NATIONAL REAL ESTATE PRACTICE EXAM V1
• North Carolina broker Grace is helping buyers Frank and Ella Carson complete the Offer
to Purchase and Contract, Standard Form 2-T for a housethey found on Manor Drive.The
Carsons have to sell their current home beforethey can complete the purchase of the Manor
Drive property. Where should Grace indicate this in the contract?
Topic: Other North Carolina Laws and Practices Subtopic: Sales contracts and related
procedures
In an addendum to the contract
Under the Loan provision
Under the Other Property provision
Under the Sale of Other Property contingency: The need to sell an existing property before
being able to complete the purchase of a new home should be indicted under the Other
Property provision. However, this provision does NOT makethe purchase of the property (on
which the offer's being made) contingent on the sale of the existing property.
• Under the terms of the North Carolina Offer to Purchase and Contract, Standard Form 2-
T, if the buyer fails to before the due diligence period
expires, this indicates that the buyer waives any right to terminate the contractbased on anything
related to the buyer's due diligence.
Topic: Other North Carolina Laws and Practices
Subtopic: Sales contracts and related proceduresDeliver a termination notice to the seller
Deliver a written notice of property inspection to the seller
Provide the seller with a written reminder of the pending due diligence periodexpiration at
least eight days
Provide the seller with a written reminder of the pending due diligence periodexpiration at least
five days: If the buyer doesn't deliver a termination notice to theseller before the due diligence
period expires, the buyer waives any right to terminatethe contract related to the buyer's due
diligence. However, after the due diligence period, the buyer still has the right to terminate the
contract if the seller does not materially comply with any of the seller's obligations.
• NCREC has determined through an investigation that Gayle has been practicing real
estate without a license. Since the commission doesn't haveauthority over unlicensed people,
how will it handle the situation to preventGayle from continuing her unlawful practice of real
estate?
Topic: North Carolina Commission Rules and License LawSubtopic: The real estate
commission
It will impose a discipline that Gayle is free to accept or ignore.
It will notify law enforcement so a warrant for Gayle's arrest can be issued. It will publish a
consumer notice alerting everyone to be on the lookout forGayle.
It will seek injunctive relief in a superior court.: Injunctive relief is a request for a court order
demanding that a party cease performing a specific action or actions.This is something the
commission does when an unlicensed person engages in realestate activity.
,• Mary is a property manager for a small apartment complex in Greensboro.If no exceptions
are agreed upon between Mary and Charlotte, the property owner, within what time frame
would Mary need to deliver any rental agree- ments or leases to Charlotte?
Topic: North Carolina Commission Rules and License LawSubtopic: General brokerage
provisions
Any time before the termination of tenancy
Within 45 days of Mary's receipt of the signed document
Within the first month of tenancy
Within three days of Mary's receipt of the signed document: D
• North Carolina broker-in-charge Ken was preparing to disburse trust funds for a transaction
that was underway. Unless otherwise directed by the parties involved, Ken may only disburse
trust funds to .
Topic: North Carolina Commission Rules and License Law
Subtopic: Handling of trust funds
The licensee who originally accepted the funds
The seller
The seller's agent
The settlement agent: North Carolina statute requires that the broker-in-charge who's
responsible for a trust account disburse the appropriate trust funds only to the settlement agent
(such as a closing attorney), and do so no more than 10 daysbefore the settlement date.
• North Carolina buyer Max wanted to pay the due diligence fee and initial earnest money
deposit by personal check. Which of the following statementsis correct in this situation?
Topic: Other North Carolina Laws and Practices Subtopic: Sales contracts and related
procedures
Both fees may be paid by a single personal check to the escrow agent.
Both fees may be paid by personal check, but each must be paid separately inchecks made out to
different people.
The due diligence fee may be paid by personal check, but the earnest moneydeposit may not.
The earnest money deposit may be paid by personal check, but the due diligence fee may not.:
While both fees may be paid using a personal check, the due diligence fee check must be made
payable to the seller, while the earnest moneycheck must be made payable to the escrow agent.
