Superior Real Estate School Exam Questions And Answers With Well Detailed Correct Solutions Latest 2025 All of the following are physical characteristics of land except: A. Indestructibility B. Uniqueness C. Immobility D. Scarcity - correct answerD.

Superior Real Estate School Exam Questions And Answers With Well Detailed Correct Solutions Latest 2025 All of the following are physical characteristics of land except: A. Indestructibility B. Uniqueness C. Immobility D. Scarcity - correct answerD. Scarcity Under the doctrine of specific performance, the party harmed by breach of a real estate contract can ask a judge to force the breaching party to carry out the terms of the contract rather than order the breaching party to pay monetary damages. Which physical characteristic of land is the basis for the doctrine of specific performance? A. Indestructibility B. Uniqueness C. Immobility D. Permanence of Investment - correct answerB. Uniqueness Which of the following is considered to have the greatest impact on the value of a property? A. Area Preference B. Permanence of Investment C. Scarcity D. Uniqueness - correct answerA. Area Preference The concept by which land would increase automatically along a river or stream is known as: A. Accretion B. Littoral Rights C. Avulsion D. Reliction - correct answerA. Accretion The owner of a house wants to fence the yard for a dog. When the fence is erected, the fencing materials are converted to real estate by: A. Severance B. Annexation C. Immobility D. Indestructibility - correct answerB. Annexation A deed conveyed ownership to a grantee "so long as the existing building on the property is not destroyed." Following the transfer, the original grantor has what type of interest? A. Life Estate B. ongoing ownership in the property that lasts as long as the condition C. Fee Simple Estate D. Reversionary Estate - correct answerD. Reversionary Estate A woman conveys a life estate to her son-in-law and stipulates that upon his death the estate will pass to her grandson. The grandson has an: A. Estate in Reversion B. Estate in Remainder C. Estate Pur Autre Vie D. Estate for the life of another - correct answerB. Estate in Remainder A person who acquired ownership that can be inherited, with the provision "that the land must always be used for recreational purposes," has: A. a fee simple absolute estate B. a defeasible fee C. a fee simple to a condition subsequent estate D. an estate that cannot be sold - correct answerB. a defeasible fee A brother and sister bought a commercial building and took title as joint tenants with right of survivorship. The brother died. The sister now owns the building: A. as a joint tenant with right of survivorship with her brother's heirs B. in severalty C. as a tenant in common with her brother's heirs D. as a life tenant with her brother's heirs having remainder interests - correct answerB. in severalty Co-owners of a fee simple interest in a small office building are neither related to nor a creditor to each other. One owner dies intestate. The surviving owner would become the sole owner of the property under which of the following rights? A. adverse possession B. reversionary interest C. survivorship D. foreclosure - correct answerC. survivorship Three joint tenants with rights of survivorship own a parcel of land. One owner sells his interest to a long-time friend. After the conveyance, the remaining original owners: A. become tenants in common with each other B. become tenants in common with each other and the newest owner C. become joint tenants with the newest owner D. remain joint tenants with each other - correct answerD. remain joint tenants with each other The owner of a condominium unit learns that a neighbor has failed to pay his condominium association dues. If the neighbor does NOT pay the dues: A. a lien can be filed against the condominium complex B. a lien can be filed against the neighbor's unit C. a lien can only be filed against the common areas of the condominium D. the taxing authority can order the condominium be dissolved - correct answerB. a lien can be filed against the neighbor's unit The severalty owner of a parcel of land sells it. The buyer insists that the owner's wife also sign the deed. The purpose of obtaining the wife's signature is to: A. terminate any rights the wife may have in the property B. defeat any curtsey rights C. provide evidence that the owner is married D. subordinate the wife's signature to the buyer - correct answerA. terminate any rights the wife may have in the property Vonda Lee and William purchased a home together in 2003 with the deed simply listing both of them as "grantees" without specifying how they were to hold title. They married each other in early 2004. How do they now likely hold title to the house purchased in 2003 if they have not made any other adjustments to their deed? A. tenancy by the entirety B. tenancy in severalty C. joint tenancy D. tenancy in common - correct answerD. tenancy in common Which of the following statements is true? I. A life estate is a freehold estate. II. It is possible to have a freehold estate and a non-freehold estate on the same property at the same time. A. I only B. II only C. Both I and II D. Neither I nor II - correct answerC. Both I and II Which of the following would be considered real property? I. Electrical switch plate covers II. Gas logs attached to a fireplace A. I only B. II only C. Both I and II D. Neither I nor II - correct answerC. Both I and II Jason's property is adjacent to a navigable river in North Carolina and Jason wants to sell his property. Which of the following statements is true? A. Jason can restrict the public from using that portion of the river that is next to his property B. An owner can sell the property and retain his rights to access the river once it is sold C. Jason's land ends at the center of the waterway D. If Jason obtains proper permits and builds a dock on the river, the dock will automatically become owned by the public - correct answerB. An owner can sell the property and retain his rights to access the river once it is sold The owner of two acres of land sold one acre but retained an appurtenant easement over that land for ingress and egress to his retained lot. The retained lot: A. is the dominant tenement B. serves as the servient tenement C. can be cleared of the easement when it is sold to a third party D. is subject to an easement in gross - correct answerA. is the dominant tenement Which of the following liens generally holds first priority? A. mortgage lien B. purchase money lien C. ad valorem real estate tax lien D. federal income tax lien - correct answerC. ad valorem real estate tax lien Title to real estate passes when a valid deed is: A. signed and recorded B. signed, delivered and accepted C. filed and microfilmed D. executed and mailed - correct answerB. signed, delivered and accepted Which of the following is an essential element of a valid North Carolina deed? A. a seal B. recordation C. the signature of the grantee D. words of conveyance - correct answerD. words of conveyance Regarding title recordation, which of the following statement(s) is/are true? l. Physically taking possession of the property is constructive notice. ll. Public notice of recording documents is actual notice. A. l only B. ll only C. Both l and ll D. Neither l nor ll - correct answerD. Neither l nor ll The recording of a deed: A. is required in order to fully transfer the title of the real estate B. makes the deed enforceable C. ensures the grantee's interest in a parcel of real estate D. warrants the grantee's title to real property - correct answerB. makes the deed enforceable Determine the excise tax to be paid on a house that sells for $268,210 if the buyer makes a $25,000 down payment and the seller takes back a second