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A resident of Big City purchased her house for $169,000 and paid an additional $3,500 in closing expenses. She proposes to sell her house for $200,000 and the listing broker estimates that total closing expenses (including 6% brokerage fee) on such a sale would be $17,500. The resident's projected net profit on this sale would be A) $14,000. B) $10,000. C) $45,000. D) $13,500. ---------CORRECT ANSWER-----------------B) $10,000. A homeowner purchased a house for $180,000 and paid an additional $7,500 in closing expenses. The homeowner wants to sell the house for $225,000 and the listing broker estimates that total closing expenses (including 5% brokerage fee) on such a sale would be $13,000. The homeowner's projected net profit on this sale would be A) $45,500. B) $24,500. C) $34,000. D) $32,000. ---------CORRECT ANSWER-----------------B) $24,500. What is the listing agent's BEST option if they are being asked by the seller to set a listing price that is unreasonably high? A) Set the listing price at the higher price because they must provide all fiduciary duties to the seller B) Set the listing price at the higher price because they must obey the seller C) Set the listing price at the higher price because they must stay in compliance with licensing law
D) Refuse the listing ---------CORRECT ANSWER-----------------D) Refuse the listing Betty with Green Acres Realty had an appointment with a seller in a short sale situation. Betty reached out to her broker-in-charge to see what the firm's options were regarding signing a listing agreement with the seller. What are Green Acre Realty's options in this situation? A) Betty must list the property because it would be discrimination if she declined the listing. B) Betty must list the property because the North Carolina Real Estate Commission rules mandate she must treat all sellers equally. C) Betty can decline to list the property. D) Betty must tell the seller that they are not allowed to sell the property since it is a short sale. ---------CORRECT ANSWER-----------------C) Betty can decline to list the property. Daisy is eager to sell her property and has asked Xavier, a real estate agent, to help her determine what she would need to sell her house for in order to net $45,000. Xavier has estimated her closing costs to be $1, and he charges 6% of the sales price as a commission fee. Daisy has a loan pay off of $140,000. What price does she need to sell her home for in order to net $45,000? A) $197, B) $198, C) $195, D) $196,100 ---------CORRECT ANSWER-----------------B) $198, A listing agent has completed the prelisting meeting, prepared a comparative market analysis (CMA), and is now meeting with the seller to discuss a listing price. All of the following factors need to be discussed with the seller EXCEPT A) current market conditions. B) agent's needs. C) estimated closing cost for the buyer.
B) Cesar needs to have the seller resurvey the property to make sure the property lines are current. C) Cesar needs to make sure that buyers know they need to get their own survey; the seller's copy is for informational purposes only. D) Cesar may not share the seller's prior survey with potential buyers. ------- --CORRECT ANSWER-----------------C) Cesar needs to make sure that buyers know they need to get their own survey; the seller's copy is for informational purposes only. Jada is selling her beach house at 11 Ocean View Lane and moving closer to her family. She hires Anthony at Beach Front Properties to assist her with the sale. She gave the firm permission to place a sign in her yard and advertise in the town's small newspaper. Which of the following advertisements would be in compliance with North Carolina Real Estate Commission rules? A) Anthony has done it again, listed another ocean front property - give him a call at 999- 555 - 1212. B) Call Beach Front Properties at 999- 555 - 1212 for more information on 11 Ocean View Lane. C) 11 Ocean View Lane - Best view at the coast! Call 999- 555 - 1212 for more information. D) Best view at the coast - 11 Ocean View Lane! Call Anthony, REALTOR® at 999- 555 - 1212. ---------CORRECT ANSWER-----------------B) Call Beach Front Properties at 999- 555 - 1212 for more information on 11 Ocean View Lane. Michael is planning on showing a For Sale by Owner (FSBO) property to one of his buyer-clients. The North Carolina Real Estate Commission (NCREC) suggests that Michael get a written agreement signed by the seller. What is the name of this type of agreement? A) An exclusive agency agreement B) A protection agreement C) NCREC form - unrepresented seller D) An exclusive listing agreement ---------CORRECT ANSWER----------------- B) A protection agreement
