301 NC POST LICENSING EXAM ACTUAL EXAM 2024 | 380 QUESTIONS AND CORRECT ANSWERS, Exams of Real Estate Management

Download 301 NC POST LICENSING EXAM ACTUAL EXAM 2024 | 380 QUESTIONS AND CORRECT ANSWERS and more Exams Real Estate Management in PDF only on Docsity! 301 NC POST LICENSING EXAM ACTUAL EXAM 2024 | 380 QUESTIONS AND CORRECT ANSWERS | ALREADY GRADED A+ | LATEST VERSION Atala is driving by a property that is listed for sale by Best Homes Realty and calls the telephone number on the for-sale sign. LaTosha answers the phone and Atala asks what the price of the property is. At this time, does LaTosha have to present the brochure "Working with Real Estate Agents"? A) No, because first substantial contact has not occurred. B) Yes, because first substantial contact has occurred. C) Yes, because LaTosha must present the brochure at initial contact. D) No, because LaTosha is not required to present the brochure over the phone. ----- CORRECT ANSWER----------------A) No, because first substantial contact has not occurred. The Working with Real Estate Agents brochure provides the consumer with all the following information EXCEPT A) useful information about the various services real estate agents can provide buyers and sellers. B) it will indicate that you must choose a firm for representation and that you may never represent yourself. C) the various types of agency relationships that may be available to a consumer. D) it will help explain how real estate agents are paid. -----CORRECT ANSWER----------- -----B) it will indicate that you must choose a firm for representation and that you may never represent yourself. The Working with Real Estate Agents brochure explains to both buyers and sellers the firm acting as a dual agent. In dual agency, the brochure states all the following EXCEPT A) if dual agency has not already been agreed upon by either the buyer or the seller and later they want to agree to dual agency, the firm can amend the agency agreement. B) it will be difficult for a dual agent to advance the interests of both buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. The firm's loyalty is divided between parties with competing interests. C) although the dual agent owes the buyer and seller the same duties, they cannot prohibit dual agents from divulging certain confidential information about them to the other party. D) although the dual agent owes the buyer and seller the same duties, they can prohibit dual agents from divulging certain confidential information about them to -----CORRECT ANSWER----------------C) although the dual agent owes the buyer and seller the same duties, they cannot prohibit dual agents from divulging certain confidential information about them to the other party. Brokers must understand that before they can assist a prospective buyer with locating a property, the broker must have A) a disclosure in writing to the prospective buyer that the broker will be working with the buyer as a seller's agent or subagent. B) either an express written buyer-agency agreement or an express oral buyer-agency agreement. C) an express oral disclosure to the prospective buyer that the broker will be working with the buyer as a seller's agent or subagent. D) either an express oral or written buyer-agency agreement with the buyer or disclosed in writing to the prospective buyer that the broker will be working with the buyer as a seller's agent or subagent. -----CORRECT ANSWER----------------D) either an express oral or written buyer-agency agreement with the buyer or disclosed in writing to the prospective buyer that the broker will be working with the buyer as a seller's agent or subagent. Which of the following statements is FALSE regarding buyer and tenant representation agreements? A) When a broker wants to bind a buyer or tenant or to restrict the buyer's or tenant's right to work with other agents, then the agreement must be in writing. B) A broker shall not continue to represent a buyer or tenant without a written, signed agreement when such agreement is required by Commission rules. C) The broker can have an express oral agreement with a buyer or tenant but it must be nonexclusive and cannot have a time period associated with the oral agreement. D) A broker can continue to represent a buyer or tenant with an express oral representation agreement up until closing. At that time, the representation agreement will need to be reduced to writing. -----CORRECT ANSWER----------------D) A broker can continue to represent a buyer or tenant with an express oral representation agreement up until closing. At that time, the representation agreement will need to be reduced to writing. D) Boycotting -----CORRECT ANSWER----------------A) Price fixing All of the following topics are okay to discuss at a local REALTOR® association meeting EXCEPT A) planning a tech fair for all members. B) raising money and gifts for the holiday season. C) offering computer training for all members. D) setting fees that all affiliated members must charge consumers. -----CORRECT ANSWER----------------D) setting fees that all affiliated members must charge consumers. Green Acres Realty has been in business for many years. A new company, For Sellers Only, has been charging much less than Green Acres Realty charges to list and sell homes. At a recent company meeting, the owner of Green Acres Realty instructed their agents not to show any listings that were being sold by For Sellers Only. Which of the following statements is MOST likely true? A) Such conduct would likely be a boycotting violation under the Sherman Antitrust Act. B) Such conduct is considered an acceptable and normal business practice. C) Such conduct would be considered illegal steering. D) Such conduct is legal because Green Acres Realty has the right as a brokerage firm to choose the companies with which it wants to work. -----CORRECT ANSWER----------- -----A) Such conduct would likely be a boycotting violation under the Sherman Antitrust Act. Rico, a broker with Green Acres Realty, just had a listing go under contract and he wants to send out an email to all the neighbors telling them the good news. When he sends out the "just sold" email, he needs to consider which of the following laws or rules? A) CAN-SPAM Act B) Do Not Email Registry Act C) Do Not Call Registry Act D) "Junk Fax" laws and rules -----CORRECT ANSWER----------------A) CAN-SPAM Act Marissa, a broker with Green Acres Realty, wants to call homeowners who live in the Bradford Luxury Homes neighborhood to solicit their listing with her firm. Which of the following is exempt from checking the Do Not Call Registry? A) For Sale by Owner B) Expired listing who previously listed with Smart Moves Realty and the listing expired less than seven days ago. C) Marissa has a buyer-principal interested in seeing the For Sale by Owner listed property and Marissa is calling in her role as a buyer's agent. D) Expired listing who previously listed with Better Homes Realty and the listing expired 90 days ago -----CORRECT ANSWER----------------C) Marissa has a buyer-principal interested in seeing the For Sale by Owner listed property and Marissa is calling in her role as a buyer's agent. Cho, a real estate broker, is out to dinner with a best friend, Jo. Jo did not want to mix business with friendship and decided to list her house with a different brokerage firm than Cho's. During dinner, Jo continues to complain about what a terrible job her listing firm is doing to get her home sold. What is Cho's BEST response? A) I've sold one of their listings before and had some of the same issues. B) I'm sorry you feel they are not doing a good job. Have you spoken to the listing agent about your concerns? C) I've heard they are a terrible company and understand those issues happen all the time. D) I'm sorry you feel they are not doing a good job; I would be happy to list your property. -----CORRECT ANSWER----------------B) I'm sorry you feel they are not doing a good job. Have you spoken to the listing agent about your concerns? Best Homes Realty had a bad experience with Founders Law Firm, one of the local real estate law firms. The owners of Best Homes Realty got together with three of the other top real estate firms in the area and spread the word not to use Founders Law Firm. This would be an example of which of the following? A) Unfair competitive practices B) Blockbusting C) Price fixing D) Boycotting -----CORRECT ANSWER----------------D) Boycotting Samuel, a real estate broker and REALTOR®, is looking to list some properties for sale in his neighborhood. He notices that the property across the street from him is listed for sale with another company. According to the REALTOR® Code of Ethics, which of the following statements is correct? A) Samuel can email the seller of that property and solicit their listing because they live in the same neighborhood. B) Samuel cannot call the seller to solicit their listing because it could be in violation of the Do-Not-Call laws and rules. C) Samuel cannot reach out to the seller because he cannot solicit the business of a property owner who has an active exclusive listing. D) Samuel can speak to the seller at a neighborhood party and ask them if they are interested in listing with his firm. This way he would not be violating the Do Not Call laws and rules. -----CORRECT ANSWER----------------C) Samuel cannot reach out to the seller because he cannot solicit the business of a property owner who has an active exclusive listing. The seller's deed will help determine if there are any liens against the property. ----- CORRECT ANSWER----------------False The Residential Property Disclosure Act requires a listing agent to provide the seller with the appropriate disclosure form and to help the seller in proper completion of the form. -----CORRECT ANSWER----------------False Additional duties of the listing agent in connection with the Residential Property Disclosure Act include all the following EXCEPT A) assist the seller in assessing the property by gathering property data. B) explain to the seller that a broker is not required to disclose material facts about the property if the seller chooses to answer all the questions "no representation." C) identify items of possible concern and review with the seller their options for addressing such items. D) provide the seller with copies of both Residential Property and Owners' Association Disclosure Statement and the Mineral and Oil and Gas Rights Disclosure Statement. ---- -CORRECT ANSWER----------------B) explain to the seller that a broker is not required to disclose material facts about the property if the seller chooses to answer all the questions "no representation." Deidra is meeting with a seller to discuss listing their property for sale. All of the following will need to be accomplished at this prelisting meeting EXCEPT A) inspect the property and verify information. B) measure the lot to determine square footage. C) explain agency relationship and company policy/services. D) assist the seller with various disclosure forms. -----CORRECT ANSWER---------------- B) measure the lot to determine square footage. The duties owed from the "agent" to the "principal" are BEST described by which of the following? A) Obedience, loyalty, accounting, and reasonable care B) Fairness and honesty C) Fairness, honest, obedience, loyalty, accounting, reasonable skill, and care D) Obedience, loyalty, disclosure, confidentiality, accounting, reasonable skill, care, and diligence -----CORRECT ANSWER----------------D) Obedience, loyalty, disclosure, confidentiality, accounting, reasonable skill, care, and diligence Which of the following BEST describes subagent? A) Literally the agent of an agent, a person designated or employed by an agent to perform all or part of the agent's assigned tasks or services on behalf of the agent's principal B) The person who authorizes another to act on the principal's behalf within specified parameters and to whom the agent owes certain legal duties C) The person acting for and on behalf of the principal within the bounds of the authority granted and who owes fiduciary duties to the principal D) The relationship that exists when one person is authorized to act for and on behalf of another -----CORRECT ANSWER----------------A) Literally the agent of an agent, a person designated or employed by an agent to perform all or part of the agent's assigned tasks or services on behalf of the agent's principal Which of the following statements is TRUE regarding agency agreements? A) Listing agreements, property management agreements, buyer agency agreements, and tenant representation agreements can all be express oral agreements for a period of time. B) Listing agreements and property management agreements must be express written agreements from the beginning of the relationship and buyer agency agreements and tenant representation agreements can be in express oral agreements for a period of time. C) Listing agreements and buyer agency agreements must be express written agreements from the beginning of the relationship and property management agreements and tenant representation agreements can be express oral agreements for a period of time. D) Listing agreements and property management agreements can express oral agreements for a period of time and buyer agency agreements and tenant representation agreements must be in ex -----CORRECT ANSWER----------------B) Listing agreements and property management agreements must be express written agreements from the beginning of the relationship and buyer agency agreements and tenant representation agreements can be in express oral agreements for a period of time. Which of the following statements BEST describes North Carolina Unfair Deceptive Practices Act? A) This law prohibits disclosure regarding facts about the property itself or the surrounding area. B) This law prohibits unfair or deceptive acts or practices in commerce and applies to the sale or rental of real estate and to real estate brokers. C) This law holds that—except in cases involving fraud by the seller or the seller's agent—the seller has no affirmative obligation to disclose information about the property being sold to the purchaser and places the burden on the buyer to investigate the property before contracting to purchase the property. D) This law prohibits making generalized expression of a broker's opinion about a property. -----CORRECT ANSWER----------------B) This law prohibits unfair or deceptive acts or practices in commerce and applies to the sale or rental of real estate and to real estate brokers. George knows that the property is about to be rezoned for commercial use, which will greatly increase the value of the property. George does not share this information with the seller and offers to buy the property for himself as an investment. George closes on the property with the seller and then after the rezoning has been finalized, George sells the property at a substantial profit. This is an example of A) self-dealing. B) making false promises. C) undisclosed dual agency. D) improper dealing. -----CORRECT