At closing, how would a buyer best protect themselves from a title defect or cloud?

Owners Title Coverage Insurance

What are the 4 elements to a contract?

Competent Parties Mutual Assent Consideration Lawful Purpose

If the seller doesnt discuss keeping a fixture, can they remove it after being under contract?

No, it has to be excluded in writing in the offer to purchase

When must an agent follow the instructions of the client?

Agents must obey the client unless, its unethical or illegal

When must offers be submitted to a seller?

Immediately or within 3 days max

Trade fixtures are personal property unless the item was removed before?

The expiration date of the lease

What does the covenant of warranty forever say?

Grantor promises to compensate the grantee if title issues occur

What would be the overall job of a broker working as the property Manager of an apt building?

Maximize the return on the client investment

What is pre-approval? What does the lender do before issuing that approval letter?

Preliminary Qualifying Technique/check credit, income & debt

What is Functional Obsolescence?

when your house is outdated or has an outdated feature

When can an offer be treated as a Back-up contract?

When a property is already under contract

How does supply and demand effect housing?

When supply goes down, the cost of a property goes up

What is Statute of Frauds?

Contracts in writing to be legally enforceable

What will make an offer become a counter offer?

If the offeree makes any changes

What terms are used in a Metes and Bounds legal description?

monuments, point of beginning, point of end

What is an estate at sufferance?

Leasehold estate where the tenant has over stayed the lease

What does a subordination clause means in a mortgage?

one lender give another lender higher priority in lien

What powers does the real estate commission have?

Power to set fees and impose disciplinary actions.

When is a commission earned by a broker?

When they produce a ready, willing and able buyer.

In an installment land sales contract, what type of title is given to purchaser? Kind does the seller have?

Seller will have both equitable title and legal title

What are the protected classes under Federal Fair Housing?

Family status, race, sex, handicapped, color, religion, national origin

How would one use GRM to value a property and how should they evaluate it?

Sold price of comp ÷ rent rate= GRM

Who signs and gives the mortgage note?

The borrower signs and gives the agreement to the lender

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Duplicate of NC Real Estate Prelicensing Final Quiz 1

