North Carolina Real Estate Broker Exam — All Questions

The principle of contribution states that the value of a component or improvement is measured by:

• a.The raw number of square feet of floor area or land area that the improvement happens to occupy
• b.The owner's personal emotional attachment to and sentimental feelings about that improvement
• c.Its original construction or installation cost in every case, dollar for dollar, with no exception
• d.How much it adds to the overall value of the property, not its cost✓

Under contribution, an improvement is worth the amount it adds to the whole property's market value, which may be more or less than its cost. This principle explains why some renovations do not fully return their expense, a key point in over-improvement analysis.

Under Internal Revenue Code Section 121, a qualifying homeowner may generally EXCLUDE from taxable capital gain:

• a.Up to $250,000 of gain if single, or $500,000 if married filing jointly✓
• b.Up to a full one million dollars of gain on any property at all, at any time and any frequency
• c.All gain on any and every investment or rental property the taxpayer happens to own and sell
• d.Absolutely nothing, because gain on the sale of a home is always fully and entirely taxable

Section 121 lets homeowners who owned and used the home as their principal residence for at least two of the prior five years exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). It applies to a primary residence, not to investment property.

Depreciation recapture on the sale of investment real estate means that:

• a.All of the depreciation deductions previously claimed are simply refunded to the investor in cash
• b.The investor is legally required to physically restore and rebuild the depreciated building itself
• c.Gain from prior depreciation may be taxed, often at a special rate✓
• d.No income tax is ever owed at all on the sale of a property that has previously been depreciated

When depreciated property is sold at a gain, the portion of gain due to depreciation deductions is 'recaptured' and taxed under special rules, reflecting the earlier tax benefit. It is a tax concept, not a requirement to rebuild, and it increases, not eliminates, tax on sale.

Which appraisal approach is generally MOST reliable for a special-purpose property, such as a church or public school, that rarely sells and earns no market income?

• a.The sales comparison approach, which depends on recent sales of similar comparable properties
• b.The income approach, which converts a property's market rental income into an indicated value
• c.The gross rent multiplier method, which relies on typical market rents that these lack entirely
• d.The cost approach✓

Special-purpose properties have few or no comparable sales and generate no market rent, so the cost approach (replacement cost new, less depreciation, plus land) is typically most reliable. Sales comparison lacks comparables and the income/GRM methods need market income these properties do not produce.

The four characteristics an item must have to possess value in the market, often remembered as DUST, are:

• a.Debt, Utility, Supply, and Taxes, a mix of unrelated financing and cost terms rather than value
• b.Demand, Utility, Scarcity, and Transferability✓
• c.Depreciation, Use, Sale, and Title, which describe stages of ownership rather than value itself
• d.Demand, Ownership, Scarcity, and Time, which swaps in two terms that are not part of the concept

For something to have market value it must have Demand (buyers who want it), Utility (usefulness), Scarcity (limited supply), and Transferability (the ability to convey it). The DUST acronym captures these four essentials of value.

A homeowner installs custom bookshelves that are bolted into wall studs and built to fit a specific alcove. In a sale, how are these most likely treated?

• a.Trade fixtures the seller may remove regardless of the contract
• b.Personal property the seller always removes
• c.Fixtures that transfer with the real property unless excluded in writing✓
• d.Emblements that pass to the buyer at closing

Items permanently attached and adapted to the property are fixtures and pass with the real estate unless the contract specifically excludes them. Personal property would move with the seller, but bolting into studs and custom fitting show intent for the items to become part of the realty. Trade fixtures apply to a commercial tenant's business equipment, and emblements refer to annual crops, neither of which fits a homeowner's bookshelves.

Two unmarried business partners take title so that if one dies, the survivor automatically owns the whole property. Which form of co-ownership accomplishes this?

• a.Tenancy by the entirety
• b.Joint tenancy with right of survivorship✓
• c.Severalty
• d.Tenancy in common

Joint tenancy with right of survivorship passes a deceased owner's interest automatically to the surviving joint tenant, avoiding probate. Tenancy in common has no survivorship, so a decedent's share goes to their heirs. Tenancy by the entirety is reserved for married couples, and severalty means sole ownership by one person, so neither fits two unmarried partners seeking survivorship.