ANSWER----------------A) self-dealing. Lanzo is in the process of listing a house for sale and tells the seller that he will stage the house, steam clean the carpets, and hire a professional cleaning crew to clean prior to showing the house. Once the seller signed the listing agreement, Lanzo failed to provide these services. Lanzo may be guilty of which of the following? A) Making false promises B) Undisclosed dual agency C) Self-dealing D) Improper brokerage commission -----CORRECT ANSWER----------------A) Making false promises Who is required to disclose material facts? A) Sellers and listing agents B) Sellers and buyers C) Listing agents and selling agents D) Sellers, buyers, listing agents, and selling agents -----CORRECT ANSWER------------- ---C) Listing agents and selling agents Francis listed a property for sale and did not investigate the property for material facts because he relied on the seller's statement that there was nothing wrong with the property. It was later discovered that there was a substantial leak in the roof that was easily detectable. In this situation, Francis could be held liable for which of the following? A) The seller will be held responsible and Francis has no liability B) Negligent misrepresentation or omission. C) Willful misrepresentation or omission. D) Francis is not required to discover material facts since he has the seller's word that there is nothing wrong. -----CORRECT ANSWER----------------B) Negligent misrepresentation or omission. Which of the following statements regarding agent's duties under real estate license law is TRUE? A) A broker's duties under license law when dealing with parties to a transaction apply regardless of the broker's agency relationship to such parties. B) A broker's duties under license law when dealing with parties to a transaction apply only to the firm's clients. C) A broker's duties under license law when dealing with parties to a transaction apply only to the firm's customers. D) A broker does not have duties under license law as brokers are only bound by North Carolina Real Estate Commission rules. -----CORRECT ANSWER----------------A) A broker's duties under license law when dealing with parties to a transaction apply regardless of the broker's agency relationship to such parties. When it comes to standards for selling agents, which of the following statements is TRUE? A) A selling agent may rely on the accuracy of property information provided by a listing agent in MLS only and must verify other forms of advertising. B) Generally, a selling agent may rely on the accuracy of property information provided by a listing agent. C) A selling agent may never rely on the accuracy of property information provided by a listing agent as they must always verify everything. D) Neither the listing nor selling agent are liable for advertising as long as there is a "disclaimer" warning for the reader to make an independent investigation. ----- automatically creates an agency relationship between the seller and the buyer agent's firm. All the following are considered categories of "material fact" EXCEPT A) facts directly affecting the property. B) facts about the property itself. C) the seller's reasons for selling. D) facts of special importance to a party. -----CORRECT ANSWER----------------C) the seller's reasons for selling. A licensee does not have actual knowledge of a material fact and consequently does not disclose the fact, but a reasonably prudent licensee "should reasonably have known" of such fact. In this case, the licensee may be guilty of which of the following if they fail to disclose this fact to a buyer, seller, landlord, or tenant, even though the licensee acted in good faith in the transaction. A) Willful omission B) Willful misrepresentation C) Negligent misrepresentation D) Negligent omission -----CORRECT ANSWER----------------D) Negligent omission Travis is holding an open house and Sarah stops by to view the home. Sarah starts to tell Travis how much she would be willing to pay for the property when she makes an offer. At this point, Travis discloses that he and his firm are representing the seller only, then notifies Sarah of her agency options. The seller has already agreed to dual agency. If Sarah wants to make an offer on the property and she agrees to dual agency as well, this would be an example of which of the following? A) Intentional, undisclosed dual agency B) Unintentional, disclosed dual agency C) Unintentional, undisclosed dual agency D) Intentional, disclosed dual agency -----CORRECT ANSWER----------------D) Intentional, disclosed dual agency When a broker is selling a property they have an ownership interest in, they need to disclose they have a real estate license, and the North Carolina Real Estate Commission rules state that A) the broker can represent a buyer or offer to represent a buyer in the purchase of a property the broker has an ownership interest in so long as the broker discloses the ownership interest and gets consent to act as a buyer agent. B) the broker can represent the buyer or offer to represent the buyer as long as the broker does not have a conflict of interest. C) the broker cannot represent the buyer or offer to represent the buyer unless they have permission from their broker-in-charge. D) the broker cannot represent a buyer or offer to represent a buyer in the purchase of a property the broker has an ownership interest in. -----CORRECT ANSWER---------------- D) the broker cannot represent a buyer or offer to represent a buyer in the purchase of a property the broker has an ownership interest in. Who decides whether a listing firm will cooperate with other firms to procure a buyer for the property? A) Buyer-agent firm B) Listing firm C) Buyer D) Seller -----CORRECT ANSWER----------------D) Seller Which of the following statements BEST describes the agency options available for real estate firms? A) Seller agency, buyer agency, dual agency, and a form of dual agency called designated agency B) Unintentional dual agency, seller agency, and buyer agency C) Dual agency, intentional undisclosed dual agency, and unintentional dual agency D) Intentional undisclosed dual agency, seller agency, and buyer agency ----- CORRECT ANSWER----------------A) Seller agency, buyer agency, dual agency, and a form of dual agency called designated agency Best Homes Realty was hired by a buyer to represent them in purchasing a property. The buyer wanted to have exclusive representation at all times. What type of agency would BEST describe the relationship between Best Homes Realty and the buyer? A) Buyer agency B) Dual agency C) Nonagency D) Seller agency -----CORRECT ANSWER----------------A) Buyer agency Dream Homes Realty is showing a buyer client a property listed with Dream Homes Realty. According to licensing law, which of the following statements is TRUE? A) Dream Homes Realty only needs to get informed consent from the seller prior to showing the property. B) Dream Homes Realty only needs to get informed consent prior to showing the property if the buyer ends up making an offer. C) Dream Homes Realty will need informed consent of both principals. D) Dream Homes Realty does not need informed consent of both principals. ----- CORRECT ANSWER----------------C) Dream Homes Realty will need informed consent of both principals. A property is listed for sale with one firm and the buyer of that property is procured by a different firm. This type of transaction is BEST described as A) in-house sale. B) single agency sale. C) dual agency sale. D) cooperating sale. -----CORRECT ANSWER----------------D) cooperating sale. According to North Carolina Real Estate Commission rules regarding a broker representing a buyer or offering to represent a buyer in a property the broker has an ownership interest is A) illegal because the buyer would be getting all the fiduciary duties from the owner- broker. B) illegal because the broker has an obvious conflict of interest. C) legal because the buyer is allowed to choose the type of agency representation they would like. D) legal because the broker can represent the interest of the buyer and their own interest at the same time. -----CORRECT ANSWER----------------B) illegal because the broker has an obvious conflict of interest. Which of the following statements are TRUE regarding the different agency arrangements possible when firms are cooperating in a real estate transaction? A) The cooperating or selling broker who procures the buyer may be operating as the agent of the buyer or the subagent of the seller. B) The cooperating or selling broker who procures the buyer is the same firm that is representing the seller. C) The cooperating or selling broker is representing the seller as a seller subagent. D) The cooperating or selling broker is representing the buyer as a buyer agent. ----- CORRECT ANSWER----------------A) The cooperating or selling broker who procures the buyer may be operating as the agent of the buyer or the subagent of the seller. D) At the time when Marcus and Naomi form their agency relationship -----CORRECT ANSWER----------------D) At the time when Marcus and Naomi form their agency relationship When first substantial contact with a prospective buyer or seller occurs by telephone or other electronic means that make it impractical to give the person the written brochure, the broker is required to do which of the following? A) At the earliest opportunity but no later than seven days from the date of first substantial contact, mail, or transmit a copy of the brochure to the consumer and review it with them at the earliest opportunity. B) The broker must cease all communication with the consumer until they can meet in person with the broker to review the brochure. C) The broker must remain neutral and only discuss material facts about properties until the consumer can meet with the broker in person to discuss the brochure. D) At the earliest opportunity but no later than three days from the date of first substantial contact, mail, or transmit a copy of the brochure to the consumer and review it with them at the -----CORRECT ANSWER----------------D) At the earliest opportunity but no later than three days from the date of first substantial contact, mail, or transmit a copy of the brochure to the consumer and review it with them at the earliest opportunity. Carlos calls a real estate office to obtain a price of a property and indicates that he would like to buy the property since he needs to be moved in and starting his new job within the month. At this time, the broker presents the information in the "Working with Real Estate Agents" brochure. All of the following should occur EXCEPT A) the broker needs to inform Carlos to not reveal any confidential or personal information to any broker until he decides who to hire as his agent. B) at the earliest opportunity, the broker needs to transmit to Carlos a copy of the brochure. C) the broker needs to contact Carlos and review the brochure again once Carlos has a copy. D) the broker has seven days to transmit a copy of the brochure to Carlos. ----- CORRECT ANSWER----------------D) the broker has seven days to transmit a copy of the brochure to Carlos. At the prelisting meeting, the broker needs to discuss the brokerage fee. What does the broker need to determine prior to attending the prelisting meeting regarding the firm's fee? A) If the firm has come to an agreement with other firms about what the standard fee will be in the area B) If the firm has checked the latest Commission rules regarding what firms should charge sellers C) If the firm has a policy that indicates what the listing fee will be and if it is negotiable D) If the firm has determined the latest trends in what all firms are charging sellers ----- CORRECT ANSWER----------------C) If the firm has a policy that indicates what the listing fee will be and if it is negotiable Caroline is selling her property and is deciding what personal property she wants to sell with the property. Hugo, her real estate broker, should recommend which of the following? A) Hugo needs to tell Caroline to leave all personal property with the house since it is now considered real property. B) Hugo needs to tell Caroline they need to list all the personal property she is selling with the property in the property data sheet and the listing agreement. C) Hugo needs to tell Caroline she can leave whatever personal property she would like to once they have gone under contract with the buyer. D) Hugo needs to tell Caroline to remove all personal property from the property because the lender will not allow personal property to be in the sales contract. ----- CORRECT ANSWER----------------B) Hugo needs to tell Caroline they need to list all the personal property she is selling with the property in the property data sheet and the listing agreement. Isla is meeting with Hector to discuss listing his property for sale. As they are walking through the property, Isla is inquiring about the television screens that are mounted on the wall in the family room and the playroom. Which of the following statements would be TRUE? A) Isla must tell Hector that they are considered fixtures and therefore are considered part of real property. If Hector wants to take them, he can, as long as he excepts them from the listing agreement and the sales contract. B) Isla must tell Hector he must take the television screens off the walls because they are personal property and he must take them with him. C) Isla must tell Hector that the buyer must ask for television screens in the sales contract if the buyer is intending for Hector to leave them since they are considered personal property. D) Isla must tell Hector that he has to leave the television screens since they are mounted on th -----CORRECT ANSWER----------------A) Isla must tell Hector that they are considered fixtures and therefore are considered part of real property. If Hector wants to take them, he can, as long as he excepts them from the listing agreement and the sales contract. A real estate agent has been called by a seller to meet about possibly listing the seller's home for sale. According to the North Carolina Real Estate Commission (NCREC) the real estate agent: A) Can use whatever preprinted form their firm decides they would like to use as the listing agreement with the seller, NCREC does not have rules regarding listing agreements. B) Can use whatever preprinted form their firm decides they would like to use at the listing agreement with the seller as long as it conforms with the requirements of NCREC rules. C) Must use the Standard form provided by the North Carolina Real Estate Commission as the listing agreement with the seller. D) Must use the Standard Form 101 - Exclusive Right to Sell Listing Agreement created by the North Carolina Association of REALTORS® as the listing agreement with the seller. -----CORRECT ANSWER----------------B) Can use whatever preprinted form their firm decides they would like to use at the listing agreement with the seller as long as it conforms with the requirements of NCREC