NC 302 POSTLICENSING CONTRACTS & CLOSINGS PROCTORED EXAM 2024, Exams of Nursing

Download NC 302 POSTLICENSING CONTRACTS & CLOSINGS PROCTORED EXAM 2024 and more Exams Nursing in PDF only on Docsity! 1 | P a g e NC 302 POSTLICENSING CONTRACTS & CLOSINGS PROCTORED EXAM 2024 WITH ACTUAL CORRECT QUESTIONS AND VERIFIED DETAILED ANSWERS |FREQUENTLY TESTED QUESTIONS AND SOLUTIONS |ALREADY GRADED A+|NEWEST|GUARANTEED PASS |LATEST UPDATE NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must provide copies of transaction documents: A) Within a day of receiving B) Within 3 days of receiving C) Within 5 days of receiving D) Within 14 days of receiving B) Within 3 days of receiving A broker must provide copies of transaction documents:- To the Firm or Sole Proprietorship (BIC) with which they are affiliated- Within 3 days NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must keep copies of transaction documents for A) Service Agreements B) Professional Conduct C) Safety Procedures D) FIRPTA A broker must provide copies of transaction documents:- To the Firm or Sole Proprietorship (BIC) with which they are affiliated- Within 3 days Keep records for 3 years after Closing Termination of Agency Disbursement of Trust Monies 2 | P a g e WHICHEVER OCCURS LAST Brokers and BIC are responsible for keeping records in a transaction These are CALENDAR days, not business days You don't count the day it was executed/received (if received Tuesday, have to upload by Friday) An offer is terminated anytime by A) Counter offer B) Rejection by the offeror C) Revocation by the offeree D) Discovery of convicted rapist in the area A) Counter offer NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must keep copies of transaction documents for ______ from the conclusion of a transaction. A) 1 year B) 3 years C) 4 years D) 5 years B) 3 years NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must keep copies of transaction documents for A) 5 years B) personal account records C) all transaction records and trust account records D) none of the above C) all transaction records and trust account records NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must keep copies of transaction documents for A) all closings for 5 years B) Start of Agency and Disbursement of Trust Monies C) Termination of Agency and Disbursement of Trust Monies D) Start of Agency and Handling of Option Fees and Earnest Money C) Termination of Agency and Disbursement of Trust Monies NC 302 Postlicensing Contracts & Closings Regarding Retention of Records 58A.108, a broker must keep copies of transaction documents for A) uncanceled checks and bookkeeping systems B) non-expenditures C) non-general account ledgers D) trust or escrow account records D) trust or escrow account records 5 | P a g e B) Non Recourse Note C) Cartway Proceeding D) Cancellation D) Cancellation NC 302 Postlicensing Contracts & Closings What is the person to whom an agreement or contract is assigned? A) Assignee B) Assignor C) Assignar D) Assignment A) Assignee NC 302 Postlicensing Contracts & Closings One who makes an assignment A) Assignment of Note B) Assignee C) Assignor D) Assignment C) Assignor NC 302 Postlicensing Contracts & Closings The method or manner by which a right or a contract is transferred from one person to another. A) Assignment of Note B) Assignee C) Assignor D) Assignment D) Assignment NC 302 Postlicensing Contracts & Closings In Contract Assignments: A) Assignor is primarily liable B) Assignee remains secondarily liable C) Generally assignable unless contract prohibits D) Assignment is auditable C) Generally assignable unless contract prohibits NC 302 Postlicensing Contracts & Closings What is the BEST answer? In Contract Assignments, there are: A) Assignors & Assignees B) Trustors & Trustees C) Payors & Payees D) Mortgagor & Mortgagee 6 | P a g e A) Assignors & Assignees NC 302 Postlicensing Contracts & Closings In Contract Assignments: A) Assignor is primarily liable B) Assignor remains secondarily liable C) Assignor in contract prohibits D) Assignee remains secondarily liable B) Assignor remains secondarily liable NC 302 Postlicensing Contracts & Closings In Contract Assignments: A) Assignor is primarily liable B) Assignee remains secondarily liable C) Assignor in contract prohibits D) Assignee is primarily liable D) Assignee is primarily liable NC 302 Postlicensing Contracts & Closings Appropriate signatures A) All Co-Owners must sign the contract 1 B) Must use the full legal name of all entities C) Identify people by their individual Full Legal Names 2 D) All of the above NC 302 Postlicensing Contracts & Closings NC 302 Postlicensing Contracts & Closings NC 302 Postlicensing Contracts & Closings Names NOT to Use in the