Free North Carolina Real Estate Practice Exam

Q1.A buyer in North Carolina pays a $1,000 earnest money deposit when signing the Offer to Purchase and Contract (Form 2-T). The buyer later terminates the contract after the due diligence period has expired without a valid contractual basis. What is the seller's most likely remedy regarding the earnest money?

• A.The earnest money must be returned to the buyer within three business days.
• B.The earnest money is automatically forfeited to the listing broker.
• C.The seller is entitled to retain the earnest money as liquidated damages.
• D.The earnest money is deposited into the NC Real Estate Commission's trust fund.

Q2.A broker's written buyer representation agreement has expired, but the buyer continues to work with the broker's affiliated salesperson without signing a renewal. The buyer then makes an offer on a property, and the transaction closes. Under general agency and brokerage principles, which statement best describes the agency relationship that existed at closing?

• A.An implied agency likely arose through the continued conduct of the parties, potentially creating enforceable duties and exposing the broker to liability without a formal written agreement.
• B.No agency relationship existed because agency can only be created by a written agreement, so the broker had no duties to the buyer at closing.
• C.The broker automatically became a transaction broker upon expiration of the written agreement, eliminating all fiduciary duties.
• D.The expired agreement was automatically renewed by operation of law when the buyer continued to use the salesperson's services.

Q3.A purchase contract includes a provision that the sale is contingent upon the buyer selling their current home within 60 days. If the buyer's home does not sell within this timeframe, what happens to the contract?

• A.The contract automatically renews for another 60 days
• B.The seller can sue for specific performance
• C.The buyer must proceed with the purchase regardless
• D.The contract becomes voidable at the buyer's option

Q4.Under North Carolina law, when a real estate firm's agent represents both the buyer and the seller in the same transaction as a dual agent, what must occur before the dual agency can be legally effective?

• A.Both the buyer and the seller must give their informed written consent to the dual agency arrangement
• B.Only the seller must consent in writing, since the agent is the listing agent
• C.The broker-in-charge must approve the arrangement, but no client consent is required
• D.Dual agency is prohibited in North Carolina and can never be legally effective

Q5.What is the fundamental legal relationship that exists between a real estate agent and their client?

• A.Fiduciary relationship
• B.Independent contractor relationship
• C.Employer-employee relationship
• D.Vendor-customer relationship

Q6.In a real estate purchase contract, what is the legal effect of a condition precedent that fails to occur?

• A.The contract becomes voidable at either party's option
• B.The contract remains valid but performance is delayed
• C.The parties' obligations under the contract are discharged
• D.The contract becomes an option contract

Q7.RESPA (Real Estate Settlement Procedures Act) primarily protects consumers by requiring disclosure of what information?

• A.Property inspection results
• B.Property tax assessments
• C.Settlement costs and loan servicing details
• D.Homeowners insurance requirements

Q8.A provisional broker working under a broker-in-charge receives a $5,000 earnest money deposit on a Friday afternoon. The buyer pays with a personal check. Under North Carolina Commission rules, by when must the deposit be deposited into the firm's trust account?

• A.By the end of the next business day after receipt
• B.Within three banking days of the offer being accepted
• C.No later than three days after the contract is signed by all parties
• D.Immediately upon receipt, the same day the check is received

Q9.A broker-in-charge (BIC) at a real estate firm goes on an extended medical leave and is absent from supervision of the office for more than 90 consecutive days. Under NC General Statutes Chapter 93A and Commission rules, which of the following statements is MOST accurate?

• A.The firm may continue to operate normally because a BIC designation is permanent once granted.
• B.Another broker at the office who holds an active broker license automatically becomes the acting BIC after 30 days of absence.
• C.The firm must designate a qualified broker to serve as BIC and notify the North Carolina Real Estate Commission of the change.
• D.The provisional brokers at the firm may continue to conduct brokerage independently during the BIC's absence.

Q10.Under the North Carolina Real Estate License Law, what is the minimum age requirement for an applicant seeking a real estate salesperson (broker) license?

• A.16 years old
• B.18 years old
• C.19 years old
• D.21 years old

Q11.A North Carolina firm represents both the seller and the buyer in the same transaction as a dual agent. The buyer asks the dual agent what the seller's lowest acceptable price is. Under 21 NCAC 58A .0104, the dual agent must:

• A.Disclose the seller's bottom line to the buyer because full disclosure is required under dual agency
• B.Refuse to answer and explain that as a dual agent, the agent cannot disclose the seller's confidential negotiating position
• C.Withdraw from the transaction immediately because the question creates an irreconcilable conflict
• D.Ask the seller for permission and disclose the information only if the seller consents

Q12.When investigating a complaint alleging ECOA (Equal Credit Opportunity Act) violations by a real estate licensee, what is the primary limitation on a state licensing board's authority?

• A.The board can only discipline licensees, not lenders or mortgage brokers
• B.The board cannot investigate credit-related complaints
• C.ECOA violations must be prosecuted exclusively in federal court
• D.The board cannot access credit files during investigations

Q13.Under the North Carolina State Fair Housing Act, which agency is primarily responsible for receiving and investigating fair housing complaints filed by aggrieved individuals?

• A.North Carolina Real Estate Commission (NCREC)
• B.North Carolina Human Relations Commission
• C.North Carolina Department of Justice
• D.North Carolina Department of Commerce

Q14.Under NC General Statutes § 93A-2, which of the following activities performed for compensation on behalf of ANOTHER person MOST clearly requires a North Carolina broker license?

• A.Auctioning real property under a license issued by the NC Auctioneer Licensing Board, without also holding a broker license
• B.Managing a single-family home owned solely by one's spouse
• C.Negotiating the exchange of two commercial properties owned by parties who have each retained the individual as their agent
• D.Selling a cemetery lot on behalf of a nonprofit religious organization

Q15.A rectangular lot measures 150 feet by 200 feet. If the lot sold for $12 per square foot, what was the total sale price?

• A.$360,000
• B.$42,000
• C.$4,200
• D.$30,000