NC License Law 02

Question 1

The broker-in-charge of a real estate office is responsible for all of the following, EXCEPT:
A. Appointing a BIC at every location where the firm operates
B. Maintaining all records for at least 3 years
C. Maintaining the trust account
D. Active and direct supervision of all provisional brokers

Answer 1

A. Appointing a BIC at every location where the firm operates
(BIC’s are appointed by the Qualifying Broker who holds a firm’s license)

Question 2

Jack, a licensee wants to make an offer to the seller on a property which Jack has listed on behalf of his firm ABC. Which of the following is CORRECT?
A. A licensee may not make an offer on a property which they have listed
B. Jack can only proceed with an offer if he obtains full and proper consent for dual agency
C. Jack must withdraw as the listing agent prior to making an offer. If the seller wants to continue representation by the firm, the BIC can appoint another licensee to handle the listing
D. So long as Jack discloses his status as a licensee and treats the seller fairly, he may proceed with an offer

Answer 2

C. Jack must withdraw as the listing agent prior to making an offer. If the seller wants to continue representation by the firm, the BIC can appoint another licensee to handle the listing

Question 3

Sally has had a buyer sign the Working with Real Estate Agents Brochure and execute an Exclusive Buyer Representation Agreement. How long does Sally have to deliver these documents to her Broker-in-Charge?
A. Immediately
B. Prior to Sally Being Paid Compensation
C. Within 3 Calendar Days
D. Within 5 Calendar Days

Answer 3

C. Within 3 Calendar Days
(All transaction documents must be delivered to the firm or the BIC within 3 calendar days of their receipt by a broker)

Question 4

Regarding nonresident commercial licensees, all of the following statements are TRUE, EXCEPT:
A. They must affiliate with an in-state brokerage firm.
B. They may enter North Carolina to assist a buyer or seller, but must sign a document allowing the NC Real Estate Commission to discipline the agent.
C. They must take and successfully pass the state portion of the NC Real Estate Commission licensing exam before conducting business in North Carolina.
D. They must place any trust monies they receive from clients or customers into the in-state brokerage firm’s trust account.

Answer 4

C. They must take and successfully pass the state portion of the NC Real Estate Commission licensing exam before conducting business in North Carolina.
(A license is issued to nonresident commercial licensees who submit the application and meet other requirements. They do not have to take any courses or pass any examinations. The license does have to be renewed on an annual basis on June 30th)

Question 5

A real estate agent is representing a buyer under a written buyer agency agreement. The buyer would like to see a builder’s home. The builder is offering a $1,000 bonus to agents who sell at least 3 homes in the neighborhood. The real estate agent has not yet made a sale in that neighborhood. Which of the following actions should the agent take regarding disclosure of the bonus?
A. Because the agent has not made a sale, they are not required to notify the buyer of a bonus until they are eligible for it.
B. The agent should notify the buyer of the bonus at the time of contract.
C. If the buyer client requests the agent share a portion of the bonus with them, the agent is to instruct them that it is illegal for the agent to share bonuses with unlicensed entities.
D. The agent may notify the buyer of the bonus orally, but the bonus must be confirmed in writing before the client makes an offer to buy the home.

Answer 5

D. The agent may notify the buyer of the bonus orally, but the bonus must be confirmed in writing before the client makes an offer to buy the home.
(Licensees can receive bonuses if they have disclosed the bonus to the principal and have their consent. This consent is required before the licensee writes an offer)

Question 6

When dealing with multiple offers, which of the following is a correct statement regarding North Carolina statutes and rules?
A. The existence of multiple offers is a material fact and must be disclosed
B. A licensee is always permitted to disclose the terms of multiple offers to competing buyers
C. A seller may not accept an offer when multiple offers exist without giving the other buyers an opportunity to increase their offers
D. The existence of multiple offers is not a material fact and the terms and conditions of multiple offers can only be disclosed with the consent of the offeror.