Contract A) Owner of Record B) Nicknames C) Combined Mr. & Mrs. "Smith" D) All of the above D) All of the above NC 302 Postlicensing Contracts & Closings Marital Life Estates A) Spousal signatures are required on all SALES CONTRACTS B) Signatures are required even with ownership in Severalty Buyer options in the event of the non signature Contract Rescission Specific Performance 7 | P a g e NC 302 Postlicensing Contracts & Closings After a couple separates, before the divorce gets finalized, couples become Tennants in the Entireties. After divorce, couples become Tennants in Common. A) NC 302 Postlicensing Contracts & Closings pg. 184 1. All Purchase contracts should be signed by All owners of the property NC 302 Postlicensing Contracts & Closings Pg. 184 2. When identifying people in the contract, use their ________. The signature line should indicate whether or not people are "married" or "Husband and wife". individual legal names NC 302 Postlicensing Contracts & Closings Pg. 184 3. The one to buy, two to sell rule in NC means the following: Both spousal signatures to sell, one spouse may buy on their own. NC 302 Postlicensing Contracts & Closings Pg. 184 4,5. Spouses buying properties in their own name in NC usually are required to: A) Acknowledge deed of trust B) Sign a free trader agreement C) Spousal signature necessary on the OTPC (Offer to Purchase Contract) D) A & B only A) Acknowledge deed of trust B) Sign a free trader agreement Lender's will require signature acknowledging Deed of Trust Legal counsel may recommend a "Free Trader Agreement" by signed NC 302 Postlicensing Contracts & Closings Pg. 184 6. Electronic signatures are permitted and authorized by both a federal law dealing with interstate commerce and a state law dealing with intrastate commerce. These two laws are ____ and ____. Electronic systems as Docusign or Dotloop contain a mandated disclosure for the consumers that informs them of the extent of use and purpose of their electronic signature. E-Sign Act UETA- Uniform Electronic Transaction Act FYI: Within your state only, not just NC, but whatever state you are in. ESign for interstate. NC 302 Postlicensing Contracts & Closings Pg. 184 TQ ____________are regulated and require disclosure and compliance with statutes, records and security A) Lis Perdens B) Mailbox Rule 10 | P a g e NC 302 Postlicensing Contracts & Closings Pg. 187 Back-Up Contract Addendum 2A1-T Used when a property is under contract and a secondary buyer wants a contract in place should the original contract fall-through. NC 302 Postlicensing Contracts & Closings Pg. 187 Back -Up Contract Addendum 1 What is the purpose and use of this form? Create an enforceable backup contract. No one can get between the buyer and the seller if the 1st buyer falls through. We want to be ready to go if the primary contract goes away without competition. Avoiding Multiple offer deals. Condition. It is a condition of this Back-up Contract that the Primary Contract is terminated as described below before Buyer and Seller shall be obligated to perform under the Back Up Contract NC 302 Postlicensing Contracts & Closings Pg. 187 Back -Up Contract Addendum 2 How does the primary contract get terminated? The primary buyer cannot close on the sale. NC 302 Postlicensing Contracts & Closings Pg. 187 Back -Up Contract Addendum 3. How does the buyer with the backup contract know that they are now in primary position? The seller told us in writing. Seller informed the backup party agent. One of the broker's responsibilities is to make sure the primary contract is terminated before the back up contract can move forward. NC 302 Postlicensing Contracts & Closings Pg. 187 Back -Up Contract Addendum 5 How is the backup buyer to handle due diligence EMD is deposited even when they are in secondary position. Refunded if primary goes to closing When to pay EMD? 5 days after delivery of primary status Due diligence Fee 6. Initial Earnest Money Deposit: Buyer and Seller agree that any initial earnest money deposit shall be deposited within 3 banking days following the Effective date of this back-up Contract even while this Back-up Contract is in secondary position. Aka 3 days for the earnest money. NC 302 Postlicensing Contracts & Closings Pg. 187 Back -Up Contract Addendum 6 How and when may the buyer terminate their backup contract? 11 | P a g e 9. Good to have days start days AFTER termination of the primary buyer. ie b. 30 days after becoming primary buyer. 10. Buyer's Right to Terminate: Buyer may terminate this Buyer may terminate this Back up Contract without liability by giving written notice of termination to Seller at any time prior to receipt by Buyer of Notice of Primary Status and any Earnest Money Deposit shall be refunded to Buyer. 