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REAL ESTATE U FINAL EXAM 2025 | ALL QUESTIONS
AND CORRECT ANSWERS | GRADED A+ | VERIFIED
ANSWERS | LATEST VERSION (JUST RELEASED)
A buyer makes an offer to the seller that includes a $2,500 earnest money deposit (EMD) and a check for $1,000 due diligence fee. The buyer's agent emails the offer to the listing agent who later calls the buyer agent to tell him the seller has signed the offer. The buyer agent discusses with the listing agent how he will drop the EMD and due diligence fees by the listing firm some time tomorrow. That night, when the buyer agent calls the buyer to share the news that the seller has signed his acceptance, the buyer informs his broker that he has changed his mind and no longer wishes to purchase the house. He demands the return of his EMD check and due diligence fee. The seller agrees to the return of the EMD but refuses to agree to the return of the due diligence fee. What should the buyer agent do with the due diligence fee? ---------CORRECT ANSWER----------------- Return it to the buyer. The due diligence fee is typically non-refundable and considered property of the seller; however, since an effective date of contract was not established, the buyer is entitled to get back the due diligence fee. Which of the following is NOT true in order to place trust monies in an interest-bearing account? ---------CORRECT ANSWER-----------------The trust account must be located in a bank that is physically located in NC. The bank is not required to be physically located in NC. It only needs to do business in NC. Sandy is acting as buyer's agent for the Carpenters. When listing agent Dusty calls her to promote a property that might fit the Carpenter's needs, which of these is NOT an action Sandy will take? - --------CORRECT ANSWER-----------------Present the Working With Real Estate Agents brochure to the seller and the seller's agent.
In this situation, Sandy doesn't need to use the Working With Real Estate Agents brochure to make the required disclosure of her agency relationship with the Carpenters. What is TRUE about dual agency in North Carolina? ---------CORRECT ANSWER-----------------All the affiliated licensees at the firm are considered sub-agents of both principals. Because the agency agreement is between the principal and the brokerage firm, all affiliated brokers at the firm are automatically sub-agents of both principals. Affiliated broker Karen expects to receive a split and a bonus from her BIC after closing a difficult transaction. When her BIC declines to pay the bonus, what can Karen do? ---------CORRECT ANSWER-----------------She can file a claim against her BIC in court to attempt to force payment of the bonus she expected to receive. What is TRUE about a time share buyer's right to cancel the purchase contract? ---------CORRECT ANSWER-----------------The buyer may waive this right in writing. The buyer's right to cancel may not be waived. What is the lien priority of a special assessment tax? ---------CORRECT ANSWER-----------------It is inferior to a lien for county property tax, but superior to a mortgage lien. Which of these transfers of real estate is exempt from excise tax? --------- CORRECT ANSWER-----------------After April died, her sister Beryl inherited the home where April had lived alone with her cats for 40 years.