rules. What are Norah's duties when she is verifying acreage of the lot? A) Norah must hire a surveyor and have the acreage determined. B) Norah needs to ask the seller to hire a surveyor and have the acreage determined. C) Norah can advertise acreage as long as she has a general idea of the total acreage. D) Norah should walk the lot with the seller and locate corners and property lines. ----- CORRECT ANSWER----------------D) Norah should walk the lot with the seller and locate corners and property lines. While Nele is presenting the agency disclosure brochure, she discusses her firm's compensation policies and Lanzo asks her if they are charging the customary fee. Which would be the BEST way for Nele to respond to Lanzo's question? A) Our firm is charging the standard fee. B) I don't know what other firms are charging, each firm sets their own fees. C) I have not checked with the latest data to see what all the other firms have agreed to charge. D) I need to check with my firm to see if they are willing to charge the standard commission. -----CORRECT ANSWER----------------B) I don't know what other firms are charging, each firm sets their own fees. Kristin has an appointment with Logan, a broker at Green Acres Realty, to discuss listing her property at 2398 Black Top Lane. Logan is expected to accomplish which of the following at their prelisting meeting? A) Discuss how the property will be marketed Sellers of all of the following types of transfers or types of properties are exempt from completing the Residential Property and Owners' Association Disclosure Statement (RPOADS) but not exempt from completing the Mineral and Oil and Gas Rights Disclosure Statement EXCEPT A) transfers between parties when both parties agree not to complete a RPOADS. B) relocation company owned properties. C) first sale of a dwelling never inhabited. D) lease with the option to purchase contracts where the lessee occupies or intends to occupy the dwelling. -----CORRECT ANSWER----------------B) relocation company owned properties. Boris is in a prelisting meeting with the seller. Boris sees that there is an active leak in the roof while he is inspecting the property and verifying information regarding the property. Which of the following statements is TRUE regarding the leak in the roof? A) Boris must disclose the leak in the roof regardless of whether the seller lists with him or not. B) The seller is the only one that would need to disclose the leak in the roof; Boris would not be required. C) Boris must keep the leak in the roof confidential if he lists the property for sale. D) Boris and the seller must disclose that there is a leak in the roof. -----CORRECT ANSWER----------------A) Boris must disclose the leak in the roof regardless of whether the seller lists with him or not. Knowing the balance due on seller's existing mortgages and statuses of mortgages is important because A) the real estate broker needs the information so they can personally call the seller's bank to get final loan payoff for closing. B) the real estate broker needs the information to help advise the seller if this is a good time to sell the property because they could have little or no equity in the property. C) the real estate broker needs the information to help assist the seller with a listing price. D) the real estate broker needs the information to help assist the seller in case they are behind in payments and may be facing foreclosure. -----CORRECT ANSWER-------------- --B) the real estate broker needs the information to help advise the seller if this is a good time to sell the property because they could have little or no equity in the property. Jessica is in the prelisting meeting with the seller and asks for their mortgage balances and statuses. Jessica is going to utilize the information along with the results of her comparative market analysis to do which of the following? A) To help Jessica tell the sellers exactly what their seller net proceeds will be at closing B) To help Jessica tell buyers how much the seller will be able to net since this is a material fact C) To help Jessica decide if the sellers are serious about selling the property D) To help the seller determine if this is a good time to sell their property because they could actually owe more than the market is saying that their home will sell for ----- CORRECT ANSWER----------------D) To help the seller determine if this is a good time to sell their property because they could actually owe more than the market is saying that their home will sell for It is important to inspect the property by performing a careful "walk-through" inspection of the seller's property in the presence of the seller during the "inspect the property and verify information" phase of the prelisting meeting. The real estate agent and the seller are verifying the physical features of the property in order to do all the following EXCEPT A) to complete the property data sheet. B) to prepare advertising for the property. C) to determine a probable list price for the property. D) to assist the seller in completing the property disclosure form. -----CORRECT ANSWER----------------C) to determine a probable list price for the property. Which of the following statements is TRUE regarding bringing a copy of the brochure "Working with Real Estate Agents" to the prelisting meeting with the seller? A) The real estate agent does not need to give a copy to the seller nor do they need to review it with the seller until the seller gets an offer on the property. B) The real estate agent will need to give a copy to the seller and review it when they first meet. C) The real estate agent will need to leave a copy of the brochure with the seller for them to read after the real estate agent leaves. D) The real estate agent will need to give a copy to the seller and review it when they have first substantial contact. -----CORRECT ANSWER----------------D) The real estate agent will need to give a copy to the seller and review it when they have first substantial contact The purpose of acquiring a copy of the restrictive covenants would include the following: A) Having covenants available can help the listing agent readily answer questions about the various easements that are currently affecting the property. B) Having covenants available will expedite the transaction later, possibly at a critical point where the buyer has a sufficient interest in the seller's property, the listing agent will be able to readily answer questions about permitted property uses. C) Having covenants available can help the listing agent readily answer questions about the various title issues that are currently affecting the property. D) Having covenants available can help the listing agent readily answer questions about the various liens against the property. -----CORRECT ANSWER----------------B) Having covenants available will expedite the transaction later, possibly at a critical point where the buyer has a sufficient interest in the seller's property, the listing agent will be able to readily answer questions about permitted property uses. A real estate agent is in a prelisting meeting with a seller and is conducting the "inspect the property and verify information" phase of the meeting. During this time, the real estate agent will do all of the following EXCEPT A) caution the seller about providing confidential information. B) inquire as to construction/alteration/repair permits. C) note all significant property defects. D) inspect the property. -----CORRECT ANSWER----------------A) caution the seller about providing confidential information. A real estate agent who is choosing comparables to prepare a comparative market analysis should consider current active listings. -----CORRECT ANSWER---------------- False To determine the gross rental multiplier (GRM), divide the sales price of an income- producing property by the gross rental income. -----CORRECT ANSWER---------------- True Licensees are never allowed to prepare a broker price opinion (BPO) for a fee. ----- CORRECT ANSWER----------------False What is one of the similarities between an appraisal and broker price opinion? A) Both utilize the broker opinion report (BOR) B) Both utilize the Uniform Residential Appraisal Report (URAR) C) Both are based on exactly the same valuations concepts and principles D) Both have a goal of determining the value of the property -----CORRECT ANSWER-- --------------C) Both are based on exactly the same valuations concepts and principles B) Where the subject property is inferior to the comparable sale property, the sale price of the comparable property is adjusted downward. C) Where the subject property is inferior to the comparable sale property, the sale price of the subject property is adjusted downward. D) Where the subject property is infer -----CORRECT ANSWER----------------B) Where the subject property is inferior to the comparable sale property, the sale price of the comparable property is adjusted downward. Precious is assisting an investor in the purchase of a residential property that is listed for $90,000 and the current owner is charging $700 per month for rent. What formula would Precious use to determine the gross rent multiplier (GRM)? A) Sales price × gross rental income = GRM B) Gross rental income ÷ sales price = GRM C) Sales price ÷ gross rental income = GRM D) GRM × sales price = gross rental income -----CORRECT ANSWER----------------C) Sales price ÷ gross rental income = GRM Which of the following statements is TRUE regarding "comparative market analysis" (CMA) and "broker price opinion" (BPO)? A) BPO and CMA are interchangeable terms. B) BPO determines the value of a property and a CMA is an estimate of the probable selling price or leasing price. C) CMA is a report provided by a licensed real broker and a BPO is a report that can only be provided by a licensed real estate appraiser. D) CMA determines the value of a property and a BPO is an estimate of the probable selling price or leasing price. -----CORRECT ANSWER----------------A) BPO and CMA are interchangeable terms. Emma is a real estate broker and is offering as part of her buyer representation services to prepare a comparative market analysis (CMA) for all potential buyers. Will Emma be in compliance of licensing law if she provides the CMAs? A) Emma may prepare the CMA for the buyers but is not allowed to charge a fee. B) Emma may perform the CMA for the buyers. C) Emma may not perform the CMA because she can only provide that service for seller-clients, not buyer-clients. D) Emma may perform the CMA for the buyers as long as she charges for the CMA. ---- -CORRECT ANSWER----------------B) Emma may perform the CMA for the buyers. Tara is listing a property for sale. Under the law of agency, what are her duties, if any, regarding comparative marketing analysis (CMA)? A) Tara should not complete the CMA unless she obtains a fee. B) Tara has a duty to serve the client with skill, care, and diligence. C) Tara can complete the CMA only if she gets guidance from an appraiser. D) Tara should not complete the CMA because she would be telling the seller what to list their property for and that would be a violation of agency. -----CORRECT ANSWER-- --------------B) Tara has a duty to serve the client with skill, care, and diligence. Layne has recently been licensed and not completed all of her postlicensing educational requirements. Downtown Bank has reached out to Layne regarding paying her $200 for preparing a broker price opinion (BPO). In this situation, what can Layne do? A) Layne must decline Downtown Bank's offer because she charges $300 for a BPO. B) Layne must decline Downtown Bank's offer because she is still on provisional status. C) Layne can accept the offer because she meets all the requirements to charge for a BPO. D) Layne can accept the offer because she is willing to reduce her fee from $300 down to $200. -----CORRECT ANSWER----------------B) Layne must decline Downtown Bank's offer because she is still on provisional status. Johnny has located several houses to rent in the city he is relocating to next month. He really does not know anything about the city and would really like to hire a real estate broker to assist him with his housing search. He interviews a few brokers and asks them if they are allowed to help him negotiate rental amounts with the property owners. According to license law, will the brokers be allowed to provide a comparative market analysis (CMA) for Johnny if he hires one of them? A) The broker may perform the CMA for the tenants. B) The broker may prepare the CMA for the tenants but is not allowed to charge a fee. C) The broker may perform the CMA for the tenants as long as he charges for it. D) The broker may not perform the CMA for any tenants. -----CORRECT ANSWER------- ---------A) The broker may perform the CMA for the tenants. Javier has been affiliated with Top Notch Property Management for several years. He has managed many properties on behalf of his firm. Elena has decided to allow her current property management agreement to expire with her current firm and hire Javier and Top Notch Property Management to begin managing all her properties. According to licensing law regarding comparative market analysis (CMA), A) Javier may perform the CMA for the client. B) Javier may not perform the CMA for the client because brokers do not perform CMAs for property management. C) Javier may perform the CMA for the client as long as he charges for the CMA. D) Javier may perform the CMA for the client but is not allowed to charge a fee. ----- CORRECT ANSWER----------------A) Javier may perform the CMA for the client. Abia is in process of gathering data to advise the seller on a listing price. Which of the following reports is Abia allowed to provide to the seller? A) A determination of value report B) An appraisal report C) A comparative market analysis D) A sales data report -----CORRECT ANSWER----------------C) A comparative market analysis Penny is affiliated with a real estate firm who works for people who are in need of tenant representation in a real estate transaction. Penny offers as part of her tenant representation services to prepare a comparative market analysis (CMA) for all potential tenants. Will Penny be in compliance of licensing law if she provides the CMAs? A) Penny may perform the CMA for the tenants as long as she charges for it. B) Penny may prepare the CMA for the tenants but is not allowed to charge a fee. C) Penny may perform the CMA for the tenants. D) Penny may not perform the CMA for any tenants. -----CORRECT ANSWER------------- ---C) Penny may perform the CMA for the tenants. If the seller wants to net $100,000, has closing costs of $4,000, a loan payoff of $88,500, and broker commission fee of 6%, what would they need to sell their property for to net $100,000? A) $164,893 B) $180,950 C) $204,787 D) $200,531 -----CORRECT ANSWER----------------C) $204,787 A seller wants to net $85,000 from a property sale. The seller's outstanding loan balance is $45,320 that will need to be paid off in the sale. Estimated additional