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Real
NC
| Question | Answer |
|---|---|
| What is an estate in severalty? | Ownership by one person. All other interests are severed. |
| What is tenancy in common? | Co-ownership where each owner has a separate interest that is inheritable. |
| What is joint tenancy? | Co-ownership with equal shares and right of survivorship. Requires unity of time |
| What is tenancy by the entirety? | Co-ownership only for married couples with survivorship and protection from individual debts. |
| What is a trust in real estate? | An arrangement where a trustee holds property for the benefit of a beneficiary. |
| What is a fee simple absolute estate? | The most complete form of ownership |
| What is a fee simple determinable estate? | Ownership ends automatically upon violation of a condition. Includes 'while' |
| What is a fee simple subject to condition subsequent? | Ownership may end if a condition is violated |
| What is a life estate? | Ownership limited to someone's lifetime. May include reversion or remainder interests. |
| What is the bundle of rights? | Rights of possession |
| What is an estate for years? | Lease with a specific start and end date. |
| What is a periodic estate? | Lease that automatically renews |
| What is an estate at will? | Lease without a fixed term |
| What is an estate at sufferance? | Tenant remains without landlord's permission after lease expiration. |
| What is a gross lease? | Landlord pays property expenses. Common in residential leases. |
| What is a triple net lease (NNN)? | Tenant pays all property expenses (taxes |
| What is a percentage lease? | Tenant pays base rent + % of gross sales. |
| What is a mechanic's lien? | Lien from a contractor or supplier for unpaid work on a property. |
| What is lien priority? | Property tax liens first |
| What are riparian and littoral rights? | Riparian: Rights to moving water. Littoral: Rights to static water like lakes. |
| What is accretion? | Gradual land build-up from water-borne sediment. |
| What is avulsion? | Sudden loss of land by water action. |
| What is a deed? | Legal document that transfers title from grantor to grantee. |
| What are the elements of a valid deed? | Written |
| What is a general warranty deed? | Deed with full title protection through six covenants. |
| What is a quitclaim deed? | Deed that transfers interest with no warranties. Often used to clear title issues. |
| What is voluntary alienation? | Transfer of property with owner's consent by deed or will. |
| What is involuntary alienation? | Transfer without owner's consent due to foreclosure |
| What is constructive notice? | Public record of ownership. Recording provides constructive notice. |
| What is a cloud on title? | Any claim or encumbrance that may impair ownership. |
| What is title insurance? | Insurance that protects against title defects and claims not found in the public record. |
| What is equity in real estate? | The difference between a property's value and the amount owed on it. Example: Home value = $350 |
| What does it mean to be 'upside down' on a mortgage? | The borrower owes more than the property's current market value (aka negative equity). |
| Define principal and interest in a mortgage loan. | Principal: The loan amount borrowed. Interest: The cost to borrow the principal |
| How is per diem interest calculated (using a 360-day year)? | Loan Balance × Interest Rate ÷ 360 = Daily Interest; Daily Interest × Days Owned in Month = Interest Owed |
| What is amortization? | Gradual loan repayment over time through monthly payments of principal and interest. |
| What is a loan origination fee? | A fee lenders charge for processing a loan—typically 1% of loan amount. Example: $325 |
| What is a buydown and how does a 3-2-1 buydown work? | A prepaid interest reduction to lower rates short-term. 3-2-1: Interest rate is 3% lower in year 1 |
| Difference between conventional and FHA loans? | Conventional: Not government-backed; often 20% down. FHA: Government-insured |
| What is the purpose of the VA loan program? | Guarantees loans for veterans with no required down payment unless purchase price > conforming loan limit. |
| What's the difference between lien theory and title theory states? | Lien Theory: Mortgage = lien; borrower holds title. Title Theory: Lender/trustee holds title until loan is repaid. |
| What is the secondary mortgage market and why does it matter? | Entities like Fannie Mae/Freddie Mac buy existing loans |
| What is a purchase money mortgage? | A mortgage where the seller finances part or all of the purchase. |
| Define balloon loan. | A loan with smaller payments at first |
| What does PITI stand for? | Principal |
| What are ARM caps in adjustable-rate mortgages? | Initial Cap: Max increase at first adjustment; Periodic Cap: Max increase each adjustment; Lifetime Cap: Max increase over loan's life |
| What does PMI stand for and when is it required? | Private Mortgage Insurance—required when down payment is < 20% on a conventional loan. |
| What is MIP? | Mortgage Insurance Premium — required on all FHA loans for the life of the loan. |
| What is a Loan Estimate (LE) vs. a Closing Disclosure (CD) under TRID? | LE: Given within 3 days of application |
| What law prohibits lenders from discriminatory lending practices? | Equal Credit Opportunity Act (ECOA) |
| What is predatory lending? | Unfair lending that exploits consumers — e.g. |
| How do you calculate the area of a rectangle? | Area = length × width |