What is true about insulation with an R-30 rating? ---------CORRECT ANSWER-----------------This is a more effective insulation than one with an R-15 rating. Amy is looking to obtain a loan to purchase a new house. Her monthly mortgage payment (PITI) will be $3,650 per month. Amy's gross monthly income (her salary) is $12,000 per month. The lender requires a front-end ratio of no more than 32%. Will Amy qualify for a loan? ---------CORRECT ANSWER-----------------The answer is Yes because Amy's front-end ratio equals $3,650 / $12,000 = 0.304 or 30%.In other words, Amy's total monthly housing expense equals 30% of her gross monthly income, which is less than the lender's requirement of 32%. Lenders typically look for a borrower to have a maximum front-end ratio of 28-32%. John is applying for a new mortgage. After submitting all of his financials to the lender, the lender calculates that John's total monthly debt obligations (mortgage, car loan, and student loans) will equal $5,640 per month. John's gross monthly income (his salary) equals $13,000 per month. Assuming the lender requires a maximum debt-to-income ratio of 42%, will John qualify for the mortgage? ---------CORRECT ANSWER-----------------The answer is No because John's debt-to-income ratio equals $5,640 / $13,000 = 0. or 43.9%. Since his debt-to-income ratio exceeds the lender's requirement of 42% John cannot qualify for the loan. Lenders typically look for a borrower to have a maximum back-end-ratio of 36-43%. CMA: The subject property has three bedrooms. Comp #2 has two bedrooms.Based on the broker's analysis, a bedroom in this neighborhood is worth $6,000. The subject property also has an attached garage, while Comp #2 has a detached garage.The attached garage adds $2,000 in value. Comp #2 has a pool, while the subject property does not. A pool is worth around $4,000. If Comp #2 sold for $280,000, what should be the value of the subject property? ---------CORRECT ANSWER-----------------To find the answer, we need to adjust the sales price of Comp #2 based on the superior and inferior features of the subject property. You have to adjust
the sales price of the comparable property up or down based on superior and/or inferior features of the subject property. If the subject property is superior, then add value to the sales price of the comp. If the subject property is inferior, then subtract value from the sales price of the comp. The subject property is more valuable than Comp #2 by $6,000 for the extra bedroom and $2,000 for the attached garage. However, the subject property is less valuable than Comp #2 by $4,000 for the pool. Therefore, the value of the subject property equals $280,000 + $6,000 + $2,000 - $4,000 = $284, A buyer makes a written offer to purchase a property and includes a $2, earnest money deposit. The seller makes a counteroffer for more money. The buyer verbally accepts. The listing agent deposits the money in the trust account at this point in time. When the buyer receives the seller's counteroffer, he refuses to sign even though he had verbally agreed earlier. The seller is angry and tells the buyer that he will not return the earnest deposit since the buyer has reneged on his word. In fact, the seller demands that the listing agent give him the deposit. What must the real estate agent do regarding the earnest money in this situation? --------- CORRECT ANSWER-----------------He must retain the deposit in the trust account until he obtains written permission from the buyer and seller or await a court order. While a broker was inspecting a property for listing, the property owner told the broker the house contained 2,400 square feet of heated living area. Relying on this information, the broker listed the property and represented it to prospective buyers as containing 2,400 square feet. After purchasing the property, the buyer accurately determined that there were only 1, square feet and sued for damages for the difference in value between 2,400 square feet and 1,850 square feet. Which of the following is correct? ---------CORRECT ANSWER-----------------Both the broker and the seller are liable.
The lowest concrete part of a house is the: ---------CORRECT ANSWER----- ------------Footing Samantha is a newly licensed provisional broker in NC who passed the licensing exam on July 12, 2021. In order to have her license remain on "Active" status, when must she complete 8 hours of continuing education? - --------CORRECT ANSWER-----------------By June 10 of 2023 Mary is a salaried assistant of Broker Bob. She makes $500 per week. Mary schedules and shows apartment units for rent to potential tenants in a building that Bob manages. Is Mary required to have a license? --------- CORRECT ANSWER-----------------No Buyer Joe recently purchased a condominium unit. According to the Residential Square Footage Guidelines, how is the square footage of Buyer Joe's unit calculated? ---------CORRECT ANSWER-----------------All measurements should be taken from the interior of the walls. James has measured his new listing as containing a total of 3,200 square feet of area that matches the description of living area in NC. This contains 400 square feet of space in the 3 rd floor attic area that was finished by the sellers after they purchased without the proper permits obtained. What living area should James use to market the property? ---------CORRECT ANSWER-----------------3,200 square feet If a buyer does not receive the mandatory Mineral, Oil and Gas Mandatory Disclosure Statement before signing a 2-T Offer to Purchase and Contract ...? ---------CORRECT ANSWER-----------------This contract is voidable at the whim of the buyer for three calendar days
