North Carolina Real Estate State Only Exam Review Flashcards

North Carolina Real Estate (State Only Exam Review) Flashcards All of the following statements are true regarding a

broker-in-charge, EXCEPT:1. A brokerage operating as a

sole proprietorship must appoint a broker-in-charge in order to handle trust funds and advertise property.2. A broker-in-charge must notify the Commission when a change in his or her status occurs.3. A broker-in-charge is responsible for maintaining transaction records and notification of a change in address of the firm to the Commission.4. A broker-in-charge has a duty to supervise all brokers affiliated with the firm with regard to violations of license law.

• A broker-in-charge has a duty to supervise all brokers

affiliated with the firm with regard to violations of license law.ExplanationA 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.

• Which of the following would require a NC Real Estate

license according to Commission rules?1. A For Sale by Owner who advertises his listing with an online database.2.An attorney who is compensated for selling real property at a lien foreclosure sale.3. An executor who sells estate property and is compensated as a condition of the will.4. A real estate assistant who holds regular open houses for a listing agent.

• An executor who sells estate property and is

compensated as a condition of the will.ExplanationAn 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.Jake Merritt, an agent with ABC Realty, meets a buyer and reviews the Working with Real Estate Agents brochures with him. The buyer listens to the explanation but refused to sign the acknowledgement. Which of the following is TRUE?1. Jake may not work with a buyer who refuses to sign the acknowledgment.2. Jake may only work with this buyer as a sell sub-agent.3. Jake may act as an oral buyer agent until he shows a home listed by ABC, at which time he must reduce agency to writing.4. Jake may act as an oral buyer agent but he must reduce his agency relationship to writing no later than the Offer to Purchase.

• Jake may act as an oral buyer agent but he must reduce

his agency relationship to writing no later than the Offer to Purchase.ExplanationOral buyer agency is a legal position to be in until the time of offer (or if agent seeks to exclusively represent the client). In the event a potential buyer or seller refuses to sign the Working with Real Estate Agent Brochure, an agent should note this on the acknowledgment panel and retain it in his/her transaction record file.A broker is representing a tenant under an oral agency agreement while seeking an apartment to rent in downtown Charlotte. The broker has shown multiple apartments, however has not found the right property for the prospective tenant. Over the weekend prospective tenant attended an open house hosted by an owner that is leasing property "for lease by owner" and entered into a 2-year lease agreement. Is the broker entitled to compensation?1.No. A broker can only seek compensation offered through a Multiple Listing Service and this proper was offered "for lease by owner".2. No. Since the agreement is

non-exclusive, the tenant and landlord are under no obligation to compensate the broker.3. Yes. The broker earns compensation no matter how the tenant was introduced to the property.4. Yes. The broker has earned compensation since the buyer entered into a lease agreement, however the tenant must pay the fee, not the property owner.

• No. Since the agreement is non-exclusive, the tenant

and landlord are under no obligation to compensate the broker.ExplanationAn oral tenant representation agreement must be non-exclusive and open-ended. Therefore, there is no exclusivity and the tenant is free to look at other properties for lease and not be obligated to utilize the broker under the oral agreement. No compensation is due to the broker.Lilly Smith, an agent with ABC Realty, was recently married to John Wilson. Which of the following is true regarding Lily her commission rules?1. 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.2. Lily has up to 60 days to change her name with NC Real Estate Commission, if she legally changes her name.3. If Lily chooses to change her legal name, she should notify the records division within 10 days of name change.4. Lily should notify the Commision of her name change at license renewal.

• If Lily chooses to change her legal name, she should

notify the records division within 10 days of name change.ExplanationA licensee must notify the commission

upon name or address changes, email address, and telephone number whether personal or business within 10 days.A broker received three (3) offers on Sunday on a hot listing in Cary. In what manner should agent present these offers?1. Deliver to the seller in the order in which they were received so that the Seller can respond to each accordingly.2. Deliver offers from lowest price to highest price.3. Counter each offer and take the first one to accept the terms of the counteroffer.4.Deliver offers simultaneously to seller and advise as necessay regarding the merits 4.Deliver offers simultaneously to seller and advise as necessary regarding the meritsExplanationDeliver offers simultaneously (no later than 5 days from receipt). The listing agent must fulfill his/her duties to the seller by providing advice regarding each offer. The seller will make the ultimate deciion on how to respond. An agent cannot accept, reject or counter an offer on his/her own.

Muntin, mullion, casing and sashes are terms defining:1.

Door construction2. Roof construction3. Window construction4. Wall construction

• Window constructionExplanationMuntin, mullion, casing

and sashes relate to the window construction. Top rail, bottom rail, hinge and lock stile are all components of door construction. Ceiling joist, rafters, trusses and ridge board are components of roof construction. Sill plate, header, stud and top plate are all components of wall construction.A landlord enters a triple net lease agreement with a commercial tenant for five years with an automatic renewal of the lease agreement for one year after expiration unless either party provides 30 days notice to terminate. All of the

following statements are true, EXCEPT:1. The agreement

must be in writing to be enforceable per the North Carolina Statue of Frauds.2. A triple net lease is where the landlord takes on responsibilities for certain cost that are typically born by the tenant.3. To be protected against 3rd party transfers, the lease should be recorded.4. The tenant would not be protected by the North Carolina Rental Agreement Act.

• A triple net lease is where the landlord takes on

responsibilities for certain cost that are typically born by the tenant.ExplanationA net lease is where the tenant takes on some of the cost of ownership typically paid for by the owner such as taxes, insurance or common area maintenance. The NC Statute of frauds requires leases of greater than 3 years to be in writing to be enforceable. The NC Connor Act requires a lease to be recorded to be enforceable against 3rd parties. The RESIDENTIAL Rental Agreement Act does not protect commercial tenants.Individuals/entities that enter commercial transactions as they are expect to be more educated (sophisticated) and therefore there are fewer protections on the Commercial real estate business Which of the following would most likely be included in the heated living area of a single-family home?1. An in-law cottage that attaches to the house by an unheated breezeway2. A two (2) car garage with finished, sheet-rocked walls3. A finished walk up attic with maximum ceiling height of six (6) to four (4) inches4. A finished and heated basement accessible from the kitchen by interior stairs

• A finished and heated basement accessible from the

kitchen by interior stairsExplanationOnly the finished basement is heated, finished, and directly accessible from another heated living area of the house. In order for attic to be included 50% or more would need to be 7 feet, 6 foot 4 inches under ducts and beams; the agent would be able to include area with a height of 5 feet.