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

According to the Truth in Lending Act (TILA) and advertising guidelines in North Carolina, if a licensee advertises specific financing terms—such as the amount of down payment—this triggers the requirement to disclose additional terms, including the annual percentage rate (APR), amount of payments, and term of the loan. The failure to include these terms makes the advertisement misleading and non-compliant.

According to NCREC rules, even when a seller selects “No Representation” on the RPOADS, the listing broker is obligated to disclose any material facts they know about the property to prospective buyers. A leaking basement is considered a material fact, and withholding that information would be a violation of license law and Commission rules. Therefore, the listing agent must disclose the leak to the buyer.

The North Carolina Subdivision Streets Disclosure Law requires developers to provide written disclosure to prospective buyers regarding whether the subdivision streets are intended to be publicly maintained (by the NCDOT or a municipality) or privately maintained. This ensures that buyers are aware of their responsibility for street upkeep if they are private. Therefore, the correct answer is A.

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In appraisal practice, when adjusting a comparable property to reflect differences from the subject property, the adjustment is always made to the comparable. Since the comparable has a finished basement worth $10,000 and the subject does not, we subtract $10,000 from the comparable's sale price to estimate what it would have sold for if it were more like the subject.

$300,000 − $10,000 = $290,000.

Therefore, the correct answer is A.

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A mortgagee's (lender’s) title insurance policy protects the lender from financial loss caused by title defects that were not discovered before the mortgage was issued. The policy coverage lasts until the loan is repaid. The borrower pays a one-time premium at closing—it is not part of the monthly mortgage. Claims are based on the unpaid balance of the loan, not necessarily the full loan amount. Therefore, the correct answer is D.

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Capital gain is determined by subtracting theadjusted basis(original cost plus improvements minus depreciation) from theamount realized(selling price minus selling costs). This matchesAmount Realized – Adjusted Basisas per the Broker‑N Financing and Taxation section.

Under North Carolina law, a property manager acts as a general agent for the property owner and owes fiduciary duties—including loyalty, obedience, accounting, and full disclosure—to the owner. While managers must comply with fair housing and other tenant-related laws, their primary duty is to the owner of the property.

The primary mortgage market is where loans are originated. Lenders such as commercial banks, credit unions, mortgage bankers, and savings institutions interact directly with borrowers. The Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae) operate in the secondary market, purchasing existing loans. The Federal Housing Administration (FHA) insures loans but does not lend directly. Therefore, the correct answer is A.

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Under NCREC rules, a broker must deposit any earnest money received (including cash) into the firm’s trust account within three banking days of receipt if the offer has been accepted. If the offer has not yet been accepted, the funds must be safeguarded and then deposited within three banking days following acceptance. Cash must be treated with particular care, and a detailed receipt should be provided. Therefore, the correct answer is C.

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