Escrow & Title
In NC, 'constructive fraud' in a real estate transaction may occur when:
AA buyer offers below list price
BA party in a position of trust or confidence abuses that relationship to take advantage of the other party, even without fraudulent intent✓ Correct
CA lender miscalculates closing costs
DA broker charges a higher-than-market commission
Explanation
Constructive fraud occurs when a party in a position of trust (like a fiduciary) breaches their duty in a way that harms the other party, even without proving actual intent to defraud.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Math Concepts
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