Free North Carolina Real Estate Commission NCREC-Broker-N Practice Exam with Questions & Answers | Set: 4

Capital gain is determined by subtracting theadjusted basis(original cost plus improvements minus depreciation) from theamount realized(selling price minus selling costs). This matchesAmount Realized – Adjusted Basisas per the Broker‑N Financing and Taxation section.

In North Carolina, if a property borders a non-navigable river or stream, the property owner holds riparian rights. This means the owner's property extends to the centerline of the watercourse. Littoral rights, by contrast, apply to properties bordering large, navigable bodies of water such as oceans and lakes. The owner does not own the water and cannot restrict its natural flow or public use where applicable. Therefore, the correct answer is C.

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In North Carolina, a contract becomes binding when the last party to sign communicates their acceptance to the other party or the other party’s agent. Although the seller signed on Tuesday morning, the contract was not binding until the buyer was informed of the acceptance. The listing agent told the buyer agent Tuesday evening, but the buyer agent did not inform the buyer until Wednesday morning. Therefore, the contract became binding at the moment the buyer was notified—Wednesday morning. Correct answer: C.

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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.

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In North Carolina, a broker may not disclose the price or terms of one buyer’s offer to another party without the express permission of the party who made the offer. This ensures fair dealing and prevents misuse of confidential offer terms. While a seller can instruct a broker to disclose that there are multiple offers, the details (like price, due diligence fee, etc.) require written consent from the offeror. Therefore, the correct answer is B.

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NC brokers are bound by an affirmative duty to both discover and disclose material facts to all parties in a transaction, not just their clients. This includes facts they know or should reasonably know, such as structural defects, zoning violations, or environmental issues. This duty exists regardless of whom the broker represents. Therefore, option A is correct.

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The FHA (Federal Housing Administration) does not lend money directly to borrowers. Instead, FHA-insured loans are funded by approved private lenders such as banks, mortgage companies, or credit unions. The FHA insures the loan to protect the lender from default risk. HUD oversees the FHA but does not provide the funds. Fannie Mae is part of the secondary market. Therefore, the correct answer is A.

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