Answer 6

D. The existence of multiple offers is not a material fact and the terms and conditions of multiple offers can only be disclosed with the consent of the offeror.
(A licensee must always communicate all offers to their client. Multiple offers are not a material fact and their existence does not need to be disclosed to competing buyers unless the seller directs the licensee to do so. However, the terms and conditions of the offers cannot be disclosed without the consent of the offeror)

Question 7

A broker has received an offer from a prospective buyer on a property that the broker has listed for sale. How long does the broker have to deliver the offer to their seller/client?
A. Immediately, but never later than 5 banking days
B. Immediately, but never later than 5 calendar days
C. Immediately, but never later than 3 banking days
D. Immediately, but never later than 3 calendar days

Answer 7

D. Immediately, but never later than 3 calendar days
(All documents and offers in real estate transactions must be provided to the client, “immediately, but never later than 3 days.” The three days are calendar days. Generally speaking, the time frames dealing with documents are always calendar days. The time frames dealing with deposits and money are always banking or business days)

Question 8

Under the NC Machinery Act, which of the following is a TRUE statement about North Carolina real property taxes?
A. They are not levied on an ad valorem basis.
B. They become a lien on the property on September 1st.
C. They become a lien on the property on January 1st and are due on September 1st
D. The Machinery Act requires reappraisal of the property every four years.

Answer 8

C. They become a lien on the property on January 1st and are due on September 1st
(NC real estate taxes ARE levied on an ad valorem basis “according to value.” They become a lien on January 1st and are due on September 1st. The Machinery Act requires an appraisal every 8 years (octennial appraisal))

Question 9

All of the following are true regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT:
A. The consumer is not required to sign the brochure.
B. If the first substantial contact is by phone, the brochure must be provided within 3 calendar days.
C. The brochure’s use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions.
D. The brochure must be given in all sales transactions at first substantial contact.

Answer 9

C. The brochure’s use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions.
(Use of the brochure is mandatory in all residential and commercial transactions. It is not mandatory in lease transactions)

Question 10

The North Carolina Working With Real Estate Agents brochure must be given:
A. to property owners upon initial contact
B. to all consumers upon initial contact
C. only to clients in a real estate transaction at first substantial contact
D. to all consumers in a sales transaction no later than first substantial contact

Answer 10

D. to all consumers in a sales transaction no later than first substantial contact
(The timing for use of the brochure is “first substantial contact.” First substantial contact is defined as when the client begins discussing personal, financial, confidential information or motivations, needs and wants)

Question 11

Which of the following can be contained in the Standard 2T Offer to Purchase & Contract?
A. A disclaimer of liability for actions of the firm or broker
B. The fee splits between the listing firm and the selling firm
C. The amount of liens and judgments that the seller has against the property
D. An estimated date for settlement

Answer 11

D. An estimated date for settlement
(The amounts of compensation and fees are properly contained in the agency employment agreements, not the purchase contract between the seller and buyer. Real estate licensees may not disclaim liability for their conduct in regard to the transaction. Such limitation of liability clauses may not be utilized in either the Offer to Purchase and Contract nor any agency employment agreements)

Question 12

Jane is a non-provisional broker who is affiliated with ABC Realty. Jane wants to form an LLC entity for legal or tax purposes and have her BIC make her commission checks payable to her LLC. Which of the following is correct?
A. A broker affiliated with a firm is prohibited from forming their own entity
B. Jane must obtain a firm license for the LLC
C. The LLC must have a Broker-in-Charge
D. Only provisional brokers are permitted to have a separate entity

Answer 12

B. Jane must obtain a firm license for the LLC
(Every entity must obtain a firm license. So long as the entity is for compensation only it does not have to have a Broker-in-Charge)

Question 13

After being active in the real estate business for three years, Broker Sallie wants to become a broker-in-charge. All of the following are requirements that Sallie must meet to become a BIC, EXCEPT:
A. have two out of the last five years of active real estate practice
B. complete the 12-hour BIC course prior to becoming a BIC
C. file a designation form with the NCREC
D. have completed all of her post-licensing requirements and not be in provisional status

Answer 13

B. complete the 12-hour BIC course prior to becoming a BIC
(Sallie must take the 12 hour BIC course, however, she does not have to complete the course before becoming a BIC. If she meets the other eligibility requirements she will have 120 days within which to take the 12 hour course)

Question 14

A licensee can act as the Broker-in-Charge of more than one firm, when:
A. the office is an approved national franchise
B. the offices are affiliated and owned by the same person
C. the offices are in the same building
D. the offices are in the same city

