North Carolina Real Estate (State Only
Exam Review) Questions and Answers
100% Pass
Which of the following statements is true regarding Ad Valorem taxation in North Carolina?
1. Real property is taxed according to its most recent sale price.
2. The Machinery Act requires reassessment tax purposes every 4 years.
3. Real property taxes and special assessments constitute an involuntary lien against property on
January 1st of the next year.
4. Tax rates are effective until the next revaluation year. ✔✔3. Real property taxes and special
assessments constitute an involuntary lien against property on January 1st of the text year
Explanation
Real property is taxed according to its assessed value, not sale price. The Machinery Act requires
that properties be assessed at least once every 8 years (octennial appraisal). Tax rates can be
changed every year and not set by the Machinery Act, rather by budget of the municipality.
John recently retired and moved to a coastal community located in North Carolina. He decided to
seek opportunities to supplement his retirement income by responding to an advertisement to
,become a timeshare salesman. John is told by the developer no license is required to sell a
timeshare as he will be paid a flat fee for each timeshare sold is the developer correct?
1. No. In order to sell time shares an individual will need to obtain a timeshare sales license.
2. No. In order to sell timeshares an individual will need to obtain a North Carolina real estate
license.
3. Yes. So long as an individual is not paid a percentage based commission there is no
requirement to obtain a time share salesman license.
4. Yes. Timeshare sales fall under vacation property sales and therefore are exempt from the
typical licensing requirements. ✔✔2. No. In order to sell timeshares an individual will need to
obtain a North Carolina real estate license.
Explanation
The license triggering event is earning compensation on behalf of another. John will require an
active real estate license in order to earn compensation from the sale of timeshare properties.
Which of the following statements regarding real estate sales contract is true?
1. A provisional broker acting as the seller's agent is required to safeguard an option money
check until effective and they must deliver it directly to the seller.
,2. An agent representing a buyer must submit an offer to purchase to the seller or sellers agent
immediately or no later than 7 days.
3. When earnest money is paid with an effective contract it must be deposited within 5 banking
days of receipt.
4. A broker is not permitted to accept an earnest money deposit if it is tender in cash. ✔✔1.
Option fee and due diligence fee checks are made payable to the seller and delivered once the
contract becomes effective. Offers and contracts must be delivered within five days. Earnest
money must be deposited the later of three banking days from the effective date of the contract
or receipt. While it is not recommended that a broker accept cash, it is permitted. When cash is
tendered for earnest money or due diligence, it must be deposited immediately but no later than
three banking days.
Explanation
Option fee and due diligence fee checks are made payable to the seller and delivered once the
contract becomes effective. Offers and contracts mut be delivered within 5 days. Earnest money
must be deposited the later of 3 banking days from the effective date of the contract or receipt.
While it is not recommended that a broker accept cash, it is permitted. When cash is tendered for
earnest money r due diligence, it must be deposited immediately but no later than 3 banking
days.
All of the following statements are true regarding a broker-in-charge, EXCEPT:
, 1. A brokerage operating as a sole proprietorship must appoint a broker-in-charge in order to
handle trust funds and advertise property.
2. A broker-in-charge must notify the Commission when a change in his or her status occurs.
3. A broker-in-charge is responsible for maintaining transaction records and notification of a
change in address of the firm to the Commission.
4. A broker-in-charge has a duty to supervise all brokers affiliated with the firm with regard to
violations of license law. ✔✔4. A broker-in-charge has a duty to supervise all brokers affiliated
with the firm with regard to violations of license law.
Explanation
A broker-in-charge must directly supervise provisional brokers. While they are responsible to
ensure compliance with agency disclosure and adherence to fair housing they are not responsible
for all violations of license law for a broker.
A buyer's agent is responsible for which of the following in regard to the Closing Disclosure?
Exam Review) Questions and Answers
100% Pass
Which of the following statements is true regarding Ad Valorem taxation in North Carolina?
1. Real property is taxed according to its most recent sale price.
2. The Machinery Act requires reassessment tax purposes every 4 years.
3. Real property taxes and special assessments constitute an involuntary lien against property on
January 1st of the next year.
4. Tax rates are effective until the next revaluation year. ✔✔3. Real property taxes and special
assessments constitute an involuntary lien against property on January 1st of the text year
Explanation
Real property is taxed according to its assessed value, not sale price. The Machinery Act requires
that properties be assessed at least once every 8 years (octennial appraisal). Tax rates can be
changed every year and not set by the Machinery Act, rather by budget of the municipality.
John recently retired and moved to a coastal community located in North Carolina. He decided to
seek opportunities to supplement his retirement income by responding to an advertisement to
,become a timeshare salesman. John is told by the developer no license is required to sell a
timeshare as he will be paid a flat fee for each timeshare sold is the developer correct?
1. No. In order to sell time shares an individual will need to obtain a timeshare sales license.
2. No. In order to sell timeshares an individual will need to obtain a North Carolina real estate
license.
3. Yes. So long as an individual is not paid a percentage based commission there is no
requirement to obtain a time share salesman license.
4. Yes. Timeshare sales fall under vacation property sales and therefore are exempt from the
typical licensing requirements. ✔✔2. No. In order to sell timeshares an individual will need to
obtain a North Carolina real estate license.
Explanation
The license triggering event is earning compensation on behalf of another. John will require an
active real estate license in order to earn compensation from the sale of timeshare properties.
Which of the following statements regarding real estate sales contract is true?
1. A provisional broker acting as the seller's agent is required to safeguard an option money
check until effective and they must deliver it directly to the seller.
,2. An agent representing a buyer must submit an offer to purchase to the seller or sellers agent
immediately or no later than 7 days.
3. When earnest money is paid with an effective contract it must be deposited within 5 banking
days of receipt.
4. A broker is not permitted to accept an earnest money deposit if it is tender in cash. ✔✔1.
Option fee and due diligence fee checks are made payable to the seller and delivered once the
contract becomes effective. Offers and contracts must be delivered within five days. Earnest
money must be deposited the later of three banking days from the effective date of the contract
or receipt. While it is not recommended that a broker accept cash, it is permitted. When cash is
tendered for earnest money or due diligence, it must be deposited immediately but no later than
three banking days.
Explanation
Option fee and due diligence fee checks are made payable to the seller and delivered once the
contract becomes effective. Offers and contracts mut be delivered within 5 days. Earnest money
must be deposited the later of 3 banking days from the effective date of the contract or receipt.
While it is not recommended that a broker accept cash, it is permitted. When cash is tendered for
earnest money r due diligence, it must be deposited immediately but no later than 3 banking
days.
All of the following statements are true regarding a broker-in-charge, EXCEPT:
, 1. A brokerage operating as a sole proprietorship must appoint a broker-in-charge in order to
handle trust funds and advertise property.
2. A broker-in-charge must notify the Commission when a change in his or her status occurs.
3. A broker-in-charge is responsible for maintaining transaction records and notification of a
change in address of the firm to the Commission.
4. A broker-in-charge has a duty to supervise all brokers affiliated with the firm with regard to
violations of license law. ✔✔4. A broker-in-charge has a duty to supervise all brokers affiliated
with the firm with regard to violations of license law.
Explanation
A broker-in-charge must directly supervise provisional brokers. While they are responsible to
ensure compliance with agency disclosure and adherence to fair housing they are not responsible
for all violations of license law for a broker.
A buyer's agent is responsible for which of the following in regard to the Closing Disclosure?
