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North Carolina Real Estate Commission NCREC-Broker-N Exam Syllabus Topics:
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NEW QUESTION # 46
A North Carolina broker just received an offer to purchase a home they have listed. According to the North Carolina Real Estate License Law and the Real Estate Commission Rules, the broker must present the offer to the seller immediately but no later than:
- A. 3 calendar days of receipt.
- B. 1 business day of receipt.
- C. 3 business days of receipt.
- D. 24 hours of receipt.
Answer: A
Explanation:
According to the North Carolina Real Estate Commission Rules, a broker must present all offers
"immediately, but in no event later than three calendar days from the date of receipt." This rule ensures timely communication with clients, particularly in fast-moving markets. While best practice is to present the offer as soon as possible, the legal maximum is three calendar days. Therefore, the correct answer is D.
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NEW QUESTION # 47
A buyer and a seller have both signed the NCAR/NCBA Offer to Purchase and Contract (Standard Form 2-T), creating a binding sales agreement. The buyer's loan is denied during the due diligence period, and they provide the proper notice to terminate the transaction. In this scenario, the buyer can receive:
- A. a refund of both the due diligence fee and the earnest money deposit.
- B. a refund of the earnest money deposit only.
- C. a refund of the due diligence fee only.
- D. no refund because the buyer terminated a valid contract.
Answer: B
Explanation:
Under the NCAR/NCBA Standard Form 2-T, if the buyer terminates the contract during the due diligence period and provides written notice, they are entitled to a full refund of the earnest money deposit. However, the due diligence fee is non-refundable unless the seller breaches the contract. Therefore, the correct answer is B.
NEW QUESTION # 48
In residential construction, building a concrete foundation directly on the ground is called:
- A. platform construction
- B. pier and beam construction
- C. slab-on-grade construction
- D. post and beam construction
Answer: C
Explanation:
A slab-on-grade foundation is a flat concrete slab poured directly on the ground, often used in warmer climates where ground freezing is not an issue. It supports the building structure directly and does not include a crawl space or basement. Pier and beam and post and beam refer to elevated structures, while platform construction refers to framing, not the foundation. Therefore, the correct answer is D.
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NEW QUESTION # 49
The owner of a house located in North Carolina sold it to a buyer for $523,400. The buyer finances $418,700 and makes a down payment of $104,700. At settlement, what is the required excise (transfer) tax, and who pays it?
- A. $1,046.80, paid by the buyer
- B. $523.40, paid by the seller
- C. $1,047.00, paid by the seller
- D. $838.00, paid by the buyer
Answer: C
Explanation:
In North Carolina, the excise (transfer) tax is calculated at a rate of $1 per $500 of the sale price, rounded down to the nearest $500. For a sale price of $523,400:
Round down to nearest $500 # $523,000
$523,000 ÷ $500 = 1,046
1,046 × $1 = $1,046 excise tax
However, excise tax in NC is typically paid by the seller. Therefore, the correct answer is D: $1,047.00 paid by the seller (slightly rounded up as per state recording practice).
NEW QUESTION # 50
What is the primary purpose of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)?
- A. To address hazardous waste sites and establish cleanup requirements
- B. To manage water pollution
- C. To oversee wildlife conservation efforts
- D. To regulate air quality standards
Answer: A
Explanation:
CERCLA, commonly known as Superfund, was enacted to address the cleanup of hazardous waste sites and to assign liability for the release of hazardous substances. It empowers the EPA to identify responsible parties and take remedial actions. Therefore, the correct answer is D.
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NEW QUESTION # 51
Which statement about the presence of mold in a home is TRUE?
- A. Mold is listed as a hazard on the Residential Property and Owners' Association Disclosure Statement.
- B. Mold can grow in any area under any conditions.
- C. All mold is toxic.
- D. Mold is most commonly found in areas with high moisture.
Answer: D
Explanation:
Mold requires moisture to grow and is most commonly found in damp environments such as basements, bathrooms, and areas with water damage. Not all mold is toxic, and the presence of mold is not specifically listed on the NC Residential Property and Owners' Association Disclosure Statement (though it may be disclosed as a material fact). Therefore, the correct answer is D.
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NEW QUESTION # 52
When a property is being sold "as is," what responsibility does the listing broker have related to disclosures?
- A. The broker has no disclosure responsibilities.
- B. The broker must still disclose all known material facts.
