NC 302 Post Licensing Unit Test bank
Questions with 100% Correct Answers
2026 Update
Why is the buyer usually responsible for the largest portion of closing costs? - Answer-
Expenses related to the mortgage loan and down payment make up the majority of the
closing costs.
Which type of contract allows a buyer to legally possess the property after all of the
terms and conditions have been met? - Answer- Sale agreement
In reference to a real estate transaction, which of these terms does NOT refer to the
process in which title is actually conveyed and proceeds disbursed? - Answer-
Termination
Page four of the Closing Disclosure lists specific disclosures about the loan, such as the
penalty for late payments, whether a demand feature applies, whether the loan can be
assumed, and ______. - Answer- Whether partial payments are accepted, and the use
of an escrow account
In addition to itemizing all borrower-paid and seller-paid closing costs, page two of the
Closing Disclosure also tells the borrower when each amount is paid by listing it under
______. - Answer- "At closing" or "before closing"
Margot reviewed page three of her Closing Disclosure to see the amounts she'll pay and
receive, and the total cash amount. She located this information under the "Summaries
of Transaction" in the "Seller's Transaction" table, which is completed by ______. -
Answer- The settlement agent
Zara is reviewing the "Calculating Cash to Close" table on page three of the Closing
Disclosure to see what has changed from her Loan Estimate. She found this extremely
helpful and easy to understand because the table explicitly lists _______. - Answer-
Loan estimate and final amounts side-by-side
Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage
him to verify as soon as he receives the form? - Answer- That the borrower and seller
names, the property address, and the sales price are accurate and spelled correctly
,Although the Closing Disclosure lists all amounts as accurately as possible, some costs
must be estimated. Why? - Answer- Property taxes and insurance may change over the
life of the loan, resulting in changes to the required escrow amounts.
The _______ section contains the seller's existing mortgage loan payoff amount that
must be paid to complete the transaction. - Answer- "Due from Seller at Closing"
Under the "Summaries of Transaction" section on page three of the Closing Disclosure,
amounts listed for the borrower's transaction are calculated to result in ______. -
Answer- An amount due from the borrower, which will match the cash to close amount
Which of the following could be different from the amount on the initial Loan Estimate
and can impact the monthly payment? - Answer- Interest rate
Closing costs are itemized on page two of the Closing Disclosure, and all amounts are
______. - Answer- Listed according to who paid them: the borrower, seller, or other
Maria is a borrower reviewing her Closing Disclosure. She notices that the appraisal fee
is listed under "Paid by Others" and has an L listed with the amount. What does this
mean? - Answer- The L indicates that the creditor pays the item at consummation.
The ______ table discloses the amounts associated with the transaction that the seller
will pay and receive, usually resulting in a total cash to seller. - Answer- Seller's
Transaction
Buyers Romy and Steven are looking over closing documents and don't know if the
Loan Estimate matches everything on the Closing Disclosure. Usually, amounts shown
on the Closing Disclosure that don't exactly match the figures on the Loan Estimate will
be due to _______. - Answer- Updates to reflect the terms of the borrower's legal
obligation when the loan closes
Borrower Max is reviewing his Closing Disclosure to check the amount of prepaid
mortgage insurance, taxes, and interest. In addition to itemizing what his borrower-paid
closing costs are, the prepaid section includes ______ for each item. - Answer- The
applicable time period
The final page of the Closing Disclosure provides loan calculations that tell the
consumer how much ______. - Answer- The loan costs, including total payments,
finance charge, and TIP
Closing costs are itemized on page two of the Closing Disclosure, and all amounts are
______. - Answer- Listed according to who paid them: the borrower, seller, or other
Earnest money on deposit is a ______. - Answer- Credit to the buyer
,You're representing buyer Edward in a condo purchase, and the closing date is
approaching. Both Edward and the seller will have costs to pay at closing. Edward asks
you how he'll know who is paying what, and he wants to know the final amount he'll
need to provide at closing. Which of the following documents will show these numbers?
- Answer- The closing statement
Victor is a buyer reviewing the Closing Disclosure he received from his lender. On the
last page of the form, he sees a signature line. By signing the form, Victor has ______. -
Answer- Confirmed receipt of the Closing Disclosure
In North Carolina, an installment sales contract is also known as _______. - Answer- An
installment land contract
Cynthia loves her apartment in Bayboro and would like to have the option to buy it once
her lease is up. Who's the best person to help Cynthia prepare a lease option? -
Answer- A real estate attorney
Which of these describes a right of first refusal agreement in North Carolina? - Answer-
The holder of the right is given the opportunity to match the first offer on a property.