closing costs are estimated at $1,550 and the commission rate will be 4.5% of the sales price. What will the seller need to sell the property for in order to net $85,000? A) $136,460 B) $125,935 C) $138,083 D) $139,544 -----CORRECT ANSWER----------------C) $138,083 Esme purchased her house for $180,000 and paid an additional $4,000 in closing expenses. She proposes to sell her house for $230,000 and the listing broker estimates that total closing expenses (including 7% brokerage fee) on such a sale would be $19,000. Esme's projected net profit on this sale would be A) $73,000. B) $60,000. C) $27,000. D) $50,000. -----CORRECT ANSWER----------------C) $27,000. Keisha is a residential real estate appraiser and has been called by Willa, a local real estate agent, to prepare a current appraisal for 2057 Easy Street. Willa is in the middle of the listing process with the owner. Under what conditions would Willa want to involve an appraiser prior to listing the property? A) Willa may not feel completely confident of the estimated probable selling price. B) Only an appraiser can help determine the probable selling price. C) North Carolina Real Estate Commission rules require an appraiser to assist in pricing properties. D) North Carolina Licensing Law requires an appraiser to assist in pricing properties. ---- -CORRECT ANSWER----------------A) Willa may not feel completely confident of the estimated probable selling price. Milo is deciding if this is a good time to sell his property and asks the real estate agent to calculate what he needs to sell his home for in order to net $80,000. The agent is charging 5% of the sales price for commission fee, he has a loan to pay off in the amount of $175,000, and the agent estimates other closing costs to be $1,000. What does he need to sell his home for in order to net $80,000? A) $260,000 B) $267,750 C) $269,475 D) $268,800 -----CORRECT ANSWER----------------C) $269,475 The Joneses are in process of listing their home. They have a follow-up appointment with Charlie who is affiliated with Dream Homes Realty. Charlie has completed his comparative market analysis and is meeting them to discuss the best possible listing price for the property. Which of the following is NOT a factor to be considered at this appointment? A) Agent's needs B) Measuring the property C) Estimating net to seller D) Calculating net profit to seller -----CORRECT ANSWER----------------B) Measuring the property Pauline is preparing a comparative market analysis for a property owner. During her research, Pauline does not find any homes that have recently sold in the neighborhood where the subject property is located, and there are not any homes that have recently sold that are comparable to the subject property in the past 18 months. What is BEST step that Pauline can take at this time? A) Pauline could ask the seller to split the fee and hire a licensed real estate appraiser to prepare a current appraisal of the property. B) Pauline must hire an appraiser according to North Carolina Real Estate Commission rules. C) Pauline could tell the seller that she will make her best guess as to a probable selling price. D) Pauline could ask the seller to determine a listing price based on what the seller would like to net from the sale. -----CORRECT ANSWER----------------A) Pauline could ask the seller to split the fee and hire a licensed real estate appraiser to prepare a current appraisal of the property. The listing broker has all of the following duties when advising the seller about list price EXCEPT A) the broker should counsel the seller on the legal consequences of a short sale. B) if a "short sale" is likely, the broker should explain the brokerage aspects of a short sale. C) alert the seller to the possible consequences of a "short sale." D) the broker has a responsibility to the seller-client to identify any potential "short sale" situation prior to completing a listing contract and setting a listing price. -----CORRECT ANSWER----------------A) the broker should counsel the seller on the legal consequences of a short sale. Emmett is in a meeting with a real estate agent discussing a listing price. The agent is presenting the comparative market analysis, and it shows that there are no good comparables that have recently sold. What is the BEST advice for the agent to give Emmett at this time? A) To have the agent reach out to an attorney to help them understand their liability in this situation B) To have Emmett decide on a listing price without adequate information to assist them. C) To have the agent call the North Carolina Real Estate Commission for guidance D) To have Emmett hire an appraiser to perform a current appraisal on the property ----- CORRECT ANSWER----------------D) To have Emmett hire an appraiser to perform a current appraisal on the property Antonio, a broker affiliated with Best Homes Realty, is assisting a buyer-client with the purchase of a home. What is Antonio's duty to discover if a listed property will involve a short sale? A) Antonio needs to ask the listing agent if the property is a short sale. B) Antonio needs to reach out to the lender directly to determine if the property is a short sale. C) Antonio has no duty to discover if the property is a short sale because the information will not affect the buyer. D) Antonio has no duty to the buyer to confirm if a property is a short sale. ----- CORRECT ANSWER----------------A) Antonio needs to ask the listing agent if the property is a short sale. Lucy has completed the comparative market analysis for the sellers at 3091 Sunny Lane and is meeting with them tonight to discuss listing price. What would be the BEST strategy for Lucy during this meeting? A) Lucy should determine the listing price herself since she is the professional. B) Lucy should suggest listing at the bottom of the comparative market analysis price range if they are in no hurry to sell. C) Lucy should make recommendations based on the needs and desires of the sellers. D) Lucy should suggest listing at the top of the comparative market analysis price range if they are in a hurry to sell. -----CORRECT ANSWER----------------C) Lucy should make recommendations based on the needs and desires of the sellers. Declan is a real estate broker affiliated with Best Homes Realty. He is in process of listing a property for sale and is having trouble determining a probable sales price of a property. The property is very unique and there are no other properties like it in the area either recently sold or currently on the market. What is the BEST course of action for Declan at this time? A) Declan can make a guess based on how much he likes the property. B) Declan can ask the owner to hire a licensed residential real estate appraiser to prepare a current appraisal on the property. C) Declan can ask the owner to determine their own listing price based on their financial needs. Brandon is a broker affiliated with Dream Homes Realty. He receives a call from Anja about listing her home. What does Brandon need to determine first before proceeding with an agency relationship with her? A) Brandon should have her sign an exclusive agency agreement before they meet in person. B) Brandon needs to disclose that he is a provisional broker who still needs to complete additional educational requirements. C) Brandon should ask Anja whether she already has an agency agreement with another broker. D) Brandon needs to disclose that his real estate license is on active status. ----- CORRECT ANSWER----------------C) Brandon should ask Anja whether she already has an agency agreement with another broker. Tom has a listing that expires tonight at midnight and several buyers who have recently viewed the property during his listing period may want to make offers later this week. How will Tom be able to ensure that his firm receives compensation if one of these buyers ends up purchasing the home after the listing expires? A) Tom's firm included a provision that requires a certain act to be done or a certain event to occur before the contract becomes binding. B) Tom's firm included a provision that cancels a specified right upon the occurrence of a certain condition. C) There is no way for Tom's firm to receive a commission outside the listing term. D) Tom's firm included a "protection clause" in the listing agreement that would allow the firm compensation outside the listing term under certain circumstances. ----- CORRECT ANSWER----------------D) Tom's firm included a "protection clause" in the listing agreement that would allow the firm compensation outside the listing term under certain circumstances. Sommer, a real estate broker, has met a prospective seller in the checkout line of the neighborhood grocery store. Sommer asks if he already has his home listed for sale with another firm and he indicates that, yes, in fact he does have it listed with Greater Area Realty. What should Sommer do at this situation? A) Sommer should delay entering into an agency agreement with the prospective seller until the existing agency agreement expires or it is legally terminated. B) Sommer should follow up with an email to see if he would be willing to change listing firms to list with her firm. C) Sommer should see if he is willing to terminate his agency agreement prior to the expiration date and list with her firm. D) Sommer should ask to visit his home and to give her an opportunity to present the marketing her firm provides and see if he will consider switching listing firms. ----- CORRECT ANSWER----------------A) Sommer should delay entering into an agency agreement with the prospective seller until the existing agency agreement expires or it is legally terminated. Dorothy and Kirk Brown are in process of selling their property at 202 East Second Street. They hired Top Notch Realty to list their property since the firm has listed and sold several homes in their neighborhood in the last six months. What seller names does the listing agent need to use on the listing agreement? A) Dorothy and Kirk Brown B) Dot and Kirk Brown. C) Mr. and Mrs. Kirk Brown D) Dorothy Brown and Kirk Brown -----CORRECT ANSWER----------------D) Dorothy Brown and Kirk Brown When the broker produces a buyer ready, willing, and able to buy under the terms specified in the listing contract, the broker remains entitled to a brokerage fee even if the transaction fails due to all of the following EXCEPT A) the buyer fails to obtain loan approval after they have gone under contract with the seller. B) the seller will be unable to deliver possession within a reasonable time. C) the seller insists on sale terms and conditions not stated in the listing contract. D) the seller has a defect in title. -----CORRECT ANSWER----------------A) the buyer fails to obtain loan approval after they have gone under contract with the seller. Two brokerage firms split a 7% commission equally on a $245,000 property. The selling provisional broker was paid 55% of their firm's share. How much did the provisional broker earn on this sale? A) $4,651 B) $4,716 C) $4,043 D) $4,288 -----CORRECT ANSWER----------------B) $4,716 Which of the following statements is TRUE regarding a reason to state the price and terms of a sale in the listing contract? A) The seller will be required to reject all offers that do not meet the specified terms listed in the listing agreement. B) If the broker subsequently tenders to the seller an offer from a bona fide buyer who agrees to pay the exact price and to buy upon the exact terms as specified in the contract, the broker will have earned a commission even if the seller refuses to accept the offer. C) The seller will be required to sell their property if they receive an offer for price and terms. D) The seller will be forced to wait for an offer that exceeds the specified terms listed in the listing agreement. -----CORRECT ANSWER----------------B) If the broker subsequently tenders to the seller an offer from a bona fide buyer who agrees to pay the exact price and to buy upon the exact terms as specified in the contract, the broker will have earned a commission even if the seller refuses to accept the offer. Quinn is selling her home and would like to work exclusively with Samuel and his firm, Home Team Realty. What will Quinn and Samuel need to do to list her property for sale? A) Quinn and Samuel will need to enter into a formal oral exclusive listing agreement. B) Quinn and Samuel will need to enter into a written exclusive right to sell listing agreement. C) Quinn and Samuel can have an exclusive agency relationship when their express agreement is oral. D) Quinn and Samuel can have an oral exclusive agency agreement. -----CORRECT ANSWER----------------B) Quinn and Samuel will need to enter into a written exclusive right to sell listing agreement. When co-owners own a property as tenants in common and they want to sell the property, who needs to sign the listing agreement? A) Only one of the co-owners need to sign the listing agreement. B) All of the co-owners need to sign the listing agreement. C) They must have a majority of the co-owners sign the listing agreement. D) At least half of the owners need to sign the listing agreement. -----CORRECT ANSWER----------------B) All of the co-owners need to sign the listing agreement. Dylan and Alex own a property as tenancy by the entirety and are listing the property for sale. What does the listing agent, Travis, need to do regarding signatures on the listing agreement? A) Since they are married, one spouse can sign for both of them. B) Both spouses need to sign the listing agreement. C) Travis can sign the listing agreement for the sellers. D) Either Dylan or Alex needs to sign the listing agreement; it takes one of the owners to sell a property but would require both signatures if they were buying a property together. -----CORRECT ANSWER----------------B) Both spouses need to sign the listing agreement. A) $10,500 B) $8,750 C) $9,625 D) $9,125 -----CORRECT ANSWER----------------C) $9,625 In the listing agreement, the seller owes duties to the listing firm. Those duties include all the following EXCEPT A) the seller shall cooperate with the firm by agreeing to pay the firm when they produce a ready, willing, and able buyer. B) the seller shall agree to sell the home when the buyer has made an offer on the home with terms listed in the listing agreement. C) the seller shall cooperate with the firm by providing the appropriate disclosure forms required by law. D) the seller shall cooperate with the firm by making the home available for showings. -- ---CORRECT ANSWER----------------B) the seller shall agree to sell the home when the buyer has made an offer on the home with terms listed in the listing agreement. Which of the following statements is TRUE regarding the North Carolina Real Estate Commission (NCREC) and use of standard forms used with consumers in a real estate transaction? A) NCREC does not provide mandated agency agreements for any real estate transactions. B) All brokers must use the NCREC mandated agency agreements for residential transactions. C) NCREC does not