Tommy is a listing broker and states to a potential buyer that one of his listings has "no problems with the roofing". Later, the buyer finds out that the roof is actually leaking. What is Tommy guilty of? ---------CORRECT ANSWER-----------------Misrepresentation - Misrepresentation occurs when a licensee says something that turns out to be untrue about a material fact. A leaking roof is considered a material fact. David just purchased a home that was listed by Mark of ABC Realty. Mark's MLS listing mentions that the property is serviced by city water and sewer even though Mark has discussed with the seller that there is a well on the property which provides drinking water. This is an example of...? --------- CORRECT ANSWER-----------------Willful Misrepresentation Mr. Jones, a Realtor with XYZ Realty showed Mr. Smith's listing. Mr. Smith is with ABC Realty. Mr. Jones asked Mr. Smith to deliver a Residential Property and Owners' Association Disclosure. Mr. Smith told Mr. Jones that the seller refused to fill out the form. Two days later, the buyer notified Mr. Jones and Mr. Smith that he was backing out on the deal. He demanded a refund of his earnest money deposit and his due diligence fee. Which of the following is true? ---------CORRECT ANSWER-----------------All money must be returned. The Residential Property and Owners' Association Disclosure form must be completed by the seller and delivered to the buyer. The failure to provide a buyer with this form may allow the buyer to cancel the contract by notifying the seller within 3 calendar days of contract acceptance. Susan, a real estate broker, accepted a cash deposit for earnest money with an offer from a buyer. When must this money be deposited in the bank? ---------CORRECT ANSWER-----------------Trust monies must be deposited into a trust account within 3 banking days of receipt.
After discussing with the buyer, including the preparation of the Working with Real Estate Agents brochure, the broker has agreed to serve in the capacity of a buyer agent. The agent must have the buyer sign a written Buyer Agency Agreement by what specific point in time? ---------CORRECT ANSWER-----------------at the time the broker will present an offer on the buyer's behalf John is a licensed real estate broker in NC who is managing an apartment complex. He wants to run a promotion to help attract new tenants. Which of the following would NOT be allowed? ---------CORRECT ANSWER------------ -----A free month's rent given to any current tenants who recommend a friend that signs a one-year lease. Remember, you cannot receive any form of compensation from an owner if you perform a real estate service for someone else. A free month's rent given to new tenants involves a form of compensation; however, the tenant is not representing or helping someone else. The tenant is representing themselves. A $50 gift card is also a form of compensation; however, the tenant is not performing any real estate services for someone else (they are representing themselves again). The remaining answer choice involves compensation and real estate services for someone else; however, the person offering those services is licensed. This leaves "a free month's rent given to any current tenants who recommend a friend that signs a one-year lease" as the correct answer. The tenant is being compensated in the form of one month's free rent and performing real estate services for someone else (their friend in this case). Since they are being compensated and performing real estate services for someone else, a license is required. Joan finds out that her best friend is interested in purchasing a new home and puts her friend into contact with an active real estate broker named Paula who will represent the friend in the purchase. Upon closing, Paula sends Joan a $200 Amazon gift card. Is Joan required to have a license in order to receive the gift card? ---------CORRECT ANSWER-----------------Yes
Dan is a real estate broker in NC who is holding a $8,000 earnest money deposit for a sales transaction between Seller Sam and Buyer Bob. Buyer Bob has breached the sales contract, and the contract specifies that in the event of a breach, the earnest money should be released to the seller. Seller Sam wants the earnest money to be released to him, as per the terms of the contract. What should Dan do? ---------CORRECT ANSWER--- --------------Hold on to the earnest money until both Seller Sam and Buyer Bob agree to release the earnest money. Bob owns a building lot in Holly Springs that he and his wife purchased when they both attended graduate school in Raleigh. Although they paid only $10,000 for the lot many years ago, it has a current tax value of $18,000. Bob and his wife now realize they will not be moving back to NC so they decide to sell. They contact Arnold, who is a real estate broker, to list the property. Arnold tells Bob that he has a builder friend who might be interested in purchasing the lot quickly. Two days later Arnold emails Bob a copy of the listing contract for $20,000 and once it is signed, he immediately emails a contract to purchase from the builder friend for full asking price. Bob and his wife sign the contract and the property is closed. Three months later Bob learns from an old college friend, who still lives in the area, that these lots are very much in demand and that they are selling for close to $40,000. After some resear ---------CORRECT ANSWER--------- --------Arnold has likely violated his duties to Bob by not performing a CMA in order to determine the probable selling price of the lot. Funds paid to a time-share developer: ---------CORRECT ANSWER----------- ------Belong to the buyer for 10 days from the date of contract. A broker licensee on provisional status has just been hired by a local lender to assist them in the preparation of a CMA/BPO. The lender is asking for this assistance in order to help them understand how much the property might be sold for so they can better set the limits for the equity line of credit