mortgage for $50,000? A. $536.42 B. $537 C. $533 D. $538 - correct answerB. $537 Deed restrictions can be created by all of the following, EXCEPT: A. deeds B. statutes C. written agreements D. general plans of a subdivision - correct answerB. statutes The enforcement of zoning requirements occurs by: A. local homeowners' associations B. local municipalities through the Enabling Act C. The NC Department of Transportation D. local homeowners' associations - correct answerB. local municipalities through the Enabling Act A seller has indicated to the listing agent that the heating closet area is lined with asbestos. The seller tells the listing agent that the asbestos was tested and since it was not friable posed no environmental hazard. Which of the following would be an appropriate comment for the listing agent to make to prospective buyers? A. There is no dangerous asbestos in this home. B. The asbestos was tested and poses no danger to anyone who occupies the home. C. The home has asbestos. D. I am not aware of any dangerous asbestos in the home. - correct answerC. The home has asbestos. An unlicensed assistant may do all of the following activities, EXCEPT: A. assist the licensee with administrative duties and tasks B. exhibit units for rent and provide tenants with information about the lease agreement C. exhibit homes that are for sale and show the buyer around the home D. fill in preprinted lease agreements and collect monies from prospective tenants, as long as the employee does not negotiate rents - correct answerC. exhibit homes that are for sale and show the buyer around the home All of the following statements are correct regarding the NCREC, EXCEPT: A. They shall be entitled to the services of the Attorney General of North Carolina. B. They shall not make rules or regulations regulating commissions, salaries, or fees to be charged by licensees. C. They shall make rules to allow a licensee to pay a travel agent who does not have a real estate license a referral fee. D. They shall have the power to make reasonable bylaws, rules and regulations that are inconsistent with the provisions of the general statutes. - correct answerD. They shall have the power to make reasonable bylaws, rules and regulations that are inconsistent with the provisions of the general statutes. General Statute 93A-2 states, in part, that a real estate broker is any person who, for compensation or valuable consideration or the promise thereof, lists or offers to list property. All of the following would constitute valuable consideration, EXCEPT: A. a listing agent is promised a weekend trip to Myrtle Beach if the agent puts the home under contract before the end of the year B. the owner of a jewelry store gives his buyer's agent a diamond bracelet as a way of saying thank you for the agent's hard work C. a butcher offers a year's supply of top sirloin to his agent if they can purchase an investment property for 50% off the asking price D. the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you - correct answerD. the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you A nonprovisional real estate licensee is on inactive status. They are NOT holding themselves out to be available to help others buy, sell, rent or auction property. A friend asks for their help in a real estate transaction. Which of the following is TRUE? A. Because they did not actively advertise or solicit the business the licensee may assist their friend, but they will have to be paid directly, not through the brokerage firm. B. The agent may assist their friend so long as they activate their license before the transaction closes and they are paid. C. An agent who's license is inactive may not earn any fees or represent others in a real estate transaction. D. Because the agent is a full broker they are not required to affiliate with a BIC and therefore the licensee may represent their friend and collect a fee. - correct answerC. An agent who's license is inactive may not earn any fees or represent others in a real estate transaction. Which of the following do not need a real estate license to sell property? A. a corporation that owns property and is using an employee to sell the property B. an auction house that deals in the sale of real property C. an attorney who regularly and routinely assists others in the buying and selling of real property D. an unlicensed assistant sitting in an open house - correct answerA. a corporation that owns property and is using an employee to sell the property Which of the following is INCORRECT about the post licensing requirement of a provisional broker? A. the due date of the post licensing education is the anniversary date of licensure B. post licensing consists of three 30 hour courses which may be taken in any order and must be completed within 3 years of the date of licensure C. post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th D. if a provisional broker does not complete post licensing by the deadlines their license will become inactive - correct answerC. post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th If a licensee does not pay their renewal fee on or before June 30 of the year, what is the time period for the licensee to reinstate their license without the imposition of additional educational requirements? A. 30 days B. 60 days C. 6 months D. one year - correct answerC. 6 months A corporation selling its own properties through the actions of its own salaried W2 employees: A. is not required to have a firm license, but may not use its own employees B. can use its own unlicensed employees, but must have a firm license C. needs neither a firm license nor do its employees need to be licensed D. need not have a license, but must affiliate with an NC broker-in-charge - correct answerC. needs neither a firm license nor do its employees need to be licensed In regard to real estate fees and commissions between brokerages and clients what is the role of the North Carolina Real Estate Commission: A. only sets maximum limits on the fees and commissions B. has no role in fees or commissions C. only becomes involved when a complaint if filed D. regulates the commissions exchanged between brokers, but not those exchanged with clients - correct answerB. has no role in fees or commissions All of the following are requirements of licensure for a NC Real Estate license, EXCEPT: A. Possess a social security number B. Be a United States citizen C. File a complete application and fee D. Be a resident of North Carolina - correct answerD. Be a resident of North Carolina Judy is an unlicensed individual. Her parents are selling their own home as For Sale by Owner without the representation of a real estate licensee. While her parents are on vacation, Judy shows the home to some interested potential buyers and has long conversations with them about the conditions under which they may purchase her parent's home. Judy's parents do not pay her in cash but instead offer to send on an upcoming vacation. Is Judy in violation of NC Licensing Law? A. No because the home is her parent's own property and it is therefore exempt from the licensure requirement. B. No, because Judy did not receive any cash payment for her activity. C. Yes, Judy is engaged in the business of real estate without a license D. Yes because Judy is legally required to obtain a power of attorney from her parents in this instance. - correct answerC. Yes, Judy is engaged in the business of real estate without a license All of the following require the refiling of an applicant's application for a NC Real Estate license, EXCEPT: A. If the applicant delays taking the examination until after the 180 expiration of their examination eligibility period B. If the license was expired for a period of more than 6 months C. If the license was surrendered or revoked for