NORTH CAROLINA REAL ESTATE EXAM 2026 LATEST TEST BANK USDA loans are designed for ______. - ANSWER-Low- to moderate-income home buyers
WITH 600 REAL EXAM PREP QUESTIONS AND CORRECT ANSWERS/
NC REAL ESTATE LICENSE TEST 2025/ NCREC EXAM (NEW!) Which of the following best describes a home equity line of credit? - ANSWER-Used as an
openend account similar to the revolving credit of a credit card from which borrowers can take
advances, repay money, and even borrow money again
What's the best definition of personal property? - ANSWER-Everything thats not real property
What may the lender require if the borrower is unable to put at least 20% down on a conventional
What are improvements with regard to property? - ANSWER-artificial attachments to land that loan? - ANSWER-Private mortgage insurance
include items such as fencing, buildings and walkways
A home equity line of credit (HELOC) is based on the homeowner's available ______. -
Physical characteristics of land include its immobility, indestructibility, and ______. - ANSWEREquity
ANSWERuniqueness (non homogeneity)
What generally determines the priority of a lien? - ANSWER-The date it is recorded
Which physical characteristic of land addresses the concept that the geographic location of a piece of
land is fixed and can never be changed? - ANSWER-immobility
Fairwell Lending must seek the court's permission to foreclose on a property used as collateral for a
loan that is in default. What type of foreclosure process is likely being used? - ANSWER-Judicial
Annette really wants to move to San Francisco, but she's unsure whether she'll be able to afford to
foreclosure
live there. Housing is very expensive because there simply is no room to build any new housing units.
Which economic characteristic does this reflect? - ANSWER-scarcity
What's it called when a property is sold for less than the amount owed? - ANSWER-Short sale
Upon examination of his mortgage document, Jared finds a clause stating he will owe additional
interest if he pays off his loan within one year of the loan origination date. What type of penalty
A commitment fee is calculated based on the undisbursed loan amount and is usually paid ______. -
does this describe? - ANSWER-The borrower doesn't hold the legal title to the property until the
loan is paid in full. ANSWER-At closing
In a mortgage, the property is used as collateral for the loan. What's the term for the process of A commitment fee may be a percentage of the loan amount or ______. - ANSWER-A flat fee
pledging something as collateral? - ANSWER-Hypothecation
In the eyes of a lender, when financing a residence, what advantage does an investor have over
owner-occupied borrowers? - ANSWER-Investors can use rental income to qualify.
Where are mortgages recorded? - ANSWER-They're recorded at the recorder's office in the county
where the property is located.
What would happen if your client's rate lock expires three days prior to closing? - ANSWER-The
Conventional loans may be conforming or nonconforming, depending on whether they meet ______ interest rate will revert to the current rates.
guidelines. - ANSWER-Fannie Mae and Freddie Mac
,What is the formula for calculating the total debt ratio? - ANSWER-(Monthly debt payments ÷
gross monthly income) × 100 Which product's fibers are dangerous when inhaled because they can lodge in the lungs and
intestines, causing cancer? - ANSWER-Asbestos
Which of the following is the credit score range? - ANSWER-300 and 850
Radon is found in well water and where else - ANSWER-Soil
Which range of credit scores do most consumers fall into? - ANSWER-The median credit score
In any given property, the place with the highest radon levels will likely be the ______. -
range is 670 to 739.
ANSWERLowest level of the house
Which of the following best describes a marketable title? - ANSWER-Ensures the title to property
is free and clear of liens and only subject to loan payoff and any taxes owed. What is the borrower charged for all FHA loans? - ANSWER-Mortgage insurance premium
Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might
Which type of loan is insured by the Federal Housing Administration? - ANSWER-Government her lender also require her to obtain private mortgage insurance? - ANSWER-Her down payment
of $50,000 isn't at least 20% of the purchase price.