Answer 14

C. the offices are in the same building
(Usually each location has one BIC and there is only one BIC per location. There is an exception which allows a licensee to be a BIC for more than one firm when the two firms are in the same location)

Question 15

In regard to the use of standard forms and contracts by real estate professionals and the role of the North Carolina Real Estate Commission, NCREC:
A. requires the use of specific forms and contracts
B. drafts specific forms and contracts but does not mandate their use
C. prescribes certain essential provisions that must be included in the forms and contracts
D. has no authority regarding the content of real estate forms and contracts

Answer 15

C. prescribes certain essential provisions that must be included in the forms and contracts
(The NCREC does not create, write or prescribe the standard forms. Standard forms are created by a joint committee of the bar association and the REALTOR Association. However, the Commission does dictate that certain provisions must be included in the forms and contracts)

Question 16

Real estate licensees and firms can create entities. Which of the following is INCORRECT regarding real estate entities in North Carolina?
A. Every entity, other than a sole proprietorship must have a firm license
B. Firm licenses must be renewed annually no later than June 30th
C. A licensed broker working for a firm cannot create their own legal entity
D. Partnerships create the most liability for the general partners involved

Answer 16

C. A licensed broker working for a firm cannot create their own legal entity
(A licensee can create an entity such as an LLC or a Subchapter S corporation and be affiliated with a firm. However, every entity in NC that is involved in real estate brokerage must have a firm license)

Question 17

Which of the following is INCORRECT in regard to brokerage advertising?
A. Provisional brokers cannot advertise without broker-in-charge approval and consent.
B. Brokers-in-charge are not required to review and approve all firm advertising.
C. Real estate professionals cannot create blind advertising.
D. All real estate ads must include the name of the firm or the BIC

Answer 17

B. Brokers-in-charge are not required to review and approve all firm advertising.
(Brokers-in-Charge ARE required to supervise all firm advertising)

Question 18

Which of the following does NOT need a firm license in North Carolina?
A. a national franchise that is licensed to do business in multiple states and has formed a corporation to do real estate business in North Carolina
B. a local sole proprietorship using a tradename or DBA
C. a general partnership that consists of only two individuals
D. a corporation that is already approved by the NC Secretary of State

Answer 18

B. a local sole proprietorship using a tradename or DBA
(A sole proprietorship does not need a firm license because it is not an entity. Every entity that is formed, such as a corporation, partnership or LLC must have a firm license)

Question 19

If a provisional broker terminates their affiliation with a BIC and does not reaffiliate with another BIC or firm, their license is considered:
A. terminated
B. expired
C. revoked
D. inactive

Answer 19

D. inactive
(A provisional broker may not engage in real estate brokerage activities or earn fees unless they are affiliated with a firm. If the provisional broker leaves the firm or their affiliation is terminated, they will become inactive. They may not engage in the practice of real estate or earn fees until they have re-affiliated with another firm)

Question 20

When can an unlicensed person receive fees for real estate referrals in North Carolina?
A. when the individual is a past client of the broker
B. when the individual is a licensee, but their license is inactive
C. when the individual is a travel agent making a vacation referral
D. when the individual is a family member of the broker

Answer 20

C. when the individual is a travel agent making a vacation referral
(The general rule is that an unlicensed person may never receive fees for the referral of real estate business to a licensee. The only exception is that a travel agent who does not have a real estate license may receive a referral fee when making a vacation rental referral)

Question 21

All of the following are required for an individual to become a broker-in-charge, EXCEPT:
A. They must complete a 12-hour BIC course taught by the Commission within 120 days of designation.
B. They must have at least 2 years full-time practice or the equivalent
C. The experience must have been attained within the last 5 years.
D. They must have completed at least 75% of their postlicensing requirements as a provisional broker.

