a new offer. The buyer can choose to accept the counteroffer or make a counteroffer of their own. BYes. A valid agreement is formed when the seller signs the counteroffer and delivers it to the buyer. The buyer's signature is not needed. CNo. A counteroffer means the parties must start over again with the buyer preparing a new OPC form and delivering it to the seller who can choose to accept or reject it. DThe parties automatically have a valid agreement three days after the seller submits a counteroffer to the buyer if the buyer has not accepted or rejected the counteroffer by that point.

No. A counteroffer is, in effect, a rejection and a new offer. The buyer can choose to accept the counteroffer or make a counteroffer of their own.

May a broker who receives an offer "sit on" the offer and wait five days to give it to their client so they can deliver all offers at the same time? ANo. Agents must present offers as soon as possible but under no circumstances later than three days from receipt. BYes. The rules require brokers to deliver offers within seven days, so it is acceptable for a broker to wait five days to share the offer with their client. CYes, if the client has signed a separate authorization telling the agent they don't want to receive individual offers. DYes. There are no rules about when a broker must deliver offers to their client.

No. Agents must present offers as soon as possible but under no circumstances later than three days from receipt. Agents must deliver to their clients all executed offers within three days of the broker's receipt of such offers. It is important to note that the three day time period mentioned in the rule does not mean a broker can sit on an offer for three days before providing it to the seller. Agents must present offers as soon as possible but under no circumstances later than three days from receipt.

May a broker who receives an offer "sit on" the offer and wait five days to give it to their client so they can deliver all offers at the same time? ANo. Agents must present offers as soon as possible but under no circumstances later than three days from receipt. BYes. The rules require brokers to deliver offers within seven days, so it is acceptable for a broker to wait five days to share the offer with their client. CYes, if the client has signed a separate authorization telling the agent they don't want to receive individual offers. DYes. There are no rules about when a broker must deliver offers to their client.

No. Agents must present offers as soon as possible but under no circumstances later than three days from receipt. Agents must deliver to their clients all executed offers within three days of the broker's receipt of such offers. It is important to note that the three day time period mentioned in the rule does not mean a broker can sit on an offer for three days before providing it to the seller. Agents must present offers as soon as possible but under no circumstances later than three days from receipt.

Barb Buyer wants her agent to write up a quick two-page agreement, because she doesn't want to make her offer too confusing for the seller. May the agent do as the client requested? ANo. Licensees may not draft real estate contracts or forms for their clients. BYes. Normally, agents may not draft contracts. But, in this case, the client specifically requested it. CYes. Real estate licensees frequently receive this kind of request, and drafting contract provisions is part of the job. DNo. The client must use the pre-printed standard sales contract form.

No. Licensees may not draft real estate contracts or forms for their clients. Barb's agent may not draft a contract or write up contract provisions for her client under any circumstances. However, the client may choose to retain a real estate attorney to draft a shorter contract for her.

May North Carolina real estate licensees draft contracts for their clients? ANo. State statutes and Real Estate Commission rules specifically prohibit licensees from drafting contracts or agreements for clients. BYes. State statutes prohibit providing real estate-related legal services, but drafting a contract is not considered legal advice. CYes, as long as they also recommend that the client have a licensed attorney review the document. DNo, unless the client signs a separate agreement and pays the real estate licensee to draft the contract.

No. State statutes and Real Estate Commission rules specifically prohibit licensees from drafting contracts or agreements for clients.

May North Carolina real estate licensees draft contracts for their clients? ANo. State statutes and Real Estate Commission rules specifically prohibit licensees from drafting contracts or agreements for clients. BYes. State statutes prohibit providing real estate-related legal services, but drafting a contract is not considered legal advice. CYes, as long as they also recommend that the client have a licensed attorney review the document. DNo, unless the client signs a separate agreement and pays the real estate licensee to draft the contract.

No. State statutes and Real Estate Commission rules specifically prohibit licensees from drafting contracts or agreements for clients. Real estate licensees are strictly prohibited from drafting offers, sales contracts, options, leases, promissory notes, deeds, deeds of trust, or other legal instruments.

Are all of the provisions included in the standard NC OPC form required to form a valid contract? ANo. The OPC includes required provisions plus additional terms and conditions designed to protect both the buyer and the seller. BYes. Licensees must use the OPC or another form including all of the provisions contained in the OPC. CYes. Licensees must either use the OPC or draft their own contracts for clients that include all of the same provisions. DNo. There are no required provisions for a real estate contract.

No. The OPC includes required provisions plus additional terms and conditions designed to protect both the buyer and the seller. The OPC includes many provisions designed to protect both the seller and buyer by establishing, in writing, their respective rights, obligations, and duties under the contract. A legal offer does not technically need to include all of these provisions. At a minimum, the offer must identify the parties, the property to be purchased, the sales price, the closing date, and the agreed-upon terms and conditions. Licensees may use pre-printed forms or a client can retain an attorney to prepare a contract, but licensees may not draft their own contracts or contract provisions for clients.

Are all of the provisions included in the standard NC OPC form required to form a valid contract? ANo. The OPC includes required provisions plus additional terms and conditions designed to protect both the buyer and the seller. BYes. Licensees must use the OPC or another form including all of the provisions contained in the OPC. CYes. Licensees must either use the OPC or draft their own contracts for clients that include all of the same provisions. DNo. There are no required provisions for a real estate contract.

No. The OPC includes required provisions plus additional terms and conditions designed to protect both the buyer and the seller. The OPC includes many provisions designed to protect both the seller and buyer by establishing, in writing, their respective rights, obligations, and duties under the contract. A legal offer does not technically need to include all of these provisions. At a minimum, the offer must identify the parties, the property to be purchased, the sales price, the closing date, and the agreed-upon terms and conditions. Licensees may use pre-printed forms or a client can retain an attorney to prepare a contract, but licensees may not draft their own contracts or contract provisions for clients.

Are all of the provisions included in the standard NC OPC form required to form a valid contract? ANo. The OPC includes required provisions plus additional terms and conditions designed to protect both the buyer and the seller. BYes. Licensees must use the OPC or another form including all of the provisions contained in the OPC. CYes. Licensees must either use the OPC or draft their own contracts for clients that include all of the same provisions. DNo. There are no required provisions for a real estate contract.

No. The OPC includes required provisions plus additional terms and conditions designed to protect both the buyer and the seller. The OPC includes many provisions designed to protect both the seller and buyer by establishing, in writing, their respective rights, obligations, and duties under the contract. A legal offer does not technically need to include all of these provisions. At a minimum, the offer must identify the parties, the property to be purchased, the sales price, the closing date, and the agreed-upon terms and conditions. Licensees may use pre-printed forms or a client can retain an attorney to prepare a contract, but licensees may not draft their own contracts or contract provisions for clients.

Traditionally, real estate contracts were always made and signed on paper. Is that still the case? ANo. Unless the contract limits or specifies the way offer and acceptance can be made, it is acceptable to create a contract through electronic means. BNo. It is always acceptable to use electronic means to create real estate contracts. CYes. Real estate agreements must be signed on paper using ink in order to be valid and enforceable. DYes. Real estate contracts must be signed on paper using ink, but addenda may be completed electronically.