• What is the statutory period for adverse possession in North Carolina?Topic: General
Real Estate Topics
Subtopic: Transfer of title
10 years
15 years
20 years
Five years: 20 years
, • North Carolina broker Teddy was representing buyer Jamaal, and was getting ready to
complete an Offer to Purchase and Contract form for him.Which of the following provisions is
prohibited in this form?
Topic: Other North Carolina Laws and Practices Subtopic: Sales contracts and related
procedures
A provision addressing payment of broker compensation or commission,including the forfeit
of any earnest money
A provision regarding any loan the buyer must obtain as a condition of the contract, including
the loan type, amount, term, interest rate, discount points,and other required details
A provision that denotes any part of the purchase price to be paid using a promissory note,
including the specific amount, interest rate, payment terms,and other required details
A provision that provides the property's legal description: A
• When a brokerage firm acts as a dual agent in a transaction, who mustdisclose this agency
status to the transaction parties?
Topic: Other North Carolina Laws and Practices Subtopic: Agency relationships in real estate
sales
The firm's administrative staff
The firm's associate broker
The firm's attorney
The firm's broker-in-charge: A brokerage firm that's representing more than one party in a real
estate transaction is acting as a dual agent; this dual agency status must be disclosed by the
firm's associate broker.
• The Real Property Marketable Title Act says, in part, that if a title's checkedfor 30 years
back, and there aren't any claims recorded in that time, then all claims and defects against the
title that date beyond that 30-year period are
.
Topic: General Real Estate TopicsSubtopic: Title assurance Extinguished
Invalid Likely fake
Valid: The Real Property Marketable Title Act states, in part, that if a title is checkedfor the
previous 30 years and there are no claims recorded during that time, then all claims and
defects against the title that date beyond that 30-year period are extinguished.
• In order for a North Carolina brokerage firm's license to remain active, itmust have .
Topic: North Carolina Commission Rules and License LawSubtopic: Broker-in-charge
A broker-in-charge
A minimum of five licensed brokers affiliated with it
An actively licensed qualifying broker
Office space: For a North Carolina business entity other than a sole proprietorshipto operate as
a brokerage within the law, it must be licensed as a firm, and it must have a qualifying broker
with an active license at the helm. If the qualifying broker'slicense lapses, then the firm's
license will become inactive.
• North Carolina broker Grace is helping buyers Frank and Ella Carson complete the Offer
to Purchase and Contract, Standard Form 2-T for a housethey found on Manor Drive.The
Carsons have to sell their current home beforethey can complete the purchase of the Manor
Drive property. Where should Grace indicate this in the contract?
Topic: Other North Carolina Laws and Practices Subtopic: Sales contracts and related
procedures
In an addendum to the contract
Under the Loan provision
Under the Other Property provision
Under the Sale of Other Property contingency: The need to sell an existing property before
being able to complete the purchase of a new home should be indicted under the Other
Property provision. However, this provision does NOT makethe purchase of the property (on
which the offer's being made) contingent on the sale of the existing property.
• Under the terms of the North Carolina Offer to Purchase and Contract, Standard Form 2-
T, if the buyer fails to before the due diligence period
expires, this indicates that the buyer waives any right to terminate the contractbased on anything
related to the buyer's due diligence.
Topic: Other North Carolina Laws and Practices
Subtopic: Sales contracts and related proceduresDeliver a termination notice to the seller
Deliver a written notice of property inspection to the seller
Provide the seller with a written reminder of the pending due diligence periodexpiration at
least eight days
Provide the seller with a written reminder of the pending due diligence periodexpiration at least
five days: If the buyer doesn't deliver a termination notice to theseller before the due diligence
period expires, the buyer waives any right to terminatethe contract related to the buyer's due
diligence. However, after the due diligence period, the buyer still has the right to terminate the
contract if the seller does not materially comply with any of the seller's obligations.
• NCREC has determined through an investigation that Gayle has been practicing real
estate without a license. Since the commission doesn't haveauthority over unlicensed people,
how will it handle the situation to preventGayle from continuing her unlawful practice of real
estate?
Topic: North Carolina Commission Rules and License LawSubtopic: The real estate
commission
It will impose a discipline that Gayle is free to accept or ignore.
It will notify law enforcement so a warrant for Gayle's arrest can be issued. It will publish a
consumer notice alerting everyone to be on the lookout forGayle.
