South Carolina Real Estate Final Exam

Question 1

South Carolina Real Estate Final Exam. What does the last page of the Residential Property Condition Disclosure Statement require the buyer(s) to do?

• The buyer(s) to acknowledge a series of statements before signing it
• The buyer(s) to list all repairs they want to be made before closing
• The buyer(s) to waive their right to a professional home inspection
• The buyer(s) to pay a fee to the South Carolina Real Estate Commission

Question 2

When selling a property, what should you do to ensure the accuracy of public records about the property’s physical dimensions?

• Rely on the previous listing’s data
• Measure the property
• Ask the neighbor for their opinion
• Use a satellite image

Question 3

Because real estate is not a liquid investment, what advice should real estate agents give to clients who want to invest in real estate?

• Do not invest money you may need to access quickly
• Only invest in commercial properties
• Expect to sell the property within 30 days
• Real estate is just as liquid as the stock market

Question 4

You know a murder took place on a property you are listing, so what should you do?

• Disclose it to everyone who views the home
• You can’t lie if specifically asked
• Put it in the public listing remarks
• It is a material fact and must be disclosed immediately

Question 5

Which of the following elements cannot be provided by a facilitator?

• Preparation of paperwork
• Confidentiality and loyalty to a single party
• Transaction coordination
• Fair and honest dealing

Question 6

Comps A and B lack a garage. Comps C and D have a two-car garage. What is the value of a two-car garage if A sold for $250,000, B for $225,000, C for $300,000, and D for $235,000?

• $15,000 (Dollars)
• $20,000 (Dollars)
• $25,000 (Dollars)
• $30,000 (Dollars)

Question 7

What must happen for a real estate contract to be enforceable under a court of law?

• A meeting of the minds
• It must be recorded at the courthouse
• A 10% down payment
• A verbal agreement is sufficient

Question 8

Which of the following phrases refers to polite behavior within a professional context?

• Business etiquette
• Fiduciary duty
• Professionalism
• Code of Ethics

Question 9

When is the cost approach method more likely to be used by an appraiser?

• When valuing a historic home
• When an appraiser is valuing a newer building rather than an older building
• When there are many recent comparable sales
• When valuing a rental property

Question 10

A buyer’s earnest money is generally…?

• Applied toward the purchase of the property
• Given to the seller as a gift
• Non-refundable in all circumstances
• Kept by the agent as commission

Question 11

Which steps can an investor take to realize the equity in a commercial property?

• Sell or refinance the property
• Increase the rent
• Pay off the property taxes
• Change the zoning

Question 12

In the real estate industry, what do you call behavior that is intentionally deceptive?

• Puffing
• Fraud
• Negligence
• Ethics

Question 13

Can a company use company policies to prove industry compliance? South Carolina Real Estate Final Exam

• Yes, since a company policy is detailed enough to address compliance requirements
• No, company policies are internal only
• Only if the policy is signed by the Governor
• Yes, but only in commercial real estate

Question 14

The listing price for a property is typically based on a…?

• comparative market analysis
• property tax assessment
• verbal agreement
• mortgage statement

Question 15

In order for a real estate agreement to be valid, one of the things it has to contain is?

• The signatures of all parties to the transaction
• A notarized seal
• A blueprint of the home
• A list of all previous owners

Question 16

A property is priced at $600,000 and the current owner shows an NOI of $75,000. What is the rate of return?

• 10%
• 12.5% (Percent)
• 15%
• 8%

Question 17

When do investors recognize their capital gain for tax purposes in an installment sale?

• All in the first year
• Only when the final payment is made
• Spread out each year; the payments are received in proportion to the payments
• Installment sales are tax-exempt

Question 18

Which article of the NAR Code of Ethics deals with clients who have obtained exclusive representation with other brokers?

• Article 1
• Article 10
• Article 16
• Article 20

Question 19

All of the following may occur during a pre-listing meeting except which of these activities?

• Discussing the CMA
• Walking through the property
• Reviewing an offer from a potential buyer
• Signing the listing agreement

Question 20

What is the process appraisers use to reach a single figure from multiple appraisal methods?

• Averaging
• Reconciliation
• Finalization
• Aggregation

Question 21

Which of the following is an example of a material fact?