Chelsea is assisting a buyer with the purchase of their first home. They find a property a 492 West Pine Avenue that is being represented by the seller as For Sale by Owner (FSBO). Which of the following would be appropriate for Chelsea to do in this situation? A) Chelsea should preview the property and gain as much personal information from the seller as they can and share that information with their buyer-principal. B) Chelsea should share with the seller how much her buyer-client loves their home. C) Chelsea should tell the seller they are required to work with her and pay her a buyer agent's commission. D) Chelsea should present Working with Real Estate Agents brochure to the FSBO seller at first substantial contact. ---------CORRECT ANSWER---- -------------D) Chelsea should present Working with Real Estate Agents brochure to the FSBO seller at first substantial contact. April is affiliated with Green Acres Realty and representing a buyer, Eyla. They are looking at several properties including one where the seller is representing themselves. In this situation, which of the following scenarios is possible? A) April could represent both the buyer and the seller with both parties' consent. B) April could represent both the buyer and the seller with only the seller's consent. C) April could represent both the buyer and seller without consent of either party. D) April could represent both the buyer and the seller with only the buyer's consent. ---------CORRECT ANSWER-----------------A) April could represent both the buyer and the seller with both parties' consent. Maria is working for a buyer who agrees to exclusive agency representation at all times. Maria can show all of the following listed properties EXCEPT A) a property listed with Maria's firm. B) a property listed with a limited services firm.
A) Alyssa will represent LaTosha and the FSBO seller will be represented by the listing firm. B) Alyssa will fully disclose to the FSBO seller her status as a buyer's agent. C) Alyssa will be a designated agent for LaTosha and for the FSBO seller. D) Alyssa will automatically represent both LaTosha and the FSBO seller. - --------CORRECT ANSWER-----------------B) Alyssa will fully disclose to the FSBO seller her status as a buyer's agent. Megan is working with Vicky to help her buy her first home. Megan has found three homes that meet Vicky's requirements and has made appointments to view the properties on Saturday. One of the homes is being represented by the seller as a For Sale by Owner (FSBO). Can Vicky offer the seller any agency representation? A) No, Vicky is Megan's agent and cannot offer representation to the seller. B) Yes, Vicky, with Megan's permission, can offer the seller dual agency representation. C) No, Vicky is not allowed to solicit listings. D) Yes, Vicky can offer the seller dual agency representation even without Megan's permission. ---------CORRECT ANSWER-----------------B) Yes, Vicky, with Megan's permission, can offer the seller dual agency representation. Which of the following conditions is NOT required when a broker is representing a property that they own or have an ownership interest in? A) A broker as a seller-owner must disclose they will be representing only the seller-owner's interest in the transaction. B) A broker must never attempt to represent a buyer as a buyer agent if the broker has any ownership interest in the real property that is the subject of the sales transaction. C) A broker must require the buyer to agree to dual agency if they want to purchase the property directly from the broker owner. D) A broker as a seller-owner may engage in arms-length good faith negotiations with buyers, only after disclosing to the prospective buyer that the broker is an owner of the property. ---------CORRECT ANSWER----------
-------C) A broker must require the buyer to agree to dual agency if they want to purchase the property directly from the broker owner. Garrick does not want to hire a firm to represent him in the purchase of a property that is listed by a firm. Which of the following statements is TRUE? A) Garrick can represent himself when purchasing a property and can work with a listing agent who would act as a seller subagent. B) Garrick is not allowed to represent himself when purchasing real property because it is against the law. C) If Garrick wants to represent himself in the purchase of a property, he must allow the listing firm to practice dual agency. D) If Garrick is representing himself, then he can only purchase a property where the seller is selling For Sale by Owner. ---------CORRECT ANSWER- ----------------A) Garrick can represent himself when purchasing a property and can work with a listing agent who would act as a seller subagent. Darren has his home listed with Home Town Realty and a buyer, Ashley, is representing herself and wanting to make an offer on the property. Which of the following BEST describes the agency situation between Ashley and Home Town Realty? A) Home Town Realty is acting as a dual agent. B) Home Town Realty is acting as a single agent for Ashley. C) Home Town Realty is acting as an exclusive agent for Ashley. D) Home Town Realty is acting as a seller subagent. ---------CORRECT ANSWER-----------------D) Home Town Realty is acting as a seller subagent. Alice has been looking at some properties with an agent working as a seller subagent. She now wants to have the agent work as a buyer's agent on one of the properties. After the agent gets permission from the seller to cancel their agreement, what must that agent share now that Alice has hired them as her buyer agent? A) The buyer agent owes fiduciary duties to Alice now and is required to share any information about the seller that could get the buyer a better deal.
