nc practice exam

A broker in charge is responsible for:

a.ensuring that each office location has a project broker.

b.renewing all affiliated brokers' licenses.

c.direct supervision of all affiliated brokers.

d.ensuring agency disclosure has occurred.

ensuring agency disclosure has occurred.

A broker on inactive status may:

a.negotiate rent on behalf of a property management client.

b.earn compensation for a personal transaction.

c.earn a referral fee for introducing a buyer to a licensee.

d.manage property for their mother in exchange for a free unit.

earn compensation for a personal transaction.

A licensee violates license law.  The North Carolina Real Estate Commission CANNOT take which of the following actions?

a.Suspend

b.Fine

c.Revoke

d.Reprimand

Fine

A licensee lists a property for sale and advertises its square footage as 3,500 square feet. The buyer's agent makes no representation regarding the square footage, relying upon the listing agent's calculation. The buyer purchases the property and later learns that it has 3,400 square feet due to an unpermitted addition. Which licensee is liable?

a.Both the listing and buyer licensees are responsible for misrepresentation

b.Only the listing agent is responsible for misrepresentation

c.Neither licensee is responsible as the buyer should have measured the property

d.Only the buyer's agent is responsible for the misrepresentation

Only the listing agent is responsible for misrepresentation

A seller offers a $2,000 bonus to a buyer agent. The buyer agent:

a.can receive the payment directly from the seller.

b.CANNOT receive the payment as it forms an agency relationship with the seller.

c.can receive the payment when properly disclosed to the buyer.

d.CANNOT receive the payment as it creates a conflict of interest.

can receive the payment when properly disclosed to the buyer.

Broker A represents a buyer, and broker B represents a seller as exclusive agents in a purchase transaction. In which situation should Broker B conceal information about the seller from the buyer?

a.The seller owes more than the property is worth

b.The broker is aware of an underground storage tank that the seller did not disclose

c.The property has polybutylene pipes that have leaked in the past

d.The seller received a foreclosure notice

The seller owes more than the property is worth

A provisional broker is appointed to act as the designated dual agent for the buyer. Which of the following individuals could be appointed to act as the designated agent for the seller?

a.The provisional broker's supervising broker-in-charge

b.A broker in the same office as the provisional broker

c.A provisional broker in the office who knows personal information about the buyer

d.A provisional broker affiliated with another firm

A broker in the same office as the provisional broker

In the Standard NCAR Exclusive Buyer Agency Agreement the:

a.buyer owes compensation when the buyer agent locates a home that meets the buyer's needs.

b.brokerage earns compensation when the transaction closes.

c.brokerage agrees to seek compensation from the listing firm or seller first before charging the buyer.

d.buyer agrees to purchase one of the buyer agent's listings.

brokerage agrees to seek compensation from the listing firm or seller first before charging the buyer.

A broker offered to buy new appliances if the borrower purchased a listed property. After closing, the broker refused, stating that the agreement was not in writing. Has the broker violated license law?

a.Yes. The broker made material misrepresentations about the property.

b.Yes. The broker made false promises to the buyer.

c.No. The Parol Evidence Rule requires the agreement to be in writing.

d.No. The Statute of Frauds requires the agreement to be in writing.

Yes. The broker made false promises to the buyer.

When a North Carolina licensee wants to list a property for lease, the licensee MUST:

a.enter a written property management agreement.

b.ask the lessee to sign the agreement.  

c.explain the Working with Real Estate Agents disclosure.

d.obtain a property managers license.

enter a written property management agreement.

A North Carolina provisional broker meets a buyer at an open house. The buyer volunteers they must buy because of a divorce. Which of the following statements is MOST ACCURATE regarding this interaction?

a.The provisional broker should present the Working With Real Estate Agents Disclosure when the buyer provided personal information.

b.The provisional broker has violated North Carolina license law by not providing the Working With Real Estate Agents Disclosure at the beginning of such a conversation.

cThe provisional broker IS NOT required to present the Working With Real Estate Agents Disclosure to this buyer until the property is shown.

d.The provisional broker should inform the buyer they MUST sign the Working With Real Estate Agents Disclosure since personal information was disclosed.

The provisional broker should present the Working With Real Estate Agents Disclosure when the buyer provided personal information.

A North Carolina seller enters a listing agreement with XYZ Realty. The listing agreement MUST:

a.authorize dual agency representation.

b.include the list price.

c.include the metes and bounds property description.

d.authorize the listing firm to enter purchase contracts.

include the list price.