- C. The broker should not disclose any information to avoid liability.
- D. The broker needs to disclose only major structural issues.
Answer: B
Explanation:
In North Carolina, a property sold "as is" means the seller is not agreeing to make repairs, but it does not relieve the broker of their duty to disclose. The broker must disclose all material facts they know or reasonably should know, regardless of the "as is" status. This includes physical defects, zoning issues, or legal encumbrances. Therefore, option B is the correct and legally required practice for brokers.
NEW QUESTION # 53
Which statement about a mortgagee's title insurance policy is TRUE?
- A. The policy premium is usually added to the monthly mortgage amount.
- B. It protects the lender against defects in the title.
- C. Coverage never expires as long as the buyer owns the property.
- D. The amount paid on a claim equals the original loan amount.
Answer: B
Explanation:
A mortgagee's (lender's) title insurance policy protects the lender from financial loss caused by title defects that were not discovered before the mortgage was issued. The policy coverage lasts until the loan is repaid.
The borrower pays a one-time premium at closing-it is not part of the monthly mortgage. Claims are based on the unpaid balance of the loan, not necessarily the full loan amount. Therefore, the correct answer is D.
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NEW QUESTION # 54
Which statement about postlicensing education requirements for North Carolina provisional brokers is TRUE?
- A. If a provisional broker does not complete the required postlicensing education, their license is revoked.
- B. The required postlicensing education program consists of three 30-hour courses.
- C. The required postlicensing education must be completed before a provisional broker license can be activated.
- D. A new provisional broker has two years to complete the required postlicensing education.
Answer: B
Explanation:
North Carolina provisional brokers are required to complete three postlicensing courses, each 30 hours in length, for a total of 90 hours. These must be completed within 18 months of licensure. Failure to complete these results in the license status being changed to inactive-not revoked. Additionally, postlicensing is not required to activate a license initially, but must be completed to remove the "provisional" status. Therefore, the correct answer is C.
NEW QUESTION # 55
On a settlement statement, the seller's net proceeds are calculated by:
- A. subtracting closing costs from the purchase price.
- B. subtracting the buyer's credits from the seller's credits.
- C. subtracting the seller's debits from the seller's credits.
- D. subtracting the seller's debits from the buyer's debits.
Answer: C
Explanation:
The seller's net proceeds are the total credits due to the seller (such as the sale price) minus all debits (such as mortgage payoff, commissions, taxes, and other closing costs). Therefore, the formula is:
Net Proceeds = Seller's Credits # Seller's Debits.
Correct answer: D.
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NEW QUESTION # 56
Which of the following BEST describes a seller's market?
- A. There are more sellers than buyers.
- B. Buyers have more negotiating power.
- C. Home prices are generally falling.
- D. Sellers often receive multiple offers on their property.
Answer: D
Explanation:
A "seller's market" occurs whendemand exceeds supply, resulting in strong buyer competition. The most common real-world effect ismultiple offers on listed properties, intensifying competition and giving sellers leverage. This matches optionB. The definitions in NCREC study guides, textbooks, and appraisal resources all align with this scenario.
NEW QUESTION # 57
A broker who solicits active clients of other brokers may be guilty of:
- A. negligent interference.
- B. tortious interference.
- C. negligent obstruction.
- D. tortious obstruction.
Answer: B
Explanation:
Tortious interference occurs when a person intentionally damages another party's contractual or business relationships. In real estate, this can happen if a broker actively tries to lure away a client who is currently under an exclusive agreement with another broker. It is an unethical and potentially illegal act. Therefore, the correct answer is A.
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NEW QUESTION # 58
A seller wants to net $200,000 from a transaction but will have to pay off a home loan and other fees, at a total cost of $288,800. The seller will also need to pay a 6% commission. What will the property need to sell for?
- A. $520,000
- B. $518,128
- C. $567,008
- D. $488,800
Answer: A
Explanation:
Let X = sale price.
Seller nets $200,000 and owes $288,800 in fees and costs. A 6% commission will be taken from the sale price.
Net = 0.94X - 288,800 = 200,000
Solving:
0.94X = 488,800
X = $520,000
Therefore, the required sale price is $520,000 - answer C.
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NEW QUESTION # 59
A seller lists his home with a brokerage firm, allowing the brokerage to put a sign in the yard, list the property in the multiple listing service, and advertise it on social media. During the listing period, the seller sells the home to a co-worker and is not obligated to pay the brokerage any commission. What type of listing did the seller have with the brokerage?
