SUPERIOR NC REAL ESTATE FINAL EXAM ACTUAL EXAM 2026 | ALL QUESTIONS AND
CORRECT ANSWERS | VERIFIED ANSWERS | BRAND NEW VERSION!
Question 1
Which party is legally required to sign a Deed of Trust in a North Carolina real estate
transaction?
A. The Trustee
B. The Beneficiary
C. The Trustor(s)
D. The Grantee(s)
E. The Mortgagee
Correct Answer: C) The Trustor(s)
Rationale: The trustor is the borrower in a lending situation using a trust deed. The
borrower is giving the lender security or collateral interests in the property. Because those
rights and interests belong to the borrower and they are surrendering them, only the
trustor (or borrower) must sign the trust deed.
Question 2
Under which of the following mortgage loan types would a buyer be required to produce a
Certificate of Reasonable Value (CRV)?
A. FHA Insured Loan
B. Conventional Loan
C. Adjustable Rate Mortgage
D. VA Guaranteed Loan
E. USDA Rural Development Loan
Correct Answer: D) VA Guaranteed Loan
Rationale: The Certificate of Reasonable Value, or CRV, is the specific name for the
appraisal used in VA (Veterans Affairs) loans. While FHA loans use a "Conditional
Commitment," the CRV is unique to the VA guaranteed loan program.
Question 3
In environmental remediation, the term "encapsulation" refers to which of the following
processes?
A. Removing lead-based paint from window sills
B. The chemical treatment of radon in well water
C. The sealing away of friable asbestos
D. The process of replacing polybutylene piping
E. The removal of underground storage tanks
Correct Answer: C) The sealing away of friable asbestos
Rationale: Encapsulation is a method of asbestos control that involves sealing the material
in place rather than removing it. This prevents friable (crumbly) asbestos fibers from
becoming airborne and posing a health risk.
, 2
Question 4
At what level does the presence of radon gas become a "material fact" that must be disclosed in
North Carolina?
A. 1.0 picocuries or higher
B. 2.5 picocuries or higher
C. 4.0 picocuries or higher
D. Only when requested by the buyer
E. Only in the Appalachian mountain region
Correct Answer: C) 4.0 picocuries or higher
Rationale: Radon is a colorless, odorless gas. In North Carolina, the presence of radon at a
level of 4.0 picocuries per liter of air or higher is considered a material fact that must be
disclosed to all parties in a transaction regardless of whether they ask.
Question 5
What is the primary legal difference between an Installment Land Contract and a Purchase
Money Mortgage?
A. Seller financing is only allowed in a Purchase Money Mortgage.
B. The Purchase Money Mortgage requires a 20% down payment.
C. The time at which the legal deed is actually delivered to the buyer.
D. Installment Land Contracts are illegal for residential properties in NC.
E. Only a Purchase Money Mortgage involves a promissory note.
Correct Answer: C) The time in which delivery of the deed is made.
Rationale: In a Purchase Money Mortgage, the buyer receives legal title at closing. In an
Installment Land Contract (or Contract for Deed), the seller retains legal title (the deed)
until the buyer makes the final payment, at which point the deed is delivered.
Question 6
A buyer assumes an existing $80,000 loan at 9.5% interest. Since interest is paid in arrears and
the buyer will make the next full payment, how does the interest for the month of closing appear
on the settlement statement?
A. A single entry; debit to the seller
B. A single entry: credit to the buyer
C. A double entry: debit to the seller, credit to the buyer
D. A double entry: credit to the seller, debit to the buyer
E. It does not appear on the settlement statement
Correct Answer: C) A double entry: debit to the seller, credit to the buyer
Rationale: Because the buyer will pay the interest for the entire month in their first payment
(in arrears), the seller must pay the buyer for the portion of the month the seller owned the
home. This results in a debit to the seller and an equal credit to the buyer.
, 3
Question 7
Under a typical "Ground Lease," which of the following rights does the lessee (tenant) usually
receive?
A. The right to build structures on the property
B. The right to mineral deposits found beneath the surface
C. The right to transfer permanent ownership to a third party
D. The right to harvest all timber without restriction
E. The right to ignore local zoning ordinances
Correct Answer: A. The right to build structures on the property.
Rationale: A ground lease is a long-term lease of land. The tenant is typically permitted to
construct buildings on the land. At the end of the lease term, the improvements usually
become the property of the landlord (lessor).
Question 8
What is the legal role of a real estate licensee regarding the North Carolina Residential Property
Disclosure Statement?
A. To fill out the form on behalf of the seller
B. To advise and assist the seller with the disclosure
C. To guarantee the accuracy of the seller's representations
D. To sign the document as a witness for the buyer
E. To decide which questions the seller should answer "No Representation"
Correct Answer: B) Licensees are required to advise and assist the seller with the disclosure.
Rationale: Licensees must explain the seller's rights and duties regarding the form. While
the licensee assists, the seller must ultimately complete the form. The licensee must not tell
the seller how to answer specifically, but must disclose any material facts they personally
know.
Question 9
Which specific homeowner's insurance form is designed to cover the unique needs of a
condominium unit owner?
A. HO-1
B. HO-3
C. HO-4
D. HO-6
E. HO-8
Correct Answer: D) HO-6
Rationale: The HO-6 policy is specifically for condominium owners. It covers the "walls-in"
portion of the unit and personal property, while the HOA's master policy typically covers
the exterior and common areas.
