State: North Carolina | Category: Real Estate | All tests in this Category:
Practice Test 1 Practice Test 21. An option to purchase real estate in NC requires which element to be valid and enforceable?
In North Carolina, an option to purchase real estate is a separate contract that typically requires consideration to be irrevocable during the option period.
2. Which adjustment is made when a comparable property is smaller than the subject?
If a comparable is smaller than the subject, its price is increased to make it comparable to the subject property.
3. Which term refers to property rights that are transferred separately from the land itself?
Appurtenances are rights or interests that are attached to the land but can be transferred with it.
4. In North Carolina, which action transfers the tenant's entire interest in the leased property to another party?
An assignment transfers the tenant's entire remaining interest in the lease to another party. A sublease transfers only a portion of the interest and rights.
5. The main purpose of a real estate appraisal is to determine:
The primary goal of a real estate appraisal is to determine the property's market value, which reflects the price it would likely sell for under typical market conditions.
6. Effective gross income is calculated by:
Effective gross income = potential gross income – vacancy and collection losses, representing the actual expected income from the property.
7. Which statement best describes ostensible (apparent) authority in North Carolina real estate practice?
Ostensible authority occurs when the principal's words or actions lead a third party to believe the agent has authority, even if no actual authority was granted.
8. Which loan is paid first in a foreclosure sale?
In foreclosure, loans are paid in order of priority. The first trust deed (senior loan) is paid before junior liens or second trust deeds.
9. In a grant that creates a life estate and a remainder, who has the right to possession after the life estate ends?
After the life estate ends, the remainderman receives possession if a remainder was created for a named person.
10. What is the effect of a 'Notice to Owner' on a property owner in North Carolina mechanics lien proceedings?
A Notice to Owner notifies the owner that a lien claim may be pursued, identifying the claimant and basis for the lien.
11. A junior mortgage is usually:
A junior mortgage is secondary to the primary mortgage and is repaid after the first lien in case of default.
12. In North Carolina contract law, the 'meeting of the minds' refers to which essential element?
Mutual assent means both parties agree to the terms—an offer and its acceptance.
13. In North Carolina, a lease that continues from month to month and renews automatically unless either party gives notice is called?
A periodic tenancy (often month-to-month) has no fixed end date and automatically renews; termination requires proper notice.
14. What forms of payment are typically acceptable for an earnest money deposit in NC?
Earnest money can be paid by cash, personal check, or wired funds, depending on contract terms and escrow instructions.
15. A ceiling fan permanently installed in a home is classified as:
A permanently installed ceiling fan is considered a fixture, thus part of real property.
16. Which statement about retaliation is true under North Carolina law?
Retaliation against tenants for asserting rights or complaining about housing conditions is generally illegal, and NC law provides protections against such actions.
17. Under North Carolina law, which disclosure is required for a residential dwelling built before 1978 that is offered for rent?
Federal law (and NC practice) requires disclosure of known lead-based paint hazards in dwellings built before 1978. The disclosure form must be provided to the tenant and retained with the lease documentation.
18. If a real estate contract leaves a critical term (such as price) blank, the contract is generally considered:
Lack of essential terms like price makes the contract indefinite and unenforceable.
19. How often must counties in North Carolina reappraise real property for tax purposes?
NC counties are required to complete a real property revaluation at least every eight years to reflect current market values.
20. How many hours of approved pre-licensing education are required in NC to qualify for the real estate licensing exam?
The NC Real Estate Commission requires 75 hours of approved pre-licensing education before you may sit for the licensing exam.
21. After a zoning change, a legally established nonconforming use may continue:
Legal nonconforming uses may continue as-is, but expansion or enlargement of the nonconforming use is generally not permitted under the zoning ordinance.