Free North Carolina Real Estate Commission NCREC-Broker-N Practice Exam with Questions & Answers

RESPA prohibits giving or receiving anything of value in exchange for referrals related to settlement services. However, a title company using space provided by a brokerage (without compensation tied to referrals) for mutual client convenience may be permitted as long as fair market value is paid (if rent is involved) and there is no requirement or agreement for referrals. The other choices involve direct value exchange for referrals, which are prohibited. Correct answer: A.

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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.

An option contract gives the buyer (optionee) the exclusive right, but not the obligation, to purchase a property at a predetermined price within a specified time. The seller (optionor), however, is bound by the terms of the contract and must sell if the buyer exercises the option. Consideration (often a non-refundable option fee) is required to make the option enforceable. Therefore, the seller is obligated to sell if the buyer chooses to exercise the option, making statement B true.

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To qualify for Broker-in-Charge Eligible status in North Carolina, a broker must have at least three years of full-time brokerage experience (or equivalent part-time experience) within the past five years. Additionally, they must complete the 12-hour Broker-in-Charge Course. Option B is incorrect due to the course length (not 24 hours), and option D is incorrect because a broker-in-charge can only manage one physical office location. Option C is incorrect as branch offices may also have a separate BIC. Therefore, A is the correct answer.

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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.

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The U.S. Environmental Protection Agency (EPA) has established a recommended action level of 4.0 picocuries per liter (pCi/L) for radon gas in indoor air. If a home's radon level is at or above this threshold, mitigation is recommended to reduce exposure. Radon is a naturally occurring radioactive gas that can pose serious health risks, particularly lung cancer. Therefore, the correct answer is C.

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According to North Carolina Real Estate Commission policy, as long as the broker was actively licensed at the time the transaction was originated (i.e., while performing licensed activity), the broker is legally entitled to compensation—even if their license becomes inactive before closing. The commission is paid through the firm. Therefore, the correct answer is A.

In an installment land contract (contract for deed), the buyer receives equitable title upon signing and possession of the property. Legal title remains with the seller until the full purchase price is paid or the contract conditions are met. The buyer typically takes possession and lives in the property during the installment period. This is a form of seller financing covering both land and improvements. Therefore, the correct answer is B.

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A fully amortizing loan is one in which the borrower makes equal monthly payments over the loan term, with a portion of each payment applied to interest and the remainder to principal. By the end of the loan term, the entire balance is paid off. Therefore, the correct answer is A — fully amortizing.

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According to North Carolina law, brokers are not required to disclose psychological stigmas such as death, illness, or belief in haunting. However, the manufacture of methamphetamine is a material fact due to health and safety hazards and must be disclosed. Therefore, answer B is correct.