You must get their permission in writing that it’s okay to limit their list of potential buyers
You are the broker-in-charge of a firm that represents sellers only. You like to cooperate with EZ Realty because the brokerage represents buyers as buyer agents, but you don’t enjoy working with Realty First, because those agents don’t represent buyers. Licensees from Realty First want to be
subagents of the listing brokerage, which can leave you liable-and you don’t want that. Which of these duties do you owe to your seller clients?
* You must get their permission in writing that it’s okay to limit their list of potential buyers.
* You must have them sign a form saying that they will allow dual agency.
* You must let them know that they are responsible for paying a finder’s fee to the brokerage that brings the buyer for their property.
* You must tell them that they can’t find their own buyers for their listings.
Many seller-only brokers-in-charge in North Carolina don’t like to work with other agents in a subagency capacity. In that case, their seller clients must be made aware of this preference and provide written permission saying that it’s okay to have their pool of potential buyers limited in this way.
* The buyer must pay the broker a portion of the commission.
Which of the following statements is false regarding North Carolina’s protection agreement?
* The buyer must pay the broker a portion of the commission.
* The contract includes the agreed commission fee.
* The contract includes the named buyer.
* The contract includes the time allotted to secure the sales contract.
The contract focuses on the broker’s fee, and all other components set limits on time and named parties.
The method can’t be used alone as an indication of value for residen
Which of the following is true about the GRM method?
- Appraisers rely solely on the GRM method to appraise small residential investment properties.
- Comparable rental properties play no part in the method.
* The method can’t be used alone as an indication of value for residential property. - The more rental properties there are in an area, the less reliable the method is.
Neither GRM nor GIM can stand by itself as an indication of value for residential property. The sales comparison approach is also needed.
You represent the seller.
You’re working with Angela, your buyer customer. Since there’s no agency relationship in place, it’s important for her to understand which of the following?
- You can’t accept her earnest money check.
- You represent her.
- You represent neither the buyer nor the seller.
* You represent the seller.
When there’s no agency agreement in place with a buyer, it’s important that she understands you represent the seller.
She used at least three comparable properties with similar characteristi
North Carolina broker Karen is preparing a for-fee CMA. She made sure she complied with all of her brokerage’s policies and North Carolina laws for preparation. Which of the following must be true?
- Her report includes an automated valuation model.
- She is a broker-in-charge.
* She used at least three comparable properties with similar characteristics. - The property is not a commercial property.
North Carolina licensees are required to use at least three comparable properties with similar characteristics when preparing a for-fee CMA.
A seller wants to net $40,000 after paying the broker’s commission of 5% and a loan balance of $170,000. Assuming no other closing costs, calculate the sales price of the property to the nearest whole dollar.
* $175,587
* $210,000
* $221,053
* $225,040
A seller wants to net $40,000 after paying the broker’s commission of 5% and a loan balance of $170,000. Assuming no other closing costs, calculate the sales price of the property to the nearest whole dollar.
* $175,587
* $210,000
* ** $221,053**
* $225,040
To calculate this, flip the net to seller equation to be: sales price = (net amount + mortgage or other expenses) x (100% commission rate). So, we have: sales price = ($40,000 + $170,000) ÷ (100% 5%) = $210,000 ÷ 95% = $210,000 ÷ 0.95 = $221,052.63, which rounds to the nearest dollar as $221,053.
** Commission rate**
The formula for net to seller is sales price x (100% - _______).
* Commission rate
* Loan amount
* Market value
* Sales price
The formula for net to seller is sales price x (100% - _______).
* ** Commission rate**
* Loan amount
* Market value
* Sales price**
The formula for net to seller is sales price x (100% - commission rate). Remember that other closing expenses and an existing mortgage also affects the seller’s net proceeds.
Stacy is a broker-in-charge in North Carolina. What must be true about her role?
- She’s a member of the North Carolina Real Estate Commission.
