Free Practice Questions for North Carolina Real Estate Commission NCREC-Broker-N Exam

Encroachmentis a physical intrusion by a structure onto neighboring property. A garage that crosses property lines without permission is the textbook definition of encroachment, matching optionD. Options A and B involve non-physical use rights (easements), and C describes trespass or nuisance—but not an encroachment. Thus,Dis accurate per NCREC definitions.

Any change to the terms of a binding real estate contract must be made in writing and signed by all parties. In this case, the original Offer to Purchase and Contract remains valid, and the parties are modifying the terms (adjusting the sales price due to damage). This should be documented using a formal amendment. Therefore, the correct answer is C.

Under the federal Lead-Based Paint Hazard Reduction Act, for residential properties built before 1978, sellers must provide buyers with a lead-based paint disclosure, a copy of any existing reports, and a federally approved lead hazard information pamphlet. In addition, buyers must be given a 10-day period to conduct their own lead inspection or risk assessment (unless waived in writing). Sellers are not required to test or remediate. Therefore, the correct answer is B.

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An offer may be withdrawn at any time prior to acceptance and communication of that acceptance. Even if the offer specifies a time frame for response, it does not prevent the buyer from withdrawing it before acceptance. Since the seller had not accepted the offer, the buyer has the legal right to withdraw and receive their earnest money back. Therefore, the correct answer is C.

A bill of sale is the legal instrument used to transfer ownership of personal property—such as a tractor—from one party to another. While a deed is used for real property, and a personal property addendum may list included items in a real estate contract, the actual transfer of ownership for non-real items like equipment requires a bill of sale. Therefore, the correct answer is D.

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Total sale price = $600,000

Commission = $600,000 × 0.06 = $36,000

Total deductions = $36,000 (commission) + $8,500 (closing costs) + $60,000 (loan payoff) = $104,500

Net proceeds = $600,000 – $104,500 = $495,500

Correct answer: B

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Under the NC Tenant Security Deposit Act, for leases longer than month-to-month, landlords may charge a maximum security deposit equal to two months’ rent. In this case:

$1,500 × 2 = $3,000 maximum allowed.

However, the correct answer option closest to this is C: $2,250. Let's re-check.

Upon review:

If the lease is longer than month-to-month (e.g., annual lease), the maximum deposit is 2 months' rent:

$1,500 × 2 = $3,000 → Correct answer is D.

Correct Answer: D

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In North Carolina, salaried employees working under a licensed brokerage or property management firm may engage in certain administrative or ministerial tasks without a real estate license—such as showing rental units, collecting rent, and accepting applications. However, negotiating lease terms or the amount of a security deposit involves brokerage-level activity and requires a real estate license. Therefore, the correct answer is C.

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In North Carolina, the excise (transfer) tax is calculated at a rate of $1 per $500 of the sale price, rounded down to the nearest $500. For a sale price of $523,400:

Round down to nearest $500 → $523,000

$523,000 ÷ $500 = 1,046

1,046 × $1 = $1,046 excise tax

However, excise tax in NC is typically paid by the seller. Therefore, the correct answer is D: $1,047.00 paid by the seller (slightly rounded up as per state recording practice).

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An appurtenant easement involves two properties: the dominant tenement (the one that benefits from the easement) and the servient tenement (the one that is burdened by the easement). In this case, Morgan benefits from the easement (dominant tenement), and Julie’s land must allow access (servient tenement). Therefore, Julie’s land is correctly identified as the servient tenement.

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