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North Carolina Brokerage Practice — Printable Practice Pack
North Carolina state portion · NC Commission rules, provisional broker status and agency agreements · 20 questions · Answer key on the last page · agentexamcoach.com
1.A North Carolina real estate broker is found to have commingled personal funds with client funds in the trust account. What is the most likely consequence of this action?
(A)The broker will be required to take additional education courses
(B)The broker will be subject to a fine and a reprimand
(C)The broker will be required to pay back the commingled funds with interest
(D)The broker's license will be suspended or revoked
2.A broker receives a complaint from a client alleging that the broker made a misrepresentation about a property. What is the first step the broker should take?
(A)Respond to the client and try to resolve the issue
(B)Ignore the complaint and hope it goes away
(C)File a counter-complaint against the client
(D)Report the complaint to the North Carolina Real Estate Commission
3.A buyer and seller disagree over the disposition of earnest money in a North Carolina transaction. What is the Commission's stance on this issue?
(A)The Commission will arbitrate the dispute and make a decision
(B)The Commission will pay the earnest money to the seller
(C)The Commission will refund the earnest money to the buyer
(D)The Commission will not intervene and the parties must resolve the issue in court
4.A North Carolina real estate broker is found to have engaged in misrepresentation during a transaction. What is the most severe sanction that the North Carolina Real Estate Commission can impose?
(A)Reprimand
(B)Censure
(C)Suspension
(D)Revocation of the broker's license
5.What is the primary purpose of the due diligence period in a North Carolina residential real estate transaction?
(A)To allow the buyer to inspect the property and negotiate repairs
(B)To allow the seller to market the property to other buyers
(C)To allow the buyer to secure financing for the purchase
(D)To allow the seller to renegotiate the purchase price
6.What is the purpose of the due-diligence fee in a North Carolina real estate transaction?
(A)To compensate the seller for the buyer's inspection and testing of the property
(B)To compensate the broker for their services
(C)To ensure the buyer is serious about purchasing the property
(D)To pay for the buyer's closing costs
7.What happens to the interest earned on an interest-bearing trust account in a North Carolina real estate brokerage?
(A)It is paid to the broker-in-charge
(B)It is paid to the firm's operating account
(C)It is paid to the North Carolina Real Estate Commission
(D)It is paid to the client whose funds are in the account
8.A broker is maintaining transaction records. How long must the records be retained?
(A)1 year
(B)7 years
(C)5 years
(D)3 years
9.A broker creates a social media post advertising a property without including the firm's name. What is the primary issue with this post?
(A)The post does not include a photo of the property
(B)The post does not include the property's address
(C)The post is not approved by the broker-in-charge
(D)The post does not include the firm's name
10.A buyer pays an earnest money deposit of $1,000 to a North Carolina brokerage firm. What must the firm do with the deposit?
(A)Deposit it into the firm's operating account
(B)Return it to the buyer immediately
(C)Give it to the seller
(D)Place it in the firm's trust account within 3 banking days
11.A North Carolina broker is found to have engaged in self-dealing in a transaction. What is a possible sanction the Commission could impose?
(A)Fine of $1,000
(B)Reprimand
(C)Suspension of license
(D)All of the above
12.A broker is handling a transaction where the buyer is paying a due diligence fee of $500. What happens to the fee if the buyer terminates the contract during the due diligence period?
(A)The fee is refundable to the buyer
(B)The fee is non-refundable, and the buyer does not get the earnest money back
(C)The fee is refundable to the buyer, and the buyer also gets the earnest money back
(D)The fee is non-refundable, but the buyer gets the earnest money back
13.A North Carolina brokerage firm has a trust account that earns interest. Who is entitled to the interest earned on the account?
(A)The brokerage firm
(B)The broker-in-charge
(C)The North Carolina Real Estate Commission
(D)The buyers and sellers whose funds are in the account
14.A dispute arises over earnest money in a transaction, and the buyer and seller cannot agree on how to dispose of the funds. What is the Commission's stance on this issue?