| What is the formula for the area of a triangle? | Area = 1/2 × base × height |
| How many square feet are in one acre? | 43 |
| How do you calculate price per square foot? | Price ÷ Area |
| How do you calculate value using price per square foot? | Price per square foot × Area |
| How do you calculate acres from square feet? | Square feet ÷ 43 |
| How is Net Operating Income (NOI) calculated? | Effective Gross Income - Operating Expenses |
| What is the formula for capitalization rate? | Cap Rate = NOI ÷ Value |
| How do you calculate value using cap rate? | Value = NOI ÷ Cap Rate |
| What is the formula for Gross Rent Multiplier (GRM)? | GRM = Value ÷ Gross Monthly Rent |
| How do you calculate equity in property? | Equity = Property Value - Loan Amount |
| How do you calculate assessed value? | Assessed Value = Value × Assessment Ratio |
| How do you calculate annual property tax? | Assessed Value × Tax Rate |
| How do you calculate commission? | Commission = Sales Price × Commission Rate |
| What is the formula for loan-to-value ratio (LTV)? | LTV = (Loan Amount ÷ Value) × 100 |
| How do you calculate monthly interest? | Annual Interest ÷ 12 |
| How do you calculate amortized monthly mortgage payment? | Monthly Payment = (Loan ÷ 1 |
| How are discount points calculated? | Loan Amount × Discount Point % |
| How is net to seller calculated? | Net to Seller = Sales Price × (100% - Commission Rate) |
| How is per diem interest calculated? | Annual Interest ÷ 360 or 365 |
| How do you calculate daily rent? | Monthly Rent ÷ Days in Month |
| How is return on investment (ROI) calculated? | Annual Cash Flow ÷ Initial Investment |
| How do you calculate appreciation? | Original Value × Appreciation Rate |
| How do you calculate depreciation for residential property? | Cost ÷ 27.5 years |
| How do you calculate depreciation for commercial property? | Cost ÷ 39 years |
| How many feet are in a mile? | 5 |
| What is the Gross Income Multiplier (GIM)? | GIM = Value ÷ Gross Annual Income |
| What is the formula for proration using statutory year? | Proration = Item Amount ÷ 360 × Days Owed |
| What is the formula to convert percentage to decimal? | Divide by 100 (e.g. |
| How is transfer tax calculated per $1 | 000? |
| What is cash flow in property management? | Net Operating Income - Debt Service |
| [Real Estate Practice] What is the duty of reasonable skill and care? | Act within your area of expertise. Do not provide services you're unqualified to perform. |
| [Real Estate Practice] What constitutes unauthorized practice of law? | Giving legal advice or drafting legal documents without being a lawyer. |
| [Real Estate Practice] What is the CAN-SPAM Act? | Regulates commercial email |
| [Real Estate Practice] What does the Telephone Consumer Protection Act regulate? | Prohibits unsolicited calls to numbers on the Do Not Call Registry (DNC) |
| [Real Estate Practice] How often must licensees check the DNC registry? | At least every 31 days. |
| [Real Estate Practice] What is an exclusive right-to-sell agreement? | Listing agent gets commission regardless of who finds the buyer. |
| [Real Estate Practice] What is a net listing? | Broker keeps all proceeds over a set amount. Illegal in many states. |
| [Real Estate Practice] What is procuring cause? | The agent whose actions led to the sale. |
| [Real Estate Practice] What is a property management agreement? | Outlines duties between property owner and manager; creates general agency. |
| [Real Estate Practice] What is commingling? | Mixing client funds with personal or business funds—illegal. |
| [Real Estate Practice] What is conversion? | Using client funds for personal or unauthorized business use—illegal. |
| [Real Estate Practice] What are federally protected fair housing classes? | Race |
| [Real Estate Practice] What is blockbusting? | Inducing sales by suggesting demographic changes will lower property value. |
| [Real Estate Practice] What is steering? | Directing buyers to or from areas based on protected class. |
| [Real Estate Practice] What is redlining? | Refusing loans in certain areas based on demographics. |
| [Real Estate Practice] What is the Housing for Older Persons Act (HOPA)? | Allows age-based housing for 55+ communities if 80% of units meet criteria. |
| [Real Estate Practice] What does the ADA require? | Accessibility in public/commercial buildings; applies to new and remodeled structures. |
| [Real Estate Practice] What is vicarious liability? | Broker may be liable for actions of licensees. |
| [Real Estate Practice] What are antitrust violations? | Includes price fixing |
| [Real Estate Practice] What is puffery vs. misrepresentation? | Puffery is obvious exaggeration. Misrepresentation is a false statement of fact. |
| [Real Estate Practice] What is E&O insurance? | Errors and Omissions insurance protects against mistakes in real estate practice. |
| [Real Estate Practice] What are the penalties for Fair Housing Act violations? | Up to $20 |
| [Property] What is the difference between land | real estate |
| [Property] What is personal property? | Movable items not permanently attached to land; also called chattel. |
| [Property] What is a fixture? | An item permanently attached to land or improvements and considered real property. |
| [Property] What is annexation and severance? | Annexation: personal → real property. Severance: real → personal property. |
| [Property] What is a trade fixture? | Tenant-installed items for business use; considered personal property. |