Answer 21

D. They must have completed at least 75% of their postlicensing requirements as a provisional broker.
(It is not possible to become a broker-in-charge until ALL post licensing requirements have been met and the licensee has removed their provisional status)

Question 22

A real estate licensee must notify the North Carolina Real Estate Commission of any changes in address within:
A. 3 days
B. 5 days
C. 10 days
D. 60 days

Answer 22

C. 10 days
(Any change of address, name change or change in the affiliation of a provisional broker must be reported to NCREC within 10 days)

Question 23

A real estate licensee in North Carolina must comply with which of the following rules in regard to any criminal activity:
A. report all arrests within 60 days
B. report all court proceedings within 15 days
C. report all convictions within 60 days of the conviction
D. report all criminal activity within 10 days whether convicted or not

Answer 23

C. report all convictions within 60 days of the conviction
(Note that the 60 day reporting requirement is from the date of the conviction, not the date of the court hearing or the arrest)

Question 24

When must a firm practicing “designated agency” disclose to the seller the name of the agent representing the buyer?
A. at first substantial contact with the seller
B. at initial contact with the seller
C. at the time the buyer’s agent shows the seller’s property
D. at the time the offer is submitted to the seller

Answer 24

D. at the time the offer is submitted to the seller
(This is different from “first substantial contact.” First substantial contact mandates the use of the WWREA brochure. When a firm is practicing designated agency and one licensee is designated as the seller’s representative and another licensee is designated as the buyer’s representative in the same firm, in the same transaction, the disclosure of the name of the agent representing the buyer and their designated status is provided at the time of offer)

Question 25

When a provisional broker terminates their relationship with a firm or BIC, what is the requirement for notification of the termination to NCREC?
A. the provisional broker must notify the BIC within 10 days
B. the BIC must notify NCREC of the termination within 10 days
C. both the BIC and the provisional broker must notify NCREC immediately
D. the notification must be received by NCREC within 30 days

Answer 25

B. the BIC must notify NCREC of the termination within 10 days
(Brokers-in-Charge must notify NCREC within 10 days of changes in the affiliation of provisional brokers)

Question 26

A real estate broker is aware that the highway department has adopted a long-range plan for a new interstate beltway to be constructed. Anticipating that such actions will increase the surrounding land values, the broker seeks out buyers and encourages them to buy property in that area, suggesting they would be able to make substantial profits. The broker begins submitting offers, but never discloses the proposed developments with any of the property owners. Which of the following statements is true?
A. The broker must disclose this information as a material fact even though acting as a buyer’s agent.
B. This information is only required to be disclosed if the broker were representing the sellers.
C. The broker would violate fiduciary duties owed to their buyer if they made such a disclosure.
D. The broker is only obligated to disclose such information if specifically asked about highway expansion by the seller or their agents.

Answer 26

A. The broker must disclose this information as a material fact even though acting as a buyer’s agent.
(The construction of the highway is a material fact. Material facts must always be disclosed to all parties in the transaction regardless of whom the licensee represents)

Question 27

All of the following statements is correct regarding “designated agency”, EXCEPT:
A. Only the agents in the transaction are designated, the other agents are dual agents
B. If the Broker-in-Charge is not one of the designated agents, then the BIC is in dual agency
C. A BIC and a provisional broker in the same transaction must be designated agents
D. A BIC and a provisional broker may never act as designated agents in the same transaction

Answer 27

C. A BIC and a provisional broker in the same transaction must be designated agents

Question 28

A real estate broker is working with a buyer as a seller’s subagent. All of the following are duties that the broker owes to the buyer, EXCEPT:
A. confidentiality
B. fairness
C. honesty
D. disclosure of material facts

Answer 28

A. confidentiality
(The agent is working for the seller. The licensee owes fiduciary duties to the seller including the duty of confidentiality. No such duty extends to customers which is the role of a buyer when the licensee is working as a subagent of the seller)

Question 29

A real estate broker is working with a buyer client. The broker wants to show a property that is listed with a competing real estate firm. When must the real estate broker, working with the buyer disclose their agency status to the listing licensee?
A. first substantial contact with the firm when the buyer shows serious interest in the property
B. initial contact with the firm when the agent first calls to show the property
C. time of offer where the real estate broker gives confirmation of agency on the offer to purchase and contract
D. time of contract where there is a meeting of the minds and the brokers confirm their agency status in the contract

Answer 29

B. initial contact with the firm when the agent first calls to show the property
(Licensees must disclose their agency status to other licensees at initial contact. Other licensees deserve to know at the time of initial contact whom the agent represents)

