NC Real Estate Exam State Portion
A provisional broker obtains their NC real estate license on April 15th and joins a real estate firm. In order to remain active, the broker must pay the renewal fee to the NC Real Estate Commission on or before: A: June 30 of the current year B: June 30 of the following year C: June 10 of the current year D: December 31 of the current year
A: June 30 of the current year
Jane is a non-provisional broker who is affiliated with ABC Realty. Jane wants to form an LLC entity for legal or tax purposes and have her BIC make her commission checks payable to her LLC. Which of the following is correct? A: broker affiliated with a firm is prohibited from forming their own entity B: Jane must obtain a firm license for the LLC C: The LLC must have a Broker-in-Charge D: Only provisional brokers are permitted to have a separate entity
B: Jane must obtain a firm license for the LLC
If a licensee does not pay their renewal fee on or before June 30 of the year, what is the time period for the licensee to reinstate their license without the imposition of additional educational requirements? A: 30 days B: 60 days C: 6 months D: one year
C: 6 months
How are members of the NC Real Estate Commission chosen? A: they are elected by the public at large B: they are appointed by the Governor C: 7 are appointed by the Governor and 2 are appointed by the legislature D: 4 are appointed by the legislature and 3 are appointed by the governor
C: 7 are appointed by the Governor and 2 are appointed by the legislature
Under the NC Machinery Act, which of the following is a TRUE statement about North Carolina real property taxes? A: They are not levied on an ad valorem basis. B: They become a lien on the property on September 1st. C: They become a lien on the property on January 1st and are due on September 1st D: The Machinery Act requires reappraisal of the property every four years.
C: They become a lien on the property on January 1st and are due on September 1st
All of the following could result in disciplinary action by the NC Real Estate Commission for unworthiness or incompetence, EXCEPT: A: failure of the agent to properly complete an offer to purchase and contract B: failure of the agent to diligently perform services they agreed to in a listing contract C: failure of the agent to review the Closing Disclosures of their clients D: failure of a property manager to provide a depreciation schedule
D: failure of a property manager to provide a depreciation schedule. Property managers do not provide depreciation schedules or tax information to the owners of property that they manage
What is the maximum late fee that a landlord, owner or property manager may charge a tenant for delinquent rent? A: $15 or 5% of the rent, whichever is greater B: $15 or 5% of the rent, whichever is less C: $25 or 25% of the rent, whichever is greater D: $10 or 10% of the rent, whichever is less
A: $15 or 5% of the rent, whichever is greater
With regard to tenant security deposits, all of the following statements are correct, EXCEPT: A: A property management company is required to have a separate property management trust account for each property that it manages B: Should the lease end and the tenant vacate the property, the property management company must provide an initial accounting of the use of the security deposit within 30 days and a final accounting within 60 days. C: A property management company may deposit all monies from all tenants and the various owners they manage into a single trust or escrow account. D: A property manager is required to place all security deposit monies they receive into their trust account in a licensed and FDIC-insured bank.
A: A property management company is required to have a separate property management trust account for each property that it manages Property managers do not need a separate trust account for each property that they manage. They may keep the trust funds in one account. A ledger is used to track which money belongs to which client.
Earnest money given in the form of a check on an Offer to Purchase and Contract must be deposited by the BIC into an escrow account: A: No later than three banking days after acceptance of contract B: No later than 72 hours after receipt of money C: No later than three banking days from receipt D: No later than 72 hours after acceptance of contract
A: No later than three banking days after acceptance of contract
In verifying and reporting square footage, a real estate licensee may rely on which of the following measurements? A: The square footage determined by the listing agent and placed into MLS. B: The measurement as contained and verified in public records. C: The square footage as contained in a previous appraisal or survey in a past transaction concerning the property. D: The square footage as reported by the seller.
A: The square footage determined by the listing agent and placed into MLS. Real estate licensees should not rely on the owner's representations or any past measurements contained in public records, appraisals or surveys from a previous transaction. They may rely on the measurements performed by other licensees, including the listing agent.
A real estate broker is working with a buyer as a seller's subagent. All of the following are duties that the broker owes to the buyer, EXCEPT: A: confidentiality B: fairness C: honesty D: disclosure of material facts
A: confidentiality The agent is working for the seller. The licensee owes fiduciary duties to the seller including the duty of confidentiality. No such duty extends to customers which is the role of a buyer when the licensee is working as a subagent of the seller.
All of the following statements are correct regarding commission rules, EXCEPT: A: should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days B: a provisional broker may not be the Broker-in-Charge regardless of the years of experience they may have as a broker in another state C: a broker must include the firm or BIC's name in all advertising D: should a broker or provisional broker be convicted of a DWI (driving while impaired) they must report this within 60 days of the conviction
A: should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days Address changes by any licensee must be reported to the NCREC within 10 days.
Which of the following 3rd party checks may a broker have in their custody? A: the due diligence fee made payable to the seller and an earnest money check made payable to a 3rd party escrow agent such as the closing attorney B: any fees or monies that the buyer wants delivered so long as the broker is only acting as a courier C: only fees and monies that are connected with the purchase of the property, such as the home inspection, home warranty and other similar charges D: only the due diligence fee made payable to a seller
A: the due diligence fee made payable to the seller and an earnest money check made payable to a 3rd party escrow agent such as the closing attorney. These are the only 3rd party checks that should ever be in the custody of a licensee
Sam is selling a NC residential property that is being used as a vacation rental and is subject to the NC Vacation Rental Act. All of the following are true about the sale of this property, EXCEPT: A: the new buyer must honor all existing leases B: all of the leases for the vacation rental must be in writing C: the maximum time for accounting for and returning the security deposit on vacation rentals is 45 days D: Sam must provide the new owner with all leases on the property within 10 days of closing
A: the new buyer must honor all existing leases On a vacation rental unit the new buyer must only honor leases for occupancy that occurs within 180 days of closing
What is the first point at which a provisional broker may begin practicing real estate in North Carolina? A: when the NCREC receives notification of the provisional broker's activation with a BIC B: upon successful completion of all course work and required examinations C: upon completion of all educational requirements D: upon formal notification from the NCREC that the candidate has successfully passed the real estate examination and has been issued a license number
A: when the NCREC receives notification of the provisional broker's activation with a BIC
With regard to brokers-in-charge, all of the following statements are correct, EXCEPT: A: A broker-in-charge may supervise more than one firm as long as the firms are in the same building B: A broker-in-charge is required to take the General Update update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled. C: A broker-in-charge is required to have two years of experience out of the last five years and may not be a provisional broker. D: A broker-in-charge is required to take the 12- hour initial broker-in-charge course either within the last three years or within 120 days of becoming the broker-in-charge.
B: A broker-in-charge is required to take the General Update update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled. A broker-in-charge is not required to take General Update. They must take Broker Update (BICUP) and one elective. The license is not cancelled. If any licensee fails to complete the proper and required CE, their license becomes "inactive." Even BIC's who do not represent clients must take the CE courses. There are no exceptions. If the BIC becomes inactive, the firm would also become inactive, because a firm cannot operate without a BIC.
Which of the following is TRUE regarding tenant security deposits? A: Any a licensee or property manager must place such monies into a trust account B: Any property owner, landlord or property manager must place security deposits in a trust account C: Only a licensed property manager is required to have a trust account D: A trust account is not required so long as the funds are securely held in an FDIC bank
B: Any property owner, landlord or property manager must place security deposits in a trust account Tenant security deposits must be placed into a trust account regardless of whether the owner or landlord is or uses a licensed property manager. Even a private owne must place tenant security deposits in a trust account, although a private owner who is not a licensee is permitted to obtain a bond
Which of the following is INCORRECT in regard to brokerage advertising? A: Provisional brokers cannot advertise without broker-in-charge approval and consent. B: Brokers-in-charge are not required to review and approve all firm advertising. C: Real estate professionals cannot create blind advertising. D: All real estate ads must include the name of the firm or the BIC
B: Brokers-in-charge are not required to review and approve all firm advertising. Brokers-in-Charge ARE required to supervise all firm advertising.
Jane is a non-provisional broker who is affiliated with ABC Realty. Jane wants to form an LLC entity for legal or tax purposes and have her BIC make her commission checks payable to her LLC. Which of the following is correct? A: broker affiliated with a firm is prohibited from forming their own entity B: Jane must obtain a firm license for the LLC C: The LLC must have a Broker-in-Charge D: Only provisional brokers are permitted to have a separate entity
B: Jane must obtain a firm license for the LLC
A tenant rents a residential property in an area that has no HOA and in which zoning allows for small businesses to exist in the residences. The landlord stated in the lease agreement that the property could only be used for residential purposes. The tenant wants to open a barbershop. Can the tenant operate the business out of the property? A: Yes, because the property is zoned for such use B: No, because the lease can prohibit certain activities even though they may be lawful and permitted under other laws and rules C: No, because the tenant did not inform the landlord of their intentions prior to signing the lease D: Yes, because the zoning negates any contrary lease provisions
B: No, because the lease can prohibit certain activities even though they may be lawful and permitted under other laws and rules Landlords and tenants can place restrictions in leases that are more restrictive than zoning and HOA requirements. The lease evidences a mutual agreement by the parties as to use of the property
The North Carolina Real Estate Commission may take which of the following action(s) against a broker-in-charge who has converted and embezzled trust account monies for his own personal use? A: Fine the broker-in-charge B: Revoke the broker-in-charge's license C: File criminal charges against the broker-in-charge D: Redesignate their license as expired
B: Revoke the broker-in-charge's license The NCREC does not not get involved in monetary disputes between licensees and consumers. NCREC would not order the licensee to pay damages, reimburse a consumer or return money to a trust account. Those actions may occur by a lawsuit or criminal prosecution, but the Commission's authority is limited to actions that affect the professional license, such as a suspension or revocation.