- She’s a sole proprietor.
- She’s not allowed to participate directly in real estate transactions.
* She’s responsible for the actions of the affiliated provisional brokers at her firm.
Stacy is responsible for the actions of the affiliated provisional brokers at her firm. There’s no rule that prohibits the broker-in-charge from participating directly in real estate transactions. Stacy could be a member of NCREC or be a sole proprietor, but doesn’t have to be.
Sherman Antitrust Act.
The 1950 case involving the District of Columbia’s Washington Board of Realtors and the National Association of REALTORS® determined that real estate boards that set schedules of fixed or mandatory real estate commissions or fees violated this law.
- Fair housing laws
- Licensing laws
- The Federal Trade Commission Act
* The Sherman Antitrust Act
Setting schedules of fixed or mandatory real estate commissions or fees was found to be a violation of antitrust law under the Sherman Antitrust Act.
Jack keeps current buyer tastes in mind when touring a home during a pre-listing appointment. This helps him to ______.
- Block out any dated features
- Compile a list of current buyers who would like the home
- Determine whether he wants to list a home that’s too dated
* Make a note of any recommended updates to discuss with the sellers
It’s best to make a note of any upgrades or updates needed during the pre-listing appointment. Your
knowledge of current buyer tastes will come in handy when offering suggestions to the sellers.
* An adverse material fact
A fact related to the property or transaction that negatively affects the value of a property is known as _______.
- A confidential fact
- A material fact
* An adverse material fact - An immaterial fact
Agents must disclose any adverse material facts about which they know or should know.
Jules wants to receive the most representation from a single agent. Which type of buyer agency
agreement does she want?
- Exclusive agency
* Exclusive right-to-represent - Limited agency
- Open agency
Jules wants an exclusive right-to-represent agreement, which offers the buyer the highest level of exclusive representation.
A four-unit rental property has a sales price of $700,000. Monthly gross rent is estimated at $7,000. What is the gross rent multiplier?
- 10
- ** 100**
- 83
- 8.3
Gross rent multiplier is sales price divided by monthly gross income. Improperly calculating GRM could lead an investor to purchase a property that turns out to be a poor investment.
What is the purpose of overlay zones?
- Defines what ornamental accents may decorate a property to keep with the area’s
- “feel.”
*** Designates additional regulations over existing base zones to protect special features - or areas.**
- Extends regulations over additional areas where no other zoning exists.
- Grants a developer more building density on the condition that the developer includes
- certain amenities.
Overlay zones designate special zones over existing base zones to protect special features or areas.
Pay just $33 per $1,000 borrowed.
Which section of this ad is a trigger term according to Regulation Z? HOME FOR SALE 4567 Busco
Lane, Durham, NC. List Price: $525,000. Beautiful home in the highly sought-after community of
Busco Beach. Master and bath on main, large island kitchen, deck, amazing backyard. A true oasis! This home offers lots of extras! Community features a huge pool, tennis courts, and playground. Lots of activities for everyone! Pay just $33 per $1,000 borrowed. Contact Joey, CanDo Realty, at 919-111-111 .”
- Beautiful home in the highly sought-after community of Busco Beach.
- Community features a huge pool, tennis courts, and playground.
* Pay just $33 per $1,000 borrowed. - There are no trigger terms in this advertisement.
“Pay just $33 per $1,000 borrowed” is a trigger term. If advertising for available financing includes a trigger term, then the ad must include the required disclosures.
Seller Bob is selling his Maryville house with the help of his agent, Carol. Buyer Ted, with the help of
his agent, Alice, is purchasing Bob’s house. To which of the parties does Alice owe the duties of
obedience and loyalty?
- Only to Bob
* Only to Ted - To Bob, Carol, and Ted
- To both Bob and Ted
Because Alice is buyer Ted’s agent, she only owes the fiduciary (agency) duties of obedience and loyalty to Ted.