No. Unless the contract limits or specifies the way offer and acceptance can be made, it is acceptable to create a contract through electronic means. North Carolina law defines an "electronic signature" as "an electronic sound, symbol, or process attached to, or logically associated with, a record and executed or adopted by a person with an intent to sign the record." Unless the contract limits or specifies the way offer and acceptance can be made, it is acceptable to make and accept offers through fax or email, including using electronic signatures using tools like DocuSign. The standard OPC form includes a paragraph addressing this method of communication.

Traditionally, real estate contracts were always made and signed on paper. Is that still the case? ANo. Unless the contract limits or specifies the way offer and acceptance can be made, it is acceptable to create a contract through electronic means. BNo. It is always acceptable to use electronic means to create real estate contracts. CYes. Real estate agreements must be signed on paper using ink in order to be valid and enforceable. DYes. Real estate contracts must be signed on paper using ink, but addenda may be completed electronically.

No. Unless the contract limits or specifies the way offer and acceptance can be made, it is acceptable to create a contract through electronic means. North Carolina law defines an "electronic signature" as "an electronic sound, symbol, or process attached to, or logically associated with, a record and executed or adopted by a person with an intent to sign the record." Unless the contract limits or specifies the way offer and acceptance can be made, it is acceptable to make and accept offers through fax or email, including using electronic signatures using tools like DocuSign. The standard OPC form includes a paragraph addressing this method of communication.

Which of these is not an element of an option to purchase real estate? ANon-binding contract. BExclusive right to buy property. CSpecified time period. DPre-defined price.

Non-binding contract. Real estate options are legally-binding, and they give the option holder the exclusive right to purchase real estate property for a specified time period at a pre-defined price.

Rich has a right of first refusal and Oscar has a right of first opportunity. Whose right gives them more control? AOscar. When notified that the property owner wants to sell, he can be the first to make an offer. Rich cannot make an offer until a third-party has already done so and then, he can only offer to match that third party offer. BRich. When notified that the property owner wants to sell, he can be the first to make an offer. Oscar cannot make an offer until a third-party has already done so and then, he can only offer to match that third party offer. CNeither Rich nor Oscar has more control than the other. DRight of first refusal and right of first opportunity are different names for the same preemptive right.

Oscar. When notified that the property owner wants to sell, he can be the first to make an offer. Rich cannot make an offer until a third-party has already done so and then, he can only offer to match that third party offer. Both of these rights give the holder the chance to make offers to purchase the underlying property when the property holder is selling it. The key difference is that the right of first opportunity puts the control in the hands of the holder of the right, who can make an offer when they are notified that the property owner wants to sell. With the right of first refusal, the holder of the right is reacting to an offer made by a third party and must decide to either match that offer or decline to do so. In this example, Oscar has more control because he has the right of first opportunity.

Which of these is not one of the seller's obligations under the OPC? APaying proposed special assessments. BProviding the closing attorney with evidence of title, payoff statements, and non-foreign status documentation. CGiving the buyer reasonable access to the property to perform due diligence assessments to verify repairs were made as agreed upon and for a final walk-through. DRemoving personal property, garbage, and debris from the home before closing.

Paying proposed special assessments. Item 8 of the OPC states the seller's obligations to provide documentation to the closing attorney, to give the buyer reasonable access to the property, and to remove personal property and garbage before closing. The buyer, not the seller, is responsible for paying any proposed special assessments.

Which of these is not an option available to the seller when an offer is received? APend the offer indefinitely in the hopes of receiving a higher offer from someone else. BAccept the offer CReject the offer DReject the offer and make a counteroffer

Pend the offer indefinitely in the hopes of receiving a higher offer from someone else. The buyer has the choice of either accepting or rejecting the counter offer, or making their own counter offer back to the seller. Time is of the essence with real estate transactions and offers generally include expiration dates if the seller takes no action. Sellers may not simply hold onto offers indefinitely.

Buyers are usually responsible for paying certain expenses during the term of the contract. Which of these is an expense that the seller, not the buyer, typically pays? APersonal property insurance for the seller's property maintained on-site but not included in the sale. BReal estate taxes. CSpecial assessments. DHomeowners' association dues.

Personal property insurance for the seller's property maintained on-site but not included in the sale. Buyers are usually responsible under installment land contracts for paying real estate taxes, special assessments, homeowners' association dues (if applicable), and property insurance during the term of the contract - just as they would if they had purchased the property outright and held both equitable and legal title. If the seller is keeping personal property on the premises that is not part of the sale, the expense of insuring such property will be borne by the seller.

Buyers are usually responsible for paying certain expenses during the term of the contract. Which of these is an expense that the seller, not the buyer, typically pays? APersonal property insurance for the seller's property maintained on-site but not included in the sale. BReal estate taxes. CSpecial assessments. DHomeowners' association dues.

Personal property insurance for the seller's property maintained on-site but not included in the sale. Buyers are usually responsible under installment land contracts for paying real estate taxes, special assessments, homeowners' association dues (if applicable), and property insurance during the term of the contract - just as they would if they had purchased the property outright and held both equitable and legal title. If the seller is keeping personal property on the premises that is not part of the sale, the expense of insuring such property will be borne by the seller.

What is an acceptable way to handle earnest money and due diligence fees paid with the sales contract? APlace the funds in trust or in an escrow account until closing. BPlace the funds in the brokerage's operating account until settlement. CDeposit the funds in an account the licensee sets up with their bank, titled "client escrow," until closing. DPut the client's cash payment in a lockbox at the real estate office until settlement.

Place the funds in trust or in an escrow account until closing. Earnest money and due diligence fees are the client's funds. Until closing. These funds must be held in trust or in escrow for the parties.

What is an acceptable way to handle earnest money and due diligence fees paid with the sales contract? APlace the funds in trust or in an escrow account until closing. BPlace the funds in the brokerage's operating account until settlement. CDeposit the funds in an account the licensee sets up with their bank, titled "client escrow," until closing. DPut the client's cash payment in a lockbox at the real estate office until settlement.

Place the funds in trust or in an escrow account until closing. Earnest money and due diligence fees are the client's funds. Until closing. These funds must be held in trust or in escrow for the parties.

When authorized or directed by a client to do so, which of the following may a real estate licensee draft for a client? APre-printed sale or lease contract forms. BDeeds of trust. CReal estate deeds. DPromissory notes.

Pre-printed sale or lease contract forms. North Carolina Real Estate Commission Rule A.0111 specifically prohibits brokers from drafting offers, sales contracts, options, leases, promissory notes, deeds, deeds of trust, or other legal instruments. This rule does allow licensees to complete pre-printed forms, including pre-printed sales contracts or lease forms, when authorized or directed to do so by a party to the real estate transaction.

When authorized or directed by a client to do so, which of the following may a real estate licensee draft for a client? APre-printed sale or lease contract forms. BDeeds of trust. CReal estate deeds. DPromissory notes.

Pre-printed sale or lease contract forms. North Carolina Real Estate Commission Rule A.0111 specifically prohibits brokers from drafting offers, sales contracts, options, leases, promissory notes, deeds, deeds of trust, or other legal instruments. This rule does allow licensees to complete pre-printed forms, including pre-printed sales contracts or lease forms, when authorized or directed to do so by a party to the real estate transaction.

