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Questions and Answers

Does the seller have the right to terminate the listing contract?

Yes, but the seller has the right to refuse the offer.

Which type of validity does a contract signed under a threat fall under?

  • Void
  • Valid
  • Voidable (correct)
  • Enforceable

    • What is the status of the transaction if the buyer withdraws their offer after the seller signs it?

  • The offer is withdrawn and no contract formed (correct)
  • A binding contract was formed
  • The seller can sue for breach
  • The buyer must honor the contract

    • What law requires contracts to convey an interest in real property to be in writing?

    <p>Statute of Frauds</p> Signup and view all the answers

    What may NOT terminate a real estate sales contract?

    <p>The buyer's inability to obtain a specific loan</p> Signup and view all the answers

    What could be a remedy available for breach of contract?

    <p>Liquidated damages</p> Signup and view all the answers

    If a buyer offers terms including an appliance and those terms are countered and not included, what doctrine applies?

    <p>Parole Evidence Rule</p> Signup and view all the answers

    What is true regarding a Contract for Deed?

    <p>It conveys real property interest</p> Signup and view all the answers

    Which situation describes a 'Buydown'?

    <p>Reducing the interest rate temporarily</p> Signup and view all the answers

    Match the following loan terms with their descriptions:

    <p>Lien Theory = Borrower receives title to the property at closing Title Theory = Borrower receives equitable title at closing Due on Sale Clause = Conditions under which the loan must be paid off upon sale</p> Signup and view all the answers

    Lenders can originate the loan higher than the Certificate of Reasonable Value.

    <p>False</p> Signup and view all the answers

    The lender must provide the Closing Disclosure at least 3 business days prior to the date of settlement when delivered electronically.

    <p>True</p> Signup and view all the answers

    What trigger term was used in a recent advertisement mentioning a specific loan interest rate?

    <p>APR</p> Signup and view all the answers

    Which statements would constitute a 'trigger term' under Truth in Lending Regulation Z?

    <p>Both A and B</p> Signup and view all the answers

    What clause is not typically found in an FHA 203b mortgage loan?

    <p>Due on Sale Clause</p> Signup and view all the answers

    What method of financing is indicated when the seller remains responsible for finance payments on a property?

    <p>Subject to loan</p> Signup and view all the answers

    How would an adjustment be made for a property comparison in square footage?

    <p>Subtract the difference in value from the comparable property</p> Signup and view all the answers

    Which of the following are components of a window? (Select all that apply)

    <p>Top plate</p> Signup and view all the answers

    What zoning term describes a request for a slight deviation from the current ordinance?

    <p>Variance</p> Signup and view all the answers

    What does the Standard 2-T Offer to Purchase and Contract allow for?

    <p>A 14-day delay in settlement before the contract can be terminated.</p> Signup and view all the answers

    Which property ownership right sets a boundary at the mean high tide water mark?

    <p>Littoral</p> Signup and view all the answers

    Which of the following statements is TRUE when a licensee is writing an offer using the Standard NCAR/NCBA 2-T?

    <p>The licensee may make changes to the Standard 2-T.</p> Signup and view all the answers

    In a buyer's offer on a property already under contract, what should the broker include?

    <p>A back-up contract addendum.</p> Signup and view all the answers

    Which of the following is a permitted activity for the listing broker when receiving multiple offers on a property?

    <p>Present all offers to the seller.</p> Signup and view all the answers

    What must a standard purchase contract state?

    <p>That the seller will transfer the property by general warranty deed.</p> Signup and view all the answers

    What options does a tenant have if they complained about a non-functioning toilet?

    <p>The tenant may stop paying rent and move out.</p> Signup and view all the answers

    What type of leasehold interest does a tenant have if they rent a house for an initial term of 18 months requiring a 60-day notice to vacate?

    <p>An estate from period to period.</p> Signup and view all the answers

    What is required by a municipality extending city services to a neighborhood previously serviced by well and septic?

    <p>Charge the current owner a special assessment.</p> Signup and view all the answers

    Which entities would be EXEMPT from obtaining a separate firm license?

