Which statement about an option contract is TRUE?
Answer(s): B
An option contract gives the buyer (optionee) the exclusive right, but not the obligation, to purchase a property at a predetermined price within a specified time. The seller (optionor), however, is bound by the terms of the contract and must sell if the buyer exercises the option. Consideration (often a non-refundable option fee) is required to make the option enforceable. Therefore, the seller is obligated to sell if the buyer chooses to exercise the option, making statement B true.
If a seller whose property is currently listed with another company initiates a conversation with a broker about the possibility of the broker becoming their new listing agent, the broker:
Answer(s): A
Under the NCREC Rules and Code of Ethics, a broker may not interfere with another firm's existing exclusive listing agreement. However, if a seller independently initiates a conversation, a broker is allowed to discuss the terms of a future agreement -- but that agreement must begin only after the current listing expires. The broker must not suggest early termination or breach of contract. Therefore, option A accurately reflects what is legally and ethically permissible.
A North Carolina real estate broker may:
Answer(s): C
Under North Carolina Real Estate Commission (NCREC) rules, a broker may begin working with a buyer under oral buyer agency but must have a signed, written buyer agency agreement in place before presenting any offer on behalf of that buyer. Oral agency cannot be exclusive or have a defined time frame. Additionally, the broker must provide the Working with Real Estate Agents Disclosure at first substantial contact. Therefore, oral buyer agency is permissible temporarily but must convert to a written agreement before drafting or presenting an offer, making option C correct.
[Commission and Compensation]According to the North Carolina Good Funds Settlement Act, when can a broker expect to receive their commission following completion of a real estate transaction?
The North Carolina Good Funds Settlement Act requires that no disbursement of funds--including broker commissions--can be made until the deed and any deed of trust are recorded in the public records. Only once the documents are recorded can the closing attorney legally disburse funds. Thus, brokers should expect to be paid only after recording, making answer C correct.
A listing broker receives a signed offer from a buyer. Although the broker must present the offer to the seller as soon as possible, under the North Carolina Real Estate Commission Rules, the broker must present the offer:
NCREC rules require brokers to present all written offers to their client "immediately, but in no event later than three days." However, standard practice and Commission guidance emphasize that brokers must present offers no later than the end of the next business day after receipt. This ensures timely communication and allows the seller to respond promptly, especially in a competitive market.Therefore, the correct answer is B.
Post your Comments and Discuss Real Estate Licensing NCREC-Broker-N exam prep with other Community members: