NCREC-Broker-N NC Real Estate Broker National Questions and Answers

A variance is an exception to a zoning ordinance granted by the local zoning board when strict enforcement would cause undue hardship due to unique property conditions. In this case, the lot is too narrow for the minimum width requirement, but the buyer can seek a variance to proceed legally. A nonconforming use applies to existing properties that no longer comply after zoning changes. Therefore, the correct answer is D.

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NCREC rules allow a broker to be affiliated with more than one firm or broker-in-charge at the same time, but only with the express written consent of both BICs. This is often the case when brokers want to work in both commercial and residential markets or split their time between geographic locations. Therefore, the correct answer is A.

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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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To calculate the percentage of loss:

Loss = Original Price − Sale Price = $500,000 − $480,000 = $20,000

Percentage loss = ($20,000 ÷ $500,000) × 100 = 4%

Correct answer: A

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Step 1: Calculate Gross Scheduled Income

6 units × $2,500/month × 12 months = $180,000

Step 2: Deduct Vacancy Loss (4%)

$180,000 × 0.04 = $7,200

Effective Gross Income = $180,000 − $7,200 = $172,800

Step 3: Add Other Income

$172,800 + $3,000 (advertising fees) = $175,800

Step 4: Subtract Operating Expenses (ignore debt service)

$175,800 − $40,000 = $135,800

Note: Net Operating Income (NOI) excludes debt service.

Correct answer: C

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According to North Carolina Real Estate Commission rules, any compensation—monetary or non-monetary—that a broker expects to receive from someone other than their client (e.g., a gift card from a seller) must be disclosed in writing before the broker shows the property. Brokers owe this duty of disclosure regardless of the form or source of the compensation. Therefore, Chris must disclose the offer of the $500 gift card before showing that home to Ike.

The North Carolina Good Funds Settlement Act requires that no disbursement of funds—including broker commissions—can be made until the deed and any deed of trust are recorded in the public records. Only once the documents are recorded can the closing attorney legally disburse funds. Thus, brokers should expect to be paid only after recording, making answer C correct.

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For a contract to be valid and enforceable, all parties must have legal capacity at the time of signing. If the buyer can prove they were legally incompetent due to mental illness at the time of execution, they may have the right to void the contract—even if they later regained competence. Temporary or situational incompetence at the time of contract formation is legally sufficient to make the contract voidable. Therefore, the correct answer is D.

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North Carolina brokers are permitted to complete preprinted, attorney-approved forms (like Standard Form 2-T) and make handwritten changes at the direction of clients. However, they may not draft legal language or new provisions—doing so constitutes the unauthorized practice of law. Brokers must refer clients to an attorney when custom provisions or legal interpretations are needed. Therefore, the correct answer is B.

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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.

Under North Carolina Real Estate Commission (NCREC) rules, a broker may begin working with a buyer under oral buyer agency but must have a signed, written buyer agency agreement in place before presenting any offer on behalf of that buyer. Oral agency cannot be exclusive or have a defined time frame. Additionally, the broker must provide the Working with Real Estate Agents Disclosure at first substantial contact. Therefore, oral buyer agency is permissible temporarily but must convert to a written agreement before drafting or presenting an offer, making option C correct.

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Commingling is the illegal act of mixing a client’s funds—such as earnest money—with the broker’s personal or business funds. North Carolina law strictly prohibits brokers from depositing trust money (like earnest deposits) into the firm’s general operating account. In this case, the broker used the funds to pay rent, which could also constitute conversion (intentional misuse). But since the question specifically addresses the deposit, the correct answer is B – commingling.

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ThePrinciple of Regressionin real estate appraisal dictates that the value of a higher-quality property is negatively impacted by surrounding inferior properties. In simple terms, even a well-maintained, high-end home can lose value if it's located among less desirable homes. PrepAgent explains:

“The principle of regression states that the value of a more expensive property will decrease when less expensive properties come into the area.”

This clearly matches the definition and corresponds exactly to optionD.

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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Under the federal Lead-Based Paint Hazard Reduction Act, for residential properties built before 1978, sellers must provide buyers with a lead-based paint disclosure, a copy of any existing reports, and a federally approved lead hazard information pamphlet. In addition, buyers must be given a 10-day period to conduct their own lead inspection or risk assessment (unless waived in writing). Sellers are not required to test or remediate. Therefore, the correct answer is B.

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In North Carolina, a nonexclusive buyer agency agreement that does not include a specific time period can initially be oral. However, before writing or presenting any offers on behalf of the buyer, the agreement must be put into writing and signed. Exclusive buyer agency agreements and any agreement that includes a fixed term must be in writing from the beginning. Therefore, the correct answer is D.