The vertical masonry structures placed inside the foundation wall in order to support the subflooring are: ---------CORRECT ANSWER----------------- Piers Which of the following is true regarding the $500,000 exemption, in the sale of a personal residence, for a married couple filing jointly? --------- CORRECT ANSWER-----------------A married couple can use the $500, joint exemption if only one meets the ownership requirement, but BOTH meet the occupancy requirement. A settlement meeting is usually conducted by a closing attorney. Who typically recommends the closing attorney? ---------CORRECT ANSWER---- -------------The buyer or the buyer's lender James is a broker in NC and is also licensed as an attorney. He is buying a house and wants to rewrite part of the sales contract. Is James permitted to do so? ---------CORRECT ANSWER-----------------Yes. Since James is also an attorney and the buyer, he is permitted to rewrite parts of the contract. Where should measurements be taken according to the Residential Square Footage Guidelines? ---------CORRECT ANSWER-----------------All measurements should be taken on the exterior of the home when possible. Mark is a NC real estate broker who is looking to sell his own house. Mark doesn't have time to show the property to all prospective buyers, so he asks his assistant Jane to manage the showings. Jane does not have a license and is a salaried employee of Mark. Is Jane required to have a
license? ---------CORRECT ANSWER-----------------No. While unlicensed assistants are NOT allowed to show properties for sale on behalf of their employing broker, in this case, Jane is allowed since Mark is also the owner of the property. Remember, an unlicensed employee is always allowed to show both rental and for sale properties on behalf of the owner of the property; however, if an unlicensed employee works under a broker, they are only allowed to show rental properties, not for sale properties. When calculating the living area of a house, is the area of the garage included if the garage is heated and connected to the living room by a door? ---------CORRECT ANSWER-----------------No. Living area must be permanently heated, directly accessible to other living areas, and finished with interior finishes. All three of these requirements must be satisfied in order to classify a space as a living space. In this example, the garage is heated and accessible to the living room (another living space); however, since the garage is not finished with interior finishes it cannot be considered a living space. The closing date for a transaction is set as July 15 th. The seller is not able to close until July 18 th. Is the seller in breach of the sales contract? --------- CORRECT ANSWER-----------------No. A 7-day period is allowed between the initial closing date and the delayed closing date. Joe is a licensed broker who is taking a listing and walks through the property making note of all issues for disclosure purposes. Joe does not notice any sign of electrical issues even though there are some spots of melted plastic on receptacle covers. Months later after a buyer closes on the property the buyer discovers that the electrical wiring of several circuits is overloaded. What would be the best way to describe this issue from Joe's perspective? ---------CORRECT ANSWER-----------------Negligent Omission. Joe is negligent because he didn't notice that there was an electrical issue. In addition, since Joe did not mention any electrical issues. He is guilty of omitting the material fact.
A broker-in-charge may represent both the buyer and seller in the purchase and sale of a property if: ---------CORRECT ANSWER-----------------Both parties agree in writing. A Broker in Charge can be disciplined by the NCREC for...? --------- CORRECT ANSWER-----------------her own actions or the actions of a provisional broker that she is responsible for h of the following is correct in regards to the practice of designated agency? ---------CORRECT ANSWER-----------------A broker-in-charge can practice designated agency with a provisional broker that is associated with another branch office of the firm. A provisional broker is permitted to participate in a designated agency scenario. Designated agency is used when dual agency arises. Buyer Bob is visiting an open house held by Homes Realty. He tours the house but decides this is not really the house for him. Which of the following statements is correct regarding this situation? ---------CORRECT ANSWER-----------------First substantial contact never occurred and no further agency disclosure was required. First substantial contact occurs at the point in time when a discussion with a prospective buyer begins to focus on the buyer's specific property needs and desires or on the buyer's financial situation. The buyer must receive a copy of the Working with Real Estate agents brochure at the first substantial contact. Which of these homeowners (if any) will pay a capital gains tax on the sale of their primary residence? ---------CORRECT ANSWER-----------------Joe sells his home for $550,000, which is $300,000 more than he paid for it. He files as a single taxpayer.