provide mandated agency agreements for residential transactions, only for commercial real estate. D) All brokers must use the NCREC mandated agency agreements for both commercial and residential transactions. -----CORRECT ANSWER----------------A) NCREC does not provide mandated agency agreements for any real estate transactions. All of the following are ways that a listing agreement can be terminated without further liability EXCEPT A) Dissolution of the brokerage firm B) Destruction of the listed property C) Death of the listing broker D) Death or insanity of the owner -----CORRECT ANSWER----------------C) Death of the listing broker Samuel is completing a listing agreement with the seller, Emmerson, and they are filling in the information necessary to complete the price and terms Emmerson is willing to accept. Which of the following statements is TRUE regarding list price and terms? A) Samuel needs to have personally prepared an appraisal on the property for Emmerson before advising them on listing price. B) Samuel needs to have completed some form of analysis to determine probable sales price for Emmerson before advising them on listing price. C) Samuel has no duty to advise Emmerson on listing price because it would be a violation of their fiduciary duties to the seller. D) Samuel needs to hire and pay for a licensed real estate appraiser to perform an appraisal on the property in order to properly advise Emmerson on listing price. ----- CORRECT ANSWER----------------B) Samuel needs to have completed some form of analysis to determine probable sales price for Emmerson before advising them on listing price. Tracy is affiliated with Green Acres Realty and recently listed a property. Shortly after signing the listing agreement on behalf of the firm, Tracy passes away. Which of the following statements would be true regarding the listing agreement? A) The listing agreement is still valid. B) The terms of the listing agreement will be carried out by Tracy's estate. C) The listing agreement is terminated when Tracy dies. D) The listing agreement would have to be terminated by a civil lawsuit. -----CORRECT ANSWER----------------A) The listing agreement is still valid. Portia is signing a buyer agency agreement with her broker, Min, who is affiliated with Green Homes Realty. Which of the following content is NOT required to be contained in a buyer agency agreement? A) Fixed termination date with no automatic renewal B) Nondiscrimination clause C) Seller's signature D) Broker's license number -----CORRECT ANSWER----------------C) Seller's signature Bruno has met Pamela at an open house she is hosting and they decide to work together. Which of the following statements is TRUE regarding how they can move forward with an agency relationship? A) Bruno and Pamela cannot have an agency relationship until Pamela wants to write an offer on a property. B) Bruno and Pamela can work together only if they have a written agency agreement. C) Bruno and Pamela can work under an oral agency agreement as long as it is expressed, meaning there must be a clear understanding of all the terms of their agreement. D) Bruno and Pamela can work under an oral agency agreement until the first showing of a property and then the agreement must be reduced to writing. -----CORRECT ANSWER----------------C) Bruno and Pamela can work under an oral agency agreement as long as it is expressed, meaning there must be a clear understanding of all the terms of their agreement. North Carolina Real Estate Commission (NCREC) rules dictate all of the following content to be included in all agency agreements between a consumer and a firm EXCEPT A) automatic extension clause. B) signature of all parties. C) nondiscrimination clause. D) real estate broker license number. -----CORRECT ANSWER----------------A) automatic extension clause. Emilio is looking for a real estate broker to assist him with the purchase of a property. All the following agency agreement options would be available to him EXCEPT A) Emilio could agree to an express oral agency agreement until he writes an offer. B) Emilio could agree to an exclusive oral agency agreement until he writes an offer. C) Emilio could sign an exclusive buyer agency agreement with one firm. D) Emilio could agree to an express oral agency agreement that is open-ended and did not obligate him for any time period. -----CORRECT ANSWER----------------B) Emilio could agree to an exclusive oral agency agreement until he writes an offer. Under a limited services listing contract, the listing broker is allowed to conduct showings to prospective buyers. -----CORRECT ANSWER----------------False Sharie is affiliated with a limited services firm and lists Jodi's property in multiple listing service (MLS) for a flat fee. Sharie does not visit the property to discover any material facts about the property. According to licensing law, which of the following statements is correct? A) Limited services listing broker agreements would still require the firm to discover and disclose all material facts. B) Limited services listing broker agreements can limit their duties under licensing law. Theresa is selling her property For Sale by Owner. Brendan is representing a buyer who is interested in making an offer on Theresa's property. Brendan and Theresa sign an agreement that does not provide agency between them; the agreement states that Theresa will pay Brendan a commission if the buyer ends up purchasing her home. What type of agreement is this? A) Proprietary agreement B) Prepayment agreement C) Protection agreement D) Probate agreement -----CORRECT ANSWER----------------C) Protection agreement Which of the following statements is TRUE regarding a protection agreement when a buyer agent's firm is working with a For Sale by Owner? A) The buyer agent's firm must utilize the North Carolina Real Estate Commission's standard form with the seller. B) The seller must utilize the North Carolina Real Estate Commission's standard form with the buyer. C) The North Carolina Real Estate Commission does not provide a standard form. D) The listing firm must utilize the North Carolina Real Estate Commission's standard form with the seller. -----CORRECT ANSWER----------------C) The North Carolina Real Estate Commission does not provide a standard form. Seller's Choice Realty advertises their business model as being "fee for service" or "flat fee service." Which of the following statements is TRUE regarding Seller's Choice Realty's business model? A) Seller's Choice Realty is violating the code of ethics because they are limiting services to consumers. B) Seller's Choice Realty is not offering a valid business model in the local real estate industry. C) Seller's Choice Realty is violating the law because they are limiting services to consumers. D) Seller's Choice Realty may offer whatever business model they choose as long as they are complying with all laws and rules. -----CORRECT ANSWER----------------D) Seller's Choice Realty may offer whatever business model they choose as long as they are complying with all laws and rules. Yolanda is in a written exclusive buyer agency agreement with Jacqueline and her firm. They have looked a several properties over the last few weeks and none of them have met Yolanda's needs. Jacqueline is driving around Yolanda's favorite neighborhood and notices there is a new property for sale listed as a For Sale by Owner. What should Jacqueline do at this point? A) Meet with the seller and sign a proprietary agreement B) Meet with the seller and sign a protection agreement C) Meet with the seller and sign a prepayment agreement D) Meet with the seller and sign a probate agreement -----CORRECT ANSWER----------- -----B) Meet with the seller and sign a protection agreement If a firm is representing a buyer and wants to show a For Sale by Owner property, the buyer agent's firm would MOST likely sign which of the following agreements with the seller? A) Prepayment agreement B) Probate agreement C) Protection agreement D) Proprietary agreement -----CORRECT ANSWER----------------C) Protection agreement Membership in an MLS is mandatory for licensees. -----CORRECT ANSWER-------------- --False Brokers who agree to set fixed compensation rates are engaging in boycotting. ----- CORRECT ANSWER----------------False Sheera has agreed to list her property for sale with Dream Homes Realty. Dream Homes Realty has an extensive marketing and advertising plan that they execute for all their listed properties. Which of the following statements is TRUE regarding advertising? A) Dream Homes Realty does not need to get Sheera's permission to submit data to MLS because MLS is not considered a form of advertising. B) Dream Homes Realty makes the decisions regarding where and when advertising will take place. C) Dream Homes Realty does not have to adhere to any state and federal laws or any Commission rules when submitting data to MLS. D) Sheera must authorize all forms of advertising including MLS. -----CORRECT ANSWER----------------D) Sheera must authorize all forms of advertising including MLS. Which of the following statements is TRUE regarding antitrust laws? A) Antitrust laws do not apply to the real estate industry. B) Antitrust laws only apply to residential real estate industry. C) Antitrust laws only apply to commercial real estate industry. D) Antitrust laws apply to the real estate industry. -----CORRECT ANSWER---------------- D) Antitrust laws apply to the real estate industry. Which of the following is described as a voluntary association of real estate brokers in a local area who have agreed to share information about their listed properties, to cooperate in the sale of those properties, and to share real estate commissions earned on sales? A) Multiple cooperating listing service B) Mandatory listing service C) Co-listing cooperative service D) Multiple listing service or cooperative listing service -----CORRECT ANSWER---------- ------D) Multiple listing service or cooperative listing service Which of the following statements is TRUE regarding operating rules and procedures of multiple listing service (MLS)? A) Local MLS operations must comply with National Association of REALTORS® (NAR) guidelines and each MLS has the authority to adopt a specific set of operating guidelines. B) There is only one MLS for the entire country and the National Association of REALTORS® (NAR) determines all the rules and procedures. C) National Association of REALTORS® (NAR) sets all rules and procedures of all MLS systems throughout the country. D) National Association of REALTORS® (NAR) does not have any rules and procedures for local MLS operations. -----CORRECT ANSWER----------------A) Local MLS operations must comply with National Association of REALTORS® (NAR) guidelines and each MLS has the authority to adopt a specific set of operating guidelines. Lindsey just listed her house for sale with Best Homes Realty. The listing agent, Kiera, completed a walk-though of the property with Lindsey at the listing meeting. Lindsey is going to sell this house so she is able to move to a smaller home closer to downtown. Which of the following statements is FALSE regarding the importance of the walk- through? A) Kiera completed the walk-through with Lindsey to determine what fixtures, if any, will be excluded from the listing. B) Kiera completed the walk-through with Lindsey in order to complete the MLS property data sheet to ensure accurate advertising. C) Kiera completed the walk-through with Lindsey to have an understanding of the location of the property lines. An advertisement that references a "low down payment" would trigger additional disclosures under TILA's Regulation Z. -----CORRECT ANSWER----------------False; specific credit terms Julian has just listed a property. The seller, Michelle, needs to get the property under contract in the next 45 days and wants Julian to advertise aggressively including at least five social media posts every day. Which of the following internet advertisements would be in compliance with advertising regulations? A) Payments only $1,050 per month for potential buyers, hurry, won't last long. Click for more property info from Julian at Dream Homes Realty. B) Great home in new subdivision, low payments of $900 available. Message Julian with Dream Homes Realty for more info. C) Want to be in this home quickly? Easy monthly payments available. Message Julian with Dream Homes Realty for more information. D) Buy now for payments of $7.38 per $1,000 borrowed, hurry! Click here for more information, property offered by Julian at Dream Homes Realty. -----CORRECT ANSWER----------------C) Want to be in this home quickly? Easy monthly payments available. Message Julian with Dream Homes Realty for more information. Jada is affiliated with AAA Property Management firm and wants to place an advertisement at the local college newspaper for 103-C Varsity Lane, a property they are representing. Which of the following statements is TRUE? A) AAA Property Management firm does not need the property owner's permission prior to placing the advertisement in the college newspaper. B) AAA Property Management is required to place newspaper advertisements on all properties they are representing per Commission rules. C) AAA Property Management firm needs the property owner's permission prior to placing the advertisement in the college newspaper. D) AAA Property Management is required to have advertisements in all local newspapers for all their properties because they must accurately advertise. ----- CORRECT ANSWER----------------C) AAA Property Management firm needs the property owner's permission prior to placing the advertisement in the college newspaper. Tonya is affiliated with Top Team Realty and is preparing advertising copy for her new listing. Which of the following ads would be in compliance with the Fair Housing Act? A) New on the Market! Two-story, 4 bedrooms and 3 baths, great for people who are agile. B) New on the Market! Two-story, 4 bedrooms and 3 baths, great for people who are not in a wheelchair. C) New on the Market! Two-story, 4 bedrooms and 3 baths, near St. Michaels Catholic Church. D) New on the Market! Two-story, 4 bedrooms and 3 baths, quiet residential neighborhood. -----CORRECT ANSWER----------------D) New on the Market! Two-story, 4 bedrooms and 3 baths, quiet residential neighborhood. Which of the following advertisement is NOT in compliance with all advertising regulations when advertising on social media? A) Click here for more information on this beautiful 3-bedroom home offered by Best Home Realty. B) Call Best Home Realty for more information on this 3-bedroom home, 999-555-1212. C) Offered by Best Home Realty, click here for a virtual tour. D) Call 999-555-1212 for more information on this 3-bedroom home. -----CORRECT ANSWER----------------D) Call 999-555-1212 for more information on this 3-bedroom home. Ryan has just listed his home with Top Notch Realty and does not want a "for sale" sign in his front yard. Which of the following statements is TRUE? A) Top Notch Realty would be in violation of Commission