• The color of the kitchen walls
• Cracks in the foundation
• The seller’s reason for moving
• A broken lightbulb

Question 22

Which statement is NOT a standard of practice under Article 15 of the NAR Code of Ethics?

• Agents should be truthful about competitors
• Agents can make misleading statements against other brokers in the interest of promoting fair competition in the industry
• Agents must not file false ethics complaints
• Agents should refrain from making false comments about other real estate professionals

Question 23

What do most arbitration cases consist of?

• Criminal activities
• Financial disputes
• Fair housing violations
• Personality conflicts

Question 24

Which of the following is NOT a potential consequence of making a morally questionable, if still legal, decision?

• Damage to your reputation
• Loss of future referrals
• A loss of your real estate license
• Tension with colleagues

Question 25

How does the Pathways to Professionalism section relate to the NAR Code of Ethics?

• It is a legally binding addition
• This section lists suggestions for real estate agents to help them maintain respectful relationships with everyone
• It replaces the Code of Ethics
• It only applies to commercial agents

Question 26

What type of agreement outlines that an agent cannot “steal” another agent’s client after a contract is signed?

• A non-compete agreement
• An exclusivity agreement
• A dual agency disclosure
• A facilitator agreement

Question 27

What is the name of the agreement that governs the sale of real estate between a buyer and seller?

• Listing agreement
• Real estate sales contract
• Buyer agency agreement
• Settlement statement

Question 28

Should you try to persuade a client to bring down the exaggerated price of their home? South Carolina Real Estate Final Exam

• No, the client is always right
• Yes. It is your responsibility to challenge the seller in this case
• Only if the home doesn’t sell after a year
• It is illegal to suggest a lower price

Question 29

Why might an agent make an unethical decision?

• Because they’ve considered all other options and picked the wrong one
• The Code of Ethics is too long to read
• They are required to by their broker
• Most unethical decisions are accidental

Question 30

When preparing for a pre-listing meeting, it’s important to ask for all of the following except?

• A copy of the deed
• Utility bill information
• A copy of the seller’s most recent tax returns
• Any existing surveys

Question 31

Can a real estate agent modify the terms of a contract?

• Yes, to help the client
• No, it is the practice of law
• Only with the broker’s permission
• Yes, if both parties agree verbally

Question 32

When a licensee represents both the buyer and the seller in a real estate transaction, that’s called being a?

• Single agent
• Dual agent
• Transaction broker
• Sub-agent

Question 33

What are the two main types of buyer agency contracts?

• Express and implied
• Buyer and seller
• Exclusive and non-exclusive
• Agent and broker

Question 34

How do you adjust the comp when the subject home has four bedrooms and the comp has three?

• Upward by the value of one bedroom
• Downward by the value of one bedroom
• Upward by $20,000
• Adjustments for bedrooms are not allowed

Question 35

Which condition must an investor meet to qualify for the long-term capital gains tax rate?

• Own the property for at least three years
• Own the property for at least one year
• Register as an LLC
• Perform a 1031 exchange

Question 36

As an agent, what are you obligated to do when presenting multiple offers to a seller?

• Present all offers promptly and objectively
• Only present the highest offer
• Present your own buyer’s offer last
• Wait until all potential offers are in before presenting any

Question 37

What type of arrangement consists of a licensee working under brokerage to represent the interests of the brokerage’s clients?

• General agency
• Special agency
• Universal agency
• Facilitator agency

Question 38

After how many late days can a landlord terminate a residential lease in South Carolina?

• Three days
• Five days
• Ten days
• Thirty days

Question 39

Which of the following words refers to incredulous claims made by a seller or their agent to attract potential buyers?

• Fraud
• Puffing
• Misrepresentation
• Marketing

Question 40

The value of which type of real estate often moves in the opposite direction as the stock market?

• Residential
• Commercial real estate
• Industrial
• Agricultural

Question 41

What can a property owner do if they don’t agree with the assessed value of their home for property tax purposes?

• Refuse to pay
• Challenge the assessment
• Sell the property immediately
• Deduct the difference from their income tax

Question 42

When is a comparative market analysis (CMA) conducted?

• After the home is under contract
• Before a property is listed for sale
• During the appraisal process
• At the closing table

Question 43

What does South Carolina consider a designated agency?

