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POST 301 - NC Real Estate Exam Review
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Who must disclose material facts and to whom? - ✔✔Only real estate brokers must discover and disclose material facts to everyone. All of the following are true EXCEPT: a) a listing agent has a higher duty to discover and disclose material facts because they have greater access to the property and information from the seller b) a broker who relies solely on what their client tells them does so at their peril. c) buyer agents can rely on the listing company's representations and have no duty to discover and disclose d) buyer agents can rely on the listing company's representations and have - ✔✔c) buyer agents can rely on the listing company's representations and have no duty to discover and disclose Minimally, how many parties are there in an agency relationship and what are they called under agency law? - ✔✔There must be at least two parties, one is the agent and the other is the principal Real estate companies may work with consumers under which of the following agency options? a) representing only the property owner b) representing only the buyer or tenant c) representing both parties as a dual agent d) all of the above - ✔✔d) all of the above The Unfair and Deceptive Practices Act prohibits misrepresentations, omissions of material fact, and misleading advertising in a trade or business and applies to: - ✔✔Real Estate Brokers Before a broker may represent a seller, the broker must have all of the following to comply with REC rules EXCEPT:
a) the broker must have provided and reviewed the WWREA Disclosure and obtained the seller's signature, if possible b) the broker may have an oral listing agreement with the seller for not more than 10 days c) the agency agreement with the seller must be in writing before the broker may provide any brokerage services d) the written agency agreement should be signed by both the seller and the agent - ✔✔b) the broker may have an oral listing agreement with the seller for not more than 10 days A buyer asks the listing agent whether all the appliances are in good working order. The listing agent says yes, although he hasn't personally checked any of the appliances. The buyer later discovers the dishwasher doesn't work. Which of the following is true? a) the broker is guilty of negligent omission b) the broker is guilty of willful misrepresentation c) the broker is guilty of negligent misrepresentation d) the broker isn't liable for an innocent, casual statement and the burden was on the buyer to verify the property condition during his due diligence. - ✔✔c) the broker is guilty of negligent misrepresentation A broker acting as a buyer agent under a written buyer agency agreement knows the following about their buyer-client which is a material fact? a) the buyer is willing to offer $ 10 ,0 00 more than list price b) the buyer appears to have significant assets, but is highly leveraged c) the buyer must purchase and close within 45 days d) the buyer loses their job two weeks before settlement - ✔✔d) the buyer loses their job two weeks before settlement Seller hires listing company and on the property disclosure statement says that the property is connected to city water and sewer. The seller knows that she has city water and that city sewer is available, but she never connected and is still on septic. Listing agent makes no attempt to verify and advertises the property as having city water and sewer. Who is guilty of misrepresentation? - ✔✔The seller is guilty of willful misrepresentation and the listing agent is guilty of negligent misrepresentation A broker has a current buyer-client who wants to see a property formerly listed by the broker, but now listed by a different company. According to the NCREC, what should the broker disclose to their buyer-
b) a listing agent has a heavier burden/duty to discover and disclose latent (hidden) property defects than a buyer's agent does c) a buyer agent need not discover and disclose material facts and instead may rely on the listing agent's representations d) both listing agents and buyer agents should discover and disclose patent (obvious) property defects - ✔✔c) a buyer agent need not discover and disclose material facts and instead may rely on the listing agent's representations Which of the following is a material fact? a) that the streets in the neighborhood are privately maintained by the owner's association b) that the seller replaced the roof 8 years ago using architectural shingles c) that the dual HVAC system was installed 3 years ago and is still under warranty d) that the exterior or siding is hardiplank - ✔✔a) that the streets in the neighborhood are privately maintained by the owner's association All of the following may lead to an express or implied agency agreement EXCEPT: a) an express agreement between the principal and agent authorizing the agent to act on the principal's behalf b) the agent begins to advise the consumer and negotiate on their behalf c) compensation to the agent must be paid by the principal d) the broker begins gathering confidential information about the consumer - ✔✔c) compensation to the agent must be paid by the principal An actively licensed real estate broker has a written contract with a company stating that he will not be treated as an employee for federal income tax purposes. The licensee's entire income is from sales commissions rather than an hourly wage. While the licensee probably will be treated by the IRS much like an independent contractor, technically the licensee is: - ✔✔a statutory non-employee All of the following are true regarding the Doctrine of Caveat Emptor EXCEPT: a) Caveat Emptor means "buyer beware" and originated under the common law of England b) Brokers' obligations to discover and disclose are less, because Caveat Emptor places the primary burden on the buyer to inspect and investigate
