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North Carolina Real Estate Commission NC Real Estate Broker National Sample Questions (Q57-Q62):

NEW QUESTION # 57
What principle states that the value of the best home in a neighborhood will be lowered by the existence of inferior homes?

A. Contribution
B. Progression
C. Regression
D. Anticipation

Answer: C

Explanation:
ThePrinciple of Regressionin real estate appraisal dictates that the value of a higher-quality property is negatively impacted by surrounding inferior properties. In simple terms, even a well-maintained, high-end home can lose value if it's located among less desirable homes. PrepAgent explains:
"The principle of regression states that the value of a more expensive property will decrease when less expensive properties come into the area." This clearly matches the definition and corresponds exactly to optionD.

NEW QUESTION # 58
Which is the correct formula for finding the value of a property using a capitalization rate?

A. Net Operating Income / Rate = Value
B. Net Operating Income × Rate = Value
C. Rate / Net Operating Income = Value
D. Potential Gross Income / Rate = Value

Answer: A

Explanation:
In the income approach to real estate valuation, the formula used is:
Value = Net Operating Income (NOI) ÷ Capitalization Rate
This method estimates the value of an income-producing property based on its ability to generate income.
Using this formula, you divide the NOI by the cap rate to find the value. Gross income is not used without adjustments, and multiplication or inverting the formula is incorrect. Therefore, the correct answer is B.
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NEW QUESTION # 59
In the context of antitrust laws, which action would be considered an example of a group boycott?

A. Two brokers from different firms agree to charge the same commission rate.
B. Two brokers from different firms agree not to cooperate with a new discount brokerage.
C. Two brokers from different firms agree to use the same marketing materials.
D. Two brokers from different firms agree to focus on different neighborhoods.

Answer: B

Explanation:
A group boycott occurs when two or more competitors conspire to exclude another competitor from fair participation in the market-such as refusing to show listings, denying cooperation, or encouraging others not to do business with a certain firm. This violates federal antitrust laws. Price-fixing (choice A) is another violation, but it's not a group boycott. Therefore, the correct answer is D.
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NEW QUESTION # 60
A prospective buyer, who just moved to town from Venezuela, asks their buyer agent to show them houses only in Latino neighborhoods. If the buyer agent complies with the buyer's directions, the agent could be guilty of:

A. redlining
B. pandering
C. blockbusting
D. steering

Answer: D

Explanation:
Steering is the illegal practice of guiding prospective buyers toward or away from certain neighborhoods based on race, ethnicity, religion, or other protected characteristics. Even if the request comes from the buyer, complying with such directions violates the Fair Housing Act. The correct answer is D - steering.
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NEW QUESTION # 61
What are the four elements of value that must exist in harmony to maximize the value of real property?

A. Uniqueness, immobility, indestructibility, and demand
B. Right of use, enjoyment, exclusivity, and disposal
C. Immobility, scarcity, transferability, and demand
D. Demand, utility, scarcity, and transferability

Answer: D

Explanation:
The four economic characteristics necessary for real property to have value are:
Demand: There must be a desire or need for the property.
Utility: The property must serve a purpose or satisfy a need.
Scarcity: There must be a limited supply of similar properties.
Transferability: The ownership rights must be transferable from one party to another.
These four components form the acronym DUST and are foundational in property valuation. The correct answer is A.
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NEW QUESTION # 62
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