North Dakota Real Estate Salesperson Exam — All Questions

To hold an active real estate license in North Dakota, a licensee must:

• a.Maintain membership in a trade association
• b.Carry errors and omissions (E&O) insurance✓
• c.Own a piece of real property in the state
• d.Post a surety bond with the county

North Dakota requires active real estate licensees to carry errors and omissions (E&O) insurance, and the Commission makes a group policy available to satisfy the requirement. A licensee who does not maintain the required coverage may not hold an active license.

Earnest money that a North Dakota salesperson receives from a buyer must be:

• a.Held by the salesperson in a personal account until closing
• b.Promptly delivered to the employing broker for deposit in the broker's trust account✓
• c.Sent to the Real Estate Commission for safekeeping
• d.Given directly to the seller when the offer is made

Client funds such as earnest money must be handled through the broker's trust (escrow) account and kept separate from personal and business funds. A salesperson who receives the money must promptly deliver it to the employing broker. Commingling or converting trust money is a serious violation of NDCC 43-23.

A North Dakota salesperson receives an earnest money check on a Tuesday. The salesperson must place it with the employing broker:

• a.Within ten days of receipt
• b.By the closing date on the contract
• c.Within twenty-four hours of receipt✓
• d.Within three business days of receipt

Failing to place real estate trust moneys with the employing broker within twenty-four hours of receipt is unprofessional conduct, and the broker in turn must deposit the money within twenty-four hours of receiving it from the salesperson. Cite: N.D.C.C. 43-23-11.1(1)(s).

A North Dakota broker's real estate trust account must be:

• a.An interest-bearing account benefiting the broker
• b.An interest-bearing account benefiting the state
• c.A noninterest-bearing account in this state✓
• d.Any account the closing agent designates

Every broker must maintain a separate, noninterest-bearing trust account, designated as such, in a federally insured financial institution in this state, and the rules repeat that all trust accounts must be noninterest bearing. Cite: N.D.C.C. 43-23-14.1.

How much of a North Dakota broker's own money may be kept in the real estate trust account?

• a.Up to $5,000 held as a general operating cushion
• b.Whatever the depository sets as a minimum balance
• c.None at all, under any circumstance whatever
• d.Up to $500 to cover service charges✓

A broker may not commingle personal funds in the trust account, except that a sum not exceeding five hundred dollars of the broker's own money may be deposited and specifically identified to cover service charges related to the account. Cite: N.D.C.C. 43-23-14.1.

North Dakota trust account records of funds and property of others must be kept for not less than:

• a.Three years from the date of receipt
• b.Six years from receipt✓
• c.Ten years from the date of receipt
• d.One year from the date of receipt

Every broker must keep permanent records of all funds and property of others received by the broker for not less than six years from the date of receipt. Cite: N.D.A.C. 70-02-01-15(3)(g).

A North Dakota seller refuses to close through no fault of the buyer. As to the buyer's earnest money, the broker:

• a.Keeps the commission portion and returns the rest
• b.Holds the deposit until the seller consents to release
• c.Has no right to any of it and must return it at once✓
• d.Splits it evenly with the cooperating brokerage

When the owner fails, refuses, neglects, or is unable to close and the buyer is not at fault, the broker has no right to any portion of the deposit even though the commission is earned; the deposit is returned to the purchaser at once and the broker looks to the owner for compensation. Cite: N.D.A.C. 70-02-03-12.

A North Dakota listing agreement on a one- to four-family home must be signed and contain a definite expiration date:

• a.Only when the seller asks for one in writing
• b.Before the property is advertised or offered for sale✓
• c.Within five days after the first showing
• d.At any time before an offer is accepted

The licensee must obtain a signed written listing agreement identifying the property and stating the price, the commission, the signatures, and a definite expiration date before the property is advertised or offered for sale. It may not require the seller to give notice of an intent to cancel after that date. Cite: N.D.A.C. 70-02-03-04.

In North Dakota advertising, the brokerage firm's licensed trade name must be:

• a.Printed somewhere on the back of the piece
• b.Equal to or greater in size than a salesperson or team name✓
• c.Smaller than the listing agent's name and number
• d.Omitted when a team name is displayed

Advertising must be done in the agency's trade name as licensed, and that trade name must be equal to or greater than, in size and visibility, the name of any salesperson, associate broker, or team appearing in the advertisement. Cite: N.D.A.C. 70-02-03-02.1(2).

A North Dakota buyer asks whether a house was the site of a homicide. The licensee must:

• a.Ask the owner and report the owner's response to the buyer✓
• b.Disclose the fact in writing before any showing
• c.Answer from the licensee's own research of police records
• d.Refuse to discuss the subject with the buyer at all

A psychologically impacted property is not a material fact that must be volunteered, but if a prospective purchaser asks, the licensee must inquire of the owner whether there are facts or suspicions and advise the purchaser of the owner's response, including a refusal to answer. Cite: N.D.A.C. 70-02-01-20.

When a licensee represents a party to the sale of a North Dakota home of no more than four units, the seller must give the buyer:

• a.A written property disclosure before final acceptance✓
• b.A certified home inspection report paid for by the seller
• c.A warranty against defects for one year after closing
• d.Nothing; North Dakota follows pure caveat emptor

Where a licensee represents or assists a party and the property is a residential dwelling of no more than four units, the seller must prepare and make available a written disclosure of all material facts the seller is aware could adversely and significantly affect an ordinary buyer's use and enjoyment, before the parties sign final acceptance. Cite: N.D.C.C. 47-10-02.1.

Since August 1, 2025, a seller of North Dakota residential real property must disclose in writing:

• a.The price the seller paid for the property
• b.The name of every prior occupant of the property
• c.The seller's reason for selling the property
• d.Any knowledge the seller has of radon in the property✓

Before executing an agreement to sell or transfer residential real property, the seller must disclose in writing any knowledge of radon concentrations, deliver the statutory radon warning for the buyer to acknowledge, and provide any available test results and evidence of mitigation. The Commission's disclosure form notes the requirement began August 1, 2025. Cite: N.D.C.C. 47-10-02.2.

A North Dakota seller of a home governed by a homeowners' association must deliver the association documents:

• a.By an agreed date or within ten days of the agreement✓
• b.Only if the buyer requests them in writing
• c.At the first showing of the property
• d.Within thirty days after the closing of the sale has occurred

By a mutually agreed upon date, or within ten days of executing the agreement, the seller must deliver budgets, bylaws, assessment information, insurance and litigation statements and related records. The contract stays voidable by the buyer until the documents are provided and for five days after receipt. Cite: N.D.C.C. 47-10-02.3(2).

A North Dakota buyer offers a promissory note instead of a cash earnest money deposit. The licensee may accept it:

• a.Only with the knowledge and permission of the principal✓
• b.Only if the note is secured by other real property
• c.Only after the purchase agreement has closed
• d.Never, under any circumstances

A broker or salesperson may not accept a note, any nonnegotiable instrument, or anything of value that is not readily negotiable as a deposit without the knowledge and permission of the principal. Cite: N.D.A.C. 70-02-03-14.