With regard to a real estate agent's pocket card, all of the following are CORRECT, EXCEPT: A: The card indicates whether the agent is a provisional broker or broker. B: The card indicates the postlicensing education the agent has taken and whether the agent is active or not. C: The pocket card displays the license expiration date. D: The pocket card displays the license number and the agent's signature.
B: The card indicates the postlicensing education the agent has taken and whether the agent is active or not. The pocket card contains the license number, license type and expiration date. It does not contain any information about whether the license is active or inactive. It does not contain the firm name and it does not indicate any education successfully completed by the licensee.
Which of the following does NOT need a firm license in North Carolina? A: a national franchise that is licensed to do business in multiple states and has formed a corporation to do real estate business in North Carolina B: a local sole proprietorship using a tradename or DBA C: a general partnership that consists of only two individuals D: a corporation that is already approved by the NC Secretary of State
B: a local sole proprietorship using a tradename or DBA A sole proprietorship does not need a firm license because it is not an entity. Every entity that is formed, such as a corporation, partnership or LLC must have a firm license.
With regard to property management agreements, which of the following is NOT correct? A: a property management agreement is a personal services contract B: a property agreement is between the agent within the property management firm and the owner C: a property management agreement creates a general agency relationship D: A provisional broker cannot be a property manager
B: a property agreement is between the agent within the property management firm and the owner
The NC Homestead Exemption would be of importance and have the greatest impact on: A: a borrower who is in default on their property and facing foreclosure B: an individual who filed bankruptcy due to excessive medical bills and judgment liens C: an investor who must engage in the short sale of an investment property Da married couple who is selling their primary residence to a buyer
B: an individual who filed bankruptcy due to excessive medical bills and judgment liens
A builder is offering a $100 gift card to real estate agents if they simply bring a buyer to look at the model home. In this case: A if an agent has an oral buyer agency agreement, they do not need to disclose to the buyer the possibility of receiving a gift card B: if an agent has an oral buyer agency agreement, they may disclose the existence of the gift card orally and if the buyer agency agreement is in writing they may disclose the existence of the gift card orally, but put the disclosure in writing prior to submitting any offer C: if the buyer is a customer, they must disclose the possibility of receiving a gift card D: the agent may not receive a gift card as this is a violation of RESPA
B: if an agent has an oral buyer agency agreement, they may disclose the existence of the gift card orally and if the buyer agency agreement is in writing they may disclose the existence of the gift card orally, but put the disclosure in writing prior to submitting any offer An agent can receive gifts or bonuses with the consent of their client. Disclosure should occur prior to the writing of an offer. The receipt of such compensation needs to be put into writing when the licensee has a written employment agreement with the client.
A provisional broker decides to leave one firm and join a different firm. Which of the following statements best describes the agent's situation: A: the agent must notify the NCREC within five days of their move B: if the agent had a transaction in progress at the previous firm, the provisional broker may be paid directly by their former BIC. They do not have to have the money flow through their current firm C: the provisional broker's license is expired when the provisional broker is in between two firms D: if the provisional broker decides to work for the new firm as a commercial agent and continue working for the old firm as a residential agent, they are allowed to do so as long as both BIC's notify the NCREC
B: if the agent had a transaction in progress at the previous firm, the provisional broker may be paid directly by their former BIC. They do not have to have the money flow through their current firm
A real estate broker is working with a buyer client. The broker wants to show a property that is listed with a competing real estate firm. When must the real estate broker, working with the buyer disclose their agency status to the listing licensee? A: first substantial contact with the firm when the buyer shows serious interest in the property B: initial contact with the firm when the agent first calls to show the property C: time of offer where the real estate broker gives confirmation of agency on the offer to purchase and contract D: time of contract where there is a meeting of the minds and the brokers confirm their agency status in the contract
B: initial contact with the firm when the agent first calls to show the property
An agent is working under an oral buyer's agency agreement. The agent knows the buyer is strongly interested in one of the homes seen by the buyer. The buyer is ready to write the offer, but refuses to sign a buyer's agency agreement. At this point, the agent may: A: write the offer, but advise the buyer they are now a sub-agent of the seller and anything the buyer has revealed must be provided to the seller B: not write the offer because the agent may not proceed without a written buyer representation agreement C: write the offer, but advise the buyer that they are a sub-agent of the seller, but they are not allowed to reveal to the seller what they have already learned about the buyer D: write and present the offer under an oral buyer's agency agreement, but reduce the buyer's agency agreement to writing prior to contract
B: not write the offer because the agent may not proceed without a written buyer representation agreement
The "delivery of instruments" rule applies to all documents; however a lease is an "exception" to this rule. The property manager, however, must give written notice to the owner of the name of the tenant, the property address and the rental amount within how many days after lease acceptance? A: 7 days B: 30 days C: 45 days D: 60 days
C: 45 days
Which of the following would be considered commingling? A: a real estate licensee owns and manages his own investment property. He has placed all security deposits in a trust account, but places each month's rent in his personal checking account B: a property management company that manages several Homeowner Associations has an interest bearing account trust account set up for each Homeowner Association. Every 30 days the property management company removes any interest earned from the trust accounts and transfers these monies to their business checking account C: A broker who is a BIC is acting as a property manager for several investors. The broker also owns several rental properties. Each month the broker deposits rents from all of the units into their trust account D: a general brokerage firm keeps some of its money in their trust account to cover bank fees
C: A broker who is a BIC is acting as a property manager for several investors. The broker also owns several rental properties. Each month the broker deposits rents from all of the units into their trust account. Commingling is the mixing of a client's monies with those belong to the broker or firm. The broker should not place their own rent into the trust account which is designated for the holding of money belonging to another.