Emilie is affiliated with Green Acres Realty and is presenting the Working with Real Estate Agents brochure to a buyer. If the buyer does not want Green Acres Realty or any other firm to represent them, what options does the buyer have if they want to see a property that Green Acres Realty has listed for sale? A) Emilie and Green Acres Realty cannot allow the buyer to represent themselves. B) Emilie and Green Acres Realty can work as a seller subagent if the buyer agrees. C) Emilie and Green Acres Realty can work as a seller subagent but the buyer does not have to agree. D) Emilie and Green Acres Realty must work as a dual agent. --------- CORRECT ANSWER-----------------B) Emilie and Green Acres Realty can work as a seller subagent if the buyer agrees. Nishi is a broker and one of four member-managers of a limited liability company (LLC) that owns three properties and decides to sell an office building the LLC owns. Nishi markets the property as For Sale by Owner. Which of the following statements is FALSE regarding Nishi representing the interests of the LLC? A) When a prospective buyer contacts Nishi, she needs to disclose that she has a real estate license. B) When a prospective buyer contacts Nishi to view the property, she needs to explain that she is a member-manager of the LLC who owns the property. C) When marketing the property, Nishi can provide her cell phone number on advertising. D) When a prospective buyer contacts Nishi to view the property, she is prohibited from showing it. ---------CORRECT ANSWER-----------------D) When a prospective buyer contacts Nishi to view the property, she is prohibited from showing it. An agent's duties to third parties include all the following EXCEPT A) fairness. B) obedience. C) disclosure of material fact.
D) honesty. ---------CORRECT ANSWER-----------------B) obedience. Derrin hires Austin with Best Homes Realty to list his home for sale. As Austin is completing the listing agreement, Derrin mentions that the hot water heater has not worked for a couple of weeks and is not planning on repairing it since he is selling the home. Derrin tells Austin that he cannot share that information with anyone as it might affect the sale of the home. What is the BEST course of action for Austin at this time? A) If Austin shares the information regarding the hot water heater, he will be in violation of his fiduciary duties, and Derrin can sue him for disclosing confidential information. B) Austin can share the information with people at Best Homes Realty but cannot share it with any firm representing a buyer. C) Austin must disclose that the hot water heater is not working because it is a material fact. D) Austin must obey the seller. Austin and Best Homes Realty owe fiduciary duties to their clien ---------CORRECT ANSWER-----------------C) Austin must disclose that the hot water heater is not working because it is a material fact. Armin, a broker affiliated with Best Homes Realty, listed a property for sale and conducted an open house. Courtney visited the open house and decided to make an offer. The seller had completed the Residential Property and Owners' Association Disclosure Statement (RPOADS) indicating all defects the seller knows that exist about the property. In this situation, which of the following statements is TRUE? A) Courtney needs to be advised to still conduct a full home inspection. B) Since the seller disclosed all known material facts, they have complied with the Doctrine of Caveat Emptor and Courtney does not need to complete a full home inspection. C) Since the seller disclosed all known material facts that they were aware of, Courtney does not need to complete a full home inspection. D) Armin can assure Courtney that the seller has disclosed all material facts and she does not need to get her own home inspection. --------- CORRECT ANSWER-----------------A) Courtney needs to be advised to still conduct a full home inspection.
