Superior NC Real Estate Important Final Exam
Questions and Answers Plus Rationales | 100%
Guaranteed Pass!!!
MULTIPLE CHOICES
Question 1: A buyer is to assume an existing loan of $80,000 at 9.5% with the approval of the lender.
The interest on the loan, which is paid in arrears, would appear on the closing statement as:
A. A single entry; debit to the seller
B. A single entry: credit to the buyer
C. A double entry: debit to the seller, credit to the buyer
D. A double entry: credit to the seller, debit to the buyer
Answer: C
Rationale: When a loan is assumed, the buyer's obligation begins with the next payment. Since interest
is paid in arrears, the buyer will be paying interest for the entire month at closing. Therefore, the seller
must credit the buyer for the portion of the month they occupied the property. This results in a double
entry: a debit to the seller and a credit to the buyer.
Question 2: A dedication refers to:
A. An instrument used in place of a mortgage
B. Additional fee charged by the lender
C. Transfer of real property from private owner to public agency
D. Right of owner to use adjacent land of another
Answer: C
1|Page SUCCESS!!!
,Rationale: Dedication is the process by which a private owner transfers land to a public agency for public
use, such as for streets, parks, or schools.
Question 3: A loan in which the lender is making regularly scheduled payments to the borrower would
be referred to as a:
A. Graduated Payment Loan
B. Negative Amortization Loan
C. Reverse Annuity Mortgage (RAM)
D. Package Loan
Answer: C
Rationale: A Reverse Annuity Mortgage (RAM) is a loan program designed for elderly individuals to
access the equity in their home. Instead of the borrower making payments to the lender, the lender
makes payments to the borrower.
Question 4: A typical residential property management agreement would impose all of the following
duties upon a property manager, EXCEPT:
A. cleaning and maintaining the common areas
B. collecting rents due
C. maintaining records and reporting to the owner
D. establishing a depreciation schedule
Answer: D
2|Page SUCCESS!!!
,Rationale: While a property manager handles day-to-day operations like maintenance, rent collection,
and reporting, establishing a depreciation schedule for tax purposes is a task for the property owner or
their accountant, not a standard duty of the property manager.
Question 5: Concerning the residential property disclosure statement, which of the following is/are
TRUE?
A. Licensees are required to advise and assist the seller with the disclosure.
B. The disclosure must be provided at first substantial contact.
C. Failure to provide the disclosure creates a 5-day right of recission period for the buyer.
D. A For Sale by Owner is exempt from providing the disclosure.
Answer: A
Rationale: The role of the real estate agent regarding the property disclosure statement is to advise and
assist the seller in completing it. However, the licensee cannot tell the seller how to respond to any
specific question.
Question 6: An attorney of fact is best described as:
A. a fiduciary to his principal
B. an agent
C. an attorney
D. a client
Answer: A
Rationale: An attorney-in-fact is a person appointed to act on behalf of another (the principal) under a
power of attorney. They are a fiduciary to that principal.
3|Page SUCCESS!!!
, Question 7: If a person obtains property through a ground lease, which of the following rights does
he/she typically receive?
A. The right to build structures on the property
B. The right to transfer ownership of the property to a 3rd party, during term of the ground lease.
C. The rights to all minerals beneath the ground.
D. The rights to oil and gas deposits beneath the ground.
Answer: A
Rationale: A ground lease is typically for a long term and allows the lessee to construct a building on the
property. The rights to subsurface minerals and oil/gas deposits are not usually transferred with a
ground lease.
Question 8: Radon becomes a material fact in North Carolina:
A. Only in regard to properties located in the western part of the state
B. In all residential real estate transactions
C. Only when the presence of radon can be sensed by smell
D. When the level of radon is 4.0 picocuries or higher
Answer: D
Rationale: In North Carolina, a radon level of 4.0 picocuries per liter or higher is considered a material
fact that must be disclosed in a real estate transaction.
Question 9: Which party's signature is required on a deed of trust?