Real estate licensees and firms can create entities. Which of the following is INCORRECT regarding real estate entities in North Carolina? A: Every entity, other than a sole proprietorship must have a firm license B: Firm licenses must be renewed annually no later than June 30th C: A licensed broker working for a firm cannot create their own legal entity D: Partnerships create the most liability for the general partners involved
C: A licensed broker working for a firm cannot create their own legal entity
The owner of a property tells her listing agent that the home is 2,500 square feet. The listing agent enters this information into the local MLS. A buyer presents an offer which is subsequently accepted by the seller. The appraisal report for the buyer indicates that the home is only 1,500 square feet. The buyer is unhappy and reports the agents to the NC Real Estate Commission. Who would be most subject to disciplinary action and why? A: the listing agent because they have primary responsibility to ensure the accuracy of data. The listing agent would be guilty of negligent misrepresentation B: the buyer's agent because they represent the buyer and should have reasonably known the difference between 1,500 square feet and 2,500 square feet. The buyer's agent would be guilty of negligent misrepresentation C: Both the buyer's agent and the listing agent because it is reasonable that both agents should have known the difference between 1,500 square feet and 2,500 square feet. Both agents would be found guilty of a negligent misrepresentation. D: Neither agent because it is not reasonable to be able to tell the difference between a 1,500 square foot home and a 2,500 square foot home. Neither agent would be guilty of a negligent misrepresentation
C: Both the buyer's agent and the listing agent because it is reasonable that both agents should have known the difference between 1,500 square feet and 2,500 square feet. Both agents would be found guilty of a negligent misrepresentation.
Jack, a licensee wants to make an offer to the seller on a property which Jack has listed on behalf of his firm ABC. Which of the following is CORRECT? A: A licensee may not make an offer on a property which they have listed B: Jack can only proceed with an offer if he obtains full and proper consent for dual agency C: Jack must withdraw as the listing agent prior to making an offer. If the seller wants to continue representation by the firm, the BIC can appoint another licensee to handle the listing D: So long as Jack discloses his status as a licensee and treats the seller fairly he may proceed with an offer
C: Jack must withdraw as the listing agent prior to making an offer. If the seller wants to continue representation by the firm, the BIC can appoint another licensee to handle the listing
Jack is a licensed real estate professional in Illinois. He has been a broker for many years, but is not licensed in NC. Jack has a friend who wants to purchase a home in Charlotte, NC. In regard to the representation of this buyer all of the following are TRUE, EXCEPT: A: Jack may refer the buyer to a licensed NC broker and receive a referral fee even though he is not licensed in NC. B: Jack may meet with the buyer in Illinois and explain the purchase process and answer questions about the NC transaction. C: So long as Jack affiliates with a NC broker he may accompany the buyer to North Carolina and assist in showing the buyer property D: The NC real estate commission does not have jurisdiction over Jack unless Jack conducts illegal brokerage activities in NC
C: So long as Jack affiliates with a NC broker he may accompany the buyer to North Carolina and assist in showing the buyer property
An unlicensed person who is managing their own rental property is subject to all of the following statutes, EXCEPT: A: Residential Agreements Act B: Security Deposit Act C: The NC Real Estate Commission rules regarding trust accounts D: The Vacation Rental Act
C: The NC Real Estate Commission rules regarding trust accounts All owners, landlords and managers whether licensed on not must comply with the Residential Rental Agreements Act, the Security Deposit Act and the Vacation Rental Act. Only licensees are subject to the jurisdiction of the NCREC.
All of the following are true regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT: A: The consumer is not required to sign the brochure. B: If the first substantial contact is by phone, the brochure must be provided within 3 calendar days. C: The brochure's use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions. D: The brochure must be given in all sales transactions at first substantial contact.
