Real Estate Pre-Licensing Course Unit 3.2 Flashcards

Real Estate Pre-Licensing Course Unit 3.2 Flashcards What are Material Facts?Facts about the property that could potentially change a seller or buyers decision about the transaction. Material facts must be disclosed in writing.Define the act of "puffing"Puffing means exaggeration.ex. "Beautiful three story home in Downtown Raleigh" this is considered puffing. It is a subjective opinion, not a fact.ex. "Beautiful plantation home in Cary, NC!" This is not puffing, it is lying.What can a seller DO and NOT DO when it comes to filling out an RPOADS form?The seller is obligated to fill out this form. IF the seller wishes to omit information about the property, they may check "No Representation". However, the seller cannot lie.When is an RPOADS form needed?When selling residential in North Carolina.What are the 3 types of material facts?1. Facts about the property itself2. Facts relating to the property (zoning, airports, train tracks)3. Facts relating to a party's ability to close Caveat Emptor Meaning"Let the buyer beware" meaning sellers may avoid liability Who does Caveat Emptor apply to?Caveat Emptor only applies to the client. The seller can choose "no representation" on an RPOADS form, however brokers MUST disclose all material facts that are known or should have been known.What is the NC Seller's Disclosure form called? The Residential Property and Owners Association Disclosure Statement or RPOADS.ResidentialPropertyOwnersAssociationDisclosur eStatement When is a licensee NOT liable for a material fact?When a material fact is hidden or cannot be seen.Who gets material facts?Anyone and everyone that a broker is working with.When do you disclose material facts?BEFORE AN OFFER IS MADE What happens if a seller does not deliver the RPOADS form before an offer is made?The seller is not in compliance with the law. In this case, the buyer is not bound to a contract and has 3 calendar days to back out the contract and get a full refund.WHEN does a material fact need to be disclosed to a buyer?

BEFORE AN OFFER IS SUBMITTED!

Which items are NOT considered a material fact? 1. Stigmatized properties:- haunted house- suicide or death in the property- someone was sick in the property2. Sex offenders in the area- "Megan's Law" requires sex offenders to be recorded in a public website database that any person can look up.When is a seller exempt from an RPOADS form? When the property is in foreclosure.When does a buyer receive and RPOADS form? A buyer should receive an RPOADS form BEFORE they make an offer.

Define the following:Willful MisrepresentationNegligent

MisrepresentationWillful omissionNegligent Omission

Willful Misrepresentation: Knowingly misrepresenting or

lying about a propertyNegligent Misrepresentation:

Unknowingly misrepresenting a property or

transactionWillful Omission: Knowingly leaving out a

material fact, or failing to disclose a material fact.Negligent

Omission: Unknowingly failing to disclose important

information