Choose the best statement about the importance of the North Carolina real estate sales contract. AReal estate sales are generally large-dollar transactions, with both the seller and potential buyer taking significant risks. The sales contract is intended to protect both parties by documenting the terms and conditions of the sale. BBuyers bear the most risk in real estate transactions. The sales contract is intended primarily to protect buyers by documenting the terms and conditions of the sale. CSellers bear the most risk in real estate transactions. The sales contract is intended primarily to protect sellers by documenting the terms and conditions of the sale. DBuyers, sellers, and real estate licensees all bear risk in real estate transactions. The sales contract is intended primarily to protect real estate licensees by documenting the terms and conditions of the sale.

Real estate sales are generally large-dollar transactions, with both the seller and potential buyer taking significant risks. The sales contract is intended to protect both parties by documenting the terms and conditions of the sale. Real estate sales are generally large-dollar transactions, with both the seller and potential buyer taking significant risks. The sales contract is intended to protect both parties by listing the terms and conditions of the sale.

How is rent handled when using this contract Addendum? ARent is a lump sum covering the term of the agreement. BRent is payable to the property owner on a semi-monthly basis. CRent is payable to the property owner on a monthly basis. DThe parties can negotiate whether rent will be payable as a lump sum, or as a monthly or semi-monthly payment.

Rent is a lump sum covering the term of the agreement. Paragraph 4 of this Addendum documents the agreed-upon rent and includes fields for the parties to document the total amount the buyer will pay the seller as a lump sum for the term of the agreement. In the event closing is delayed, the buyer agrees to pay a specified additional amount of rent per day.

What is the main reason a licensee should think twice before drafting real estate contract provisions for a client? AState statutes and commission rules prohibit licensees from drafting contract language. BIt can be difficult to get the wording just right, and it may take considerably more time than the licensee planned. CThe sale is not guaranteed to go through, so the licensee may never be compensated for their time and effort in writing contract provisions. DIf the licensee makes a mistake, the client could be upset and might tell their friends not to work with the licensee.

State statutes and commission rules prohibit licensees from drafting contract language. Licensees should never consider drafting contract provisions for clients. Doing so means violating state statutes and Real Estate Commission rules. In addition, licensees can be liable if a client incurs losses as a result of the licensee's actions

What is the main reason a licensee should think twice before drafting real estate contract provisions for a client? AState statutes and commission rules prohibit licensees from drafting contract language. BIt can be difficult to get the wording just right, and it may take considerably more time than the licensee planned. CThe sale is not guaranteed to go through, so the licensee may never be compensated for their time and effort in writing contract provisions. DIf the licensee makes a mistake, the client could be upset and might tell their friends not to work with the licensee.

State statutes and commission rules prohibit licensees from drafting contract language. Licensees should never consider drafting contract provisions for clients. Doing so means violating state statutes and Real Estate Commission rules. In addition, licensees can be liable if a client incurs losses as a result of the licensee's actions.

Which of these is a true statement about the seller possession after closing agreement? AThe agreement is not intended for long-term occupancy and does not cover the provisions typically covered by a longer-term residential lease. BThe agreement is intended for both short-term and long-term occupancy and includes all of the provisions typically covered by a residential lease. CThis agreement is used when the seller and buyer agree that the buyer will occupy the property before closing. DThis agreement is used when the buyer intends to move into the property immediately after closing, to document that the seller's possession will end at that point.

The agreement is not intended for long-term occupancy and does not cover the provisions typically covered by a longer-term residential lease. This agreement is used when the parties agree that the seller will continue to occupy the home after closing. This agreement is not intended for long-term occupancy and does not cover the provisions typically covered by a longer-term residential lease.

Which of these is a true statement regarding Installment Land Contracts? AThe agreement may provide for monthly installments for a period of years, followed by a balloon payment at the end. BThe contract terms and provisions are always clear and unambiguous. CReal estate agents may draft Installment Land Contracts without involving attorneys, since these are not typical real estate sales contracts. DIf a buyer is approved for a traditional mortgage loan but the seller offers an Installment Land Contract, the buyer should always take the Installment Land Contract.

The agreement may provide for monthly installments for a period of years, followed by a balloon payment at the end.

Why is the appraisal amount important for an FHA loan? AThe appraisal figure represents the maximum mortgage amount that HUD will insure. BThe appraisal figure represents the minimum mortgage amount that HUD will insure. CThe appraisal figure represents the maximum mortgage amount that the DVA will insure. DThe appraisal figure represents the minimum mortgage amount that the DVA will insure.

The appraisal figure represents the maximum mortgage amount that HUD will insure.

Why is the appraisal amount important for an FHA loan? AThe appraisal figure represents the maximum mortgage amount that HUD will insure. BThe appraisal figure represents the minimum mortgage amount that HUD will insure. CThe appraisal figure represents the maximum mortgage amount that the DVA will insure. DThe appraisal figure represents the minimum mortgage amount that the DVA will insure.

The appraisal figure represents the maximum mortgage amount that HUD will insure. The appraisal amount is especially important for an FHA loan, as it represents the maximum amount that HUD will insure.

Which of the following is NOT true regarding the buyer's obligations to tenants with existing rental agreements? AThe buyer is obligated to honor existing vacation rental agreements that extend beyond 180 days from closing. BThe buyer takes title subject to existing rental agreements scheduled within the first 180 days after closing. CThe buyer may honor agreements that extend beyond 180 days from closing but is not required to do so. DThe buyer must notify each tenant with an existing vacation rental agreement of the property transfer within 20 days after closing.

The buyer is obligated to honor existing vacation rental agreements that extend beyond 180 days from closing. Under the Vacation Rental Act, the buyer takes title subject to the existing vacation rental agreements up to 180 days after the closing date. For agreements that extend beyond this date, the buyer may choose to honor them but is not obligated to do so. The Act requires the buyer to notify tenants with existing rental agreements that the property has changed hands, within 20 days of closing.

A buyer using VA financing learns that the appraised value was significantly less than expected. The buyer decides to proceed with the purchase, making up the difference in cash. Which of the following statements is true? AThe buyer must disclose the source of the cash to the DVA. BThe buyer can borrow the additional cash without notifying the DVA. CThe buyer does not have the option of making up the difference in cash. If the appraised value is too low under a VA loan, the contract is cancelled. DIf the appraised value for a VA loan is lower than expected, the seller has the option of lowering the sales price or canceling the contract.

The buyer must disclose the source of the cash to the DVA.

A buyer using VA financing learns that the appraised value was significantly less than expected. The buyer decides to proceed with the purchase, making up the difference in cash. Which of the following statements is true? AThe buyer must disclose the source of the cash to the DVA. BThe buyer can borrow the additional cash without notifying the DVA. CThe buyer does not have the option of making up the difference in cash. If the appraised value is too low under a VA loan, the contract is cancelled. DIf the appraised value for a VA loan is lower than expected, the seller has the option of lowering the sales price or canceling the contract.

The buyer must disclose the source of the cash to the DVA. If the appraised value comes back lower than expected, a buyer who applied for a VA loan can cancel the contract and receive a return of their earnest money. The buyer can opt to proceed with the purchase, but they will need to pay cash for the excess. The buyer agrees that in that case, they will disclose the source of the cash to the DVA. The seller has the option of lowering the sales price but is not obligated to do so.