C: The brochure's use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions. Use of the brochure is mandatory in all residential and commercial transactions. It is not mandatory in lease transactions.
When a tenant dies who is the sole occupant of the lease the NC Residential Agreements Act provides that: A: This lease is automatically terminated upon the death of the tenant and the security deposit may be retained by the landlord or property manager B: The owner or property manager must pursue an eviction against the estate of the deceased C: The owner or property manager may file an Affidavit for Possession and must hold the tenant's personal property for 90 days D: The landlord or property manager may give a 90 day notice to terminate the lease and must account for and return the security deposit to the estate
C: The owner or property manager may file an Affidavit for Possession and must hold the tenant's personal property for 90 days. This is a special provision in the NC Residential Rental Agreements Act that is different than national real estate principles
Sally has had a buyer sign the Working with Real Estate Agents Brochure and execute an Exclusive Buyer Representation Agreement. How long does Sally have to deliver these documents to her Broker-in-Charge? A: Immediately B: Prior to Sally Being Paid Compensation C: Within 3 Calendar Days DWithin 5 Calendar Days
C: Within 3 Calendar Days
Judy is an unlicensed individual. Her parents are selling their own home as For Sale by Owner without the representation of a real estate licensee. While her parents are on vacation, Judy shows the home to some interested potential buyers and has long conversations with them about the conditions under which they may purchase her parent's home. Judy's parents do not pay her in cash but instead offer to send on an upcoming vacation. Is Judy in violation of NC Licensing Law? A: No because the home is her parent's own property and it is therefore exempt from the licensure requirement. B: No, because Judy did not receive any cash payment for her activity. C: Yes, Judy is engaged in the business of real estate without a license D: Yes because Judy is legally required to obtain a power of attorney from her parents in this instance.
C: Yes, Judy is engaged in the business of real estate without a license
Which of the following would result in a conflict of interest for which the licensee could be disciplined by the NCREC? A: an agent working for the buyer notifies the listing agent that the buyer is their sister B: a licensee notifies the listing agent that they are self-representing and are interested in purchasing the listing C: a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller D: an agent working as a sub-agent of the seller notifies the seller of confidential information the buyer shared
C: a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller
When a provisional broker terminates their relationship with a firm or BIC, what is the requirement for notification of the termination to NCREC? A: the provisional broker must notify the BIC within 10 days B: the BIC must notify NCREC of the termination within 10 days C: both the BIC and the provisional broker must notify NCREC immediately D: the notification must be received by NCREC within 30 days
C: both the BIC and the provisional broker must notify NCREC immediately
All of the following properties are exempt from the NC Residential Rental Agreements Act, EXCEPT: A: an investor renting a beach house to an out of state resident for a period of 60 days B: a private homeowner who is renting out a single family residence without a property manager C: hotels and motels D: an owner who rents a beach home out for a single weekend
C: hotels and motels
The firm holding the earnest money is allowed, by the NC Real Estate Commission to write a check from the trust account to the attorney: A: 3 days before the anticipated settlement date B: 5 days before the anticipated settlement date C: no sooner than 10 days before the anticipated settlement date D: 1 day before the anticipated settlement date
C: no sooner than 10 days before the anticipated settlement date
Which of the following is INCORRECT about the post licensing requirement of a provisional broker? A: the due date of the post licensing education is the anniversary date of licensure B: post licensing consists of three 30 hour courses which may be taken in any order and must be completed within 3 years of the date of licensure C: post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th D: if a provisional broker does not complete post licensing by the deadlines their license will become inactive
C: post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th
In regard to the use of standard forms and contracts by real estate professionals and the role of the North Carolina Real Estate Commission, NCREC: A: requires the use of specific forms and contracts B: drafts specific forms and contracts but does not mandate their use C: prescribes certain essential provisions that must be included in the forms and contracts D: has no authority regarding the content of real estate forms and contracts
C: prescribes certain essential provisions that must be included in the forms and contracts The NCREC does not create, write or prescribe the standard forms. Standard forms are created by a joint committee of the bar association and the REALTOR Association. However, the Commission does dictate that certain provisions must be included in the forms and contracts.