(A)The Commission will decide how to distribute the funds
(B)The Commission will hold the funds in escrow until the dispute is resolved
(C)The broker must decide how to distribute the funds
(D)The parties must resolve the dispute through mediation or court action
15.A broker is found to have engaged in self-dealing in a transaction. What is a possible sanction?
(A)Reprimand
(B)Censure
(C)Suspension of license
(D)All of the above
16.A broker represents a buyer in a transaction and also owns the property being sold. What is the term for this practice?
(A)Dual agency
(B)Designated agency
(C)Undisclosed compensation
(D)Self-dealing
17.A broker wants to advertise a listing on social media. What must the advertisement include to comply with North Carolina Real Estate Commission rules?
(A)The broker's personal cell phone number
(B)The broker's personal email address
(C)The listing price and a photo of the property
(D)The firm's name and the name of the broker-in-charge
18.A broker is creating a social media advertisement for a new listing. What information must be included in the advertisement?
(A)The broker's personal phone number
(B)The property's address and a photo of the broker
(C)The listing price and the seller's name
(D)The firm's name and the name of the broker-in-charge
19.A broker is maintaining transaction records, which must be retained for how long?
(A)1 year
(B)2 years
(C)5 years
(D)3 years
20.A buyer pays a due-diligence fee of $1,000 to the seller. During the due-diligence period, the buyer discovers a major issue with the property and decides to terminate the contract. What happens to the due-diligence fee?
(A)It is refunded to the buyer
(B)It is applied to the purchase price
(C)It is held in trust by the brokerage firm
(D)It is non-refundable and kept by the seller
Answer key & explanations
1. D — Commingling personal funds with client funds in the trust account is a serious violation of North Carolina Real Estate Commission rules and can result in the suspension or revocation of the broker's license.
2. A — The broker should respond to the client and try to resolve the issue in a professional and timely manner.
3. D — The North Carolina Real Estate Commission will not intervene in disputes over earnest money and the parties must resolve the issue in court or through other means.
4. D — The most severe sanction that the North Carolina Real Estate Commission can impose is the revocation of the broker's license, which would prevent the broker from practicing real estate in the state.
5. A — The due diligence period in North Carolina allows the buyer to inspect the property, negotiate repairs, and terminate the contract if they are not satisfied.
6. A — The due-diligence fee is a non-refundable fee paid to the seller to allow the buyer to conduct inspections and testing of the property.
7. D — In North Carolina, the interest earned on an interest-bearing trust account is paid to the client whose funds are in the account.
8. D — Transaction records must be retained for 3 years.
9. D — In North Carolina, all advertising, including social media posts, must include the firm's name to identify the brokerage firm responsible for the advertisement.
10. D — The firm must place the earnest money deposit into the firm's trust account within 3 banking days of receipt.
11. D — The Commission could impose a reprimand, suspension of license, or other sanctions on a broker found to have engaged in self-dealing, which is a prohibited practice.
12. D — In North Carolina, the due diligence fee is non-refundable, but the buyer is entitled to a refund of the earnest money if they terminate the contract during the due diligence period.
13. D — The buyers and sellers whose funds are in the account are entitled to the interest earned on the account.
14. D — The Commission's stance is that the parties must resolve the dispute through mediation or court action, as the Commission does not have the authority to decide how to distribute disputed earnest money.
15. D — Self-dealing is a serious violation of North Carolina real estate laws and may result in various sanctions, including reprimand, censure, or suspension of license.
16. D — Self-dealing occurs when a broker has a personal interest in a transaction, such as owning the property being sold.
17. D — North Carolina requires that all advertisements include the firm's name and be under the supervision of the broker-in-charge.
18. D — The advertisement must include the firm's name and be under the supervision of the broker-in-charge.
19. D — North Carolina regulations require that brokers maintain transaction records for at least 3 years.
20. D — The due-diligence fee is generally non-refundable and paid to the seller.
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