any period of time D. If the license was inactive for more than 2 years - correct answerD. If the license was inactive for more than 2 years So long as it is part of his or her duties, is it legal for an unlicensed assistant to solicit listings for the broker? A. Yes, if it is part of a written job description B. No, soliciting listings is the exclusive responsibility of the broker-in-charge C. Yes, because he or she is being paid a salary not a commission D. No, active participation in soliciting real estate business requires a real estate license - correct answerD. No, active participation in soliciting real estate business requires a real estate license All of the following are following are considered exempt from licensure and considered to be dealing with their own property, EXCEPT? A. the general partners of a partnership B. the managers of an LLC C. the officers, directors and W2 salaried employees of a corporation D. a sole proprietor and their W2 salaried employees - correct answerD. a sole proprietor and their W2 salaried employees A provisional broker obtains their NC real estate license on April 15th and joins a real estate firm. In order to remain active, the broker must pay the renewal fee to the NC Real Estate Commission on or before: A. June 30 of the current year B. June 30 of the following year C. June 10 of the current year D. December 31 of the current year - correct answerA. June 30 of the current year All of the following are true under the NC Condominium Act, EXCEPT: A. the units are usually separately taxed and assessed B. there must be a unit owner's association prior to the transfer of the first unit C. a unit owner is prohibited from ownership of land and must take only title to their individual unit. D. if the buyer cancels within the 7 day rescission period all money must be returned promptly with no penalty - correct answerC. a unit owner is prohibited from ownership of land and must take only title to their individual unit. In a NC condominium project, only certain owners have reserved parking spaces and garages. Under the NC Condominium Act, these areas would be known as: A. Shared special assessments B. Limited condo areas C. Areas owned by the condominium owners association D. Exclusive rights areas - correct answerB. Limited condo areas How long does a provisional broker have to activate their license from the date of licensure? A. 180 days B. there is no required time period for license activation C. 30 days D. 1 year from the date of licensure - correct answerB. there is no required time period for license activation Can a real estate licensee renew an inactive license? A. Yes, but they must pay a penalty for being inactive B. Yes, because that will prevent the license from being expired C. No, a licensee cannot renew an inactive license because inactive means they have not completed the required education D. No, a licensee cannot renew an inactive license without refiling a license application - correct answerB. Yes, because that will prevent the license from being expired Under the NC Mechanic's Lien statute an owner of property must designate a mechanic's lien agent (MLA) under which of the following situations? A. an owner who is making improvements to public buildings B. the improvements are less than $30,0000 C. the improvements are to a primary residence D. a new roof is being placed on a vacation rental unit that costs $42,000 - correct answerD. a new roof is being placed on a vacation rental unit that costs $42,000 Jack is a licensed real estate professional in Illinois. He has been a broker for many years, but is not licensed in NC. Jack has a friend who wants to purchase a home in Charlotte, NC. In regard to the representation of this buyer all of the following are TRUE, EXCEPT: A. Jack may refer the buyer to a licensed NC broker and receive a referral fee even though he is not licensed in NC. B. Jack may meet with the buyer in Illinois and explain the purchase process and answer questions about the NC transaction. C. So long as Jack affiliates with a NC broker he may accompany the buyer to North Carolina and assist in showing the buyer property D. The NC real estate commission does not have jurisdiction over Jack unless Jack conducts illegal brokerage activities in NC - correct answerC. So long as Jack affiliates with a NC broker he may accompany the buyer to North Carolina and assist in showing the buyer property Which type of estate cannot pass by inheritance? A. fee simple estate B. fee simple condition subsequent estate C. conventional life estate D. pur autre vie life estate - correct answerC. conventional life estate A rectangular-shaped parcel of land, which measures 400 feet by 600 feet, is divided into two equal lots by a creek that runs from the northeast corner to the southwest corner. What is the approximate acreage of each divided parcel? A. 55 acres B. 2.75 acres C. 3.47 acres D. 5.51 acres - correct answerB. 2.75 acres Assume annual real estate taxes amount to $1,800 and have been paid in advance for the calendar year by the seller. If closing is set for September 15, which of the following is correct? A. credit seller $525; debit buyer $1,275 B. credit seller $1,275; debit buyer $525 C. credit buyer $525; debit seller $1,275 D. credit seller $525; debit buyer $525 - correct answerD. credit seller $525; debit buyer $525 Which of the following statements is/are true? I. A freehold estate and a nonfreehold estate will never exist at the same time on the same property. II. A life estate is a nonfreehold estate. A. I only B. II only C. Both I and II D. Neither I nor II - correct answerD. Neither I nor II Aunt Fran decides to sell her property to a church with a fee simple interest, but Aunt Fran reserved or excepted a conventional life estate. Which of the following statements is true regarding this transfer? A. The church is the life tenant and Aunt Fran has a reversionary interest. B. Aunt Fran is the life tenant and the church has a remainder interest. C. The church owns the property and Aunt Fran has established a non-freehold interest. D. This is best referred to as a life estate pur autre vie. - correct answerB. Aunt Fran is the life tenant and the church has a remainder interest. The basic premise for controlling the use of land is to protect and promote the health, safety, welfare and morals of the general public. As imposed under the government's right to police power, zoning ordinances do NOT regulate: A. the use to which a property may be put B. the placement of buildings on the property C. the bulk and density of buildings D. minimum acceptable material and construction standards - correct answerD. minimum acceptable material and construction standards Joe, Moe and Harry are joint tenants owning a parcel of land. Harry conveys his interest to his long-time friend, Will. After the conveyance, Joe and Moe: A. become tenants in common B. continue to be joint tenants with Harry C. become joint tenants with Will D. remain joint tenants with Will becoming a tenant in common - correct answerD. remain joint tenants with Will becoming a tenant in common What is true about eminent domain? A. The Department of Transportation is exempted from compensating land owners for critical road widening projects. B. In order to establish eminent domain the government must meet the elements of adverse possession. C. Should the government condemn a rental property, the lease is automatically terminated. D. Eminent domain is the process by which the government condemns land. - correct answerC. Should the government condemn a rental property, the lease is automatically terminated. A city evicts tenants of an apartment complex by the power of eminent domain because of a planned highway expansion. Does the city have to pay compensation and does the city have to let the