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Flashcards in Practice Exam 3 Deck (36):
1

Mr. Granger owned a commercial office building and had several of the tenants executed long term leases. The tenants spent considerable expenses in moving and making improvements to the offices which they rented. Shortly after the lease were executed, the city was granted approval for a road widening project and instituted a condemnation proceeding against the building. In regard to the taking of the property under eminent domain, what compensation may be allowed?

Compensation will be due to Mr. Granger as the property owner and to the tenants for damages caused by the termination of the tenancy.

2

Improvements for investment property

Patio

Fence

Screen Porch

(NOT painting)

3

Which of the following laws requires a lender to notify a loan applicant within 30 days if their loan was declined?

Equal Credit Opportunity Act (ECOA)

4

A broker visited Mr. and Mrs Smith and they signed an EXCLUSIVE RIGHT TO SELL listing agreement for their home. The broker was told that all of the Smiths children were also in agreement about the sale and the broker was given strict instructions that the home must be sold asap. The next day a relative of the Smiths called the broker and said that the Smiths had died earlier in the morning in a car accident. What should the broker do?

The broker should immediately stop all efforts because the listing no longer exists

5

Under NCREC rules the Working With Real Estate Agents disclosure must be provided "at first substantial contact". If that contact occurred electronically or by phone, the brochure may be transmitted to the consumer within 3 calendar days by

FAX

US MAIL

E MAIL

6

When a landlord is responsible for the payment of taxes, insurance, and mortgage payments, and the tenant is required to only pay rent, the lease is an

GROSS LEASE

7

In an OPTION CONTRACT,

the option is enforceable by the OPTIONEE on the OPTIONOR

8

The provision of the Real Estate Settlement and Procedures Act apply to which of the following transactions if a federally related loan is used

The purchaser of a four plex by an investor

9

The following people DO NOT need a real estate license in NC

a salaried person employed by a person/property manager who exhibits rentals

an owner of real estate who is selling or leasing his/her property

A trustee in bankruptcy proceeding or foreclosure sale

10

In a foreclosure proceeding when there is an excess money bid and the funds collected exceed the amount of the mortgages and liens on the property, the trustee or sherif must do what with the overage?

Return those funds to the homeowner

11

A homeowner takes a home equity loan from their personal residence. The only reason for obtaining the loan was so that they could use those funds for down payment on a commercial building. They request that the funds be directly transferred from the home equity lender to the commercial buildings closing agent. Does the Truth in Lending Act apply to any portion of what the consumer is doing?

yes, because the home equity loan involved a residence and it was subject to the TRUTH IN LENDING ACT

12

A disclosure of agency status should be made by a buyers agent to the sellers agent

At the initial contact with the seller or sellers agent

With a written confirmation in the OFFER TO PURCHASE and Contract

13

Parts of a Window

Muntin

Mullion

Sash

14

Sill Plate

Located between the foundation wall and the floor joist

15

SOLE Plate

Connects the studs to the floor

16

Most efficient type of heat in NC

Warm Forced Air

17

Radon gas is known to cause

Lung Cancer

18

A deed provided in a foreclosure in which the sheriff or trustee promises only that they have the right to convey the property would be

BARGAIN and SALE DEED

19

A tenant has signed a six month lease that stipulates it shall convert to a month to month if the tenant continues to occupy and pay rent beyond the initial term. What is the maximum security deposit that is permitted under the NC Residential Tenant Act?

Two Months for a month to month lease

20

The Parole Evidence Rule states that

No oral agreements that contradicts the terms of a written contract may be considered in a lawsuit based on the written agreement

The party who drafted any ambiguous terms in a contract would have that provision construed most narrowly against them

Written contract is assumed to be the complete manifestation of the agreement of the parties

21

RURAL HOUSING SERVICE AGENCY

FARM SERVICE AGENCY

administer these loans under the Rural Economic and Community Services Program of the US Department of Agriculture

Eligibility requirements for these type of loans are restricted to low income residents of rural areas or very small towns

Characteristics of the loans include longer than normal repayment period and subsidized interest rates

22

When a lender is utilizing a DEED OF TRUST, at the end of the loan at the time of defeasance, which of the following will occur?

The trustee will provide the trustor with a deed of reconveyance at the instruction of the beneficiary

23

Who must sign a subordination agreement in order for the relegation of lien position to change in regard to mortgage loans on the property?

The Superior lien holder

24

NC License laws and commission rules

A broker can work for more than one firm if all of the BICs provide written permission

A BIC can be a BIC for more than one firm if the firms are doing business at the same location

25

Under the NC Good Funds Act when may funds be dispersed to the seller from the closing agent/attorney?

After recordation, which is defined in the NC Offer to Purchase and Contract as closing

26

The process of combining two or more lots to increase value is

ASSEMBLAGE

27

Fructus Naturales is classified as

APPURTENANT

28

In performing an appraisal, an appraiser would regard all of the following as NOT Arms Length Transactions

a foreclosure

a sale to a relative

a sale where one of the parties was acting under duress.

29

The Federal National Mortgage Association (FNMA) is
FANNIE MAE

A quasi governmental organization which can borrow money from the US Treasury

An entity which buys and sells loans in the secondary market.

30

When measuring a bonus room over a garage for heated living area, what is the minimum ceiling height of the knee wall in order to count the area as heated living area?

5 feet

31

A homeowner obtaining a mortgage has an automatic three day rescission (right to cancel) due to which federal law under what circumstances?

Due to the Regulation Z when the loan is for the refinance of a primary residence

32

A seller and buyer entered in and offer to Contract and Purchase in which he buyer agreed to pay 300K cash for the purchase of the sellers home. The buyer made and initial earnest money deposit of 20K to evidence their good faith intention of going through with the purchase. Before the parties reached the closing date, the buyer unexpectedly passed away. What is the result of a situation where this occurs?

The contract is still in effect and enforceable by either the seller or the buyer's heirs

33

The most popular utilized FHA loan program is

an FHA 203(b) fixed rate loan

34

A loan in which the lender is making regularly scheduled payments to the borrower would be referred to as a

Reverse annuity mortgage (RAM)

35

A seller has listed a property for a total sales price of $200 K and has a current mortgage on the property in the amount of $125 K. A buyer has proposed that they will pay the entire purchase price of $200 K by providing the seller with $50K down. if the seller will finance the rest of the total sales price and if the seller will remain liable on the existing $125 loan. What the buyer has proposed would BEST be referred to as

A WRAP AROUND LOAN

36

A homeowner lives in an area that is subject to a lengthy set of protective covenants. One of the owners has erected a fence which is in violation of the CCR's. If action is taken against the homeowner to force removal of the fence, that action will most likely be taken by

a private lawsuit filed by the homeowners or the HOA