• In South Carolina, a designated agency is when a client has talked with two different agents in the same office and the broker has to designate only one to represent that client
• When two different brokerages work together
• When an agent represents a relative
• When the broker acts as the only agent

Question 44

Under the law of agency, what type of legal responsibility does the agent have to the principal?

• Civil
• Fiduciary
• Contractual only
• Power of attorney

Question 45

What is one solution a real estate agent may want to explore when a buyer is hesitant to sign an exclusive buyer-agency contract?

• Offer to be the buyer’s agent for specific named properties, or a short period of time
• Work without any written agreement
• Charge the buyer a consulting fee
• Tell the buyer they cannot view homes without it

Question 46

When a client hires an agent to complete a task, which scenario automatically creates an agency relationship?

• Signing a buyer’s, seller’s, or dual agency agreement
• Requesting a tour of a home
• Asking for a business card
• Attending an open house

Question 47

What is the ultimate goal of company policy?

• To define relationships and help agents set expectations
• To maximize profit
• To list all local laws
• To provide marketing materials

Question 48

Which of the following details is not useful when evaluating a property using the CMA method?

• Square footage
• Age of the home
• Potential uses for the property
• Recent sales in the neighborhood

Question 49

Which of the following is NOT an accurate statement regarding the Disclosure of Real Estate Brokerage Relationships form?

• It must be provided at the first practical opportunity
• Ultimately, each individual licensee is in charge of deciding whether to establish an agency relationship with a prospective client or to maintain a customer relationship
• It explains the duties of different agency types
• It is not a contract South Carolina Real Estate Final Exam

Question 50

Which of the following types of contracts are governed by the Statute of Frauds?

• Contracts that cannot be performed within a year
• All verbal agreements
• Listing agreements under six months
• Referral agreements

Question 51

When looking at comps used in an appraisal, what does the reviewer focus on?

• The homeowner’s opinion
• How and why adjustments were made to the value of the comps
• The agent’s marketing strategy
• The original cost of the land

Question 52

When does dual agency occur?

• When one agent has two listings
• when an agent attempts to represent two opposing sides (buyer and seller) at the same time
• When two agents from different firms work together
• When a buyer uses two different agents

Question 53

In an independent contractor agreement, which type of clause states that the broker or the real estate salesperson can end their relationship at any time, without a reason?

• Termination clause
• Exclusivity clause
• Dispute clause
• Non-compete clause

Question 54

Which type of agent is only authorized to perform specific acts on the principal’s behalf based on instructions received from the principal?

• Universal agent
• Special agent
• General agent
• Sub-agent

Question 55

What kind of compensation can a transaction broker agreement include?

• Fixed or percentage
• Hourly wage
• Gift cards
• No compensation is allowed

Question 56

A broker performs a/an __________ to help establish the listing price.

• Appraisal
• CMA
• Home inspection
• Survey

Question 57

Which of the following terms describes when a real estate agent knowingly misconstrues facts or fails to disclose crucial information about a property?

• Puffing
• Fraudulent misrepresentation
• Negligent misrepresentation
• Marketing error

Question 58

Which common law doctrine means “let the buyer beware” and underscores the buyer’s obligation to inspect a property before purchasing?

• Caveat venditor
• Caveat emptor
• Res ipsa loquitur
• Quid pro quo

Question 59

In relationships between brokers and real estate salespeople, when can informal independent contractor agreements be risky?

• In cases of dispute or disagreement
• During a busy market
• When the agent is successful
• They are never risky

Question 60

The NOI of a property is $40,000 and its cap rate is 9%. What is its value?

• $360,000
• $444,444 (Dollars)
• $500,000
• $400,000

Question 61

Whenever possible, which type of solution does the National Association of Realtors (NAR) promote as a way to address a dispute before going in front of an arbitration panel?

• Lawsuit
• Mediation
• Silent treatment
• Public protest

Question 62

Which of the following metrics require you to measure the perimeter of a structure?

• Gross Living Area
• Foundation Analysis
• Room count
• Lot size South Carolina Real Estate Final Exam

Question 63

What downside do commercial real estate investors often face when their tenants leave?

• The new tenants may require considerable capital spending for renovations
• The property automatically loses all value
• They must pay a fine to the city
• Property taxes triple

Question 64

Which type of risk can increase an investor’s debt service payment?

• Liquidity risk
• Interest rate risk
• Market risk
• Environmental risk

Question 65

How do you verify the power of attorney for a seller’s agent?