11. Time is of the essence NC 302 Postlicensing Contracts & Closings Pg. 187 Back -Up Contract Addendum 4 Does the buyer on the backup contract get to see the primary contract? No, by right. But the buyer needs to see w permission, then yes. Cannot have access without permission from the 1st Buyer. The last name of the buyer, and the settlement date. NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum 1 What is the purpose and use of this form? To put the seller on notice that buyer needs to sell their property to buy the sellers home NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum 2 When is the buyer required to have an Offer to Purchase and Contract on their existing property? Buy the settlement date. On or before the expiration of DD period. NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum 3 Must the buyer provide a copy of the Offer to Purchase and Contract on their existing property to the seller? What if they don't provide it? Yes. Provide the expiration of due dilligence Immediately notify the seller Deliver docs immediately within 3 days NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum 4. What happens if the buyer's existing property does not close? 12 | P a g e Can terminate contract. Does the buyer loose DD Fee? yes. If doesn't close, can seller say, I'm going to move on? Yes. 2. TERMINATION OF CONTRACT FOR BUYER'S PROPERTY Buyer may terminate. May terminate with notice If first contract doesn't close, buyer doesn't have to wait NC 302 Postlicensing Contracts & Closings Pg. 190 Working with Addenda Contingent Sale Addendum 5. How is the earnest money and due dilligence fee handled Buyer looses DD if closes. EMD rule the same NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum 2A3-T 1. When should a broker use this addendum as opposed to form 800T the The new construction offer to purchase and contract? When the house is already built NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum 2A3-T 2. When must the seller provide a Certificate of Occupancy 2. CONSTRUCTION OF HOUSE No later than settlement NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum 2A3-T 3. Can improvements or additions to the property be made using this addendum? Minor improvements only. 2 Additional improvements 2D on form. Seller builder will pay for it. Has to make sure vendor doesn't create a lien on the property NC 302 Postlicensing Contracts & Closings Pg. 193 Working with Addenda New Construction Addendum 4. Who pays for the construction of additional improvements? 15 | P a g e Risk. NC 302 Postlicensing Contracts & Closings Pg. 201 Working with Addenda Buyer Possession Before Closing Agreement 7. What happens if the buyer can't or doesn't close? Go through normal eviction process NC 302 Postlicensing Contracts & Closings Pg. 211 Additional Provisions Addendum Form 2A11-T NC 302 Postlicensing Contracts & Closings Pg. 211 Working with Addenda Additional Provisions Addendum Separate statue for vacation rentals NC 302 Postlicensing Contracts & Closings Pg. 211 Working with Addenda Additional Provisions Addendum Time frame rent 90 days or less. NC 302 Postlicensing Contracts & Closings Pg. 211 Working with Addenda Additional Provisions Addendum 4 What is the best way to complete the agreed-upon repairs and / or improvement sections? Clear language, depends on how significant they are. Caution adding long list of items. NC 302 Postlicensing Contracts & Closings Pg. 211 Working with Addenda Additional Provisions Addendum 5 Does a seller have to use a licensed contractor for repairs and / or improvements? Does not require. Unless personally requested. What is agreed upon as far as minor repairs (replace carpet, paint walls) will be added later as an addendum to the contract. NC 302 Postlicensing Contracts & Closings Pg. 211 Working with Addenda Additional Provisions Addendum 6 What does "workmanlike manner" mean? Workman like manner- what the buyer will accept as acceptable NC 302 Postlicensing Contracts & Closings Pg. 211 Working with Addenda Additional Provisions Addendum 7 What other document should be obtained if the transaction involves a manufactured home? 16 | P a g e Affidavit of Fixture document needed LOOK at No.5 VIN Number How do you know you own a manufactured home? You take title to it. Issued by DMV. Is a material fact Affidavit of Fixture needed Copy of title Bill of sale needs to show up on the closing disclosure NC 302 Postlicensing Contracts & Closings Pg. 216 Working with Addenda Agreement to Amend the Contract Form 4-T Why was this form created? WARNING: ALL PARTIES, INCLUDING ANY LENDER, AND SETTLEMENT AGENT, MUST BE PROVIDED A COPY OF THIS AGREEMENT Changes to the contract, NC 302 Postlicensing