When must a licensee who is representing a buyer obtain a written buyer/broker employment agreement?

a.Prior to showing the property

b.Prior to an offer being written

c.At first substantial contact

d.Prior to making an offer

Prior to making an offer

A licensee is hosting an open house for a property listed by another licensee in the same office. Several prospective buyers walk through, and conversation lingers on details about the property and surrounding area. At no time does the licensee disclose their affiliation with the listing firm to the potential buyers. Has the licensee violated licensing law or commission rules?

a.No. Seller's agents and subagents do not have to disclose their agency status to the buyer at initial contact.

b.Yes. Since designated dual agency is possible, disclosure of dual agency and consent from the buyer is required.

c.Yes. Seller's agents and subagents must disclose their agency status to prospective buyers at initial contact.

d.No. The licensee was not the listing agent so there is nothing to disclose.

Feedback

No. Seller's agents and subagents do not have to disclose their agency status to the buyer at initial contact.

A licensee enters into an oral buyer agency agreement. When MUST the licensee obtain written consent for dual agency?

a.At first substantial contact

b.Before showing the buyer available properties

c.When the buyer makes an offer

d.Before the buyer enters a legally binding contract

When the buyer makes an offer

A consumer calls a licensee and discloses personal information. How long does the licensee have to provide a copy of the Working with Real Estate Agents Disclosure?

a.3 Business Days

b.3 Calendar Days

c.5 Business Days

d.5 Calendar Days

3 Calendar Days

A buyer's agent would owe which of the following to the seller?

a.Disclosure of confidential information

b.Fairness

c.Loyalty

d.Obedience

Fairness

A licensee enters an oral listing agreement with the seller. Has the licensee violated North Carolina License Law?

a.No. The licensee MUST reduce the listing agreement to writing before making an offer.

b.No. The licensee MUST reduce the listing agreement to writing before the seller enters a purchase contract.

c.Yes. The broker-in-charge MUST sign the listing agreement.

d.Yes. A listing agreement MUST be in writing before a licensee provides any services to a seller.

Yes. A listing agreement MUST be in writing before a licensee provides any services to a seller.

A property is listed with a provisional broker. A listing agreement DOES NOT terminate upon:

a.expiration.

b.death of the provision broker.

c.death of the seller.

d.closing.

death of the provision broker.

A North Carolina licensee enters an exclusive right to sell listing agreement. The seller refuses to accept a cash offer meeting all of the seller terms for more than the listing price. Which of the following is CORRECT regarding this situation?

a.The seller cannot refuse to accept such an offer as the buyer can sue for specific performance

b.The listing firm may be entitled to full payment of the commission as they met all of the seller's terms

c.Though a ready, willing, and able buyer was produced, the listing firm is not entitled to a commission unitl the due diligence period expires

d.Because the property did not sell, the listing firm has no entitlement to payment of a commission

The listing firm may be entitled to full payment of the commission as they met all of the seller's terms

When is compensation payable when a licensee lists a property for sale?

a.The due diligence period expires

b.A listed property goes under contract

c.The transaction closes

d.A ready, willing, and able buyer views a listed property

The transaction closes

A licensee takes a listing that promptly goes under contract. Before the transaction closes, the licensee becomes inactive. Can the licensee be paid compensation?

a.Yes, if the licensee DOES NOT perform brokerage services while inactive.

b.No, the licensee CANNOT receive compensation when inactive.

c.Yes, the listing agreement specifies the licensee earns the compensation.

d.No, the licensee forfeits all commission once inactive.

Yes, if the licensee DOES NOT perform brokerage services while inactive.

A licensee represents a buyer seeking to purchase a home. At what point will the licensee earn compensation?

a.Upon termination of a purchase contract during the due diligence period

b.When the licensee identifies a property that meets all of the criteria set by the buyer

c.Upon the expiration of the due diligence period in a legally binding contract

d.Upon the effective date of a purchase contract

Upon the effective date of a purchase contract

Which of the following is a material fact that a licensee MUST disclose?

a.The county plans to widen the road, increasing the property value

b.The house is haunted

c.A sex offender lives nearby

d.A previous owner committed suicide

The county plans to widen the road, increasing the property value

A buyer is concerned that a property may have deed restrictions that will limit the buyer's intended use. The licensee should:

a.ask the buyer to research the existence of deed restrictions.

b.contact the sheriffs department to ask about deed restrictions.

c.perform a title search for covenants and deed restrictions.

d.refer the buyer to an attorney that can perform a title serach.

refer the buyer to an attorney that can perform a title serach.