    <p>Mary Jones, Broker.</p> Signup and view all the answers

    A full broker affiliated with Exceptional Realty must include the firm name in all advertisements.

    <p>True</p> Signup and view all the answers

    Who is generally exempt from having a broker's license?

    <p>Legal corporations selling their property.</p> Signup and view all the answers

    What must a valid listing agreement include?

    <p>Both A and B.</p> Signup and view all the answers

    If a licensee allows their license to expire or be revoked, what action should be taken?

    <p>Reinstate the license if it's expired for more than six months.</p> Signup and view all the answers

    What is the license status of a licensee on June 28 if they have failed to complete their required continuing education?

    <p>Active on the 28th but inactive on July 1st.</p> Signup and view all the answers

    Which of the following ads run by a provisional broker would be acceptable?

    <p>Both A and B.</p> Signup and view all the answers

    If a licensee sells their own home 'For Sale By Owner' and leaves out material facts, can they be disciplined?

    <p>True</p> Signup and view all the answers

    With regard to the activation of licenses, which of the following statements is NOT true?

    <p>A broker must wait 3 years to reactivate.</p> Signup and view all the answers

    What must Bonnie do to bring her inactive license to active status?

    <p>Complete 8 hours of continuing education and 60 hours of post-licensing.</p> Signup and view all the answers

    Which party MOST likely has the authority to levy special assessment fees against a property?

    <p>Homeowners associations.</p> Signup and view all the answers

    What kind of title does a seller with unquestionable ownership claim on a property for the past 10 years have?

    <p>Clear title.</p> Signup and view all the answers

    What term describes leaving real property to heirs using a will?

    <p>Bequest.</p> Signup and view all the answers

    What deed would most likely be used to convey property to the wife in a divorce situation?

    <p>Non-warranty deed.</p> Signup and view all the answers

    What must be present in a valid deed?

    <p>Delivery &amp; voluntary acceptance to the grantee.</p> Signup and view all the answers

    What do public regulations of land use include?

    <p>Subdivision plans.</p> Signup and view all the answers

    If a commercial property needs additional parking spaces, what should the property owner do?

    <p>Seek a variance.</p> Signup and view all the answers

    What is an odorless, colorless gas that may cause lung cancer?

    <p>Radon.</p> Signup and view all the answers

    Which housing type is targeted for possible presence of lead-based paint?

    <p>Houses built before 1978.</p> Signup and view all the answers

    Why is asbestos an environmental concern?

    <p>When friable it throws dust particles into the air which cause lung disease.</p> Signup and view all the answers

    When must a firm disclose and obtain consent for dual agency?

    <p>Prior to acting as a dual agent.</p> Signup and view all the answers

    Which of the following would NOT create an agency relationship?

    <p>The payment of money.</p> Signup and view all the answers

    Which type of agency represents a landlord?

    <p>General agency.</p> Signup and view all the answers

    Most property managers are categorized under which classification of agency?

    <p>General agency because property managers are hired for a variety of tasks needing limited, binding decisions made on behalf of the client.</p> Signup and view all the answers

    What should a salesperson do when presenting a written offer to the seller?

    <p>Explain the advantages and disadvantages of the offer.</p> Signup and view all the answers

    In an exclusive agency listing agreement, when is a seller exempt from paying compensation?

    <p>When the seller procures the buyer.</p> Signup and view all the answers

    What type of contract describes an optionor giving an option to purchase over 5 years?

    <p>Unilateral.</p> Signup and view all the answers

    An agent may call clients in his database to ask for referrals even if they appear on the do not call list.

    <p>True</p> Signup and view all the answers

    What is the purpose of a Multiple or Cooperative Listing Service?

    <p>Provide exposure and opportunities for cooperation for marketed properties.</p> Signup and view all the answers

    What should the listing agreement include when a seller lacks the funds to complete a sale?

    <p>A short sale addendum.</p> Signup and view all the answers

    A real estate agent may contact a consumer they have a business relationship with for up to 18 months after the consumer's last purchase.

    <p>True</p> Signup and view all the answers

    What is TRUE regarding the first buyer who made an offer on a listed property?