A buyer makes an earnest money deposit of $1,500 on a $15,000 property and then withdraws the offer before the seller can accept it. The broker is responsible for disposing of the earnest money by: A: turning it over to the seller B: deducting the commission and giving the balance to the seller C: returning it to the buyer D: depositing it into his or her trust account
C: returning it to the buyer A buyer may always withdraw an offer prior to the seller's acceptance. If the buyer withdraws their offer all due diligence fees and earnest money deposits should be returned to the buyer
A listing agent who was a BIC and a sole proprietor received a $500.00 weekend get-away to the North Carolina Mountains from their seller because of the outstanding service the listing agent provided. According to the NC Real Estate Commission Rules this would be acceptable because: A:any amount $500 or less is considered nominal B: the agent has a relationship with the client and is therefore allowed to accept gift monies for their services C: the agent may receive the bonus as long as it was provided for in a written agency agreement D: the agent may receive the bonus, but must notify prospective buyers even if they are represented by a different company
C: the agent may receive the bonus as long as it was provided for in a written agency agreement. Licensees may receive compensation in the form of bonuses with the permission of their client and their BIC. Here the sole proprietor is the BIC and can receive the bonus
An agent must discuss agency with a prospective buyer or seller at "first substantial contact." This is the moment the consumer begins talking about confidential information, motivation, personals wants, needs and desires or any terms and conditions they would accept regarding purchase of the home. All of the following information is required to be discussed/provided, EXCEPT: A: the agent must discuss their compensation B: the agent must provide the Working with Real Estate Agents brochure immediately if the meeting is face to face or within 3 calendar days if the meeting is over the phone or by email C: the agent must get the consumer's signature on the brochure's panel before proceeding forward in a transaction D: the agent must disclose, discuss and decide they type of agency relationship the consumer wishes to have with the agent and the agent is to warn the consumer not to say anything the consumer would not want another party to know prior to hiring the agent
C: the agent must get the consumer's signature on the brochure's panel before proceeding forward in a transaction
An agent must discuss agency with a prospective buyer or seller at "first substantial contact." This is the moment the consumer begins talking about confidential information, motivation, personals wants, needs and desires or any terms and conditions they would accept regarding purchase of the home. All of the following information is required to be discussed/provided, EXCEPT: A: the agent must discuss their compensation B: the agent must provide the Working with Real Estate Agents brochure immediately if the meeting is face to face or within 3 calendar days if the meeting is over the phone or by email C: the agent must get the consumer's signature on the brochure's panel before proceeding forward in a transaction D: the agent must disclose, discuss and decide they type of agency relationship the consumer wishes to have with the agent and the agent is to warn the consumer not to say anything the consumer would not want another party to know prior to hiring the agent
C: the agent must get the consumer's signature on the brochure's panel before proceeding forward in a transaction It is not required for the consumer to sign the brochure panel, but the agent must indicate that it was provided, date the panel and place it in the real estate transaction folder
When a broker is delivering 3rd party checks such as the earnest money made payable to a closing attorney and the due diligence fee made payable to the seller. If the contract is accepted and the broker is still in possession of the funds, which of the following is CORRECT: A:the checks must be delivered within 3 banking days B: the broker must always complete delivery of the checks once the offer is accepted C: the broker is acting as a courier and until the checks have been delivered they must follow the directions of the buyer D: the checks must first be deposited in the firm's trust account and then disbursed to the appropriate parties out of the account
C: the broker is acting as a courier and until the checks have been delivered they must follow the directions of the buyer. The broker when acting as a courier must follow the buyer's instructions until delivery of the checks has occurred
A landlord is renting a duplex rental unit. All of the following are TRUE regarding utilities connected to the property, EXCEPT: A: the landlord can charge separately for water, sewage and electricity B: the landlord must notify the tenant if water contamination exceeds the acceptable limit C: the landlord can disconnect the utilities if the tenant fails to pay the utility bills D: the landlord can collect for unpaid bills that remain at the end of the lease
C: the landlord can disconnect the utilities if the tenant fails to pay the utility bills A landlord is prohibited from disconnecting utilities due to the non-payment of the bills. A disconnection would be considered a "constructive eviction". If the bills are unpaid and the lease provided for their payment, the landlord must pursue an actual eviction of the tenant for breach of the lease.
When is a broker allowed to draft their own lease agreement? A: when managing an immediate family member's property B: when managing corporate-owned property as an independent contractor C: when managing their own property D: when providing free property management services to their neighbor
C: when managing their own property The drafting of leases and contracts is considered the unauthorized practice of law. Licensees only complete preprinted forms approved by the bar association. However, clients may draft their own contracts and agreements, and in this instance the broker is handling their own property, not representing another.
