North Carolina Real Estate Pre-License Study Guide

These flashcards cover key concepts and vocabulary from the North Carolina Real Estate Pre-License Study Guide to help students prepare for their exams.

What does absolute liability mean in the context of property ownership?

A legal responsibility for harm or injury, regardless of intent or negligence.

What is a deed restriction?

A provision in a deed that limits the use of a property.

Define proration in real estate transactions.

The act of dividing or allocating expenses between buyers and sellers based on the actual period of ownership and/or usage.

Explain the principle of substitution in property valuation.

The principle stating that the value of a property is affected by the cost of obtaining a similar item elsewhere.

What is lien theory in mortgage agreements?

A legal concept where the borrower holds title to the property while the lender has a lien against it.

What is the difference between actual cash value and replacement cost in property insurance?

Actual cash value is the cost to replace property minus depreciation, while replacement cost is the cost to replace the property without considering depreciation.

Describe the purpose of the Fair Housing Act.

To protect against discrimination in housing based on race, color, religion, sex, national origin, disability, and familial status.

What is an option to purchase in real estate?

A contract that gives one party the right to buy property for a specified time at a specified price.

What are the four classifications of contracts based on legal enforceability?

Valid, void, voidable, and unenforceable.

What is the role of the North Carolina Real Estate Commission?

To protect the public interest in real estate brokerage transactions by licensing brokers, regulating the industry, and ensuring compliance with laws.

Define earnest money in real estate transactions.

A deposit made to the seller to demonstrate the buyer's serious intent to purchase.

What is the 'time is of the essence' clause in a contract?

A clause requiring that all terms of an agreement are performed within the specified time frame.

What are the responsibilities of a property manager?

To market the property, maintain tenant relationships, manage rent collection, and ensure compliance with lease agreements.

Explain what a leasehold estate is.

A temporary right to hold and use property, created by a lease agreement.

What is a trade fixture?

A fixture used for business purposes, which can typically be removed by the tenant.

What does 'property condition disclosure' mean?

A requirement for the seller to disclose known material facts about the property condition to potential buyers.

What is the primary duty of landlords under the implied warranty of habitability?

To provide tenants with a fit and habitable dwelling unit.

What is meant by 'graduated payment mortgage'?

A loan where payments start low and increase at specified intervals.

Define the 'cap rate' in real estate investment.

A rate of return on a real estate investment property, calculated based on the net operating income (NOI) divided by the property value.

What is a civil liability in the context of real estate?

The legal responsibility of a licensee for damages caused by wrongful acts to clients or customers.