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Post 302 > Section 3: Review of the North Carolina Offer to Purchase and Contract > Flashcards

Section 3: Review of the North Carolina Offer to Purchase and Contract Flashcards

1
Q

When is the buyer required to pay and deliver the due diligence fee to the seller

A

The effective date

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2
Q

How long does the buyer have to pay and deliver to the escrow agent the earnest money deposit?

A

With the offer or within 5 days of the effective date

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3
Q

As a listing agent what should I recommend that my seller do if they don’t receive the due diligence fee as required by the contract?

A

Request it in writing. If you do not receive it in 1 business day advise to exercise their right to terminate the contract.

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4
Q

What happens to the interest that may be earned on the escrow account?

A

It goes to whoever operates the escrow account

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5
Q

What if the lender cannot get the lending documents to the closing attorney by the settlement date?

A

Built in 14 delay in settlement

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6
Q

Does the buyer still have the right to continue to investigate and inspect the property after the due diligence date?

A

Yes

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7
Q

With whom should the buyer consult regarding the length of the due diligence period?

A

The Lender

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8
Q

What if the buyer has not received the RPOADS or MOG disclosures at the time of making an offer?

A

It may be give the right to back out of the contract

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9
Q

What should the parties do if disclosures indicate that the mineral, oil or gas rights to the property have been severed?

A

Consult an Attorney

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10
Q

Does the seller have to use licensed contractors in order to make agreed upon repairs?

A

No

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11
Q

U

A
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12
Q

On what date will the buyer be given possession and allowed to move into the property?

A

Closing: Legal recording has taken place

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13
Q

Which of the following is NOT able to be changed using the Agreement to Amend Contract form:

a. Building deposit
b. Purchas price
c. listing agent
d. escrow agent

A

C. Listing Agent

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14
Q

How long does the buyer have to pay and deliver the earnest money deposit to the escrow agent:

a. 3 business days
b. 3 calendar days
c. 5 business days
d. 5 calendar days

A

D. 5 Calendar Days

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15
Q

On what date will the buyer be given possession and allowed to move into the property?

a. closing date after the recording of the deed
b. on the first of the month
c. Immediately after the contract is signed
d. immediately after the offer is accepted

A

A. Closing date after the recording of the deed

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16
Q

Which of the following is NOT a valid source of standard forms for a broker:

A. NC Bar Association
B. NC Association of REALTORS
C. Joint task force
D. Wikipedia

A

D. Wikipedia

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17
Q

What happens if the buyer has not received the RPOADS or the MOG disclosures at the time of making an offer:

a. the buyer has a 3 business day right of rescission and a full refund of all monies
b. The buyer has a 3 calendar day right of rescission and a full refund of all monies
c. The buyer has a 3 calendar day right of rescission but forfeits all monies
d. the buyer has no right to rescission

A

b. The buyer has a 3 calendar day right of rescission and a full refund of all monies

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18
Q

Which of the following regarding the drafting of contracts is TRUE:

a. It is not prohibited for a seller to change a buyer’s contract
b. It is not prohibited for a seller to change their own contract
c. It is perfectly legal to draft any type of contract
d. Is it common practice to draft a contract to avoid mistakes

A

B. It is not prohibited for a seller to change their own contract

19
Q

All of the following, unless otherwise stated, will be prorated with the seller responsible for the prorated amounts through the date of settlement EXCEPT:

A. HOA dues
B. Taxes on personal property
C. Taxes on real property
D. Home owner’s insurance

A

D. Home owner’s insurance

The seller’s home owner’s insurance policy will terminate and the buyer’s will begin, but the policy will not be prorated. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

20
Q

If the buyer fails to deliver either the due diligence fee or any initial earnest money deposits by their respective due dates, then:

a. Buyer has 1 banking day after written notice to deliver the money or the seller has the right to terminate the contract

b. Buyer has 3 banking days after written notice to deliver the money or the seller has the right to terminate the contract

c. Buyer has 5 banking days after written notice to deliver the money or the seller has the right to terminate the contract

d. Buyer has 7 banking days after written notice to deliver the money or the seller has the right to terminate the contract
.

