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NEW QUESTION # 74
Friends Jack, Jill, and Harold bought a warehouse property in North Carolina, and the deed simply stated, "as joint tenants." Assuming Harold had a will when he died, who got his share of the warehouse?
- A. Harold's spouse
- B. Harold's heirs
- C. It's up to the court to decide
- D. Jack and Jill
Answer: D
Explanation:
In North Carolina, joint tenancy includes the right of survivorship unless otherwise stated. If a deed says "as joint tenants," and right of survivorship is implied or established, then Harold's share automatically passes to the surviving joint tenants (Jack and Jill), regardless of Harold's will. Since nothing indicates the tenancy was anything other than traditional joint tenancy with survivorship, Jack and Jill receive Harold's share.
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NEW QUESTION # 75
Which of the following is a key characteristic of an exclusive right to sell listing agreement?
- A. The broker must be the procuring cause of the sale to earn a commission.
- B. The broker is guaranteed a commission if the property sells during the listing term.
- C. The seller can list the property with multiple brokers.
- D. The seller does not owe a commission if they sell the property themselves.
Answer: B
Explanation:
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.
NEW QUESTION # 76
According to the North Carolina Real Estate Commission Rules, what must be included in a written agency agreement?
- A. A broker protection clause
- B. An automatic renewal clause
- C. The broker's license number
- D. The expiration date of the broker's license
Answer: C
Explanation:
According to 21 NCAC 58A .0104(a), a written agency agreement in North Carolina must include the broker' s license number and a definite expiration date. These are required by the Commission to ensure regulatory clarity and accountability. A broker protection clause is optional and negotiated between parties. Automatic renewal clauses are prohibited in listing agreements. Therefore, the correct and required component is the broker's license number.
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NEW QUESTION # 77
A real estate broker has assisted an investor with the purchase of a number of commercial properties. The investor will be out of the country for part of the year and asks the broker to manage all aspects of those properties during that time, including advertising and leasing. The real estate broker will be considered a(n):
- A. special agent
- B. general agent
- C. ostensible agent
- D. universal agent
Answer: B
Explanation:
A general agent is authorized to handle a broad range of matters for a client, such as property management or handling day-to-day operations of a business or estate. In this case, the broker is managing all aspects of the investor's real estate portfolio, which qualifies as a general agency relationship. A special agent performs only specific tasks (like listing or selling a single property), and a universal agent has unlimited authority, which is rare. Therefore, the correct answer is B.
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NEW QUESTION # 78
A North Carolina broker deposits a buyer's earnest money check into their firm's general fund so that they can pay the rent on the brokerage office. This is an example of:
- A. commingling.
- B. capitalization.
- C. puffing.
- D. negligence.
Answer: A
Explanation:
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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NEW QUESTION # 79
What are the four elements of value that must exist in harmony to maximize the value of real property?
- A. Immobility, scarcity, transferability, and demand
- B. Right of use, enjoyment, exclusivity, and disposal
- C. Uniqueness, immobility, indestructibility, and demand
- D. Demand, utility, scarcity, and transferability
Answer: D
Explanation:
The four economic characteristics necessary for real property to have value are:
Demand: There must be a desire or need for the property.
Utility: The property must serve a purpose or satisfy a need.
Scarcity: There must be a limited supply of similar properties.
Transferability: The ownership rights must be transferable from one party to another.
These four components form the acronym DUST and are foundational in property valuation. The correct answer is A.
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NEW QUESTION # 80
Which of the following is an example of encroachment?
- A. One party regularly deposits trash on the land of another without permission
- B. A prescriptive easement
- C. A utility company's easement in gross
- D. A garage that extends over the boundary line between two adjoining lots
Answer: D
Explanation:
Encroachmentis a physical intrusion by a structure onto neighboring property. A garage that crosses property lines without permission is the textbook definition of encroachment, matching optionD. Options A and B involve non-physical use rights (easements), and C describes trespass or nuisance-but not an encroachment.
Thus,Dis accurate per NCREC definitions.
NEW QUESTION # 81
Which of the following BEST describes a seller's market?
- A. Buyers have more negotiating power.
- B. There are more sellers than buyers.
- C. Sellers often receive multiple offers on their property.
- D. Home prices are generally falling.
Answer: C
Explanation:
A "seller's market" occurs whendemand exceeds supply, resulting in strong buyer competition. The most common real-world effect ismultiple offers on listed properties, intensifying competition and giving sellers leverage. This matches optionB. The definitions in NCREC study guides, textbooks, and appraisal resources all align with this scenario.
NEW QUESTION # 82
A seller sold their house for $600,000. They are responsible for paying a 6% commission to the listing broker, closing costs of $8,500, and the remaining balance on their prior mortgage loan of $60,000. How much will they net on the sale?
