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Knowledge Development Topic 5: Agency –
Offer to Purchase and Contract.
Q1. Under the NC Standard Offer to Purchase and Contract (Form 2-T), the buyer's due diligence
period is:
A) The time for the seller to find a new home
B) The negotiated time during which the buyer may inspect the property and terminate for any
reason
C) The time for the lender to approve the loan
D) The time for the attorney to prepare closing documents
✔ Correct Answer: B
The due diligence period is a specific number of days negotiated by the parties during which the
buyer may conduct inspections and terminate for any reason (or no reason).
Q2. What is the due diligence fee under Form 2-T?
A) A non-refundable fee paid directly to the seller for the right to conduct due diligence
B) An additional earnest money deposit held in escrow
C) A fee paid to the buyer's agent
D) A refundable deposit for the home inspection
✔ Correct Answer: A
The due diligence fee is paid directly to the seller (not held in escrow) and is non-refundable
unless the seller breaches the contract.
Q3. If a buyer terminates the contract during the due diligence period for any reason, what
happens to the due diligence fee?
A) It is returned to the buyer in full
,B) It is split 50/50 between buyer and seller
C) It is retained by the seller
D) It is paid to the buyer's agent
✔ Correct Answer: C
The due diligence fee is non-refundable to the buyer if the buyer terminates for any reason
allowed under the contract.
Q4. What happens to the earnest money if a buyer terminates during the due diligence period?
A) Earnest money is forfeited to the seller
B) Earnest money is returned to the buyer
C) Earnest money is split 50/50
D) Earnest money is paid to the listing broker
✔ Correct Answer: B
Earnest money is refundable to the buyer if the buyer terminates during the due diligence
period. The seller keeps only the due diligence fee.
Q5. A buyer pays a $2,000 due diligence fee and $5,000 earnest money. The buyer terminates
during the due diligence period. How much does the buyer lose?
A) $7,000
B) $5,000
C) $2,000
D) $0
✔ Correct Answer: C
The buyer loses only the $2,000 due diligence fee. The $5,000 earnest money is returned.
Q6. A buyer pays a $3,000 due diligence fee and $10,000 earnest money. The seller breaches
the contract before closing. What happens?
A) Buyer gets only earnest money back
B) Buyer gets only due diligence fee back
C) Buyer gets both earnest money and due diligence fee back, plus may sue for damages
D) Buyer gets nothing
, ✔ Correct Answer: C
If the seller breaches, the buyer is entitled to return of both the earnest money and the due
diligence fee, plus potential damages.
Q7. Under Form 2-T, if no due diligence period is specified, what happens?
A) The contract is void
B) There is no due diligence period, and the buyer accepts the property "as is"
C) A standard 14-day due diligence period is implied
D) The buyer may terminate at any time before closing
✔ Correct Answer: B
If the due diligence period is left blank or zero, the buyer has no contractual right to terminate
for inspections. The property is purchased "as is."
Q8. Can the due diligence period be extended after the contract is signed?
A) No, it is fixed and cannot be changed
B) Yes, but only by a written amendment signed by both parties
C) Yes, verbally if both agents agree
D) Only if the buyer pays an additional fee
✔ Correct Answer: B
Any extension of the due diligence period requires a written amendment signed by both buyer
and seller.
Q9. Under Form 2-T, is obtaining a loan a contingency that allows the buyer to terminate after
the due diligence period?
A) Yes, at any time before closing
B) No. The buyer's obligation to purchase is NOT contingent on obtaining a loan. If the buyer
isn't approved before due diligence expires, they may terminate and get earnest money
returned only if they notify seller during due diligence
C) Yes, but only if the buyer pays an additional fee
D) No, the buyer must close even without a loan
✔ Correct Answer: B
The buyer must notify the seller of loan denial during the due diligence period to terminate with
Vault: High-Quality Exam Practice
Questions with Expertly Written, Accurate &
Detailed Answers for Comprehensive
Knowledge Development Topic 5: Agency –
Offer to Purchase and Contract.
Q1. Under the NC Standard Offer to Purchase and Contract (Form 2-T), the buyer's due diligence
period is:
A) The time for the seller to find a new home
B) The negotiated time during which the buyer may inspect the property and terminate for any
reason
C) The time for the lender to approve the loan
D) The time for the attorney to prepare closing documents
✔ Correct Answer: B
The due diligence period is a specific number of days negotiated by the parties during which the
buyer may conduct inspections and terminate for any reason (or no reason).
Q2. What is the due diligence fee under Form 2-T?
A) A non-refundable fee paid directly to the seller for the right to conduct due diligence
B) An additional earnest money deposit held in escrow
C) A fee paid to the buyer's agent
D) A refundable deposit for the home inspection
✔ Correct Answer: A
The due diligence fee is paid directly to the seller (not held in escrow) and is non-refundable
unless the seller breaches the contract.
Q3. If a buyer terminates the contract during the due diligence period for any reason, what
happens to the due diligence fee?
A) It is returned to the buyer in full
,B) It is split 50/50 between buyer and seller
C) It is retained by the seller
D) It is paid to the buyer's agent
✔ Correct Answer: C
The due diligence fee is non-refundable to the buyer if the buyer terminates for any reason
allowed under the contract.
Q4. What happens to the earnest money if a buyer terminates during the due diligence period?
A) Earnest money is forfeited to the seller
B) Earnest money is returned to the buyer
C) Earnest money is split 50/50
D) Earnest money is paid to the listing broker
✔ Correct Answer: B
Earnest money is refundable to the buyer if the buyer terminates during the due diligence
period. The seller keeps only the due diligence fee.
Q5. A buyer pays a $2,000 due diligence fee and $5,000 earnest money. The buyer terminates
during the due diligence period. How much does the buyer lose?
A) $7,000
B) $5,000
C) $2,000
D) $0
✔ Correct Answer: C
The buyer loses only the $2,000 due diligence fee. The $5,000 earnest money is returned.
Q6. A buyer pays a $3,000 due diligence fee and $10,000 earnest money. The seller breaches
the contract before closing. What happens?
A) Buyer gets only earnest money back
B) Buyer gets only due diligence fee back
C) Buyer gets both earnest money and due diligence fee back, plus may sue for damages
D) Buyer gets nothing
, ✔ Correct Answer: C
If the seller breaches, the buyer is entitled to return of both the earnest money and the due
diligence fee, plus potential damages.
Q7. Under Form 2-T, if no due diligence period is specified, what happens?
A) The contract is void
B) There is no due diligence period, and the buyer accepts the property "as is"
C) A standard 14-day due diligence period is implied
D) The buyer may terminate at any time before closing
✔ Correct Answer: B
If the due diligence period is left blank or zero, the buyer has no contractual right to terminate
for inspections. The property is purchased "as is."
Q8. Can the due diligence period be extended after the contract is signed?
A) No, it is fixed and cannot be changed
B) Yes, but only by a written amendment signed by both parties
C) Yes, verbally if both agents agree
D) Only if the buyer pays an additional fee
✔ Correct Answer: B
Any extension of the due diligence period requires a written amendment signed by both buyer
and seller.
Q9. Under Form 2-T, is obtaining a loan a contingency that allows the buyer to terminate after
the due diligence period?
A) Yes, at any time before closing
B) No. The buyer's obligation to purchase is NOT contingent on obtaining a loan. If the buyer
isn't approved before due diligence expires, they may terminate and get earnest money
returned only if they notify seller during due diligence
C) Yes, but only if the buyer pays an additional fee
D) No, the buyer must close even without a loan
✔ Correct Answer: B
The buyer must notify the seller of loan denial during the due diligence period to terminate with