Contracts & Closings Pg. 216 Working with Addenda Agreement to Amend the Contract Form 4-T 2 What specific items does the Agreement to Amend the contract form allow to be altered in the original contract? such as Purchase Price Earnest Money Earnest money Deposit Date Building Deposit DD Fee Due Diligence Period NC 302 Postlicensing Contracts & Closings Pg. 216 Working with Addenda Due Diligence Request & Agreement Form 310-T 1 What is the purpose of this form? Parties have agreed to change due dillegence modifications, repairs, then agreement letter becomes part of the contract NC 302 Postlicensing Contracts & Closings Pg. 216 Working with Addenda Due Diligence Request & Agreement Form 310-T 2 When should this form be completed? 17 | P a g e NC 302 Postlicensing Contracts & Closings Pg. 198 Working with Addenda Due Diligence Request & Agreement Form 310-T 1 What is the purpose of this form? Offer to Purchase and Contract IS THE ONLY CONTRACT THAT IS GOING TO BE ON THE EXAM NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 11 Licensees are not permitted to courier or deliver funds relating to any of the following: A) The Amendment B) An Addendum C) Inspection payments D) Non-Repair payments C) Inspection payments Not permitted: Inspection Payments Repair Payments Survey Payments Settlement distribution other than to them or their firm NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 12 Licensees are not permitted to courier or deliver funds relating to any of the following: A) Repair payments B) Bid payments C) Greenback payments D) None of the above A) Repair payments Not permitted: Inspection Payments Repair Payments Survey Payments Settlement distribution other than to them or their firm NC 302 Postlicensing Contracts & Closings Pg. 216 Due Diligence Request & Agreement Form 310-T NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 13 Licensees are not permitted to courier or deliver funds relating to any of the following: A) Survey Payments B) Bid payments 20 | P a g e NC 302 Postlicensing Contracts & Closings Pg. 226 Integrating the Contractual Handling of Money with Commission Rules 17 18 In the event of a dispute regarding the earnest money, there are two options for the brokerage prior to releasing the earnest money to either party: Written consent between the parties 93A-12 Deposit with clerk of courts -Provide written notice -Hold 90 Days -County where property located NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 19 Firms are permitted to transfer the earnest money from their brokerage account to the attorney/ escrow agent TRANSFER FOR CLOSING No more than 10 days Broker may transfer out of trust account to closing attorney CAUTION NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 20 21 It is prohibited for any lcensee or brokerage to engage in the ______ or ________. Conversion Commingling NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 23 Trust accounts must be balanced every _____ days. Every 30 days. NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers 1,2 A licensee is required to submit ______ offers right up through and including the ________. All offers Through and including the day of closing NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers 3,4 All offers must be presented _________but never later than _______days. Immediately 3 Days 21 | P a g e NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers 5 When multiple offers are created the offers should be presented to the seller at Presented at the same time NC 302 Postlicensing Contracts & Closings Pg. 224 Integrating the Contractual Handling of Money with Commission Rules 22 Broker money in escrow account allowed up to ____ $100 NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers 6 When multiple buyers exist, neither the buyers nor the buyers have any right to know of the existence of other offers because the existence of mulitple offers is not a Material Fact NOT A MATERIAL FACT No Right to know A listing agent does not have to disclose multiple offers. NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers 7 Because all buyers must be treated fairly and equally, a licensee may not disclose the conditions or terms of any buyers offer without first obtaining the Offeror's Consent Must Treat buyers fairly and equally. Cannot disclose the terms and conditions of an offer without the offerer's consent Not the same as an outline of acceptable seller terms. Form 340-T Response to Buyer NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers The Proper Use of Addendum 340-T Response to Buyer's Offer 8 The form acts a _________ of the buyer's offer. Express rejection of the offer NC 302 Postlicensing Contracts & Closings TQ It is NOT