An appraiser adjusts comparable sales when using the sales comparison approach. To which property is the adjustment always applied?

• a.Whichever property has the higher value
• b.Both properties equally
• c.The subject property, never the comparable
• d.The comparable, never the subject property✓

In the sales comparison approach the subject has no known sale price, so adjustments are made to the comparables to make them resemble the subject. If a comparable is superior, its price is adjusted downward; if inferior, upward. The subject is never adjusted because its value is the unknown the appraiser is trying to estimate.

Which appraisal approach is generally given the most weight when valuing a single-family owner-occupied home?

• a.Sales comparison approach✓
• b.Cost approach using replacement cost
• c.Income capitalization approach
• d.Gross rent multiplier approach

For owner-occupied homes, buyers act on prices of similar recently sold homes, so the sales comparison approach best reflects market behavior and is weighted most heavily. The income and gross rent multiplier approaches suit rental or investment property because they rely on income the home does not generate. The cost approach is most useful for new construction or special-purpose buildings that lack comparable sales.

A broker's fiduciary duties to a client include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care. Which best describes the duty of confidentiality after agency ends?

• a.It continues indefinitely as to the client's confidential information✓
• b.It applies only to the purchase price
• c.It is waived automatically once a commission is paid
• d.It ends the moment the transaction closes

The duty to keep a client's confidential information private survives the termination of the agency relationship and generally continues indefinitely. Closing the transaction or paying a commission does not release the broker to reveal a former client's motivations, financial limits, or bargaining position. The duty is not limited to the price; it covers any confidential information learned during the agency.

A buyer signs an offer, and before the seller accepts, the buyer notifies the seller in writing that the offer is withdrawn. What is the legal effect?

• a.The offer is revoked and there is no contract✓
• b.The offer converts into an option contract
• c.The buyer is liable for damages for revoking the offer
• d.The seller may still accept because the offer was in writing

An offer may be revoked by the offeror any time before it is accepted, and once revoked there is no contract to enforce. The seller cannot accept an offer that has already been withdrawn, and the buyer owes no damages for revoking because no binding agreement existed. An option would require separate consideration to keep the offer open, which was not present here.

A broker tells prospective buyers that a neighborhood is 'changing' and they should buy now before values fall due to new residents moving in. This practice is called:

• a.Redlining
• b.Puffing
• c.Blockbusting✓
• d.Steering

Blockbusting is inducing owners to sell or buyers to act by suggesting that people of a particular protected class are entering the neighborhood and will affect values, and it is illegal under fair housing law. Redlining is denying loans or services in certain areas, and steering is directing buyers toward or away from areas based on protected characteristics. Puffing is legal opinion-based sales talk and does not involve protected classes.

Federal law requires disclosure of known lead-based paint hazards for residential dwellings built before which year?

• a.1988
• b.1968
• c.1978✓
• d.1992

The federal Residential Lead-Based Paint Hazard Reduction Act requires sellers and landlords of housing built before 1978 to disclose known lead-based paint and hazards and to provide the EPA pamphlet. Lead-based paint was banned for residential use in 1978, so pre-1978 homes are the concern. The 1968 date relates to the Fair Housing Act, and 1988 and 1992 are not the lead-paint threshold.

A borrower obtains a mortgage loan with a fixed interest rate and equal monthly payments that fully repay the loan by the end of the term. This is best described as:

• a.A fully amortizing loan✓
• b.A balloon loan
• c.An interest-only loan
• d.A negative amortization loan

A fully amortizing loan uses level payments that cover both interest and principal so the balance reaches zero at the end of the term. An interest-only loan leaves the principal untouched during the interest-only period, and a balloon loan requires a large lump-sum payoff before amortization would complete. Negative amortization occurs when payments are too small to cover interest, causing the balance to grow.