A

A. Buyer has 1 banking day after written notice to deliver the money or the seller has the right to terminate the contract

The buyer will only have 1 banking day to deliver the money before the seller has the right to terminate the contract if the buyer fails to deliver the due diligence fee or the initial earnest money by their respective due dates. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

21
Q

Which of the following regarding Purchase Price and Money is FALSE:

a. Can be paid in any valid currency
b. Due diligence fee made payable and delivered to the seller by the Effective date
C. Initial earnest money deposit made payable and delivered to escrow agent
D. Balance of the purchase price in cash due at settlement

A

a. Can be paid in any valid currency

22
Q

What is the role of the Commission regarding forms and contracts for brokers:
a. The commission does not create nor approve contracts and does not provide standard forms
b. Provide standard forms
c. Approve contracts
d. Create contracts

A

a. The commission does not create nor approve contracts and does not provide standard forms

23
Q

Who is liable for unclear or ambiguous language in a contract:
a. The buyer and seller agents
b. The BIC of both firms
c. Attorney representing the injured party
d. Drafter of the document

A

d. Drafter of the document

24
Q

Which of the following is NOT part of closing:
a. Settlement
b. Completion of a satisfactory title update to the property
c. Recordation in the appropriate county registry of deeds
d. Turnover of keys to the buyer

A

d. Turnover of keys to the buyer

25
Q

The settlement date is the:
a. Period in which the buyer is able to investigate the property
b. Day when all signatures and initials have been placed and communicated to all parties
c. Day of the proper execution and delivery to the closing attorney of all documents necessary to complete the transaction
d. Day of completion of the legal process which results in the transfer of the title to the property from seller to buyer

A

C. Day of the proper execution and delivery to the closing attorney of all documents necessary to complete the transaction

26
Q

Who is authorized to draft a North Carolina Offer to Purchase and Contract:
a. An attorney who is licensed to practice law in North Carolina
b. A full broker who has received authorization from their BIC
c. A provisional broker under the supervision of their BIC
d. Approved lenders selected by the buyer

A

a. An attorney who is licensed to practice law in North Carolina

27
Q

Does the seller have to use licensed contractors in order to make agreed upon repairs:
a. Yes
b. Yes, but only if the buyer requests that licensed contractors be used
c. No, the seller never needs to use a licensed contractor
d. No, seller has right to make repairs in a good and workmanlike manner, unless repairs require by law a licensed contractor

A

d. No, seller has right to make repairs in a good and workmanlike manner, unless repairs require by law a licensed contractor

28
Q

All of the following, unless otherwise stated, will be prorated with the seller responsible for the prorated amounts through the date of settlement EXCEPT:

a. HOA dues
b. Taxes on personal property
c. Taxes on real property
d. Home owner’s insurance

A

d. Home owner’s insurance

The seller’s home owner’s insurance policy will terminate and the buyer’s will begin, but the policy will not be prorated. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

29
Q

Which of the following is NOT able to be changed using the Agreement to Amend Contract form:
a. Building deposit
b. Purchase price
c. Listing agent
d. Escrow agent

A

c. Listing agent

The listing agent is hired by the seller and is a not valid change using for 4-T. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

30
Q

What requires that previous negotiations and informal agreements are superseded by the final written contract and cannot be used to alter the written contract:
a. Specific Performance
b. Statute of Frauds
c. Parole Evidence rule
d. Right of Recission

A

c. Parole Evidence rule

The parole evidence rule states that all negotiations and informal agreements must be written and included in the final contract. (LO: Explain what is and what is not prohibited regarding the drafting of contracts, where to find common forms, and the role of the commission in providing standard forms)

31
Q

What should the parties do if the disclosures indicate that the mineral, oil, and gas rights to the property have been severed:
a. Contact the commission
b. Contact their agents
c. Contact a listing agent’s BIC
d. Contact an attorney

A

d. Contact an attorney

32
Q

What changes to a contract take priority over preprinted text:
a. Buyer’s right to reject unacceptable terms from the seller
b. Specific evidence rules
c. Handwritten changes
d. Articles of constructive notice