    <p>The first buyer has no remedy since the parties were never under contract.</p> Signup and view all the answers

    If Mr. Jones makes a full price offer on a home contingent on his wife approving the contract, what will happen?

    <p>Yes, although the contract will be voidable at Mrs. Jones's option should she not approve of the contract.</p> Signup and view all the answers

    Study Notes

    Window Components

    • Key components of a window include: Sole plate, Header, Stud, Top plate.

    Zoning Variance

    • A variance is a request for a slight deviation from current zoning ordinances.

    Real Estate Contract Delay

    • The Standard 2-T Offer to Purchase and Contract allows a 14-day delay in settlement before the contract can be terminated.

    Property Ownership Rights

    • The littoral property ownership right establishes boundaries at the mean high tide water mark.

    Licensee Changes

    • Licensees can amend the Standard 2-T contract when making offers on properties.

    Backup Offers

    • When making an offer on a property already under contract, a buyer's broker should include a back-up contract addendum.

    Broker Duties with Multiple Offers

    • A listing broker must present all offers to the seller to facilitate decision-making.

    Transfer of Property

    • A standard purchase contract must specify that the seller will transfer property via a general warranty deed.

    Tenant Rights

    • A tenant may cease rent payments and vacate if a landlord fails to address significant maintenance issues.

    Estate Types

    • An estate at will allows a tenant to occupy a property until a specified legal process is completed (e.g., condemnation).

    Municipality Assessments

    • Municipalities may charge special assessments to current owners when extending essential services like water and sewer.

    License Exemptions

    • Certain entities, such as legal corporations selling property, are exempt from obtaining a separate brokerage license.

    Advertising Compliance

    • Real estate advertisements must include the firm's name to comply with commission rules.

    Material Fact Disclosure

    • Brokers must disclose material facts, even if selling their own properties as "For Sale By Owner."

    Continuing Education for License Activation

    • Non-provisional brokers must complete 8 hours of continuing education before activating an inactive license.

    Disclosure of Agency Status

    • Disclosure of agency status is required when certain first contacts occur, but showing a home does not necessitate it.

    Material Facts in North Carolina

    • Synthetic stucco, even if removed, is considered a material fact that must be disclosed.

    Dual Agency Notification

    • Sellers should be informed of the buyer's designated agent upon initial contact.

    Real Estate Brochure Purpose

    • The Working with Real Estate Agents brochure clarifies the types of agency relationships in real estate transactions.

    Agency Disclosure in Leasing

    • Commercial agents must use the agency disclosure brochure for sales transactions but not for leases.

    Required Home Disclosure

    • Sellers of new homes must provide a Mineral and Oil and Gas Rights disclosure.

    Buyer Agency Agreement Termination

    • A buyer agency agreement with a sole practitioner ends upon the practitioner's death.

    Special Assessment Authority

    • Other homeowners in a neighborhood can levy special assessment fees by majority vote.

    Title Status

    • A seller with an unquestionable ownership claim over ten years has a "clear" title.

    Bequest Definition

    • Bequest refers to the process of leaving real property to heirs through a valid will.

    Nonwarranty Deed Usage

    • A nonwarranty deed is commonly utilized during the resolution of interests in a marital home during divorce.

    Valid Deed Requirements

    • A valid deed must include delivery and voluntary acceptance by the grantee.

    Land Use Regulation

    • Public regulations of land usage oversee subdivision plans.

    Seeking Variance for Parking

    • Property owners needing more parking spaces should seek a variance to accommodate their business needs.

    Environmental Concerns

    • Radon is an odorless, colorless gas that poses lung cancer risks.

    Lead-Based Paint Concerns

    • Properties built before 1978 are potential targets for lead-based paint assessments.

    Asbestos Risks

    • Asbestos is considered an environmental concern due to its ability to become airborne and cause lung diseases.

    Dual Agency Disclosure Timing

    • Firms must disclose and obtain consent for dual agency before acting in such capacities.

    Creating Agency Relationships

    • The payment of money does not create an agency relationship on its own.