When would a lender require a mortgage insurance premium? - ANSWER-The borrower has an
FHA mortgage. Harley and Quinn are refinancing their home and their lender is charging them 1% for their loan
commitment fee. Their loan amount is $192,000, their interest rate is 4.75%, and their appraised
value is $275,000. Harley and Quinn will pay a ______ loan commitment fee. - ANSWER-$1,920
What is a triggering term? - ANSWER-A word or phrase that, when used in advertising, requires
the disclosure of all of the terms of a loan
Sgt. Johnson is an active member of the Marines. He's been serving for 10 years. He wants to buy a
home with no money down. What loan option seems like the best fit? - ANSWER-VA
What is an annual percentage rate? - ANSWER-A standardized measure for interest rates and
other costs of the loan
Which of the following provides a summary of the title history? - ANSWER-Abstract of title
The Equal Credit Opportunity Act specifies that credit applicants must be judged using only what
Which of the following statements regarding HOA responsibilities and duties is true? -
criteria? - ANSWER-Income, net worth, job stability, and credit rating
ANSWERHOAs can place liens on properties if owners don't pay their dues.
Regulation B is the set of regulations used to ______ the Equal Credit Opportunity Act. -
Which of the following statements best describes a buyer performing due diligence during a North
ANSWEREnforce
Carolina real estate transaction? - ANSWER-The buyer meets with a lender to get pre-qualified,
arranges a home inspection and appraisal, asks questions, and investigates any other areas of the
property the buyer feels may need it.
Who does a pre-closing final walk-through of a property? - ANSWER-The buyer and the buyer's
agent
,Your buyer clients want to know why their lender requires them to purchase property insurance. The existence of lead-based paint is considered a(n) ______. - ANSWER-Environmental hazard
What should you say? - ANSWER-Explain that the lender is protecting its interest in the property. During his final walk-through, buyer Gabe discovered that the toilet had begun to leak and the seller
Who usually acts as a closing attorney? - ANSWER-An attorney who may or may not be the "repaired" the leak with duct tape. What can Gabe do? - ANSWER-He can delay the closing until
lender's attorney the seller makes appropriate repairs.
Which of the following protects the owner against financial loss if the real estate title has defects? -
Which of the following tasks is a closing attorney's responsibility? - ANSWER-Order title work ANSWER-Title insurance
Which of the following is a true statement about pest inspections in North Carolina? - The Slorahns are purchasing a property in Wilmington and are concerned about the title. They want
ANSWEROnly a licensed structural pest inspector may inspect for and report on the presence of to have a title search performed. Who can perform a title search? - ANSWER-The closing attorney
wooddestroying organisms.
What is the process that occurs when all of the parties in the transaction come together to finalize
Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended the deal, transfer the ownership of the property from the seller to the buyer, sign and execute the
that they get a professional home inspection done. The couple tell Ed that they thought inspections loan agreements, and ensure that all parties receive the consideration outlined in the sales contract?
were only for older homes. How should Ed respond to that? - ANSWER-He should remind them - ANSWER-Closing
that every dwelling, no matter the age or size, should have a home inspection.
Which of the following closing activities occurs on the day of closing in North Carolina? -
Radon is found in well water and where else? - ANSWER-Soil ANSWERFunds are transferred.
Who traditionally pays for a pest inspection during a real estate transaction in North Carolina? -
What's the purpose of a chain of title? - ANSWER-To establish history of past ownership
ANSWER-Typically the buyer
Morton is heading into escrow and his broker tells him he needs to make sure he has good funds for
You're working with a client, Maggie, who is buying a 1950s home. Maggie asks you whether a closing. What does this mean? - ANSWER-His funds are in a certified check or wire transfer.
home's insulation appears to contain any asbestos. Which of the following would be an appropriate
response to her question? - ANSWER-"I'm sorry, your question is beyond my expertise."
Which of the following statements is true about North Carolina deeds? - ANSWER-The buyer
Claudia is buying a property with a well. The EPA recommends testing wells annually for receives the deed at closing.
microorganisms, and once every ______ for harmful chemicals and elemental contaminants. -
ANSWER-Two to three years
Which of the following will be issued only if title is acceptable and an attorney provides a certificate
of title opinion? - ANSWER-Title insurance policy
You're showing a house in Fayetteville when you notice piles of what looks like sawdust outside near
the basement windows. This may be evidence of ______. - ANSWER-Carpenter ants
Both parties must sign a multitude of documents at closing. Funds must change hands. Who keeps all
this straight? - ANSWER-The closing attorney
, Which of the following is used to establish proof of ownership? - ANSWER-Deed is imposed by the home's builder, a small, family-owned construction company. What kind of
limitation is this? - ANSWER-Private land use control
What gets recorded and serves as public notice of ownership? - ANSWER-Deed
Which term means "for another's life"? - ANSWER-Pur autre vie
What's the difference between reversionary interest and remainder interest in a property? -
What's the best definition of real property? - ANSWER-Real estate, plus all of the interests,
benefits, and rights included in ownership ANSWER-With reversionary interest, the property reverts to the owner after the death of the life
tenant. With remainder interest, the title to the property goes to a named third party following the
death of the life tenant.
Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to
install sewer and underground electric for the entire subdivision, because he thinks that he will
easily recoup his initial infrastructure investment. This is an example of which economic Some plants are considered personal property. Which of the following type of plant is considered
characteristic of real property? - ANSWER-Permanence personal property? - ANSWER-Fruits of industry
Which of the following best describes the goal of governmental land use controls? - ANSWER-To In real estate, what are emblements? - ANSWER-Cultivated crops
ensure the health, safety, and welfare of its citizens
In regard to fixtures, what does the NC Uniform Commercial Code grant creditors? - ANSWER-The
Residential, commercial, and industrial are submarkets within which real estate market segment? - right to repossess
ANSWER-Property Type
Noah is a major barbecue freak. He loves cooking just about everything over flames. As a birthday
When appraiser Kate appraises a property, which of the following pieces of information should she gift, his wife had a beautiful brick barbecue pit built on the edge of their patio. What is this an
include in the report? - ANSWER-Whether the neighborhood is increasing, stable, or declining example of? - ANSWER-Annexation
Which one of the following options provides three valid examples of a private land use control? - Kyle owns six acres of land with 400 feet of river frontage. He wants to build a beach along the river
ANSWER-Easement, lien, deed restriction bank to make it easier to swim in the river. He can do this because as the owner of river frontage, he
has ________ rights. - ANSWER-Riparian
When both supply and demand increase, what tends to happen to prices? - ANSWER-Stay the
same Agricultural fixtures, even if they are installed by a tenant, are _______. - ANSWER-Real property
For most residential properties, the highest and best use of the property is relatively obvious. What
Which act created federal regulations for the construction of manufactured homes? - ANSWER-
is it? - ANSWER-Current Use
National Manufactured Housing Construction and Safety Standards Act of 1976
The Sanchezes learned that the home they recently purchased has a limitation built in to the deed
affecting what sort of aesthetic changes they can make to the outside of their home. This limitation
WITH 600 REAL EXAM PREP QUESTIONS AND CORRECT ANSWERS/
NC REAL ESTATE LICENSE TEST 2025/ NCREC EXAM (NEW!) Which of the following best describes a home equity line of credit? - ANSWER-Used as an
openend account similar to the revolving credit of a credit card from which borrowers can take
advances, repay money, and even borrow money again
What's the best definition of personal property? - ANSWER-Everything thats not real property
What may the lender require if the borrower is unable to put at least 20% down on a conventional
What are improvements with regard to property? - ANSWER-artificial attachments to land that loan? - ANSWER-Private mortgage insurance
include items such as fencing, buildings and walkways
A home equity line of credit (HELOC) is based on the homeowner's available ______. -
Physical characteristics of land include its immobility, indestructibility, and ______. - ANSWEREquity
ANSWERuniqueness (non homogeneity)
What generally determines the priority of a lien? - ANSWER-The date it is recorded
Which physical characteristic of land addresses the concept that the geographic location of a piece of
land is fixed and can never be changed? - ANSWER-immobility
Fairwell Lending must seek the court's permission to foreclose on a property used as collateral for a
loan that is in default. What type of foreclosure process is likely being used? - ANSWER-Judicial
Annette really wants to move to San Francisco, but she's unsure whether she'll be able to afford to
foreclosure
live there. Housing is very expensive because there simply is no room to build any new housing units.
Which economic characteristic does this reflect? - ANSWER-scarcity
What's it called when a property is sold for less than the amount owed? - ANSWER-Short sale
Upon examination of his mortgage document, Jared finds a clause stating he will owe additional
interest if he pays off his loan within one year of the loan origination date. What type of penalty
A commitment fee is calculated based on the undisbursed loan amount and is usually paid ______. -
does this describe? - ANSWER-The borrower doesn't hold the legal title to the property until the
loan is paid in full. ANSWER-At closing
In a mortgage, the property is used as collateral for the loan. What's the term for the process of A commitment fee may be a percentage of the loan amount or ______. - ANSWER-A flat fee
pledging something as collateral? - ANSWER-Hypothecation
In the eyes of a lender, when financing a residence, what advantage does an investor have over
owner-occupied borrowers? - ANSWER-Investors can use rental income to qualify.
