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Exam Review) Questions And Answers
Which of the following statements is true regarding Ad Valorem taxation in North Carolina?
- Real property is taxed according to its most recent sale price.
- The Machinery Act requires reassessment tax purposes every 4 years.
- Real property taxes and special assessments constitute an involuntary lien against property on January 1st of the next year.
- Tax rates are effective until the next revaluation year. - correct answer ✅3. Real property taxes and special assessments constitute an involuntary lien against property on January 1st of the text year Explanation Real property is taxed according to its assessed value, not sale price. The Machinery Act requires that properties be assessed at least once every 8 years (octennial appraisal). Tax rates can be changed every year and not set by the Machinery Act, rather by budget of the municipality. John recently retired and moved to a coastal community located in North Carolina. He decided to seek opportunities to supplement his
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retirement income by responding to an advertisement to become a timeshare salesman. John is told by the developer no license is required to sell a timeshare as he will be paid a flat fee for each timeshare sold is the developer correct?
- No. In order to sell time shares an individual will need to obtain a timeshare sales license.
- No. In order to sell timeshares an individual will need to obtain a North Carolina real estate license.
- Yes. So long as an individual is not paid a percentage based commission there is no requirement to obtain a time share salesman license.
- Yes. Timeshare sales fall under vacation property sales and therefore are exempt from the typical licensing requirements. - correct answer ✅2. No. In order to sell timeshares an individual will need to obtain a North Carolina real estate license. Explanation The license triggering event is earning compensation on behalf of another. John will require an active real estate license in order to earn compensation from the sale of timeshare properties.
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Option fee and due diligence fee checks are made payable to the seller and delivered once the contract becomes effective. Offers and contracts mut be delivered within 5 days. Earnest money must be deposited the later of 3 banking days from the effective date of the contract or receipt. While it is not recommended that a broker accept cash, it is permitted. When cash is tendered for earnest money r due diligence, it must be deposited immediately but no later than 3 banking days. All of the following statements are true regarding a broker-in- charge, EXCEPT:
- A brokerage operating as a sole proprietorship must appoint a broker-in-charge in order to handle trust funds and advertise property.
- A broker-in-charge must notify the Commission when a change in his or her status occurs.
- A broker-in-charge is responsible for maintaining transaction records and notification of a change in address of the firm to the Commission.
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- A broker-in-charge has a duty to supervise all brokers affiliated with the firm with regard to violations of license law. - correct answer ✅4. A broker-in-charge has a duty to supervise all brokers affiliated with the firm with regard to violations of license law. Explanation A broker-in-charge must directly supervise provisional brokers. While they are responsible to ensure compliance with agency disclosure and adherence to fair housing they are not responsible for all violations of license law for a broker. A buyer's agent is responsible for which of the following in regard to the Closing Disclosure?
- The accuracy of all items on the Closing Disclosure.
- The accuracy of all items the buyer which they are reasonably aware.
- The correct distribution of proceeds of sale
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correct answer ✅1. The tenant may vacate after providing written notice to the landlord and waiting a reasonable period of time. Explanation The tenant may remove himself from the property and then stop paying rent. Remember that a tenant may never withhold rent while in possession of the property tenant cannot make repairs and seek compensation from the landlord or reduce rental payment by the amount. A Landlord hired a broker to manage his residential rentals. The landlord request that several provisions be added to the standard lease provided by the Realtor Association. Which of the following is NOT an acceptable suggestion by the agent?
- That the agent will write up a provision but only if the landlord dictates the language.
- The landlord may draft up a provision for inclusion in the lease agreement.
- The landlord should seek legal advice regarding language to be drafted in the contract.
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- The landlord and tenant may agree to anything in the lease that does not violate public policy - correct answer ✅1. That the agent will write up a provision but only if the landlord dictates the language. Explanation The agent should never draft a provision, even if the client suggests what to write. It ins best practice to refer the client to an attorney, however the client can opt to draft the language in their own handwriting Which of the following would most likely be included in the heated living area of a single-family home?
- An in-law cottage that attaches to the house by an unheated breezeway
- A two (2) car garage with finished, sheet-rocked walls
- A finished walk up attic with maximum ceiling height of six (6) to four (4) inches
- A finished and heated basement accessible from the kitchen by interior stairs -
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Explanation Since the couple were not married prior to purchasing the house, they will own as tenancy in common. Tenants by the Entirety is reserved for a married couple. Joint tenancy is not favored in North Carolina and would require very specific language and instruction be given to an attorney handling the closing. Ownership in sevearlty is one owner and therefore would not apply. Which is true regarding an agent obligation for the residential property owners association disclosure statement?
- The agent should advise the seller on how to answer a specific question, as the agent has greater knowledge on my system.
- The agent should fill in form after thoroughly interviewing the homeowner.
- The agent should advise the seller of his obligations regarding the Property Disclosure Statement and assure timely disclosure.
