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302 NC POST LICENSING EXAM CONTRACTS
AND CLOSING NEWEST 2024 ACTUAL EXAM 400
QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A
NC 302 Postlicensing Contracts & Closings Discharge of Contracts TQ Contracts can be terminated in several ways except: A) impossibility of performance B) operation of law C) each party to the contract releases the other from contractual duties D) ovation - ANSWER- D) ovation NC 302 Postlicensing Contracts & Closings Discharge of Contracts TQ Contracts can be terminated by A) Novation B) Pur Autre Vie C) Proration D) Lateral Support - ANSWER- A) Novation (the substitution of a new contract in place of an old one)
NC 302 Postlicensing Contracts & Closings Discharge of Contracts TQ Contracts can be terminated by A) RESPA B) Subsequent Modification C) Reservation D) Prima Facie - ANSWER- B) Subsequent modification NC 302 Postlicensing Contracts & Closings Discharge of Contracts TQ Contracts can be terminated by A) Preemptive Right B) Non Recourse Note C) Accord & Satisfaction D) CERCLA - ANSWER- C) Accord & Satisfaction NC 302 Postlicensing Contracts & Closings Discharge of Contracts TQ Contracts can be terminated by A) Affidavit B) Non Recourse Note C) Cartway Proceeding D) Cancellation - ANSWER- D) Cancellation
NC 302 Postlicensing Contracts & Closings In Contract Assignments: A) Assignor is primarily liable B) Assignee remains secondarily liable C) Generally assignable unless contract prohibits D) Assignment is auditable - ANSWER- C) Generally assignable unless contract prohibits NC 302 Postlicensing Contracts & Closings What is the BEST answer? In Contract Assignments, there are: A) Assignors & Assignees B) Trustors & Trustees C) Payors & Payees D) Mortgagor & Mortgagee - ANSWER- A) Assignors & Assignees NC 302 Postlicensing Contracts & Closings In Contract Assignments: A) Assignor is primarily liable B) Assignor remains secondarily liable C) Assignor in contract prohibits D) Assignee remains secondarily liable - ANSWER- B) Assignor remains secondarily liable
NC 302 Postlicensing Contracts & Closings In Contract Assignments: A) Assignor is primarily liable B) Assignee remains secondarily liable C) Assignor in contract prohibits D) Assignee is primarily liable - ANSWER- D) Assignee is primarily liable NC 302 Postlicensing Contracts & Closings Appropriate signatures A) All Co-Owners must sign the contract 1 B) Must use the full legal name of all entities C) Identify people by their individual Full Legal Names 2 D) All of the above - ANSWER- NC 302 Postlicensing Contracts & Closings - ANSWER- NC 302 Postlicensing Contracts & Closings - ANSWER- NC 302 Postlicensing Contracts & Closings Names NOT to Use in the Contract A) Owner of Record B) Nicknames
The signature line should indicate whether or not people are "married" or "Husband and wife". - ANSWER- individual legal names NC 302 Postlicensing Contracts & Closings Pg. 184
- The one to buy, two to sell rule in NC means the following: - ANSWER- Both spousal signatures to sell, one spouse may buy on their own. NC 302 Postlicensing Contracts & Closings Pg. 184 4,5. Spouses buying properties in their own name in NC usually are required to: A) Acknowledge deed of trust B) Sign a free trader agreement C) Spousal signature necessary on the OTPC (Offer to Purchase Contract) D) A & B only - ANSWER- A) Acknowledge deed of trust B) Sign a free trader agreement Lender's will require signature acknowledging Deed of Trust Legal counsel may recommend a "Free Trader Agreement" by signed NC 302 Postlicensing Contracts & Closings Pg. 184
- Electronic signatures are permitted and authorized by both a federal law dealing with interstate commerce and a state law dealing with intrastate commerce. These two laws are ____ and ____. Electronic systems as Docusign or Dotloop contain a mandated disclosure for the
consumers that informs them of the extent of use and purpose of their electronic signature. - ANSWER- E-Sign Act UETA- Uniform Electronic Transaction Act FYI: Within your state only, not just NC, but whatever state you are in. ESign for interstate. NC 302 Postlicensing Contracts & Closings Pg. 184 TQ ____________are regulated and require disclosure and compliance with statutes, records and security A) Lis Perdens B) Mailbox Rule C) Electronic signatures D) Recordations - ANSWER- Electronic signatures POA - ANSWER- power of attorney Consumer Transaction - ANSWER- Used in a "Consumer Transaction" Involving a "Natural Person" Personal Household or Family Purposes As Opposed to Business Transactions Between Entities and Companies ie all rentals would be a Business Transaction
The Modification or Amendment of Contracts It does NOT prohibit any buyer or seller from _____, but they should be advised to consult an attorney. - ANSWER- changing or altering the language NC 302 Postlicensing Contracts & Closings Pg. 185 9 - 12. As an attorney state, North Carolina prohibits licensees from drafting contracts for others. This does not prohibit any of the following
- ANSWER- A person altering an agreement to which they are a party Licensees own employment agreement with the firm A listing agreement on behalf of the firm A buyer broker agreement on behalf of the firm NC 302 Postlicensing Contracts & Closings Pg. 185 TQ 13. When a contract is changed it is called an ________. Changing or editing existing terms of a contract is considered an _____.