rules if they did not place a "for sale" sign in Ryan's yard. B) Ryan is required to place a "for sale" sign in his front yard. C) Top Notch Realty is required under all circumstances to place a "for sale" sign at all properties they are representing. D) Ryan can refuse to have a "for sale" sign in his front yard. -----CORRECT ANSWER-- --------------D) Ryan can refuse to have a "for sale" sign in his front yard. Which of the following statements is correct regarding internet advertising for a brokerage firm? A) The only regulation that a real estate brokerage firm needs to adhere to in internet advertising is North Carolina Real Estate Commission rules. B) The real estate brokerage firm does not have to adhere to fair housing or Truth in Lending Act, Regulation Z, regulations in internet advertising, only lenders do. C) The only regulation that a real estate brokerage firm needs to adhere to in internet advertising is having the firm's name on all the advertising. D) All legal requirements and restrictions on advertising apply equally to internet advertising. -----CORRECT ANSWER----------------D) All legal requirements and restrictions on advertising apply equally to internet advertising. Gavin has just listed his home with Green Acres Realty and does not want ads placed on social media. Which of the following statements is TRUE? A) Green Acres Realty would be in violation of Commission rules if they did not place advertising on social media. B) Green Acres Realty is required under all circumstances to advertise all properties they are representing on social media. C) Gavin can refuse to have his home advertised on social media. D) Gavin is required to allow the firm to place advertisements on social media. ----- CORRECT ANSWER----------------C) Gavin can refuse to have his home advertised on social media. According to TILA, Regulation Z, which of the following advertisements of down payment would NOT trigger additional disclosures? A) $1,000 down B) 10% down C) 95% financing D) Low down payment -----CORRECT ANSWER----------------D) Low down payment The North Carolina Real Estate Commission recommends all the following when a real estate agent is advertising properties EXCEPT A) real estate agents are competent to calculate annual percentage rate (APR) on their own and need to keep this calculation in their real estate file for three years. B) real estate agents who include credit terms in their real estate advertisements should follow the rule that if any specific credit terms are included in the advertisement, then all required credit disclosures must be included. C) real estate agents should seek assistance from qualified finance experts to calculate any annual percentage rate (APR) to be used in an advertisement. D) real estate agents may want to avoid Regulation Z issues by not including any numbers in their advertising, other than the list or lease price. -----CORRECT ANSWER- ---------------A) real estate agents are competent to calculate annual percentage rate (APR) on their own and need to keep this calculation in their real estate file for three years. A real estate firm is required to engage in customary advertising and marketing activities assuming that the property owner is in agreement. Which of the following advertising and marketing activities are NOT customary? A) Preparing and making available to prospective buyers a promotional flyer about the property D) April could represent both the buyer and the seller with only the buyer's consent. ----- CORRECT ANSWER----------------A) April could represent both the buyer and the seller with both parties' consent. Maria is working for a buyer who agrees to exclusive agency representation at all times. Maria can show all of the following listed properties EXCEPT A) a property listed with Maria's firm. B) a property listed with a limited services firm. C) a property listed with a firm that is not Maria's firm. D) a property listed as For Sale by Owner. -----CORRECT ANSWER----------------A) a property listed with Maria's firm. Jose has a buyer-client who wants to see a property listed For Sale by Owner (FSBO). When Jose goes to preview the FSBO property, the seller shares why he needs to sell their property. At this time, what does Jose need to do? A) Jose needs to let the seller know that he will keep anything the seller tells him personal and confidential. B) Jose needs to present Working with Real Estate Agents (WWREA) brochure. C) Jose needs to tell the seller that the buyer is motivated to buy quickly. D) Jose needs to empathize with the seller and ask more personal questions. ----- CORRECT ANSWER----------------B) Jose needs to present Working with Real Estate Agents (WWREA) brochure. Alexia is purchasing her first home and has hired Vijay with Home Town Realty to help her. Vijay has found five homes that meet Alexia's requirements and one of the homes is being represented by the seller as a For Sale by Owner (FSBO). Is Vijay allowed to offer the seller any agency representation? A) Yes, Vijay can offer the seller dual agency representation even without buyer's permission. B) No, Vijay is not allowed to solicit listings because it is against the law. C) No, Vijay is the buyer's agent and cannot offer representation to the seller. D) Yes, Vijay, with the buyer's permission, can offer the seller dual agency representation. -----CORRECT ANSWER----------------D) Yes, Vijay, with the buyer's permission, can offer the seller dual agency representation. Alyssa is a buyer's agent for LaTosha and makes an appointment to preview a property listed For Sale by Owner (FSBO). Which of the following statements is TRUE? A) Alyssa will represent LaTosha and the FSBO seller will be represented by the listing firm. B) Alyssa will fully disclose to the FSBO seller her status as a buyer's agent. C) Alyssa will be a designated agent for LaTosha and for the FSBO seller. D) Alyssa will automatically represent both LaTosha and the FSBO seller. ----- CORRECT ANSWER----------------B) Alyssa will fully disclose to the FSBO seller her status as a buyer's agent. Megan is working with Vicky to help her buy her first home. Megan has found three homes that meet Vicky's requirements and has made appointments to view the properties on Saturday. One of the homes is being represented by the seller as a For Sale by Owner (FSBO). Can Vicky offer the seller any agency representation? A) No, Vicky is Megan's agent and cannot offer representation to the seller. B) Yes, Vicky, with Megan's permission, can offer the seller dual agency representation. C) No, Vicky is not allowed to solicit listings. D) Yes, Vicky can offer the seller dual agency representation even without Megan's permission. -----CORRECT ANSWER----------------B) Yes, Vicky, with Megan's permission, can offer the seller dual agency representation. Which of the following conditions is NOT required when a broker is representing a property that they own or have an ownership interest in? A) A broker as a seller-owner must disclose they will be representing only the seller- owner's interest in the transaction. B) A broker must never attempt to represent a buyer as a buyer agent if the broker has any ownership interest in the real property that is the subject of the sales transaction. C) A broker must require the buyer to agree to dual agency if they want to purchase the property directly from the broker owner. D) A broker as a seller-owner may engage in arms-length good faith negotiations with buyers, only after disclosing to the prospective buyer that the broker is an owner of the property. -----CORRECT ANSWER----------------C) A broker must require the buyer to agree to dual agency if they want to purchase the property directly from the broker owner. Garrick does not want to hire a firm to represent him in the purchase of a property that is listed by a firm. Which of the following statements is TRUE? A) Garrick can represent himself when purchasing a property and can work with a listing agent who would act as a seller subagent. B) Garrick is not allowed to represent himself when purchasing real property because it is against the law. C) If Garrick wants to represent himself in the purchase of a property, he must allow the listing firm to practice dual agency. D) If Garrick is representing himself, then he can only purchase a property where the seller is selling For Sale by Owner. -----CORRECT ANSWER----------------A) Garrick can represent himself when purchasing a property and can work with a listing agent who would act as a seller subagent. Darren has his home listed with Home Town Realty and a buyer, Ashley, is representing herself and wanting to make an offer on the property. Which of the following BEST describes the agency situation between Ashley and Home Town Realty? A) Home Town Realty is acting as a dual agent. B) Home Town Realty is acting as a single agent for Ashley. C) Home Town Realty is acting as an exclusive agent for Ashley. D) Home Town Realty is acting as a seller subagent. -----CORRECT ANSWER------------ ----D) Home Town Realty is acting as a seller subagent. Alice has been looking at some properties with an agent working as a seller subagent. She now wants to have the agent work as a buyer's agent on one of the properties. After the agent gets permission from the seller to cancel their agreement, what must that agent share now that Alice has hired them as her buyer agent? A) The buyer agent owes fiduciary duties to Alice now and is required to share any information about the seller that could get the buyer a better deal. B) The buyer agent can provide a limited number of fiduciary duties since he possesses personal, confidential information about the seller. C) The buyer agent owes fiduciary duties to both Alice and the seller and must remain neutral. D) The buyer agent owes fiduciary duties to Alice now and cannot share any personal, confidential information about the seller. -----CORRECT ANSWER----------------A) The buyer agent owes fiduciary duties to Alice now and is required to share any information about the seller that could get the buyer a better deal. Tony meets with a buyer at a property he has listed for sale where the seller has authorized dual agency. He presents Working with Real Estates Agents brochure and the buyer chooses to represent himself. At this time, what is Tony's relationship to the buyer? A) Tony is a subagent of the seller and the buyer is a client. B) Tony is a subagent of the seller and the buyer is a customer. C) Tony is a subagent of the buyer and the seller is a client. D) Tony is a subagent of the buyer and the seller is a customer. -----CORRECT ANSWER----------------B) Tony is a subagent of the seller and the buyer is a customer. If seller or listing firm is offering less than Buyer Agent Firm requires in the agreement, Firm may inform Buyer that the compensation offered is less than expected and, if Buyer is so informed prior to making an offer to purchase, Firm may seek a reasonable modification of the compensation terms herein and, if unable to reach such a modification, Firm may unilaterally terminate this Agreement. -----CORRECT ANSWER- ---------------True Agency Agreement Renewal and/or Amendment can only be used with the Exclusive Right to Sell Listing Agreement and the Exclusive Buyer Agency Agreement. ----- CORRECT ANSWER----------------False; variety of agency agreements At what point in the relationship with a buyer must Tara, a broker with Home Town Realty, disclose all the agency options available to a prospective buyer? A) Tara must disclose agency options at the time when a potential buyer wants to make an offer. B) Tara must disclose agency options at first substantial contact. C) Tara must disclose agency options at initial contact with a prospective buyer. D) Tara must disclose agency options before meeting a prospective buyer in person. ---- -CORRECT ANSWER----------------B) Tara must disclose agency options at first substantial contact. Which of the following statements is TRUE regarding a nonexclusive buyer agency agreement? A) Nonexclusive buyer agency agreements are in violation of Commission rules. B) Nonexclusive buyer agency agreements can be in writing but oral buyer agency agreements are automatically nonexclusive. C) All nonexclusive buyer agency agreements must be in writing. D) All nonexclusive buyer agency agreements must be oral. -----CORRECT ANSWER--- -------------B) Nonexclusive buyer agency agreements can be in writing but oral buyer agency agreements are automatically nonexclusive. Austin is a provisional broker and affiliated with Top Ten Realty. He is in process of creating a buyer agency contract with Cho and she wants exclusive representation at all times. Which of the following statements is TRUE regarding their written agency contract? A) Top Ten Realty is not required to have the duration of the agency contract, it can be open-ended. B) Top Ten Realty is required to have a release of liability provision. C) Top Ten Realty is not required to have a dual agency provision. D) Top Ten Realty is required to have a dual agency provision. -----CORRECT ANSWER----------------C) Top Ten Realty is not required to have a dual agency provision. Does the North Carolina Association of REALTORS® Form 203, Nonexclusive Buyer Agency Agreement, address nondiscrimination? A) The nonexclusive written buyer agency agreement is required to contain a nondiscriminatory clause. B) Since it is a nonexclusive agreement, there does not need to be a nondiscriminatory clause. C) Since the nonexclusive written buyer agency agreement is not binding on either party, the nondiscriminatory clause is not needed. D) The nonexclusive written buyer agency agreement is not required to contain a nondiscriminatory clause because the buyer is not working with the firm exclusively. ----- CORRECT ANSWER----------------A) The nonexclusive written buyer agency agreement is required to contain a nondiscriminatory clause. All of the following statements are true regarding a real estate broker (or firm) proposing to work with a prospective buyer as a buyer's agent EXCEPT A) The broker (or firm) needs to have an oral agreement first before putting the agreement in writing. B) The broker (or firm) needs to have an express agreement regarding all of the terms of the working relationship prior to providing services. C) The broker (or firm) is allowed to provide an oral buyer agency agreement for a limited period of time under certain circumstances. D) The broker (or firm) needs to have the agreement in writing prior to making an offer. - ----CORRECT ANSWER----------------A) The broker (or firm) needs to have an oral agreement first before putting the agreement in writing. Allyson is in process of purchasing an investment property and is not sure if she is ready to work with one firm exclusively. Which of the following would NOT be an agency option for Allyson? A) Allyson could represent herself and the agent could work as a seller subagent. B) Allyson could agree to an exclusive oral buyer agency agreement. C) Allyson could agree to a nonexclusive oral buyer agency