What happens if the seller does not leave the property at the end of the agreed upon term? AThe seller will be responsible for all of the agreement's terms and conditions and must also pay the buyer a daily holdover fee. BThe seller and buyer must sign a new seller possession after closing" agreement. CThe agreement does not contemplate this situation, so the parties would need to work it out on their own. DThe buyer must initiate foreclosure proceedings against the seller.

The buyer must initiate foreclosure proceedings against the seller. Paragraph 4 of the addendum contains the seller's agreement to vacate the property at the end of the specified term. In the event the seller fails to leave, they will be responsible for all of the agreement's terms and conditions. The seller will also be responsible for paying the buyer a holdover fee as specified by the parties for each day of continued occupancy. The buyer may initiate an eviction proceeding but not foreclosure.

During the term of the Installment Land Contract, who holds equitable title and who holds legal title to the property? AThe buyer takes equitable title and the seller holds legal title. BThe seller takes equitable title and the buyer holds legal title. CThe buyer takes both equitable and legal title. DThe seller takes both equitable and legal title.

The buyer takes equitable title and the seller holds legal title. The buyer takes equitable title to the property, giving them the right to occupy, enjoy, and use it. However, the seller is the legal title holder until the buyer makes all of the installment payments. At that point, the seller records a deed to transfer legal title to the buyer.

During the term of the Installment Land Contract, who holds equitable title and who holds legal title to the property? AThe buyer takes equitable title and the seller holds legal title. BThe seller takes equitable title and the buyer holds legal title. CThe buyer takes both equitable and legal title. DThe seller takes both equitable and legal title.

The buyer takes equitable title and the seller holds legal title. The buyer takes equitable title to the property, giving them the right to occupy, enjoy, and use it. However, the seller is the legal title holder until the buyer makes all of the installment payments. At that point, the seller records a deed to transfer legal title to the buyer.

During the term of the Installment Land Contract, who holds equitable title and who holds legal title to the property? AThe buyer takes equitable title and the seller holds legal title. BThe seller takes equitable title and the buyer holds legal title. CThe buyer takes both equitable and legal title. DThe seller takes both equitable and legal title.

The buyer takes equitable title and the seller holds legal title. The buyer takes equitable title to the property, giving them the right to occupy, enjoy, and use it. However, the seller is the legal title holder until the buyer makes all of the installment payments. At that point, the seller records a deed to transfer legal title to the buyer.

What does this addendum say about the buyer's right to conduct due diligence on the property? AThe buyer waives the right to conduct further due diligence after the Commencement Date and agrees to accept the property in its condition on that date. BThe parties negotiate a Due Diligence period, which may extend beyond the Commencement Date. CThe buyer waives the right to conduct further due diligence after Closing and agrees to accept the property in its condition on that date. DThere is no Due Diligence provision in an OPC using this addendum, and the buyer cannot ask the seller to complete any repairs or make any updates.

The buyer waives the right to conduct further due diligence after the Commencement Date and agrees to accept the property in its condition on that date.

Which of these is NOT a common element included in Installment Land Contracts? AThe buyer's credit score. BThe amount of the periodic payments the buyer agrees to make. CEach party's rights if the other party defaults on their obligations. DThe interest rate percentage.

The buyer's credit score.

Which of the following is not required to be included in the notice the buyer must provide to each tenant with an existing vacation rental agreement within 20 days of closing? AThe buyer's experience managing vacation rental properties. BThe buyer's name and address. CA notice about the tenant's rights to occupy the property subject to the existing agreement or about the tenant's rights to a refund. DThe date the ownership change was recorded.

The buyer's experience managing vacation rental properties. The buyer is legally obligated to notify each tenant with an existing vacation rental agreement of the property transfer within 20 days after closing. This notification must include the buyer's name and address, the date the buyer's ownership was recorded, a notice about the tenant's rights to occupy the property subject to the existing agreement, and if not, a notice about the buyer's right to a refund. The notice does not need to include information about the buyer's previous property management experience.

If the property is damaged in the course of the buyer's due diligence efforts, who bears the risk of loss? AThe buyer. BThe seller. CThe buyer and seller share the risk of loss equally. DThe investigator or other party conducting due diligence.

The buyer. If, during the course of conducting due diligence, the property is damaged in any way, the buyer is responsible for making any necessary repairs at the buyer's expense. This obligation is stated in item 2(c) of the agreement. Similarly, the buyer agrees in item 2(d) to indemnify and hold the seller harmless for any damages, claims, suits, or other expenses arising from the buyer's investigations during the due diligence period.

If the property is damaged in the course of the buyer's due diligence efforts, who bears the risk of loss? AThe buyer. BThe seller. CThe buyer and seller share the risk of loss equally. DThe investigator or other party conducting due diligence.

The buyer. If, during the course of conducting due diligence, the property is damaged in any way, the buyer is responsible for making any necessary repairs at the buyer's expense. This obligation is stated in item 2(c) of the agreement. Similarly, the buyer agrees in item 2(d) to indemnify and hold the seller harmless for any damages, claims, suits, or other expenses arising from the buyer's investigations during the due diligence period.

Who is responsible if losses or damages occur as a result of the buyer's due diligence activities? AThe buyer. BThe seller. CThe buyer and seller agree to share responsibility. DIt depends on the circumstances. The buyer and seller may each bear some responsibility.

The buyer. In items 4(d) and 4(e) of the OPC, the parties agree that the buyer will be responsible for any such losses or damages. The buyer agrees to hold the seller harmless.

Which of the following is not a reason why a sales contract is important? AThe contract must be recorded with the Register of Deeds. BThe contract includes important terms and conditions of the sale. CThe contract is intended to protect both buyers and sellers. DReal estate transactions are generally large-dollar transactions.

The contract must be recorded with the Register of Deeds. Real estate transactions are generally large-dollar transactions, so the sales contract is intended to protect both buyers' and sellers' rights by spelling out the important terms and conditions of the sale. If a deed is transferred, it should be recorded, but the sales contract itself is not recorded.

When signing this form, the seller agrees to provide the buyer with all of the following within ten days of closing, EXCEPT: AThe credit scores of each tenant with existing vacation rental agreements. BThe names of each tenant with an existing vacation rental agreement. CThe addresses of each tenant with an existing vacation rental agreement. DCopies of each existing vacation rental agreement.

The credit scores of each tenant with existing vacation rental agreements. The seller agrees to provide the buyer with the names and addresses of each tenant with an existing rental agreement within ten days after closing. In addition, the Seller agrees to give the buyer copies of the vacation rental agreements. The seller does not agree to disclose the vacation tenants' credit scores.

Which one of these is NOT something that would be included in Item 2 of the Additional Provisions Addendum, for Septic Tank Installation or Modification (if applicable)? AThe date the septic system was installed. BThe number of bedrooms in the home. CWhether the septic system is "conventional" or "other." DThe date for completion of septic system tests or inspections.

The date the septic system was installed.

Which one of these is NOT something that would be included in Item 2 of the Additional Provisions Addendum, for Septic Tank Installation or Modification (if applicable)? AThe date the septic system was installed. BThe number of bedrooms in the home. CWhether the septic system is "conventional" or "other." DThe date for completion of septic system tests or inspections.