| [Property] What are emblements? | Tenant-owned crops grown on rented land; considered personal property. |
| [Property] What is the MARIA test for real vs. personal property? | Method |
| [Property] What are the economic characteristics of real property? | Scarcity |
| [Property] What are the physical characteristics of real property? | Immobility |
| [Property] What is metes and bounds? | Legal description using direction |
| [Property] What is a monument? | A physical marker used in metes and bounds to mark property corners. |
| [Property] What is the lot and block system? | Legal description using a plat map filed in public records. |
| [Property] What is the rectangular government survey system? | Describes land using townships and sections. Townships are 6 miles square. |
| [Property] How big is a section in RGSS? | 1 mile by 1 mile (640 acres). |
| [Property] What is a survey? | On-site measurement of boundaries and improvements; includes drawing and report. |
| [Property] What is police power? | Government authority to regulate land use for public health |
| [Property] What is eminent domain and condemnation? | Eminent domain: right to take property. Condemnation: the process of taking it. |
| [Property] What is inverse condemnation? | Government takes property or devalues it without compensation—owner must sue. |
| [Property] What is escheat? | State claims property when an owner dies with no heirs or will. |
| [Property] What is ad valorem tax? | Tax based on property value. |
| [Property] What are zoning classifications? | Residential |
| [Property] What is a nonconforming use? | Use that existed before zoning change and is allowed to continue. |
| [Property] What is a variance? | Allows deviation from zoning rules due to hardship. |
| [Property] What is a special use permit? | Permission for non-conforming but acceptable use (e.g. |
| [Property] What is spot zoning? | Re-zoning one property in a different zone. |
| [Property] What are deed restrictions? | Private limitations placed by previous owners on future land use. |
| [Property] What is a CC&R? | Covenants |
| [Property] What is an easement? | Non-possessory right to use someone else's land. |
| [Property] What is the difference between dominant and servient estates? | Dominant benefits from the easement; servient bears the burden. |
| [Property] What is an easement by prescription? | Created by continuous |
| [Property] What is a license? | Temporary |
| [Property] What is an encroachment? | Unauthorized physical intrusion onto another's land (always illegal). |
| [Appraisal] What is market value? | The most probable price a property would sell for under normal conditions. |
| [Appraisal] What is market price? | The actual amount a buyer paid and a seller accepted. |
| [Appraisal] What are the four characteristics of value? | Demand |
| [Appraisal] What is the principle of substitution? | No one pays more for a property if a similar one costs less. |
| [Appraisal] What is highest and best use? | The most profitable legal use of a property. |
| [Appraisal] What is plottage? | Combining parcels increases value more than the sum of individual parcels. |
| [Appraisal] What is regression and progression? | Regression: value declines due to nearby lower values. Progression: value increases due to higher-value surroundings. |
| [Appraisal] What is anticipation? | Expectation of future events affecting property value. |
| [Appraisal] What are the steps of the appraisal process? | 1. State the problem |
| [Appraisal] What is FIRREA? | Federal law requiring USPAP standards and licensed appraisers for federally related transactions. |
| [Appraisal] What is the Sales Comparison Approach? | Uses recent sales of similar properties (comps); most often used for residential. |
| [Appraisal] What is bracketing? | Using comps that are both superior and inferior to subject property. |
| [Appraisal] What is the Cost Approach formula? | Land value + (cost to rebuild - depreciation) = value. |
| [Appraisal] What are the types of depreciation? | Physical |
| [Appraisal] What is curable vs incurable depreciation? | Curable: cost-effective to fix. Incurable: not practical to fix. |
| [Appraisal] What is the Income Approach formula? | Value = NOI ÷ Capitalization Rate. |
| [Appraisal] What is NOI? | Net Operating Income = Gross Income - Operating Expenses (excluding mortgage and taxes). |
| [Appraisal] What is GRM? | Gross Rent Multiplier = Price ÷ Gross Monthly Rent. |
| [Appraisal] What is GIM? | Gross Income Multiplier = Price ÷ Gross Annual Income. |
| [Appraisal] What is a CMA? | Comparative Market Analysis - informal market value estimate by a licensee. |
| [Appraisal] What is a BPO? | Broker's Price Opinion - similar to CMA but usually for lenders |
| [Appraisal] When should you adjust comps in a CMA? | Adjust the comp |
| [Appraisal] What is assessed value? | Value assigned by local tax authority |
| [Appraisal] How is taxable value calculated? | Assessed Value × Assessment Ratio. |
| [Appraisal] How are property taxes calculated? | Taxable Value × Tax Rate. |
| [Contracts & Agency] What is the difference between express and implied contracts? | Express is written or spoken; implied is based on actions. |
| [Contracts & Agency] What is the difference between unilateral and bilateral contracts? | Unilateral: one party makes a promise. Bilateral: both parties have obligations. |
| [Contracts & Agency] What are the 5 essential elements of a valid contract? | Offer/acceptance |
