NC License Law 01

Question 1

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

Answer 1

A. when the NCREC receives notification of the provisional broker’s activation with a BIC
(Once an applicant has passed the NC Licensing Examination, they are licensed, but their license is inactive until they affiliate with a brokerage. Provisional brokers are always inactive when they are not affiliated)

Question 2

An unlicensed assistant may do all of the following activities, EXCEPT:
A. assist the licensee with administrative duties and tasks
B. exhibit units for rent and provide tenants with information about the lease agreement
C. exhibit homes that are for sale and show the buyer around the home
D. fill in preprinted lease agreements and collect monies from prospective tenants, as long as the employee does not negotiate rents

Answer 2

C. exhibit homes that are for sale and show the buyer around the home
(Unlicensed property management assistants are permitted to show rental properties to prospective tenants, however, we do not allow unlicensed assistants to show homes or conduct open houses in residential sales)

Question 3

With regard to timeshares, all of the following are true, EXCEPT:
A. A timeshare developer and broker must maintain records of sales, rentals or exchange transactions for a minimum of three years.
B. All monies received by a timeshare developer or broker must be deposited within three banking days of receipt and remain in the trust account for ten days from the date of sale or until cancellation by the purchaser, whichever occurs first.
C. Timeshares are not considered real estate and no license is required to sell time shares in North Carolina.
D. Any refunds due to a cancellation of a timeshare purchase will be refunded within 30 days following the date of execution of the contract.

Answer 3

C. Timeshares are not considered real estate and no license is required to sell time shares in North Carolina.
(You must be licensed to sell timeshares in North Carolina. All of the other answers are correct regarding the handling of funds and monies concerning timeshares)

Question 4

Which of the following statements is true about timeshares?
A. They do not have to be registered with the NC Real Estate Commission.
B. They may be transferred prior to registering with the NC Real Estate Commission.
C. They must be registered with the NC Real Estate Commission prior to sale.
D. The timeshare broker may be fined by the NC Real Estate Commission.

Answer 4

C. They must be registered with the NC Real Estate Commission prior to sale.
(Timeshares must be registered and approved by the NC Real Estate Commission. They cannot be transferred or sold without that registration)

Question 5

All of the following statements are correct regarding the NCREC, EXCEPT:
A. They shall be entitled to the services of the Attorney General of North Carolina.
B. They shall not make rules or regulations regulating commissions, salaries, or fees to be charged by licensees.
C. They shall make rules to allow a licensee to pay a travel agent who does not have a real estate license a referral fee.
D. They shall have the power to make reasonable bylaws, rules and regulations that are inconsistent with the provisions of the general statutes.

Answer 5

D. They shall have the power to make reasonable bylaws, rules and regulations that are inconsistent with the provisions of the general statutes.
(Their bylaws, rules and regulations must be “consistent” with the general statutes. It is true that the NCREC can use the services of the Attorney General. It is also true that they do not regulate the commissions or fees charged by licensees. Though referral fees generally cannot be paid to unlicensed people, the payment of a referral fee to a travel agent is the exception to the rule and is permitted)

Question 6

It is correct to say that the NC Real Estate Commission may not fine a real estate licensee. However, the NC Real Estate Commission may do which of the following?
A. order licensees to pay clients for damages caused and arbitrate disputes over fees
B. fine a timeshare developer up to $500 per violation of the Timeshare Act
C. revoke a broker’s license if the broker fails to take the required number of continuing education hours per year
D. dictate the amount of commission brokers may charge their clients and resolve commission disputes between agents

Answer 6

B. fine a timeshare developer up to $500 per violation of the Timeshare Act
(The Commission cannot fine a licensee, but they can fine a developer. They do not get involved in fee disputes or dictate the commission which brokers may charge. If a broker failed to take CE, their license would become “inactive.” The commission would not revoke the license)

Question 7

General Statute 93A-2 states, in part, that a real estate broker is any person who, for compensation or valuable consideration or the promise thereof, lists or offers to list property. All of the following would constitute valuable consideration, EXCEPT:
A. a listing agent is promised a weekend trip to Myrtle Beach if the agent puts the home under contract before the end of the year
B. the owner of a jewelry store gives his buyer’s agent a diamond bracelet as a way of saying thank you for the agent’s hard work
C. a butcher offers a year’s supply of top sirloin to his agent if they can purchase an investment property for 50% off the asking price
D. the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you

Answer 7

D. the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you
(Brokerage activities are defined as acting on behalf of another for compensation. These nominal items would not be considered compensation or valuable consideration. However, vacations, trips, expensive jewelry and expensive food would all be considered valuable)