- When listing a new home the agent can have superintendent complete form for builder. - correct answer ✅3. The agent said it back to stellar outlets obligation regarding the property.
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Explanation Agents should only advise parties of their rights and obligations under the act. Agents should never complete the form for the parties. The property disclosure form is not required for new constructio, foreclosure, lease options or transfers among related parties.
- Which term describes the lowest wooden faming member of the house?
- Pier
- Footing
- Floor joist
- Sill - correct answer ✅4. Sill Explanation Sill. The sill is the lowest wooden member that rests upon the foundation wall and upon the piers. A pier is a vertical support inside the perimeter of the home used to support the structure. A footing is the foundation wall dug below the frost line. Floor joints
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monthly debt obligations for a student loan and car payment of $500. The anticipated housing expense will be $1.300. Under which rule would he qualify? I. Housing 28% II. Total Debit 36%
- I Only
- II Only
- Both
- Neither - correct answer ✅1. I Only Explanation 4800 x 28 = 1,344 (could afford up to 1,344 which is greater than payment of 1,300) 4800 x 36% = 1,288 (not enough since his housing expense is 1,300) Kelley completes a prelicense class and successfully passes the licensing exam on May 23, 2018. She affiliates with a broker-in- charge and begins working the business as a part-time agent on
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provisional status. She receives a promotion from her other job that requires her to stop representing buyers and sellers, however continues to refer clients other agents in return for a referral fee. Which of the following statements is true?
- Kelley must continue to be affiliated with a broker-in-charge keep her license active so that she can receive referral fees.
- Kelley is not required to take continuing education so long as she is only receiving referral fees, however must to pay the license renewal fee.
- Kelley is not required to take postlicensing education by her anniversary date so long as she is only earning referral fees.
- Kelley must complete continuing education prior to June 10, 2018 or her license wil - correct answer ✅1. Kelley must continue to be affiliated with a broker-in-charge keep her license active so that she can receive referral fees. Explanation To be compensated - referral, commission, etc., a broker must be on active status. A provisional broker must be affiliated with a broker in charge to remain on active status. In order to remain on active status, the broker must renew his/her license by the June
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Comp 3 is just like the subject property except for difference between a 1-car garage and a two car is 10,000. Comp 1 and 3 are similar except for square footage therefore the cost per square foot is $50 ($5,000 divide by 100 square foot difference). Then make adjustments to bring the comps in line with the subject.
- Which of the following would require a NC Real Estate license according to Commission rules?
- A For Sale by Owner who advertises his listing with an online database.
- An attorney who is compensated for selling real property at a lien foreclosure sale.
- An executor who sells estate property and is compensated as a condition of the will.
- A real estate assistant who holds regular open houses for a listing agent. - correct answer ✅3. An executor who sells estate property and is compensated as a condition of the will. Explanation
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An assistant must be licensed to hold an open houses for other agents when the property is for sale. Remember that there are different rules for unlicensed assistants performing a tad under property management. A provisional broker listed a property on 809 Ridge Lane for $425,000 with the seller authorizing both dual and designated agency for an open house a perspective buyer begins to spread significant interest in the property. Which of the following statements is FALSE?
- The provisional broker should disclose the Working with Real Estate Agents Brochure before obtaining personal or confidential information
- The provisional broker may enter into a oral buyer's agency agreement so long as the potential buyer agrees to dual agency representation.
- The provisional broker must disclose all material facts regarding the property no matter the type of agency that the buyer agrees to.
- The provisional broker should review the buyer to anothee agent of the firm if the buyer desires exclusive representation. - correct answer ✅4. The provisional broker should review the buyer
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A broker may be affiliated with a BIC or may decide to keep his license active under his own name. If a broker does not have a IC, the broker may, himself, perform a few task such as referrals or representing a buyeer so long as they do not hold trust money and the broker has not solicited the business. Which of the following is NOT a role of the NC Real Estate commission?
- Regulate the activities of Real Estate agents.
- Devise a system of education for licensees including continuing education.
- To fine agents who have been negligent in their duties and caused damage to their clients.
- License individuals and firms who practice real estate brokerage activities. - correct answer ✅3. To fine agents who have been negligent in their duties and caused damage to their clients. Explanation
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Commission never fines agents. They can reprimand, censure, suspend or revoke a license. The Commission can fine a timeshare developer for failing to register the project with the commission. Lilly Smith, an agent with ABC Realty, was recently married to John Wilson. Which of the following is true regarding Lily her commission rules?
- She may continue to practice as Lilly Smith, even if she legally changes her name to Lily Wilson, since most of her clients know her by her maiden name.
- Lily has up to 60 days to change her name with NC Real Estate Commission, if she legally changes her name.
- If Lily chooses to change her legal name, she should notify the records division within 10 days of name change.
- Lily should notify the Commision of her name change at license renewal. - correct answer ✅3. If Lily chooses to change her legal name, she should notify the records division within 10 days of name change. Explanation