When the seller is filing as a single taxpayer, capital gains is owed if the gain on the sale is more than $250,000. lice is performing a CMA. She identifies three comps, and after adjustments has prices of $379,000 for comp A, $385,000 for Comp B, and $388,000 for Comp C. The comparable property that required the fewest adjustments was comp C. What is the most likely price Alice should find for her subject property based on this information? ---------CORRECT ANSWER-------------- ---The most likely value for the subject property would be $385,500. Alice should weight comp C a bit more heavily, making the most likely value slightly higher than the average of the three adjusted comps at $385,500. Excise Tax Rate ---------CORRECT ANSWER-----------------$1 for every $500 or fraction thereof of the sale price Mud SIl ---------CORRECT ANSWER-----------------The mudsill, also called a "sill plate", is the first layer of wood to be installed on top of the foundation wall. Gross Rent Multiplier ---------CORRECT ANSWER-----------------The gross rent multiplier (GRM) is a screening metric used by investors to compare rental property opportunities in a given market. The GRM functions as the ratio of the property's market value over its annual gross rental income. (Price/Rent) Gross Income Multiplier ---------CORRECT ANSWER-----------------A gross income multiplier (GIM) is a rough measure of the value of an investment
the broker has the listing, the seller must pay the agreed-upon commission regardless of who actually procured the buyer. Open Listing Agreement ---------CORRECT ANSWER-----------------An open listing is a non-exclusive contract. This type of listing gives the seller or buyer the right to engage any number of brokers as agents. With an open listing, all contracted brokers can market the property or search for property at the same time, but only the broker who brings the ready, willing and able buyer to the seller, or who find the desired property for a buyer, will receive a commission. However, if the client ends up buying or selling property by him or herself, they don't have to pay any commission to the broker. Joint Tenancy ---------CORRECT ANSWER-----------------A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. A joint tenancy creates a right of survivorship, which means that if one party dies, their interest is automatically transferred to the surviving tenant(s). Tenancy in Common ---------CORRECT ANSWER-----------------Co- ownership of property in which each party owns an undivided interest that passes to his or her heirs at death. Platform framing ---------CORRECT ANSWER-----------------A method of framing where the floor joists form a platform on which the walls rest. Most common framing. Hip Roof ---------CORRECT ANSWER-----------------A roof with four sloped sides
Balloon Framing ---------CORRECT ANSWER-----------------An older framing method whereby studs are continuous from the foundation sill to the bottom of the top plate of a one or two story building.The Problem With a Balloon FrameBalloon framing exacerbated the problem of house fires because without any firebreaks between floors due to full length studs. What forms of ownership is limited to married couples ---------CORRECT ANSWER-----------------Tenancy by the entirety A tenant's right to occupy real estate during the term of a lease, generally considered to be a personal property interest. Does not include title. --------- CORRECT ANSWER-----------------Leasehold Estate Which lien takes priority over all other liens? ---------CORRECT ANSWER--- --------------Tax lien Sales contracts and listings are examples of bilateral contracts --------- CORRECT ANSWER-----------------In a listing contract, the seller promises to pay if the agent promises to procure a purchaser. A unilateral contract is a one-sided agreement-that is, only one party makes a promise to perform. Gross leases are most common for commercial properties such as offices and retail space. ---------CORRECT ANSWER-----------------The tenant pays a single, flat amount that includes rent, taxes, utilities, and insurance. The landlord is responsible for paying taxes, utilities, and insurance from the rent fees.