c) Under current NC Residential Property Disclosure forms, a seller is not required to disclose the property's true condition because of this doctrine d) Because of Caveat Emptor, as between the buyer and seller, the buyer has the heavier burden to investigate and discover the property - ✔✔b) Brokers' obligations to discover and disclose are less, because Caveat Emptor places the primary burden on the buyer to inspect and investigate Which of the following is NOT a fiduciary duty under agency law? a) loyalty b) reasonable skill, care, diligence c) auditory skills d) confidentiality - ✔✔c) auditory skills The Commission's agency rule requires all of the following items to be in a written agency agreement EXCEPT: a) the brokerage commission to be paid to the company and the affiliated broker b) the names of the parties to the agency agreement c) language that the broker will not discriminate based on fair housing protected classes d) a definite expiration date on which the agency agreement will terminate - ✔✔a) the brokerage commission to be paid to the company and the affiliated broker All of the following are true EXCEPT: a) a broker's duty to discover and disclose material facts includes what the broker knows and what they should have known b) the Doctrine of Caveat Emptor excuses a broker from the duty to discover and disclose c) the standard in gauging a broker's conduct is what an ordinary, reasonable, prudent broker would have done or known in similar circumstances d) the Doctrine of Caveat Emptor allows a property owner to say nothing about the property condition - ✔✔b) the Doctrine of Caveat Emptor excuses a broker from the duty to discover and disclose A buyer asks a broker to show him a property listed with another company that is offering compensation only to buyer agents. The broker provides the agency disclosure and explains the options, but the buyer
b) a broker, who having made no attempt to verify the accuracy of information from the seller, tells a prospective buyer incorrect information c) a seller who checks "no representation" on a mandatory property disclosure document even though he knows there is a problem with that feature d) a listing broker who in the MLS states " 3265 SF per tax records" when the actual square footage is 2800 square feet. - ✔✔c) a seller who checks "no representation" on a mandatory property disclosure document even though he knows there is a problem with that feature Before a broker may work with a buyer, the broker must perform all of the following to comply with REC rules EXCEPT: a) the broker must have provided and reviewed the WWREA Disclosure and obtained buyer's signature (if possible) b) the broker and buyer must decide whether and how they will work together c) the buyer agency agreement must be in writing before the broker can show the buyer any properties d) the buyer agency agreement may be oral initially, if permitted by company policy - ✔✔c) the buyer agency agreement must be in writing before the broker can show the buyer any properties When discussing the Residential Property and Owners Association Disclosure statement with a seller, the NCREC expects a broker to do all of the following EXCEPT: a) complete the form for the seller b) explain when the seller must provide the form and their answer options c) explain the consequences of not timely providing the form d) explain that if the seller answers "yes" or "no" the information must be accurate or the seller may be guilty of misrepresentation - ✔✔a) complete the form for the seller To adequately prepare for the listing presentation, a competent broker may do all of the following EXCEPT: a) Get a copy of the title insurance policy b) Look at the tax records and get a copy of the most recent deed to the sellers c) Perform a CMA to suggest a probable sales price range d) Check MLS records for prior sales involving the property to learn what information was presented - ✔✔a) Get a copy of the title insurance policy
All of the following statements regarding measuring residential properties are true EXCEPT: a) listing brokers must personally measure the property b) measurements are based on first floor exterior walls with adjustments for upper floors as needed c) condominiums are measured based on interior walls d) ceiling height must be at least 7 ft, except under beams or ducts that may not be lower than 6 ft 4 in - ✔✔a) listing brokers must personally measure the property Which of the following is FALSE regarding federal lead-based paint disclosure laws? a) they apply to "target housing" defined as housing built before 1978 b) an owner must test for the presence of lead-based paint c) the owner must provide a written disclosure form to the buyer/tenant prior to offer whether the target housing is for sale or lease d) an owner must state that they either know or do not know that there is lead-based paint - ✔✔b) an owner must test for the presence of lead-based paint A broker may ask a seller to have these documents available at the listing presentation EXCEPT: a) a copy of any surveys they may have of the property b) a copy of the settlement from when they purchased the property c) a list of current balances on all mortgages, home equity lines of credit, or other debts secured by the property d) a copy of the attorney's title opinion from when they purchased and a copy of the current title insurance policy - ✔✔b) a copy of the settlement from when they purchased the property All of the following are true about the Residential Property and Owner's Association Disclosure Statement EXCEPT: a) it must be provided to the buyer prior to submission of an offer b) it is intended for 1 - 4 unit residential properties c) it requires a seller to disclose material defects in their home prior to sale d) failure to provide the disclosure form creates a 3 day right of rescission for the buyer - ✔✔c) it requires a seller to disclose material defects in their home prior to sale
