NC 302 POST LICENSING FINAL EXAM UPDATED
QUESTIONS AND ANSWERS SURE A+
✔✔Mutual Mistakes - ✔✔Mistake of "Material Fact" - read pg. 283 - 284
May allow buyer to rescind the contract and be refunded all monies
Does NOT apply to "Mistakes of Law"
✔✔Fraud & Misrepresentation - ✔✔Fraud makes contracts voidable
Willful misrepresentations or omissions
Of material facts
Make the contract voidable by the person deceived
✔✔Unfair or deceptive trade practices act: - ✔✔A misleading opinion or false
inducement
Fails to disclose material facts
Misleading advertising
Misrepresentation of the nature of a guarantee
This applies to real estate professionals and sellers who regularly trade in the business
Does not apply to an owner who does not regularly act in the business
✔✔Discharge of Contracts: [TEST QUESTION] p g. 290-291 - ✔✔Release
Novation (the substitution of a new contract in place of an old one)
Subsequent modification
Accord & Satisfaction
Cancellation
✔✔Contract Assignments - ✔✔Generally assignable
Unless contract prohibits
Assignors & Assignees
Assignee is primarily liable
Assignor remains secondarily liable
✔✔NC Requires Consent Prior to Assignment - ✔✔The NC offer to purchase and
contract requires the permission and consent of the parties in order to assign rights
under the agreement
✔✔Remedies for Breach page 295 - ✔✔Compensatory
Consequential
Liquidated
Specific Performance
Rescission
✔✔Drafting of Contracts - ✔✔No "drafting" of contracts
Don't engage in the unauthorized practice of law
,"Fill-in" or "Complete" preprinted forms
T-from (Number) -- it's a transaction form.
✔✔The prohibition is against drafting contracts for others - ✔✔It does not prohibit a
buyer or seller from changing their own contracts
If a client wants to alter the contract, they should be advised to consult an attorney
✔✔The Role of the Commission - ✔✔Don't create contracts
Don't provide the forms
Don't approve contracts
Create rules regarding the provisions contracts must contain
Give licenses and regulates licenses
✔✔Parol Evidence Rule - ✔✔previous oral negotiations and statements are superseded
by the written contract
✔✔Basic Rules of interpreting contracts - ✔✔A contract is interpreted as a whole
Words are given ordinary meaning
Handwritten provisions outweigh preprinted form language
Clear or ambiguous language is construed against the drafter of the document
Buyer or seller can extend for 14 days
✔✔Offer and Acceptance - ✔✔Identity of the parties: Names of Seller and Buyer (full
legal names) - get the seller's name on the deed
Identity of the Property -- put in an address, right city, county, zip, legal description,
subdivision, etc. {TEST QUESTION}
Purchase PRICE & MONEY - Time is of the essence
Failure to Deliver Funds by Due Dates - You give them the money but the check
bounces, you have one banking day to fix it.
The earnest money deposit [TEST QUESTION]
Paragraph E in the contract -- READ ITTTTT
Identity of the escrow agent
Effective date of the contract - the date that the last one of buyer and seller has signed
or initialed the offer or the final counter, if any. Such signing or initialing is
communicated to the party
Due diligence definition
Due diligence fee TEST QUESTION!!! READ IT (i) -- who keeps it, when is it refunded
Due diligence period and settlement - time is of the essence -- TQ!!!
Settlement -- the execution and delivery to the closing attorney of all docs to complete
the transaction, including the deed, settlement statement, deed of trust and any other
loan or conveyance docs and the closing attorney's receipt of all funds necessary to
complete transactions.
Closing (M) -- READ FOR TEST!!! ALL IN PURCHASE CONTRACT WHICH IS PAGE
80 OR SO OF BOOKLET
compilation of legal process which transfers title / recording of the deed. Recording of
the deed = closing
, Closing = practice of law use of non-attorneys -- TEST QUESTION!!!
WARNING: THE NORTH CAROLINA STATE BAR HAS DETERMINED THAT THE
PERFORMANCE OF MOST ACTS .....
They are still supervised, legalities are kept, this happens in refinances more than
purchases
Special Assessments - gov or HOA
Fixtures & Exclusions --- TEST QUESTION!!!
What is a fixture and what isn't a fixture -- all of the following are considered fixtures
except
2. (a) in contract
RPOADS - disclosu
✔✔NC is a Caveat Emptor state - ✔✔The principle that the buyer alone is responsible
for checking the quality and suitability of goods before a purchase is made.
