missed practice exam questions

Question 1

A time-share developer fails to give a purchaser the public offering statement as required by rule. Which of the following could result?

Answer 1

The buyer could receive funds from the developer, levied by the North Carolina Real Estate Commission as a fine.

Question 2

In North Carolina, excise tax is paid when and by whom?

Answer 2

At recordation of the deed, by the attorney with funds collected from the seller

Question 3

Conventional loans are viewed as the MOST secure loans because

Answer 3

their loan to value ratios are often lower than other types of loans

Question 4

A real estate broker has measured the square footage of a home and included it in all marketing. The MOST likely reason the broker has given the square footage of the property is because

Answer 4

some MLS systems will not accept a listing without square footage

Question 5

The defeasance clause in a mortgage requires the mortgagee to execute

Answer 5

a satisfaction of mortgage

Question 6

The defeasance clause in a mortgage requires the mortgagee to execute

Answer 6

a satisfaction of mortgage

Question 7

The addition to the general insurance policy language that normally increases the number of perils or situations covered by the policy is

Answer 7

an endorsement

Question 8

Provisional broker post-licensing coursework is

Answer 8

optional for inactive licenses, unless they wish to become active

Question 9

To increase yield on a loan, the lender charges

Answer 9

Discount points rates

Question 10

A property owner conveys a life estate to his cousin for the duration of the life of the cousin’s grandfather. If the cousin were to die before his grandfather, how long may his heirs have possession of the property?

Answer 10

until the grandfather dies

Question 11

In the cost approach to value, the appraiser makes use of

Answer 11

the estimated replacement cost of the building

Question 12

The principal difference between an estate for years and an estate from period to period is that

Answer 12

an estate from period to period has no expiration date

Question 13

When determining which properties to show to a buyer, when must a buyer’s agent disclose that one of the properties has a $300 bonus?

Answer 13

Disclosure must be made before to showing the property

Question 14

A buyer purchased a property but did not record the deed. Under these circumstances,

Answer 14

the buyers interest is not fully protected against third parties

Question 15

A buyer and a seller have entered into a binding contract for the sale of real estate. During this phase and until closing, the buyer has which type of title?

Answer 15

Equitable

Question 16

The primary intent of zoning ordinances is to

Answer 16

ensure that proposed land uses conform to the master plan

Question 17

Under the North Carolina Condominium Act of 1986, the seller of a condominium (created after October 1, 1986, who is not the developer) must

Answer 17

provide the buyer with information on the association’s dues and assessments

Question 18

Which of these is TRUE regarding anyone who is paid to perform work that disturbs the paint in a house?

Answer 18

Homeowners are not regulated in the remodeling or paint removal of a private residence

Question 19

When must an earnest money check be deposited by the escrow agent?

Answer 19

Within three business days of contract acceptance

Question 20

If a buyer and an agent agree to an oral buyer agency agreement and before writing the offer to purchase and contract, the buyer wants to make an offer but does not want to sign a buyer’s agency agreement as the buyer promised, the agent

Answer 20

should not write the offer at that time

Question 21

Which of these is TRUE of condominium ownership?

Answer 21

The common elements cannot be sold separately

Question 22

Which of these is TRUE of condominium ownership?

Answer 22

The common elements cannot be sold separately

Question 23

Defined as a loss in value from any cause, depreciation is generally divided into three categories. The loss of value due to the normal wear and tear on a property is called

Answer 23

physical deterioration

Question 24

A contract that may be rescinded by one party due to duress, fraud, misrepresentation, or because one party is a minor, is also known as

Answer 24

a voidable contract

Question 25

A landowner subdivides her acreage and offers the lots for sale. A broker tells her that he can sell the lots. After the broker sells some of the lots, the landowner refuses to pay him a commission. The broker can

Answer 25

do nothing

Question 26

A licensee in North Carolina can be disciplined for

Answer 26

failing to disclose a material fact

Question 27

A disclosure of agency status should be made by a buyer’s agent to the seller

Answer 27

with a written confirmation in the purchase and sale agreement because a declaration of agency status is included in the standard Offer to Purchase and Contract form.

Question 28

A buyer tells the agent that he likes a home because it is so quiet and peaceful. The agent knows that a busy shopping center is ready to start construction next door. The buyer does not ask about the surrounding property, so the agent says nothing. What, if anything, is the agent guilty of?

Answer 28

Willful omission

Question 29

A promise, or something of value, made by one party to induce another party to enter into a contract is

Answer 29

legal consideration

Question 30

A licensed auctioneer must disclose his agency status to a buyer

Answer 30

never because there is no required agency disclosure.

Question 31

A seller agreed to list his home for $220,000, but the listing agent did not tell him that the fair market value of the home was $245,000. The listing agent purchased the property the next day. The agent has violated which of these duties to the seller?

Answer 31

Loyalty

Question 32

A store owner has operated a neighborhood grocery store for the last 30 years. Her store is the only retail property in an area that is zoned residential. The store is an example of

Answer 32

a nonconforming use

Question 33

The buyer and the seller have entered into a binding contract for sale. However, before closing, the law changes and the buyer’s intended use of the property becomes illegal. Which is TRUE?

Answer 33

The contract is void due to impossibility of performance

Question 34

A woman has a nine-year-old grandson living with her, and her application for an apartment has been rejected because the community does not allow anyone under the age of 18. Is this permissible?

Answer 34

Yes, if the housing complies with regulations for senior housing.

Question 35

Every purchaser of a time-share in North Carolina must be given

Answer 35

none of these

Question 36

The purpose of a mortgage is to

Answer 36

provide security for a loan

Question 37

Which of the following is exempt under North Carolina real estate licensing laws?

Answer 37

A managing member selling the LLCs property

Question 38

An optionee has communicated to the optionor that the optionee will purchase the property. This option contract is now exercised and is BEST described as

Answer 38

an executory bilateral purchase contract

Question 39

The Tenant Security Deposit Act regulates

Answer 39

all of these

Question 40

A listing agent representing a seller is required to disclose agency status to a buyer when the buyer

Answer 40

says she is a first time home buyer

Question 41

The entity MOST likely to use a 1031 tax-deferred exchange would be

Answer 41

an investor selling income property

Question 42

All of these are typically prorated at closing EXCEPT

Answer 42

security deposits

Question 43

The due diligence period in the Offer to Purchase and Contract (NCAR/NCBA) allows for the buyer to do all of the following EXCEPT

Answer 43

request the return of the due diligence fee if the seller will not address the items found in the home inspection report.

Question 44

A participant in the secondary market is

Answer 44

an institutional investor that buys and sells loans

Question 45

Two men are co-owners in fee simple of a small office building. One of the men dies intestate and leaves nothing to be distributed to his heirs. The surviving owner is related to neither the deceased owner nor his creditor. What would explain how the surviving owner acquired the deceased owner’s interest in the office building?

Answer 45

Joint tenancy

Question 46

A title insurance policy protects against title defects

Answer 46

found after closing

Question 47

Unlicensed assistants of a broker may do all of the following EXCEPT

Answer 47

agree to a prospective tenant’s suggestion to reduce the monthly rent by $100 if the tenant cuts the grass every week.