- A. $495,500
- B. $499,610
- C. $531,500
- D. $564,000
Answer: A
Explanation:
Total sale price = $600,000
Commission = $600,000 × 0.06 = $36,000
Total deductions = $36,000 (commission) + $8,500 (closing costs) + $60,000 (loan payoff) = $104,500 Net proceeds = $600,000 - $104,500 = $495,500 Correct answer: B
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NEW QUESTION # 83
Under the provisions of the federal Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA), a lender must provide a borrower with the Closing Disclosure at least _________ prior to loan consummation.
- A. 7 calendar days
- B. 3 business days
- C. 3 calendar days
- D. 1 business day
Answer: B
Explanation:
TILA-RESPA Integrated Disclosure rules (TRID) require that theClosing Disclosurebe delivered to the consumerno later than 3 business days before consummationof the loan. This mandates a three-business- day review period for borrowers before finalizing the loan-makingoption Bcorrect.
NEW QUESTION # 84
When attempting to distinguish a fixture from personal property, one can ignore the:
- A. method of attachment.
- B. intent of the person who attached it.
- C. cost of the item.
- D. item's adaptability.
Answer: C
Explanation:
In determining whether an item is a fixture (real property) or personal property, North Carolina courts and the NCREC consider several tests: method of attachment, adaptability of the item for the real estate's purpose, intent of the person who installed it, and whether removal would cause damage. The cost of the item is irrelevant to whether it is a fixture or not. Therefore, the correct answer is B.
NEW QUESTION # 85
A lease with a simple exchange of rent for occupancy, under which the tenant pays none of the costs of ownership, is known as a(n):
- A. percentage lease
- B. net lease
- C. gross lease
- D. graduated lease
Answer: C
Explanation:
In a gross lease, the tenant pays a fixed rent amount, and the landlord is responsible for property taxes, insurance, and maintenance costs. This type of lease is common in residential rentals and contrasts with a net lease, where the tenant pays some or all ownership costs. A graduated lease involves rent increases at intervals, and a percentage lease involves paying rent based on the tenant's gross business income. Therefore, the correct answer is B, gross lease.
NEW QUESTION # 86
Which statement about acknowledging a deed is TRUE?
- A. Acknowledging a deed requires the signature of the listing agent.
- B. A deed must be acknowledged to be valid.
- C. A deed must be acknowledged to be recorded.
- D. A deed must be acknowledged or the transaction cannot close.
Answer: C
Explanation:
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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NEW QUESTION # 87
Bernie is the broker-in-charge at a brokerage firm located in North Carolina. He is actively involved in listing and selling properties. Mei is a provisional broker at the same brokerage firm. She has a buyer client who has expressed interest in one of Bernie's listings. In this transaction, what would be a permissible agency arrangement?
- A. Bernie and Mei would be designated agents of their respective clients.
- B. Bernie would be the designated agent for both buyer and seller.
- C. Bernie and Mei could act as dual agents to both clients.
- D. Bernie and Mei each have a single agency relationship with their respective clients.
Answer: A
Explanation:
Under North Carolina agency rules,dual agencyis permissible only ifwritten informed consentis secured from both parties, and typically involvesdesignated agencyto avoid conflict of interest. Bernie could serve as thedesignated agentfor the seller (listing), and Mei could serve as thedesignated agentfor the buyer, each separately representing their client while the brokerage acts as dual agent at the firm level Option C accurately reflects this legal structure. Option A (non-designated dual agency) is rarely allowed, B leaves Bernie unrepresented for seller, and D improperly places one agent on both sides.
NEW QUESTION # 88
Under the provisions of the North Carolina Subdivision Streets Disclosure Law, a subdivision developer must give a prospective buyer a disclosure statement that indicates:
- A. the anticipated cost of assessments for public or private streets.
- B. that the developer is responsible for maintaining private streets.
- C. whether the property's frontage street is subject to flooding.
- D. whether the property's frontage street is public or private.
Answer: D
Explanation:
The North Carolina Subdivision Streets Disclosure Law requires developers to provide written disclosure to prospective buyers regarding whether the subdivision streets are intended to be publicly maintained (by the NCDOT or a municipality) or privately maintained. This ensures that buyers are aware of their responsibility for street upkeep if they are private. Therefore, the correct answer is A.
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NEW QUESTION # 89
A property owner gave a five-acre parcel of land to a church as long as the church does not build a parking lot on it. What kind of estate does the church have for this property?
- A. Conventional life estate
- B. Life estate pur autre vie
- C. Defeasible fee estate
- D. Fee simple absolute
Answer: C
Explanation:
A defeasible fee estate (specifically, a fee simple determinable or fee simple subject to a condition subsequent) is one that may be voided if a specific condition is violated or a required event does not occur. In this case, the condition is that the church cannot build a parking lot. If it does, ownership may revert to the grantor. Therefore, the correct answer is B.