A

c. Handwritten changes

33
Q

Which of the following is a basic rule for interpreting a contract:
a. Previous oral negotiations and statements are superseded by a written contract
b. Words that are ambiguous are best understood in the most abstract and unexpected way
c. A contract is interpreted piece by piece, never as a whole
d. Printed text outweighs handwritten provisions

A

a. Previous oral negotiations and statements are superseded by a written contract

34
Q

What constitutes acceptance of the property:
a. Due diligence money
b. Accepting an offer
c. Closing
d. Drafting a contract

A

c. Closing

35
Q

All of the following are able to be changed using the Agreement to
Amend Contract form 4-T EXCEPT:
a. Due diligence fee and due diligence period
b. (Additional) Earnest money
c. Settlement date
d. Closing date

A

d. Closing date

The closing date occurs after settlement and is not amendable using form 4-T. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

36
Q

The closing date is the:
a. Period in which the buyer is able to investigate the property
b. Day when all signatures and initials have been placed and communicated to all parties
c. Day of the proper execution and delivery to the closing attorney of all documents necessary to complete the transaction
d. Day of completion of the legal process which results in the transfer of the title to the property from seller to buyer

A

d. Day of completion of the legal process which results in the transfer of the title to the property from seller to buyer

The closing date is the final completion of the legal process and results in the property being transferred from the seller to the buyer. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

37
Q

What happens if the buyer has not received the RPOADS or the MOG disclosures at the time of making an offer:
a. The buyer has a 3 business day right of rescission and a full refund of all monies
b. The buyer has a 3 calendar day right of rescission and a full refund of all monies
c. The buyer has a 3 calendar day right of rescission but forfeits all monies
d. The buyer has no right of rescission

A

b. The buyer has a 3 calendar day right of rescission and a full refund of all monies

38
Q

The settlement date is the:
a. Period in which the buyer is able to investigate the property
b. Day when all signatures and initials have been placed and communicated to all parties
c. Day of the proper execution and delivery to the closing attorney of all documents necessary to complete the transaction
d. Day of completion of the legal process which results in the transfer of the title to the property from seller to buyer

A

c. Day of the proper execution and delivery to the closing attorney of all documents necessary to complete the transaction

When all necessary documents have been delivered to the closing attorney and have been property executed, that is the settlement date. (LO: Remember the vocabulary that is involved with contracts, including special assessments, fixtures, and the details of the offer to purchase and contract form 2-T as well as the amend agreement form 4-T)

39
Q

Which of the following regarding Purchase Price and Money is FALSE:
a. Can be paid in any valid currency
b. Due diligence fee made payable and delivered to the seller by the Effective date
c. Initial earnest money deposit made payable and delivered to escrow agent
d. Balance of the purchase price in cash due at settlement

A

a. Can be paid in any valid currency

40
Q

What happens to a contract if the property is damaged by a storm or fire prior to closing:
a. The contract is void
b. The contract is voidable
c. The seller must repair the property at the seller’s expense
d. The buyer is obligated to collect the full amount of insurance to restore the property

A

b. The contract is voidable

If the property is damaged by a storm or fire prior to closing, the contract is voidable by the buyer. (LO: Explain the process by which a property exchanges hands from a seller to a buyer after a contract is signed)

41
Q

Which of the following is NOT a valid source of standard forms for a broker:
a. North Carolina Bar Association
b. NC association of REALTORS®
c. Joint task forces
d. Wikipedia

A

d. Wikipedia

42
Q

Which of the following agreements is NOT an employment agreement:
a. Exclusive right to sell listing agreement between seller and broker
b. Exclusive buyer agency agreement between the buyer and the broker
c. Property management agreement between the owner and the broker
d. Offer to purchase and contract between the buyer and seller

A

d. Offer to purchase and contract between the buyer and seller

43
Q

Who is liable for unclear or ambiguous language in a contract:
a. The buyer and seller agents
b. The BIC of both firms
c. Attorney representing the injured party
d. Drafter of the document

A

d. Drafter of the document

Post 302 (10 decks)

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