✔✔All prior to closing: - ✔✔All inspections performed
Property investigation
**Loan in place & secured
Insurance secured
Appraisal completed
**Repairs completed
**Walk-through
**Any cancellation for any reason by the buyer after the DD period will result in a forfeit
of both DD fees and earnest money deposits
✔✔Buyer;s DD includes: - ✔✔Restrictive covenants
Septic/sewer
Percolation Tests - for soil suitability
Sewer connections require a certification of connection permit
Community water system/community sewer system is a MATERIAL FACT
***
✔✔Insurance Issues: - ✔✔Flood certifications
FEMA flood plain
**CLUE REPORTS!!
✔✔Title insurance - ✔✔The attorney's opinion letter
Backed by title insurance policy (Lender & Owner)**
✔✔Clearing Title Defects & Encumbrances: - ✔✔Mortgages & Deeds of Trust
Affidavits on Mechanic's Liens
Transfer of leases and deposits
✔✔Seller's Doc Prep: - ✔✔Deed
Affidavit regarding mechanic's liens
QUESTIONS AND ANSWERS SURE A+
✔✔Mutual Mistakes - ✔✔Mistake of "Material Fact" - read pg. 283 - 284
May allow buyer to rescind the contract and be refunded all monies
Does NOT apply to "Mistakes of Law"
✔✔Fraud & Misrepresentation - ✔✔Fraud makes contracts voidable
Willful misrepresentations or omissions
Of material facts
Make the contract voidable by the person deceived
✔✔Unfair or deceptive trade practices act: - ✔✔A misleading opinion or false
inducement
Fails to disclose material facts
Misleading advertising
Misrepresentation of the nature of a guarantee
This applies to real estate professionals and sellers who regularly trade in the business
Does not apply to an owner who does not regularly act in the business
✔✔Discharge of Contracts: [TEST QUESTION] p g. 290-291 - ✔✔Release
Novation (the substitution of a new contract in place of an old one)
Subsequent modification
Accord & Satisfaction
Cancellation
✔✔Contract Assignments - ✔✔Generally assignable
Unless contract prohibits
Assignors & Assignees
Assignee is primarily liable
Assignor remains secondarily liable
✔✔NC Requires Consent Prior to Assignment - ✔✔The NC offer to purchase and
contract requires the permission and consent of the parties in order to assign rights
under the agreement
✔✔Remedies for Breach page 295 - ✔✔Compensatory
Consequential
Liquidated
Specific Performance
Rescission
✔✔Drafting of Contracts - ✔✔No "drafting" of contracts
Don't engage in the unauthorized practice of law
,"Fill-in" or "Complete" preprinted forms
T-from (Number) -- it's a transaction form.
✔✔The prohibition is against drafting contracts for others - ✔✔It does not prohibit a
buyer or seller from changing their own contracts
If a client wants to alter the contract, they should be advised to consult an attorney
✔✔The Role of the Commission - ✔✔Don't create contracts
Don't provide the forms
Don't approve contracts
Create rules regarding the provisions contracts must contain
Give licenses and regulates licenses
✔✔Parol Evidence Rule - ✔✔previous oral negotiations and statements are superseded
by the written contract
✔✔Basic Rules of interpreting contracts - ✔✔A contract is interpreted as a whole
Words are given ordinary meaning
Handwritten provisions outweigh preprinted form language
Clear or ambiguous language is construed against the drafter of the document
Buyer or seller can extend for 14 days
✔✔Offer and Acceptance - ✔✔Identity of the parties: Names of Seller and Buyer (full
legal names) - get the seller's name on the deed
Identity of the Property -- put in an address, right city, county, zip, legal description,
subdivision, etc. {TEST QUESTION}
Purchase PRICE & MONEY - Time is of the essence
Failure to Deliver Funds by Due Dates - You give them the money but the check
bounces, you have one banking day to fix it.
The earnest money deposit [TEST QUESTION]
Paragraph E in the contract -- READ ITTTTT
Identity of the escrow agent
Effective date of the contract - the date that the last one of buyer and seller has signed
or initialed the offer or the final counter, if any. Such signing or initialing is
communicated to the party
Due diligence definition
Due diligence fee TEST QUESTION!!! READ IT (i) -- who keeps it, when is it refunded
Due diligence period and settlement - time is of the essence -- TQ!!!
Settlement -- the execution and delivery to the closing attorney of all docs to complete
the transaction, including the deed, settlement statement, deed of trust and any other
loan or conveyance docs and the closing attorney's receipt of all funds necessary to
complete transactions.
Closing (M) -- READ FOR TEST!!! ALL IN PURCHASE CONTRACT WHICH IS PAGE
80 OR SO OF BOOKLET
compilation of legal process which transfers title / recording of the deed. Recording of
the deed = closing
, Closing = practice of law use of non-attorneys -- TEST QUESTION!!!
WARNING: THE NORTH CAROLINA STATE BAR HAS DETERMINED THAT THE
PERFORMANCE OF MOST ACTS .....
They are still supervised, legalities are kept, this happens in refinances more than
purchases
Special Assessments - gov or HOA
Fixtures & Exclusions --- TEST QUESTION!!!
What is a fixture and what isn't a fixture -- all of the following are considered fixtures
except
2. (a) in contract
RPOADS - disclosu
✔✔NC is a Caveat Emptor state - ✔✔The principle that the buyer alone is responsible
for checking the quality and suitability of goods before a purchase is made.
✔✔All prior to closing: - ✔✔All inspections performed
Property investigation
**Loan in place & secured
Insurance secured
Appraisal completed
**Repairs completed
**Walk-through
**Any cancellation for any reason by the buyer after the DD period will result in a forfeit
of both DD fees and earnest money deposits
✔✔Buyer;s DD includes: - ✔✔Restrictive covenants
Septic/sewer
Percolation Tests - for soil suitability
Sewer connections require a certification of connection permit
Community water system/community sewer system is a MATERIAL FACT
***
✔✔Insurance Issues: - ✔✔Flood certifications
FEMA flood plain
**CLUE REPORTS!!
✔✔Title insurance - ✔✔The attorney's opinion letter
Backed by title insurance policy (Lender & Owner)**
✔✔Clearing Title Defects & Encumbrances: - ✔✔Mortgages & Deeds of Trust
Affidavits on Mechanic's Liens
Transfer of leases and deposits
✔✔Seller's Doc Prep: - ✔✔Deed
Affidavit regarding mechanic's liens