A MATERIAL FACT that you had______offers on your property. It is confidential information between seller and seller agent multiple 22 | P a g e NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers The Proper Use of Addendum 340-T Response to Buyer's Offer 9 The form does not create a counteroffer The form is not a counteroffer NC 302 Postlicensing Contracts & Closings Pg. 230 Dealing with Offers & Counteroffers The Proper Use of Addendum 340-T Response to Buyer's Offer 10 The form does invite the buyer to take the following action Rewrite your offer on different terms NC 302 Postlicensing Contracts & Closings Pg. 231 Practical Pointers for Handling Multiple Offers & Counteroffers In Manual pgs 384-385 How to deal with Multiple Offers and Counteroffers Initial and date each change. Keep all communication prompt. Consider starting over again with a blank form. Seek out phones calls and conversations for clarification. Make it clear the inquiries and questions are not creating a counteroffer. Consider referral to an attorney for complex negotiations and changes. NC 302 Postlicensing Contracts & Closings Pg. 242 Dealing with Land Purchases and Subdivisions 1 In NC, the Vacant Land Contract should NOT be used to transfer parcels where _____ is involved. Subdividing NC 302 Postlicensing Contracts & Closings Pg. 242 Dealing with Land Purchases and Subdivisions 2 Subdivided land requires complinace with NC Subdivision laws and Statues. A subdivision in NC exists when a parcel of land is divided into _____ lots. Two or more NC 302 Postlicensing Contracts & Closings Pg. 242 Dealing with Land Purchases and Subdivisions 3,4 There are two exceptions to the Two or more lots. No lot is maller than ____acres. A division of up to a ______lot into as many as 3 lots by a single owner. 25 | P a g e or not. NCREC Commission Rules allow unlicensed individuals who are W2 employees to be involved in the sale of their employer's own property without licensure. Contractors are licensed by NC Licensing Board for General Contractors NC 302 Postlicensing Contracts & Closings Pg. 275 The Art of Seller Financing 18-20 A seller can assist the buyer when traditional financing is not available by_____ Assumptions Seller financing & Carrybacks Contracts for deed NC 302 Postlicensing Contracts & Closings Pg. 275 The Art of Seller Financing 21 All FHA, VA, and Conventional loans are______ so long as the borrower qualifies in the same manner and method as the original owner. Assumable NC 302 Postlicensing Contracts & Closings Pg. 275 The Art of Seller Financing NTQ 22 23 Approval by the lender is almost always required so as not to trigger the ________ or _______ in most loans. Alienation Clause Due on Sale Clause Alienation = Due on Sale Clause Check the Seller's Promissory Note Promissory note is not of public record NC 302 Postlicensing Contracts & Closings Pg. 279 A Guideline to Understanding Seller Financing NTQ 24-26 All of the following are synonymous terms where the seller is simply acting as the bank. Transfers full title to the owner and has a lien for all or part of the home's price. The buyer typically executes a Promissory Note and a Deed of Trust to the seller. The seller retains no ownership of the home. Seller financing Seller carryback Subordinated seller mortgage OWNER FINANCE NC 302 Postlicensing Contracts & Closings Pg. 279 A Guideline to Understanding Seller Financing 26 | P a g e 27 When subordinate financing is utilized the ______ should always be informed and all financing should appear on the _____. Lender Closing disclosures NC 302 Postlicensing Contracts & Closings Pg. 279 The Loan Assumption Addendum Form 2A6-T NTQ NTQ Form NC 302 Postlicensing Contracts & Closings Pg. 279 A Guideline to Understanding Seller Financing 29 In the event of a default in NC, state statutes prevent the seller from obtaining _____ deficiency judgement NC 302 Postlicensing Contracts & Closings Pg. 283 Installment Land Contract Vendor's Deeds & Contracts for Deeds 30-33 Land Contracts in NC have all of the following characteristics Buyer provides downpayment Seller retains title Buyer makes payments Sellers transfers title upon full payment NC 302 Postlicensing Contracts & Closings Pg. 283 Installment Land Contract Vendor's Deeds & Contracts for Deeds 34-36 North Carolina law requires all of the following in a Land Contract or Deed of Trust 3-Day Cancellation Seller must record within 5 days of execution Buyer (Vendee) must be given 30 days to cure any default prior to forfeiture of interest NC 302 Postlicensing Contracts & Closings Pg. 284 Dealing with Options 37 Options in NC must be in Writing Conner Act Requires Recording "I will sell IF you decide to buy". Deliver in 5 days NC 302 Postlicensing Contracts & Closings Pg. 284 Dealing with Options TQ 38 Options are ______ because only one party is bound. 