Under the NC Mechanic's Lien statute an owner of property must designate a mechanic's lien agent (MLA) under which of the following situations? A: an owner who is making improvements to public buildings B: the improvements are less than $30,0000 C: the improvements are to a primary residence D :new roof is being placed on a vacation rental unit that costs $42,000
D :new roof is being placed on a vacation rental unit that costs $42,000 An mechanic's lien agent is designate by the owner of the property to receive notice of the lien. This is not required for improvements to a primary residence or when the improvements are less than $30,000. Because these improvements are not to a primary residence and exceed $30,000 a lien agent must be designated under the statute
With regard to advertising, which of the following is INCORRECT? A: a licensee must have a client's permission before placing a sign in a yard B: In order for a nonresident commercial licensee to advertise their services in North Carolina, they must conspicuously identify themselves as "Limited non-resident Commercial Real Estate Broker" C: All real estate ads must contain the name of the firm or BIC D: A licensee may advertise a home as "Coming Soon" before they have a written listing agreement
D: A licensee may advertise a home as "Coming Soon" before they have a written listing agreement A licensee may not advertise or market a property without a written listing agreement
Which of the following can be contained in the Standard 2T Offer to Purchase & Contract? A: disclaimer of liability for actions of the firm or broker B: The fee splits between the listing firm and the selling firm C: The amount of liens and judgments that the seller has against the property D: An estimated date for settlement
D: An estimated date for settlement The amounts of compensation and fees are properly contained in the agency employment agreements, not the purchase contract between the seller and buyer. Real estate licensees may not disclaim liability for their conduct in regard to the transaction. Such limitation of liability clauses may not be utilized in either the Offer to Purchase and Contract nor any agency employment agreements.
Charlene is an active sole proprietor independent broker who teaches school full time. Charlene gives referrals to brokers and she receives referrals. Charlene is not required to be a broker-in-charge or affiliated with a firm so long as she does not: A: Receive any commissions B: Make any referrals C: Represent a buyer in a sales transaction D: Hands out business cards promoting herself as a broker
D: Hands out business cards promoting herself as a broker
A broker has received an offer from a prospective buyer on a property that the broker has listed for sale. How long does the broker have to deliver the offer to their seller/client? A: Immediately, but never later than 5 banking days B: Immediately, but never later than 5 calendar days C: Immediately, but never later than 3 banking days D: Immediately, but never later than 3 calendar days
D: Immediately, but never later than 3 calendar days All documents and offers in real estate transactions must be provided to the client, "immediately, but never later than 3 days." The three days are calendar days. Generally speaking, the time frames dealing with documents are always calendar days. The time frames dealing with deposits and money are always banking or business days.
All of the following are TRUE in regard to trust accounts and the earning of interest on such monies, EXCEPT: A:the accounts must be balanced and reconciled monthly B: An escrow account or trust account may be interest bearing so long as the client is informed and consents to the interest and it is paid in accordance with the client's agreement C: All interest that is being retained by the broker must be removed every 30 days D: It is illegal for the broker to retain the interest on trust accounts
D: It is illegal for the broker to retain the interest on trust accounts A broker may have a trust account with the consent of the client and disperse the interest as agreed.
John, a North Carolina licensee has completed all of his required post-licensing courses and is currently an active and current North Carolina Broker. He just terminated his affiliation with a BIC. Which of the following is TRUE regarding John. A: He must reaffiliate with a BIC in order to engage in the practice of real estate and in the meantime his license is inactive B: If John does not affiliate with a BIC he must become a BIC C: John may not remain a sole proprietor. If he does not affiliate with a BIC he must at least obtain a firm license D: John may engage in the practice of real estate and receive compensation so long as he does not perform any activities which would require him a BIC.
D: John may engage in the practice of real estate and receive compensation so long as he does not perform any activities which would require him a BIC.
Sherry is a provisional broker who works for a residential sales BIC and firm in North Carolina. Sherry has a couple of clients who want her to manage their rental properties. What are Sherry's options? A: Sherry can manage the properties on her own outside of her existing firm B: With the permission of her BIC Sherry can also affiliate with another firm that engages in property management. C: Sherry can manage the rental properties only if she obtains a power of attorney from the owners. D: Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC
D: Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC
A real estate agent is representing a buyer under a written buyer agency agreement. The buyer would like to see a builder's home. The builder is offering a $1,000 bonus to agents who sell at least 3 homes in the neighborhood. The real estate agent has not yet made a sale in that neighborhood. Which of the following actions should the agent take regarding disclosure of the bonus? A: Because the agent has not made a sale, they are not required to notify the buyer of a bonus until they are eligible for it. B: The agent should notify the buyer of the bonus at the time of contract. C: If the buyer client requests the agent share a portion of the bonus with them, the agent is to instruct them that it is illegal for the agent to share bonuses with unlicensed entities. D: The agent may notify the buyer of the bonus orally, but the bonus must be confirmed in writing before the client makes an offer to buy the home.
D: The agent may notify the buyer of the bonus orally, but the bonus must be confirmed in writing before the client makes an offer to buy the home.
When dealing with multiple offers, which of the following is a correct statement regarding North Carolina statutes and rules? A: The existence of multiple offers is a material fact and must be disclosed B: An licensee is always permitted to disclose the terms of multiple offers to competing buyers C: A seller may not accept an offer when multiple offers exist without giving the other buyers an opportunity to increase their offers D: The existence of multiple offers is not a material fact and the terms and conditions of multiple offers can only be disclosed with the consent of the offeror.