CORRECT ANSWERS | VERIFIED ANSWERS | BRAND NEW VERSION!
Question 1
Which party is legally required to sign a Deed of Trust in a North Carolina real estate
transaction?
A. The Trustee
B. The Beneficiary
C. The Trustor(s)
D. The Grantee(s)
E. The Mortgagee
Correct Answer: C) The Trustor(s)
Rationale: The trustor is the borrower in a lending situation using a trust deed. The
borrower is giving the lender security or collateral interests in the property. Because those
rights and interests belong to the borrower and they are surrendering them, only the
trustor (or borrower) must sign the trust deed.
Question 2
Under which of the following mortgage loan types would a buyer be required to produce a
Certificate of Reasonable Value (CRV)?
A. FHA Insured Loan
B. Conventional Loan
C. Adjustable Rate Mortgage
D. VA Guaranteed Loan
E. USDA Rural Development Loan
Correct Answer: D) VA Guaranteed Loan
Rationale: The Certificate of Reasonable Value, or CRV, is the specific name for the
appraisal used in VA (Veterans Affairs) loans. While FHA loans use a "Conditional
Commitment," the CRV is unique to the VA guaranteed loan program.
Question 3
In environmental remediation, the term "encapsulation" refers to which of the following
processes?
A. Removing lead-based paint from window sills
B. The chemical treatment of radon in well water
C. The sealing away of friable asbestos
D. The process of replacing polybutylene piping
E. The removal of underground storage tanks
Correct Answer: C) The sealing away of friable asbestos
Rationale: Encapsulation is a method of asbestos control that involves sealing the material
in place rather than removing it. This prevents friable (crumbly) asbestos fibers from
becoming airborne and posing a health risk.
, 2
Question 4
At what level does the presence of radon gas become a "material fact" that must be disclosed in
North Carolina?
A. 1.0 picocuries or higher
B. 2.5 picocuries or higher
C. 4.0 picocuries or higher
D. Only when requested by the buyer
E. Only in the Appalachian mountain region
Correct Answer: C) 4.0 picocuries or higher
Rationale: Radon is a colorless, odorless gas. In North Carolina, the presence of radon at a
level of 4.0 picocuries per liter of air or higher is considered a material fact that must be
disclosed to all parties in a transaction regardless of whether they ask.
Question 5
What is the primary legal difference between an Installment Land Contract and a Purchase
Money Mortgage?
A. Seller financing is only allowed in a Purchase Money Mortgage.
B. The Purchase Money Mortgage requires a 20% down payment.
C. The time at which the legal deed is actually delivered to the buyer.
D. Installment Land Contracts are illegal for residential properties in NC.
E. Only a Purchase Money Mortgage involves a promissory note.
Correct Answer: C) The time in which delivery of the deed is made.
Rationale: In a Purchase Money Mortgage, the buyer receives legal title at closing. In an
Installment Land Contract (or Contract for Deed), the seller retains legal title (the deed)
until the buyer makes the final payment, at which point the deed is delivered.
Question 6
A buyer assumes an existing $80,000 loan at 9.5% interest. Since interest is paid in arrears and
the buyer will make the next full payment, how does the interest for the month of closing appear
on the settlement statement?
A. A single entry; debit to the seller
B. A single entry: credit to the buyer
C. A double entry: debit to the seller, credit to the buyer
D. A double entry: credit to the seller, debit to the buyer
E. It does not appear on the settlement statement
Correct Answer: C) A double entry: debit to the seller, credit to the buyer
Rationale: Because the buyer will pay the interest for the entire month in their first payment
(in arrears), the seller must pay the buyer for the portion of the month the seller owned the
home. This results in a debit to the seller and an equal credit to the buyer.
, 3
Question 7
Under a typical "Ground Lease," which of the following rights does the lessee (tenant) usually
receive?
A. The right to build structures on the property
B. The right to mineral deposits found beneath the surface
C. The right to transfer permanent ownership to a third party
D. The right to harvest all timber without restriction
E. The right to ignore local zoning ordinances
Correct Answer: A. The right to build structures on the property.
Rationale: A ground lease is a long-term lease of land. The tenant is typically permitted to
construct buildings on the land. At the end of the lease term, the improvements usually
become the property of the landlord (lessor).
Question 8
What is the legal role of a real estate licensee regarding the North Carolina Residential Property
Disclosure Statement?
A. To fill out the form on behalf of the seller
B. To advise and assist the seller with the disclosure
C. To guarantee the accuracy of the seller's representations
D. To sign the document as a witness for the buyer
E. To decide which questions the seller should answer "No Representation"
Correct Answer: B) Licensees are required to advise and assist the seller with the disclosure.
Rationale: Licensees must explain the seller's rights and duties regarding the form. While
the licensee assists, the seller must ultimately complete the form. The licensee must not tell
the seller how to answer specifically, but must disclose any material facts they personally
know.
Question 9
Which specific homeowner's insurance form is designed to cover the unique needs of a
condominium unit owner?
A. HO-1
B. HO-3
C. HO-4
D. HO-6
E. HO-8
Correct Answer: D) HO-6
Rationale: The HO-6 policy is specifically for condominium owners. It covers the "walls-in"
portion of the unit and personal property, while the HOA's master policy typically covers
the exterior and common areas.