It will seek injunctive relief in a superior court.: Injunctive relief is a request for a court order
demanding that a party cease performing a specific action or actions.This is something the
commission does when an unlicensed person engages in realestate activity.
,• Mary is a property manager for a small apartment complex in Greensboro.If no exceptions
are agreed upon between Mary and Charlotte, the property owner, within what time frame
would Mary need to deliver any rental agree- ments or leases to Charlotte?
Topic: North Carolina Commission Rules and License LawSubtopic: General brokerage
provisions
Any time before the termination of tenancy
Within 45 days of Mary's receipt of the signed document
Within the first month of tenancy
Within three days of Mary's receipt of the signed document: D
• North Carolina broker-in-charge Ken was preparing to disburse trust funds for a transaction
that was underway. Unless otherwise directed by the parties involved, Ken may only disburse
trust funds to .
Topic: North Carolina Commission Rules and License Law
Subtopic: Handling of trust funds
The licensee who originally accepted the funds
The seller
The seller's agent
The settlement agent: North Carolina statute requires that the broker-in-charge who's
responsible for a trust account disburse the appropriate trust funds only to the settlement agent
(such as a closing attorney), and do so no more than 10 daysbefore the settlement date.
• North Carolina buyer Max wanted to pay the due diligence fee and initial earnest money
deposit by personal check. Which of the following statementsis correct in this situation?
Topic: Other North Carolina Laws and Practices Subtopic: Sales contracts and related
procedures
Both fees may be paid by a single personal check to the escrow agent.
Both fees may be paid by personal check, but each must be paid separately inchecks made out to
different people.
The due diligence fee may be paid by personal check, but the earnest moneydeposit may not.
The earnest money deposit may be paid by personal check, but the due diligence fee may not.:
While both fees may be paid using a personal check, the due diligence fee check must be made
payable to the seller, while the earnest moneycheck must be made payable to the escrow agent.
• What is the statutory period for adverse possession in North Carolina?Topic: General
Real Estate Topics
Subtopic: Transfer of title
10 years
15 years
20 years
Five years: 20 years
, • North Carolina broker Teddy was representing buyer Jamaal, and was getting ready to
complete an Offer to Purchase and Contract form for him.Which of the following provisions is
prohibited in this form?
Topic: Other North Carolina Laws and Practices Subtopic: Sales contracts and related
procedures
A provision addressing payment of broker compensation or commission,including the forfeit
of any earnest money
A provision regarding any loan the buyer must obtain as a condition of the contract, including
the loan type, amount, term, interest rate, discount points,and other required details
A provision that denotes any part of the purchase price to be paid using a promissory note,
including the specific amount, interest rate, payment terms,and other required details
A provision that provides the property's legal description: A
• When a brokerage firm acts as a dual agent in a transaction, who mustdisclose this agency
status to the transaction parties?
Topic: Other North Carolina Laws and Practices Subtopic: Agency relationships in real estate
sales
The firm's administrative staff
The firm's associate broker
The firm's attorney
The firm's broker-in-charge: A brokerage firm that's representing more than one party in a real
estate transaction is acting as a dual agent; this dual agency status must be disclosed by the
firm's associate broker.
• The Real Property Marketable Title Act says, in part, that if a title's checkedfor 30 years
back, and there aren't any claims recorded in that time, then all claims and defects against the
title that date beyond that 30-year period are
.
Topic: General Real Estate TopicsSubtopic: Title assurance Extinguished
Invalid Likely fake
Valid: The Real Property Marketable Title Act states, in part, that if a title is checkedfor the
previous 30 years and there are no claims recorded during that time, then all claims and
defects against the title that date beyond that 30-year period are extinguished.
• In order for a North Carolina brokerage firm's license to remain active, itmust have .
Topic: North Carolina Commission Rules and License LawSubtopic: Broker-in-charge
A broker-in-charge
A minimum of five licensed brokers affiliated with it
An actively licensed qualifying broker
Office space: For a North Carolina business entity other than a sole proprietorshipto operate as
a brokerage within the law, it must be licensed as a firm, and it must have a qualifying broker
with an active license at the helm. If the qualifying broker'slicense lapses, then the firm's
license will become inactive.