| [Contracts & Agency] What is the difference between assignment and novation? | Assignment transfers obligations; novation replaces with a new contract and party. |
| [Contracts & Agency] What is the difference between executed and executory contracts? | Executed: all terms completed. Executory: still in progress. |
| [Contracts & Agency] What makes a contract void | voidable |
| [Contracts & Agency] What are liquidated damages? | Pre-agreed amount of damages for breach |
| [Contracts & Agency] What is the statute of frauds? | Requires real estate contracts to be in writing to be enforceable. |
| [Contracts & Agency] What does 'time is of the essence' mean? | Parties must meet all deadlines exactly as stated. |
| [Contracts & Agency] What is equitable title? | The buyer's right to obtain legal title after meeting conditions of the contract. |
| [Contracts & Agency] What are contingencies? | Conditions that must be met for a contract to proceed (e.g. |
| [Contracts & Agency] What is a counter-offer? | A rejection of an offer and presentation of a new offer. |
| [Contracts & Agency] What is an option contract? | Unilateral contract allowing purchase but not requiring it. |
| [Contracts & Agency] What is an installment land contract? | Seller finances |
| [Contracts & Agency] What are the types of agency relationships? | Single |
| [Contracts & Agency] What is a fiduciary? | Someone in a position of trust who owes loyalty and duties. |
| [Contracts & Agency] What are the fiduciary duties (OLD CAR)? | Obedience |
| [Contracts & Agency] What is the difference between a client and a customer? | Client = represented. Customer = unrepresented. |
| [Contracts & Agency] What is dual agency? | Licensee represents both parties. Legal with written informed consent in some states. |
| [Contracts & Agency] What terminates an agency relationship? | Completion |
| [Contracts & Agency] What is agency coupled with interest? | Agent has a financial interest in the property. Can't be revoked by principal. |
| [Contracts & Agency] What is the difference between express and implied agency? | Express: clearly agreed to. Implied: created by actions. |
| [Contracts & Agency] What obligations does a buyer's agent have? | Show properties |
| [Contracts & Agency] What obligations does a seller's agent have? | Market property |
| [Contracts & Agency] What are the duties to customers? | Honesty |
| [Disclosures & Environmental] What must be disclosed for homes built before 1978? | Lead-based paint hazards |
| [Disclosures & Environmental] What is Title X? | The Residential Lead-Based Paint Hazard Reduction Act requiring lead disclosures. |
| [Disclosures & Environmental] What is the EPA's RRP Rule? | Requires contractors disturbing lead paint to be certified and follow lead-safe practices. |
| [Disclosures & Environmental] What is radon and when is mitigation recommended? | A radioactive gas; mitigation recommended at 4 picocuries/liter or more. |
| [Disclosures & Environmental] What is friable asbestos? | Asbestos that crumbles easily and becomes airborne |
| [Disclosures & Environmental] What is mold and how is it regulated? | Mold grows in moist areas; no federal laws require remediation |
| [Disclosures & Environmental] What are brownfields? | Contaminated properties formerly used for industrial/commercial purposes. |
| [Disclosures & Environmental] What are floodplains and how do they affect insurance? | Low-lying areas near water; homes in SFHAs require flood insurance. |
| [Disclosures & Environmental] What does the Clean Air Act regulate? | Air pollutants |
| [Disclosures & Environmental] What does the Clean Water Act regulate? | Pollutants entering U.S. waters; protects rivers |
| [Disclosures & Environmental] What is CERCLA? | Cleans up hazardous waste sites via Superfund; targets responsible parties. |
| [Disclosures & Environmental] What is SARA? | Amends CERCLA; protects innocent landowners who did due diligence. |
| [Disclosures & Environmental] What is NEPA? | Requires environmental impact assessments for federally funded projects. |
| [Disclosures & Environmental] What is the purpose of Phase I environmental site assessments? | Investigate a property's history and conditions for contamination risk. |
| [Disclosures & Environmental] What is the MAAP standard for licensee disclosure? | Material |
| [Disclosures & Environmental] What is a CLUE report? | Shows past insurance claims on a property; available to owners once per year. |
| [Disclosures & Environmental] What is caveat emptor? | 'Buyer beware'—buyer responsible for inspecting |
| [Disclosures & Environmental] What are wetlands and why do they matter? | Saturated land areas protected under the Clean Water Act; may limit development. |
| [Disclosures & Environmental] What agency issues floodplain maps? | FEMA (Federal Emergency Management Agency). |
| [Disclosures & Environmental] Who regulates asbestos | radon |
| [Disclosures & Environmental] What is the buyer's agent's role in disclosure states? | Advise due diligence |
| [Taxes & Insurance] What does 'ad valorem' mean? | According to value; property tax based on assessed value. |
| [Taxes & Insurance] How is property tax calculated in NC? | Tax = (Assessed Value ÷ 100) × Tax Rate (expressed as $ per $100). |
| [Taxes & Insurance] What is the NC property tax timetable? | Jan 1: lien attaches |
| [Taxes & Insurance] What is a special feature of NC property tax liens? | They take priority over all other liens. |
| [Taxes & Insurance] What is NC's excise tax rate for property transfers? | $1 per $500 of property value |