The seller is aware that the roof leaks during periods of heavy rain. The provisional broker is unaware of the issue and did not discover the leak when performing a walk-through. The seller selected "no representation" regarding roof issues on the property disclosure. Which of the following statements is CORRECT?

a.The North Carolina Real Estate Commission will likely suspend the provisional broker's license

b.The seller is liable as the seller MUST disclose ALL material issues related to the property

c.The provisional broker is liable for failing to disclose this material fact

d.The provisional broker IS NOT responsible for discovering latent defects

Feedback

The provisional broker IS NOT responsible for discovering latent defects

Feedback

A provisional broker lists a property for sale and places an advertisement on social media. The advertisement lists the brokerage's website address, which, when clicked, provides the brokerage's name and contact information. This advertisement:

a.complies with license law as the website has been provided.

b.complies with license law as long as the broker-in-charge approved it.

c.violates License Law as provisional brokers are not permitted to place advertisements for the property.

d.violates License Law as it does not provide the name of the brokerage.

violates License Law as it does not provide the name of the brokerage.

A property is scheduled to close on October 23rd. The seller paid the property tax bill on September 15th. What is the entry on the settlement statement?

a.Debit Buyer and Credit Seller

b.Credit Buyer and Debit Seller

c.Debit Seller and Debit Buyer

d.Credit Seller and Credit Buyer

Debit Buyer and Credit Seller

A buyer agent misrepresents the square footage of a home because the listing agent advertised it incorrectly. The representation was off by 400 square feet from the actual 1,800 square feet measurement. Who could be held liable by the North Carolina Real Estate Commission for this misrepresentation?

a.Buyer agent only

b.Listing agent only

c.Both agents

d.Neither the listing or buyer agent

Both agents

A broker-in-charge (BIC) hires a bookkeeper to manage the brokerage trust account. The BIC did not review bank reconciliations. The bookkeeper embezzles $200,000 of client funds. Has the BIC violated License Law and Rules?

a.Yes. The BIC failed to supervise the bookkeeper.

b.No. The bookkeeper is subject to disciplinary action.

c.Yes. The Real Estate Commission will order the BIC to pay back the funds.

d.No. The qualifying broker is responsible for the trust account.

Yes. The BIC failed to supervise the bookkeeper.

Which North Carolina law delegated zoning powers from the General Assembly to local counties and municipalities?

a Enabling Acts

b. Statute of Frauds

c. Connor Act

d.Machinery Act

Enabling Acts

A licensee adds a provision to the listing agreement that states, "either party may terminate this agreement at any time prior to the receipt of an offer to purchase". Has the licensee violated License Law or Commission Rules?

a.No. A licensee can add provisions to all contracts that they prepare.

b.Yes. The licensee is not a party to the agreement and therefore is in violation.

c. yes. A licensee is not permitted to draft provisions in all contracts.

d. No. A licensee may draft provisions to listing or buyer agency agreements.

No. A licensee may draft provisions to listing or buyer agency agreements.

A buyer hires a buyer agent. The buyer drafts an offer to purchase and asks the buyer agent to submit the offer to the listing agent. The buyer agent complies. The listing agent, affiliated with another brokerage, refuses to present the offer unless it is on the standard NCAR/NCBA form. Which of the following is TRUE?

a.The listing agent has violated license law by failing to deliver the offer

b.The listing agent should rewrite the offer on the Standard NCAR/NCBA Offer to Purchase

c.The buyer's agent has violated license law by permitting the buyer to draft his offer to purchase

d.The buyer's agent has violated license law by using an offer to purchase that was not prepared by NCAR / NCBA

The listing agent has violated license law by failing to deliver the offer

A provisional broker represents a buyer in a transaction. The buyer enters a legally binding contract. Before closing the provisional broker's license expires. Which of the following is TRUE?

a.The provisional broker can be paid if they DID NOT provide brokerage services while expired

b.The provisional broker CANNOT be paid compensation since the license expired

c.The brokerage CANNOT be paid compensation since the license expired

d.The ONLY factor for determining payment is authorization by the broker-in-charge

The provisional broker can be paid if they DID NOT provide brokerage services while expired

The seller completes the Residential Property and Owners Association Disclosure Statement (RPOADS).  The listing broker MUST deliver a copy no later than:

a.five banking days.

b.five calendar days.

c.three banking days.

d.three calendar days.

three calendar days.

A licensee represents the seller in a transaction. With regard to property insurance, the licensee should:

a.encourage the seller to maintain coverage until closing.

b.advise the seller to terminate coverage upon settlement.

c.encourage the seller to terminate coverage on the effective date of the purchase contract.

d.advise the seller that the buyer carries the risk of loss after the expiration of the due diligence period.

encourage the seller to maintain coverage until closing.