Question 8

All of the following could result in disciplinary action by the NC Real Estate Commission for unworthiness or incompetence, EXCEPT:
A. making any willful or negligent misrepresentation
B. pursuing a course of making false promises
C. accepting commissions or valuable consideration as a provisional broker from any person other than your Broker In Charge
D. Attempting to take all of the post licensing courses in a single year

Answer 8

D. Attempting to take all of the post licensing courses in a single year
(There is a list of reasons why a licensee can be disciplined in Statute 93A-6. A provisional broker may always elect to complete post licensing classes on an earlier schedule than that required by the Commission)

Question 9

A provisional broker is subject to two separate education requirements. They must complete postlicensing education of 90 hours within 18 months from the date of licensure. When must a provisional broker complete their first 8-hour CE requirement?
A. Within 1 year of the date of licensure
B. At the conclusion of their post licensing education
C. At the time of the first renewal of their license
D. Prior to the 2nd renewal of their real estate license

Answer 9

D. Prior to the 2nd renewal of their real estate license

Question 10

A nonprovisional real estate licensee is on inactive status. They are NOT holding themselves out to be available to help others buy, sell, rent or auction property. A friend asks for their help in a real estate transaction. Which of the following is TRUE?
A. Because they did not actively advertise or solicit the business the licensee may assist their friend, but they will have to be paid directly, not through the brokerage firm.
B. The agent may assist their friend so long as they activate their license before the transaction closes and they are paid.
C. An agent whose license is inactive may not earn any fees or represent others in a real estate transaction.
D. Because the agent is a full broker they are not required to affiliate with a BIC and therefore the licensee may represent their friend and collect a fee.

Answer 10

C. An agent whose license is inactive may not earn any fees or represent others in a real estate transaction.
(A licensee on inactive status may not earn any fees or be involved in brokerage activities. The commission is concerned with the status of the license at the time the money was earned, not when it was received)

Question 11

In the event that a licensee’s annual renewal fee is returned unpaid, the North Carolina Real Estate Commission may take all of the following actions, EXCEPT:
A. deny licensure renewal
B. suspend the agent’s license
C. revoke the agent’s license
D. fine the agent

Answer 11

D. fine the agent
(NCREC does not fine licensees. If the fee is returned unpaid or the check was returned for insufficient funds the license would be expired because it was not properly renewed. The Commission could also take any of the actions listed in the other answers)

Question 12

All of the following would constitute an illegal action by an inactive licensee who is not affiliated with a firm, EXCEPT:
A. telling members of a networking club that they are a broker and offering members of the club their services
B. handing out business cards at a social gathering
C. telling a new acquaintance that they are a broker, but they are on inactive status
D. hosting an open house for another agent

Answer 12

C. telling a new acquaintance that they are a broker, but they are on inactive status
(A licensee who is inactive may not advertise, solicit business or engage in brokerage activities)

Question 13

Which of the following do not need a real estate license to sell property?
A. a corporation that owns property and is using an employee to sell the property
B. an auction house that deals in the sale of real property
C. an attorney who regularly and routinely assists others in the buying and selling of real property
D. an unlicensed assistant sitting in an open house

Answer 13

A. a corporation that owns property and is using an employee to sell the property
(A real estate license is never needed when handling your own property. A corporation’s W2 salaried employees who are not paid on a commission basis are considered as dealing with the corporation’s own property, therefore do not need a license)

Question 14

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 18 months of obtaining license
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

Answer 14

C. post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th
(This is the rule for continuing education courses, not post licensing)

Question 15

If a provisional broker fails to complete all three postlicensing courses within 18 months of obtaining license, what is their license status once the anniversary date passes?
A. active
B. expired
C. cancelled
D. inactive

Answer 15

D. inactive
(Failure to complete any required education will result in an inactive license. An expired license occurs when a licensee fails to file their renewal or pay the license renewal fee)

Question 16

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

Answer 16

C. 6 months
(When a licensee fails to renew their license, it becomes expired. The licensee may renew up to 6 months late. They will have to pay a late fee and they may not practice or earn fees while it is expired. After 6 months, the NCREC may impose additional educational requirements)

Question 17

If an active provisional broker pays their renewal fee before their second renewal, but does not take their 8 hours of continuing education before their second renewal, what is their license status on July 1st?
A. Active
B. Inactive
C. Expired
D. Suspended

Answer 17

B. Inactive
(Failure to renew the license results in the license being expired. Failure to complete required education make the license inactive)