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The total commission earned was 7% of the final sales price ($695,000 × 0.07 = $48,650).

The cooperating (buyer’s) broker received 3% ($695,000 × 0.03 = $20,850).

The listing brokerage firm retained the difference:

$48,650 – $20,850 = $27,800.

So, the listing firm earned $27,800 — answer C.

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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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According to theNCREC Broker National (Broker-N)guidelines and the Federal Telephone Consumer Protection Act (TCPA), a real estate business may continue to contact a former client for up to18 monthsafter the conclusion of a transaction under the established business relationship exception, even if the client is on the National Do Not Call Registry. The NCREC’s official materials affirm this 18-month contact window.

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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Under NC General Statutes Chapter 42A (Vacation Rental Act), a landlord may employ theexpedited eviction process(using magistrate and four-hour notice) when a tenant under a vacation rental agreement (30 days or fewer) breaches the contract—such as overstaying, failing to pay rent, or materially violating terms. A two-week vacation rental falls under this provisionsog.unc.edufairhousingnc.org+14ncleg.gov+14nclamp.gov+14fairhousingnc.org. Option A is standard eviction, not expedited; B and C don't qualify under expedited procedures.

In the income approach to real estate valuation, the formula used is:

Value = Net Operating Income (NOI) ÷ Capitalization Rate

This method estimates the value of an income-producing property based on its ability to generate income. Using this formula, you divide the NOI by the cap rate to find the value. Gross income is not used without adjustments, and multiplication or inverting the formula is incorrect. Therefore, the correct answer is B.

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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.

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To qualify for Broker-in-Charge Eligible status in North Carolina, a broker must have at least three years of full-time brokerage experience (or equivalent part-time experience) within the past five years. Additionally, they must complete the 12-hour Broker-in-Charge Course. Option B is incorrect due to the course length (not 24 hours), and option D is incorrect because a broker-in-charge can only manage one physical office location. Option C is incorrect as branch offices may also have a separate BIC. Therefore, A is the correct answer.

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According to the North Carolina Timeshare Act, a purchaser of a timeshare has the right to cancel the purchase without penalty within five (5) calendar days after execution of the contract. This right of rescission is non-waivable and must be disclosed in the contract. The cancellation does not require a reason and must be honored fully. Therefore, the correct answer is B.

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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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A bill of sale is the legal instrument used to transfer ownership of personal property—such as a tractor—from one party to another. While a deed is used for real property, and a personal property addendum may list included items in a real estate contract, the actual transfer of ownership for non-real items like equipment requires a bill of sale. Therefore, the correct answer is D.

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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.

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Per theNorth Carolina Real Estate Commission statutes, the Commission consists of7 members, a majority of whom must be active real estate brokers. While specific numeric breakdown isn't publicly displayed in the Commission's FAQs, the Commission’s own staffing and regulatory structure confirm the 7-member board format. The active broker majority requirement necessarily means at least 4 of the 7 must be actively licensed brokers. Therefore,C (7 members)is the correct answer.

Anexclusive right to selllisting gives one broker the sole authority to market and sell a property. The broker is entitled to a commissionno matter who procures the buyer, even if the seller finds the buyer independently during the listing period commission payment upon sale within the term—matchingoption A. Option B is false (that applies to exclusive agency); C applies to open or exclusive-agency; and D conflicts with the exclusivity provision.

Steering is the illegal practice of guiding prospective buyers toward or away from certain neighborhoods based on race, ethnicity, religion, or other protected characteristics. Even if the request comes from the buyer, complying with such directions violates the Fair Housing Act. The correct answer is D — steering.

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Under the NCREC Rules and Code of Ethics, a broker may not interfere with another firm’s existing exclusive listing agreement. However, if a seller independently initiates a conversation, a broker is allowed to discuss the terms of a future agreement — but that agreement must begin only after the current listing expires. The broker must not suggest early termination or breach of contract. Therefore, option A accurately reflects what is legally and ethically permissible.

In the sales comparison approach, appraisers always make adjustments to the comparable properties — never to the subject property — to reflect how they differ from the subject. This ensures that all comparables are on an equal footing with the subject being appraised. Thus, answer B is correct.

In North Carolina, a deed must be in writing, signed by the grantor, and delivered to the grantee to be valid. However, acknowledgment (notarization) is not required for validity—but it is required for the deed to be recorded at the county Register of Deeds. Recording provides constructive notice of ownership. Therefore, the correct answer is C.

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