North Carolina Real Estate Broker Exam — All Questions

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.

What is the most the North Carolina Real Estate Education and Recovery Fund will pay on a single transaction, and what happens to the broker's license?

• a.$10,000, and the license is unaffected by the payment
• b.$100,000, with the broker's license placed on inactive status
• c.$25,000, and the broker may keep practising while repaying
• d.$50,000, and the broker's license is automatically suspended✓

The Fund pays no more than fifty thousand dollars per transaction regardless of how many people were harmed, and any license held by the broker is automatically suspended on the effective date of the payment order until the Fund is repaid in full with interest. Cite: N.C.G.S. 93A-21(b)(2); 93A-20.

What limit does the License Law place on the North Carolina Real Estate Commission's rulemaking power over compensation?

• a.It sets the minimum commission rate that brokers may charge
• b.It arbitrates commission splits between competing firms
• c.It may not adopt rules regulating commissions or fees✓
• d.It approves each firm's published fee schedule annually

The Commission may make reasonable rules not inconsistent with the Chapter, but it shall not make rules regulating commissions, salaries or fees charged by licensees, and by rule it does not arbitrate disputes over commission rates or splits. Cite: N.C.G.S. 93A-3(c); 21 NCAC 58A .0109(f).