Providing a disclosure stating that you are acting as a limited service
If you are acting as a limited service agent, then you must act within the guidelines of a written
brokerage agreement by:
- Conducting the home inspection yourself
- Disclosing the number of years you have been a real estate professional
* Providing a disclosure stating that you are acting as a limited service agent - Providing personal legal advice
If you are acting as a limited service agent, then you must act within the guidelines of a written brokerage agreement by providing a disclosure stating that you are acting as a limited service agent. Refer to Lesson: Limited Service Agencies.
He prefers to take the seller’s word for square footage over tax records
Bob always conducts a pre-listing appointment with his clients. This is likely for all of the following
reasons EXCEPT _______.
- He finds it helps him prepare a more accurate list price
- He likes to see the property firsthand and ask questions to determine its condition
* He prefers to take the seller’s word for square footage over tax records - He uses the additional time to develop trust with the seller
A pre-listing appointment does not eliminate the need to consult other sources.
Which of these situations is an example of designated agency?
- Cindy’s broker at Homeworks Realty appoints her as the buyer’s agent in a transaction. Tim’s broker at Great Homes Real Estate appoints him as the seller’s broker in the same transaction.
- Meredith’s broker appoints her to represent both the buyer and the seller in a single transaction.
- Michele is the firm’s managing broker. She’s the designated dual agent in all dual agency transactions.
* The broker-in-charge at ABC Realty appoints Mark to represent the buyer and Todd to represent the seller in the same transaction.
In a dual agency situation, designated agency means the firm designates one of the firm’s licensees to represent the buyer and a different licensee to represent the seller, keeping the transaction “in house.”
$220,000 ÷ .94 = $234,042.55, or $234,043
Your seller wants to net $220,000 after the 6% commission is paid. Assuming no closing costs, at
what price does the home need to sell for the seller to net this amount (rounded to the nearest whole
dollar)?
$206,800
$226,592
$231,000
$234,043
Your seller wants to net $220,000 after the 6% commission is paid. Assuming no closing costs, at
what price does the home need to sell for the seller to net this amount (rounded to the nearest whole
dollar)?
$206,800
$226,592
$231,000
** $234,043**
$220,000 ÷ .94 = $234,042.55, or $234,043 when rounded to the nearest whole dollar.
Give Leonard the “Working with Real Estate Agents” disclosure
Clarke, a North Carolina licensee, just met with Leonard over coffee. Leonard said that he’s interested
in buying a house and wants to know if Clarke can help. What should Clarke do next?
- Give Leonard some advertisements about houses in the area.
* Give Leonard the “Working with Real Estate Agents” disclosure form and explain its contents. - Make an appointment to show Leonard some houses.
- Orally disclose how his commission will be paid.
When Leonard asked Clarke for help, that became their first substantial contact. Clarke should provide Leonard with the WWREA disclosure form and discuss agency options with him.
The North Carolina Residential Property Disclosure Act applies to which type of transaction?
- A sale by foreclosure or auction
- A transfer of a single-family residential real property to a family member as part of an estate
- The initial sale of a single-family residential property that has never been occupied
* The sale of single-family residential real properties that includes four or fewer units
This act applies to the sale of residential properties that include four or fewer units.
Which of the following statements may indicate a price fixing violation?
- “I base my price on my services.”
- “My price is non-negotiable.”
- “This is the price my brokerage requires me to charge.”
* “This is the standard price for a full-service listing.”
Discussing or even implying that there is a standard commission in the industry alludes to price fixing, which is an antitrust violation.
Danae must not give one client an advantage over the other.
Licensee Danae is going to work as a dual agent in a condominium sale. Which of the following statements is true regarding Danae’s dual agent role?
- Danae cannot legally work as a dual agent.
- Danae does not owe fiduciary duties to the buyer.
* Danae must not give one client an advantage over the other. - Danae should favor the seller in the transaction since the seller will pay her commission.
Dual agents must not give one client an advantage over the other.