The date the septic system was installed. If the offer includes OPC form 2-T for Septic System Installation or modification, then this item documents the buyer's intention to obtain an Improvement Permit or written evaluation from the County Health Department as part of the due diligence process. There are spots to indicate whether the septic system is "conventional" or "other," and the number of bedrooms in the home. There is also a line to document the date for completion of the tests or inspections.

What does the OPC state will happen if a dispute arises about the earnest money while it's in escrow? AThe escrow agent may not release the funds until they receive a release signed by all the parties or until they receive a court order to disburse the funds. BThe escrow agent disburses the earnest money: one-half to the seller and one-half to the buyer. COn the condition that the seller must pay back the buyer if it's later determined that the buyer was entitled to the funds, the escrow agent delivers the funds to the seller. DOn the condition that the buyer must pay back the seller if it's later determined that the seller was entitled to the funds, the escrow agent delivers the funds to the buyer.

The escrow agent may not release the funds until they receive a release signed by all the parties or until they receive a court order to disburse the funds. If a dispute arises as to what happens to the earnest money in escrow, the contract states that the money will remain in the escrow account until the escrow agent receives a written release from all parties or a court orders disbursement of the funds.

Who is entitled to the interest earned on the earnest money while it's in escrow? AThe escrow agent. BThe buyer. CThe seller. DThe buyer and seller, equally

The escrow agent.

Item 14 of this contract addresses tax-free exchanges. Who does the contract state is responsible for additional costs related to a tax-free exchange? AThe exchanging party. BThe buyer. CThe seller. DThe non-exchanging party.

The exchanging party. If this transaction will comprise a tax-free exchange for either the buyer or seller, item 14 states that the parties agree to cooperate but that the exchanging party is responsible for any additional costs related to the exchange.

Pre-printed real estate forms are available from a variety of sources, including online forms that are available from national providers. Which of the following is most important when a licensee is considering buying a form online? AThe form may not comply with current North Carolina real estate laws and regulations. BThe provider may be charging too much to use the forms. CThe formatting of the form may be "off" when the licensee tries to print it. DThe form may not look like other real estate contracts.

The form may not comply with current North Carolina real estate laws and regulations All of these are potential concerns. However, the most important concern when buying pre-printed forms off the internet is that the form may not be up-to-date and may not comply with current North Carolina rules and regulations. Licensees could be responsible for damages that arise if a party incurs losses because the wrong form was used.

Pre-printed real estate forms are available from a variety of sources, including online forms that are available from national providers. Which of the following is most important when a licensee is considering buying a form online? AThe form may not comply with current North Carolina real estate laws and regulations. BThe provider may be charging too much to use the forms. CThe formatting of the form may be "off" when the licensee tries to print it. DThe form may not look like other real estate contracts.

The form may not comply with current North Carolina real estate laws and regulations. All of these are potential concerns. However, the most important concern when buying pre-printed forms off the internet is that the form may not be up-to-date and may not comply with current North Carolina rules and regulations. Licensees could be responsible for damages that arise if a party incurs losses because the wrong form was used.

Why might an investor want to enter into an option to purchase real estate? AThe investor thinks the market will go up, and they can lock in a lower price. BThe investor thinks the market will go down, and they can lock in a higher price. CThe investor thinks the market will go up, and they can lock in a high price. DThe investor definitely wants to purchase the property as quickly as possible.

The investor thinks the market will go up, and they can lock in a lower price. An investor who buys an option to purchase a piece of real estate likely thinks the market will go up, and they will be able to lock in the right to buy the property at a lower price. Someone who is certain they want to buy the property, and quickly, would not be likely to use an option contract.

Which of the following is not a true statement about the North Carolina Realtors' pre-printed forms library? AThe library includes forms for standard sales contracts, but it doesn't include forms for additional contract-related matters. BNorth Carolina Realtors Association members have access to the forms library as part of their membership. CThe library includes forms for residential and commercial contracts. DThe library includes forms that can be used for property management.

The library includes forms for standard sales contracts, but it doesn't include forms for additional contract-related matters

What right does a right of first refusal provide to the holder? AThe option of matching a third party's offer to purchase the property owner's real estate (or to refuse to do so). BThe option of buying the property owner's real estate at a discount from a purchase offer made by a third party. CThe first opportunity to buy the property if the owner decides to sell. DThe right to refuse rent increases levied by the property owner or a new owner after the property is sold.

The option of matching a third party's offer to purchase the property owner's real estate (or to refuse to do so). The right of first refusal means the holder has the option of either matching a third party's offer to buy the burdened property or of refusing to match it, in which case the property owner is free to accept the third party's offer.

In an option to purchase real estate, who is the "optionee," and who is the "optioner"? AThe optionee is the tenant, investor, or another party buying the right to purchase the real estate property. The optioner is the property owner, selling that right. BThe optionee is the property owner selling the right to purchase real estate property. The optionee is the property owner, selling that right. CThe property owner, tenant, investor, or other party can all be either the optionee or optioner, depending on who initiates the options contract. DThe optionee is the property owner, and the optioner is the listing agent.

The optionee is the tenant, investor, or another party buying the right to purchase the real estate property. The optioner is the property owner, selling that right. The optionee is the tenant, investor, or other party buying the right to purchase the real estate property. The optioner is the property owner who is selling that right.

In an option to purchase real estate, who is the "optionee," and who is the "optioner"? AThe optionee is the tenant, investor, or another party buying the right to purchase the real estate property. The optioner is the property owner, selling that right. BThe optionee is the property owner selling the right to purchase real estate property. The optionee is the property owner, selling that right. CThe property owner, tenant, investor, or other party can all be either the optionee or optioner, depending on who initiates the options contract. DThe optionee is the property owner, and the optioner is the listing agent.

The optionee is the tenant, investor, or another party buying the right to purchase the real estate property. The optioner is the property owner, selling that right. The optionee is the tenant, investor, or other party buying the right to purchase the real estate property. The optioner is the property owner who is selling that right.

When the Short Sale Addendum is used, how does the Due Diligence period work? AThe period begins when the buyer receives notification that the short sale has been approved, and it continues for the number of days specified in the Addendum. BThe period begins when the contract is executed, and it continues for the number of days specified in the OPC. CThere is no Due Diligence period when using the Short Sale Addendum. DThe period begins when approval has been requested from the lienholder(s), and it continues for the number of days specified in the Addendum.

The period begins when the buyer receives notification that the short sale has been approved, and it continues for the number of days specified in the Addendum. The Due Diligence period begins when the buyer receives notification that the short sale has been approved and continues for the number of days specified in the Addendum. However, when signing the Addendum, the parties acknowledge that it may make sense to conduct Due Diligence sooner than that, because it could uncover issues that might affect the lienholder's approval, give the buyer time to obtain financing, and otherwise avoid unnecessary delays.

Which of the following statements regarding the Lead-Based Paint Addendum is false? AThe presence of lead-based paint alone is not necessarily a risk. BLead-based paint assessments or inspections conducted by the buyer are at the buyer's expense. CWhen the Lead-Based Paint Addendum applies, it attaches to, and becomes part of, the OPC. DThe purpose of the Addendum is not necessarily to disclose that there is a problem, just that the potential for risk exposure may exist.