    Special Agency Description

    • A special agency relationship is when an agent performs specific tasks like marketing a property sale.

    Buyer Client Obligations

    • Agents must advise clients on negotiating strategies when crafting offers.

    North Carolina Property Disclosure Act

    • Agents are responsible for informing buyers and sellers of their rights and obligations under this act.

    Subagent Role

    • If a listing firm cooperates with another broker who lacks buyer agency consent, they act as a subagent.

    Listing Agent Duties

    • Listing agents must notify sellers about ongoing offers and their impact on negotiations.

    Information Duty for Buyer Agents

    • Buyer agents have a duty to disclose information that could weaken their client's position.

    Property Management Agency Type

    • Property managers typically operate under general agency due to their broad authority over tasks.

    Offer Requirements

    • An offer becomes valid and binding only when signed by all parties and communicated.

    Commission Rate Policies

    • A brokerage maintains the right to refuse commission rate reductions regardless of a seller's request.

    All-Risk Insurance Policy

    • An HO-3 policy covers structures and personal property for various hazards, meeting lender requirements.

    CLUE Report

    • A CLUE Report details insurance claims made against a property and is often used by brokers during transactions.

    Leasehold Interest

    • A tenant with a lease that requires a 60-day notice to vacate likely has an estate from period to period.

    Intangible Appurtenance

    • HOA covenants exemplify intangible appurtenances that run with the land.

    Real Property Ownership Benefits

    • Advantages of owning real property include favorable tax treatment.

    Joint Tenants Ownership

    • Upon Russell's death, his property share passed to Nancy and Jed under joint tenancy laws.

    Special Assessment Fee Authority

    • Only other homeowners in the area typically have the authority to impose special assessments.

    Clear Title Definition

    • A clear title indicates unquestioned ownership over real property.

    Will and Bequest

    • Bequest describes the process of transferring property to heirs as per a deceased’s will.

    Nonwarranty Deed in Divorce

    • During property division, a nonwarranty deed may be used for transferring ownership in a marital home.

    Valid Deed Requirements Recap

    • Valid deeds require both delivery and voluntary acceptance by the grantee for legality.

    Land Use Public Regulation

    • Subdivision plans fall under the oversight of public land use regulations.

    Variance for Business Needs

    • Property owners may request a zoning variance when needing additional space for business operations.

    Health Risk from Radon

    • Radon, an invisible gas, poses serious health risks, especially lung cancer.

    Lead Risk in Older Homes

    • Properties constructed before 1978 should be screened for potential lead-based paint exposure.

    Asbestos Health Hazard

    • Asbestos can cause severe lung diseases when disturbed, releasing harmful particles into the air.
    • Firms must disclose dual agency commitments and acquire necessary consents beforehand.

    Agency Formation Misconceptions

    • Financial transactions alone do not establish an agency relationship without additional context.

    Nature of Special Agency

    • Special agency agreements restrict an agent to specific tasks, primarily related to property sale or purchase.

    Agent Responsibilities

    • Agents should provide thorough advice to clients, especially regarding negotiating strategies.

    Compliance with Property Disclosure Act

    • Duty includes educating clients on their rights and responsibilities as outlined in property law.

    Role of Subagent Clarification

    • Subagents operate under the direction of a listing firm without buyer agency consent, fulfilling commission roles.

    Notification Duties of Listing Agents

    • Agents are obligated to communicate any significant offers to sellers promptly.

    Buyer Agency Obligations

    • Agents must inform buyers of any vulnerabilities relating to their contract position.

    Classification of Property Managers

    • The majority of property managers function under general agency due to their expansive responsibilities.

    Offer to Purchase Validity

    • Contracts only become binding upon both parties’ signatures and proper communication.

    Commission Agreement Policies

    • Agents can set policies regarding commission reductions despite client's requests.

    All-Risk Insurance Description

    • All-risk coverage under an HO-3 policy fulfills lender coverage requirements for structures and contents.

    Insurance Claims Report

    • CLUE Reports provide insight into past claims against a property and are essential in real estate transactions.

    Lease Terms Classification

    • Tenants with a two-month notice requirement likely possess an estate governed by periodic leases.