Where are mortgages recorded? - ANSWER-They're recorded at the recorder's office in the county
where the property is located.
What would happen if your client's rate lock expires three days prior to closing? - ANSWER-The
Conventional loans may be conforming or nonconforming, depending on whether they meet ______ interest rate will revert to the current rates.
guidelines. - ANSWER-Fannie Mae and Freddie Mac
,What is the formula for calculating the total debt ratio? - ANSWER-(Monthly debt payments ÷
gross monthly income) × 100 Which product's fibers are dangerous when inhaled because they can lodge in the lungs and
intestines, causing cancer? - ANSWER-Asbestos
Which of the following is the credit score range? - ANSWER-300 and 850
Radon is found in well water and where else - ANSWER-Soil
Which range of credit scores do most consumers fall into? - ANSWER-The median credit score
In any given property, the place with the highest radon levels will likely be the ______. -
range is 670 to 739.
ANSWERLowest level of the house
Which of the following best describes a marketable title? - ANSWER-Ensures the title to property
is free and clear of liens and only subject to loan payoff and any taxes owed. What is the borrower charged for all FHA loans? - ANSWER-Mortgage insurance premium
Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might
Which type of loan is insured by the Federal Housing Administration? - ANSWER-Government her lender also require her to obtain private mortgage insurance? - ANSWER-Her down payment
of $50,000 isn't at least 20% of the purchase price.
When would a lender require a mortgage insurance premium? - ANSWER-The borrower has an
FHA mortgage. Harley and Quinn are refinancing their home and their lender is charging them 1% for their loan
commitment fee. Their loan amount is $192,000, their interest rate is 4.75%, and their appraised
value is $275,000. Harley and Quinn will pay a ______ loan commitment fee. - ANSWER-$1,920
What is a triggering term? - ANSWER-A word or phrase that, when used in advertising, requires
the disclosure of all of the terms of a loan
Sgt. Johnson is an active member of the Marines. He's been serving for 10 years. He wants to buy a
home with no money down. What loan option seems like the best fit? - ANSWER-VA
What is an annual percentage rate? - ANSWER-A standardized measure for interest rates and
other costs of the loan
Which of the following provides a summary of the title history? - ANSWER-Abstract of title
The Equal Credit Opportunity Act specifies that credit applicants must be judged using only what
Which of the following statements regarding HOA responsibilities and duties is true? -
criteria? - ANSWER-Income, net worth, job stability, and credit rating
ANSWERHOAs can place liens on properties if owners don't pay their dues.
Regulation B is the set of regulations used to ______ the Equal Credit Opportunity Act. -
Which of the following statements best describes a buyer performing due diligence during a North
ANSWEREnforce
Carolina real estate transaction? - ANSWER-The buyer meets with a lender to get pre-qualified,
arranges a home inspection and appraisal, asks questions, and investigates any other areas of the
property the buyer feels may need it.
Who does a pre-closing final walk-through of a property? - ANSWER-The buyer and the buyer's
agent
,Your buyer clients want to know why their lender requires them to purchase property insurance. The existence of lead-based paint is considered a(n) ______. - ANSWER-Environmental hazard
What should you say? - ANSWER-Explain that the lender is protecting its interest in the property. During his final walk-through, buyer Gabe discovered that the toilet had begun to leak and the seller
Who usually acts as a closing attorney? - ANSWER-An attorney who may or may not be the "repaired" the leak with duct tape. What can Gabe do? - ANSWER-He can delay the closing until
lender's attorney the seller makes appropriate repairs.
Which of the following protects the owner against financial loss if the real estate title has defects? -
Which of the following tasks is a closing attorney's responsibility? - ANSWER-Order title work ANSWER-Title insurance
Which of the following is a true statement about pest inspections in North Carolina? - The Slorahns are purchasing a property in Wilmington and are concerned about the title. They want
ANSWEROnly a licensed structural pest inspector may inspect for and report on the presence of to have a title search performed. Who can perform a title search? - ANSWER-The closing attorney
wooddestroying organisms.