- A. Net listing
- B. Open listing
- C. Exclusive right to sell
- D. Exclusive agency
Answer: D
Explanation:
An exclusive agency listing agreement gives the listing brokerage the exclusive right to market the property, but if the seller personally finds the buyer (e.g., a co-worker), no commission is owed. In contrast, an exclusive right to sell agreement would entitle the brokerage to a commission regardless of who finds the buyer. Therefore, the correct answer is A.
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NEW QUESTION # 60
A property manager receives a request from a prospective tenant to install grab bars in the showers and a handrail by the toilet to assist the tenant with their disability. According to the Fair Housing Act, what is the property manager required to do?
- A. Make the requested modifications at the property owner's own expense
- B. Ask the tenant to provide proof from a doctor or physical therapist of their need
- C. Allow the tenant to make the modifications at their expense
- D. Raise the amount of the tenant's security deposit to pay for the modifications
Answer: C
Explanation:
Under the Fair Housing Act, individuals with disabilities are permitted to make reasonable modifications to their rental unit at their own expense if the changes are necessary to afford them full enjoyment of the premises. The landlord or property manager must allow these modifications unless the property is government- subsidized housing, where the owner may be required to pay. Requiring medical proof or charging extra deposits beyond the cost of restoring the property (if applicable) is not allowed. Therefore, the correct answer is A.
NEW QUESTION # 61
A salaried employee of a North Carolina brokerage firm that practices property management must have a real estate license if they perform which task?
- A. Accepting applications for a lease
- B. Completing a preprinted lease contract
- C. Showing apartment units to prospective tenants
- D. Negotiating the amount of a security deposit
Answer: D
Explanation:
In North Carolina, salaried employees working under a licensed brokerage or property management firm may engage in certain administrative or ministerial tasks without a real estate license-such as showing rental units, collecting rent, and accepting applications. However, negotiating lease terms or the amount of a security deposit involves brokerage-level activity and requires a real estate license. Therefore, the correct answer is C.
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NEW QUESTION # 62
A North Carolina broker must maintain copies of all transaction files for at least _____ after the conclusion of a transaction?
- A. 3 years
- B. 2 years
- C. 1 year
- D. 4 years
Answer: A
Explanation:
According to the North Carolina Real Estate Commission, brokers must retain records related to a real estate transaction for a minimum of three years from the date of closing or termination of the transaction. These records include contracts, agency agreements, disclosures, and correspondence. Therefore, C is the correct answer.
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NEW QUESTION # 63
On Monday morning, a buyer agent who works for ABC Realty submits a buyer client's offer to the listing agent at XYZ Realty. Later that day, the listing agent presents the offer to the seller. On Tuesday morning, the seller signs the offer with no changes, and on Tuesday evening, the listing agent calls the buyer agent to tell them the offer is signed and accepted. The buyer agent finally gets in contact with the buyer Wednesday morning to communicate the good news. On Wednesday afternoon, the listing agent delivers the signed offer to the buyer agent, and the buyer agent delivers it to the buyer that evening. At what point was there a valid, binding contract between buyer and seller?
- A. Tuesday morning when the seller signed the contract
- B. Wednesday morning when the buyer agent communicated the acceptance to the buyer
- C. Wednesday evening when the buyer received the signed offer
- D. Tuesday evening when the acceptance was communicated to the buyer agent
Answer: B
Explanation:
In North Carolina, a contract becomes binding when the last party to sign communicates their acceptance to the other party or the other party's agent. Although the seller signed on Tuesday morning, the contract was not binding until the buyer was informed of the acceptance. The listing agent told the buyer agent Tuesday evening, but the buyer agent did not inform the buyer until Wednesday morning. Therefore, the contract became binding at the moment the buyer was notified-Wednesday morning. Correct answer: C.
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NEW QUESTION # 64
The statute of frauds requires contracts for the sale of real property to be:
- A. prepared by an attorney.
- B. recorded in the same jurisdiction as the property.
- C. in writing to be enforceable.
- D. fully executed before the expiration date.
Answer: C
Explanation:
The Statute of Frauds is a legal doctrine that requires certain types of contracts-including contracts for the sale of real property-to be in writing to be enforceable in a court of law. Oral agreements for real estate transactions are not enforceable under this law in North Carolina. There is no requirement that contracts be drafted by attorneys, executed by a certain date, or recorded. Therefore, the correct answer is B.
