127 Q&As in UPDATED NCREC-Broker-N Exam Questions Certification Test Engine to PDF
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NEW QUESTION # 60
An investor bought a small office building for $500,000. They sold it 10 years later for $480,000. What is their percentage of loss?
- A. 4.2%
- B. 10.4%
- C. 9.6%
- D. 4%
Answer: D
Explanation:
To calculate the percentage of loss:
Loss = Original Price # Sale Price = $500,000 # $480,000 = $20,000
Percentage loss = ($20,000 ÷ $500,000) × 100 = 4%
Correct answer: A
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NEW QUESTION # 61
Which of the following will an appraiser consider when appraising a property?
- A. A reconciliation of values if more than one appraisal method is used
- B. The original price paid for the property
- C. The average value of all available comparables
- D. The cost to update the subject property
Answer: A
Explanation:
When using more than one approach to value (sales comparison, cost, and income), an appraiser must reconcile the results, weighting each method based on its relevance to the subject property. The original purchase price and average of all comps are not directly used in determining value. The cost to update may factor into adjustments but is not a primary valuation method. Therefore, the correct answer is D.
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NEW QUESTION # 62
In North Carolina, which lien has the highest priority when property is sold to recover a debt?
- A. Whichever lien was recorded first
- B. Ad valorem property tax lien
- C. Mortgage lien
- D. Judgment lien
Answer: B
Explanation:
In North Carolina, and in most states, ad valorem (real estate) property tax liens have "superior lien" status.
They take precedence over all other liens, regardless of recording date. This includes mortgage liens and judgment liens. Therefore, even if a mortgage was recorded first, a property tax lien takes priority. Correct answer: A.
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NEW QUESTION # 63
In the context of antitrust laws, which action would be considered an example of a group boycott?
- A. Two brokers from different firms agree to focus on different neighborhoods.
- B. Two brokers from different firms agree to use the same marketing materials.
- C. Two brokers from different firms agree to charge the same commission rate.
- D. Two brokers from different firms agree not to cooperate with a new discount brokerage.
Answer: D
Explanation:
A group boycott occurs when two or more competitors conspire to exclude another competitor from fair participation in the market-such as refusing to show listings, denying cooperation, or encouraging others not to do business with a certain firm. This violates federal antitrust laws. Price-fixing (choice A) is another violation, but it's not a group boycott. Therefore, the correct answer is D.
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NEW QUESTION # 64
After taking a listing on a property, a broker learns of major highway changes in the area. The broker should disclose this information:
- A. to the buyer but only if the buyer asks about it.
- B. as a material fact to all transactional parties.
- C. to the buyer but only if the seller agrees to the disclosure.
- D. as a material fact to all transactional parties but only if the changes will be completed within a year.
Answer: B
Explanation:
North Carolina brokers are obligated to disclose all material facts to all parties in a transaction, regardless of representation. Planned infrastructure changes such as highway expansions may affect property value or desirability and are therefore material facts. The duty to disclose is not conditional on the buyer's inquiry or seller's permission. So the correct answer is C.
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NEW QUESTION # 65
Josh is a new North Carolina broker at Atlantic Realty. He just got his first listing and wrote the following ad:
"Charming seaside cottage. Call Broker Josh at 555-9876 for an appointment." Which statement about this ad copy is TRUE?
- A. This is an example of an illegal blind ad.
- B. The ad is acceptable as written.
- C. The ad must include an address for the property.
- D. The ad must include Josh's email address.
Answer: A
Explanation:
According to NCREC advertising rules, any advertisement by a broker must clearly identify the firm with which the broker is affiliated. Failing to do so results in what is considered a "blind ad," which is prohibited.
Josh's ad does not include his brokerage firm's name-Atlantic Realty-so it is a blind ad. Therefore, the correct answer is D.
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NEW QUESTION # 66
Which statement about an option contract is TRUE?
- A. The seller is obligated to sell the property if the buyer chooses to exercise the option.
- B. Any money paid with an option must be refunded if the option is not exercised.
- C. An option contract does not require consideration to be enforceable.
- D. The buyer is obligated to purchase the property within the indicated time frame.
Answer: A
Explanation:
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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NEW QUESTION # 67
Which situation would be an appropriate use of an expedited eviction process in North Carolina?