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Questions 91

Answers

1
At closing, how would a buyer best protect themselves from a title defect or cloud?
Owners Title Coverage Insurance
All of the above
Mortgage Cancellation Insurance
Life Insurance
2
What are the 4 elements to a contract?
Competent Parties, Front End, Consideration, Lawful Purpose
Competent Parties Mutual Assent Back End Lawful Purpose
Competent Parties, Earnest Money, Agreement, Lawful Purpose
Competent Parties Mutual Assent Consideration Lawful Purpose
3
What are some characteristics of a condominium?
you own the common areas as a tenant in common
all of the above
you own everything in between the interior walls
You own the lot and everything in between the interior walls
4
If the seller doesnt discuss keeping a fixture, can they remove it after being under contract?
No, it has to be excluded in writing in the offer to purchase
No, because it is attached to the home
Yes because it was not built with the house foundation.
Yes, because they have the receipt for it.
5
What are the licensing requirements for a broker in North Carolina?
Be of good moral character and pass the state exam
The broker has to complete 75 hours of prelicensing education
The broker has to be at least 18 years old
all of the above
6
Which of the following is a type of exaggeration?
all of the above
Slandering
Over pricing the home
Puffing
7
When must an agent follow the instructions of the client?
none of the above
Agents must obey the client unless, its unethical or illegal
Agents must always obey the client
Agents must never obey the client, only the broker
8
When must offers be submitted to a seller?
withing 7 days of acceptance
All of the above
Immediately or within 3 days max
Only between 8 am and 9 pm
9
What are the different types of depreciation?
Physical Deterioration
All of the Above
Functional Obsolescence
Economic Obsolescence
10
What right gives an owner legal use of a water non navigable stream that adjoins his property?
Riparian and Littoral Rights
Riparian right
None of the above
Littoral rights
11
Trade fixtures are personal property unless the item was removed before?
expiration date of the lease and the new tenant has moved in
The expiration date of the lease
all of the above
The new tenants move in
12
What does the covenant of warranty forever say?
Grantor will go half with grantee on fees
None of the above
Grantor promises to compensate the grantee if title issues occur
Grantor will not compensate the grantee
13
Can a real estate licensee perform an appraisal?
Yes if they are a licensed appraiser
Both C & D
No, they cannot
Yes if their broker allows it
14
What can a home owner do to stop another homeowners violation of a deed restriction?
Take them to court
Report it to their mortgage company
All of the above
Put a mechanic lien on them
15
Joint tenant transfers ownership of their shares, what manner does the grantee take it?
tenants in common
joint tenancy
sole ownership
none of the above
16
What would be the overall job of a broker working as the property Manager of an apt building?
Make sure the office is open at 8 am
Maximize the return on the client investment
Get all applicants qualified
All of the above
17
What is pre-approval? What does the lender do before issuing that approval letter?
Guarantee Approval Technique/check credit, income & debt
Preliminary Qualifying Technique/check credit, income & debt
None of the above
Preliminary Qualifying Technique/tax returns, credit, income
18
What is Functional Obsolescence?
when you have the worst house on the block
all of the above
when your house is outdated or has an outdated feature
when you have the best house on the block
19
When can an offer be treated as a Back-up contract?
Before any offer is accepted
None of the above
After closing
When a property is already under contract
20
A purchase agreement is bilateral or unilateral? Expressed or Implied?
bilateral, implied
unilateral, implied
bilateral, expressed
unilateral, expressed
21
How does supply and demand effect housing?
When supply goes up, the cost of a property goes up
both A & B
When supply goes down, the cost of demand goes down
When supply goes down, the cost of a property goes up
22
Is North Carolina a lien theory or title theory state and are they judicial or non judicial?
lien theory and non judicial
title theory and non judicial
lien theory and judicial
title theory and judicial
23
What are the remedies for a buyer if the seller defaults?
Report the broker to the commissioner
all of the above
Return the earnest money
Sue for specific performance
24
What is Statute of Frauds?
None of the above
Contracts accepted verbally to be legally enforceable
Contracts in writing to be legally enforceable
Contracts post marked to be legally enforceable
25
What will make an offer become a counter offer?
If the offeror makes any changes
If the offeree or the offeror makes any changes
None of the above
If the offeree makes any changes
26
Is Fructus Industriales real or personal property?
personal property
Real property
It is not a property at all
Real and personal Property
27
Differences between general agency, universal agency and special agency?
General Agency has the authority to perform continuously
Universal Agency has authority to act as client
All of the above
Special agency the agent can perform one task
28
What terms are used in a Metes and Bounds legal description?
all of the above
township, baseline, meridian
monuments, point of beginning, point of end
lot and block
29
What is an estate at sufferance?
Leasehold estate where the tenant files a quit claim deed
Leasehold estate where the tenant becomes the new owner
Leasehold estate where the tenant has over stayed the lease
Leasehold estate where the tenant files a quiet action title
30
What are the benefits to a lender when receiving discount points?
