POST 301- NC REAL ESTATE EXAM REVIEW
QUESTIONS WITH 100% ACCURATE ANSWERS
Who must disclose material facts and to whom? - Accurate answers Only real estate brokers must
discover and disclose material facts to everyone.
All of the following are true EXCEPT:
a) a listing agent has a higher duty to discover and disclose material facts because they have greater
access to the property and information from the seller
b) a broker who relies solely on what their client tells them does so at their peril.
c) buyer agents can rely on the listing company's representations and have no duty to discover and
disclose
d) buyer agents can rely on the listing company's representations and have - Accurate answers c)
buyer agents can rely on the listing company's representations and have no duty to discover and
disclose
Minimally, how many parties are there in an agency relationship and what are they called under agency
law? - Accurate answers There must be at least two parties, one is the agent and the other is the
principal
Real estate companies may work with consumers under which of the following agency options?
a) representing only the property owner
b) representing only the buyer or tenant
c) representing both parties as a dual agent
d) all of the above - Accurate answers d) all of the above
The Unfair and Deceptive Practices Act prohibits misrepresentations, omissions of material fact, and
misleading advertising in a trade or business and applies to: - Accurate answers Real Estate Brokers
Before a broker may represent a seller, the broker must have all of the following to comply with REC
rules EXCEPT:
a) the broker must have provided and reviewed the WWREA Disclosure and obtained the seller's
signature, if possible
b) the broker may have an oral listing agreement with the seller for not more than 10 days
c) the agency agreement with the seller must be in writing before the broker may provide any brokerage
services
d) the written agency agreement should be signed by both the seller and the agent - Accurate answers
b) the broker may have an oral listing agreement with the seller for not more than 10 days
A buyer asks the listing agent whether all the appliances are in good working order. The listing agent
says yes, although he hasn't personally checked any of the appliances. The buyer later discovers the
dishwasher doesn't work. Which of the following is true?
a) the broker is guilty of negligent omission
b) the broker is guilty of willful misrepresentation
c) the broker is guilty of negligent misrepresentation
,d) the broker isn't liable for an innocent, casual statement and the burden was on the buyer to verify the
property condition during his due diligence. - Accurate answers c) the broker is guilty of negligent
misrepresentation
A broker acting as a buyer agent under a written buyer agency agreement knows the following about
their buyer-client which is a material fact?
a) the buyer is willing to offer $10,000 more than list price
b) the buyer appears to have significant assets, but is highly leveraged
c) the buyer must purchase and close within 45 days
d) the buyer loses their job two weeks before settlement - Accurate answers d) the buyer loses
their job two weeks before settlement
Seller hires listing company and on the property disclosure statement says that the property is
connected to city water and sewer. The seller knows that she has city water and that city sewer is
available, but she never connected and is still on septic. Listing agent makes no attempt to verify and
advertises the property as having city water and sewer. Who is guilty of misrepresentation? - Accurate
answers The seller is guilty of willful misrepresentation and the listing agent is guilty of negligent
misrepresentation
A broker has a current buyer-client who wants to see a property formerly listed by the broker, but now
listed by a different company. According to the NCREC, what should the broker disclose to their buyer-
client about the seller? - Accurate answers The broker should tell their buyer-client what they
know about the seller that may influence or affect the buyer's decision
A real estate company whose policy is that it represents only the buyer or seller in a transaction is acting
as: - Accurate answers An exclusive agent
A provisional broker at her first listing presentation notices some cracks in the foundation wall during
the walk-through, but doesn't ask her seller about them and says nothing in agent remarks. Seller checks
"no representation" on the property disclosure form. Who may be guilty of omission? - Accurate
answers The listing agent was aware of a potential problem, yet failed to inquire further or say
anything to prospective buyers.
Which of the following statements is FALSE?
a) a company may be civilly liable for the actions of its affiliated licensees' actions under agency law
b) a company has no civil liability for its affiliated licensees' actions because they are paid as
independent contractors
c) a BIC will be included in a Letter of Inquiry filed against a provisional broker
d) a BIC may not be involved in a Letter of Inquiry filed against an affiliated full broker - Accurate
answers b) a company has no civil liability for its affiliated licensees' actions because they are paid as
independent contractors
A listing agent knows that there is a significant problem with water damage in the crawl space during
heavy rains. The seller checks "no representation" as to drainage issues. A prospective buyer asks
whether or not there are any drainage issues. Of the following, who may be guilty of misrepresentation?