agreement. D) Allyson could agree to a written nonexclusive buyer agency agreement. ----- CORRECT ANSWER----------------B) Allyson could agree to an exclusive oral buyer agency agreement. Leticia has been working under an oral buyer agency agreement with Clifford. He has found a property he would like to make an offer on, so Leticia has him sign the Exclusive Buyer Agency Agreement Form 201 prior to writing the offer on his behalf. In the agreement, Leticia ensures that Clifford understands which of the following regarding working with other buyers? A) That the firm is working exclusively with Clifford and will not represent any other buyers that are looking at the same properties that Clifford is looking at. B) That the firm will work in a dual agency capacity with other buyers that are seeking the same or similar properties as Clifford and that he will get exclusive agency representation by the firm. C) That the firm will disclose the names of all the other buyers that are seeking the same or similar properties as Clifford and that all buyers acknowledge, understand, and consent. D) That the firm is -----CORRECT ANSWER----------------D) That the firm is working with other buyers that are seeking the same or similar properties as Clifford and that he acknowledges, understands, and consents to such representation of other purchasers. Chad is affiliated with Dream Homes Realty and has been working with a buyer under an oral buyer agency agreement. The buyer has found a property they would like to make an offer on and Chad needs to reduce their agreement to writing. All of the following would be essential elements of their written buyer agency contract EXCEPT A) all parties should be named in the contract and all parties should sign the contract. B) there must be a dual agency provision. C) the amount and method of compensation of the buyer's broker should clearly be defined. D) the contract must include the nondiscrimination provision required by Commission rules. -----CORRECT ANSWER----------------B) there must be a dual agency provision. Jasmine has an exclusive buyer agency agreement with Amos and Home Town Realty. Jasmine is purchasing a property listed with another firm. Which of the following statements is FALSE? A) The listing agent needs to assist Jasmine and Amos with the purchase of the property because of the listing firm's duties they owe to the seller. B) Amos's obligations to Jasmine are far greater than the obligations of the listing agent to Jasmine. C) Home Town Realty owes all fiduciary duties to Jasmine and the listing firm owes all fiduciary duties to the seller. D) The listing agent would be attempting to violate their legal obligations to the seller if they assist the buyer and the buyer agent during the purchase of the seller's property. -- ---CORRECT ANSWER----------------D) The listing agent would be attempting to violate B) The broker may continue to represent the buyer as a buyer's agent but needs to get the agreement in writing prior to acceptance of the offer. C) The broker may not continue to represent the buyer as a buyer's agent and may not write or present the offer to the seller on the buyer's behalf. D) The broker may continue to represent the buyer as a buyer's agent and get the agreement in writing prior to closing. -----CORRECT ANSWER----------------C) The broker may not continue to represent the buyer as a buyer's agent and may not write or present the offer to the seller on the buyer's behalf. Dana is affiliated with Home Team Realty and is signing a buyer agency contract with a buyer. Dana has named the buyer on the contract and will have the buyer sign it as well. What else does Dana need to include in the buyer agency contract? A) Dana can have an automatic renewal of the buyer agency agreement. B) Dana needs to have a nondiscriminatory provision. C) Dana needs to have a provision that allows her to disclaim liability. D) Dana needs the firm license number. -----CORRECT ANSWER----------------B) Dana needs to have a nondiscriminatory provision. A lender uses gross income to determine the expense-to-income ratios to qualify a buyer. -----CORRECT ANSWER----------------True A 28/36 qualifying ratio means that 28% of the borrower's total gross monthly income can be applied to monthly housing expense. -----CORRECT ANSWER----------------True A buyer has an annual income of $92,000 with recurring monthly debt of $700 that does not include housing expenses. If the lender's qualifying ratios are 28% and 36%, what is the maximum monthly house payment for which he can qualify? A) $2,059 B) $1,446 C) $2,759 D) $2,146 -----CORRECT ANSWER----------------A) $2,059 To prepare a buyer for a meeting with a lender, the agent should pull a credit report on the buyer and verify the buyer's credit score. -----CORRECT ANSWER----------------False LaTosha is working with a buyer as a buyer's agent. Before she starts showing properties, LaTosha suggests the buyer get prequalified. Which of the following is the BEST suggestions for financially prequalifying the buyer? A) LaTosha's best approach to prequalifying the buyer is to only send them to her in- house lender. B) LaTosha's best approach to prequalifying the buyer is to refer them to one or more lenders or mortgage brokers. C) LaTosha does not need to concern the buyer with prequalification until after they are under contract. D) LaTosha's best approach to prequalifying the buyer is to prequalify them personally. - ----CORRECT ANSWER----------------B) LaTosha's best approach to prequalifying the buyer is to refer them to one or more lenders or mortgage brokers. Charlie is working with a buyer-client who is looking for a property in a neighborhood with a homeowners' association. Charlie needs to check many things including proper property uses. Which of the following would Charlie NOT need to check? A) Flood hazard area B) Protective covenants C) General zoning certificates D) Zoning -----CORRECT ANSWER----------------C) General zoning certificates Which of the following formulas calculates the borrower's housing expense ratio? A) Verified gross monthly income times total proposed monthly housing expense. B) Total proposed monthly housing expense divided by the verified gross monthly income. C) Total proposed monthly housing expense times the verified gross monthly income. D) Verified gross monthly income divided by total proposed monthly housing expense. -- ---CORRECT ANSWER----------------B) Total proposed monthly housing expense divided by the verified gross monthly income. Dotty is purchasing a property and is speaking with a lender about the various governmental loan programs available. Which of the following statement is TRUE? A) Federal Housing Administration loans are insured by FHA. B) All of these. C) Rural Development loans have an income limit for the borrower. D) Veteran Administration loans are guaranteed by VA. -----CORRECT ANSWER--------- -------B) All of these. Ronin is meeting with a buyer agent at their firm to discuss purchasing a property. Ronin makes the appropriate agency disclosures and obtains a buyer agency agreement. In addition to asking about various features and amenities he is looking for, the real estate agent asks about his financial situation. Which of the following statements is TRUE? A) The real estate agent needs to ask about his financial situation to help determine the maximum price he is able and willing to pay for a property. B) The real estate agent needs to ask about his financial situation so they can share this financial information with all the sellers. C) Both of these. D) Neither of these. -----CORRECT ANSWER----------------A) The real estate agent needs to ask about his financial situation to help determine the maximum price he is able and willing to pay for a property. Walker is assisting a buyer, Sydney, with the purchase of a residential property where she will be obtaining a loan. Which of the following will MOST likely occur with regards to homeowner's insurance? A) The lender will make it optional for Sydney to obtain a property insurance policy. B) The lender will require that Sydney obtain a property insurance policy that will protect Sydney only. C) The lender will require that Sydney obtain a property insurance policy that will protect the lender only. D) The lender will require that Sydney obtain a property insurance policy to protect both Sydney and the lender. -----CORRECT ANSWER----------------D) The lender will require that Sydney obtain a property insurance policy to protect both Sydney and the lender. Noelle is in process of getting prequalified for a loan to determine if her regular income is sufficient to enable her to comfortably pay the loan payment and other housing expenses as well as all other recurring debts and living expenses. When the lender is calculating the expense-to-income ratios, the lender looks at which of the following? A) Both housing expense-to-income and debt-to-income ratios B) None of these C) Housing expense-to-income ratio D) Debt-to-income ratio -----CORRECT ANSWER----------------A) Both housing expense- to-income and debt-to-income ratios Zhen has a client who owns a plant company that has several greenhouses located in an area that has just been rezoned for residential use and calls Zhen for advice. Zhen suggests that the client reach out to the local zoning department and MOST likely would limited in some of the fiduciary duties that the seller would receive if the firm were in exclusive agency. What duties are limited in dual agency? A) They will be limiting loyalty. B) They will be limiting fairness. C) They will be limiting honesty. D) They will be limiting presentation of offers. -----CORRECT ANSWER----------------A) They will be limiting loyalty. Francesca and Taylor are affiliated with Top Notch Realty. Francesca is working as the listing agent for the seller and Taylor is working with the firm's buyer-client. The buyer wants to purchase the seller's property. Which of the following statements is TRUE? A) Francesca and Taylor need to have a dual agency agreement in writing from both the buyer and the seller by the time the buyer makes an offer. B) Neither Francesca nor Taylor need to get dual agency disclosure and consent in writing. C) Francesca needs to have the seller's dual agency agreement in writing by offer time, but Taylor never needs to get the buyer's consent in writing. D) Francesca does not need to get the seller's written consent for dual agency, but Taylor needs to get the buyer's written consent for dual agency by the due diligence period. -----CORRECT ANSWER----------------A) Francesca and Taylor need to have a dual agency agreement in writing from both the buyer and the seller by the time the buyer makes an offer. Beck would like to hire a firm to represent him but is unsure of the dual agency provision in the North Carolina Association of REALTORS® Form 201, Exclusive Buyer Agency Agreement. What does his agent need to tell him about the provision regarding the buyer's duties under dual agency? A) Buyer has determined that the benefits of dual agency outweigh any disadvantages or adverse consequences. B) Both of these. C) Buyer has the responsibility of making their own decisions as to what terms are to be included in any purchase and sale agreement with a seller-client of the firm. D) Neither of these. -----CORRECT ANSWER----------------B) Both of these. Bruce is affiliated with Dream Homes Realty and just listed a nice ranch style home for sale. He is also working with a buyer who has been looking for a similar property. How can Bruce stay in compliance with Commission rules and show this new listing to the buyer? A) Bruce must obtain disclosure and consent from the seller. B) Bruce must obtain disclosure and consent from both the buyer and the seller. C) Bruce does not need disclosure and consent from either one of them until they go under contract. D) Bruce must obtain disclosure and consent from the buyer. -----CORRECT ANSWER- ---------------B) Bruce must obtain disclosure and consent from both the buyer and the seller. Eddie is a seller who has an agency agreement signed with a local real estate firm. The firm has a buyer that would potentially like to see the seller's home. According to the North Carolina Association of REALTORS® Form 101, Exclusive Right to Sell Listing Agreement, what does Eddie need to understand about dual agency? A) The firm is required by law to disclose to seller and buyer any known or reasonably ascertainable material facts. B) Both of these. C) Prior to the time dual agency occurs, the firm will act as seller's exclusive agent. D) Neither of these. -----CORRECT ANSWER----------------B) Both of these. Ethan is affiliated with Dream Homes Realty and meets with a buyer, Andrew, to discuss working together. Ethan is explaining the agency options available to Andrew. When explaining dual agency, what does Andrew need to understand MOST about the dual agency option? A) Andrew needs to understand that there is no conflict of interest between the buyer and the seller. B) Andrew needs to understand that there is an inherent conflict of interest between the buyer and the seller. C) Andrew needs to understand that he will be getting full representation and the seller will be getting full representation. D) Andrew needs to understand that neither the buyer nor the seller will be getting any representation. -----CORRECT ANSWER----------------B) Andrew needs to understand that there is an inherent conflict of interest between the buyer and the seller. Bailee is hiring a firm to represent her and has agreed to designated agency. Which of the following statements is TRUE? A) Designated agency is where one firm and only one agent within that firm is representing both the interests of the buyer and the seller. B) Designated agency is a form of exclusive agency; there is one firm representing the buyer and a different firm representing the seller. C) Designated agency has the effect of restoring the ability of the designated agents working with the seller and the buyer to fully advise their clients and advocate for their client's interests. D) Designated agency is a form of dual agency where each of the firm's principals must remain neutral in the transaction. -----CORRECT ANSWER----------------C) Designated agency has the effect of restoring the ability of the designated agents working with the seller and the buyer to fully advise their clients and advocate for their client's interests. Theo and his firm have been working with a buyer-client for several weeks and have not found the right property yet. Theo recently listed a property for sale that meets the buyer's requirements. If both the buyer and seller agreed to dual and designated agency, which of the following statements would be TRUE? A) Theo is not allowed to act in dual agency in this situation and the broker-in-charge will need to reassign the listing to another agent in the firm. B) Theo can work with both the buyer and the seller and remain in dual agency. C) Theo could act as a designated agent for both the buyer and the