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North Carolina Real Estate Test Overview
North Carolina Real Estate Test Overview
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North Carolina Real Estate Exam Overview
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Answers
1
A real estate licensee does not pay the annual fee. What is the time period to reinstate their license & pay the fee?
1 month
12 months
6 months
2 months
2
Which of the following terms is associated with Real Property Taxes?
Ad valorem
Annuity coepits
Caveat venditor
Caveat emptor
3
A transaction featuring an installment land contract
The contract terms are more advantageous to buyer
Buyer has same rights as a buyer in a deed of trust
Buyer gains equitable title to the property after all payments are made
Buyer who defaults may loose rights to property & loose previous payments
4
When can a seller receive a due diligence fee under the NC standard OTP and Contract?
When the offer is presented to the seller
When a contact is created between seller & buyer
At the settlement meeting
After the deed is recorded
5
In NC, the last day that real estate taxes for the current year may be paid w/o penalty is
Dec 31st of the current tax year
At any time
Jan 5th of the next year
Sept 1st of the current year
6
A joint tenant sells their interest to a 3rd party. What is the new relationship with the remaining owner and new owner?
Tenants in common
2/3 interest original owner and 1/3 interest new owner
Joint tenants
No relationship
7
A person may not perform a real estate related act when their license is
Both
Suspended
Revoked
Neither
8
The NC Mechanic’s Lien Law does not apply to construction projects costing over $30,000 on owner occupied dwellings
True
False
9
A buyer purchases a single family home. The appraiser will MOST LIKELY use which method?
Cost Approach
Income Approach
Market Data
GIM
10
A property sold. All the following could be used to convey title except
Quitclaim deed
Warranty deed
Trustee’s deed
Deed in lieu of foreclosure
11
The principal that is the basis for the sale comparison approach is the principal of
Highest & best use
Competition
Substitution
Replacement
12
Which of the following statements is NOT TRUE?
Liquidated damages are agreed to in advance
Equitable title is transferred when deed is signed by grantor @ closing
A land contract is also known as an installment contract
Time is of the essence = duties are to be performed in a reasonable time
13
A real estate broker’s fiduciary responsibility to keep a principal informed of all facts affecting a transaction is
Obedience
Accounting
Skill, care & diligence
Disclosure
14
The Truth in Lending Act (Regulation Z) is NOT concerned with the
Loan to value ratio
Disclosure of loan costs
Loan finance charges
APR
15
Zoning ordinances do NOT regulate
The use which a property may be put
The bulk & density of buildings
The placement of buildings on property
Minimum acceptable material and construction standards
16
Which requires a real estate license?
Neither
Both
Preparing an appraisal
Drafting a deed
17
A buyer is buying a single family home. The appraiser will most likely use which method of appraisal?
GIM - GrossIncome Multiplier
Income approach
Cost approach
Market Data
18
Which of the following does NOT need an NC real estate license?
Secretary of a property MGMT company who negotiates and executes leases
Neither
Both
Owner selling their own property
19
A listing broker must provide the seller with a signed copy of the closing statements
Within 3 days
After the deed is recorded
Immediately after closing
No later than 5 days after closing
20
The NCREC requires all licensees to use an offer to purchase form which
Must contain a provision for payment of a commission
Neither
Both
Contains provisions specified by NCREC Rules
21
Ad valorem property tax rates may be adjusted every
4 years
2 years
8 years
Year
22
If a broker fails to pay their renewal fee by June 30th of the current year
Their license is expired
Their license is terminated
Their license becomes inactive
Their license is suspended
23
All the following would be considered improvements to the land EXCEPT
Sidewalks
Roads
Buildings
Sewers
24
A leasehold that automatically renews itself at each expiration is a
Tenancy for years
Tenancy at sufferance
Tenancy at will
Periodic tenancy
25
In NC during foreclosure, the period of time between the breach of the note and the date of sale at the courthouse is
10 day upset bed period
Equitable redemption
Strict redemption
Statutory redemption
26
Which is an example of a specific lien?