• You would view a certified copy of their power of attorney document that’s notarized with witnesses
• Take their word for it
• Ask the seller’s neighbor
• Check their driver’s license

Question 66

Which of the following parties pays earnest money after signing a sales contract?

• The seller
• The buyer
• The lender
• The broker

Question 67

An appraiser typically values a residential home using the…?

• Income approach
• sales comparison approach
• Cost approach
• Tax assessment approach

Question 68

The final step in reaching a market value after the appraisal process is known as…?

• Assessment
• reconciliation
• Verification
• Certification

Question 69

What is considered a conflict of interest in real estate?

• Working with two different buyers
• A conflict of interest in real estate is when a licensee’s interests compete with those of his or her client’s best interests
• Having a second job
• Representing a buyer and seller in separate deals

Question 70

Which of the following metrics takes into account both above and below grade finished living areas?

• Gross Living Area (GLA)
• Gross Building Area (GBA)
• Habitable Space Area
• Foundation Area

Question 71

Can agents be subjected to financial penalties under the NAR Code of Ethics?

• No, only expulsion
• Yes. Agents may be required to pay a fine out of their own pocket, although there are limits in place
• Only if the client sues
• Yes, but only in South Carolina

Question 73

What type of real estate contracts could be prepared by real estate agents who work under the supervision of licensed brokers?

• Oral contracts.
• New contracts created by the agent.
• Fill-in-the-blank contracts.
• None of the answers are correct.

Question 74

If a real estate investor has more than $25 (Dollars) million in annual revenue, they can only deduct interest up to a limit of 30% (Percent) of their taxable income. If their interest exceeds this threshold, what can they do?

• Carry the deduction to a future year when they have not exceeded the limitation threshold.
• Deduct the interest from a different property’s income.
• Investors cannot deduct interest if they earn more than $25 (Dollars) million in annual revenue.
• None of the answers are correct.

Question 75

How can a property owner find out how to challenge the assessed value of their home?

• Ask their neighbor how they did it.
• Contact their local taxing authority to learn about the process.
• Review the instructions on the back of their most recent tax bill.
• Contact their state’s Department of Revenue.

Question 76

What is the purpose of the income approach for the buyer?

• To evaluate if a seller’s asking price is fair.
• To assess if and how property will generate a profit.
• To estimate the property’s potential for future appreciation.
• To compare the property with other similar properties in the area.

Question 77

What happens if a buyer defaults on their obligations under an Installment Land Contract?

• The seller must provide a series of foreclosure notices before they can take back the property.
• The seller can pursue their rights as a contract matter rather than as a foreclosure.
• The buyer is entitled to a refund of all the money they have paid.
• None of the answers are correct.

Question 6

You know a murder took place on a property you are listing, so what should you do?

• Disclose it to every prospective buyer.
• You can’t lie if specifically asked.
• Nothing, because you shouldn’t disclose it.
• None of the answers are correct.

Question 79

Which of the following elements cannot be provided by a facilitator?

• Transactional documents.
• Access to the property.
• Confidentiality and loyalty to a single party.
• Information about the property’s history.

Question 80

How do income tax deductions benefit taxpayers?

• Deductions increase a taxpayer’s taxable income.
• Deductions reduce a taxpayer’s income tax liability.
• Deductions have no impact on a taxpayer’s income tax liability.
• None of the answers are correct.

Question 9

What’s the best way for a client to tell you the kind of neighborhood they want to live in?

• By describing the type of people who live there.
• By providing cross-streets.
• By specifying the school district.
• By describing the amenities they want. South Carolina Real Estate Final Exam

Question 81

What is the purpose of an adjustment?

• To make the subject property more appealing to potential buyers.
• To improve the accuracy of pricing by making the comps more closely resemble the subject property.
• To justify a higher asking price for the subject property.
• To account for the differences between the subject property and the comps.

Question 82

Which of the following parties sets the listing price?

• The agent.
• The broker.
• The seller.
• The appraiser.

Question 83

When selling a property, what should you do to ensure the accuracy of public records about the property’s physical characteristics?

• Rely on the information provided by the seller.
• Compare the property’s physical features to the descriptions in the public record.
• Hire a professional appraiser to verify the property’s physical characteristics.
• None of the answers are correct South Carolina Real Estate Final Exam