A home sells for $340,000. The listing brokerage charges a 6% commission, split equally between the listing and selling firms. How much does the listing firm receive?

• a.$13,600
• b.$20,400
• c.$10,200✓
• d.$5,100

The total commission is 6% of $340,000, which equals $20,400. Splitting that equally between the listing and selling firms gives each firm half, or $10,200. The $20,400 figure is the full commission before the split, and the other options do not match a 50/50 division of the 6% fee.

A rectangular lot measures 150 feet by 200 feet. How many acres is the lot, rounded to the nearest hundredth? (One acre = 43,560 square feet.)

• a.0.69 acres✓
• b.1.38 acres
• c.0.34 acres
• d.0.55 acres

The lot area is 150 x 200 = 30,000 square feet. Dividing 30,000 by 43,560 square feet per acre yields about 0.69 acres. Answers such as 0.34 or 1.38 result from halving or doubling the area incorrectly, and 0.55 does not match the correct division.

Under North Carolina law, when must a broker first review the Working With Real Estate Agents Disclosure with a consumer?

• a.Only at the closing table
• b.At first substantial contact with the consumer✓
• c.Only after a written offer is prepared
• d.Whenever the broker feels it is appropriate

North Carolina requires brokers to review the Working With Real Estate Agents Disclosure with a buyer or seller at first substantial contact, meaning before the consumer shares confidential information. Waiting until closing or until an offer is written would defeat the disclosure's purpose of explaining agency options early. The timing is set by Commission rule, not left to the broker's discretion.

In North Carolina, dual agency is permitted only when:

• a.Both the buyer and seller give informed written consent✓
• b.The transaction involves commercial property only
• c.It is never permitted under any circumstances
• d.The broker discloses it verbally at closing

North Carolina allows dual agency, where a firm represents both buyer and seller in the same transaction, only with the informed written consent of both parties. Verbal disclosure at closing is insufficient because consent must be informed and in writing before the conflict arises. Dual agency is not restricted to commercial deals and is not categorically prohibited in North Carolina.

A North Carolina broker receives an earnest money deposit. Where must those funds be held?

• a.In cash inside the office safe until the closing date
• b.In the broker-in-charge's personal investment account
• c.In a trust or escrow account, separate from own funds✓
• d.In the individual broker's personal checking account

North Carolina License Law requires client and customer money such as earnest money to be deposited in a trust or escrow account kept separate from the broker's personal or business funds. Commingling those funds with the broker's own money is prohibited and can lead to discipline. Holding deposits in cash or a personal account fails the safeguarding and record-keeping requirements the Commission enforces.

In North Carolina, what is the primary role of the broker-in-charge (BIC) at a real estate office?

• a.To supervise the brokers and the trust accounting at that office location✓
• b.To guarantee commissions to all affiliated brokers
• c.To act as the sole agent for all clients of the firm
• d.To personally close every transaction handled by the office

The broker-in-charge is responsible for supervising the brokers affiliated with an office and overseeing the office's trust account and advertising. The BIC does not have to personally close every deal or serve as agent for every client. The BIC also does not guarantee other brokers' commissions; the role is one of oversight and compliance, not payment guarantees.

North Carolina's Residential Property and Owners' Association Disclosure Statement generally requires a seller of residential real property to:

• a.Disclose known defects or state 'No Representation'✓
• b.Guarantee that the property carries no known defects
• c.Repair every disclosed defect before listing the home
• d.Furnish the buyer a professional home inspection report

North Carolina's disclosure statement asks sellers to reveal known conditions of the property or to answer 'No Representation,' placing the duty on disclosure rather than warranty. The seller need not guarantee the property is defect-free, repair items before listing, or supply an inspection. The form gives buyers information about known conditions while allowing the seller to decline to represent certain items.