Personal property tax lien
Special assessment lien
IRS income tax lien
Judgement lien
27
A property owner signs a 90 day listing agreement. The owner does before the listing expires. The listing is
Terminated automatically upon the death of the principal
Still in effect as the owner’s intention was defined
Binding on the owner’s heirs for the remainder of the 90 days
Binding only of the broker produces a buyer
28
A buyer who finances the purchase of their home using a VA loan is permitted to pay loan discount points
True
False
29
The annual net income of a commercial property remains constant and the capitalization rate increases.
The value of the property decreases
The value of the property is unaffected
The value of the property increases the tax basis only
The value of the property increases
30
In NC, the removal of the wheels and axels in a manufactured home converts a manufactured home into real property
False
True
31
All the following are elements of value EXCEPT
Demand
Scarcity
Uniqueness
Utility
32
A sales contract for real property may be terminated by all the following EXCEPT
Mutual agreement of buyer & seller
Insanity of buyer
Destruction of the property
Death of seller
33
Land is sold to a church “so long as” the land is used for religious purposes. This is
Fee simple determinable
Tenancy for years
Fee simple absolute
Fee simple condition subsequent
34
The chief factor in determining whether an item is a fixture is the
Intent of the annexor
Identity of the installing party
Method of attachment
Degree of customization
35
An Acceleration Clause will be found in which of the following documents?
Sale contracts
Leases
Listings
Mortgages
36
If a real estate firm is incorporated
Neither
Both
The corporation must be licensed by the NCREC
At least one of the officers must be licensed
37
The NCREC is responsible for
Both
Issuing licenses to all applicants
Neither
Defining administrative requirements for BICs
38
In a condominium, each owner has a proprietary lease with the owner’s association for the unit
True
False
39
According to NCREC rules, a valid sales contract can contain all the following EXCEPT
Terms of the buyer’s loan
Legal description of the property
Brokerage compensation split
How repair issues will be handled
40
The deed that contains covenants against all encumbrances that would affect title conveyed and assured quiet enjoyment
Grant deed
Quick claim deed
General warranty deed
Special warranty deed
41
If theowner of the dominant tenement becomes the owner of the serving tenement and merges the 2 Properties, the easement
Is not held by the owner
Becomes dormant
Is terminated
Is unaffected
42
All earnest money checks must be deposited
Within 3 days after acceptance of the offer
Within 3 days of receipt
Within 3 banking days of receipt
Within 3 banking days after acceptance of the offer
43
What form of agency exists under the usual real estate listing contract?
Special agency
Independent agency
General agency
Universal agency
44
A property MGMT firm must deposit tenant security deposit checks
Within 3 banking days after acceptance of the lease
Immediately upon receipt
Within 5 banking days after receipt
Within 3 banking days after receipt
45
Under and installment land contract, the title to property is held by the
Trustor
Vendee
Vendor
Trustee
46
Which of the following can a Provisional Broker do?
None of the above
Prepare an appraisal price
Prepare a CMA for a few
Prepare a BPO for a fee
47
A broker gets her license on May 15, 2013 and is on “active” status. She must pay the annual renewal fee on or before
Dec 31st, 2013
June 30th, 2014
June 30th, 2013
May 15th, 2014
48
A necessary element of an enforceable real estate sales contract
Verbal meeting of the minds between contact parties
The recordation of the agreement
An agreement for exchange of things of value between contract parties
Receipt of earnest money by the named escrow agent
49
The contract interest rate for FHA and VA Loans is determined by
The lender making the loans
HUD sets the FHA rates and DVA sets VA rates
Dept. of HUD
Dept. of Veterans Affairs
50
Which of the following is a lien on real estate?