In a real estate transaction, which of the following is an example of consideration? -
Answer- The seller's promise to sell
Your automatic check writer wrote a check for $51.50, but your printer ran out of toner,
so you had to fill in the handwritten line. In a hurry, you accidentally wrote, "Fifty-one
dollars and no/100 cents." Which amount takes priority? - Answer- The handwritten
number
Morgan has agreed to sell his home to Dierks, and they've signed a contract. Which of
these actions changes the contract from executory to executed? - Answer- Dierks'
lender funded the loan, and closing took place
_______ is an example of circumstances that are beyond the buyers' control, meaning
they can't practically do what they've agreed to do, and the offer terminates. - Answer-
Destruction of property
If a contract is for an illegal purpose, it's ______ - Answer- Void
Which of the following is NOT a valid reason for an offer termination in North Carolina? -
Answer- Improper forms
Which offer would be the most appealing to a seller? - Answer- It depends on the
seller's needs and motivations
Kirk and his cousin Dewey decided to buy a vacation home. They entered into a
contract with the seller, Crystal. Before finalizing the sale, Dewey wanted out, but he
, doesn't want to let his cousin down. So instead of pulling out altogether, Dewey
convinced his son to replace him in the purchase contract. Kirk and Crystal agreed to
the substitution, and Dewey was released from all his obligations under the contract.
Dewey's son is now the contracting party. What's this an example of? - Answer-
Novation
What type of language should be used to write contracts? - Answer- Plain language
When does offer and acceptance occur? - Answer- When both parties sign a contract
with the full understanding of the terms.
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an
offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric
exercises his option to buy, only Sylvan is bound by the option agreement; he may not
sell the property to anyone else during the option period. What type of contract is this? -
Answer- Unilateral
Three of these statements about interpreting contracts are true, and one is not. Which
statement is FALSE? - Answer- A handwritten insertion can be canceled out by typing
over it.
What is wrong with this statement: "Handwritten information on a contract is not legally
binding. All insertions must be typed."? - Answer- Insertions do not have to be typed to
be legally binding.
Desmond has a signed listing agreement with his clients, the Harpers. In exchange for
helping the Harpers list, market, and sell their home, the Harpers have agreed to pay
Desmond a commission. What type of agreement do Desmond and the Harpers have? -
Answer- Bilateral
The Nettles have accepted the Briars' purchase offer, and both parties have signed the
sales contract. The funds, and the title, should transfer in a matter of days, but
otherwise the all elements and terms of the contract have been met. What type of
contract do the Nettles and the Briars have? - Answer- Executory
Ruthie is explaining the termination option to her buyer client. How would she explain
that "time is of the essence" is for the discharge under operation of law option? -
Answer- "This means that if the seller doesn't decide by the deadline, the buyer is no
longer held to the contract"
Why do you think that handwritten changes take priority over typed changes? - Answer-
It's less likely to be done inadvertently
Breanna signed a purchase offer stating she'd buy Kathy's home for $150,000. Kathy
rejected that offer but said she'd sell it to Breanna for $200,000. Breanna agreed to
Questions with 100% Correct Answers
2026 Update
Why is the buyer usually responsible for the largest portion of closing costs? - Answer-
Expenses related to the mortgage loan and down payment make up the majority of the
closing costs.
Which type of contract allows a buyer to legally possess the property after all of the
terms and conditions have been met? - Answer- Sale agreement
In reference to a real estate transaction, which of these terms does NOT refer to the
process in which title is actually conveyed and proceeds disbursed? - Answer-
Termination
Page four of the Closing Disclosure lists specific disclosures about the loan, such as the
penalty for late payments, whether a demand feature applies, whether the loan can be
assumed, and ______. - Answer- Whether partial payments are accepted, and the use
of an escrow account
In addition to itemizing all borrower-paid and seller-paid closing costs, page two of the
Closing Disclosure also tells the borrower when each amount is paid by listing it under
______. - Answer- "At closing" or "before closing"
Margot reviewed page three of her Closing Disclosure to see the amounts she'll pay and
receive, and the total cash amount. She located this information under the "Summaries
of Transaction" in the "Seller's Transaction" table, which is completed by ______. -
Answer- The settlement agent
Zara is reviewing the "Calculating Cash to Close" table on page three of the Closing
Disclosure to see what has changed from her Loan Estimate. She found this extremely
helpful and easy to understand because the table explicitly lists _______. - Answer-
Loan estimate and final amounts side-by-side
Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage
him to verify as soon as he receives the form? - Answer- That the borrower and seller
names, the property address, and the sales price are accurate and spelled correctly
,Although the Closing Disclosure lists all amounts as accurately as possible, some costs
must be estimated. Why? - Answer- Property taxes and insurance may change over the
life of the loan, resulting in changes to the required escrow amounts.
The _______ section contains the seller's existing mortgage loan payoff amount that
must be paid to complete the transaction. - Answer- "Due from Seller at Closing"
Under the "Summaries of Transaction" section on page three of the Closing Disclosure,
amounts listed for the borrower's transaction are calculated to result in ______. -
Answer- An amount due from the borrower, which will match the cash to close amount
Which of the following could be different from the amount on the initial Loan Estimate
and can impact the monthly payment? - Answer- Interest rate
Closing costs are itemized on page two of the Closing Disclosure, and all amounts are
______. - Answer- Listed according to who paid them: the borrower, seller, or other
Maria is a borrower reviewing her Closing Disclosure. She notices that the appraisal fee
is listed under "Paid by Others" and has an L listed with the amount. What does this
mean? - Answer- The L indicates that the creditor pays the item at consummation.