seller. D) Theo would need to refer the buyer to a different firm and then he can represent the interests of the seller only. -----CORRECT ANSWER----------------B) Theo can work with both the buyer and the seller and remain in dual agency. Kate is a buyer who has an agency agreement signed with a local real estate firm and is looking at a property listed by the same firm. According to the North Carolina Association of REALTORS® Form 201, Exclusive Buyer Agency Agreement, Kate needs to understand about dual agency. Which of the statements is FALSE? A) That the firm shall make every reasonable effort to encourage the seller to negotiate a lower price for the buyer. B) That the firm serves as agent for both buyer and seller in a transaction. C) That the firm shall make every reasonable effort to represent buyer and seller in a balanced and fair manner. D) That the firm shall make every reasonable effort to encourage and effect communication negotiations between buyer and seller. -----CORRECT ANSWER--------- -------A) That the firm shall make every reasonable effort to encourage the seller to negotiate a lower price for the buyer. Joe is a W-2 employee of a real estate firm who manages income-producing properties for others. Which of the following activities would Joe NOT be allowed to perform? A) Showing the rental units B) Collect rents and deposits C) Complete preprinted lease agreements D) Negotiate lease terms -----CORRECT ANSWER----------------D) Negotiate lease terms Devesh is meeting with his property management firm to discuss his annual operating budget. The firm has determined that the gross potential rental income is $1,695,000, the vacancy and collection losses are 6%, the operating expenses are $585,000, and debt service is $897,000. What would the firm calculate the before tax cash flow to be? A) $213,000 B) $111,300 C) $696,300 D) $1,008,300 -----CORRECT ANSWER----------------B) $111,300 Which of the following is part of the management plan? A) Tenant screening B) Marketing plan C) Property analysis and market analysis D) Preparing and enforcing rules and regulation -----CORRECT ANSWER---------------- C) Property analysis and market analysis Camille owns a duplex which she lives in one unit and leases the other unit. According to licensing law, which of the following options would NOT be allowed? A) Camille could show the property, collect rents and security deposits, and negotiate lease terms on her own behalf. B) Camille could hire a real estate firm to manage her rental property and they could have one of their W-2 employees place "for rent" sign, enter listing data into MLS, and type leases. C) Camille could sign a property management agreement with Real Property Management to show the property and negotiate lease terms. D) Camille could hire an unlicensed W-2 employee to assist her in showing the property and negotiating lease terms. -----CORRECT ANSWER----------------D) Camille could hire an unlicensed W-2 employee to assist her in showing the property and negotiating lease terms. Kent is affiliated with Rental Realty Experts. Timothy owns several properties and is hiring Rental Realty Experts to manage his rentals. Which of the following statements is FALSE? A) Timothy is Rental Realty Experts' customer. B) Timothy is Rental Realty Experts' principal. C) Rental Realty Experts is Timothy's agent. D) Kent is a subagent of the property owner, Timothy. -----CORRECT ANSWER----------- -----A) Timothy is Rental Realty Experts' customer. Yoshi is an affiliate with Top Management Team and is preparing an annual operating budget. What would the cash flow before taxes be if the effective gross income is $2,400,000, operating expenses are $735,000, and debt service is $825,000? A) $840,000 B) $1,665,000 C) $70,000 D) $1,575,000 -----CORRECT ANSWER----------------A) $840,000 Lester is a prospective tenant and Olivia is the property owner. Olivia has hired BPM Realty to manage her rental properties. Which of the following statements is TRUE? A) BPM Realty owes fiduciary duties to Lester. B) BPM Realty does not owe fiduciary duties to either Olivia or Lester because it is against agency law to provide fiduciary duties in a property management agreement. C) BPM Realty is required to disclose the lowest rent that Olivia will accept to Lester. D) BPM Realty owes fiduciary duties to Olivia. -----CORRECT ANSWER----------------D) BPM Realty owes fiduciary duties to Olivia. Which of the following is TRUE regarding property management? A) Only individuals (nonentity) can undertake management of real property belonging to others for compensation or consideration and they must obtain a real estate license. B) Only entities not individuals can undertake management of real property belonging to others for compensation or consideration and they must obtain a firm license. C) Any individual or entity that undertakes to manage real property belonging to others for compensation or consideration does not need to be a licensed real estate broker. D) Any individual or entity that undertakes to manage real property belonging to others for compensation or consideration must be a licensed real estate broker. -----CORRECT ANSWER----------------D) Any individual or entity that undertakes to manage real property belonging to others for compensation or consideration must be a licensed real estate broker. Jayson is a broker and has an inactive license. Which of the following statements is TRUE? A) Jayson is eligible to help clients because his license is still active. B) Jayson is eligible to help clients because his license is still current. C) Jayson is not eligible to help clients because his license is on expired status. D) Jayson is not eligible to help clients because his license is on inactive status. ----- CORRECT ANSWER----------------D) Jayson is not eligible to help clients because his license is on inactive status. Vanessa completed all of her continuing education requirements prior to the due date but failed to complete her renewal by midnight June 30. What is the status of Vanessa's license and is she eligible to help a buyer or seller and, if so, can she be compensated? A) Vanessa is not eligible to help a buyer or seller because her license is on expired status. B) Vanessa is not eligible to help a buyer or seller because her license is on inactive status. C) Vanessa is eligible to help a buyer and/or seller because her license is still current and can be compensated. D) Vanessa is eligible to help a buyer and/or seller because her license is still active and can be compensated. -----CORRECT ANSWER----------------A) Vanessa is not eligible to help a buyer or seller because her license is on expired status. Hassan is a broker who has listed five residential properties for sale just in the month of May and has gotten three buyers under contract. He completed all of his continuing education requirements in February. Does Hassan need to do anything else in order to stay on active and current license status? A) Yes, Hassan must complete the renewal form and pay his renewal fee prior to midnight of June 30. B) Yes, Hassan must complete the renewal form and pay his renewal fee prior to midnight of July 31. There is a 30-day grace period for renewal. C) No, Hassan can obtain a waiver for renewal of his license as long as he gets a request in prior to June 10. D) No, Hassan is a broker and has no additional requirements. -----CORRECT ANSWER----------------A) Yes, Hassan must complete the renewal form and pay his renewal fee prior to midnight of June 30. Lamar, a broker affiliated with Dream Homes Realty, is the buyer agent for a property that is under contract and due to close on July 5. Lamar was busy with several other buyer and seller clients and forgot to renew his real estate license. Can Dream Homes Realty share compensation with Lamar when his license is expired? A) No, because Lamar's license is on inactive status. B) Yes, because Lamar earned his compensation while active and current. C) Yes, because the firm is always required to share compensation under all circumstances. D) No, because Lamar's license is on expired status. -----CORRECT ANSWER------------ ----B) Yes, because Lamar earned his compensation while active and current. Who can sue agents civilly for monetary compensation? -----CORRECT ANSWER-------- -------Principles of a transaction If Dual Agency is not disclosed is a commission due? -----CORRECT ANSWER----------- ----No. Therefore it is imperative to disclose dual agency before any offers are written As a dual agent, the agent's duties are reduced to what? -----CORRECT ANSWER------- --------Contractual Obligations What must all agency agreements have? -----CORRECT ANSWER---------------A beginning and ending date Oral to Oral & Written to Written describe what? -----CORRECT ANSWER--------------- The permissions needed to show a property as a "Dual Agent" What should every agent bring to a listing appointment? -----CORRECT ANSWER-------- -------Deed, Plot Map, Tax Info, RPD, MOG, Listing Agreement (Several Other items) Who gets paid in an Exclusive Right to Sell listing agreement? -----CORRECT ANSWER---------------The listing agent, regardless of who brings a buyer, and likely the buyer agent Who gets paid in an exclusive listing agreement? -----CORRECT ANSWER--------------- Whomever brings a buyer Who can sell a property in an Open listing? -----CORRECT ANSWER---------------Any actively licensed agent In a net listing money above the asking price is paid to whom? -----CORRECT ANSWER---------------Listing Agent Who is the actual agent to the principle in a transaction? -----CORRECT ANSWER------- --------The Firm (Individual agents are sub agents to seller) No M.O.G. is needed for what 3 listings? -----CORRECT ANSWER---------------Lease to purchase, 1st Dwelling, and Foreclosure First Substantial Contact -----CORRECT ANSWER---------------WWREA be explained / signed Personal Information Needs, Motivations, and Pre-Approval If you miss the 6/10 Deadline for CE what must you do to re-activate your license? ----- CORRECT ANSWER---------------Complete latest General Update (4 Hours), and 3 CE Classes (4 hours each) Total of 16 hours Under NC License Law who can be held responsible for reporting Material Facts? ----- CORRECT ANSWER---------------Only Agents... (License Law) Under Civil /Criminal law who can be held responsible for reporting Material Facts? ----- CORRECT ANSWER---------------Principles Name the 4 types of Material Facts -----CORRECT ANSWER---------------Facts about the property, facts that relate to the property, facts relating to the ability to close the transaction, and facts of special importance Who must Material Facts be disclosed to? -----CORRECT ANSWER---------------All parties, including 3rd Parties regardless of who you represent Who can The Real Estate Commission fine? -----CORRECT ANSWER---------------Time Share Developers Willfull Omission means -----CORRECT ANSWER---------------You knew but you didn't disclose Willfull Misrepresentation means -----CORRECT ANSWER---------------You lied, by speaking wrong information Negligent Omission means -----CORRECT ANSWER---------------You should have known, but did not Negligent Misrepresentation means -----CORRECT ANSWER---------------You should have known, but spoke wrong information May a principle be held responsible for mis-information as it relates to a material fact? -- ---CORRECT ANSWER---------------Yes. Typically civilly or criminally The provision in a listing agreement that may obligate seller to pay a commission after the agreement has expired is called? -----CORRECT ANSWER---------------Override Clause or Extender Clause A listing agreement is said to be what, if the principle dies during the agreement? ----- CORRECT ANSWER---------------Automatically Terminated If a Seller wants to net exactly $50,000 but must pay 7% commission, plus a $1200 settlement fee, then what price must the property sell at? -----CORRECT ANSWER------ ---------50,000+1200=51,200 then 51,200 divided by 93% = $55,053.76 If a Seller refuses to pay the listing agent commission due, and there was a valid listing agreement in place, and the agent procured a buyer, what can the listing agent do? ----- CORRECT ANSWER---------------File suit in a civil court against the Seller What are the 3 types of Agency? -----CORRECT ANSWER---------------Exclusive, Non- Exclusive, and Dual All Oral Agency Agreements are...? -----CORRECT ANSWER---------------Non-Exclusive All Agency Agreements must include what disclaimer? -----CORRECT ANSWER---------- -----Fair Housing Disclaimer Which Comparables hold the most weight? -----CORRECT ANSWER---------------The ones with the fewest adjustments On a CMA all adjustments are made to which property? Subject or Comparable? ----- CORRECT ANSWER---------------Always to the comparable How many days before disputed Earnest Monies go to Clerk of Court? -----CORRECT ANSWER---------------90 Days Creation of Agency Relationship -----CORRECT ANSWER---------------Mutual Consent, Control of the agent by the principal, Action by the agent on behalf of the principal, Proof of the agency to third parties Determines the start of an agency relationship -----CORRECT ANSWER---------------1. negotiates on their behalf2. acts on their behalf3. gathering confidential information4. conducting detailed conversations about personal situation Does not determine the start of an agency relationship -----CORRECT ANSWER---------- -----payment, written agreement (NC), Express agreement OK TO CALL, OK TO KNOCK: -----CORRECT ANSWER---------------business relationship for up to 18 months after termination 3 months after consumer inquiry FSBO when you have a buyer with a bona fide agency agreement KNOCKING, ANYTIME! Current license -----CORRECT ANSWER---------------$45 and taken the 8 hrs of CE Expired License -----CORRECT ANSWER---------------June 30th Midnight/ $45 Inactive License -----CORRECT ANSWER---------------CE, Not Affiliated w/ a Firm Property Manager -----CORRECT ANSWER---------------May not complete Taxes and Reinvest owners money. Renter still needs a real estate license. The listing agreement should contain: -----CORRECT ANSWER---------------No Automatic Renewal NC Real Estate Law -----CORRECT ANSWER---------------"Buyer Beware" Caveat Emptor "Financing" -----CORRECT ANSWER---------------is a Material Fact Limited Listing Agreement -----CORRECT ANSWER---------------May not limit liabilities Place on the MLS, but do not "Show" Listing Agreement -----CORRECT ANSWER---------------Beginning and End Date License # Termination Date Pre-Listing: Last Mortgage Statement Data Sheet When in doubt... -----CORRECT ANSWER---------------always list "Higher" Lead-Based Paint -----CORRECT ANSWER---------------1978 A BPO (Broker Price Opinion) -----CORRECT ANSWER---------------Must complete a "Personal Walk-through Inspection" MOG -----CORRECT ANSWER---------------If severed, Must Disclosed RPOD -----CORRECT ANSWER---------------Seller Filled Buyer has 3 days to rescind OLDCAR: -----CORRECT ANSWER---------------OLDCAR: 1. Obedience 2. Loyalty 3. Disclosure