An encroachment
A recorded deed of trust
An easement
A restrictive covenant
51
The phrase, bundle of legal rights is
Another name for legal description
Part of the definition of real property
Refers to legal documents in real estate
Refers to a tenants’ rights in a lease
52
The method that is the most reliable in estimating the value of an owner occupied, single family home is
Income capitalization approach
Sales comparison approach
Cost approach
Gross rent multiplier (GRM)
53
All of the following must have a NCREC firm license number EXCEPT
Sole proprietorship
Corporation
Partnership
LLC
54
A time share broker may be fined $500 for failure to provide the public offering statement within 5 days after contract
True
False
55
Which of the following have clauses identifying the listing firm as the trustee for receiving/holding trust funds?
Listing agreement
Neither
Both
Offer to purchase
56
An unlicensed secretary in a real estate firm can solicit listings if
They have the BIC’s permission
Hey solicit in the name of the firm
Permission from the owner of the firm
None of the above
57
Deed restrictions and tax liens are examples of encumbrances
True
False
58
All the following are parts of the flooring system EXCEPT
Sill
Header
Girders
Joists
59
A real estate broker acting as the agent of the seller, is obligated to render faithful service to the principal
True
False
60
Debts incurred by an individual and become liens against real or personal property owned by that person are
General liens
Specific liens
Fiduciary encumbrances
Special assessments
61
The legal practice of oral buyer agency in Nc requires
The consumer go under contract to buy within 30 days
The buyer agree to oral dual agency
A definite time period for the agency relationship
The relationship to be up in writing before a presenting an offer
62
A real estate corporation license extends also to all of the following
All employees of the corporation
One officer of the corporation
None of the above
All officers of the corporation
63
Payments received by a time share developer
Have a 5 day recission
Neither
Must be deposited within 3 banking days of receipt
Both
64
Brokers may refer to their CMA as an appraisal
True
False
65
Property management contracts are NOT required to contain
A management fee
An automatic renewal clause
A legal description of the property
A contract period
66
A grantor of property promises to defend the title against persons claiming an interest by, through, or under himself
Grant deed
Special warranty deed
Quitclaim deed
General warranty deed
67
All the following would affect demand EXCEPT
Population
Demographics
Fiscal policy
Wage levels
68
Rent would be best described as
All monies paid by the lessor to the leassee
The contractual consideration to a third party
The consideration for the use of real property
The total amount owed under the terms of a lease
69
Public land use controls include all of the following except
Subdivision regulations
Master plan specifications
Environmental protection laws
Deed restrictions
70
The broker will receive the sales commission from the seller when
The transaction is closed
Seller lists the property w/ broker
An offer is procured by a ready, willing, and able buyer
Purchaser takes possession of the property
71
A real estate trust account must
Identify date funds are disbursed
Identify date funds are deposited
All of the above
Identify date funds are received
72
Which of the following are functions of the NCREC
To monitor broker compliance with firm requirements
To license all applications
To issue real estate licenses
To monitor firm-client fees
73
A buyer who finances the purchase of their home using a VA loan is permitted to pay a loan origination fee
False
True
74
NCREC members can be removed by the governor for misconduct
True
False
75
Each legitimate comparable should be as similar as possible in all the following EXCEPT
Sale price
Date of sale
Square footage
Location
76
Trust monies received other than cash (checks,money orders etc.) must be deposited
Immediately
Within 3 banking days after contract formation
Within 3 banking days after receipt
Within 5 banking days after contract formation
77
All REALTORS are either PBs, Full Brokers or BICS
True
False
78
The NCREC is authorized to regulate commissions charged between the firm & client
True
False
79
Which tax advantage is Not associated with owner occupied personal dwellings?
Deductibility of mortgage interest
Ability to depreciate the property
Possibility of tax-free capital gains
Capital gains treatment of resale profits
80
Which is NOT considered a trigger term under the Truth In Lending Act? (TILA)
(APR) Annual % Rate
Number of payments
Annual interest rate
Monthly payment amount
81
A crier at an auction is not required to have a NC real estate license
False
True
82
How is the Loan To Value ratio calculated?
Mortgage amount / Sales Price = LTV
Mortgage amount / P+I = LTV
Sale Price / Mortgage Amount = LTV
P+I / mortgage amount = LTV
