Before you read
Test yourself first: 5 questions
Question 1 of 5
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. 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.
Question 2 of 5
How must a North Carolina broker handle earnest money and other client funds received in a transaction?
Answer: A. License Law requires client funds such as earnest money to be deposited into a trust or escrow account and kept separate from the broker's own funds; commingling is prohibited.
Question 3 of 5
A broker-in-charge fails to properly supervise a provisional broker, who then mishandles trust funds. Under North Carolina law, the broker-in-charge:
Answer: B. A broker-in-charge is responsible for supervising affiliated provisional brokers and for the office's trust account handling, advertising, and recordkeeping. Failure to adequately supervise is itself a disciplinable offense, independent of whether the BIC personally executed the transaction.
Question 4 of 5
A broker is convicted of fraud in a matter unrelated to a specific real estate transaction. With respect to the broker's North Carolina license, the Commission may:
Answer: B. North Carolina requires that licensees possess good moral character and the honesty, truthfulness, and integrity necessary to protect the public. A criminal conviction involving fraud or dishonesty—even outside a real estate transaction—can be grounds for disciplinary action, including denial, suspension, or revocation.
Question 5 of 5
How long does North Carolina generally require a broker (or BIC) to retain records of real-estate transactions, including trust-account records and agency agreements?
Answer: B. NCREC rules require retention of transaction and trust-account records for at least three years (generally measured from the conclusion of the transaction or the relevant event). This allows the Commission to audit and investigate compliance.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
Brokers must place earnest money and other trust funds into a trust or escrow account no later than three banking days after receipt and may never commingle those funds with their own. Because brokers commonly fill in standard preprinted forms rather than draft contracts, they must use approved forms carefully and recommend that parties seek an attorney for legal questions; agency and listing agreements must be in writing to be enforceable.
North Carolina Contract/Transaction Specifics: FAQs
Is North Carolina Contract/Transaction Specifics on the real estate exam?
Yes. State License Law is a scored domain on the North Carolina real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does North Carolina test this differently?
North Carolina applies its own license law on top of the national portion. This page covers the North Carolina rules specifically, which is what the state section of your exam tests.