tenants finish their lease terms? A. The city would have to allow the tenants to complete their lease term and must pay them compensation. B. The city may never condemn an apartment building or other facility that is currently occupied. C. The city does not have to allow the tenants to complete their lease term, but the city will have to compensate the tenants. D. The city does not have to allow the tenants to finish their lease terms an because they are not the owner of the apartment building, the tenants have no right to compensation. - correct answerC. The city does not have to allow the tenants to complete their lease term, but the city will have to compensate the tenants. A developer requires all builders within the subdivision to build a certain standard home and also requires that no home may be built smaller than 4,000 square feet. What type of restriction has the developer created and how may it be enforced? A. Building permits, enforced through the city or county in which the property is located. B. Private deed restrictions, enforced through a court of law. C. Building codes, enforced through state and city building councils. D. Zoning, enforced through the zoning board. - correct answerB. Private deed restrictions, enforced through a court of law. Which of the following adds land due to natural changes along non-navigable streams? A. Accretion B. Avulsion C. Erosion D. Reliction - correct answerA. Accretion The recording of a deed: A. insures the interest in a parcel of real estate. B. warrants the title to real property. C. gives constructive notice of the ownership of real property. D. is all that is required to transfer the title to real estate. - correct answerC. gives constructive notice of the ownership of real property. Subdivision regulations in North Carolina are administered and enforced by: A. the city and county local municipalities. B. through the state office of Code Enforcement. C. the state Department of Transportation. D. the developer and the local homeowner's association. - correct answerC. the state Department of Transportation. With regard to road disclosures in North Carolina: A. a public street is guaranteed to be approved and maintained by NCDOT. B. a licensee must disclose whether the streets are public or private and who has the responsibility for maintaining the street. C. the buyer representative and the listing agent are not required to make street disclosures. Such disclosures are the seller's responsibility. D. all public streets are maintained by NCDOT or our automatically maintained by the municipality where the streets are located. - correct answerB. a licensee must disclose whether the streets are public or private and who has the responsibility for maintaining the street. Karen purchased a property and has a written and recorded document that gives her permanent ingress and egress to her parcel across an adjacent property. Which of the following statements is correct regarding Karen's situation? A. Karen has a license which will end when her term of ownership terminates. B. Karen has an easement in gross which is an appurtenance and travels with the property. C. She owns the dominant parcel and the adjacent property is the servient parcel. D. She owns the servient parcel and the parcel over which the easement runs is the dominant - correct answerC. She owns the dominant parcel and the adjacent property is the servient parcel. The North Carolina Real Estate Commission consists of nine members, three of which must have a license and two which must be members of the public and not licensed. Which of the following is also true regarding the NCREC? A. The NC Real Estate Commission will not hear commission disputes between the agent and their client, but they will assist in the resolution of fee disputes between real estate licensees B. The terms of the NC Real Estate Commission are life-long appointments. C. Seven of the NC Real Estate commission members are appointed by the Governor, one is appointed by the house and one is appointed by the senate. D. The NC Real Estate Commission is led by a commission chair that is also appointed by the Governor. - correct answerC. Seven of the NC Real Estate commission members are appointed by the Governor, one is appointed by the house and one is appointed by the senate. Designated agency in North Carolina is considered: I. A form of dual agency II. Mandatory if you practice dual agency A. I only B. II only C. Both I and II D. Neither I nor II - correct answerA. I only Designated agency can be practiced: I. Between two firms II. Between a broker-in-charge and a provisional broker licensee in their office A. I only B. II only C. Both I and II D. Neither I nor II - correct answerD. Neither I nor II Under the general principles of agency, when a licensee is acting on behalf of a client and acts improperly who is liable for the acts of the licensee? A. only the client B. only the licensee and the broker-in-charge C. only the client and the licensee D. the client, the licensee, the firm and or the broker-in-charge - correct answerD. the client, the licensee, the firm and or the broker-in-charge A disclosure of agency status should be made by a buyer's agent to the seller: l. With a written confirmation in the offer to purchase and contract ll. At the initial contact with the seller's agent, orally or in writing A. l only B. ll only C. Both l and ll D. Neither l nor ll - correct answerC. Both l and ll Which of the following would be dual agency? A. a broker-in-charge assisting a buyer client in the purchase of property that was listed by a provisional broker of another firm B. a provisional broker and a broker licensee from firms that are cooperating in a transaction C. a firm that represents buyers and sellers D. a broker having a buyer client for a property the broker personally listed - correct answerD. a broker having a buyer client for a property the broker personally listed A parcel of vacant land 80 feet wide and 200 feet deep was sold for $200 per front foot. How much money would an individual agent receive for a 60% share of the 10% commission earned? A. $640 B. $960 C. $1,600 D. $2,400 - correct answerB. $960 A buyer-client has instructed the agent to show only properties where the seller is willing to pay the buyer agent's commission. The agent contacts an owner selling a property without the assistance of a real estate agent with the hope that the seller would be willing to pay her commission if the buyer decided to purchase the seller's property. In order to comply with North Carolina Real Estate Commission Rules, the agent must do all of the following, EXCEPT: A. obtain permission from her buyer-client in order to obtain compensation from the seller B. disclose her agency status to the seller at initial contact C. convince the seller to list with her and authorize dual agency D. provide the Working with Real Estate Agents brochure to the seller - correct answerC. convince the seller to list with her and authorize dual agency If the broker-in-charge (BIC) is to act as one of the designated agents on a North Carolina in-house transaction, which of the following may be appointed as a designated agent for the other party to the transaction? A. an actively licensed provisional broker within the firm, so long as disclosure is made to both clients B. a full broker within the firm who has no prior confidential knowledge of the party that the BIC will represent C. a broker-in-charge cannot be appointed as a designated agent D. a licensed broker who has prior confidential knowledge about the party that the BIC will represent - correct answerB. a full broker within the firm who has no prior confidential knowledge of the party that the BIC will represent A licensee is an actively licensed real estate broker who has a written contract