| [Taxes & Insurance] Which counties in NC may charge an extra 1% land transfer tax? | Perquimans |
| [Taxes & Insurance] What types of deeds are exempt from NC transfer tax? | Gifts |
| [Taxes & Insurance] What is HO-3 insurance? | Standard homeowner's package policy covering property and liability. |
| [Taxes & Insurance] What does a coinsurance clause require? | Insurance equal to at least 80% of value or replacement cost. |
| [Taxes & Insurance] What is an endorsement or rider in insurance? | Amendment to an insurance policy that modifies coverage. |
| [Taxes & Insurance] What are common specialized insurance policies? | HO-4 (renters) |
| [Taxes & Insurance] Why is flood insurance necessary? | Standard homeowner policies do not cover flood damage. |
| [Taxes & Insurance] Who manages the National Flood Insurance Program (NFIP)? | FEMA. |
| [Taxes & Insurance] When is flood insurance mandatory? | For properties in SFHAs with federally insured/regulated mortgages. |
| [Taxes & Insurance] What is the 100-year floodplain? | Area with a 1% chance of flooding in a given year. |
| [Taxes & Insurance] What is a CLUE report? | Shows property's 7-year insurance claim history |
| [Taxes & Insurance] What is the unoccupied building exclusion? | Limits insurance coverage if property is left empty for 30-60 days. |
| [Taxes & Insurance] Why must sellers maintain insurance until closing? | To ensure coverage during transfer and avoid gaps. |
| [Taxes & Insurance] What insurance issue arises with early or late possession? | Complicates coverage; seller or buyer may not be protected. |
| [Taxes & Insurance] What homeownership costs may be tax-deductible federally? | Mortgage interest |
| [Taxes & Insurance] What is the capital gains exclusion for sale of a principal residence? | $250 |
| [Taxes & Insurance] What are the ownership and use tests for capital gains exclusion? | Must own and live in the home for 2 of the last 5 years. |
| [Taxes & Insurance] What is an installment sale? | Seller defers capital gains tax over time as payments are received. |
| [Taxes & Insurance] What is a 1031 exchange? | Defers capital gains tax by reinvesting in like-kind property. |
| [Taxes & Insurance] What determines if a vacation home is personal or rental? | Personal use >14 days or >10% of rental days makes it personal. |
| [Taxes & Insurance] What qualifies a home office for tax deductions? | Exclusive and regular use for business; deductible by size or expenses. |
| [NC Laws] What is the Connor Act in NC? | Requires real estate documents to be recorded to be enforceable against third parties. |
| [NC Laws] What is the Marketable Title Act? | Eliminates claims older than 30 years if not re-recorded. |
| [NC Laws] What is the Torrens System? | State-guaranteed title registration system; rarely used in NC. |
| [NC Laws] What contracts fall under the NC Statute of Frauds? | Real estate transfers and leases over 3 years must be in writing. |
| [NC Laws] What does the NC Residential Property Disclosure Act require? | Use of RPOADS and MOG disclosures for 1-4 unit residential properties. |
| [NC Laws] What is straight piping and is it legal? | Illegal method of discharging wastewater; must be disclosed. |
| [NC Laws] What is the NC Good Funds Settlement Act? | Requires verified funds and deed recording before disbursement at closing. |
| [NC Laws] What are NC's additional protected classes under Fair Housing? | Includes low income and land use for affordable housing. |
| [NC Laws] What is the NC Timeshare Act? | Regulates registration |
| [NC Laws] What is a developer's Public Offering Statement (POS)? | Disclosure given to timeshare buyers with rights and obligations. |
| [NC Laws] What is the right of rescission for NC timeshares? | Buyers can cancel and receive a refund within the rescission period. |
| [NC Laws] What is the Unfair or Deceptive Trade Practices Act? | Makes unfair practices in commerce illegal; triple damages possible. |
| [NC Laws] Are stigmatized properties a material fact in NC? | No |
| [NC Laws] What does the IRMA test evaluate? | Intent |
| [NC Laws] How are manufactured vs. modular homes treated? | Manufactured = DMV title |
| [NC Laws] What does 'pure race' recording statute mean in NC? | First to record has priority |
| [NC Laws] What is the license requirement for timeshare sales? | Must be licensed by the NCREC. |
| [NC Laws] What is a mechanic's lien and its timeline in NC? | Lien by unpaid contractors; must file within 120 days and enforce by 180. |
| [NC Laws] What is a NC broker's commercial lien right? | Lien on commercial property for unpaid commission |
| [NC Laws] What must be disclosed about subdivision streets? | Whether streets are public or private and who maintains them. |
| [NC Laws] What must be disclosed about septic systems? | Capacity and presence; misrepresentation may result in discipline. |
| [NC Laws] What does NC law say about measuring square footage? | Must follow NCREC guidelines; brokers must measure accurately. |
| [NC Laws] What is required before occupancy in new construction? | Certificate of Occupancy (CO) after final inspection. |
| [NC Laws] What is the NC LHMP? | Manages lead-paint safety in pre-1978 housing; contractors must be certified. |
| [NC Laws] What is caveat emptor? | 'Let the buyer beware' — sellers have limited disclosure duty but can't commit fraud. |
| [Agency in NC] What laws govern agency in NC real estate? | NCGS Chapter 93A and NCREC Rules (Chapter 58A |
| [Agency in NC] What are the fiduciary duties of a real estate agent? | Loyalty |