It reduces the sellers cost
It increases the lender yield
All of the above
It increases the brokers commission
31
How is the priority of liens determined?
by the judge
date of recordation
The value of the lien
The date of recordation and the value of the lien
32
What would an appraiser begin with for a replacement cost approach when valuing a property?
How much the last similiar property sold for in the neighborhood
How much the property last sold for
Measuring Square Footage
How many bathrooms the property has
33
What does a subordination clause means in a mortgage?
all lenders dividing the money equally
None of the above
Both A & C
one lender give another lender higher priority in lien
34
What powers does the real estate commission have?
Power to waive state testing
The power to increase commission rates at a broker's firm
All of the above
Power to set fees and impose disciplinary actions.
35
Another name for "meeting of the minds" is?
Mutual Assent
Cam Spam Act
Statues de Fraudes
Mutual Consent
36
When is a commission earned by a broker?
When they produce a ready, willing and able buyer.
All of the above
When they get the seller to sign the listing agreement
When they do an open house
37
In an installment land sales contract, what type of title is given to purchaser? Kind does the seller have?
Equitable Title; seller has legal title
Seller will have both equitable title and legal title
None of the above
Legal Title; seller will have equitable title
38
What are the protected classes under Federal Fair Housing?
None of the above
Race, relign, color, nat origin, sex, familiar status
Family status, race, sex, handicapped, color, religion, national origin
Race, relign, color, nat origin, sex, sexual preference
39
What are the requirements for one to be a grantee in a deed transfer?
They must be put in a will
They must be named
all of the above
They must be a living heir
40
A licensee cannot come up with a list price due to a unique situation, who should they refer to
appraiser
broker
commissioner
courts
41
In any advertising, the sales person must also include whose name?
None of the above
broker and firm
The broker's
The sellers and the broker's
42
Grantee fails to record a deed, his cousin races to the courthouse and records the deed in his name, who now owns it
1st person to record the deed and change address with USPS
1st person to move in
1st person to change address with USPS
1st person to record the deed
43
Someone buys another's equal share of land that they own with 2 others, what ownership is this?
Tenant in common
joint tenancy
none of the above
sole owner
44
How long can a broker legally hold earnest money without depositing it?
14 days or less
10 days or less
3 days or less
7 days or less
45
How would one use GRM to value a property and how should they evaluate it?
Sold price of comp ÷ interest rate=GRM
Sold price of comp ÷ rent rate= GRM
Sold price of comp x rent ÷ interest rate=GRM
Sold price of comp X interest rate=GRM
46
What are the powers under the government rights to police power?
none of the above
Zoning, building codes and lawful purpose
Zoning, building codes and non-conforming use.
Zoning and building codes
47
Who signs and gives the mortgage note?
The lender signs and gives the agreement to the borrower
The FHA signs and gives to the borrower
The broker signs and gives to the borrower
The borrower signs and gives the agreement to the lender
48
Does the real estate commission decide what commissions brokers can charge?
Yes, it is based on the Security Bond the Broker has
No, the cannot
Yes, everything must be approved through them
None of the above
49
What are the trigger terms of Regulation Z?
The amount of the monthly payment
The total APR
All of the above
The amount of down payment
50
How many real estate commissioners are there
3
9
7
6
51
Can a restrictive covenant allow only a certain group of people in a subdivision?
Yes if it is in the brokers policy
Yes, if it is their belief
No
Yes if approved by the commissioner
52
What does the Federal Truth in Lending Act require?
All of the above
ANTI-TRUST LAWS
disclosure of all closing cost
POLAND
53
If an appraiser were valuing a church, what approach would be best suited for this property?
All of the above
Income Capitalization Approach
Sales Comparison Approach
Replacement Cost Approach
54
After squatting on another's land for a lengthy period of time, that person might file what?
constructive eviction to get adverse possession
quit claim deed to get adverse possession
Quiet title action to get adverse possession
all of the above
55
RESPA requires what fees to be listed on a closing statement?
The appraisal price, mortgage note and attorney fees.
All cost associated with financing the transaction.
The mortgage note and appraisal price only.
None of the above
56
As it relates to points, what does 1 point amount to as it relates to the amount paid?
1% of the loan amount
1% of the commission
1% of the appraisal value
All of the above
57
Does an agent have to disclose a material fact that he/she knows about?
Only when a contract is received signed
Only if the customer asks
No, because they are not a client
Yes they do
58
When a broker receives earnest money when should they deposit it?
Trust funds must be deposited at closing in brokers account
Trust funds must be deposited within 3 days into the trust account
Trust funds must deposit before closing in brokers account
Trust funds must deposit within 7 days in brokers account
59
What is a Constructive Eviction?
When the tenant goes to court to be let out of a lease.
When the landlord takes the tenant to court to evict them
When the landlord does not need to go to court to evict
None of the above
60
What are the duties a broker owes a customer?
Loyalty, Honesty, Integrity
Loyalty, Honesty, Integrity, Trustworthiness
Honesty, Loyalty, Trustworthiness
Honesty (fairness), Accountability Reasonable care, Material facts