with his firm that specifies that he will not be treated like an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee will be treated by the IRS as: A. a real estate assistant B. an employee C. subagent D. an independent contractor - correct answerD. an independent contractor All of the following are TRUE regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT: A. the consumer is not required to sign the brochure B. if the first substantial contact is by phone, the brochure must be provided within 3 calendar days C. the brochure's use is mandatory in all real estate transactions, including residential sales, commercial transactions and property management D. the brochure must be given in all sales transactions at first substantial contact - correct answerC. the brochure's use is mandatory in all real estate transactions, including residential sales, commercial transactions and property management All of the following are exempt from the requirement to provide an RPOADS and MOG, EXCEPT: A. Transfers between spouses B. First sale of a dwelling not yet inhabited C. Both parties agree not to complete the form D. A For Sale by Owner - correct answerD. A For Sale by Owner The fact that the NC listing agreement and buyer agency agreement must be in writing is required by: A. Statute of Frauds B. Commission Rule C. Conner Act D. Contract law - correct answerB. Commission Rule A licensee has just discovered a major roofing leak in one of his current listings even though the seller has indicated "no representation" on the Residential Property Disclosure Statement. The listing agent does not inform the selling agent of the defect and since the defect, is hidden, the selling agent does not discover or disclose the problem to the buyer. According to the North Carolina Real Estate Commission, who is held responsible for this nondisclosure? A. the listing agent B. he listing broker and the selling broker C. the seller and the listing agent D. the seller - correct answerA. the listing agent Which of the following is TRUE about the North Carolina Residential Property Disclosure Act? A. All agents in the transaction should facilitate the timely delivery of the property disclosure report to the buyer. B. The property owner should disclose the condition of the listed property or be subject to a 3-day rescission period on any contract formed. C. All residential sellers are exempt from this act unless a broker is not involved in the transaction. D. Buyers must receive the completed disclosure report no later than the beginning of the due diligence period. - correct answerA. All agents in the transaction should facilitate the timely delivery of the property disclosure report to the buyer. Earnest money deposits, when paid in the form of a personal check given on an Offer to Purchase and Contract, must be deposited in an escrow account: A. no later than three banking days after acceptance of contract B. no later than 72 hours after receipt of money C. no later than three business days after receipt of the money D. no later than 72 hours after acceptance of contract - correct answerA. no later than three banking days after acceptance of contract A seller sold his property for $97,000. He made a 321.74% profit. What was the purchase price of the property? A. $13,000 B. $23,000 C.$74,000 D. $97,000 - correct answerB. $23,000 Which of the following statement(s) is/are true? l. In a breach of a sales contract, the earnest money deposit is considered liquidated damages. ll. In a breach of a sales contract, liquidated damages are an agreed upon amount of money the parties agree to accept in the event of breach. A. l only B. ll only C. Both l and ll D. Neither l nor ll - correct answerC. Both l and ll Which of the following document(s) would be covered by the NC Statute of Frauds? l. Listing agreement ll. Buyer agency agreement A. l only B. ll only C. Both l and ll D. Neither l nor ll - correct answerD. Neither l nor ll A man has posted a $100 reward for anyone who returns his missing dog. This is an example of: A. a unilateral contract B. a bilateral contract C. an implied contract D. an executed contract - correct answerA. a unilateral contract An executory contract is one in which: A. all of the terms and conditions have been performed B. there are still essential elements to be performed C. one or more of the parties is in breach of the agreement D. the contract has expired - correct answerB. there are still essential elements to be performed A prospective buyer makes a written purchase offer through a buyer's agent at ABC Realty. The seller accepts the offer as written. The seller communicates to a listing agent at XYZ Realty that the offer was signed. At this point in time, the: A. seller is contractually bound B. buyer is contractually bound C. both parties are contractually bound D. buyer can still withdraw the offer - correct answerD. buyer can still withdraw the offer A real estate Offer to Purchase and Contract becomes valid when: A. the written offer has been signed by both the offeror and offeree B. communication of acceptance is given to the offeror or the offeror's agent C. communication of acceptance is given to the offeree or the offeree's agent D. earnest money has been deposited into the escrow agent's trust account - correct answerB. communication of acceptance is given to the offeror or the offeror's agent During the due diligence period in the North Carolina standard offer to purchase and contract, the buyer who was attempting to obtain a conventional loan did not receive final loan approval, but chose not to terminate the contract based on favorable communications from the lender. A week before closing, the buyer's loan application is denied. If the buyer terminates the contract at this point, the buyer: A. will forfeit the earnest money deposit and due diligence fee because it would be a buyer breach B. will receive a refund of the earnest money, since the termination was related to financing C. can be sued by the seller for specific performance D. will receive a refund of the earnest money and the due diligence fee - correct answerA. will forfeit the earnest money deposit and due diligence fee because it would be a buyer breach When should parties to a purchase contract in NC utilize the NCBA/NCAR Contingent Sale Addendum? A. When there are multiple offers pending in a short sale transaction B. When the buyer wants to make multiple offers on several properties at the same time C. When the buyer conditions their offer upon the sale of another property that they currently own D. When the seller is also purchasing a property and needs that property to close before they can sell and transfer a current property to a buyer - correct answerC. When the buyer conditions their offer upon the sale of another property that they currently own Under which type of listing agreement does the seller lose his/her right to compete for the commission? A. open listing B. exclusive agency listing C. exclusive right to sell listing D. net listing - correct answerC. exclusive right to sell listing A contract that binds the owner of real estate to hold an offer to sell open for a set period of time, and gives the buyer the legal right to either accept or withdraw is a(n): A. right of first refusal B. option to purchase contract C. backup offer D. installment land contract - correct answerB. option to purchase contract Several months ago, Bill purchased four lots for $24,000 each. He later divided the lots into six lots and sold each for $20,000. What was Bill's percent of profit (loss)? A. 20% B. 25% C. 80% D. 125% - correct answerB. 