North Carolina imposes an excise tax (transfer tax) on deeds at a rate of:

• a.$5 per $1,000 of value
• b.$2 per $100 of value
• c.$1 per $500 of value or fraction thereof✓
• d.A flat $500 per transaction

North Carolina's real estate excise tax is $1 for every $500 of consideration or value, or fraction thereof, and is customarily paid by the seller. The other rates listed overstate the tax; for example, a $200,000 sale produces $400 in excise tax under the $1-per-$500 rule. It is calculated on the sale price, not charged as a flat per-transaction fee.

The standard North Carolina Offer to Purchase and Contract typically uses which mechanism to give the buyer a negotiated period to investigate the property and terminate for any reason?

• a.A due diligence fee and due diligence period✓
• b.An automatic 30-day inspection contingency
• c.A mandatory appraisal contingency
• d.A statutory three-day rescission period

North Carolina's standard form uses a negotiated due diligence period, often paired with a due diligence fee paid to the seller, during which the buyer may investigate and terminate for any reason or no reason. There is no general statutory three-day rescission right for a home purchase, and the inspection period is negotiated rather than a fixed automatic 30 days. Appraisal protections are handled within due diligence, not as a separate mandatory contingency.

In North Carolina, residential real estate closings are conducted under a model in which:

• a.Only real estate brokers may conduct the closing
• b.Closings are always handled by out-of-state escrow companies
• c.No attorney involvement is permitted
• d.A licensed attorney supervises the closing and handles the title work✓

North Carolina follows an attorney-supervised closing model in which a licensed North Carolina attorney handles the title examination and the disbursement of funds. Brokers may facilitate the transaction but do not perform the legal closing work themselves. Out-of-state escrow-only companies do not replace the attorney's role in North Carolina residential closings.

In North Carolina, from whom may an affiliated broker lawfully accept a commission for a real estate transaction?

• a.From any party who offers to pay them
• b.From the opposing brokerage firm directly
• c.Directly from the buyer with no firm involvement
• d.Only from their own broker-in-charge or firm✓

A provisional broker or affiliated broker in North Carolina may accept compensation for brokerage activity only through their own firm or broker-in-charge, not directly from clients or other firms. This keeps compensation flowing through the supervising firm, which is responsible for the broker's conduct. Accepting money directly from a client or the other firm would violate License Law.

A buyer is purchasing a home in a federally designated Special Flood Hazard Area with a federally backed mortgage. What is typically required?

• a.Private mortgage insurance instead of flood coverage
• b.Flood insurance as a condition of the loan✓
• c.A waiver of all hazard insurance
• d.Nothing, because flood insurance is always optional

When a property in a Special Flood Hazard Area is financed with a federally backed or federally regulated loan, the lender must require flood insurance. Standard homeowners hazard policies do not cover flood damage, so a separate flood policy is needed. Private mortgage insurance protects the lender against default and is unrelated to flood risk, so it cannot substitute for flood coverage.

A newly licensed North Carolina broker holds a provisional broker license. To remove the provisional status, the broker must:

• a.Pass a second North Carolina state licensing examination
• b.Open and personally operate their own brokerage firm
• c.Complete the required post-licensing education in time✓
• d.Renew the license once for a further two-year period

A North Carolina provisional broker must complete the mandatory post-licensing education courses within the allowed period to remove the provisional status and become a full broker. Merely renewing, opening a firm, or retaking the exam does not satisfy this requirement. Failing to complete post-licensing education on time results in the license becoming inactive.

Under North Carolina's Tenant Security Deposit Act, a landlord who collects a residential security deposit must:

• a.Deposit it into the landlord's own spending account
• b.Hold it in trust or bond it, and account after move-out✓
• c.Treat the deposit as additional non-refundable rent
• d.Return the deposit only if the tenant stays two years

North Carolina's Tenant Security Deposit Act requires residential landlords to hold deposits in a trust account with a licensed North Carolina bank or post a bond, and to provide an accounting of any deductions after the tenancy ends. The deposit is the tenant's money held in trust, not additional rent or personal funds. Return is tied to the lawful accounting process, not an arbitrary length of stay.

What prelicensing education does North Carolina require of an applicant for a broker license?

