Real Estate Disclosure Obligations Quiz

Questions and Answers

A listing agent has knowledge of a 'pending foreclosure' of a property and does not disclose this information. The agent is guilty of:

Willful omission (correct)

Willful misrepresentation

Negligent misrepresentation

Negligent omission

A broker tells a prospective buyer that the owner of his listing is having financial problems and must sell. This is:

Not acceptable unless the seller's financial position might result in an inability to close (correct)

Acceptable since it may promote an offer

Acceptable if the broker does not disclose specific financial information concerning his client

Never acceptable to disclose by a buyer or seller's agent

Which of the following would NOT be considered a material fact that must be disclosed to potential buyers?

A basement that leaks after a heavy rain

Contamination of an adjoining property's well

An existing lien on the property

A person committed suicide in the home (correct)

Broker Ron Thompson did not disclose to Mr. Simpson that there was a potential zoning change. Which of the following is true?

Thompson is obligated to disclose the zoning change to both the buyer and the seller Signup and view all the answers

Sam Sleazy tells broker Hank Honor not to disclose problems with the septic tank. Hank should:

Refuse to take the listing unless the seller agrees for him to disclose the problem to the buyers Signup and view all the answers

A North Carolina licensee working with Buyer A and Buyer B receives multiple offers on a property. The licensee should:

Should tell the seller that Buyer A must first agree to such disclosure Signup and view all the answers

The doctrine of 'caveat emptor' still applies to some extent to the relationship between:

Seller and buyer Signup and view all the answers

The North Carolina Residential Property Disclosure Act requires all of the following EXCEPT:

Accurate disclosure of material facts must be made on the form when a listing broker is involved Signup and view all the answers

A listing broker should

Complete the Property Disclosure Statement for the seller based on their information. Signup and view all the answers

Study Notes

Disclosure Obligations in Real Estate

A listing agent's failure to disclose a "pending foreclosure" amounts to willful omission.
Brokers must evaluate whether disclosing a seller's financial issues is acceptable; it is not acceptable unless it affects the ability to close the deal.

Material Facts in Real Estate Transactions

A material fact requiring disclosure includes any physical defects, such as a leaking basement or an existing lien.
The suicide of an individual in the home is not classified as a material fact that necessitates disclosure to potential buyers.

Zoning Changes and Seller Obligations

Brokers must disclose potential zoning changes that could significantly enhance property value to both the buyer and the seller.

Seller's Instructions and Ethical Obligations

If a seller instructs a broker not to disclose issues like septic tank problems, the broker should refuse the listing unless the seller consents to disclosure.

Dual Agency and Offer Disclosure

In a dual agency scenario, if one buyer makes an offer and another buyer expresses interest, the agent must ensure that the first buyer agrees to any disclosure before sharing their offer with the second buyer.

Caveat Emptor Principle

Caveat emptor applies primarily to the relationship between sellers and buyers, emphasizing that buyers should exercise caution.

North Carolina Residential Property Disclosure Act

Sellers are required to complete a property disclosure form before buyers submit an offer.
This law does not require the disclosure of material facts when a listing broker is involved.

Listing Broker Responsibilities

A listing broker is expected to ensure that sellers complete the appropriate property disclosure forms accurately and timely.

Description

Test your knowledge on the disclosure obligations that real estate agents must adhere to. This quiz covers critical topics such as material facts, zoning changes, and ethical responsibilities in real estate transactions. Understand the importance of transparency and the implications of willful omission.