4|Page SUCCESS!!!
Questions and Answers Plus Rationales | 100%
Guaranteed Pass!!!
MULTIPLE CHOICES
Question 1: A buyer is to assume an existing loan of $80,000 at 9.5% with the approval of the lender.
The interest on the loan, which is paid in arrears, would appear on the closing statement as:
A. A single entry; debit to the seller
B. A single entry: credit to the buyer
C. A double entry: debit to the seller, credit to the buyer
D. A double entry: credit to the seller, debit to the buyer
Answer: C
Rationale: When a loan is assumed, the buyer's obligation begins with the next payment. Since interest
is paid in arrears, the buyer will be paying interest for the entire month at closing. Therefore, the seller
must credit the buyer for the portion of the month they occupied the property. This results in a double
entry: a debit to the seller and a credit to the buyer.
Question 2: A dedication refers to:
A. An instrument used in place of a mortgage
B. Additional fee charged by the lender
C. Transfer of real property from private owner to public agency
D. Right of owner to use adjacent land of another
Answer: C
1|Page SUCCESS!!!
,Rationale: Dedication is the process by which a private owner transfers land to a public agency for public
use, such as for streets, parks, or schools.
Question 3: A loan in which the lender is making regularly scheduled payments to the borrower would
be referred to as a:
A. Graduated Payment Loan
B. Negative Amortization Loan
C. Reverse Annuity Mortgage (RAM)
D. Package Loan
Answer: C
Rationale: A Reverse Annuity Mortgage (RAM) is a loan program designed for elderly individuals to
access the equity in their home. Instead of the borrower making payments to the lender, the lender
makes payments to the borrower.
Question 4: A typical residential property management agreement would impose all of the following
duties upon a property manager, EXCEPT:
A. cleaning and maintaining the common areas
B. collecting rents due
C. maintaining records and reporting to the owner
D. establishing a depreciation schedule
Answer: D
2|Page SUCCESS!!!
,Rationale: While a property manager handles day-to-day operations like maintenance, rent collection,
and reporting, establishing a depreciation schedule for tax purposes is a task for the property owner or
their accountant, not a standard duty of the property manager.
Question 5: Concerning the residential property disclosure statement, which of the following is/are
TRUE?
A. Licensees are required to advise and assist the seller with the disclosure.
B. The disclosure must be provided at first substantial contact.
C. Failure to provide the disclosure creates a 5-day right of recission period for the buyer.
D. A For Sale by Owner is exempt from providing the disclosure.
Answer: A
Rationale: The role of the real estate agent regarding the property disclosure statement is to advise and
assist the seller in completing it. However, the licensee cannot tell the seller how to respond to any
specific question.
Question 6: An attorney of fact is best described as:
A. a fiduciary to his principal
B. an agent
C. an attorney
D. a client
Answer: A
Rationale: An attorney-in-fact is a person appointed to act on behalf of another (the principal) under a
power of attorney. They are a fiduciary to that principal.
3|Page SUCCESS!!!
, Question 7: If a person obtains property through a ground lease, which of the following rights does
he/she typically receive?
A. The right to build structures on the property
B. The right to transfer ownership of the property to a 3rd party, during term of the ground lease.
C. The rights to all minerals beneath the ground.
D. The rights to oil and gas deposits beneath the ground.
Answer: A
Rationale: A ground lease is typically for a long term and allows the lessee to construct a building on the
property. The rights to subsurface minerals and oil/gas deposits are not usually transferred with a
ground lease.
Question 8: Radon becomes a material fact in North Carolina:
A. Only in regard to properties located in the western part of the state
B. In all residential real estate transactions
C. Only when the presence of radon can be sensed by smell
D. When the level of radon is 4.0 picocuries or higher
Answer: D
Rationale: In North Carolina, a radon level of 4.0 picocuries per liter or higher is considered a material
fact that must be disclosed in a real estate transaction.
Question 9: Which party's signature is required on a deed of trust?
4|Page SUCCESS!!!