Question 18

A corporation selling its own properties through the actions of its own salaried W2 employees:
A. is not required to have a firm license, but may not use its own employees
B. can use its own unlicensed employees, but must have a firm license
C. needs neither a firm license nor do its employees need to be licensed
D. need not have a license, but must affiliate with an NC broker-in-charge

Answer 18

C. needs neither a firm license nor do its employees need to be licensed
(a corporation is exempt from licensure when dealing with its own property and using its own W2 salaried employees)

Question 19

In regard to real estate fees and commissions between brokerages and clients what is the role of the North Carolina Real Estate Commission:
A. only sets maximum limits on the fees and commissions
B. has no role in fees or commissions
C. only becomes involved when a complaint if filed
D. regulates the commissions exchanged between brokers, but not those exchanged with clients

Answer 19

B. has no role in fees or commissions
(The NCREC plays no role in either the setting of commissions, the regulation of commissions or commission disputes)

Question 20

All of the following are correct statements about the composition of the NCREC, EXCEPT:
A. there are 9 appointed members of the NC Real Estate Commission
B. the chairman of the Commission is elected by the Commission members
C. commission members serve 5-year terms
D. there are at least three licensees and at least two laypeople serving on the commission

Answer 20

C. commission members serve 5-year terms
(Members of the NCREC serve for 3 year terms and may be reappointed at the end of their term)

Question 21

All of the following are required in order to obtain a NC real estate license, EXCEPT:
A. a high school diploma
B. age of at least 18
C. completing an application
D. successfully completing a 75-hour course and passing a school final examination

Answer 21

A. a high school diploma

Question 22

All of the following are true when a real estate license is inactive due to a CE deficiency, EXCEPT:
A. the licensee must cease all real estate activity as of July 1st
B. the licensee may not earn any commissions or referral fees while inactive
C. if the inactivity is for longer than 5 years the license will be considered expired
D. a licensee who is inactive due to CE deficiency more than 2 years must complete current year’s CE and 2 postlicensing courses

Answer 22

C. if the inactivity is for longer than 5 years the license will be considered expired
(A licensee may remain on inactive status indefinitely. However, if more than 2 years, see answer D. The license will not be considered expired regardless of the period of inactivity)

Question 23

Which of the following must have a NC real estate license?
A. The executor of an estate selling their parent’s property and receiving a fee as the executor
B. An investor who is purchasing rental properties and placing them back on the market for sale
C. An auctioneer
D. A crier of sales

Answer 23

C. An auctioneer
(An auctioneer must have a NC real estate license when selling real estate. Criers of sales are exempt)

Question 24

All of the following are requirements of licensure for a NC Real Estate license, EXCEPT:
A. Possess a social security number
B. Be a United States citizen or possess proper documentation
C. File a complete application and fee
D. Be a resident of North Carolina

Answer 24

D. Be a resident of North Carolina
(An applicant does not have to reside in NC. Many people who live outside of NC have a North Carolina real estate license)

Question 25

An unlicensed individual who transacts real estate for another or participates in the sale, lease or exchange of another for compensation is subject to which of the following penalties?
A. They will likely be issued a cease and desist order
B. They are guilty of a misdemeanor
C. They are subject to a fine of up to $10,000
D. They are subject to civil sanctions and a civil lawsuit

Answer 25

A. They will likely be issued a cease and desist order
(Practicing real estate and operating as a real estate agent without a license is a felony)

Question 26

An individual licensed in another state may receive a waiver of the NC education requirement to complete the 75-hour Broker Prelicense course if they meet which of the following criteria:
A. Successful completion of another state’s prelicense course of at least 75 hours within the last 3 years.
B. They must have been licensed in another state for a minimum of 10 years
C. Be a resident of North Carolina
D. They must have taken another state’s course within the last 5 years

Answer 26

A. Successful completion of another state’s prelicense course of at least 75 hours within the last 3 years.
(An individual who completed a prelicense course of at least 75 hours in another state within the last 3 years may obtain an education waiver and directly take the NC Licensing Examination)

Question 27

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.