- A. A tenant has filed a false complaint with a local housing authority.
- B. A residential tenant has not paid the rent in more than two months.
- C. A tenant has been arrested on a charge of domestic violence.
- D. A tenant in a two-week vacation rental has breached the rental agreement.
Answer: D
Explanation:
Under NC General Statutes Chapter 42A (Vacation Rental Act), a landlord may employ theexpedited eviction process(using magistrate and four-hour notice) when a tenant under a vacation rental agreement (30 days or fewer) breaches the contract-such as overstaying, failing to pay rent, or materially violating terms. A two-week vacation rental falls under this provisionsog.unc.edufairhousingnc.org+14ncleg.gov+14nclamp.
gov+14fairhousingnc.org. Option A is standard eviction, not expedited; B and C don't qualify under expedited procedures.
NEW QUESTION # 68
Which statement about a mortgagee's title insurance policy is TRUE?
- A. The amount paid on a claim equals the original loan amount.
- B. Coverage never expires as long as the buyer owns the property.
- C. It protects the lender against defects in the title.
- D. The policy premium is usually added to the monthly mortgage amount.
Answer: C
Explanation:
A mortgagee's (lender's) title insurance policy protects the lender from financial loss caused by title defects that were not discovered before the mortgage was issued. The policy coverage lasts until the loan is repaid.
The borrower pays a one-time premium at closing-it is not part of the monthly mortgage. Claims are based on the unpaid balance of the loan, not necessarily the full loan amount. Therefore, the correct answer is D.
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NEW QUESTION # 69
The buyer of a long-vacant lot plans to build a home. The zoning ordinance for the town in which the property is located indicates that every lot with a structure must be at least 80 feet wide. When the buyer applies for a building permit, they are surprised to learn that the lot is only 76 feet wide. The property is worthless if they cannot build a home. To build a home on the lot legally, what must the buyer obtain from the local zoning board?
- A. Variance
- B. Buffer exemption
- C. Nonconforming use permit
- D. Conditional exception
Answer: A
Explanation:
A variance is an exception to a zoning ordinance granted by the local zoning board when strict enforcement would cause undue hardship due to unique property conditions. In this case, the lot is too narrow for the minimum width requirement, but the buyer can seek a variance to proceed legally. A nonconforming use applies to existing properties that no longer comply after zoning changes. Therefore, the correct answer is D.
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NEW QUESTION # 70
A provision in a contract that makes the parties' rights and obligations dependent on the occurrence or nonoccurrence of a specified event is a(n):
- A. contingency
- B. stipulation
- C. option
- D. amendment
Answer: A
Explanation:
A contingency is a clause in a contract that makes the agreement dependent upon a certain event or action occurring before the contract becomes fully binding. Common examples include financing, appraisal, or home inspection contingencies. An amendment modifies an existing contract, an option gives a party the right but not the obligation to act, and a stipulation may refer to a general condition but not necessarily a legal contingency. Therefore, the correct answer is B.
NEW QUESTION # 71
A North Carolina broker deposits a buyer's earnest money check into their firm's general fund so that they can pay the rent on the brokerage office. This is an example of:
- A. puffing.
- B. capitalization.
- C. commingling.
- D. negligence.
Answer: C
Explanation:
Commingling is the illegal act of mixing a client's funds-such as earnest money-with the broker's personal or business funds. North Carolina law strictly prohibits brokers from depositing trust money (like earnest deposits) into the firm's general operating account. In this case, the broker used the funds to pay rent, which could also constitute conversion (intentional misuse). But since the question specifically addresses the deposit, the correct answer is B - commingling.
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NEW QUESTION # 72
A business may contact a former client for up to _______ after a transaction closes, even if that client is on the National Do Not Call Registry?
- A. 9 months
- B. 18 months
- C. 24 months
- D. 12 months
Answer: B
Explanation:
According to theNCREC Broker National (Broker-N)guidelines and the Federal Telephone Consumer Protection Act (TCPA), a real estate business may continue to contact a former client for up to18 monthsafter the conclusion of a transaction under the established business relationship exception, even if the client is on the National Do Not Call Registry. The NCREC's official materials affirm this 18-month contact window.