Question 30

Charlene is an active sole proprietor independent broker who teaches school full time. Charlene gives referrals to brokers and she receives referrals. Charlene is not required to be a broker-in-charge or affiliated with a firm so long as she does not:
A. Receive any commissions
B. Make any referrals
C. Represent a buyer in a sales transaction
D. Hands out business cards promoting herself as a broker

Answer 30

D. Hands out business cards promoting herself as a broker
(a full broker is not required to affiliate with or be a BIC unless they: 1) advertise or market in any way 2) maintain a trust account 3) hire other licensees)

Question 31

Nonresident commercial licensees are allowed to conduct business in North Carolina if they obtain a limited non-resident commercial brokerage license. Which of the following statements is NOT correct regarding nonresident commercial licensees?
A. A nonresident licensee may advertise in North Carolina, but must indicate in the advertisement “limited nonresident commercial real estate broker.”
B. No person shall enter North Carolina to perform real estate services unless he or she has first entered into a brokerage cooperation agreement and declaration of affiliation with an individual who is a resident in North Carolina licensed as a North Carolina broker.
C. A nonresident commercial licensee must agree to be subject to the jurisdiction and discipline of the NC Real Estate Commission.
D. Commissions or fees earned by a nonresident commercial licensee shall be paid directly to the licensee if said licensee is employed by or working for a North Carolina real estate broker or firm.

Answer 31

D. Commissions or fees earned by a nonresident commercial licensee shall be paid directly to the licensee if said licensee is employed by or working for a North Carolina real estate broker or firm.
(A limited nonresident commercial licensee must be affiliated with a NC resident broker. All monies must pass through the firm and may not be paid directly to the non-resident licensee. They must file a declaration of affiliation, agree to be subject to the jurisdiction and discipline of the NCREC and their advertising must indicate that they have a “limited nonresident commercial broker license.”)

Question 32

With regard to brokers-in-charge, all of the following statements are correct, EXCEPT:
A. A broker-in-charge may supervise more than one firm as long as the firms are in the same building
B. A broker-in-charge is required to take the General Update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled.
C. A broker-in-charge is required to have two years of experience out of the last five years and may not be a provisional broker.
D. A broker-in-charge is required to take the 12- hour initial broker-in-charge course either within the last one year or within 120 days of becoming the broker-in-charge or BIC-eligible.

Answer 32

B. A broker-in-charge is required to take the General Update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled.
(A broker-in-charge is not required to take General Update. They must take Broker Update (BICUP) and one elective. The license is not cancelled. If any licensee fails to complete the proper and required CE, their license becomes “inactive.” Even BIC’s who do not represent clients must take the CE courses. There are no exceptions. If the BIC becomes inactive, the firm would also become inactive, because a firm cannot operate without a BIC.)

Question 33

Which of the following is NOT a correct statement when describing agents and firms responsibilities regarding pocket cards?
A. an agent must keep their pocket card on them at all times when conducting real estate business
B. all licenses expire on June 30th of each year. At that time, a new card will be issued once the agent pays their annual fee to the NCREC
C. once the licensee removes their provisional broker status, they will be issued a new card
D. a firm must display all pocket cards prominently

Answer 33

D. a firm must display all pocket cards prominently

Question 34

All of the following statements are correct regarding commission rules, EXCEPT:
A. should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days
B. a provisional broker may not be the Broker-in-Charge regardless of the years of experience they may have as a broker in another state
C. a broker must include the firm or BIC’s name in all advertising
D. should a broker or provisional broker be convicted of a DWI (driving while impaired) they must report this within 60 days of the conviction

Answer 34

A. should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days
(Address changes by any licensee must be reported to the NCREC within 10 days)

Question 35

In the event that a licensee fails to deliver, within a reasonable time, a completed copy of any purchase agreement or offer to buy and sell real estate to the buyer and to the seller, the NCREC may take all of the following actions, EXCEPT:
A. revoke the agent’s license
B. suspend the agent’s license
C. censure or reprimand the licensee
D. set the agent’s license to inactive status

Answer 35

D. set the agent’s license to inactive status
(The NCREC does not make licenses inactive or expired as a result of disciplinary action. These occur because a licensee failed to complete required education or renew the license)