The ______ table discloses the amounts associated with the transaction that the seller
will pay and receive, usually resulting in a total cash to seller. - Answer- Seller's
Transaction
Buyers Romy and Steven are looking over closing documents and don't know if the
Loan Estimate matches everything on the Closing Disclosure. Usually, amounts shown
on the Closing Disclosure that don't exactly match the figures on the Loan Estimate will
be due to _______. - Answer- Updates to reflect the terms of the borrower's legal
obligation when the loan closes
Borrower Max is reviewing his Closing Disclosure to check the amount of prepaid
mortgage insurance, taxes, and interest. In addition to itemizing what his borrower-paid
closing costs are, the prepaid section includes ______ for each item. - Answer- The
applicable time period
The final page of the Closing Disclosure provides loan calculations that tell the
consumer how much ______. - Answer- The loan costs, including total payments,
finance charge, and TIP
Closing costs are itemized on page two of the Closing Disclosure, and all amounts are
______. - Answer- Listed according to who paid them: the borrower, seller, or other
Earnest money on deposit is a ______. - Answer- Credit to the buyer
,You're representing buyer Edward in a condo purchase, and the closing date is
approaching. Both Edward and the seller will have costs to pay at closing. Edward asks
you how he'll know who is paying what, and he wants to know the final amount he'll
need to provide at closing. Which of the following documents will show these numbers?
- Answer- The closing statement
Victor is a buyer reviewing the Closing Disclosure he received from his lender. On the
last page of the form, he sees a signature line. By signing the form, Victor has ______. -
Answer- Confirmed receipt of the Closing Disclosure
In North Carolina, an installment sales contract is also known as _______. - Answer- An
installment land contract
Cynthia loves her apartment in Bayboro and would like to have the option to buy it once
her lease is up. Who's the best person to help Cynthia prepare a lease option? -
Answer- A real estate attorney
Which of these describes a right of first refusal agreement in North Carolina? - Answer-
The holder of the right is given the opportunity to match the first offer on a property.
In a real estate transaction, which of the following is an example of consideration? -
Answer- The seller's promise to sell
Your automatic check writer wrote a check for $51.50, but your printer ran out of toner,
so you had to fill in the handwritten line. In a hurry, you accidentally wrote, "Fifty-one
dollars and no/100 cents." Which amount takes priority? - Answer- The handwritten
number
Morgan has agreed to sell his home to Dierks, and they've signed a contract. Which of
these actions changes the contract from executory to executed? - Answer- Dierks'
lender funded the loan, and closing took place
_______ is an example of circumstances that are beyond the buyers' control, meaning
they can't practically do what they've agreed to do, and the offer terminates. - Answer-
Destruction of property
If a contract is for an illegal purpose, it's ______ - Answer- Void
Which of the following is NOT a valid reason for an offer termination in North Carolina? -
Answer- Improper forms
Which offer would be the most appealing to a seller? - Answer- It depends on the
seller's needs and motivations
Kirk and his cousin Dewey decided to buy a vacation home. They entered into a
contract with the seller, Crystal. Before finalizing the sale, Dewey wanted out, but he
, doesn't want to let his cousin down. So instead of pulling out altogether, Dewey
convinced his son to replace him in the purchase contract. Kirk and Crystal agreed to
the substitution, and Dewey was released from all his obligations under the contract.
Dewey's son is now the contracting party. What's this an example of? - Answer-
Novation
What type of language should be used to write contracts? - Answer- Plain language
When does offer and acceptance occur? - Answer- When both parties sign a contract
with the full understanding of the terms.
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an
offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric
exercises his option to buy, only Sylvan is bound by the option agreement; he may not
sell the property to anyone else during the option period. What type of contract is this? -
Answer- Unilateral
Three of these statements about interpreting contracts are true, and one is not. Which
statement is FALSE? - Answer- A handwritten insertion can be canceled out by typing
over it.
What is wrong with this statement: "Handwritten information on a contract is not legally
binding. All insertions must be typed."? - Answer- Insertions do not have to be typed to
be legally binding.
Desmond has a signed listing agreement with his clients, the Harpers. In exchange for
helping the Harpers list, market, and sell their home, the Harpers have agreed to pay
Desmond a commission. What type of agreement do Desmond and the Harpers have? -
Answer- Bilateral
The Nettles have accepted the Briars' purchase offer, and both parties have signed the
sales contract. The funds, and the title, should transfer in a matter of days, but
otherwise the all elements and terms of the contract have been met. What type of
contract do the Nettles and the Briars have? - Answer- Executory
Ruthie is explaining the termination option to her buyer client. How would she explain
that "time is of the essence" is for the discharge under operation of law option? -
Answer- "This means that if the seller doesn't decide by the deadline, the buyer is no
longer held to the contract"
Why do you think that handwritten changes take priority over typed changes? - Answer-
It's less likely to be done inadvertently
Breanna signed a purchase offer stating she'd buy Kathy's home for $150,000. Kathy
rejected that offer but said she'd sell it to Breanna for $200,000. Breanna agreed to