D: The existence of multiple offers is not a material fact and the terms and conditions of multiple offers can only be disclosed with the consent of the offeror.
Which of the following is NOT a correct statement when describing agents and firms responsibilities regarding pocket cards: A: an agent must keep their pocket card on them at all times when conducting real estate business B: all licenses expire on June 30th of each year. At that time, a new card will be issued once the agent pays their annual fee to the NCREC C: once the licensee removes their provisional broker status, they will be issued a new card D: a firm must display all pocket cards prominently
D: a firm must display all pocket cards prominently
Which of the following properties are subject to the NC Vacation Rental Act? A: a summer vacation rental that is rented for 180 days B: a beach cottage that is leased as a temporary residence for the summer C: a 30 day property rented by an out of state contractor who is working on repairs to the property D: a mountain condo that is rented to an out of state resident for 2 weeks and visiting North Carolina with their family
D: a mountain condo that is rented to an out of state resident for 2 weeks and visiting North Carolina with their family The VRA act applies to residential properties leased to out of state residents for less than 90 days and who are renting the property for vacation, recreation or leisure
The standard form NC Residential Rental Contract provides for all of the following, EXCEPT: A: lead based paint disclosure B: early termination by military personnel C: a provision that can require the tenant to obtain insurance and provide a renter's policy D: a provision that if the tenant breaches the lease the landlord is entitled to retain the security deposit
D: a provision that if the tenant breaches the lease the landlord is entitled to retain the security deposit. Regardless of how a lease ends there is no automatic forfeiture of a security deposit. It must be accounted for and only those deductions permitted by the Tenant Security Deposit Act are permitted.
All of the following are following are considered exempt from licensure and considered to be dealing with their own property, EXCEPT? A: the general partners of a partnership B: the managers of an LLC C: the officers, directors and W2 salaried employees of a corporation D: a sole proprietor and their W2 salaried employees
D: a sole proprietor and their W2 salaried employees
When must a firm practicing "designated agency" disclose to the seller the name of the agent representing the buyer. A: at first substantial contact with the seller B: at initial contact with the seller C: at the time the buyer's agent shows the seller's property D: at the time the offer is submitted to the seller
D: at the time the offer is submitted to the seller
All of the following would be examples of a licensee committing mortgage fraud, EXCEPT: A: misrepresenting on a purchase contract the occupancy of the property to the lender B: encouraging the buyer and the seller to have separate agreements outside of escrow and closing C: providing a lender with a gift letter for the borrower's downpayment when the licensee has been told that the funds are actually a loan and must be paid back D: crediting a portion of the licensee's commission to the borrower's closing costs on the Closing Disclosure
D: crediting a portion of the licensee's commission to the borrower's closing costs on the Closing Disclosure. A licensee can always share commissions with a client so long as the client is not performing brokerage services.
In the event that a licensee fails to deliver, within a reasonable time, a completed copy of any purchase agreement or offer to buy and sell real estate to the buyer and to the seller, the NCREC may take all of the following actions, EXCEPT: A: revoke the agent's license B: suspend the agent's license C: censure or reprimand the licensee D: set the agent's license to inactive status
D: set the agent's license to inactive status The NCREC does not set fines to inactive or expired status. These occur because a licensee failed to complete required education or renew the license, not as a result of disciplinary action
All of the following are TRUE if a time share is not properly registered in NC and a public offering statement is not provided to a buyer prior to contract under the NC Time Share Act, EXCEPT: A: the purchaser has a five day rescission period to cancel their purchase without penalty B: it is a felony to not register the units C: the purchaser may be entitled to a penalty of 10% of their purchase price or $3,000 whichever is greater D: the buyer and the developer may agree to waive both the 5 day cancellation period and the providing of a public offering statement.
D: the buyer and the developer may agree to waive both the 5 day cancellation period and the providing of a public offering statement. A buyer and a developer may not waive either the 5 day cancellation period or the providing of a public offering statement
In a NC real estate development subject to the NC subdivision requirements all of the following can occur prior to approval or recordation of the final plat map, EXCEPT: A: offers to purchase and contract may be written and accepted B: reservations may be taken and accepted C: deposits may be accepted and held D: transfer of title can occur
D: transfer of title can occur Transfer of title, closing and coveyance cannot occur until approval of the final plat map
A property manager may: A: advise the owner as to the tax consequences of rental income B: negotiate rents and obtain the owner's authority and approval after the fact C: allow unlicensed employees of the property management company to negotiate rents for long-term leases D: with the owner's permission, offer concessions as inducements to all prospective tenants
D: with the owner's permission, offer concessions as inducements to all prospective tenants Concessions are inducements to attract or retain tenants. With the owner's permission this is permissible. Unlicensed employees cannot negotiate. Property managers do not give tax advice and if the property manager is negotiating rents, they should have authority and approval from the owner before the fact,not after the fact.