- Accurate answers The listing agent who replies that there are no drainage issues
, A broker-listing agent is conducting an open house for her seller-client. A former buyer-client with
whom the broker had worked for previously attends. Later that afternoon the listing agent receives a
written offer from that buyer. When presenting the offer to the seller, the listing agent should: -
Accurate answers Share any information she has about the buyer with the seller, including the
buyer's financial ability or resources and needs or desires
Which of the following statements is FALSE?
a) a buyer agent may reasonably rely on the representations a listing agent makes when marketing the
property unless there is a "red flag"
b) a listing agent has a heavier burden/duty to discover and disclose latent (hidden) property defects
than a buyer's agent does
c) a buyer agent need not discover and disclose material facts and instead may rely on the listing agent's
representations
d) both listing agents and buyer agents should discover and disclose patent (obvious) property defects -
Accurate answers c) a buyer agent need not discover and disclose material facts and instead may
rely on the listing agent's representations
Which of the following is a material fact?
a) that the streets in the neighborhood are privately maintained by the owner's association
b) that the seller replaced the roof 8 years ago using architectural shingles
c) that the dual HVAC system was installed 3 years ago and is still under warranty
d) that the exterior or siding is hardiplank - Accurate answers a) that the streets in the
neighborhood are privately maintained by the owner's association
All of the following may lead to an express or implied agency agreement EXCEPT:
a) an express agreement between the principal and agent authorizing the agent to act on the principal's
behalf
b) the agent begins to advise the consumer and negotiate on their behalf
c) compensation to the agent must be paid by the principal
d) the broker begins gathering confidential information about the consumer - Accurate answers c)
compensation to the agent must be paid by the principal
An actively licensed real estate broker has a written contract with a company stating that he will not be
treated as an employee for federal income tax purposes. The licensee's entire income is from sales
commissions rather than an hourly wage. While the licensee probably will be treated by the IRS much
like an independent contractor, technically the licensee is: - Accurate answers a statutory non-
employee
All of the following are true regarding the Doctrine of Caveat Emptor EXCEPT:
a) Caveat Emptor means "buyer beware" and originated under the common law of England
b) Brokers' obligations to discover and disclose are less, because Caveat Emptor places the primary
burden on the buyer to inspect and investigate
c) Under current NC Residential Property Disclosure forms, a seller is not required to disclose the
property's true condition because of this doctrine
d) Because of Caveat Emptor, as between the buyer and seller, the buyer has the heavier burden to
investigate and discover the property - Accurate answers b) Brokers' obligations to discover and
disclose are less, because Caveat Emptor places the primary burden on the buyer to inspect and
investigate
QUESTIONS WITH 100% ACCURATE ANSWERS
Who must disclose material facts and to whom? - Accurate answers Only real estate brokers must
discover and disclose material facts to everyone.
All of the following are true EXCEPT:
a) a listing agent has a higher duty to discover and disclose material facts because they have greater
access to the property and information from the seller
b) a broker who relies solely on what their client tells them does so at their peril.
c) buyer agents can rely on the listing company's representations and have no duty to discover and
disclose
d) buyer agents can rely on the listing company's representations and have - Accurate answers c)
buyer agents can rely on the listing company's representations and have no duty to discover and
disclose
Minimally, how many parties are there in an agency relationship and what are they called under agency
law? - Accurate answers There must be at least two parties, one is the agent and the other is the
principal
Real estate companies may work with consumers under which of the following agency options?
a) representing only the property owner
b) representing only the buyer or tenant
c) representing both parties as a dual agent
d) all of the above - Accurate answers d) all of the above
The Unfair and Deceptive Practices Act prohibits misrepresentations, omissions of material fact, and
misleading advertising in a trade or business and applies to: - Accurate answers Real Estate Brokers
Before a broker may represent a seller, the broker must have all of the following to comply with REC
rules EXCEPT:
a) the broker must have provided and reviewed the WWREA Disclosure and obtained the seller's
signature, if possible
b) the broker may have an oral listing agreement with the seller for not more than 10 days
c) the agency agreement with the seller must be in writing before the broker may provide any brokerage
services
d) the written agency agreement should be signed by both the seller and the agent - Accurate answers
b) the broker may have an oral listing agreement with the seller for not more than 10 days
A buyer asks the listing agent whether all the appliances are in good working order. The listing agent
says yes, although he hasn't personally checked any of the appliances. The buyer later discovers the
dishwasher doesn't work. Which of the following is true?
a) the broker is guilty of negligent omission
b) the broker is guilty of willful misrepresentation
c) the broker is guilty of negligent misrepresentation
,d) the broker isn't liable for an innocent, casual statement and the burden was on the buyer to verify the
property condition during his due diligence. - Accurate answers c) the broker is guilty of negligent
misrepresentation
A broker acting as a buyer agent under a written buyer agency agreement knows the following about
their buyer-client which is a material fact?