| [Agency in NC] When must agency relationships be disclosed? | At first substantial contact with a consumer. |
| [Agency in NC] What is the WWREA disclosure and when is it required? | The Working with Real Estate Agents disclosure is mandatory at first substantial contact for all residential and commercial sales. |
| [Agency in NC] How long must brokers retain WWREA disclosure forms? | At least three years |
| [Agency in NC] What is dual agency? | When one agent or firm represents both the buyer and seller with written informed consent. |
| [Agency in NC] What is designated dual agency? | A form of dual agency where different agents in the same firm represent the buyer and seller separately. |
| [Agency in NC] Can a broker be a designated dual agent for one party if they have confidential info about the other? | No. |
| [Agency in NC] What are the duties of an agent under NC law? | Avoid misrepresentation |
| [Agency in NC] What must agency contracts in NC include? | Written form |
| [Agency in NC] Are oral listing or property management agreements legal in NC? | No |
| [Agency in NC] When can buyer agency agreements be oral? | Only for non-exclusive agreements |
| [Agency in NC] What is required before showing properties to a buyer? | Establishing the agency relationship. |
| [Agency in NC] What is the broker's role in property management? | Act as fiduciary for owner |
| [Agency in NC] What must be included in a property management contract? | Property description |
| [Agency in NC] What are typical broker duties in managing property? | Create budgets |
| [Agency in NC] What disclosures are required when working with buyers? | Agency status |
| [Agency in NC] What is the broker's responsibility if working with an unrepresented seller (FSBO)? | Remain neutral |
| [Agency in NC] What's required of a listing agent before a CMA? | Collect deed |
| [Agency in NC] What legal documents must be explained and verified when working with buyers? | Disclosure forms |
| [Brokerage Practice] What is the role of the NC Real Estate Commission (NCREC)? | Regulates real estate practices in NC and ensures compliance with laws and rules. |
| [Brokerage Practice] What must brokers disclose about access to public highways? | Access restrictions must be disclosed as a material fact. |
| [Brokerage Practice] What is the ILSFDA? | A federal law requiring developers to register 100+ lot subdivisions with CFPB and provide a property report. |
| [Brokerage Practice] What should brokers advise clients regarding covenants and zoning? | Review covenants and HOA documents before signing; consult an attorney if needed. |
| [Brokerage Practice] What environmental hazard law is specific to NC? | Leaking Petroleum Underground Storage Tank Cleanup Act - requires disclosure and cleanup. |
| [Brokerage Practice] When must brokers deliver offers or contracts? | Within 3 days of receipt |
| [Brokerage Practice] What are brokers' responsibilities with the settlement statement? | Verify all entries |
| [Brokerage Practice] What are advertising rules under NCREC? | Ads must be truthful |
| [Brokerage Practice] How long must NC brokers retain records? | Three years |
| [Brokerage Practice] What is a trust account? | Separate |
| [Brokerage Practice] How soon must trust funds be deposited? | No later than 3 banking days after receipt. |
| [Brokerage Practice] How much personal money may a broker deposit into a trust account? | Up to $1 |
| [Brokerage Practice] When can a broker use an interest-bearing trust account? | If all parties agree in writing. |
| [Brokerage Practice] Who is responsible for trust fund compliance? | The Broker-in-Charge (BIC). |
| [Brokerage Practice] What is the rule on disputed trust funds? | Hold funds until resolution or written agreement; notify all parties. |
| [Brokerage Practice] What is the Basic Deposit Rule? | All trust money must be deposited into a designated trust account unless an exception applies. |
| [Brokerage Practice] What is misrepresentation vs. omission? | Misrepresentation = false info; omission = failing to disclose material facts. |
| [Brokerage Practice] What material facts must be disclosed? | All known facts affecting value |
| [Brokerage Practice] What is puffing? | Exaggerated statements not considered factual misrepresentation. |
| [Brokerage Practice] Can brokers draft legal documents? | No |
| [Brokerage Practice] Who can brokers receive compensation from? | Only their supervising BIC |
| [Brokerage Practice] Can inactive or unlicensed brokers be paid? | No |
| [Brokerage Practice] Can out-of-state brokers receive a referral fee? | Only if licensed in their state and have no NC presence. |
| [Brokerage Practice] Can brokers disclose competing offers? | Only with seller's consent. Cannot disclose terms without offeror's consent. |
| [Brokerage Practice] What are the consequences of failing to review the closing disclosure? | Disciplinary action for errors or omissions. |
| [Brokerage Practice] What is commingling? | Mixing client and personal funds; prohibited except $1 |
| [Supervision & Compensation] What is a provisional broker (PB)? | A broker who passed the licensing exam but hasn't completed 90 hours of post-licensing education. |
| [Supervision & Compensation] Who must supervise a PB in NC? | A designated Broker-in-Charge (BIC) or Broker-in-Charge-Designated Agent (BIC-DA). |
| [Supervision & Compensation] What are BIC supervision responsibilities? | Oversee PB activities |