27 | P a g e Unilateral contract TQ Installment Land Contract (Contract for Deed) Vendor (Owner) -> Vendee Prospective Buyer -> Making Payments back to the Vendor (Owner) No Transfer of Deed Until the Last Payment is Made (Example - Equitable Title) TQ Honey is better than Vineager when speaking Uniform Electronic Transactions Act (UETA) (NC) UETA: Legislation validates electronic contracts / other documents / and signatures. Provides that they will not be denied validity & enforce-ability solely b/c they are in electronic form. (Federal) E-Sign: Validates electronic contracts & signatures in transactions & provides they will not be denied validity & enforce-ability solely b/c they are in electronic form. Offer to Purchase & Contract (Form 2-T) The most common type of contract used for the sale of real property in NC. Also called a sales or purchase contract. 1 - Installment Land Contract 2 - Option to Purchase Contract SALES contracts can only be drafted by LAWYERS!!! (legal consideration) Formed jointly between the NC Bar and the NC Realtors. Who must sign the offer to purchase & contract All parties involved MUST sign the contract The legal effect of a counter offer A counter offer is a rejection of the offer and is considered to be a new offer. Counteroffer An offer made to an original offer which contains NEW or DIFFERENT TERMS/CONDITIONS not included in the original offer. The counteroffer (once COMMUNICATED) has the effect of rejecting the original offer which cannot subsequently be accepted unless renewed by the original offer. Type of contract used on single-family homes? Standard Offer to Purchase & Contract Type of contract used on 5+ dwellings? 30 | P a g e YES # of Required Copies of the signed contract ONE Real estate guidelines suggest 2 but legally only 1 is needed. You may make as many as you feel is needed. Real Estate Settlement Procedures Act (RESPA) Prohibits: Broker / Agent from receiving anything of VALUE from the SETTLEMENT SERVICE PROVIDER (SSR) Right of 1st Refusal An owner of a property does not bind himself to sell under this agreement He promises another that IF he decides to sell at some future time - the promisee will receive the FIRST chance to buy / the opportunity to MATCH OFFERS to purchase from 3rd parties Often included as a provision in leases! Pro-Rate Taxes Paid before Closing: Credit to the seller/Debit to the buyer Paid after Closing: Debit to the seller/Credit the buyer Paid at Closing: (double debit method) Debit to the seller/ Debit to the buyer EXCISE TAX Seller Pays = Sales Prices / 500 Round Up to the nearest dollar Deed Prep Seller Pays Back up contract addendum Contract in a secondary position until the primary contract is either terminated or performed Contract Valid Legally enforceable agreement between 2/more parties based on legal consideration OFFER DOES NOT MEAN A CONTRACT An offer does not mean that there is now a contract Contingency Provisions 31 | P a g e Always over rules a contract Concurrent Multiple Offers All offers should be presented to the seller at the SAME Time! Broker cannot disclose PRICE or other MATERIAL TERMS in an OFFER to a competing party Must send copies within 5 DAYS!!!! Counteroffer = rejection of original offer Response to buyers offer (Form 340-T) = used to formally reject an offer Termination of Offers Mailbox rule does NOT apply Must be PHYSICALLY in their possession!!!!! What does a response to offer do? It is a rejection of the offer. It is now open for negotiations. Statute of Frauds NC State law - contracts for the sale of real estate must be IN WRITING in order to be ENFORCEABLE at law Express Contracts Contract stated in WORDS: Orally or in WRITING Implied Contracts Contract that is based upon CONDUCT/ACTIONS: Not a result of an express agreement b/t parties. Valid Contracts Having binding/legal force Legally sufficient & authorized by LAW Void Contracts Contract is UNENFORCEABLE Has NO force / effect Voidable Contracts Contract is capable of being judged void BUT is not Void UNLESS ACTION is taken to make it so. Can be voided by one of parties based upon legal terms NC 22-2 (Lease Land Selling) 32 | P a g e Any selling of lease land exceeding 3 years will be VOID unless put in writing and signed REAL PROPERTY 1 - Street Address 2 - Plat Reference 3 - PIN/PID 4 - Other Description 5 - Reference to Recorded Deed (if known) Ernest Money $$$ (aka Deposits) 1 - Held in ESCROW and credited to buyer at closing (unless the contract states differently) 2 - CAN BE REFUNDED before end of Due Diligence!!!! 