Obedience, loyalty, disclosure, confidentiality, accounting, reasonable skill, care, and diligence Which of the following BEST describes subagent? A) Literally the agent of an agent, a person designated or employed by an agent to perform all or part of the agent's assigned tasks or services on behalf of the agent's principal B) The person who authorizes another to act on the principal's behalf within specified parameters and to whom the agent owes certain legal duties C) The person acting for and on behalf of the principal within the bounds of the authority granted and who owes fiduciary duties to the principal D) The relationship that exists when one person is authorized to act for and on behalf of another ---------CORRECT ANSWER-----------------A) Literally the agent of an agent, a person designated or employed by an agent to perform all or part of the agent's assigned tasks or services on behalf of the agent's principal Which of the following statements is TRUE regarding agency agreements? A) Listing agreements, property management agreements, buyer agency agreements, and tenant representation agreements can all be express oral agreements for a period of time. B) Listing agreements and property management agreements must be express written agreements from the beginning of the relationship and buyer agency agreements and tenant representation agreements can be in express oral agreements for a period of time. C) Listing agreements and buyer agency agreements must be express written agreements from the beginning of the relationship and property management agreements and tenant representation agreements can be express oral agreements for a period of time. D) Listing agreements and property management agreements can express oral agreements for a period of time and buyer agency agreements and tenant representation agreements must be in ex ---------CORRECT ANSWER-----------------B) Listing agreements and property management agreements must be express written agreements from the beginning of the relationship and buyer agency agreements and tenant representation agreements can be in express oral agreements for a period of time.
Which of the following statements BEST describes North Carolina Unfair Deceptive Practices Act? A) This law prohibits disclosure regarding facts about the property itself or the surrounding area. B) This law prohibits unfair or deceptive acts or practices in commerce and applies to the sale or rental of real estate and to real estate brokers. C) This law holds that—except in cases involving fraud by the seller or the seller's agent—the seller has no affirmative obligation to disclose information about the property being sold to the purchaser and places the burden on the buyer to investigate the property before contracting to purchase the property. D) This law prohibits making generalized expression of a broker's opinion about a property. ---------CORRECT ANSWER-----------------B) This law prohibits unfair or deceptive acts or practices in commerce and applies to the sale or rental of real estate and to real estate brokers. George knows that the property is about to be rezoned for commercial use, which will greatly increase the value of the property. George does not share this information with the seller and offers to buy the property for himself as an investment. George closes on the property with the seller and then after the rezoning has been finalized, George sells the property at a substantial profit. This is an example of A) self-dealing. B) making false promises. C) undisclosed dual agency. D) improper dealing. ---------CORRECT ANSWER-----------------A) self- dealing. Lanzo is in the process of listing a house for sale and tells the seller that he will stage the house, steam clean the carpets, and hire a professional cleaning crew to clean prior to showing the house. Once the seller signed the listing agreement, Lanzo failed to provide these services. Lanzo may be guilty of which of the following?
D) A broker does not have duties under license law as brokers are only bound by North Carolina Real Estate Commission rules. ---------CORRECT ANSWER-----------------A) A broker's duties under license law when dealing with parties to a transaction apply regardless of the broker's agency relationship to such parties. When it comes to standards for selling agents, which of the following statements is TRUE? A) A selling agent may rely on the accuracy of property information provided by a listing agent in MLS only and must verify other forms of advertising. B) Generally, a selling agent may rely on the accuracy of property information provided by a listing agent. C) A selling agent may never rely on the accuracy of property information provided by a listing agent as they must always verify everything. D) Neither the listing nor selling agent are liable for advertising as long as there is a "disclaimer" warning for the reader to make an independent investigation. ---------CORRECT ANSWER-----------------B) Generally, a selling agent may rely on the accuracy of property information provided by a listing agent. Alfonso tells a prospective buyer that, in his opinion, the property they are about to view is the most beautiful property in the neighborhood. Even if the property would be considered to many as being very unattractive, the nature of Alfonso's statement would be considered as A) willful misrepresentation. B) negligent misrepresentation. C) false advertising. D) puffing. ---------CORRECT ANSWER-----------------D) puffing. Jessica is a broker working for a property management company that manages Getty Luxury Apartments. Jessica promises a prospective tenant that the apartment will be repainted and have the carpet replaced before