In North Carolina, the Machinery Act provides that:

a.the assessed value of real property will be based on the property tax rate established by each county in the state.

b.real property will be individually assessed according to its market value, repeated at least once every 8 years.

c.the real property tax becomes a lien against the property unless paid by the due date.

d.the real property tax bill is considered delinquent when unpaid by December 31 of any calendar year.

real property will be individually assessed according to its market value, repeated at least once every 8 years.

The formula for calculating excise tax in North Carolina is:

a.Loan / $500 and round up to a full dollar amount

b.Fair Market Value / $500 and round up to a full dollar amount

c.Assessed Value / $500 and round up to a full dollar amount

d.Sales Price / $500 and round up to a full dollar amount

Sales Price / $500 and round up to a full dollar amount

A town installed water and sewer lines in an area recently annexed. The town did not pay for the water and sewer lines. Which of the following statements is TRUE?

a.The town filed a general lien against each property

b.The town filed a mechanics lien against each property

c.The town would typically file a lis pendens, which is a general lien

d.The town would typically charge a special assessment, which is a specific lien

The town would typically charge a special assessment, which is a specific lien

The seller advertises they are willing to leave the washer and dryer. A represented buyer enters a purchase contract that fails to reference the washer and dryer. Which of the following statements is TRUE

a.The seller can remove the washer and dryer

b.The seller MUST leave the washer and dryer because of the advertisement

c.The washer and dryer are fixtures that remain with the property

d.The licensee representing the property made false promises

The seller can remove the washer and dryer

A buyer and seller enter a legally binding contract using the standard 2-T Offer to Purchase and Contract. The seller refused to sell the property to the buyer. What is the remedy available to the buyer?

a.Refund of earnest money only

b.Refund of earnest money, due diligence, and compensatory damages

c.Refund of due diligence only

d.Refund of earnest money and due diligence

Refund of earnest money, due diligence, and compensatory damages

Which date is "time is of the essence" in the Standard NCAR/NCBA 2-T Offer to Purchase and Contract?

a.Due Diligence Period

b.Closing

c.Settlement

d.Effective Date

Due Diligence Period

A buyer and seller utilize the 2-T Standard NCAR/NCBA Offer to Purchase and Contract. Before the due diligence date expires, the buyer's loan is denied. The buyer may:

a.be sued for breach of contract if they do not at least attempt to obtain other financing.

b.terminate during the due diligence period and be entitled to a full refund of the earnest money deposit.

c.terminate and expect to receive a refund of both the earnest money deposit and due diligence fee.

d.terminate the contract but will forfeit the earnest money deposit and due diligence fee to the seller.

terminate during the due diligence period and be entitled to a full refund of the earnest money deposit.

A licensee pays an attorney to prepare a standard lease agreement. Which of the following statements is TRUE?

a.The lease MUST include the fair housing provision regarding non-discrimination

b.A licensee may ONLY use the lease if the Commission approves the form

c.A licensee MUST use the standard NCAR lease form

d.The lease MUST contain the amount of compensation the licensee will earn

The lease MUST include the fair housing provision regarding non-discrimination

The standard 2-T Offer to Purchase and Contract:

a.states that settlement is time is of the essence.

b.is the ONLY form allowed to be used by members of the Association of Realtors.

c.asks the seller to represent the length of ownership of the property for sale.

d.is contingent on the property appraising for the purchase price.

asks the seller to represent the length of ownership of the property for sale.

A purchase contract includes the short sale addendum. Which of the following is TRUE?

a.The property IS NOT effectively under contract until the bank agrees to the short sale

b.The buyer IS NOT required to purchase the property unless the bank grants the short sale

c.The listing broker CANNOT advertise the property as a short sale

d.The buyer and seller CANNOT terminate the contract until the bank refuses the short sale

The buyer IS NOT required to purchase the property unless the bank grants the short sale

The North Carolina Residential Security Deposit Act:

a.ONLY applies to licensees and licensed property managers.

b.requires that the unused balance of the security deposit MUST be returned to the tenant within 45 days.

c.sets the maximum security deposit that can be collected on a 1-year lease as twice the monthly rent amount.

d.requires private owners to place security deposits into the owner's personal checking or savings accounts.

sets the maximum security deposit that can be collected on a 1-year lease as twice the monthly rent amount.