The presence of lead-based paint alone is not necessarily a risk. The purpose of the Lead-Based Paint Addendum, which attaches to and becomes part of the OPC, is to disclose that there is a potential for risk, not that there is necessarily a problem. If the buyer chooses to conduct inspections or assessments, the buyer is responsible for the costs of such investigations.

Which of the following is NOT a risk associated with using an incorrect real estate contract form? AThe property description might be incorrect or inaccurate. BImportant disclosures required by law may not be provided if an incorrect form is used. CAn incorrect form could include extra information that doesn't apply to the parties' situation. DAn incorrect form could exclude certain sections and omit material information that the parties need to know.

The property description might be incorrect or inaccurate.

When the Short Sale Addendum is used, which of these is NOT a true statement regarding other offers and additional contracts? AThe sales contract covered by this Addendum becomes null and void if the seller closes on another sales contract. In that case, nobody is entitled to a return of the earnest money. BAfter the agent submits a request for a short sale to the lienholder, the seller's agent must inform the lienholders of all the offers and contracts received. CIf a seller accepts additional offers, they may substitute an additional contract for short sale approval with the lienholder up until the point the lienholder approves the original submission. DUnless and until the parties terminate this contract, the seller is obligated to notify the buyer in writing if the seller accepts any additional contracts, substitutes an existing or additional contract for this one, closes on an existing or additional sales contra

The sales contract covered by this Addendum becomes null and void if the seller closes on another sales contract. In that case, nobody is entitled to a return of the earnest money.

Which of these is a true statement about the North Carolina sales contract? AThe sales contract is the form the prospective buyer submits to the property owner with their bid to purchase real estate. BEven after an offer is accepted, the sales contract is not a binding agreement. CThe sales contract is binding on all parties as soon as the seller receives notice of the offer. DThe sales contract is ultimately recorded with the Register of Deeds.

The sales contract is the form the prospective buyer submits to the property owner with their bid to purchase real estate.

Which of these is a true statement about the North Carolina sales contract? AThe sales contract is the form the prospective buyer submits to the property owner with their bid to purchase real estate. BEven after an offer is accepted, the sales contract is not a binding agreement. CThe sales contract is binding on all parties as soon as the seller receives notice of the offer. DThe sales contract is ultimately recorded with the Register of Deeds.

The sales contract is the form the prospective buyer submits to the property owner with their bid to purchase real estate. The North Carolina sales contract is the form the prospective buyer submits to the property owner with their bid to purchase real estate. The agreement becomes binding on all the parties when everyone has signed it, but it's not recorded with the Register of Deeds.

Which of these is a true statement about the FHA/VA Financing Addendum? AThe sections of the form to be completed depend on which financing option the buyer is pursuing. BAll sections of the form must be completed for it to be valid. CThis form is attached to every sales contract in NC regardless of whether the buyer is pursuing FHA or VA financing. DThis form is a separate contract and not part of the OPC.

The sections of the form to be completed depend on which financing option the buyer is pursuing. There are separate sections of the form for FHA financing and VA financing. Depending on which option the buyer is pursuing, that's the section that will apply. This form, which is only used when the buyer uses FHA or VA financing, will attach to and become part of the OPC.

If the parties agree that the seller will make additional improvements to the property before settlement, who is responsible for paying for such improvements? AThe seller. BThe buyer. CThe parties cannot agree on additional improvements when they use this form, as it is for completed construction. DThe parties must negotiate and document who will pay for agreed-upon improvements.

The seller

When would you use the New Construction Addendum, Standard Form 2A3-T? AThe seller built a "spec" single-family home or townhome on property the seller owns or will own. BThe seller built a condominium on property the seller owns or will own. CThe seller owns property that would be perfect for a new construction single-family home. DThe seller began construction on a townhome on property the seller owns or will own but decided to sell when construction was only one-quarter complete.

The seller built a "spec" single-family home or townhome on property the seller owns or will own. This form should be used when the seller is a licensed contractor who built a "spec" home, or when the seller engaged a licensed contractor who built a spec home on property the seller owns or will own. The spec home could be a single-family home or a townhome, but not a condominium. This form should not be used when construction is not complete.

When would you use the New Construction Addendum, Standard Form 2A3-T? AThe seller built a "spec" single-family home or townhome on property the seller owns or will own. BThe seller built a condominium on property the seller owns or will own. CThe seller owns property that would be perfect for a new construction single-family home. DThe seller began construction on a townhome on property the seller owns or will own but decided to sell when construction was only one-quarter complete.

The seller built a "spec" single-family home or townhome on property the seller owns or will own. This form should be used when the seller is a licensed contractor who built a "spec" home, or when the seller engaged a licensed contractor who built a spec home on property the seller owns or will own. The spec home could be a single-family home or a townhome, but not a condominium. This form should not be used when construction is not complete.

If the parties agree that the seller will make additional improvements to the property before settlement, who is responsible for paying for such improvements? AThe seller. BThe buyer. CThe parties cannot agree on additional improvements when they use this form, as it is for completed construction. DThe parties must negotiate and document who will pay for agreed-upon improvements.

The seller.

The seller may agree to make repairs or improvements prior to the settlement date, in Item 4 of the Additional Provisions Addendum. Which of the following is NOT a true statement: AThe seller is responsible for making agreed-upon repairs, but the buyer and seller agree to be jointly responsible for paying the costs of such repairs. BThe seller agrees to make repairs at the seller's expense, unless otherwise agreed. CThe buyer retains the right to verify repairs and improvements were completed in a "good and workmanlike" manner. DThe seller is ultimately responsible for making the agreed-upon repairs, and failure to do so means the seller is in breach of contract.

The seller is responsible for making agreed-upon repairs, but the buyer and seller agree to be jointly responsible for paying the costs of such repairs. Item 4 of the Additional Provisions Addendum form includes space to document the parties' agreement related to repairs and/or improvements that the seller will make before the Settlement date - at the seller's expense. List all agreed-upon repairs or improvements. While the seller is responsible for making the repairs, the buyer retains the right to verify that the work was completed in "a good and workmanlike manner."

Which statement regarding assessments is NOT accurate? AThe seller is responsible for paying for both the proposed and confirmed assessments. BProposed assessments are those under consideration but not yet approved. CConfirmed assessments are those approved by the settlement date. DSpecial assessments may include tax assessments or owners' association assessments.

The seller is responsible for paying for both the proposed and confirmed assessments. Special assessments can be additional tax assessments or owners' association assessments. These can either be "proposed" assessments, which are under consideration but not yet approved by the settlement date, or "confirmed' assessments, which are approved by settlement. If there are any proposed or confirmed special assessments, they must be noted in paragraph 5(b). The buyer is responsible for proposed assessments, while the seller is responsible for confirmed assessments.

What happens if a buyer is in breach of their responsibilities under a sales contract using the Buyer Possession Before Closing Addendum? AThe seller may evict the buyer using the North Carolina Summary Ejectment Proceeding. BThe seller must abide by state and federal foreclosure laws, giving the buyer the opportunity to make up missed payments. CThe buyer may have a claim to remain in the home under the theory of Adverse Possession. DThe seller may evict the buyer using the federal Eviction of Buyers Before Closing proceeding.