• a.90 hours of instruction completed within the prior three years
• b.120 hours of instruction completed within the prior two years
• c.75 hours of instruction completed within the prior three years✓
• d.75 hours of instruction completed within the prior five years

The applicant must be at least 18 and, within the three years preceding application, have completed at least 75 hours of instruction through a Commission-certified education provider (or equivalent education or experience the Commission accepts). Cite: N.C.G.S. 93A-4(a).

A North Carolina provisional broker must complete the Postlicensing education program on what schedule?

• a.18 months, in three 30-hour courses✓
• b.Three years, in three 30-hour courses
• c.Two years, in two 45-hour courses each
• d.12 months, in four 25-hour courses total

Every broker licensed on or after April 1, 2006 starts as a provisional broker and has 18 months from initial licensure to finish 90 hours of Postlicensing instruction, delivered as Courses 301, 302 and 303 of 30 instructional hours each. Cite: N.C.G.S. 93A-4(a1); 21 NCAC 58A .1902(a)-(b).

A North Carolina provisional broker reaches 18 months after initial licensure having finished only two of the three Postlicensing courses. What happens to the license?

• a.It is revoked; the broker must reapply and retest to be relicensed
• b.It is cancelled; course credit already earned is forfeited
• c.It stays active, but trust money may no longer be held
• d.It is placed on inactive status until the broker requalifies✓

Missing the 18-month deadline does not revoke or cancel the license: the statute and rule both place it on inactive status, and it returns to active status only when the broker satisfies the Commission's reactivation requirements. Cite: N.C.G.S. 93A-4(a1); 21 NCAC 58A .1902(c)-(d).

What brokerage experience does North Carolina require before a broker may be designated broker-in-charge?

• a.Four years of experience within the previous six years
• b.Two years of brokerage experience within the previous five years✓
• c.One year of experience within the previous three years
• d.Three years of experience within the previous ten years

A BIC needs at least two years of full-time brokerage experience, or equivalent part-time experience, within the previous five years, plus the Commission's 12-hour Broker-in-Charge Course. A provisional broker may never be designated BIC. Cite: N.C.G.S. 93A-4.2; 21 NCAC 58A .0110(e).

When does a North Carolina real estate license expire, and when may it be renewed?

• a.June 30 each year, with renewal available 45 days prior✓
• b.December 31, with renewal opening 30 days prior
• c.June 30, but only on the anniversary of initial licensure
• d.December 31, but only on the first renewal anniversary

All licenses issued under Article 1 expire on the 30th day of June following issuance, and a broker may renew during the 45 days before that expiration date. Cite: N.C.G.S. 93A-4(c); 21 NCAC 58A .0503(a).

A North Carolina broker let the license expire and applies to reinstate eight months later. What does the License Law permit?

• a.Reinstatement on payment of the ordinary renewal fee alone
• b.Reinstatement is barred permanently once six months have passed
• c.The Commission may treat the person as not previously licensed✓
• d.Reinstatement is automatic, on inactive status, at no charge

Reinstatement costs twice the renewal fee, and if the licensee fails to reinstate within six months after expiration the Commission may, in its discretion, treat the person as never having been licensed, which subjects the person to the original licensing requirements including the examination. Cite: N.C.G.S. 93A-4(c).

A North Carolina broker is convicted of a misdemeanor. When must the broker report it to the Commission?

• a.Within 30 days, but only for felony convictions
• b.Within 60 days, for a felony or misdemeanor conviction✓
• c.At the next license renewal, for felonies only
• d.Within 10 days, for any criminal charge filed

The broker must file a Criminal Conviction Disciplinary Action Reporting Form within 60 days of final judgment on any felony or misdemeanor conviction; the same 60-day duty covers occupational licensing discipline, military court-martial convictions and notarial sanctions. Cite: 21 NCAC 58A .0113(a).

A North Carolina broker's first substantial contact with a prospective buyer happens by telephone, so the Working with Real Estate Agents disclosure cannot be handed over. By when must it be transmitted?