| [Supervision & Compensation] How long does a PB have to complete post-licensing? | Three years from licensure date to complete 90 hours. |
| [Supervision & Compensation] What is a BIC's responsibility to their office? | Ensure all brokers comply with laws |
| [Supervision & Compensation] Can a BIC supervise multiple offices? | Only if they share the same delivery address and physical space. |
| [Supervision & Compensation] What ends a BIC's eligibility? | Failure to renew license |
| [Supervision & Compensation] Who can earn a real estate brokerage fee in NC? | Only brokers with an active |
| [Supervision & Compensation] Can a licensee accept vendor compensation? | Only with written disclosure describing amount |
| [Supervision & Compensation] What must be disclosed about compensation? | Value |
| [Supervision & Compensation] When is a licensee entitled to a fee even if the deal doesn't close? | If seller fails to close |
| [Supervision & Compensation] What determines commission in in-house sales? | Brokerage firm's internal compensation agreement. |
| [Supervision & Compensation] Who pays provisional and full brokers in a firm? | Only their supervising BIC. |
| [Supervision & Compensation] What is a co-brokered sale? | A transaction involving brokers from different firms who agree on fee sharing. |
| [Supervision & Compensation] What are the rules for co-brokering with an out-of-state broker? | The out-of-state broker must not enter NC and must hold an active license in their home state. |
| [Supervision & Compensation] How is a buyer agent compensated? | Via written buyer agency agreement |
| [Supervision & Compensation] When must a broker stop working due to license expiration? | Immediately upon license expiration. |
| [Supervision & Compensation] Can a firm pay a broker whose license is now inactive? | Yes |
| [Contracts & Closing NC] What form is most commonly used for residential real estate contracts in NC? | Offer to Purchase and Contract (OPC) |
| [Contracts & Closing NC] Can NC brokers draft contracts? | No |
| [Contracts & Closing NC] Who provides standard sales contract forms in NC? | NC REALTORS® and the NC Bar Association. NCREC provides only disclosure forms. |
| [Contracts & Closing NC] What must preprinted contracts include under Rule 58A .0112? | 19 specific provisions including names |
| [Contracts & Closing NC] What must brokers avoid in sales contract forms? | Provisions on compensation or disclaiming broker liability. |
| [Contracts & Closing NC] What is the Due Diligence Period (DDP)? | Timeframe for buyer inspections |
| [Contracts & Closing NC] What is the Due Diligence Fee (DDF)? | Paid by buyer to seller for the right to conduct due diligence. |
| [Contracts & Closing NC] When is the contract effective? | When all parties have signed and acceptance is communicated. |
| [Contracts & Closing NC] What is the buyer's right during DDP? | To terminate the contract for any reason by written notice. |
| [Contracts & Closing NC] What happens if buyer breaches after DDP ends? | They may forfeit the EMD and DDF. |
| [Contracts & Closing NC] What are special assessments? | Charges imposed by government for property improvements. |
| [Contracts & Closing NC] What must sellers disclose under Paragraph 7? | Length of ownership |
| [Contracts & Closing NC] Who selects the settlement agent? | The buyer. |
| [Contracts & Closing NC] What is the role of the settlement agent? | Prepares documents |
| [Contracts & Closing NC] What are the steps in the NC closing process? | Preparation |
| [Contracts & Closing NC] What is the Good Funds Settlement Act? | Requires verified funds before deed recording and disbursement. |
| [Contracts & Closing NC] What must be prorated at closing? | Taxes |
| [Contracts & Closing NC] What must brokers do with offers? | Deliver written offer within 3 days |
| [Contracts & Closing NC] What is Form 2A1-T? | Backup Contract Addendum. |
| [Contracts & Closing NC] What is Form 2A4-T? | FHA/VA Financing Addendum. |
| [Contracts & Closing NC] What is Form 2A9-T? | Lead-Based Paint Addendum. |
| [Contracts & Closing NC] What is Form 2A5-T? | Seller Financing Addendum. |
| [Contracts & Closing NC] What is Form 2A3-T? | New Construction Addendum. |
| [Contracts & Closing NC] What is Form 2A14-T? | Short Sale Addendum. |
| [Contracts & Closing NC] What must brokers do with the settlement statement? | Review for accuracy and deliver to client. |
| [Contracts & Closing NC] What is the difference between settlement and closing? | Settlement: signing docs and funding. Closing: recording and finalization. |
| [Contracts & Closing NC] What inspections are common in NC? | Termite |
| [Contracts & Closing NC] What is Paragraph 23 about? | Outlines remedies for breach |
| [Contracts & Closing NC] What is Paragraph 11 about? | Risk of loss and property condition until closing. |
| [Contracts & Closing NC] When is possession transferred? | Specified in Paragraph 13; not always at settlement. |
| [Contracts & Closing NC] What are brokers prohibited from doing at closing? | Delivering wiring instructions or acting as legal reps. |
| [Landlord/Tenant] What does the NC Residential Rental Agreements Act require? | Landlords must provide habitable units; tenants must follow lease and report issues. |
| [Landlord/Tenant] Can tenants withhold rent in NC if the property is uninhabitable? | No |
| [Landlord/Tenant] What damages can tenants recover if a unit is uninhabitable? | General damages: FRV as warranted - FRV as unfit. Triple damages possible for deceptive practices. |