The seller may evict the buyer using the North Carolina Summary Ejectment Proceeding. Paragraph 14 of the Addendum contemplates a scenario where the buyer is in breach of their responsibilities under this agreement. In that case, the buyer may be evicted through a North Carolina Summary Ejectment Proceedin

All of these are potential reasons a buyer might enter into a seller possession after closing agreement with the exception of: AThe seller may not vacate the premises at the end of the term BThe buyer receives a lump sum rent payment at closing. CBuyers can have peace of mind knowing the property is not vacant. DBuyers who are not planning on moving in right away have a tenant without having to advertise for one.

The seller may not vacate the premises at the end of the term

All of these are potential reasons a buyer might enter into a seller possession after closing agreement with the exception of: AThe seller may not vacate the premises at the end of the term BThe buyer receives a lump sum rent payment at closing. CBuyers can have peace of mind knowing the property is not vacant. DBuyers who are not planning on moving in right away have a tenant without having to advertise for one.

The seller may not vacate the premises at the end of the term A buyer who is not ready to move into the property at closing can receive a rent payment for the short term between closing and when they are ready to move in. They can also take comfort in knowing the property is not sitting vacant. However, there is a risk that the seller will simply not vacate the premises at the end of the agreement.

If the agreement is terminated after the Commencement Date, all of the following are true EXCEPT: AThe seller must pay one-half of the buyer's relocation expenses. BThe buyer must immediately vacate the property. CIf the buyer does not vacate, they remain subject to the terms and conditions of the agreement. DThe buyer must pay the seller a daily hold-over fee for each day the buyer remains on the property.

The seller must pay one-half of the buyer's relocation expenses. If this contract is terminated after the Commencement Date, the buyer agrees to immediately vacate the property. If the buyer does not vacate, they will continue to be bound by the terms of this agreement and pay the seller a daily hold-over fee, as specified in the agreement. This daily fee will be payable until the buyer vacates the property or is evicted from it.

If the agreement is terminated after the Commencement Date, all of the following are true EXCEPT: AThe seller must pay one-half of the buyer's relocation expenses. BThe buyer must immediately vacate the property. CIf the buyer does not vacate, they remain subject to the terms and conditions of the agreement. DThe buyer must pay the seller a daily hold-over fee for each day the buyer remains on the property.

The seller must pay one-half of the buyer's relocation expenses. If this contract is terminated after the Commencement Date, the buyer agrees to immediately vacate the property. If the buyer does not vacate, they will continue to be bound by the terms of this agreement and pay the seller a daily hold-over fee, as specified in the agreement. This daily fee will be payable until the buyer vacates the property or is evicted from it.

Which of these is NOT a statement or certification the seller makes on the New Construction Addendum? AThe seller or their General Contractor will begin construction after closing. BThe seller or their General Contractor has completed construction of a dwelling and related improvements. CThe seller or their General Contractor was appropriately licensed. DThe seller will provide the buyer with a Certificate of Occupancy no later than at Settlement for the transaction.

The seller or their General Contractor will begin construction after closing. The seller certifies in item 1 that construction has been completed, that they or their General Contractor was appropriately licensed, and that they will provide the Buyer with a Certificate of Occupancy no later than at Settlement for the transaction.

What happens at the end of the installment term, after the buyer has made all payments? AThe seller records a deed to transfer legal title to the buyer. BThe seller records a deed to transfer equitable title to the buyer. CThe seller records a deed to transfer both equitable and legal title to the buyer. DThe buyer records a deed to transfer legal title to the seller.

The seller records a deed to transfer legal title to the buyer.

Which of the following is not a true statement about the "Settlement" date in the OPC? AThe settlement date and closing date are always the same date. BSettlement refers to the date the settlement statements should be received by the closing attorney. CThe settlement date is when the closing attorney should receive all the financing documents and the funds to complete the transaction. DThe settlement date may be before the closing sate.

The settlement date and closing date are always the same date. Item 1(k) on the OPC states the settlement date, which may or may not be the same as the closing date. "Settlement" refers to the date that the closing attorney receives all deeds, settlement statements, financing documents, and funds to complete the transactio

Which of the following is not a true statement about the "Settlement" date in the OPC? AThe settlement date and closing date are always the same date. BSettlement refers to the date the settlement statements should be received by the closing attorney. CThe settlement date is when the closing attorney should receive all the financing documents and the funds to complete the transaction. DThe settlement date may be before the closing sate.

The settlement date and closing date are always the same date. item 1(k) on the OPC states the settlement date, which may or may not be the same as the closing date. "Settlement" refers to the date that the closing attorney receives all deeds, settlement statements, financing documents, and funds to complete the transaction.

If there are unforeseen delays that prevent the seller from completing agreed-upon minor improvements by settlement, what happens? AThe time for completion will be extended if the seller notifies the buyer of the delay within five days. BThe sales contract is automatically cancelled. CThe time for completion will be extended if the seller notifies the buyer of the delay within fifteen days. DThe seller will be deemed to be in breach of the contract. There is no provision for extending the time for completion.

The time for completion will be extended if the seller notifies the buyer of the delay within five days. If there are delays in completing minor additional improvements because of the buyer's actions or negligence, changes during construction, material shortages, adverse weather, unanticipated transportation delays, or acts of God, then the time for completion of construction for additional improvements and settlement will be automatically extended. In the case of a delay, the seller must notify the buyer within five days. Failure to make such notice waives the right to an extension.

Which of these is not a disclaimer or important statement included on the FHA/VA Financing addendum? AThis addendum is deemed legally valid by the NC REALTORS Association and the NC Bar Association. BHUD does not warrant the value or condition of the property for FHA financing. CIn the event there is a conflict between the terms of this addendum and the OPC, the addendum will control. DIt is a federal crime to knowingly make false statements about any of the facts and that doing so could be punishable by fines, imprisonment or both.

This addendum is deemed legally valid by the NC REALTORS Association and the NC Bar Association.

Which of these is not a disclaimer or important statement included on the FHA/VA Financing addendum? AThis addendum is deemed legally valid by the NC REALTORS Association and the NC Bar Association. BHUD does not warrant the value or condition of the property for FHA financing. CIn the event there is a conflict between the terms of this addendum and the OPC, the addendum will control. DIt is a federal crime to knowingly make false statements about any of the facts and that doing so could be punishable by fines, imprisonment or both.

This addendum is deemed legally valid by the NC REALTORS Association and the NC Bar Association. There is a disclaimer stating that neither the NC REALTORS Association nor the NC Bar Association make any representations about the legal validity of this Addendum. The other statements are all included on the addendum.

Barbara bought a beach house from Sam and closing occurred May 1. Victoria had a rental agreement with Sam scheduled to begin December 15. Which of the following is NOT a true statement about Victoria's and Barbara's rights? AVictoria can compel Barbara to honor the existing rental, since it was made before closing. BBarbara may choose to, but is not required to, honor the rental agreement with Victoria. CIf Barbara chooses not to honor Victoria's rental agreement, she must refund any payments already made by Victoria. DSince Victoria's rental is more than 180 days after closing, she does not have the legal right to compel performance of the rental contract.

Victoria can compel Barbara to honor the existing rental, since it was made before closing. In this case, because the existing rental is scheduled for more than 180 days after closing, it is the buyer's decision (Barbara) as to whether or not she wants to honor the agreement. If she decides not to honor it, she must refund any money Victoria already paid.