Answer 27

C. Yes, Judy is engaged in the business of real estate without a license
(She is receiving compensation or valuable consideration and is assisting another on a property she does not own.ate license because she did not receive compensation of anything of value)

Question 28

Henri is the manager and owner of his own LLC. He has a full-time salaried staff person, Sheila, that he employs to work for his LLC. Henri’s company is buying homes, renovating them and putting them back on the market. He has Sheila show the properties to prospective buyers. Who is in violation of NC Licensing Law?
A. Only Henri
B. Only Sheila
C. Both Henri and Sheila
D. Neither Henri nor Sheila

Answer 28

D. Neither Henri nor Sheila
(There is no license law violation. Both the managers of the LLC and the W2 employees are exempt when dealing with property in the name of the LLC)

Question 29

All of the following are TRUE about the character issue of an applicant for a NC Real Estate License, EXCEPT:
A. an applicant must possess honesty, integrity and good moral character
B. a mandatory criminal background check is required
C. the Commission makes a character determination before an applicant is permitted to take the NC Licensing Examination
D. an applicant has 60 days to request a hearing if the Commission determines that they do not possess satisfactory character

Answer 29

C. the Commission makes a character determination before an applicant is permitted to take the NC Licensing Examination
(The background check must be ordered and in the possession of NCREC prior to examination, but the Commission makes a determination on any character issue only AFTER the applicant has successfully passed the examination)

Question 30

How long is an applicant’s Examination Eligibility Period to take the NC Real Estate Examination once the Commission has approved their application?
A. 60 days
B. 90 days
C. 180 days
D. 360 days

Answer 30

C. 180 days
(Once an individual has successfully completed the 75 hour course and their application has been processed by NCREC, the applicant will receive notification that they are eligible to take the examination within the next 180 days)

Question 31

All of the following require the refiling of an applicant’s application for a NC Real Estate license, EXCEPT:
A. If the applicant delays taking the examination until after the 180 expiration of their examination eligibility period
B. If the license was expired for a period of more than 6 months
C. If the license was surrendered or revoked for any period of time
D. If the license was inactive for more than 2 years

Answer 31

D. If the license was inactive for more than 2 years
(A licensee may remain inactive indefinitely. There is never a requirement to refile an application for a licensee to move from inactive to active status, regardless of the time period of inactivity)

Question 32

An applicant will forfeit both their examination and license application fees and their license will be canceled for all of the following, EXCEPT:
A. Failure to take the examination within the 180-day period
B. Failure to appear for an examination appointment as scheduled
C. Attempting to reschedule an examination appointment
D. Appearing more than 15 minutes late for a scheduled examination appointment

Answer 32

C. Attempting to reschedule an examination appointment
(Once an examination appointment has been scheduled it may be rescheduled by contacting PSI one time. Applicants are not permitted to reschedule a second time)

Question 33

A NC provisional broker’s real estate license is initially issued on what type of status?
A. active
B. inactive
C. probationary
D. expired

Answer 33

B. inactive
(The initial license is issued on inactive status. In order to activate the license a provisional broker must affiliate with a BIC and the proper license activation form must be filed with NCREC)

Question 34

So long as it is part of his or her duties, is it legal for an unlicensed assistant to solicit listings for the broker?
A. Yes, if it is part of a written job description
B. No, soliciting listings is the exclusive responsibility of the broker-in-charge
C. Yes, because he or she is being paid a salary not a commission
D. No, active participation in soliciting real estate business requires a real estate license

Answer 34

D. No, active participation in soliciting real estate business requires a real estate license
(Cold calling, prospecting and soliciting of real estate business requires a license. An unlicensed assistant may schedule appointments, but they cannot solicit or cold call for business)

Question 35

When a corporation is involved in the sale or leasing of property that is owned by the corporation, who is exempt from the requirement to possess a real estate license?
A. Only the officers of the corporation
B. Only the directors of the corporation
C. Only the officers and directors of the corporation
D. The corporation’s officers, directors and all W2 salaried employees are exempt from licensure

Answer 35

D. The corporation’s officers, directors and all W2 salaried employees are exempt from licensure
(The officers and directors of the entity are exempt. Only in corporate entities are the W2 salaried employees also exempt from licensure)

Question 36

All of the 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

Answer 36

D. a sole proprietor and their W2 salaried employees
(Only the sole proprietor would be exempt. No exemption would apply to the W2 salaried employees of a sole proprietorship, an LLC or a partnership)

Question 37

A provisional real estate broker must remove the provisional status of their license by taking 90 hours of post licensing courses. The 90-hour courses are divided into three 30-hour courses. When must these courses be complete?
A. the annual renewal date of their real estate license
B. within 18 months of initial licensing
C. the end of the first calendar year their license was obtained
D. the second renewal of their real estate license

Answer 37

B. within 18 months of initial licensing
(Postlicensing deadlines have nothing to do with the month of June. The June deadlines are for CE courses. Postlicensing due dates are 18 months of initial licensing)

Question 38

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

Answer 38

A. June 30 of the current year
(Although provisional brokers are not required to complete any CE until the 2nd renewal of their license, they must still renew the license on June 30th. This is accomplished by going to the NCREC website, filing the form and paying the renewal fee)

