NC REAL ESTATE EXAM STATE PORTION
2025-2026 200 COMPREHENSIVE
QUESTIONS AND ANSWERS PRACTICE
BANK AND VERIFIED RATIONALE
Master the state-specific section of your North Carolina licensing
exam with this comprehensive test bank featuring 200 highly realistic
multiple-choice questions. Every question mimics the structural
formatting, phrasing, and difficulty of the actual NCREC exam,
targeting high-frequency topics like trust accounts, dual agency, and
the Machinery Act. Detailed italicized answers and bolded rationales
ensure you understand the legal reasoning behind every correct
choice to maximize your study efficiency and pass on your first
attempt.
North Carolina Real Estate License Exam: State Portion (50-Question
Mastery Pool)
Q1. The North Carolina Real Estate Commission (NCREC) has the
legal authority to discipline licensees. Which of the following
disciplinary actions is OUTSIDE the power of the NCREC?
A) Suspending a broker's license for two years.
B) Issuing a formal public reprimand.
C) Fining a licensee $1,000 for a rule violation.
D) Revoking a broker's license permanently.
Answer: C) Fining a licensee $1,000 for a rule violation.
Rationale: The NCREC does not have the power to fine licensees for
general violations of license law. It can only reprimand, censure,
,suspend, or revoke a license. The only time the NCREC can fine
anyone is a $100 per-unit fee against timeshare developers.
Q2. A provisional broker receives a cash earnest money deposit from
a buyer client on Friday at 4:30 PM. When must this money be
delivered to the broker's Broker-in-Charge (BIC)?
A) Immediately.
B) Within 3 banking days.
C) Within 3 calendar days.
D) By the next business morning before 10:00 AM.
Answer: A) Immediately.
Rationale: North Carolina license law strictly dictates that a
provisional broker must turn over all trust funds (cash, check, or
electronic) to their Broker-in-Charge immediately upon receipt. The 3-
banking-day rule applies to the BIC's deposit deadline, not the
provisional broker's delivery deadline.
Q3. According to the North Carolina Machinery Act, how often must
real property undergo a general octennial reappraisal?
A) Every year.
B) Every 4 years.
C) Every 8 years.
D) Every 10 years.
Answer: C) Every 8 years.
Rationale: The word "octennial" means occurring every eight years.
The Machinery Act mandates that all NC counties must conduct a full
real property reappraisal at least once every 8 years to adjust ad
valorem tax assessments.
Q4. A broker is filling out an Offer to Purchase and Contract (Form 2-
T) for a buyer client. The buyer asks to include a clause that allows
them to move in two weeks before closing. What should the broker
do?
A) Draft a custom pre-possession clause directly into the contract's
addendum section.
,B) Advise the buyer to use a standard Buyer Possession Before Closing
Agreement form.
C) Write a handwritten note in the margins of Form 2-T detailing the move-
in terms.
D) Verbally agree to the arrangement with the listing agent without
changing the paperwork.
Answer: B) Advise the buyer to use a standard Buyer Possession Before
Closing Agreement form.
Rationale: North Carolina brokers are expressly prohibited from
drafting custom contract clauses or legal provisions, as doing so
constitutes the unauthorized practice of law. They must use pre-
printed, standard addenda approved by the NCREC/NCAR.
Q5. A listing agent notice that a property has synthetic stucco (EIFS)
siding hidden behind a thin layer of stone veneer. The seller asks the
agent not to mention it. What is the agent's obligation?
A) Follow the seller's lawful instruction to maintain fiduciary confidentiality.
B) Disclose the presence of EIFS to all prospective buyers, as it is a per se
material fact.
C) Only disclose the EIFS if a prospective buyer specifically asks about the
siding material.
D) Wait for the home inspector to find it and let the inspector handle the
disclosure.
Answer: B) Disclose the presence of EIFS to all prospective buyers, as it is
a per se material fact.
Rationale: Synthetic stucco (EIFS) is categorized as a per se material
fact in North Carolina due to its historic tendency to trap moisture and
cause structural rot. Brokers must disclose material facts to all
parties in the transaction, regardless of the seller’s wishes.
Q6. Under NCREC rules, which of the following is considered an
acceptable method for a firm to handle a dispute over earnest money
held in their trust account?
A) Pay the funds to the party who seems most reasonable after a 30-day
waiting period.
, B) Split the funds equally between the buyer and seller to avoid a lawsuit.
C) Keep the money in the trust account indefinitely until a court orders its
release or the parties sign a mutual release.
D) Forfeit the funds to the state treasury department within 10 days of the
dispute.
Answer: C) Keep the money in the trust account indefinitely until a court
orders its release or the parties sign a mutual release.
Rationale: If an earnest money dispute arises, the broker must hold
the funds in the trust account until they receive written mutual
agreement from the parties, a final court order, or they may choose to
safely transfer the funds to the local Clerk of Court.
Q7. A broker changes their residential address after moving into a
new home. Within how many days must the broker notify the NCREC
of this change?
A) 5 days.
B) 10 days.
C) 30 days.
D) 60 days.
Answer: B) 10 days.
Rationale: Licensees must notify the NCREC in writing (or via their
online portal) within 10 days of any change in personal name,
business name, trade name, residence address, or business address.
Q8. A non-provisional broker wants to advertise a listing on social
media. What is required under NCREC advertising rules for this post?
A) The ad must include the price per square foot of the home.
B) The ad must explicitly list the name of the broker’s real estate firm.
C) The ad must display the broker’s individual license number in the image
caption.
D) The ad does not need any specific branding as long as it links back to a
valid website.
Answer: B) The ad must explicitly list the name of the broker’s real estate
firm.
