Practice Exam 1

Question 1

Under which of the following types of mortgage loans would a buyer have to produce a CRV

Answer 1

VA Guaranteed Loan

Question 2

Promissory Note elements

Answer 2

a promise to pay

terms of payment

amount of the debt

(NOT Needed is lenders signature)

Question 3

In regard to loan costs, FHA Mortgage Insurance Premium (MIP) and VA funding fees, who can legally pay these items at closing ?

Answer 3

the borrower

the seller

the lender or they can be financed into the loan

Question 4

Which parties signature is required on the DEED of TRUST?

Answer 4

The TrustOR

Question 5

Which of the following statements are correct regarding construction loans

Answer 5

Construction loans have the HIGHEST RISK to the LENDER

Construction loans have a shorter repayment period than a home loan

Open ended mortgages

Non Amortized

Question 6

If first substantial contact occurs by telephone, the licensee is required to transmit the Working with Real Estate brochure immediately but not later than

Answer 6

3 CALENDAR days after the telephone conversation

Question 7

Concerning the Residential Property Disclosure Act, if a buyer does NOT receive the disclosure,…

Answer 7

then the buyer has 3 calendar days within to RESCIND the transaction from either the DATE OF CONTRACT or the DATE OF RECEIPT of the disclosure whichever comes first

Question 8

If a provisional does not take their 90 hours of post licensing training within three years from the date on which they were initially licensed their license is

Answer 8

INACTIVE

Question 9

A licensees annual renewal pocket card must always be

Answer 9

Carried on his person while doing business as a real estate agent

Question 10

If a real estate agent has been found guilty of violating the NC Real Estate Licensing Law, the NCREC can

Answer 10

Suspend or revoke the license

Reprimand or censure the licensee

Question 11

When is the developer of a timeshare project required to deliver the public offering statement to the purchaser?

Answer 11

No later than the DATE of CONTRACT EXECUTION

Question 12

When must the Residential Property Disclosure Statement be given to the buyer of the residential property?

Answer 12

No later than the time the BUYER MAKES AN OFFER ON THE PROPERTY

Question 13

Which is true concerning Footings?

Answer 13

Footings form the base upon which the rest of the foundation rests

Footings are poured into trenches below ground level and are usually composed of masonry type materials

Question 14

A joist is

Answer 14

Long horizontal boards installed parallel to each other to support the load of the ceiling and the rafters above it.

Long horizontal boards installed parallel to each other that are attached to the sill to support the floor and its associated loads

Question 15

Which of the following best describes the owners original basis in his or her property?

Answer 15

for income tax purposes the original cost (Purchase price) of the property

Question 16

If payment of License FEES are RETURNED unpaid or dishonored by check or credit card, the NCREC can discipline a licensee by taking all the following actions

Answer 16

Denying the license

Suspending the license

Revoking the license

NOT reprimanding (note not paying fees are involved)

Question 17

All of the following are requirements by the NCREC to obtain a limited non resident commercial license

Answer 17

Creation of a brokerage agreement and the signing of a declaration of affiliation with a NC resident real estate broker

consent to be disciplined under the rules, statutes and regulations of NC

declaration of their residence in a state or territory of the US other than NC

Question 18

The requirements of the Real Estate Settlement & Procedure Act apply to any real estate transaction that takes place

Answer 18

Involving 1-4 units

Involving a federally relate mortgage

Question 19

Which of the following statements regarding written listings agreements in NC is correct ?

Answer 19

A written listing provides proof that the broker was hired by the seller

The listing agreement must have a definite starting and ending date

The broker must deliver to the seller a copy of the signed listing agreement

(it does NOT include and automatic extension clause)

Question 20

If dual agency is undisclosed which of the following actions would most likely occur?

Answer 20

A civil lawsuit for damages caused to the client

A disciplinary action by the NCREC

Question 21

Designated agency is allowed in

Answer 21

PB and PB

Broker and PB

Broker and Broker

Question 22

Dual Agency

Answer 22

the broker acting for both the buyer and the seller in the same transaction

Question 23

A PB owes all of the fiduciary duties

Answer 23

to obey all legitimate instructions from the broker concerning the transaction

to be loyal to the interests of the principal

to disclose material facts concerning the sale

(does NOT prepare the deed for the transfer of title)

Question 24

A buyer is to assume an existing loan of 80K at 9%. The interest on the loan which is paid in Arrears would appear on the closing statement as

Answer 24

Double entry, debit seller/credit buyer

Question 25

If an owner of a building sold it, the present tenants lease would

Answer 25

be honored by the new owner until expiration

Question 26

A broker lists a property for sale at 18K with a 5% commission and obtains a verbal offer from a prospective buyer. The seller indicates to the broker that the offer is acceptable if submitted in writing. Before the offer can be put into writing the purchaser backs out. The broker is entitled to

Answer 26

NO COMMISSION

Question 27

Key principle of Estate for Years is

Answer 27

Expire automatically without notice at the end of the period designated

Question 28

Which of the following is true about TENANCY at SUFFERANCE?

Answer 28

It occurs where one had a lease for a specific term and holds over at the end of the lease without the consent of the landlord

It is the lowest FREEHOLD ESTATE known by law

Question 29

A seller signs two listing agreements on the same property at the same time for the same listing period with different firms. The seller signs an “Exclusive Right to Sell Listing Agreement” with ABC Realty and and Exclusive Agency Agreement with XYZ Realty. If a ready willing and able buyer is procured by ABC realty, which of the following would be legally correct

Answer 29

Seller would owe two commissions, one commission to ABC Realty, and one commission to XYZ Realty.

Question 30

Specific Performance

Answer 30

Legal remedy a buyer has to force a seller to honor a contract for sale

Question 31

In connection with an OTPC earnest money is used

Answer 31

as evidence of the buyers good faith

as liquidated damages to the seller in the event of a breach

Question 32

the major difference between Installment Land Contract and a Purchase Money Mortgage is

Answer 32

The time in which delivery of the deed is made

Question 33

A NC real estate listing agreement is required to be in writing under

Answer 33

NC Real Estate Commission Rules

Question 34

According to NCREC rules regarding the drafting of legal documents, which of the following statements is correct ?

Answer 34

A broker acting as an agent in real estate transaction shall not draft legal instruments, however a broker may complete pre printed fill in the blank forms, if authorized or directed to do so by the parties

Question 35

Which IS required for a contract to be valid and enforceable?

Answer 35

signatures of both parties

consideration

mutual consent

(Witnesses are Not required)

Question 36

The NC Residential Rental Agreements Act covers all of the following

Answer 36

Basement apartments

Condo Unit

Apartment Complexes

(NOT Transient Occupancy)