25% Lucy Jones, a subagent of the seller and provisional broker with ABC Realty, sold a property listed with XYZ Realty. The buyer made a low offer but told Lucy they would be willing to offer more money and better terms if the sellers did not accept the original offer. Lucy presented the offer to Joe Baker, listing agent, and repeated to Joe the buyer's statement that, "They would be willing to offer more money and better terms." Joe presented the offer, making no mention that the buyers would be willing to go higher. Which agent(s) violated the Law of Agency? I. Joe, the listing agent II. Lucy, working with a buyer, as a seller's subagent A. I only B. II only C. Both I and II D. Neither I nor II - correct answerA. I only Jones is acting as a buyer's agent under a signed buyer agency agreement. Jones assists the buyer in preparing an offer to purchase, which the buyer signs. The buyer then immediately leaves town on business. Jones presents the offer to the listing agent. The seller signs the offer without any changes, and Jones is notified of the acceptance at 4 p.m. Jones checks his voice mail messages at 5 p.m. and discovers that the buyer left him a message a 2 p.m. withdrawing his offer. Which of the following statements regarding this situation is true? A. The contract became legally binding when Jones was notified of the seller's acceptance. B. No contract was legally created because the buyer withdrew his offer before his agent was notified of the seller's acceptance. C. The contract is voidable because the buyer was not notified personally of the acceptance. D. The contract is voidable because the buyer withdrew the offer be - correct answerA. The contract became legally binding when Jones was notified of the seller's acceptance. At an open house, the seller's agent must disclose his/her agency status to a prospective buyer: A. when the prospect first walks into the house and shows interest in the property . B. when the prospect asks questions about the price of the property and its features C. when the prospect begins to talk about his/her property needs and ability to purchase D. prior to giving the prospect a tour of the property and providing detailed information about the features of the property - correct answerC. when the prospect begins to talk about his/her property needs and ability to purchase According to North Carolina law, what are the buyer and seller allowed to negotiate after contract formation? A. The buyer and seller may renegotiate, but only during the due diligence period. B. Assuming that they are both interested in negotiating, all terms of the contract may be renegotiated during the contractual period. C. Nothing. The buyer and seller are bound to the terms of the agreed to contract. D. The buyer and seller may renegotiate, but they will need to create a new contract through novation. - correct answerB. Assuming that they are both interested in negotiating, all terms of the contract may be renegotiated during the contractual period. A seller notified his listing agent that the water heater was not working properly. The agent failed to mention this to a buyer's agent. Which of the following would be at fault if the buyer is harmed due to the malfunctioning water heater? A. Seller and listing agent. B. Listing agent and buyer's agent. C. Buyer's agent. D. Listing agent - correct answerD. Listing agent Sam, a prospective buyer, signs an option contract and pays the seller $500 for an option fee. Which term best describes this contract? A. Voidable B. Void C. Unenforceable D. Valid - correct answerA. Voidable Barney Buyer made an offer to a seller which was accepted. Three days prior to closing, Barney dies. What is the status of the agreement between the buyer and the seller? A. The contract was automatically voided at the time of Barney's death. B. The seller will have to enforce the contract through a court order for specific performance. C. Barney's heirs have the option of making the contract voidable. D. The contract is still valid and enforceable. The contract is now an obligation of the estate and the probate court will direct the proper way to proceed with the agreement. - correct answerD. The contract is still valid and enforceable. The contract is now an obligation of the estate and the probate court will direct the proper way to proceed with the agreement. When must a licensee get an Exclusive Right to Sell Listing Agreement signed? A. before the seller receives an offer B. at first substantial contact C. prior to closing D. at the time of employment or the start of the relationship - correct answerD. at the time of employment or the start of the relationship An intoxicated individual enters into a sales contract to purchase a home. The contract would be considered: A. valid B. voidable C. void D. unenforceable - correct answerB. voidable Smith and Baker executed a valid contract to buy and sell a home. The home burns down. What is the status of the contract? A. The seller may void the contract. B. The buyer and seller are still under contract and must go through with the terms as written. C. The contract is voidable at the buyer's option. D. The contract is void. - correct answerD. The contract is void. Under North Carolina law and commission rules, which of the following is a correct statement regarding designated agency? I. The BIC cannot be a designated agent. II. An agent cannot be appointed as a designated agent if the agent has prior confidential knowledge about the other party in the transaction. A. Both I and II B. II only C. Neither I nor II D. I only - correct answerB. II only A buyer and seller enter into a contract. The seller backs out and the buyer sues for specific performance. What is the buyer seeking in this lawsuit? A. A new contract B. Transfer of the property C. Deficiency judgment D. Money damages - correct answerB. Transfer of the property The Statute of Frauds requires that certain agreements must be in writing in order to be enforceable. Which of the following types of agreements is subject to the Statute of Frauds? A. Offers to purchase and contract B. Buyer brokerage agreements C. One year leases with tenants D. Exclusive right to sell listing agreements - correct answerA. Offers to purchase and contract Which of the following is TRUE regarding the assignment of contracts? A. Assigned contracts make the assignee solely liable in the event of breach. B. Contracts may not be assigned without the seller's permission. C. An assignment transfers all rights and obligations of a contract to a third party. D. Contracts are assignable, unless the contract specifically prohibits assignment. - correct answerD. Contracts are assignable, unless the contract specifically prohibits assignment. Bill and Betty just received $25,000 profit from the sale of their home. They are in the process of buying a new home for $185,500 with an 80% LTV ratio. The lender is charging the normal loan origination fee and is lending the money at 1.5 discount points. Bill and Betty pay an attorney $400 to handle the closing, and they must also pay for the excise tax. How much money will the lender be paid in fees? A. $1,484 B. $4,2226 C. $3,710 D. $4,1581 - correct answerC. $3,710 Under a contract for deed, the title to the property is held by the: A. vendor B. vendee C. trustor D. trustee - correct answerA. vendor A mortgagor is the one who: A. gives the mortgage B. holds the mortgage C. provides the mortgage funds D. forecloses on the mortgage - correct answerA. gives the mortgage The defeasance clause in a deed of trust requires the trustee in a specified situation to execute: A. an assignment of mortgage B. a deed of reconveyance C. a satisfaction of mortgage D. a partial release agreement - correct answerB. a deed of reconveyance The borrower utilizing a trust deed is best referred to as the: A. beneficiary B. trustor C. trustee D. mortgagor - correct answerB. trustor Which of the following is generally considered to be an incurable form of depreciation? A. physical deterioration B. functional obsolescence C. economic obsolescence D. interior obsolescence - correct answerC. economic obsolescence When appraising real estate, the appraiser would consider all of the following in making a determination of value, EXCEPT: A. contractual agreement between the seller and the buyer B. highest and best use of the property C. seller's original purchase price of the property D. selling prices of similar properties - correct answerC. seller's original purchase price of the property In the cost approach to value, the appraiser makes use of the: A. owner's original cost of the building B. estimated replacement cost of the building C. sales prices of similar buildings in the area D. assessed value of the building - correct answerB. estimated replacement cost of the building A building is valued at $215,000 and contains four apartments that rent for $470 each per month. The owner estimates that the net operating income is 65% of the gross rental receipts. What is the capitalization rate? A. 3.7% B. 6.8% C. 10.5% D. 14.2% - correct answerB. 