- ANSWER- amendment NC 302 Postlicensing Contracts & Closings Pg. 185 TQ 14. Adding additional terms or conditions to a contact is properly done with an ________. There are a total of 13 NCAR/NCBA jointly approved standard addenda for use with residential contracts. - ANSWER- Addendum
NC 302 Postlicensing Contracts & Closings Pg. 185 15 16 17 Most of the forms have accompanying Guidelines. All of the following should be adhered to A) Type or print legibly B) Fill in all blanks w N/A if necessary C) Be precise- avoid abbreviations and acronyms D) All of the above - ANSWER- D) All of the above NC 302 Postlicensing Contracts & Closings Pg. 185 18 19 20 Most of the forms have accompanying Guidelines. All of the following should be adhered to A) Parties (Seller & Buyer) should initial and date every change, addition, or deletion B) Rewrite offer if numerous changes C) Review all contract provisions with parties and recommend to get legal advice D) All of the above - ANSWER- D) All of the above When Is It Received? Email wise? TQ - ANSWER- All about email. What happens if buyer client says "Dont send the email to purchase. We have changed our minds and don't want to buy" after you just sent the offer to buy email to seller agent? As long as Seller hasn't replied, you can send another email to cancel. NC 302 Postlicensing Contracts & Closings Pg. 187
informed the backup party agent. One of the broker's responsibilities is to make sure the primary contract is terminated before the back up contract can move forward. NC 302 Postlicensing Contracts & Closings Pg. 187 Back - Up Contract Addendum 5 How is the backup buyer to handle due diligence - ANSWER- EMD is deposited even when they are in secondary position. Refunded if primary goes to closing When to pay EMD? 5 days after delivery of primary status Due diligence Fee
- Initial Earnest Money Deposit: Buyer and Seller agree that any initial earnest money deposit shall be deposited within 3 banking days following the Effective date of this back-up Contract even while this Back-up Contract is in secondary position. Aka 3 days for the earnest money. NC 302 Postlicensing Contracts & Closings Pg. 187 Back - Up Contract Addendum 6 How and when may the buyer terminate their backup contract? - ANSWER- 9. Good to have days start days AFTER termination of the primary buyer. ie b. 30 days after becoming primary buyer.
- Buyer's Right to Terminate: Buyer may terminate this
Buyer may terminate this Back up Contract without liability by giving written notice of termination to Seller at any time prior to receipt by Buyer of Notice of Primary Status and any Earnest Money Deposit shall be refunded to Buyer.
- Time is of the essence NC 302 Postlicensing Contracts & Closings Pg. 187 Back - Up Contract Addendum 4 Does the buyer on the backup contract get to see the primary contract?
- ANSWER- No, by right. But the buyer needs to see w permission, then yes. Cannot have access without permission from the 1st Buyer. The last name of the buyer, and the settlement date. NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum 1 What is the purpose and use of this form? - ANSWER- To put the seller on notice that buyer needs to sell their property to buy the sellers home NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum
If first contract doesn't close, buyer doesn't have to wait NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum
- How is the earnest money and due dilligence fee handled - ANSWER- Buyer looses DD if closes. EMD rule the same NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum 2A3-T
- When should a broker use this addendum as opposed to form 800T the The new construction offer to purchase and contract? - ANSWER- When the house is already built NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum 2A3-T
- When must the seller provide a Certificate of Occupancy - ANSWER-
- CONSTRUCTION OF HOUSE No later than settlement NC 302 Postlicensing Contracts & Closings Pg. 193
Working with Addenda New Construction Addendum 2A3-T
- Can improvements or additions to the property be made using this addendum? - ANSWER- Minor improvements only. 2 Additional improvements 2D on form. Seller builder will pay for it. Has to make sure vendor doesn't create a lien on the property NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum
- Who pays for the construction of additional improvements? - ANSWER- Buyer. Must make sure Contractor does not put a lien on his house. NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum
- What happens if construction is delayed? - ANSWER- Seller shall notify buyer within 5 days within the commencement of the delay. Right to extension is waived if no notice is given.
- COMPLETION OF ADDITIONAL IMPROVEMENTS
- What is a building deposit and how is it handled? - ANSWER- No EMD. Paid to seller as additional $, transferred no later than the first banking day DD period. PP 5B. Building deposit. Additional Monies. The Building Deposit Paid to Seller cash, bank, wire transfer no later than first banking day following the end of the DD period NC 302 Postlicensing Contracts & Closings Pg. 201 Working with Addenda Buyer Possession Before Closing Agreement
- What is the purpose and use of this form? - ANSWER- Allows buyer to move in before closing instead of spending money on a hotel NC 302 Postlicensing Contracts & Closings Pg. 201 Working with Addenda Buyer Possession Before Closing Agreement
- Who are the two professionals that a buyer and seller may want to consult with before using this form? - ANSWER- Insurance and Attorney Professionals Seller needs to modify their ownership Insurance can say: sorry , not covered Need Renters insurance for the buyer Landlord Policy for the seller
NC 302 Postlicensing Contracts & Closings Pg. 198 Working with Addenda FHA/VA Financing Addendum 4 What funds constitute "any penalty by forfeiture"? - ANSWER- The earnest money. Buyer still gets their EMD back. NC 302 Postlicensing Contracts & Closings Pg. 201 Working with Addenda Buyer Possession Before Closing Agreement
- What is the earliest time under which a buyer can take possession using this form? - ANSWER- 8am the dated date. NC 302 Postlicensing Contracts & Closings Pg. 201 Working with Addenda Buyer Possession Before Closing Agreement
- Does the buyer using this form agree to pay - ANSWER- yes. Right to occupy the house through rent NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must provide copies of transaction documents: A) Within a day of receiving B) Within 3 days of receiving C) Within 5 days of receiving
