NORTH CAROLINA REAL ESTATE PRACTICE TEST QUESTIONS

1. A broker lists a residential property outside of town for sale. Three rooms in the house are currently being used as bedrooms. The county septic permit is for a two-bedroom house. Which of the following statements is true?

A) The broker must advertise the property for sale as a two-bedroom house

B) The broker must advertise the property for sale as a three-bedroom house

C) The property cannot be listed unless the owner removes the bedroom furniture from one room

D) The property cannot be listed until the county health department issues a septic permit for a three-bedroom house.

2. In North Carolina, may a broker who is working with a buyer as a buyers agent lawfully share with the unlicensed buyer a part of the commission the broker earns on the buyers transaction

A) No, because an unlicensed person may not lawfully receive any compensation derived from a real estate brokerage transaction

B) No, because the payment to the unlicensed buyer would violate the Real Estate Settlement Procedures Act (RESPA)

C) Yes, subject to lender approval and disclosure on the settlement statement because the buyer is a party to the transaction

D) Yes, because commissions earned by a licensed broker working as a buyers agent

3. The North Carolina Real Estate Commissions publication Working with Real Estate Agents

A) becomes a binding agency contract when properly dated and signed by all parties to the agreement

B) briefly explains real estate agency relationships and the duties of real estate agents

C) makes clear to consumers that licensees may under no circumstance work with buyers without a written buyer agent agreement

D) must be signed, dated, and attached to each offer to purchase presented to a seller by a buyers agent

4. In North Carolina, a written buyer agency agreement

A) may be automatically extended on a month-to-month basis following the initial term of the agreement

B) must be for a definite period of time and must terminate without prior notice on the expiration date

C) may be for an indefinite period of time provided the buyer is permitted to terminate the agreement at any time

D) may not exceed an initial period of 180 days, buy may be continuously renewed at the option of either party

5. A North Carolina real estate licensee is working as the agent of a buyer who becomes interested in a property listed by the licensees real estate firm. To act as a dual agent in the transaction, the licensee must obtain both the buyers and the sellers written consent not later than the time the

A) licensee makes an appointment to show the buyer the sellers property

B) licensee shows the buyer the sellers property

C) buyer makes an offer to purchase the sellers property

D) seller accepts an offer from the buyer

6. The standard offer to purchase contract form jointly approved by the North Carolina Association of REALTORS and the North Carolina Bar association contemplates that the buyer and seller may negotiate with each other related to the transaction after contract formation

A) any agreement with respect to property repairs

B) the party that will obtain any homeowners warranty

C) any additional earnest money

D) any payments by seller for the buyers closing costs

7. The offer to purchase and contract form approved jointly by the North Carolina Association of REALTORS provides for the inclusion of information about all of the following EXCEPT

A) any unpaid special assessments on the property

B) any personal property to be included in the sale

C) the possession date

D) the brokerage commission

8. In real estate transactions involving a loan and use of the standard sales contract form approved by the North Carolina Association of REALTORS and the North Carolina Bar Association, the closing is

A) The deed, deed of trust, and all other closing documents have been signed by the appropriate parties

B) the settlement meeting has been completed

C) the deed and deed of trust have been recorded

D) the proceeds of the sale have been disbursed in accordance with the closing disclosure

10. An out-of-town property owner hired a North Carolina broker to list and sell a desirable commercial lot. The seller set the listing price at $30,000. The Broker knew the lot was worth at least $50,000 but he did NOT tell the owner. The broker bought the lot himself for $30,000 and resold it shortly thereafter for $50,000. Which of the following is correct?

A) The brokers purchase of his own listing is illegal commingling

B) the broker did nothing wrong and is entitled to the $20,000 profit

C) a court could order the broker to pay the $20,000 profit to the seller

D) the commission could order the broker the to pay the $20,000 profit to the seller

11. Which of the following best describes first substantial contact between a real estate licensee and a prospective buyer for agency disclosure purposes in North Carolina?

A) The first face-to-face meeting between a licensee and a prospective buyer

B) the point in time when discussion between a licensee and a prospective buyer begins to focus on the prospective buyers specific property needs and desires

C) the point in time when a licensee and prospective buyer begins to prepare a written offer to purchase on a listed property

D) the first time a prospective buyer inquired about a listed property

12. The fact that a listed property is located in a flood zone must be disclosed to potential buyers when the

A) buyers are obtaining a federally-related mortgage loan

B) property is located in a federally designed flood hazard area

C) seller currently maintains flood insurance policy on the property

D) buyer has state that the need for flood insurance is a primary concern for him/her

Please number the answers and a brief explanation if possible. Thank you in advanced!