6.8% In the sales comparison approach, what is the indication of value for the subject property with the information given? The subject property is a 2,000 square foot home with 3 bedrooms, 2.5 baths and a 1- car garage. The comparable property is a 2,150 square foot home in the same neighborhood with 3 bedrooms, 2 full baths and a 2 car garage. The comparable property sold for $215,000 last week. The market values additional square footage at $80 per square foot; full baths are valued at $4,000 and half baths at $2,500; 2-car garages are worth an additional $10,000 over a 1-car garage. A. $195,500 B. $200,500 C. $203,000 D. $229,500 - correct answerA. $195,500 Which of the following is required in order to obtain homeowners insurance and be an "insured" under a policy, A. The insured must be the owner of the property B. The property must be the primary residence of the insured C. The insured must have an insurable interest in the property D. Only the owner of a property can be the "insured" under a homeowners policy of insurance - correct answerC. The insured must have an insurable interest in the property An HO-4 policy typically provides what type of coverage? A. An owner's rental properties B. An owner's vacation homes C. A renter's personal property D. Condominiums - correct answerC. A renter's personal property The concept of "constructive eviction" requires the lessor to keep the property in a "fit and habitable" condition. Which of the following areas of the property would apply under this doctrine? l. Common hallway leading to the apartment units ll. Parking lot A. l only B. ll only C. Both l and ll D. Neither l nor ll - correct answerC. Both l and ll A businessman agrees to lease a barber shop from a landlord. The party responsible for the expense of making repairs to the interior of the building would most likely be: A. shared equally by the landlord and the tenant B. determined by negotiation of the parties per the lease agreement C. the landlord under the NC Residential Rental Agreements Act D. the tenant - correct answerB. determined by negotiation of the parties per the lease agreement Tenants living in foreclosed residential properties: A. must vacate the property within 48 hours of the foreclosure B. must vacate the property within 30 days if the new owner wishes to occupy the property C. can always occupy the unit until the end of their lease period D. have at least a 90-day notice to vacate the property per federal law - correct answerD. have at least a 90-day notice to vacate the property per federal law Frank is not a licensee. He owns several residential investment properties. He is renting one of his houses out for $1,500 per month. What is the maximum security deposit that Frank may charge the tenant is the lease is for a one year term? A. $1,500 B. Whatever Frank would like because he is not a licensee or a licensed property manager. C. $2,250 D. $3,000 - correct answerD. $3,000 Which of the following actions is a property manager permitted to perform? l. Prepare depreciation schedules for the property owner. ll. Make capital improvements to the property for the property owner when the property manager deems them necessary for the property owner. A. l only B. ll only C. Both l and ll D. Neither l nor ll - correct answerD. Neither l nor ll Functions of the property manager include all of the following, EXCEPT: A. producing the best possible net operating income for the owner B. preservation and maintenance of the property C. carrying out a fiduciary relationship to the owner D. fulfilling fiduciary duties and obligations to the tenants - correct answerD. fulfilling fiduciary duties and obligations to the tenants In regard to the transfer and retention of risk, which of the following statements is INCORRECT regarding property management? A. a low deductible transfers risk and a high deductible retains risk B. risks can be controlled by installing sprinklers and fire doors and taking other preventative measures C. a low deductible retains risk and a high deductible transfers risk D. removing a swimming pool avoids risk - correct answerC. a low deductible retains risk and a high deductible transfers risk In order to be entitled to an owner-occupied capital gains exclusion related to a primary residence, which of the following statements is correct? A. The owner must occupy the home two consecutive years out of the last five. B. If the owner has occupied the home for two years at any time during ownership the exclusion. applies C. The owner must occupy the home for two years out of the last five years prior to sale. D. The amount of the exclusion is $500,000 per person. - correct answerC. The owner must occupy the home for two years out of the last five years prior to sale. The amount of the capital gains exclusion for the sale of a principal residence is limited to: A. a sales price of $250,000 per individual and $500,000 per married couple B. a gain of $250,000 per individual and a $500,000 gain per married couple per lifetime C. a gain of $250,000 per individual and a $500,000 gain per married couple per residence D. an aggregate lifetime gain of $500,000 - correct answerC. a gain of $250,000 per individual and a $500,000 gain per married couple per residence Jack, a licensee wants to make an offer to the seller on a property which Jack has listed on behalf of his firm ABC. Which of the following is CORRECT? A. A licensee may not make an offer on a property which they have listed B. Jack can only proceed with an offer if he obtains full and proper consent for dual agency C. Jack must withdraw as the listing agent prior to making an offer. If the seller wants to continue representation by the firm, the BIC can appoint another licensee to handle the listing D. So long as Jack discloses his status as a licensee and treats the seller fairly he may proceed with an offer - correct answerC. Jack must withdraw as the listing agent prior to making an offer. If the seller wants to continue representation by the firm, the BIC can appoint another licensee to handle the listing A broker has received an offer from a prospective buyer on a property that the broker has listed for sale. How long does the broker have to deliver the offer to their seller/client? A. Immediately, but never later than 5 banking days B. Immediately, but never later than 5 calendar days C. Immediately, but never later than 3 banking days D. Immediately, but never later than 3 calendar days - correct answerD. Immediately, but never later than 3 calendar days All of the following are true regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT: A. The consumer is not required to sign the brochure. B. If the first substantial contact is by phone, the brochure must be provided within 3 