At what point does the sales contract become legally binding on the parties? AWhen all parties have signed it. BWhen the prospective buyer submits it to the seller. CWhen the seller counters the original offer. DWhen the seller verbally states they are going to accept the offer.

When all parties have signed it. The sales contract becomes effective and binding on all the parties when both the buyer and seller have signed the agreement.

The seller is obligated to provide certain notifications and information under the Lead-Based Paint Addendum. Which of these is not a notification requirement? AWhen the last coat of paint was applied on the property. BAcknowledging that lead-based paint or lead-based paint hazards exist on the property. CThe possible lack of knowledge of any lead-based paint hazards on the property. DAny and all available reports and records about any potential lead-based paint hazards

When the last coat of paint was applied on the property.

The seller is obligated to provide certain notifications and information under the Lead-Based Paint Addendum. Which of these is not a notification requirement? AWhen the last coat of paint was applied on the property. BAcknowledging that lead-based paint or lead-based paint hazards exist on the property. CThe possible lack of knowledge of any lead-based paint hazards on the property. DAny and all available reports and records about any potential lead-based paint hazards.

When the last coat of paint was applied on the property.

The seller is obligated to provide certain notifications and information under the Lead-Based Paint Addendum. Which of these is not a notification requirement? AWhen the last coat of paint was applied on the property. BAcknowledging that lead-based paint or lead-based paint hazards exist on the property. CThe possible lack of knowledge of any lead-based paint hazards on the property. DAny and all available reports and records about any potential lead-based paint hazards.

When the last coat of paint was applied on the property. When signing this Addendum, the seller must disclose any known lead-based paint risks. The seller is also required to turn over all relevant reports and records or inform the buyer that no such records exist.

When would the addendum 2A9-T be used in a real estate transaction? AWhen the real estate in question contains a residential dwelling constructed prior to 1978. BWhen the buyer wishes to have the property inspected to ensure that it complies with all health codes. CWhen the real estate in question contains a residential dwelling constructed prior to 1981. DThe form is used to disclose any structural damage to the property.

When the real estate in question contains a residential dwelling constructed prior to 1978.

How is an option to purchase real estate different from preemptive rights? AWith preemptive rights, the holder cannot exercise their rights until and unless the property owner decides to sell. BWith an option to purchase real estate, the option holder cannot exercise their rights until and unless the property owner decides to sell. CWith preemptive rights, the holder can force a sale even if the property owner doesn't want to sell. DWith an option to purchase real estate, the option holder is legally obligated to purchase the property if the owner decides to sell.

With preemptive rights, the holder cannot exercise their rights until and unless the property owner decides to sell. An option to purchase is more powerful than preemptive rights like a right of first refusal or a right of first offer. With those types of rights, the holder cannot exercise the rights until and unless the property owner decides to sell the property. With an option to purchase, the option holder can decide to exercise the option at any point during the contractually-specified time period, effectively forcing a sale - even if the seller does not want to sell at that moment in time. While the option holder has the right to purchase, they are not legally obligated to do so.

The Additional Provisions Addendum includes five numbered items. What should the parties do if one of the provisions does not apply to their situation? AWrite "N/A" on the line next to the item number. BLeave the line next to the item number blank. CInitial the line next to the item number. DWork with a real estate attorney to draft an addendum that does not include the unnecessary provision(s).

Write "N/A" on the line next to the item number. If a particular provision will not apply to the sale, write "N/A" on the line next to the item number, so it is clear that it was not left blank by mistake.

Does the 2A9-T form allow for the buyer to inspect the property to assess lead poisoning risks? AYes, and the buyer is strongly encouraged to do so. BYes, however the buyer is discouraged from doing so. Instead, the buyer should rely on the disclosure form provided by the seller. CNo, the buyer does not have the right to make the assessment until after the due diligence period has expired. DNo, the buyer can rely on the disclosure form provided by the seller.

Yes, and the buyer is strongly encouraged to do so. The buyer is strongly encouraged to conduct a separate investigation of the property during the Due Diligence Period.

Are real estate licensees allowed to help clients select and complete pre-printed contract forms? AYes. Although real estate rules prohibit licensees from providing legal services, there is an exemption for helping clients fill out pre-printed forms. BNo, state law and real estate rules prohibit it. CYes. Licensees may help clients with pre-printed forms and may propose and draft alternate language if a section does not fit the client's situation. DNo. A licensed attorney must choose the forms and help clients fill them out; real estate professionals may not do so.

Yes. Although real estate rules prohibit licensees from providing legal services, there is an exemption for helping clients fill out pre-printed forms.

May agents point out information about offers they believe their clients should consider? AYes. An agent should point out information that he believes may be advantageous or disadvantageous. BNo. Agents may not draw clients' attention to specific information contained in offers received. CYes, if the client has signed a separate addendum authorizing to do so. DNo. Agents who point out specific information in an offer are, in effect, making independent decisions for their clients.

Yes. An agent should point out information that he believes may be advantageous or disadvantageous. Agents do not have the authority to withhold offers, nor may agents independently "accept" or "reject" offers received. Agents can, and should, point out information about offers that the parties may want to consider. For example, if there is information about an offer that could be disadvantageous, such as a buyer being a potential financial risk, agents should bring these things up with their clients. There is no need for the client to sign a separate authorization.

Can the standard sales contract be used for properties constructed before 1978? AYes. In addition to the standard sales contract, the parties will also include and sign the Lead-Based Paint Addendum. BNo. The standard sales contract is used only when the property was built after 1978. CYes. Lead-based paint disclosures for properties built before 1978 are included in the standard sales contract without the need attaching a separate contract addendum. DNo, unless the seller certifies in an affidavit that no lead-based paint was used on the premises.

Yes. In addition to the standard sales contract, the parties will also include and sign the Lead-Based Paint Addendum. For properties that may include lead-based paint risks, the Lead-Based Paint Addendum is used in addition to the standard North Carolina sales contract.

A seller decides to sell their house which was constructed in 1970. The seller does not want to include the Lead-Based Paint Addendum, reasoning that the house is more likely to sell without it. Are there any problems with this approach? AYes. The form is legally required when the transaction involves a structure built prior to 1978. BYes. The form must be included with every real estate contract. CNo. The seller may exclude the form if they reasonably believe it would dissuade buyers from considering the property. DNo. The buyer must request the form be added to the contract if they so choose.

Yes. The form is legally required when the transaction involves a structure built prior to 1978. The Lead-Based Paint Addendum is required by law, for any and all residential dwellings constructed prior to 1978.

How many days do brokers have to deposit a client's earnest money into a trust or escrow account? Ano later than three days after acceptance of the offer to purchase or lease property Bno later than five days after acceptance of the offer to purchase or lease property Cno later than three days after the buyer submits the offer to purchase or lease property regardless of whether the seller has accepted it Dno later than five days after the buyer submits the offer to purchase or lease property regardless of whether the seller has accepted it.

no later than three days after acceptance of the offer to purchase or lease property Brokers who are in receipt of a client's earnest money must deposit the funds into a trust or escrow account no later than three days after acceptance of the offer to purchase or lease property. The rules allow brokers to hold and safeguard earnest money checks until the contract has been accepted and executed by all parties. However, if earnest money is paid in cash the broker must immediately deposit it into the trust or escrow account.