Reference:
NCREC Broker National (Broker-N) Compliance Guide, Section on Telemarketing and Client Communications Federal TCPA Rules, 47 C.F.R. § 64.1200(f)(5) NCREC Legal Update Bulletin, "Do Not Call and Client Relationships," 2023
NEW QUESTION # 73
A lease with a simple exchange of rent for occupancy, under which the tenant pays none of the costs of ownership, is known as a(n):
- A. percentage lease
- B. net lease
- C. gross lease
- D. graduated lease
Answer: C
Explanation:
In a gross lease, the tenant pays a fixed rent amount, and the landlord is responsible for property taxes, insurance, and maintenance costs. This type of lease is common in residential rentals and contrasts with a net lease, where the tenant pays some or all ownership costs. A graduated lease involves rent increases at intervals, and a percentage lease involves paying rent based on the tenant's gross business income. Therefore, the correct answer is B, gross lease.
NEW QUESTION # 74
The owner of a cooperative unit has which of the following rights in the property?
- A. A fee simple interest in the unit and an undivided common interest in common areas
- B. A proprietary lease for the exclusive use of the unit and shares of stock in the corporation that owns the property
- C. A fee simple interest in the unit combined with occupancy rights for a specified recurring period annually
- D. A fee simple interest in the unit and a proportional interest in common areas based on unit size
Answer: B
Explanation:
In a cooperative (co-op) ownership arrangement, the real estate is owned by a corporation. Individual residents do not own their units as real property. Instead, they own shares of stock in the corporation and receive a proprietary lease, which gives them the right to occupy a specific unit. This contrasts with condominium ownership, where unit owners hold fee simple title. Therefore, the correct answer is D.
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NEW QUESTION # 75
A listing broker receives a signed offer from a buyer. Although the broker must present the offer to the seller as soon as possible, under the North Carolina Real Estate Commission Rules, the broker must present the offer:
- A. within 24 hours.
- B. before the end of the next business day.
- C. within 3 days.
- D. within 2 days.
Answer: B
Explanation:
NCREC rules require brokers to present all written offers to their client "immediately, but in no event later than three days." However, standard practice and Commission guidance emphasize that brokers must present offers no later than the end of the next business day after receipt. This ensures timely communication and allows the seller to respond promptly, especially in a competitive market. Therefore, the correct answer is B.
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NEW QUESTION # 76
A North Carolina real estate broker may:
- A. practice oral buyer agency so long as it is exclusive and sets a specific time frame for the oral agency agreement.
- B. practice oral seller agency but must have a listing agreement in writing no later than the time at which a buyer submits an offer.
- C. delay the use of the Working with Real Estate Agents Disclosure when there is an oral seller agency.
- D. practice oral buyer agency but must have a written agency agreement with the buyer prior to presenting an offer.
Answer: D
Explanation:
Under North Carolina Real Estate Commission (NCREC) rules, a broker may begin working with a buyer under oral buyer agency but must have a signed, written buyer agency agreement in place before presenting any offer on behalf of that buyer. Oral agency cannot be exclusive or have a defined time frame. Additionally, the broker must provide the Working with Real Estate Agents Disclosure at first substantial contact.
Therefore, oral buyer agency is permissible temporarily but must convert to a written agreement before drafting or presenting an offer, making option C correct.
NEW QUESTION # 77
Which of the following entities would participate in the primary market for mortgage lending?
- A. Federal Housing Administration
- B. Commercial bank
- C. Federal National Mortgage Association
- D. Federal Home Loan Mortgage Corporation
Answer: B
Explanation:
The primary mortgage market is where loans are originated. Lenders such as commercial banks, credit unions, mortgage bankers, and savings institutions interact directly with borrowers. The Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae) operate in the secondary market, purchasing existing loans. The Federal Housing Administration (FHA) insures loans but does not lend directly. Therefore, the correct answer is A.
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NEW QUESTION # 78
Why does the North Carolina Conner Act require deeds to be recorded?
- A. To comply with the statute of frauds
- B. To provide actual notice to all parties involved
- C. To provide constructive notice of the transfer
- D. To ensure the validity of the deed
Answer: C
Explanation:
The Conner Act in North Carolina requires that certain real estate documents (including deeds, leases over 3 years, and easements) must be recorded in order to be enforceable against third parties. Recording a deed provides constructive notice to the world that an ownership transfer has occurred. Constructive notice is a legal concept meaning everyone is deemed to know the facts once the document is publicly recorded.
