15 free questions from the Cinna RE North Carolina real estate exam bank (121 in the app). Tap an answer to check it. The rationale opens right away.
In North Carolina residential leases, the landlord owes the tenant which key implied obligation under the Residential Rental Agreements Act?
Answer: B. An implied warranty to keep the premises in a fit and habitable condition and make necessary repairs
North Carolina's Residential Rental Agreements Act imposes an implied warranty of habitability: the landlord must provide and maintain fit, safe, and habitable premises, comply with building and housing codes, and make necessary repairs. This duty cannot be waived by the lease.
When must a North Carolina broker review the 'Working with Real Estate Agents' disclosure with a consumer in a sales transaction?
Answer: B. At first substantial contact, before discussing the consumer's confidential information
The Working with Real Estate Agents Disclosure must be reviewed with a prospective buyer or seller at 'first substantial contact' - before the broker obtains confidential information - so the consumer understands agency options before proceeding.
A North Carolina broker uses earnest money held in trust to pay the firm's monthly rent, intending to replace it before closing. How is this conduct best characterized?
Answer: B. Conversion of trust funds, a serious violation
Using trust funds for the broker's own purposes, even temporarily and even with intent to repay, is conversion (misappropriation) of entrusted funds. It is one of the most serious violations and can result in license revocation regardless of whether the money is later replaced.
Mixing client trust money with the broker's own operating funds in North Carolina is best described as which prohibited act?
Answer: A. Commingling
Commingling is the prohibited mixing of client trust funds with the broker's personal or business funds and is a violation of North Carolina License Law.
A broker renews a North Carolina license on time but did NOT complete the required continuing education. What is the result?
Answer: B. The license renews but is placed on inactive status until the CE deficiency is cured
Failing to complete required CE does not by itself void the license if the renewal fee is paid, but the license becomes inactive. The broker cannot conduct brokerage until the missing CE is made up and the license is returned to active status.
Under the standard North Carolina Offer to Purchase and Contract, how is the Earnest Money Deposit generally treated if the buyer terminates within the Due Diligence Period?
Answer: B. It is refunded to the buyer
If a buyer terminates during the Due Diligence Period, the Earnest Money Deposit is refundable to the buyer. The Due Diligence Fee, by contrast, is generally not refundable because it compensated the seller for taking the property off the market during diligence.
When must the North Carolina Residential Property and Owners' Association Disclosure Statement be delivered to the buyer to preserve the seller's protection under the statute?
Answer: A. At or before the buyer makes an offer to purchase
The disclosure statement must be furnished to the buyer no later than the time the buyer makes an offer. If it is delivered late, the buyer generally gains a right to cancel the contract within a set period, so timely delivery protects the transaction.
In a North Carolina brokerage, who is responsible for the proper handling and oversight of the firm's trust (escrow) account?
Answer: B. The broker-in-charge (BIC)
The broker-in-charge is responsible for supervising the firm and ensuring proper handling of trust funds in the firm's trust account.
On North Carolina's Residential Property and Owners' Association Disclosure Statement, a seller is permitted to respond to most condition questions with which set of choices?
Answer: B. 'Yes,' 'No,' or 'No Representation'
The NC disclosure statement lets a seller answer most questions 'Yes,' 'No,' or 'No Representation.' Choosing 'No Representation' means the seller is not making a representation about that item, and the seller has no duty to disclose that condition even if known, shifting investigation to the buyer.
A North Carolina broker is working with an unrepresented buyer who calls about a listing the broker's firm has. In this first-contact situation, what must the broker disclose?
Answer: B. That the broker represents the seller, before discussing the buyer's bargaining position
A broker who represents the seller must disclose that representation to a prospective buyer at first substantial contact, so the buyer understands the broker is not protecting the buyer's interests and should not share confidential bargaining information. The agency relationship is not created merely by the buyer calling.
A broker wants the firm's trust account to earn interest. Under North Carolina rules, what governs interest earned on a trust account?
Answer: B. Interest belongs to the broker only if it is the firm's own money; interest on others' trust funds may not be retained by the broker without proper authorization/disclosure
Trust funds belong to the clients/parties, not the broker. A broker may not simply pocket interest earned on others' trust money; any interest arrangement must be properly disclosed and authorized. The broker may not treat clients' interest as personal compensation.
A North Carolina seller marks 'No Representation' for several items on the Residential Property Disclosure Statement. What is the legal effect of that choice?
Answer: B. It means the seller makes no representation and has no duty to disclose that item, even if the seller knows of a defect
When a seller selects 'No Representation,' the seller is choosing not to disclose information about that item and assumes no duty to do so under the disclosure statute, even if a defect is known. The buyer is then responsible for investigating that condition, consistent with caveat emptor for that item.
The North Carolina Real Estate Commission is composed of nine members. Which statement best describes how the Commission is appointed?
Answer: B. Members are appointed, including some by the Governor and others by legislative leaders
The Commission consists of nine members; appointments are made by the Governor and by legislative leadership (the General Assembly), with the membership including both licensees and public members.
A buyer who has NOT signed any buyer agency agreement asks a listing broker confidential questions about how low the seller will go. The listing broker should:
Answer: B. Treat the buyer as a customer—be honest and disclose material facts, but protect the seller-client's confidential information
Until and unless the buyer is represented, the listing broker's client is the seller. The buyer is a customer owed honesty and disclosure of material facts, but the broker must protect the seller-client's confidential information (such as the lowest price the seller would accept) and may not reveal it.
In North Carolina, the actual closing (settlement and disbursement of funds) of a residential real estate transaction must be conducted in a manner consistent with which state requirement?
Answer: B. Disbursement of closing funds must follow the Good Funds Settlement Act, and legal aspects are typically handled by a licensed attorney
North Carolina's Good Funds Settlement Act governs when and how settlement funds may be disbursed, and the state's practice (often described as the 'attorney state' model) means residential closings are typically handled by a licensed North Carolina attorney rather than escrow companies.
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