the tenant moves in. Jessica fails to have the work done after the lease is signed. This is an example of A) making false promises. B) self-dealing. C) improper dealing. D) undisclosed dual agency. ---------CORRECT ANSWER-----------------A) making false promises. Joseph, a broker affiliated with Right Homes Realty, lists a property for sale. Which of the following statements BEST describes the relationship between Joseph and the seller? A) Joseph is the agent of the seller and Right Homes Realty is the subagent of the seller. B) Right Homes Realty is the agent of Joseph and the seller is a customer. C) Joseph is the agent of the seller because the listing agreement is directly between Joseph and the seller. D) Right Homes Realty is the agent of the seller and Joseph is the subagent of the seller. ---------CORRECT ANSWER-----------------D) Right Homes Realty is the agent of the seller and Joseph is the subagent of the seller. Which of the following BEST describes the common law of agency? A) Case law establishing the responsibilities of a person who acts for another B) State licensing laws and statutes C) The Code of Ethics prescribed by the local trade association D) The disclosure requirement by the agent to third parties no later than first substantial contact ---------CORRECT ANSWER-----------------A) Case law establishing the responsibilities of a person who acts for another Elena hires Mendel and his firm to list her property for sale. They agree that Mendel will hold an open house for the first two weekends the property is on the market. Mendel creates an open house flyer and sends it to the printer with the square footage being listed at 2,100 square feet instead of
D) When a seller agrees to pay a buyer agent's firm, the payment automatically creates an agency relationship between the seller and the buyer agent's firm. ---------CORRECT ANSWER-----------------D) When a seller agrees to pay a buyer agent's firm, the payment automatically creates an agency relationship between the seller and the buyer agent's firm. All the following are considered categories of "material fact" EXCEPT A) facts directly affecting the property. B) facts about the property itself. C) the seller's reasons for selling. D) facts of special importance to a party. ---------CORRECT ANSWER------- ----------C) the seller's reasons for selling. A licensee does not have actual knowledge of a material fact and consequently does not disclose the fact, but a reasonably prudent licensee "should reasonably have known" of such fact. In this case, the licensee may be guilty of which of the following if they fail to disclose this fact to a buyer, seller, landlord, or tenant, even though the licensee acted in good faith in the transaction. A) Willful omission B) Willful misrepresentation C) Negligent misrepresentation D) Negligent omission ---------CORRECT ANSWER-----------------D) Negligent omission Travis is holding an open house and Sarah stops by to view the home. Sarah starts to tell Travis how much she would be willing to pay for the property when she makes an offer. At this point, Travis discloses that he and his firm are representing the seller only, then notifies Sarah of her agency options. The seller has already agreed to dual agency. If Sarah wants to make an offer on the property and she agrees to dual agency as well, this would be an example of which of the following? A) Intentional, undisclosed dual agency
B) Unintentional, disclosed dual agency C) Unintentional, undisclosed dual agency D) Intentional, disclosed dual agency ---------CORRECT ANSWER------------ -----D) Intentional, disclosed dual agency When a broker is selling a property they have an ownership interest in, they need to disclose they have a real estate license, and the North Carolina Real Estate Commission rules state that A) the broker can represent a buyer or offer to represent a buyer in the purchase of a property the broker has an ownership interest in so long as the broker discloses the ownership interest and gets consent to act as a buyer agent. B) the broker can represent the buyer or offer to represent the buyer as long as the broker does not have a conflict of interest. C) the broker cannot represent the buyer or offer to represent the buyer unless they have permission from their broker-in-charge. D) the broker cannot represent a buyer or offer to represent a buyer in the purchase of a property the broker has an ownership interest in. --------- CORRECT ANSWER-----------------D) the broker cannot represent a buyer or offer to represent a buyer in the purchase of a property the broker has an ownership interest in. Who decides whether a listing firm will cooperate with other firms to procure a buyer for the property? A) Buyer-agent firm B) Listing firm C) Buyer D) Seller ---------CORRECT ANSWER-----------------D) Seller Which of the following statements BEST describes the agency options available for real estate firms? A) Seller agency, buyer agency, dual agency, and a form of dual agency called designated agency B) Unintentional dual agency, seller agency, and buyer agency