Rationale: Blind ads are illegal in North Carolina. Any real estate
2025-2026 200 COMPREHENSIVE
QUESTIONS AND ANSWERS PRACTICE
BANK AND VERIFIED RATIONALE
Master the state-specific section of your North Carolina licensing
exam with this comprehensive test bank featuring 200 highly realistic
multiple-choice questions. Every question mimics the structural
formatting, phrasing, and difficulty of the actual NCREC exam,
targeting high-frequency topics like trust accounts, dual agency, and
the Machinery Act. Detailed italicized answers and bolded rationales
ensure you understand the legal reasoning behind every correct
choice to maximize your study efficiency and pass on your first
attempt.
North Carolina Real Estate License Exam: State Portion (50-Question
Mastery Pool)
Q1. The North Carolina Real Estate Commission (NCREC) has the
legal authority to discipline licensees. Which of the following
disciplinary actions is OUTSIDE the power of the NCREC?
A) Suspending a broker's license for two years.
B) Issuing a formal public reprimand.
C) Fining a licensee $1,000 for a rule violation.
D) Revoking a broker's license permanently.
Answer: C) Fining a licensee $1,000 for a rule violation.
Rationale: The NCREC does not have the power to fine licensees for
general violations of license law. It can only reprimand, censure,
,suspend, or revoke a license. The only time the NCREC can fine
anyone is a $100 per-unit fee against timeshare developers.
Q2. A provisional broker receives a cash earnest money deposit from
a buyer client on Friday at 4:30 PM. When must this money be
delivered to the broker's Broker-in-Charge (BIC)?
A) Immediately.
B) Within 3 banking days.
C) Within 3 calendar days.
D) By the next business morning before 10:00 AM.
Answer: A) Immediately.
Rationale: North Carolina license law strictly dictates that a
provisional broker must turn over all trust funds (cash, check, or
electronic) to their Broker-in-Charge immediately upon receipt. The 3-
banking-day rule applies to the BIC's deposit deadline, not the
provisional broker's delivery deadline.
Q3. According to the North Carolina Machinery Act, how often must
real property undergo a general octennial reappraisal?
A) Every year.
B) Every 4 years.
C) Every 8 years.
D) Every 10 years.
Answer: C) Every 8 years.
Rationale: The word "octennial" means occurring every eight years.
The Machinery Act mandates that all NC counties must conduct a full
real property reappraisal at least once every 8 years to adjust ad
valorem tax assessments.
Q4. A broker is filling out an Offer to Purchase and Contract (Form 2-
T) for a buyer client. The buyer asks to include a clause that allows
them to move in two weeks before closing. What should the broker
do?
A) Draft a custom pre-possession clause directly into the contract's
addendum section.
,B) Advise the buyer to use a standard Buyer Possession Before Closing
Agreement form.
C) Write a handwritten note in the margins of Form 2-T detailing the move-
in terms.
D) Verbally agree to the arrangement with the listing agent without
changing the paperwork.
Answer: B) Advise the buyer to use a standard Buyer Possession Before
Closing Agreement form.
Rationale: North Carolina brokers are expressly prohibited from
drafting custom contract clauses or legal provisions, as doing so
constitutes the unauthorized practice of law. They must use pre-
printed, standard addenda approved by the NCREC/NCAR.
Q5. A listing agent notice that a property has synthetic stucco (EIFS)
siding hidden behind a thin layer of stone veneer. The seller asks the
agent not to mention it. What is the agent's obligation?
A) Follow the seller's lawful instruction to maintain fiduciary confidentiality.
B) Disclose the presence of EIFS to all prospective buyers, as it is a per se
material fact.
C) Only disclose the EIFS if a prospective buyer specifically asks about the
siding material.
D) Wait for the home inspector to find it and let the inspector handle the
disclosure.
Answer: B) Disclose the presence of EIFS to all prospective buyers, as it is
a per se material fact.
Rationale: Synthetic stucco (EIFS) is categorized as a per se material
fact in North Carolina due to its historic tendency to trap moisture and
cause structural rot. Brokers must disclose material facts to all
parties in the transaction, regardless of the seller’s wishes.
Q6. Under NCREC rules, which of the following is considered an
acceptable method for a firm to handle a dispute over earnest money
held in their trust account?
A) Pay the funds to the party who seems most reasonable after a 30-day
waiting period.
, B) Split the funds equally between the buyer and seller to avoid a lawsuit.
C) Keep the money in the trust account indefinitely until a court orders its
release or the parties sign a mutual release.
D) Forfeit the funds to the state treasury department within 10 days of the
dispute.
Answer: C) Keep the money in the trust account indefinitely until a court
orders its release or the parties sign a mutual release.
Rationale: If an earnest money dispute arises, the broker must hold
the funds in the trust account until they receive written mutual
agreement from the parties, a final court order, or they may choose to
safely transfer the funds to the local Clerk of Court.
Q7. A broker changes their residential address after moving into a
new home. Within how many days must the broker notify the NCREC
of this change?
A) 5 days.
B) 10 days.
C) 30 days.
D) 60 days.
Answer: B) 10 days.
Rationale: Licensees must notify the NCREC in writing (or via their
online portal) within 10 days of any change in personal name,
business name, trade name, residence address, or business address.
Q8. A non-provisional broker wants to advertise a listing on social
media. What is required under NCREC advertising rules for this post?
A) The ad must include the price per square foot of the home.
B) The ad must explicitly list the name of the broker’s real estate firm.
C) The ad must display the broker’s individual license number in the image
caption.
D) The ad does not need any specific branding as long as it links back to a
valid website.
Answer: B) The ad must explicitly list the name of the broker’s real estate
firm.
Rationale: Blind ads are illegal in North Carolina. Any real estate