• a.Within ten days of the buyer's first substantial contact
• b.Before the consumer signs any written agency agreement
• c.At the time the consumer makes or receives a written offer
• d.Within three days of the first substantial contact✓

The disclosure is normally reviewed at first substantial contact. When contact is by telephone or other electronic means the broker must transmit it at the earliest opportunity and in no event later than three days from first substantial contact. Cite: 21 NCAC 58A .0104(c).

Under Commission rule, when must a North Carolina buyer agency agreement be reduced to writing and signed?

• a.No later than the time one of the parties makes an offer✓
• b.Never; oral buyer agency may continue through closing in NC
• c.Only after the seller accepts the buyer's written offer
• d.Within three days after the first substantial contact

Buyer or tenant agency may begin orally, but it must be in writing and signed no later than the time one of the parties makes an offer. Any agreement that binds the buyer for a period of time or restricts the buyer's right to work with others must be written from formation. Cite: 21 NCAC 58A .0104(a).

North Carolina requires every written agency agreement to end at a definite time without notice. Which agreement may nonetheless provide for automatic renewal?

• a.Any agency agreement, if the client is given written notice
• b.Only an agreement to rent or manage the landlord's property✓
• c.A listing agreement, for up to one additional year
• d.A buyer agency agreement, unless the buyer objects in writing

The rule carves out one exception to the definite-termination requirement: an agreement between a landlord and a broker to procure tenants or receive rents may automatically renew, so long as the landlord may terminate with notice at the end of any contract period or renewal. Cite: 21 NCAC 58A .0104(a).

When may a North Carolina broker who is selling property the broker owns also represent the buyer of that property?

• a.Never, in any transaction involving property the broker owns
• b.Only in residential deals if the broker owns under 50 percent
• c.Always, provided the broker discloses the interest orally
• d.Only in commercial deals where the broker owns under 25 percent✓

The general prohibition has one exception: a broker selling commercial real estate in which the broker holds less than a 25 percent ownership interest may represent the buyer if the buyer consents after full written disclosure of that interest. Cite: 21 NCAC 58A .0104(o).

A North Carolina firm practises designated dual agency in a sale. What limit does the rule place on the broker-in-charge?

• a.A BIC must personally serve as designated agent for both parties
• b.A BIC may be designated against any other broker in the office
• c.A BIC may not be designated against a provisional broker he supervises✓
• d.A BIC must first obtain the Commission's written approval

A broker-in-charge shall not act as designated broker for one party when a provisional broker under his or her supervision acts as designated broker for the other party with a competing interest, because the BIC supervises that provisional broker. Cite: 21 NCAC 58A .0104(j).

A North Carolina broker receives a property management rent payment in cash. When must it reach a trust or escrow account?

• a.No later than three banking days after the broker receives it✓
• b.No later than five banking days following the broker's receipt
• c.By the close of the next business day following receipt
• d.Within seven calendar days, or at closing if sooner

All monies received by a broker acting in a fiduciary capacity must be deposited in a trust or escrow account no later than three banking days following receipt, subject to the narrow exceptions listed in the rule. Cite: 21 NCAC 58A .0116(a).

A North Carolina broker holds a buyer's earnest money check while the offer to purchase is still pending. What is the deposit deadline?

• a.Three banking days after the broker first receives the check
• b.Immediately upon receipt, before the offer is accepted
• c.Ten days before the anticipated settlement date arrives
• d.Three days following acceptance of the offer✓

Earnest money and tenant security deposits paid other than in currency on a pending offer are deposited no later than three days following acceptance of the offer, and the contract must state the date of acceptance. Cash still follows the three-banking-day rule. Cite: 21 NCAC 58A .0116(b)(3).

How much of a North Carolina broker's own company money may be kept in the firm's trust account?

• a.Five hundred dollars, regardless of what the monthly charges are
• b.One hundred dollars, plus enough to cover larger monthly charges✓
• c.No company funds at all may be kept in the trust account
• d.One thousand dollars, whenever the bank requires a minimum balance

A broker may keep a maximum of one hundred dollars of company funds in the trust account to pay account service charges, and may deposit enough each month to cover charges that exceed that amount. A separate ledger must track those company funds. Cite: 21 NCAC 58A .0117(c)(4)(C).