d) MLS says "square footage per blueprints" but the property has been finished for three months - ✔✔c) MLS lists total square feet as 2200 , when it actually has 2050 square feet Sellers subject to the Residential Property Disclosure Act must also provide the Mineral and Oil and Gas Disclosure Statement in all of the following EXCEPT: a) First sale of a dwelling not yet inhabited (new construction) b) sale of vacant land c) lessee in possession with option to purchase d) parties agree not to provide the RPOADS disclosure statement - ✔✔b) sale of vacant land A broker may call a consumer whose number is on the Do Not Call list in all of the following situations EXCEPT: a) the broker was their buyer agent six months ago and has just found a property she thinks they will love b) the broker calls a FSBO solely for information about the property and to schedule a preview c) the consumer's listing with your competitor just expired and you call them to offer your services and schedule a listing appointment d) you met the consumer at an open house last month and they gave you their contact information - ✔✔c) the consumer's listing with your competitor just expired and you call them to offer your services and schedule a listing appointment All of the following are impermissible sources of square footage information EXCEPT: a) tax records b) owner statements c) any documents from a previous transaction d) blueprints, disclosed as an estimate, because the house isn't built yet - ✔✔d) blueprints, disclosed as an estimate, because the house isn't built yet All of the following are true concerning "Do Not Call" laws EXCEPT: a) they prohibit unsolicited calls seeking to sell goods or services to the consumer b) all residential telephone numbers are automatically protected
c) the federal laws apply to interstate calls and may carry fines of over $ 40 ,0 00 per call for violations d) a broker "cold-calling" consumers to offer his services must check the federal registry every 31 days - ✔✔b) all residential telephone numbers are automatically protected Which of the following statements is FALSE regarding "living area" that may be included in total square footage? a) an 800 square feet bonus room above the garage accessible from the second floor of the house through a heated, finished breezeway b) the amount of square feet in an unpermitted area as long as the broker separately discloses the amount of the total square feet that is unpermitted c) the listing broker cannot include unpermitted living area in the total square footage for the property d) brokers must deduct from second floor calculations any first floor areas that are open to the second floor - ✔✔c) the listing broker cannot include unpermitted living area in the total square footage for the property Which of the following statements is FALSE as to a seller's obligations to provide the lead-based paint disclosure form? a) failure to provide it prior to offer opens the door to a three-day rescission period by the buyer/tenant b) they must also provide the Protect Your Family from Lead in Your Home pamphlet c) they must allow the buyer/tenant a 10 - day inspection and rescission period before they are obligated under the contract d) failure to provide the disclosure form may allow the buyer/tenant to rescind the contract within two years - ✔✔a) failure to provide it prior to offer opens the door to a three-day rescission period by the buyer/tenant A limited listing agent who negligently misrepresents properly information: - ✔✔May be liable for the misrepresentation because they failed to meet the standard of reasonable skill, care, and diligence expected from brokers The NCREC expects a limited listing broker to do all of the following EXCEPT: a) provide the seller with copies of the RPOADS and MOG, explain their legal obligations to provide the forms, when, and the consequences if they fail to timely provide the disclosure forms b) give the seller a copy of the Standard Offer to Purchase and Contract Form
All of the following are true as to what License Law requires a BPO to contain EXCEPT: a) a copy of the assignment request from the person requesting the BPO b) a broker need not disclose any existing or contemplated self-interest to the person requesting the BPO because there is no agency relationship c) a description of the subject property and the intended purpose/use of the BPO d) the broker's name, signature, license number, and the effective date of the BPO - ✔✔b) a broker need not disclose any existing or contemplated self-interest to the person requesting the BPO because there is no agency relationship All of the following are true about limited listing agreements EXCEPT: a) they must be in writing from the formation of the relationship before any services may be provided b) the written agreement must identify the parties, be signed by each, contain the non-discrimination language, and have a definite beginning and termination date c) they should specify what services will be provided and each party's duties under the agreement d) a limited listing agreement