Real Estate Licensing NCREC-Broker-N Exam Practice Test Instant Access

Question 1

[Offers and Negotiations -- Contract Status]

A contract in which one or both parties have not yet completed performance of their contractual obligations is referred to as:

Aexecuted

Bexecutory

Cvoidable

Dunenforceable

Answer : B

An executory contract is one in which terms have been agreed upon, but some or all of the obligations have yet to be performed. For example, a purchase contract where the closing has not yet occurred is executory. An executed contract is one where all parties have completed their obligations. A voidable contract is valid unless canceled by one party due to a legal defect. An unenforceable contract cannot be upheld in court. Therefore, the correct answer is B.

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Question 2

A North Carolina real estate broker lists their vacation home for sale. A prospective buyer asks to see the property. Which statement is TRUE?

AThe broker can be a designated agent of the buyer if another licensee in the brokerage firm acts as the broker's designated agent.

BThe broker can represent the buyer with informed written consent because the property is not the broker's primary residence.

CThe broker can represent the buyer with informed written consent as long as the broker's ownership interest in the vacation home is less than 25%.

DThe broker cannot represent the buyer under any circumstances.

Answer : D

North Carolina rules prohibit a broker from representing a buyer in the purchase of property in which the broker has an ownership interest, regardless of whether the property is a vacation home, primary residence, or investment. The potential for conflict of interest is considered too great, and no form of dual or designated agency is permitted in such situations. Therefore, the broker cannot represent the buyer under any circumstances.

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Question 3

Which of the following statements regarding the proper handling of multiple offers in North Carolina is TRUE?

AA listing broker must disclose the terms of a buyer's offer to every competing buyer.

BA listing broker must continue to present offers even if the seller has accepted a previous offer.

CA listing broker must disclose the existence of multiple offers to all buyers before they make an offer.

DA listing broker should prioritize the highest offer when presenting multiple offers.

Answer : B

According to NCREC rules and guidance, a listing broker is obligated to continue presenting all offers to the seller until closing, unless specifically instructed otherwise by the seller in writing. Even if the seller has accepted an offer, other offers must still be presented unless the transaction is completed. Brokers are not required to disclose the terms of competing offers (doing so requires written consent), nor are they required to prioritize offers based on price alone. Therefore, the correct and legally accurate answer is B.

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Question 4

[Compliance with Laws and Regulations -- Title Insurance]

Which statement about a mortgagee's title insurance policy is TRUE?

AThe amount paid on a claim equals the original loan amount.

BCoverage never expires as long as the buyer owns the property.

CThe policy premium is usually added to the monthly mortgage amount.

DIt protects the lender against defects in the title.

Answer : D

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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Question 5

When a property is being sold "as is," what responsibility does the listing broker have related to disclosures?

AThe broker has no disclosure responsibilities.

BThe broker must still disclose all known material facts.

CThe broker needs to disclose only major structural issues.

DThe broker should not disclose any information to avoid liability.

Answer : B

In North Carolina, a property sold ''as is'' means the seller is not agreeing to make repairs, but it does not relieve the broker of their duty to disclose. The broker must disclose all material facts they know or reasonably should know, regardless of the ''as is'' status. This includes physical defects, zoning issues, or legal encumbrances. Therefore, option B is the correct and legally required practice for brokers.

Question 6

[Broker's Agency Relationships and Disclosures -- WWREA Disclosure]

When must a North Carolina broker provide a copy of the Working With Real Estate Agents (WWREA) Disclosure to a prospective buyer or seller?

AAt the very first contact

BAt the first substantial contact

CWithin 24 hours of the first substantial contact

DNo later than when an offer is submitted

Answer : B

Under NCREC rules, the Working With Real Estate Agents Disclosure must be presented and reviewed with a prospective buyer or seller at the first substantial contact. ''Substantial contact'' occurs when conversations begin to include personal, financial, or confidential information. It does not have to be tied to signing an agreement or making an offer. Therefore, the correct answer is B.

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Question 7

Property in Town A is assessed at 50% of market value. The property tax rate is $32 per $1,000. If the market value of a home is $630,000, what is the annual tax assessment?

A$4,032

B$8,064

C$10,080

D$20,160

Answer : C

Step 1: Determine assessed value

Market value = $630,000

Assessment rate = 50%

Assessed value = $630,000 0.50 = $315,000

Step 2: Calculate tax

Tax rate = $32 per $1,000

$315,000 $1,000 = 315

315 $32 = $10,080

However, this result matches option C. Therefore:

Corrected Final Answer: C. $10,080

Explanation Confirmed: Assessed value is 50% of $630,000 = $315,000. Tax at $32 per $1,000 means $315 $32 = $10,080. Correct answer is C.

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Real Estate Licensing North Carolina Real Estate Broker National NCREC-Broker-N Exam Practice Test