calendar days. C. The brochure's use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions. D. The brochure must be given in all sales transactions at first substantial contact. - correct answerC. The brochure's use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions. The North Carolina Working With Real Estate Agents brochure must be given: A. to property owners upon initial contact B. to all consumers upon initial contact C. only to clients in a real estate transaction at first substantial contact D. to all consumers in a sales transaction no later than first substantial contact - correct answerD. to all consumers in a sales transaction no later than first substantial contact After being active in the real estate business for three years, Broker Sallie wants to become a broker-in-charge. All of the following are requirements that Sallie must meet to become a BIC, EXCEPT: A. have two out of the last five years of active real estate practice B. complete the 12 hour BIC course prior to becoming a BIC C. file a designation form with the NCREC D. have completed all of her post-licensing requirements and not be in provisional status - correct answerB. complete the 12 hour BIC course prior to becoming a BIC A licensee can act as the Broker-in-Charge of more than one firm, when: A. the office is an approved national franchise B. the offices are affiliated and owned by the same person C. the offices are in the same building D. the offices are in the same city - correct answerC. the offices are in the same building In regard to the use of standard forms and contracts by real estate professionals and the role of the North Carolina Real Estate Commission, NCREC: A. requires the use of specific forms and contracts B. drafts specific forms and contracts but does not mandate their use C. prescribes certain essential provisions that must be included in the forms and contracts D. has no authority regarding the content of real estate forms and contracts - correct answerC. prescribes certain essential provisions that must be included in the forms and contracts Which of the following does NOT need a firm license in North Carolina? A. a national franchise that is licensed to do business in multiple states and has formed a corporation to do real estate business in North Carolina B. a local sole proprietorship using a tradename or DBA C. a general partnership that consists of only two individuals D. a corporation that is already approved by the NC Secretary of State - correct answerB. a local sole proprietorship using a tradename or DBA A real estate licensee must notify the North Carolina Real Estate Commission of any changes in address within: A. 3 days B. 5 days C. 10 days D. 60 days - correct answerC. 10 days When a provisional broker terminates their relationship with a firm or BIC, what is the requirement for notification of the termination to NCREC? A. the provisional broker must notify the BIC within 10 days B. the BIC must notify NCREC of the termination within 10 days C. both the BIC and the provisional broker must notify NCREC immediately D. the notification must be received by NCREC within 30 days - correct answerB. the BIC must notify NCREC of the termination within 10 days A real estate broker is working with a buyer client. The broker wants to show a property that is listed with a competing real estate firm. When must the real estate broker, working with the buyer disclose their agency status to the listing licensee? A. first substantial contact with the firm when the buyer shows serious interest in the property B. initial contact with the firm when the agent first calls to show the property C. time of offer where the real estate broker gives confirmation of agency on the offer to purchase and contract D. time of contract where there is a meeting of the minds and the brokers confirm their agency status in the contract - correct answerB. initial contact with the firm when the agent first calls to show the property Charlene is an active sole proprietor independent broker who teaches school full time. Charlene gives referrals to brokers and she receives referrals. Charlene is not required to be a broker-in-charge or affiliated with a firm so long as she does not: A. Receive any commissions B. Make any referrals C. Represent a buyer in a sales transaction D. Hands out business cards promoting herself as a broker - correct answerD. Hands out business cards promoting herself as a broker With regard to brokers-in-charge, all of the following statements are correct, EXCEPT: A. A broker-in-charge may supervise more than one firm as long as the firms are in the same building B. A broker-in-charge is required to take the General Update update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled. C. A broker-in-charge is required to have two years of experience out of the last five years and may not be a provisional broker. D. A broker-in-charge is required to take the 12- hour initial broker-in-charge course either within the last three years or within 120 days of becoming the broker-in-charge. - correct answerB. A broker-in-charge is required to take the General Update update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled. All of the following statements are correct regarding commission rules, EXCEPT: A. should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days B. a provisional broker may not be the Broker-in-Charge regardless of the years of experience they may have as a broker in another state C. a broker must include the firm or BIC's name in all advertising D. should a broker or provisional broker be convicted of a DWI (driving while impaired) they must report this within 60 days of the conviction - correct answerA. should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days Which of the following would result in a conflict of interest for which the licensee could be disciplined by the NCREC? A. an agent working for the buyer notifies the listing agent that the buyer is their sister B. a licensee notifies the listing agent that they are self-representing and are interested in purchasing the listing C. a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller D. an agent working as a sub-agent of the seller notifies the seller of confidential information the buyer shared - correct answerC. a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller A buyer's representative is required to reveal their agency status to the seller or listing agent: A. no later than time of offer B. at "initial contact" C. no later than contract D. at "first substantial contact" - correct answerB. at "initial contact" An agent is working under an oral buyer's agency agreement. The agent knows the buyer is strongly interested in one of the homes seen by the buyer. The buyer is ready to write the offer, but refuses to sign a buyer's agency agreement. At this point, the agent may: A. write the offer, but advise the buyer they are now a sub-agent of the seller and anything the buyer has revealed must be provided to the seller B. not write the offer because the agent may not proceed without a written buyer representation agreement C. write the offer, but advise the buyer that they are a sub-agent of the seller, but they are not allowed to reveal to the seller what they have already learned about the buyer D. write and present the offer under an oral buyer's agency agreement, but reduce the buyer's agency agreement to writing prior to contract - correct answerB. not write the offer because the agent may not proceed without a written buyer representation agreement Under the NC Residential Property Disclosure Act, a licensee should inform and request that all of the following sellers complete the Mineral, Oil & Gas (MOG) disclosure, EXCEPT: A. an investor selling a SFR vacation rental unit B. a seller who is selling a parcel