may limit both the services the broker will offer and the broker's competency in providing those services - ✔✔d) a limited listing agreement may limit both the services the broker will offer and the broker's competency in providing those services According to Commission Rule, written agency agreements must include all of the following EXCEPT: a) the identity and signatures of all parties b) the compensation due the brokerage company c) the non-discrimination language d) a definite termination date - ✔✔b) the compensation due the brokerage company Which of the following statements is FALSE as to terminating a listing agreement? a) a principal may legally terminate the agent's services at any time without any reason b) parties to a listing agreement usually have a legal right to terminate it prior to the stated expiration date only if the other party breaches its duties c) a listing agreement may include a penalty if the seller wants to terminate the agreement early as long as the penalty provision is clear and conspicuous
d) the best way to terminate a listing agreement is by selling the property - ✔✔a) a principal may legally terminate the agent's services at any time without any reason Which of the following is TRUE? a) public marketing includes flyers, yard signs, and website displays among other venues b) a listing broker must present any offers received prior to the property being marketed, but should remind the seller that marketing exposure should yield the highest price c) coming soon practices may be governed by restrictions or requirements of the brokers listing service that may be attached to the listing agreement d) all of the above - ✔✔d) all of the above All of the following are true as to why paragraph 6 , "listing price," and paragraph 7 "firms compensation" of the Exclusive Right to Sell Listing Agreement should be completed EXCEPT: a) the amount of the fee due the company is a material term of the contract b) the listing company could still sue the seller even if paragraph 7 was left blank and their listing commission would be determined by market practice c) the company may have no claim against their seller-client if the fee in paragraph 7 (a) is left blank, or N/A, or 0 appears d) the list price is a material term of the contract and impacts when the company's fee is earned under paragraph 7 - ✔✔b) the listing company could still sue the seller even if paragraph 7 was left blank and their listing commission would be determined by market practice Jason is hosting an open house for his seller-client when a visiting consumer says they would like to make an offer on the property. Jason provides them with the WWREA Disclosure, advises them that they have options, but that nothing they say is confidential until the agency relationship is determined. Jason may work with the buyer under any of the following situations EXCEPT: a) he could only clearly disclose that he is acting only as an exclusive seller agent, obtain the buyer's written acknowledgement, and then provide the buyer with an OPC for the buyer to complete b) if his seller has authorized dual agency, he could offer to work with the buyer as a buyer agent/dual agent c) he could act only as a buyer agent d) Jason could be a dual agent, but not a designated dual agent for both parties - ✔✔c) he could act only as a buyer agent
b) the listing company has a contractual right to 50 % of the earnest money and may unilaterally withhold that amount c) the listing company may submit the dispute with its seller to the local board for arbitration d) the listing company may release its claim to 50 % of the earnest money - ✔✔b) the listing company has a contractual right to 50 % of the earnest money and may unilaterally withhold that amount Which of the following statements is FALSE regarding paragraph 11 , "earnest money"? a) any earnest money paid in the transaction will be held by the escrow agent named in the sales contract b) if the earnest money is forfeited to the seller under the Offer to Purchase and Contract, then the listing company is entitled to receive 50 % of the earnest money or the amount of their listing fee, whichever is less c) if there is a dispute between the listing company and the seller over the earnest money, the escrow agent may pay the earnest money to the clerk of court under license law d) the clerk of court procedure applies to earnest money disputes between the buyer and seller. - ✔✔c) if there is a dispute between the listing company and the seller over the earnest money, the escrow agent may pay the earnest money to the clerk of court under license law The purpose of a CMA/BPO is to determine: - ✔✔Probable sales price All of the following are true about "marketing date" and "coming soon" practices EXCEPT: a) the property may not be shown or previewed by anyone, including other agents of the listing company, prior to the marketing date b) public marketing of the property is broadly defined and generally prohibited prior to the marketing date c) neither the seller nor listing company may advertise the property in any manner prior to the marketing date d) the "coming soon" practice is the only exception to the general marketing ban as long as it doesn't cross into "public marketing" - ✔✔c) neither the seller nor listing company may advertise the property in any manner prior to the marketing date A broker is performing a CMA for a seller-client to list the property. The property is located in a subdivision, is 24 years old, and has the following features: two-story design, vinyl siding, 2 , 400 square feet, 2 - car garage, 1 - acre lot. Which of the following sold properties is the best comp?