What is the process that occurs when all of the parties in the transaction come together to finalize
Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended the deal, transfer the ownership of the property from the seller to the buyer, sign and execute the
that they get a professional home inspection done. The couple tell Ed that they thought inspections loan agreements, and ensure that all parties receive the consideration outlined in the sales contract?
were only for older homes. How should Ed respond to that? - ANSWER-He should remind them - ANSWER-Closing
that every dwelling, no matter the age or size, should have a home inspection.
Which of the following closing activities occurs on the day of closing in North Carolina? -
Radon is found in well water and where else? - ANSWER-Soil ANSWERFunds are transferred.
Who traditionally pays for a pest inspection during a real estate transaction in North Carolina? -
What's the purpose of a chain of title? - ANSWER-To establish history of past ownership
ANSWER-Typically the buyer
Morton is heading into escrow and his broker tells him he needs to make sure he has good funds for
You're working with a client, Maggie, who is buying a 1950s home. Maggie asks you whether a closing. What does this mean? - ANSWER-His funds are in a certified check or wire transfer.
home's insulation appears to contain any asbestos. Which of the following would be an appropriate
response to her question? - ANSWER-"I'm sorry, your question is beyond my expertise."
Which of the following statements is true about North Carolina deeds? - ANSWER-The buyer
Claudia is buying a property with a well. The EPA recommends testing wells annually for receives the deed at closing.
microorganisms, and once every ______ for harmful chemicals and elemental contaminants. -
ANSWER-Two to three years
Which of the following will be issued only if title is acceptable and an attorney provides a certificate
of title opinion? - ANSWER-Title insurance policy
You're showing a house in Fayetteville when you notice piles of what looks like sawdust outside near
the basement windows. This may be evidence of ______. - ANSWER-Carpenter ants
Both parties must sign a multitude of documents at closing. Funds must change hands. Who keeps all
this straight? - ANSWER-The closing attorney
, Which of the following is used to establish proof of ownership? - ANSWER-Deed is imposed by the home's builder, a small, family-owned construction company. What kind of
limitation is this? - ANSWER-Private land use control
What gets recorded and serves as public notice of ownership? - ANSWER-Deed
Which term means "for another's life"? - ANSWER-Pur autre vie
What's the difference between reversionary interest and remainder interest in a property? -
What's the best definition of real property? - ANSWER-Real estate, plus all of the interests,
benefits, and rights included in ownership ANSWER-With reversionary interest, the property reverts to the owner after the death of the life
tenant. With remainder interest, the title to the property goes to a named third party following the
death of the life tenant.
Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to
install sewer and underground electric for the entire subdivision, because he thinks that he will
easily recoup his initial infrastructure investment. This is an example of which economic Some plants are considered personal property. Which of the following type of plant is considered
characteristic of real property? - ANSWER-Permanence personal property? - ANSWER-Fruits of industry
Which of the following best describes the goal of governmental land use controls? - ANSWER-To In real estate, what are emblements? - ANSWER-Cultivated crops
ensure the health, safety, and welfare of its citizens
In regard to fixtures, what does the NC Uniform Commercial Code grant creditors? - ANSWER-The
Residential, commercial, and industrial are submarkets within which real estate market segment? - right to repossess
ANSWER-Property Type
Noah is a major barbecue freak. He loves cooking just about everything over flames. As a birthday
When appraiser Kate appraises a property, which of the following pieces of information should she gift, his wife had a beautiful brick barbecue pit built on the edge of their patio. What is this an
include in the report? - ANSWER-Whether the neighborhood is increasing, stable, or declining example of? - ANSWER-Annexation
Which one of the following options provides three valid examples of a private land use control? - Kyle owns six acres of land with 400 feet of river frontage. He wants to build a beach along the river
ANSWER-Easement, lien, deed restriction bank to make it easier to swim in the river. He can do this because as the owner of river frontage, he
has ________ rights. - ANSWER-Riparian
When both supply and demand increase, what tends to happen to prices? - ANSWER-Stay the
same Agricultural fixtures, even if they are installed by a tenant, are _______. - ANSWER-Real property
For most residential properties, the highest and best use of the property is relatively obvious. What
Which act created federal regulations for the construction of manufactured homes? - ANSWER-
is it? - ANSWER-Current Use
National Manufactured Housing Construction and Safety Standards Act of 1976
The Sanchezes learned that the home they recently purchased has a limitation built in to the deed
affecting what sort of aesthetic changes they can make to the outside of their home. This limitation