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NEW QUESTION # 90
According to the North Carolina Real Estate Commission Rules, a broker must deliver a copy of any signed purchase agreement to their client or customer within ____ of receipt.
- A. 2 days
- B. 3 days
- C. 4 days
- D. 24 hours
Answer: D
Explanation:
NCREC rules require that brokers deliver a copy of any executed (signed) document to all parties within 3 calendar days. However, a stricter rule applies to offers and contracts: any signed agency agreement or sales contract must be delivered within 3 days, and any executed offer must be delivered "immediately, but in no case later than 3 days." Best practice-and NCREC recommendation-is within 24 hours. Therefore, the most accurate and safe answer is A.
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NEW QUESTION # 91
According to the North Carolina Real Estate Commission Rules, what must be included in a written agency agreement?
- A. A broker protection clause
- B. An automatic renewal clause
- C. The broker's license number
- D. The expiration date of the broker's license
Answer: C
Explanation:
According to 21 NCAC 58A .0104(a), a written agency agreement in North Carolina must include the broker' s license number and a definite expiration date. These are required by the Commission to ensure regulatory clarity and accountability. A broker protection clause is optional and negotiated between parties. Automatic renewal clauses are prohibited in listing agreements. Therefore, the correct and required component is the broker's license number.
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NEW QUESTION # 92
In North Carolina, an earnest money deposit that is paid by check must be deposited into a trust account no later than:
- A. 3 banking days after receipt.
- B. 5 banking days after acceptance of the offer.
- C. 3 banking days after acceptance of the offer.
- D. 5 banking days after receipt.
Answer: C
Explanation:
According to North Carolina Real Estate Commission rules, if an earnest money deposit is received with an offer and held by the broker, it must be deposited in the trust account no later than 3 banking days after the broker has received notice of contract acceptance (i.e., when the offer becomes a binding contract). Therefore, the correct answer is B.
NEW QUESTION # 93
It would be considered the unauthorized practice of law for a North Carolina real estate broker to:
- A. complete a preprinted offer or sales contract form that has been drafted by an attorney.
- B. modify an electronically generated preprinted form by marking a change requested by a client.
- C. draft an addendum to an offer if there are any special contract provisions.
- D. refer a client to an attorney to draft an addendum if there are special contract provisions.
Answer: C
Explanation:
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.
NEW QUESTION # 94
If a seller whose property is currently listed with another company initiates a conversation with a broker about the possibility of the broker becoming their new listing agent, the broker:
- A. must advise the seller to contact an attorney.
- B. may discuss the terms of a possible listing agreement that would begin after the current listing ends.
- C. may suggest that the seller terminate the current listing agreement early.
- D. may not discuss the terms of any possible future listing agreement.
Answer: B
Explanation:
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.
NEW QUESTION # 95
If a buyer defaults on a purchase agreement just prior to settlement, what clause in the contract would likely allow the seller to keep the earnest money deposit?
- A. Liquidated damages
- B. Compensatory damages
- C. Punitive damages
- D. Actual damages
Answer: A
Explanation:
Liquidated damages refer to a pre-agreed amount of compensation (often the earnest money deposit) that one party is entitled to retain in the event the other party breaches the contract. In North Carolina, the standard Offer to Purchase and Contract includes provisions stating that if a buyer breaches after due diligence, the seller may retain the earnest money as liquidated damages. Therefore, the correct answer is C.
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NEW QUESTION # 96
The owner of a house located in North Carolina sold it to a buyer for $523,400. The buyer finances $418,700 and makes a down payment of $104,700. At settlement, what is the required excise (transfer) tax, and who pays it?
- A. $838.00, paid by the buyer
- B. $523.40, paid by the seller
- C. $1,047.00, paid by the seller
- D. $1,046.80, paid by the buyer
Answer: C
Explanation:
In North Carolina, the excise (transfer) tax is calculated at a rate of $1 per $500 of the sale price, rounded down to the nearest $500. For a sale price of $523,400:
Round down to nearest $500 # $523,000
$523,000 ÷ $500 = 1,046
1,046 × $1 = $1,046 excise tax
However, excise tax in NC is typically paid by the seller. Therefore, the correct answer is D: $1,047.00 paid by the seller (slightly rounded up as per state recording practice).
NEW QUESTION # 97
Which of these activities is prohibited by federal antitrust laws?
- A. Racial discrimination
- B. Providing legal advice
- C. Price gouging
- D. Price-fixing
Answer: D
Explanation:
Federal antitrust laws, including the Sherman Antitrust Act, prohibit activities that restrict fair competition.
One of the key prohibited practices is price-fixing-an agreement among competitors to set commission rates or pricing, which violates the requirement for competitive, independent business conduct. Price gouging is related to consumer protection during emergencies, and racial discrimination falls under fair housing law, not antitrust. Providing legal advice is a separate licensing concern. Therefore, A is correct.
NEW QUESTION # 98
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