Question 39

All of the following are powers of the NC Real Estate Commission, EXCEPT:
A. to conduct announced or unannounced audits of licensees
B. to subpoena the books, records and bank statements and accounts of a licensee
C. to seek injunctive orders in court
D. to order licensees to make restitution to clients and levy fines

Answer 39

D. to order licensees to make restitution to clients and levy fines
The NCREC does not levy fines or order the repayment of monies to clients)

Question 40

In North Carolina under the Residential Property Disclosure Act, sellers of 1-4 unit residential properties must complete a MOG (Mineral, Oil & Gas Disclosure). The purposes of this law include all of the following, EXCEPT:
A. to require sellers to disclose to buyers if mineral, oil and gas rights have been severed from the property.
B. to prevent sellers from severing mineral, oil and gas rights from a property
C. to require sellers to disclose to buyers if mineral, oil and gas rights have been leased separately.
D. to inform buyers if the seller does not intend to transfer mineral, oil and gas rights.

Answer 40

B. to prevent sellers from severing mineral, oil and gas rights from a property
(Mineral, oil and gas rights to real estate can always be sold or leased separately from a real estate transfer. The requirement is one of disclosure and does not prevent the seller from severing such rights)

Question 41

All of the following are true under the NC Condominium Act, EXCEPT:
A. the units are usually separately taxed and assessed
B. there must be a unit owner’s association prior to the transfer of the first unit
C. a unit owner is prohibited from ownership of land and must take only title to their individual unit.
D. if the buyer cancels within the 7-day rescission period all money must be returned promptly with no penalty

Answer 41

C. a unit owner is prohibited from ownership of land and must take only title to their individual unit.
(The definition of a condominium is when an individual owns both their unit and shared ownership of the common area)

Question 42

In a NC condominium project, only certain owners have reserved parking spaces and garages. Under the NC Condominium Act, these areas would be known as:
A. Shared special assessments
B. Limited condominium areas
C. Areas owned by the condominium owners’ association
D. Exclusive rights areas

Answer 42

B. Limited condominium areas
(Condominium owners own an interest in their unit and shared ownership of the common areas. There can be certain areas only available to some specified residents. These are called limited condominium areas)

Question 43

All of the following are true of a project broker within a NC Time Share, EXCEPT:
A. the project broker is designated by the developer or owner of the time share
B. the project broker must be an actively licensed broker
C. a provisional broker may serve as a project broker
D. the project broker is responsible for supervision and management of the time share project and all licensees that are associated with the project

Answer 43

C. a provisional broker may serve as a project broker
(a provisional broker may not serve as the project broker in a NC timeshare. However, a provisional broker may work as a time share salesperson under the supervision of the project broker)

Question 44

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.

Answer 44

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)

Question 45

How long does a provisional broker have to activate their license from the date of licensure?
A. 180 days
B. there is no required time period for license activation
C. 30 days
D. 1 year from the date of licensure

Answer 45

B. there is no required time period for license activation
(There is no required time frame for a provisional broker to activate their license. A licensee may remain on inactive status indefinitely)

Question 46

Can a real estate licensee renew an inactive license?
A. Yes, but they must pay a penalty for being inactive
B. Yes, because that will prevent the license from being expired
C. No, a licensee cannot renew an inactive license because inactive means they have not completed the required education
D. No, a licensee cannot renew an inactive license without refiling a license application

Answer 46

B. Yes, because that will prevent the license from being expired
(Inactive and expired are two different statuses for the license. A licensee should always renew a license on or before June 30th whether active or not. Failure to renew will change the status to expired)

Question 47

47 of 50
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. a new roof is being placed on a vacation rental unit that costs $42,000

Answer 47

D. a 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)

Question 48

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
D. a married couple who is selling their primary residence to a buyer

Answer 48

B. an individual who filed bankruptcy due to excessive medical bills and judgment liens
(The NC homestead exemption applies to personal residences and provides protection against judgment creditors)

Question 49

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

Answer 49

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 out of state licensee be physically inside NC and participate in the real estate transaction without having a NC real estate license. NC Statute: Compensation of unlicensed persons by brokers prohibited. G.S. 93A-6(a)(9) authorizes the Commission to take disciplinary action against a licensee for paying any person for acts performed in violation of the License Law. Paragraph (g) of Rule A.0109 simply augments this statutory provision by providing an affirmative statement that a licensee shall not in any manner compensate or share compensation with unlicensed persons or entities for acts performed in North Carolina for which a license is required)

Question 50

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

Answer 50

D. Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC
(Sherry can make a referral and collect a referral fee so long as the referral fee is paid to her through her BIC)