a) the buyer is willing to offer $10,000 more than list price
b) the buyer appears to have significant assets, but is highly leveraged
c) the buyer must purchase and close within 45 days
d) the buyer loses their job two weeks before settlement - Accurate answers d) the buyer loses
their job two weeks before settlement
Seller hires listing company and on the property disclosure statement says that the property is
connected to city water and sewer. The seller knows that she has city water and that city sewer is
available, but she never connected and is still on septic. Listing agent makes no attempt to verify and
advertises the property as having city water and sewer. Who is guilty of misrepresentation? - Accurate
answers The seller is guilty of willful misrepresentation and the listing agent is guilty of negligent
misrepresentation
A broker has a current buyer-client who wants to see a property formerly listed by the broker, but now
listed by a different company. According to the NCREC, what should the broker disclose to their buyer-
client about the seller? - Accurate answers The broker should tell their buyer-client what they
know about the seller that may influence or affect the buyer's decision
A real estate company whose policy is that it represents only the buyer or seller in a transaction is acting
as: - Accurate answers An exclusive agent
A provisional broker at her first listing presentation notices some cracks in the foundation wall during
the walk-through, but doesn't ask her seller about them and says nothing in agent remarks. Seller checks
"no representation" on the property disclosure form. Who may be guilty of omission? - Accurate
answers The listing agent was aware of a potential problem, yet failed to inquire further or say
anything to prospective buyers.
Which of the following statements is FALSE?
a) a company may be civilly liable for the actions of its affiliated licensees' actions under agency law
b) a company has no civil liability for its affiliated licensees' actions because they are paid as
independent contractors
c) a BIC will be included in a Letter of Inquiry filed against a provisional broker
d) a BIC may not be involved in a Letter of Inquiry filed against an affiliated full broker - Accurate
answers b) a company has no civil liability for its affiliated licensees' actions because they are paid as
independent contractors
A listing agent knows that there is a significant problem with water damage in the crawl space during
heavy rains. The seller checks "no representation" as to drainage issues. A prospective buyer asks
whether or not there are any drainage issues. Of the following, who may be guilty of misrepresentation?
- Accurate answers The listing agent who replies that there are no drainage issues
, A broker-listing agent is conducting an open house for her seller-client. A former buyer-client with
whom the broker had worked for previously attends. Later that afternoon the listing agent receives a
written offer from that buyer. When presenting the offer to the seller, the listing agent should: -
Accurate answers Share any information she has about the buyer with the seller, including the
buyer's financial ability or resources and needs or desires
Which of the following statements is FALSE?
a) a buyer agent may reasonably rely on the representations a listing agent makes when marketing the
property unless there is a "red flag"
b) a listing agent has a heavier burden/duty to discover and disclose latent (hidden) property defects
than a buyer's agent does
c) a buyer agent need not discover and disclose material facts and instead may rely on the listing agent's
representations
d) both listing agents and buyer agents should discover and disclose patent (obvious) property defects -
Accurate answers c) a buyer agent need not discover and disclose material facts and instead may
rely on the listing agent's representations
Which of the following is a material fact?
a) that the streets in the neighborhood are privately maintained by the owner's association
b) that the seller replaced the roof 8 years ago using architectural shingles
c) that the dual HVAC system was installed 3 years ago and is still under warranty
d) that the exterior or siding is hardiplank - Accurate answers a) that the streets in the
neighborhood are privately maintained by the owner's association
All of the following may lead to an express or implied agency agreement EXCEPT:
a) an express agreement between the principal and agent authorizing the agent to act on the principal's
behalf
b) the agent begins to advise the consumer and negotiate on their behalf
c) compensation to the agent must be paid by the principal
d) the broker begins gathering confidential information about the consumer - Accurate answers c)
compensation to the agent must be paid by the principal
An actively licensed real estate broker has a written contract with a company stating that he will not be
treated as an employee for federal income tax purposes. The licensee's entire income is from sales
commissions rather than an hourly wage. While the licensee probably will be treated by the IRS much
like an independent contractor, technically the licensee is: - Accurate answers a statutory non-
employee
All of the following are true regarding the Doctrine of Caveat Emptor EXCEPT:
a) Caveat Emptor means "buyer beware" and originated under the common law of England
b) Brokers' obligations to discover and disclose are less, because Caveat Emptor places the primary
burden on the buyer to inspect and investigate
c) Under current NC Residential Property Disclosure forms, a seller is not required to disclose the
property's true condition because of this doctrine
d) Because of Caveat Emptor, as between the buyer and seller, the buyer has the heavier burden to
investigate and discover the property - Accurate answers b) Brokers' obligations to discover and
disclose are less, because Caveat Emptor places the primary burden on the buyer to inspect and
investigate