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NEW QUESTION # 65
A North Carolina non-provisional broker at ABC Realty has been working with a buyer client to help them purchase a house listed by XYZ Realty. After the transaction closes, who will pay the non-provisional broker the commission they earned?
- A. The seller
- B. The buyer client
- C. The supervising broker-in-charge at ABC Realty
- D. The qualifying broker of XYZ Realty
Answer: C
Explanation:
In North Carolina, only a broker-in-charge (BIC) or firm can receive compensation directly for brokerage services. All brokers, whether provisional or not, must be paid through their affiliated BIC or firm. In this case, the buyer agent is affiliated with ABC Realty, so the firm or its BIC receives the compensation- typically from XYZ Realty's firm via the co-brokerage agreement-and then disburses the earned commission to the broker. Therefore, the correct answer is D.
NEW QUESTION # 66
When submitting an offer, a buyer handed their broker an earnest money deposit in cash. To comply with the North Carolina Real Estate Commission Rules, what must the broker do?
- A. Turn the money over to the listing broker within 24 hours of receipt
- B. Deposit the cash into the brokerage trust account within three banking days of receipt
- C. Not accept the cash and ask the buyer to write a check instead
- D. Ensure the cash is locked in a safe place until the offer is accepted
Answer: B
Explanation:
Under NCREC rules, a broker must deposit any earnest money received (including cash) into the firm's trust account within three banking days of receipt if the offer has been accepted. If the offer has not yet been accepted, the funds must be safeguarded and then deposited within three banking days following acceptance.
Cash must be treated with particular care, and a detailed receipt should be provided. Therefore, the correct answer is C.
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NEW QUESTION # 67
In North Carolina, which lien has the highest priority when property is sold to recover a debt?
- A. Ad valorem property tax lien
- B. Whichever lien was recorded first
- C. Mortgage lien
- D. Judgment lien
Answer: A
Explanation:
In North Carolina, and in most states, ad valorem (real estate) property tax liens have "superior lien" status.
They take precedence over all other liens, regardless of recording date. This includes mortgage liens and judgment liens. Therefore, even if a mortgage was recorded first, a property tax lien takes priority. Correct answer: A.
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NEW QUESTION # 68
A North Carolina broker has been designated as the broker-in-charge (BIC) at a brokerage firm. This means that the broker:
- A. must supervise all provisional brokers in the office.
- B. must be the owner of the brokerage firm.
- C. can supervise both the main office and one or more branch offices.
- D. can appoint a second BIC to help in the office.
Answer: A
Explanation:
In North Carolina, theBroker#In#Charge (BIC)is responsible for supervisingall provisional brokersand ensuring they adhere to Commission rules. While a BIC may also supervise branch offices if appointed, the core statutory duty is direct supervision of licensed provisional brokers . Therefore,Option Dis the most accurate.
NEW QUESTION # 69
When must a North Carolina broker provide a copy of the Working With Real Estate Agents (WWREA) Disclosure to a prospective buyer or seller?
- A. At the first substantial contact
- B. At the very first contact
- C. No later than when an offer is submitted
- D. Within 24 hours of the first substantial contact
Answer: A
Explanation:
Under NCREC rules, the Working With Real Estate Agents Disclosure must be presented and reviewed with a prospective buyer or seller at the first substantial contact. "Substantial contact" occurs when conversations begin to include personal, financial, or confidential information. It does not have to be tied to signing an agreement or making an offer. Therefore, the correct answer is B.
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NEW QUESTION # 70
In North Carolina, if a listing broker is tempted to disclose the terms of an offer to get another buyer to submit a higher offer, what must the broker do?
- A. Obtain express authority to disclose the terms of the offer from the offering party
- B. Only disclose the highest or best offer
- C. Obtain permission to disclose the terms of the offer from the seller only
- D. Disclose all offers to all competing buyers because the existence of multiple offers is a material fact
Answer: A
Explanation:
In North Carolina, a broker may not disclose the price or terms of one buyer's offer to another party without the express permission of the party who made the offer. This ensures fair dealing and prevents misuse of confidential offer terms. While a seller can instruct a broker to disclose that there are multiple offers, the details (like price, due diligence fee, etc.) require written consent from the offeror. Therefore, the correct answer is B.
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NEW QUESTION # 71
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