    Example of Appurtenances

    • Intangible appurtenances like HOA restrictions are legally tied to property ownership.

    Real Estate Ownership Advantages

    • Homeownership can deliver substantial tax benefits.

    Ownership Changes After Death

    • Joint tenancy allows Russell's shares to pass directly to Nancy and Jed upon his passing.

    Authority for Special Assessments

    • Typically, it is fellow homeowners within a neighborhood who have the ability to enforce fees.

    Title Legitimacy

    • A clear title reflects an owner’s verifiable and uncontested claim to the property.
    • The term 'bequest' is specifically used to describe property transferred through a will.

    Nonwarranty Deed During Divorce

    • Couples may utilize a nonwarranty deed to transfer sole ownership of a shared home amid divorce proceedings.

    Deed Validity Essentials

    • Fundamental requirements for a deed's validity encompass voluntary acceptance and delivery to the rightful party.

    Usage of Land Plans

    • Public oversight governs the regulations surrounding land including subdivision layouts.

    Variance Requests for Business Operations

    • Owners facing logistical challenges often file for variances to secure necessary operational adjustments.

    Risks Associated with Radon Exposure

    • Given its odorless nature, radon poses significant health risks, particularly linked to lung cancer.

    Assessing Lead in Older Properties

    • Properties built prior to 1978 are potential candidates for lead paint inspections and risk assessments.

    Asbestos and Health Risks

    • Asbestos creates major public### Transaction Status
    • Offer made for property at 101 Jones Ferry Avenue on April 10.
    • B’s agent delivered signed offer to seller on April 11.
    • B accepted A's offer by signing the document.
    • A withdrawn offer on April 11 via email to A’s agent.
    • A’s agent left voicemail for B’s agent regarding withdrawal, which B’s agent did not receive.
    • Signed document delivered to A’s agent by B’s agent on April 12, after A's withdrawal.

    Statute of Frauds

    • Law stipulating contracts to convey real property must be in writing to be enforceable.

    Termination of Sales Contract

    • A buyer's inability to secure specific loan can lead to contract termination.
    • Identifying factors that may not result in termination is crucial.

    Liquidated Damages

    • Buyers and sellers believe the other has breached a purchase contract.
    • Liquidated damages may be a potential remedy for breaches.

    Parole Evidence Rule

    • A buyer included a washer and dryer in an initial offer, which was conceded in a counteroffer.
    • By omitting mention of the washer and dryer in the final counteroffer, it explains why the seller retained them post-closure.

    Multiple Offers Strategy

    • Seller under Exclusive Right to Sell listing should NOT advise the broker to counter each offer at the highest price.

    Contract for Deed

    • True statement: it serves as both a contract to convey real property and a financing instrument.

    Buydown

    • Refers to a situation where a builder prepays interest to lower loan interest rates temporarily in early years.

    Lien Theory vs. Title Theory

    • In Lien Theory, borrower gets title at closing.
    • In Title Theory, borrower gets equitable title at closing.

    TRID Regulations

    • Lender must provide Closing Disclosure at least 3 business days before settlement if delivered electronically.

    Advertising Trigger Terms

    • Example of trigger term: terms that indicate specific payment amounts or rates.

    VA Loans

    • Lenders can issue loans above the Certificate of Reasonable Value under certain conditions.

    FHA 203b Clause Restrictions

    • Due on Sale Clause not permitted in an FHA 203b mortgage loan.

    Common Promissory Note Clauses

    • Voluntary alienation clause is among common clauses in promissory notes.

    Financing Statements

    • VA loans are recognized for having the highest loan-to-value ratios compared to FHA and conventional loans.

    "Subject To" Loans

    • Method of financing where the seller remains responsible for mortgage payments despite the sale.
    • Any marketing statement that involves specific low monthly payments must disclose all material terms of the loan.

    Equal Credit Opportunity Act

    • Borrowers on public assistance are afforded protections under this act against discrimination.

    Sales Comparison Approach Adjustments

    • To adjust for square footage, subtract the difference in value between subject property and comparable property.

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