a) 12 - year old home, 2 , 000 square feet, no garage, 0. 5 - acre lot. Time on market 287 days b) 20 - year old home, 2 , 400 square feet, no garage, 2 .0-acre lot, sold as a short sale. Time on market 92 days c) 24 - year old home, 1 ,8 00 square feet, 2 - car garage,. 50 - acre lot. Priced as quick sale due to a pending divorce. Time on market 5 days d) 28 - year old home, 2 , 300 square feet, 2 - car garage,. 75 - acre lot. Time on market 32 days - ✔✔d) 28 - year old home, 2 , 300 square feet, 2 - car garage,. 75 - acre lot. Time on market 32 days Antitrust laws prohibit all of the following EXCEPT: a) multiple property management companies that agree to charge standardized management fees b) a company that requires all of its affiliated agent to join the local listing service c) three different brokerage firms agree to allocate markets to each of them based on the value of homes d) several real estate companies who agree not to cooperate with a brokerage company because the fees the broker charges. - ✔✔b) a company that requires all of its affiliated agent to join the local listing service All of the following statements are true regarding the Fair Housing Act EXCEPT: a) it prohibits discrimination against members of protected classes in the sale or leasing of 1 - 4 family unit dwellings b) the seven protected classes include race, religion, national origin, familial status, sex, disability, color c) property owners may advertise that members of a particular protected class "need not apply" when leasing a unit in a 1 - 4 family dwelling in which they or a family member also live d) while owners might discriminate in their heart in the sale or lease of their property, no one may "publish" or announce that intent - ✔✔c) property owners may advertise that members of a particular protected class "need not apply" when leasing a unit in a 1 - 4 family dwelling in which they or a family member also live All of the following are true about the Sherman Antitrust Act EXCEPT: a) its primary purpose is to promote competition in the marketplace so consumers have a choice in the purchase of goods and services b) it applies only to real estate brokerage activities c) any collusion among competitors that restricts choice violates the Act
a) any business leasing or selling housing must display the Fair Housing poster in a public area, including real estate companies b) the Fair Housing/Equal Opportunity logo must appear in all print advertising 2 " by 2 " or larger c) the Fair Housing logo must appear on all business cards and flyers d) various housing authorities and fair housing groups maintain lists of words categorized as "acceptable," "unacceptable," and "caution" when advertising - ✔✔c) the Fair Housing logo must appear on all business cards and flyers Which of the following is NOT an example of illegal price-fixing? a) companies A, B, and C agree that they will pay each other 0. 5 % more than the buyer agent compensation each offers other brokers in the MLS b) company A, B, and C discuss what should be the minimum listing period and decide each will require not less than six months c) at a social function, the BIC's of four different real estate companies discuss why they dislike oral buyer agency and decide none of them will allow it as part of their respective office policies d) the BIC of company A has a written office policy that dictates the fees the company generally charges for various services - ✔✔d) the BIC of company A has a written office policy that dictates the fees the company generally charges for various services To advertise property for lease or sale the NCREC advertising rule requires all of the following EXCEPT: a) advertising must clearly disclose that is the ad of a broker b) it must include the non-discrimination language c) it must include the name of the real estate company d) the broker must have the written consent of the property owner to advertise the property for lease or sale - ✔✔b) it must include the non-discrimination language A prudent broker whose seller wants to authorize interest advertising should do which of the following? a) warn the seller that the information the broker creates may appeared altered on some websites, e.g., a half-bath disappears b) mention that some websites will offer their own "opinions of value" that often are lower than the seller's list price and/or may allow consumers to post comments about the property c) warn the seller that the broker has virtually no control over third party websites, other than to try and correct or remove information
d) all of the above - ✔✔d) all of the above All of the following are true about the marketing paragraph in the current version of the NCAR Form
101 , Exclusive Right to Sell Agreement EXCEPT:
a) it reminds the seller that it is in their best interest to maximize the property's exposure through active marketing to gain the highest and best price b) it now allows an "Office Exclusive" feature whereby the seller does not authorize the listing company to enter the property information into the MLS for dissemination to other participants c) if a seller who chooses the "Office Exclusive" feature engages in "Public Marketing," then the listing agent may be required to submit the property information to the MLS for dissemination within 1 business day d) a listing agent who receives an offer during the "coming soon" period from a buyer who has not seen the property cannot present that offer to the seller - ✔✔d) a listing agent who receives an offer during the "coming soon" period from a buyer who has not seen the property cannot present that offer to the seller Which of the following is FALSE? a) a broker may advertise properties for sale or lease for others for a fee without being affiliated with a company or having a BIC b) both the licensee who creates advertising content and the company with which s/he is affiliated may be liable for misinformation in the advertising c) the BIC is responsible for ALL advertising emanating from their office and may be subject to disciplinary action by the NCREC d) a broker must comply with all federal and state laws impacting advertising in residential sales or leasing - ✔✔a) a broker may advertise properties for sale or lease for others for a fee without being affiliated with a company or having a BIC Primary factors affecting a consumer's ability to qualify for a loan include all of the following EXCEPT: a) credit history b) stability of income c) expense to income ratios d) marital status - ✔✔d) marital status