3 - If a buyer is in breech can be paid to the Seller (liquidated damages) 4 - Residential security deposits 5 - Frim holding escrow keeps the interest. Due Diligence $$$ Buyer investigating a property within a specific period of time. Can be any negotiated amounts PAID directly to the seller Credit buyer and debit seller on closing sheet Section 5(D) Buyer has received a Residential Property & Owners Association (HOA) statement Section 7(D) All proposed special assessments (to the best of the sellers knowledge) Unilateral Contract promise in exchange for an act Bilateral Contract A type of contract that arises when a promise is given in exchange for a return promise. Executed Contract a contract that has been fully performed by both parties (ratified contract) Executory contract contract not fully performed on both sides (sale pending) Statute of Frauds applies to: 35 | P a g e When agreement is entered into by a person who is impaired. Void Lacks an element and a contract was never formed. Bilateral Two promises, both parties bound Unilateral One party promises, bound to option either to purchase or sell Executed When deed is recorded Executory Contract is being worked on NC requires DREAM OILS to be in writing Deed, Restrictive Coventants, Easements, Assignments, Mortgage, Options, Installment Land Contracts, Leases Longer than 3 years, Sales Contracts Formation of contract should either seller or buyer die. Contract is still binding if death occurs post due diligence. Heirs would be responsible for executing contract. Fraudulent Misrepresentation Any misrepresentation, either by misstatement or by omission of a material fact, knowingly made with the intention of deceiving another and on which a reasonable person would and does rely to his or her detriment. Assignment Contracts can be assigned so long as both parties agree. Assignee becomes primary liable and assignor becomes secondary liable. When contract is breach parties can be entitled to: Compensatory, consequential, liquidated, specific performance and recission. Role of Broker/Licensee with a contract Fill in the blanks. If client wants to change consult an attorney. When does Buyer due diligence fee be delivered? On the effective date of the contract. Seller cannot terminate until written notice in writing and 1 day. 36 | P a g e Who keeps interest earned on an escrow account? The firm managing the escrow account keeps it. Length of due diligence? Consult the lender. RPOADS and MOGS are due? Whichever comes first: 3rd day following receipt of the disclosure statement or the 3rd day following the effective date or settlement or occupancy by the buyer in a case of sale or exchange or contract whichever comes first. Does seller have to use licensed contractors to make good on repairs? Depends on what Buyer/Seller agree to. Must be in good and workman order. Failure to deliver funds Can bring one day after but then must be "Good Funds" Cash, Certified Check, etc. No personal checks. Innure Cause to be accepted. Attorney's role at closing Chosen by the buyer. Coordinate the process, issues validity of title opinion, prepares closing documents, conducts closing settlement. Seller Broker Provide the following to the Attorney Copy of sellers Deed, accurate HOA info, info on sellers title insurance, current contract, bills & invoices to be paid at closing Attorney must verify all funds in excess of? $5,000 Escrow can be transferred to the attorney no sooner than? 10 days RESPA does not apply to Cash transaction, vacant land, commercial transaction, seller carrybacks. Loan estimate should be received within 3 days (Mon - Sat) and should provide APR and TILA along with Consumer Settlement Cost Booklet. Only fee prior to issuance of loan estimate is Credit Report 37 | P a g e Agency that enforces RESPA Consumer Financial Protection Bureau. They are sheriff of all loans. TRID (final disclosure) due 3 days before settlement. If receipt on Thursday than close on Monday (Fri/Sat/Mon) If the following changes a new Closing Document is required. APR increases, pre-payment penalty added, basic loan changes Monies recieved by the provisional broker must be delivered to the BIC when? And BIC must deposit by when? 1. Immediately, 2. 3 banking days. When should a vacant land contract not be used? When subdividing a lot. A subdivision in NC exists when a parcel of land is subdivided into? Exceptions are? Two or more lots. No lot is smaller than 10 acres, a division of up to 2 acre lot into as many as 3 lots by a single owner. Interstate Land Sales Contract applies? When sale of lots occurs across state lines. Only applies to developments of lots of 25 or more. HUD Property reports contain Distance to paved roads Number of homes occupied Soil conditions and septic Type of title Existence of Liens