Therefore, the correct answer is B.
NEW QUESTION # 79
In North Carolina, which type of buyer agency agreement may be oral or written?
- A. Exclusive buyer agency agreement for a fixed period of time
- B. Exclusive buyer agency agreement that does not bind the buyer for a fixed period of time
- C. Nonexclusive buyer agency agreement for a fixed period of time
- D. Nonexclusive buyer agency agreement that does not bind the buyer for a fixed period of time
Answer: D
Explanation:
In North Carolina, a nonexclusive buyer agency agreement that does not include a specific time period can initially be oral. However, before writing or presenting any offers on behalf of the buyer, the agreement must be put into writing and signed. Exclusive buyer agency agreements and any agreement that includes a fixed term must be in writing from the beginning. Therefore, the correct answer is D.
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NEW QUESTION # 80
A property owner owns 150 acres of land. Bordering one side of the property is a non-navigable river. Which statement about the owner's ownership rights is TRUE?
- A. The owner can stop other people from using the river.
- B. The owner owns the water and can build a dam to restrict its flow.
- C. The owner has littoral, not riparian rights.
- D. The owner's land ownership rights extend to the center of the river.
Answer: D
Explanation:
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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NEW QUESTION # 81
What are the four elements of value that must exist in harmony to maximize the value of real property?
- A. Immobility, scarcity, transferability, and demand
- B. Demand, utility, scarcity, and transferability
- C. Uniqueness, immobility, indestructibility, and demand
- D. Right of use, enjoyment, exclusivity, and disposal
Answer: B
Explanation:
The four economic characteristics necessary for real property to have value are:
Demand: There must be a desire or need for the property.
Utility: The property must serve a purpose or satisfy a need.
Scarcity: There must be a limited supply of similar properties.
Transferability: The ownership rights must be transferable from one party to another.
These four components form the acronym DUST and are foundational in property valuation. The correct answer is A.
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NEW QUESTION # 82
If a seller whose property is currently listed with another company initiates a conversation with a broker about the possibility of the broker becoming their new listing agent, the broker:
- A. must advise the seller to contact an attorney.
- B. may discuss the terms of a possible listing agreement that would begin after the current listing ends.
- C. may not discuss the terms of any possible future listing agreement.
- D. may suggest that the seller terminate the current listing agreement early.
Answer: B
Explanation:
Under the NCREC Rules and Code of Ethics, a broker may not interfere with another firm's existing exclusive listing agreement. However, if a seller independently initiates a conversation, a broker is allowed to discuss the terms of a future agreement - but that agreement must begin only after the current listing expires.
The broker must not suggest early termination or breach of contract. Therefore, option A accurately reflects what is legally and ethically permissible.
NEW QUESTION # 83
The statute of frauds requires contracts for the sale of real property to be:
- A. in writing to be enforceable.
- B. prepared by an attorney.
- C. recorded in the same jurisdiction as the property.
- D. fully executed before the expiration date.
Answer: A
Explanation:
The Statute of Frauds is a legal doctrine that requires certain types of contracts-including contracts for the sale of real property-to be in writing to be enforceable in a court of law. Oral agreements for real estate transactions are not enforceable under this law in North Carolina. There is no requirement that contracts be drafted by attorneys, executed by a certain date, or recorded. Therefore, the correct answer is B.
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NEW QUESTION # 84
Morgan has an appurtenant easement to cross Julie's land to get to his cornfield. Julie's land is the:
- A. dominant tenement
- B. encroachment
- C. servient tenement
- D. reserved tenement
Answer: C
Explanation:
An appurtenant easement involves two properties: the dominant tenement (the one that benefits from the easement) and the servient tenement (the one that is burdened by the easement). In this case, Morgan benefits from the easement (dominant tenement), and Julie's land must allow access (servient tenement). Therefore, Julie's land is correctly identified as the servient tenement.
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NEW QUESTION # 85
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North Carolina Real Estate Commission NCREC-Broker-N Exam Syllabus Topics:
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