Question 36

A real estate broker is working for more than one firm and more than one broker-in-charge. This would not be a violation of licensing law and commission rules as long as:
A. the broker has the consent of both firms and the broker is not a provisional broker
B. the broker works only in the property management field
C. the broker does not list properties for more than one firm
D. the broker only accepts their commission from one of the firms

Answer 36

A. the broker has the consent of both firms and the broker is not a provisional broker

Question 37

Which of the following would result in a conflict of interest for which the licensee could be disciplined by the NCREC?
A. an agent working for the buyer notifies the listing agent that the buyer is their sister
B. a licensee notifies the listing agent that they are self-representing and are interested in purchasing the listing
C. a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller
D. an agent working as a sub-agent of the seller notifies the seller of confidential information the buyer shared

Answer 37

C. a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller
(The licensee is acting as an agent of the seller. They would need to disclose any family relationship with the buyer and should not be assisting the buyer because a licensee cannot be a sub-agent of the seller and a buyer representative at the same time)

Question 38

A buyer’s representative is required to reveal their agency status to the seller or listing agent:
A. no later than time of offer
B. at “initial contact”
C. no later than contract
D. at “first substantial contact”

Answer 38

B. at “initial contact”
(The WWREA brochure must be provided to consumers at first substantial contact, however, a licensee is required to disclose their status to the other agent in the transaction at initial contact)

Question 39

An agent is working under an oral buyer’s agency agreement. The agent knows the buyer is strongly interested in one of the homes seen by the buyer. The buyer is ready to write the offer but refuses to sign a buyer’s agency agreement. At this point, the agent may:
A. write the offer, but advise the buyer they are now a sub-agent of the seller and anything the buyer has revealed must be provided to the seller
B. not write the offer because of NC license law
C. write the offer, but advise the buyer that they are a sub-agent of the seller, but they are not allowed to reveal to the seller what they have already learned about the buyer
D. write and present the offer under an oral buyer’s agency agreement, but reduce the buyer’s agency agreement to writing prior to contract

Answer 39

A. write the offer, but advise the buyer they are now a sub-agent of the seller and anything the buyer has revealed must be provided to the seller
(If buyer refuses to sign a written buyer agency agreement, then the agent can no longer represent them but can switch to seller’s sub-agency and write the offer)

Question 40

With regard to advertising, which of the following is INCORRECT?
A. a licensee must have a client’s permission before placing a sign in a yard
B. In order for a nonresident commercial licensee to advertise their services in North Carolina, they must conspicuously identify themselves as “Limited non-resident Commercial Real Estate Broker”
C. All real estate ads must contain the name of the firm or BIC
D. A licensee may advertise a home as “Coming Soon” before they have a written listing agreement

Answer 40

D. A licensee may advertise a home as “Coming Soon” before they have a written listing agreement
(A licensee may not advertise or market a property without a written listing agreement)

Question 41

Which of the following ads would be considered a blind ad?
A. Sheila Jones, REALTOR, is available for your assistance.
B. Call Mike Smith for your home buying needs
C. ABC Realty is looking for your business
D. Sandy Jones at XYZ Realty has listed a property

Answer 41

B. Call Mike Smith for your home buying needs
(A blind ad is an advertisement which gives no indication that a licensee or brokerage is involved in the sale of the home)

Question 42

With regard to a real estate agent’s pocket card, all of the following are CORRECT, EXCEPT:
A. The card indicates whether the agent is a provisional broker or broker.
B. The card indicates the postlicensing education the agent has taken and whether the agent is active or not.
C. The pocket card displays the license expiration date.
D. The pocket card displays the license number and the agent’s signature.

Answer 42

B. The card indicates the postlicensing education the agent has taken and whether the agent is active or not.
(The pocket card contains the license number, license type and expiration date. It does not contain any information about whether the license is active or inactive. It does not contain the firm name and it does not indicate any education successfully completed by the licensee)

Question 43

All of the following would constitute an illegal action by an inactive broker 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. handling 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 43

C. telling a new acquaintance that they are a broker, but they are on inactive status
(A licensee who is inactive cannot engage in real estate activity including hosting open houses, advertising and marketing)