61
An offer becomes a legally binding contract when?
When it is filed in the courts
When it is signed and communicated back to the offeror
When it is post marked and sent back to the original offeror
When the commissioner approves it
62
How should a listing agent handle a situation when they are under contract and receive another offer?
Make the new offer a back up offer
Decide to take the new offer and cancel the accepted offer
Accept both offers & close on the one with the soonest date
None of the above
63
What should a broker disclose to a client before entering into an agreement?
disclose to a client if there are any conflicts of interest
disclose to a client if the area is predominantly one race
disclose to a client if they qualify to buy a home
all of the above
64
What does the power of sale clause do?
None of the above
Allows the courts to take possession of the house
Provision that enables a lender to foreclose without filing
Provision that stops a lender to foreclose without filing
65
Is a lease with an option to purchase a unilateral or bilateral contract? Who can be enforced to act?
Unilateral, landlord
Unilateral, owner/landlord
Bilateral, owner
Bilateral, landlord
66
An offeror can rescind their offer up until what time?
none of the above
until communication of the accepted offer.
until the date of closing
right after communication of the accepted offer
67
Which lien is superior to all others?
tax liens
commercial broker lien
mechanical liens
mortgage liens
68
If an appraiser is using net operating income, he/she will be using what appraisal method?
All of the above
Interest Rate
CAP Rate
GRM Rate
69
Conspiring to fix list prices or commission rates are violating what?
All of the above
Federal Commission By Laws
Sherman Anti-Trust
Fair Housing Act
70
How do you calculate commission to be paid?
SP x Interest Rate
SP x Commission Rate
SP / Interest Rate
SP / Commission Rate
71
How does a buyer get his earnest money back?
All of the above
Terminate after DDP or with seller permission
He can write a letter to the seller explaining his situation
Terminate before end of DDP or as a credit at closing
72
Who would be ordered to pay just compensation in eminent domain and why?
government; because of eminent domain must be for public good
government; because of police power
Both B & C
lender; because of eminent domain must be for lower interest rate
73
What kind of permission does a broker have to have to make changes to a listing?
all of the above
Verbal consent from the seller.
Written agreement to make any changes to a listing.
A text or email from the seller
74
For a contract to be legally binding it must.
Legal Purpose, Mutual Assent, Earnest money, consideration
Mutual Assent, Legal Purpose, competent parties & consideration
Both B & C
Be of sound mind, have competent parties, consideration and illegal purpose
75
How does an appraiser determine his or her appraiser fee?
amount of time, work and resources required for the job
The address, amount of time, work and resources
A percentage of the market value of the house
Both A & B
76
Why do lenders sell their mortgage notes on a secondary mortgage?
all of the above
To be able to lower interest rates
To write more mortgages
To get more capital to lend
77
What violation is committed when two licenses conspire to set prices/fees?
Anti-Trust laws
Federal Housing Act
All of the above
Equal Opportunity Act
78
Earnest money can be in what forms?
anything of value that both parties accept and agree to
cashier's check
certified funds
all of the above
79
How are most encroachments found?
All of the above
Surveys uncover most encroachments
Appraisals uncover most encroachments
Mortgage Companies uncover most encroachments
80
What is the required down payment of a VA loan?
3 %
0
10 %
2 %
81
How long can a licensee call a person whom they once did business with?
Up to 3 months
Up to 12 months
Up to 6 months
Up to 18 months
82
Which of the following terminates an agency agreement?
If permission is granted from the commissioners office
None of the above
Both parties agree to part ways
If one party is tired of the other
83
What is a promissory note?
A quit claim deed
all of the above
quiet action title
Evidence of a debt
84
Who does an agent owe loyalty to?
client
client and customer
broker, client and customer
broker and client
85
When will earnest money be transferred to the closing attorney?
10 days before closing
within 30 days
All of the above
At the time of closing
86
Does a R.E. license give a broker the right to draft an original contract?
No, brokers cannot draft original or complex contracts
Yes if they have taken the certification to draft contracts class
Yes, brokers can draft original or complex contracts
Both A & B
87
How would a salesperson avoid entering into dual agency?
Treat one party as a customer and the other party as a client
Dont represent either party and refer them out
Treat both parties as a customer
Allow their spouse to work with the other client
88
Under RESPA, the lender has how long to get the applicant a loan estimate?
7 days
3 days
5 days
2 days
89
What does Regulation Z require?
Disclosure of simple interest rate or annual percentage rate based on loan
Disclosure of simple interest rate
Disclosure of annual percentage rate and loan costs
Disclosure of simple interest rate and annual percentage rate
90
As relating to landlords what does the covenant of quiet enjoyment mean to the tenant?
all of the above
The landlord will not interfere unduly or enter without prior notice
The landlord will not sell the house while tenant is in it
will not be interfered with anyone claiming superior title
91
The only fee(s) RESPA will allow a lender to charge before receiving the loan estimate is
credit report
all of the above
application fee
appraisal fee

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