How often must a North Carolina broker reconcile a trust or escrow account?

• a.Quarterly, with a worksheet retained for each reconciliation
• b.Annually, unless the Commission requests one at an earlier date
• c.Monthly, with a retained reconciliation worksheet✓
• d.Only when the bank statement fails to match the journal

Brokers reconcile trust accounts monthly as of a cutoff date they select, comparing the trial balance of ledger balances, the reconciled bank statement balance and the journal balance, and must retain a worksheet showing the three in agreement. Cite: 21 NCAC 58A .0117(e).

How long must a North Carolina broker retain transaction records such as contracts, leases and trust records?

• a.Seven years, to match the federal tax record retention rule
• b.Five years after the funds are disbursed or the deal concludes
• c.Three years from the date on which the listing was signed
• d.Three years after the funds are disbursed or the deal concludes✓

Records of all sales, rental and other transactions, whether pending, completed or terminated, are retained for three years after all funds held by the broker are disbursed to the proper parties or the conclusion of the transaction, whichever is later. Cite: 21 NCAC 58A .0108(a).

What makes an advertisement a prohibited blind ad under North Carolina Commission rules?

• a.It omits any indication that a broker or firm placed it✓
• b.It names the firm but omits the individual listing agent's name
• c.It gives the property address without the list price
• d.It runs in a newspaper rather than on the internet

A broker may not advertise property of others in a way suggesting the offer comes from the principal alone. Every such ad must show it is a broker's or firm's ad and may not be confined to a post office box, phone number, street address, web address or email address. Cite: 21 NCAC 58A .0105(b).

Which act may a North Carolina broker perform without engaging in the unauthorized practice of law?

• a.Draft a deed of trust whenever both of the parties request it
• b.Rewrite a form's language when the parties tell him to
• c.Complete a preprinted sales contract at the parties' direction✓
• d.Draft a promissory note that fits the parties' negotiated terms

A broker may not draft offers, contracts, options, leases, notes, deeds or deeds of trust, but may complete preprinted offer, option, sales contract and lease forms when authorized or directed by the parties; the form's language may not be rewritten by the broker. Cite: 21 NCAC 58A .0111(a)-(b).

A North Carolina broker receives a fully executed offer to purchase. By when must copies reach the client or customer?

• a.Within five business days of the broker receiving the document
• b.Within three days of the broker's receipt of the document✓
• c.At the closing, together with the settlement statement
• d.Within twenty-four hours of the document being signed

A broker delivers a copy of any executed agency agreement, contract, offer, lease, rental agreement, option or related transaction document within three days of receiving it, and also within three days of a client's or customer's request for a copy. Cite: 21 NCAC 58A .0106(a).

Which provision may a North Carolina broker never include in a preprinted offer or sales contract form proposed to the parties?

• a.A clause disclaiming the broker's liability for his statements✓
• b.A clause naming the escrow agent who holds the deposit
• c.A clause naming each agent and firm and who each represents
• d.A clause setting the closing and possession transfer date

A broker may not use, or cause to be inserted into, a preprinted form any provision attempting to disclaim the broker's liability for his or her representations, even at the direction of the parties or their attorneys. The other three items are required contents of the form. Cite: 21 NCAC 58A .0112(a), (b)(2).

A closing attorney prepares the settlement statement for a North Carolina sale. What duty does the License Law still place on the broker?

• a.The broker has no duty once an attorney prepares the statement
• b.The broker must prepare a second statement of his own
• c.The broker must file the statement with the Commission
• d.The broker must review it and tell the parties of any errors✓

Failing to deliver an accurate, detailed closing statement at consummation is a ground for discipline. A broker may rely on an attorney's or settlement agent's statement, but must review it for accuracy and notify all parties to the closing of any errors. Cite: N.C.G.S. 93A-6(a)(14).