Question 44

An agent must discuss agency with a prospective buyer or seller at “first substantial contact.” This is the moment the consumer begins talking about confidential information, motivation, personals wants, needs and desires or any terms and conditions they would accept regarding purchase of the home. All of the following information is required to be discussed/provided, EXCEPT:
A. the agent must discuss their compensation
B. the agent must provide the Working with Real Estate Agents brochure immediately if the meeting is face to face or within 3 calendar days if the meeting is over the phone or by email
C. the agent must get the consumer’s signature on the brochure’s panel before proceeding forward in a transaction
D. the agent must disclose, discuss and decide they type of agency relationship the consumer wishes to have with the agent and the agent is to warn the consumer not to say anything the consumer would not want another party to know prior to hiring the agent

Answer 44

C. the agent must get the consumer’s signature on the brochure’s panel before proceeding forward in a transaction
(It is not required for the consumer to sign the brochure panel, but the agent must indicate that it was provided, date the panel and place it in the real estate transaction folder)

Question 45

In a NC real estate development subject to the NC subdivision requirements all of the following can occur prior to approval or recordation of the final plat map, EXCEPT:
A. offers to purchase and contract may be written and accepted
B. reservations may be taken and accepted
C. deposits may be accepted and held
D. transfer of title can occur

Answer 45

D. transfer of title can occur
(Transfer of title, closing and coveyance cannot occur until approval of the final plat map)

Question 46

John, a North Carolina licensee has completed all of his required post-licensing courses and is currently an active and current North Carolina Broker. He just terminated his affiliation with a BIC. Which of the following is TRUE regarding John?
A. He must reaffiliate with a BIC in order to engage in the practice of real estate and in the meantime his license is inactive
B. If John does not affiliate with a BIC he must become a BIC
C. John may not remain a sole proprietor. If he does not affiliate with a BIC he must at least obtain a firm license
D. John may engage in the practice of real estate and receive compensation so long as he does not perform any activities which would require him a BIC.

Answer 46

D. John may engage in the practice of real estate and receive compensation so long as he does not perform any activities which would require him a BIC.
(John can engage in real estate without affiliation and without becoming a BIC so long as he does not: 1) maintain a trust account 2) hire other licensees or 3) engage in advertising or marketing of any kind)

Question 47

A BIC must retain records for the firm for how long?
A. 5 years
B. 3 years from the date of closing
C. 3 years from the termination of the relationship
D. 3 years from the date of closing, the termination of the relationship or the distribution of all funds, whichever is later.

Answer 47

D. 3 years from the date of closing, the termination of the relationship or the distribution of all funds, whichever is later.

Question 48

Under the NC Residential Property Disclosure Act, a licensee should inform and request that all of the following sellers complete the Mineral, Oil & Gas (MOG) disclosure, EXCEPT:
A. an investor selling a SFR vacation rental unit
B. a seller who is selling a parcel of vacant land
C. a developer selling a new home in a subdivision
D. a couple selling their primary residence

Answer 48

B. a seller who is selling a parcel of vacant land
(The NC Residential Property Disclosure Act applies to all sellers of residential 1-4 unit properties. The MOG disclosure is not required on the transfer of vacant land because it is not considered residential property)

Question 49

A buyer has requested that their real estate broker make substantial changes to the offer to purchase and contract. What should the licensee do?
A. make certain that any and all changes properly reflect the direction and instructions of their client
B. make the changes, submit the offer and recommend that the buyer seek legal advice regarding the document
C. only make those changes and alterations if the licensee believes they have sufficient experience or knowledge of the contract
D. recommend that any and all such changes and alterations be done by an attorney

Answer 49

D. recommend that any and all such changes and alterations be done by an attorney
(Licensees are prohibited from the drafting of contracts and these changes and alterations should be made by an attorney)

Question 50

How long does a provisional broker have to deliver the earnest money check once it has been delivered to them?
A. the provisional broker must deposit the money in the trust account no later than 3 banking days from the date of receipt of the money
B. the provisional broker must deliver the earnest money to the BIC immediately
C. the provisional broker must deposit the money in the trust account no later than 3 calendar days from the acceptance of the offer
D. the provisional broker must deposit the money within 3 banking days from the receipt of acceptance of the offer

Answer 50

B. the provisional broker must deliver the earnest money to the BIC immediately
(Al monies received by a provisional broker must be delivered to the BIC immediately. The deposit and holding rules are for full brokers and the BIC, not provisional brokers)