Real Estate Licensing NCREC-Broker-N Exam Questions Instant Access

Question 1

[Broker's Authority and Duties]

A North Carolina broker has been designated as the broker-in-charge (BIC) at a brokerage firm. This means that the broker:

Acan appoint a second BIC to help in the office.

Bcan supervise both the main office and one or more branch offices.

Cmust be the owner of the brokerage firm.

Dmust supervise all provisional brokers in the office.

Answer : D

In North Carolina, the Broker In Charge (BIC) is responsible for supervising all provisional brokers and ensuring they adhere to Commission rules. While a BIC may also supervise branch offices if appointed, the core statutory duty is direct supervision of licensed provisional brokers . Therefore, Option D is the most accurate.

Question 2

[Broker's Authority and Duties -- Trust Account Violations]

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:

Acapitalization.

Bcommingling.

Cnegligence.

Dpuffing.

Answer : B

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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Question 3

[Commission and Compensation]

A North Carolina non-provisional broker at ABC Realty has been working with a buyer client to help them purchase a house listed by XYZ Realty. After the transaction closes, who will pay the non-provisional broker the commission they earned?

AThe buyer client

BThe seller

CThe qualifying broker of XYZ Realty

DThe supervising broker-in-charge at ABC Realty

Answer : D

In North Carolina, only a broker-in-charge (BIC) or firm can receive compensation directly for brokerage services. All brokers, whether provisional or not, must be paid through their affiliated BIC or firm. In this case, the buyer agent is affiliated with ABC Realty, so the firm or its BIC receives the compensation---typically from XYZ Realty's firm via the co-brokerage agreement---and then disburses the earned commission to the broker. Therefore, the correct answer is D.

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Question 4

What duty does a North Carolina real estate broker have related to material facts?

AAn affirmative duty to discover and disclose material facts to all parties

BAn affirmative duty to discover and disclose material facts to their clients only

CA duty to disclose known material facts to all parties but no affirmative duty to discover material facts

DA duty to disclose known material facts to their clients only but no affirmative duty to discover material facts

Answer : A

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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Question 5

[Compliance with Laws and Regulations -- RESPA and Kickbacks]

Which is MOST likely to be an example of an acceptable practice under the provisions of the federal Real Estate Settlement Procedures Act (RESPA) related to kickbacks?

AA real estate brokerage firm allows a title company to use the brokerage's downtown office to conduct closings as a convenience to downtown clients.

BA title company buys an ad in the local newspaper every month for the real estate brokerage firm that sends the title company the most referrals.

CA home inspector gives a real estate broker tickets to the Super Bowl to thank the broker for the business they sent to the inspector this year.

DA mortgage company includes a link to a real estate brokerage firm's website on its home page in exchange for the brokerage sending clients their way.

Answer : A

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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Question 6

[Listing Price and Terms -- Income Approach]

The monthly rent for each unit in a six-unit office building is $2,500. The annual vacancy rate averages 4%. The owner collects $3,000 per year in advertising fees. Annual operating expenses are $40,000. The annual debt service is $25,000. What is the net operating income of this property?

A$110,800

B$132,680

C$135,800

D$150,800

Answer : C

Step 1: Calculate Gross Scheduled Income

6 units $2,500/month 12 months = $180,000

Step 2: Deduct Vacancy Loss (4%)

$180,000 0.04 = $7,200

Effective Gross Income = $180,000 $7,200 = $172,800

Step 3: Add Other Income

$172,800 + $3,000 (advertising fees) = $175,800

Step 4: Subtract Operating Expenses (ignore debt service)

$175,800 $40,000 = $135,800

Note: Net Operating Income (NOI) excludes debt service.

Correct answer: C

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Question 7

[Listing Price and Terms -- Appraisal Process]

Which of the following will an appraiser consider when appraising a property?

AThe cost to update the subject property

BThe original price paid for the property

CThe average value of all available comparables

DA reconciliation of values if more than one appraisal method is used

Answer : D

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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Real Estate Licensing North Carolina Real Estate Broker National NCREC-Broker-N Exam Questions