North Carolina Real Estate Broker Exam — All Questions

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'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).