| [Landlord/Tenant] Are brokers liable under the Residential Rental Agreements Act? | Yes |
| [Landlord/Tenant] What is actual eviction? | Court-ordered removal of a tenant and their belongings. |
| [Landlord/Tenant] What is constructive eviction? | Tenant leaves due to uninhabitable conditions caused by landlord. |
| [Landlord/Tenant] What is retaliatory eviction? | Illegal eviction in response to tenant asserting rights or complaining. |
| [Landlord/Tenant] What is the NC Tenant Security Deposit Act? | Regulates collection |
| [Landlord/Tenant] What are NC limits on security deposits? | 2 weeks for weekly |
| [Landlord/Tenant] What are allowed uses for security deposits? | Unpaid rent |
| [Landlord/Tenant] How long does a landlord have to return a deposit? | 30 days (with provisional accounting if needed) |
| [Landlord/Tenant] Can landlords charge for service animals? | No |
| [Landlord/Tenant] What does the NC Vacation Rental Act cover? | Rentals under 90 days for vacation purposes with written agreement. |
| [Landlord/Tenant] Who must honor a vacation rental if the property is sold? | New owners must honor rentals ending within 180 days of sale. |
| [Landlord/Tenant] When is a vacation rental agreement binding? | When signed |
| [Landlord/Tenant] What is required of advance payments in vacation rentals? | Must be held in a trust account or bonded. |
| [Landlord/Tenant] When must the vacation rental deposit be returned? | Within 45 days minus allowable deductions. |
| [Landlord/Tenant] What is a property management contract? | Written agreement detailing duties |
| [Landlord/Tenant] What must all NC property management agreements include? | Must be in writing from the beginning of the relationship. |
| [Landlord/Tenant] What is the landlord's liability for negligence? | Liable for injuries from unsafe conditions they should've addressed. |
| [Landlord/Tenant] What is constructive eviction under common law? | Tenant may terminate lease due to unlivable conditions caused by landlord. |
| [Landlord/Tenant] What must a tenant do before claiming constructive eviction? | Notify landlord and give time to fix; vacate only if uncorrected. |
| [Landlord/Tenant] What is self-help eviction? | Landlord illegally removes a tenant or property without a court order—prohibited in NC. |
| [Landlord/Tenant] What is the penalty for unlawful eviction? | Tenant may recover triple damages and be restored to occupancy. |
| [Landlord/Tenant] What is a residential summary ejectment? | Formal eviction process filed in small claims court for holdover tenants. |
| [Licensure] What is required before taking the NC real estate license exam? | Complete a 75-hour Broker Pre-licensing Course at an NCREC-approved school. |
| [Licensure] What must applicants submit to apply for a real estate license in NC? | An application |
| [Licensure] How long is the criminal background check valid for the NCREC? | Six months from the issue date. |
| [Licensure] What is the Exam Eligibility Period in NC? | 180 days to pass both the national and state sections. |
| [Licensure] What happens if a candidate fails both sections in 180 days? | They must reapply and repay fees; previous passing scores are forfeited. |
| [Licensure] What ID requirements exist for taking the exam? | Government-issued photo ID matching the name on the application. |
| [Licensure] What are the minimum qualifications for a NC broker license? | Be at least 18 |
| [Licensure] What are the different types of broker licenses in NC? | Provisional Broker (PB) |
| [Licensure] What is a Provisional Broker? | An entry-level licensee who must work under a BIC and complete post-licensing education. |
| [Licensure] What education is required to remove provisional status? | Complete 90 hours of post-licensing education within 3 years. |
| [Licensure] What must a broker do to renew their license annually? | Pay $45 fee |
| [Licensure] What CE is required each year after the first license year? | 4 hours of electives and 4 hours of a mandatory update course. |
| [Licensure] What happens if a license is not renewed by June 30? | It expires and must be reinstated to return to active status. |
| [Licensure] What are the permitted activities of unlicensed assistants? | Schedule appointments |
| [Licensure] What activities require a real estate license in NC? | Listing |
| [Licensure] What entity regulates real estate brokers in NC? | The North Carolina Real Estate Commission (NCREC). |
| [Licensure] How many members are on the NCREC? | Nine members: seven appointed by the governor and two by the legislature. |
| [Licensure] What are the NCREC's main powers? | License regulation |
| [Licensure] What disciplinary actions can the NCREC take? | Reprimand |
| [Licensure] What can the NCREC NOT do? | Settle commission disputes |
| [Licensure] What must licensees report within 60 days? | Any criminal conviction including misdemeanors and DWI. |
| [Licensure] When must licensees notify the NCREC of changes? | Within 10 days of name |
| [Licensure] What is required for reinstatement of an inactive license? | CE compliance and submitting a license activation form. |
| [Licensure] What is the post-licensing education curriculum? | Three 30-hour courses: Broker Relationships |
| [Licensure] When is CE not required? | During the first license year or for brokers renewing on inactive status. |
| [Licensure] What proof of licensure must a broker carry? | A digital pocket card issued annually by the NCREC. |
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