Per the North Carolina Vacation Rental Act, when a vacation rental is sold, the new owner MUST honor existing leases:

a.ALL signed lease agreements that end within 180 days of closing.

b.ALL signed lease agreements.

c.ALL leases signed since the effective date of the purchase contract.

d.ALL signed lease agreements that end within 90 days of closing.

ALL signed lease agreements that end within 180 days of closing.

The legal action a property manager uses to terminate a lease is:    

a.retaliatory eviction.

b.constructive eviction.

c.summary ejectment.

d.actual eviction.

summary ejectment.

A seller demands the listing agent to conceal a roof defect since the seller answered "no representation" on the North Carolina Residential Property and Owners' Association Disclosure Statement (RPOADS). The listing agent complies. Has the listing agent acted appropriately?

a.No. The listing agent has a duty to disclose material facts to the buyer.

b.Yes. The listing agent owes the fiduciary responsibility of obedience to the seller.

c.No. The listing agent breached the duty of loyalty to the seller.

d.Yes. North Carolina is a caveat emptor state, which requires the buyer to research property issues.

No. The listing agent has a duty to disclose material facts to the buyer.

Restrictive covenants prohibit the erection of a fence. Local zoning ordinance allows fences. Which of the following statements IS CORRECT in North Carolina?

a.The homeowner can build a fence since the zoning ordinance allow them

b.The homeowner CANNOT build a fence due to the restrictive covenants

c.The homeowner can build the fence, but only if the owner obtains a variance

d.Government regulations ALWAYS prevail over the restrictions placed by a Homeowners' Association (HOA)

The homeowner CANNOT build a fence due to the restrictive covenants

Which of the following is a CORRECT statement regarding the North Carolina Residential Square Footage Guidelines?

a.Licensees MUST rely on the square footage contained in public databases such as tax records

b.If a licensee is going to use square footage in marketing or advertising, the amount of square footage MUST be verified

c.When measuring a residential structure with sloped ceilings, a licensee MUST only include areas of the room where the ceiling height is at least 6 feet

d.All listing agents MUST measure the square footage of a home at the time of listing

If a licensee is going to use square footage in marketing or advertising, the amount of square footage MUST be verified

A licensee lists a property for sale within city limits. Which of the following is TRUE?

a.The licensee can assume the property is serviced by city sewer

b.The licensee should disclose to the buyer they are subject to city and county property taxes

c.The licensee can assume that the roads are publically maintained

d.The licensee should market bonus rooms as potential bedrooms

The licensee should disclose to the buyer they are subject to city and county property taxes

The Mineral, Oil, and Gas disclosure (MOG):

a.is required for vacant land sales.

b.requires the seller to terminate the severance of rights before closing.

c.requires the seller to transfer compensation earned to the buyer.

d.is required for new home sales.

is required for new home sales.

Which of the following is TRUE regarding property owned as tenancy by the entirety?

A spouse can convey a 50% interest in the property to another

b.A notarized will defeats the rights of survivorship

c.When a couple marries, any property owned converts to tenancy by the entirety

d.When a spouse dies, the surviving spouse owns the property severalty

When a spouse dies, the surviving spouse owns the property severalty

A broker is preparing to list a property for sale. The CMA indicates a probable sales price of $250,000. The seller says he wants to list the property for $200,000. The licensee offers to purchase the property for $200,000 without disclosing the CMA, which the seller accepts. Which of the following is a possible outcome?

a.The Commission may force the broker to pay the seller $50,000

b.The broker is guilty of conversion

c.The courts may force the broker to pay the seller $50,000

d.The broker is guilty of collusion

The courts may force the broker to pay the seller $50,000

For a mobile home to be considered real property, it MUST:

a.be registered as real property with the Department of Motor Vehicles (DMV).

b.be built to North Carolina state building codes.

c.have wheels removed and be placed on a permanent foundation.

d.have approval from the local Housing Authority.

have wheels removed and be placed on a permanent foundation.

A licensee represents a developer who wants to sell lots in a new subdivision. The licensee CANNOT offer the lots for sale until:

a.approval of the final plat map.

b.approval of the preliminary plat map.

c.the project is registered with the North Carolina Real Estate Commission.

d.the broker-in-charge signs the listing agreement.

approval of the preliminary plat map.

Which law requires certain real estate documents be recorded to protect against third-party transfers?

a.NC Marketable Title Act

b.NC Connor Act

c.NC Statue of Frauds

d.NC Machinery Act

NC Connor Act

Which construction type is generally the most expense per square foot to build?    

a.One story ranch

b.Two Story

c.Split-level

d.Cape Cod

one story ranch