North Carolina Real Estate Broker
Examination — State Law Practice
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. What is the primary purpose of the North Carolina Real Estate
Commission (NCREC)?
A. To set real estate prices
B. To regulate real estate professionals and enforce license law
C. To manage real estate transactions directly
D. To provide mortgage financing
B. To regulate real estate professionals and enforce license law
Rationale: The NCREC exists to enforce state real estate laws, issue
licenses, and protect the public.
, 2. Which of the following requires a real estate license in North Carolina?
A. Selling one’s own property
B. Acting as a property manager for another person for compensation
C. Representing a friend in a private sale without compensation
D. Appraising a property for personal knowledge
B. Acting as a property manager for another person for compensation
Rationale: Any activity involving compensation for real estate services
requires a license.
3. How long is a standard North Carolina real estate broker license valid
before renewal?
A. 1 year
B. 2 years
C. 3 years
D. 5 years
B. 2 years
Rationale: North Carolina broker licenses must be renewed biennially.
4. Which type of agency relationship is created when a broker represents
the buyer in a transaction?
A. Seller agency
B. Buyer agency
, C. Dual agency
D. Transaction brokerage
B. Buyer agency
Rationale: Buyer agency occurs when the broker represents the interests of
the buyer.
5. In North Carolina, a dual agency relationship requires:
A. No disclosure
B. Written consent from both parties
C. Only verbal disclosure
D. Approval from the county government
B. Written consent from both parties
Rationale: Dual agency is legal only if both parties agree in writing.
6. What is the maximum civil penalty the NCREC can impose for license
law violations per occurrence?
A. $500
B. $1,000
C. $5,000
D. $10,000
, C. $5,000
Rationale: The Commission may fine up to $5,000 per violation to enforce
compliance.
7. Which of the following is considered a trust account in North Carolina
real estate practice?
A. Broker’s personal checking account
B. Escrow account holding client funds
C. Broker’s savings account
D. Commission account
B. Escrow account holding client funds
Rationale: Client funds must be held in a trust or escrow account separate
from the broker’s personal funds.
8. How soon must a broker deposit earnest money received in a real
estate transaction?
A. Within 24 hours
B. Within 3 banking days
C. Within 7 business days
D. Immediately, no specific timeline
Examination — State Law Practice
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. What is the primary purpose of the North Carolina Real Estate
Commission (NCREC)?
A. To set real estate prices
B. To regulate real estate professionals and enforce license law
C. To manage real estate transactions directly
D. To provide mortgage financing
B. To regulate real estate professionals and enforce license law
Rationale: The NCREC exists to enforce state real estate laws, issue
licenses, and protect the public.
, 2. Which of the following requires a real estate license in North Carolina?
A. Selling one’s own property
B. Acting as a property manager for another person for compensation
C. Representing a friend in a private sale without compensation
D. Appraising a property for personal knowledge
B. Acting as a property manager for another person for compensation
Rationale: Any activity involving compensation for real estate services
requires a license.
3. How long is a standard North Carolina real estate broker license valid
before renewal?
A. 1 year
B. 2 years
C. 3 years
D. 5 years
B. 2 years
Rationale: North Carolina broker licenses must be renewed biennially.
4. Which type of agency relationship is created when a broker represents
the buyer in a transaction?
A. Seller agency
B. Buyer agency
, C. Dual agency
D. Transaction brokerage
B. Buyer agency
Rationale: Buyer agency occurs when the broker represents the interests of
the buyer.
5. In North Carolina, a dual agency relationship requires:
A. No disclosure
B. Written consent from both parties
C. Only verbal disclosure
D. Approval from the county government
B. Written consent from both parties
Rationale: Dual agency is legal only if both parties agree in writing.
6. What is the maximum civil penalty the NCREC can impose for license
law violations per occurrence?
A. $500
B. $1,000
C. $5,000
D. $10,000
, C. $5,000
Rationale: The Commission may fine up to $5,000 per violation to enforce
compliance.
7. Which of the following is considered a trust account in North Carolina
real estate practice?
A. Broker’s personal checking account
B. Escrow account holding client funds
C. Broker’s savings account
D. Commission account
B. Escrow account holding client funds
Rationale: Client funds must be held in a trust or escrow account separate
from the broker’s personal funds.
8. How soon must a broker deposit earnest money received in a real
estate transaction?
A. Within 24 hours
B. Within 3 banking days
C. Within 7 business days
D. Immediately, no specific timeline
