Various examination Problem Topics, specifically Purchase Contract Provisions, have been identified by the North Carolina Real Estate Commission (NCREC) where previous applicant testable knowledge was relatively weak.  Food for thought; if a critical content topic has been identified as an examination Problem Topic by the NCREC – should applicants expect to see the content on the NC Real Estate Broker License Examination?  Yes!!!

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ANY preprinted offer to purchase form may be used for consumer use that meets the basic provisions / elements enumerated in Commission Rule A.0112.  The basic preprinted contract provisions include;

  • Terms & Definitions. Major terms of the contract.
  • Names. ALL parties to the contract must be listed by their current individual legal name.
  • Property. A legal description must be provided to create an e
    nforceable contract.
  • Purchase price. The amount to be paid for the property.
  • Earnest money. Although not essential for a valid contract – it is unusual not to have earnest money.
  • Escrow agent. The escrow agent name and company identified to hold the trust money.
  • Effective date. Date contract was formed; after signature – upon communication.
  • Due diligence. An optional period of time established for buyer to determine if they will consummate transaction.
  • Settlement date. Closing is still identified as recording of the deed. Settlement is the gathering of the documents & funds necessary to complete transaction.
  • Special Assessments. Charges that may become a lien for something other than taxes or HOA dues.
  • Fixtures. An item of personal property that has been converted to real property by being permanently affixed to the realty.
  • Personal property. List all (chattel) personal property to convey with the real estate.
  • Buyer’s due diligence process. Recommended list of activities that should be performed during due diligence period.
  • Buyer representations. NON-conditions & disclosures (representations) of the contract.
  • Seller representations. Duties of the seller.
  • Prorations & adjustments. Proration of listed items are established.
  • Home warranty. If the seller is providing a home warranty.
  • Condition of property/risk of loss. Ensures buyer receives property in same or better condition.
  • Delay in settlement. Establishes 14 day grace period the non-delaying party agrees to.
  • Possession. Possession of property to be delivered at closing (after recordation of deed).
  • Other provisions & conditions. Identify / list addenda to the contract.
  • Concluding provisions. Assignments, tax-deferred exchange, parties, survival, etc.