Free North Carolina Real Estate Practice Test (2026) — LicenseIQ

Question 1

The Vacation Rental Act applies to residential rentals for vacation, leisure, or recreation for:

Accepted Answer

G.S. 42A-4 defines a vacation rental as one for fewer than 90 days by a person who has a permanent residence to which they intend to return.

Question 2

Under the Residential Rental Agreements Act, a North Carolina landlord must:

Accepted Answer

G.S. 42-42 lists the landlord's duties, including habitability, code compliance, safe common areas, maintenance of supplied systems and appliances, and operable smoke and CO alarms.

Question 3

During the due diligence period under Form 2-T, a buyer may terminate the contract:

Accepted Answer

Form 2-T lets the buyer terminate for any reason before the end of the due diligence period. Time is of the essence for that deadline.

Question 4

A broker may keep the firm's own money in the trust account:

Accepted Answer

Rule 58A .0117(c)(4) permits up to $100 of company funds to pay service charges, or the monthly amount needed if charges exceed $100. Deposits to meet minimum-balance requirements are not permitted.

Question 5

The minimum down payment typically required on an FHA-insured loan is as low as:

Accepted Answer

FHA allows down payments as low as 3.5%. Zero down is associated with VA and USDA loans.

Question 6

The maximum the Real Estate Education and Recovery Fund will pay for any one transaction, regardless of the number of claimants, is:

Accepted Answer

G.S. 93A-21 caps the fund at $50,000 per transaction. $25,000 per calendar year and $75,000 in total are the separate caps per licensee.

Question 7

Under the Code of Ethics, a REALTOR who wants to buy a property listed with his own firm must:

Accepted Answer

REALTORS must disclose in writing their licensed status and any interest when buying or selling property for themselves or family.

Question 8

Adverse possession allows someone to acquire title by:

Accepted Answer

Adverse possession requires open, notorious, exclusive, continuous and hostile use for the statutory period. A tenant's possession is permissive, not hostile. (Reclassified to section 1 / CORE.)

Question 9

A built-in dishwasher attached to the cabinetry is best classified as:

Accepted Answer

Once personal property is permanently attached to real estate it becomes a fixture and is treated as real property. A trade fixture is installed by a tenant for business use, which is not the case here.

Question 10

A title search is performed primarily to:

Accepted Answer

A title search establishes the chain of title and reveals encumbrances or defects before closing. (Reclassified from section 17 to section 9 / CORE - not NJ-specific.)

Question 11

The NAR Code of Ethics was first adopted in:

Accepted Answer

The Code of Ethics was first adopted in 1913 by the National Association of Real Estate Exchanges (now NAR). 1908 is when that association was founded; 1968 is the Fair Housing Act.

Question 12

The deed clause that defines the extent of the estate granted, often beginning 'to have and to hold,' is the:

Accepted Answer

The habendum clause defines the estate conveyed; the granting clause contains the words of conveyance.

Question 13

Which is a protected class under the North Carolina State Fair Housing Act?

Accepted Answer

Chapter 41A protects race, color, religion, sex, national origin, handicapping condition, and familial status.

Question 14

A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

Accepted Answer

Area = 330 x 660 = 217,800 sq ft; 217,800 / 43,560 = 5 acres.

Question 15

A tenant whose lease has expired stays in possession without the landlord's consent. This is a:

Accepted Answer

A holdover tenant without consent is a tenant at sufferance. A tenancy at will exists with the owner's consent but no fixed term.

Question 16

The revenue stamps on a deed show excise tax of $640. Which of the following could have been the sales price?

Accepted Answer

A $640 tax means the price, divided by 500 and rounded up, equals 640. That covers prices above $319,500 up to $320,000. $319,800 / 500 = 639.6, which rounds up to 640. $319,400 gives 638.8, so 639. $320,100 gives 640.2, so 641. $640,000 gives 1,280.

Question 17

The reasonably probable use of a property that is legally permissible, physically possible, financially feasible and maximally productive is its:

Accepted Answer

Highest and best use is the use producing the greatest value that meets the four tests.

Question 18

Which provision is PROHIBITED in a North Carolina listing agreement?

Accepted Answer

Agency agreements must terminate at expiration without prior notice. Automatic renewal is prohibited, except for certain landlord agreements to procure tenants or collect rents. The other three are required provisions.

Question 19

Which duty does a seller's agent owe to a buyer who is a customer, not a client?

Accepted Answer

Customers are owed HARD duties - Honesty, Accounting, Reasonable skill and care, and Disclosure of material facts - but not loyalty, obedience or confidentiality.

Question 20

Which test is MOST important in determining whether an item is a fixture?

Accepted Answer

Intention, as shown by the method of attachment, adaptation and any agreement (the M.A.R.I.A. factors), is the controlling test. A written agreement in the sales contract that spells out what stays avoids disputes. Cost and size are irrelevant.

Question 21

A licensee's advertising must generally:

Accepted Answer

Ads must identify the licensed broker/brokerage; salespersons cannot advertise under only their own name.

Question 22

Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

Accepted Answer

Agreeing with competitors to refuse to deal with another business is an illegal group boycott.

Question 23

The mortgage clause that allows the lender to declare the entire balance due immediately upon the borrower's default is the:

Accepted Answer

The acceleration clause lets the lender call the entire debt due on default. The alienation (due-on-sale) clause is triggered by transfer of the property.

Question 24

As of October 2026, what is the status of the Commission's proposal to restrict dual agency?

Accepted Answer

After 291 opposing comments, the Commission in July and August 2026 directed staff to limit the restriction to PBs. In September 2026 it approved revised rules for republication, with a new comment period and hearing and a proposed effective date of July 1, 2027. Current Rule .0104 controls until then.

Question 25

The nondiscrimination provision required in North Carolina agency agreements lists which classes?

Accepted Answer

Commission rules require the broker to conduct brokerage activities without regard to the seven classes that mirror the federal and NC Fair Housing Acts. Age and marital status are not on the list.

North Carolina real estate practice test

1. The Vacation Rental Act applies to residential rentals for vacation, leisure, or recreation for:

2. Under the Residential Rental Agreements Act, a North Carolina landlord must:

3. During the due diligence period under Form 2-T, a buyer may terminate the contract:

4. A broker may keep the firm's own money in the trust account:

5. The minimum down payment typically required on an FHA-insured loan is as low as:

6. The maximum the Real Estate Education and Recovery Fund will pay for any one transaction, regardless of the number of claimants, is:

7. Under the Code of Ethics, a REALTOR who wants to buy a property listed with his own firm must:

8. Adverse possession allows someone to acquire title by:

9. A built-in dishwasher attached to the cabinetry is best classified as:

10. A title search is performed primarily to:

11. The NAR Code of Ethics was first adopted in:

12. The deed clause that defines the extent of the estate granted, often beginning 'to have and to hold,' is the:

13. Which is a protected class under the North Carolina State Fair Housing Act?

14. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

15. A tenant whose lease has expired stays in possession without the landlord's consent. This is a:

16. The revenue stamps on a deed show excise tax of $640. Which of the following could have been the sales price?

17. The reasonably probable use of a property that is legally permissible, physically possible, financially feasible and maximally productive is its:

18. Which provision is PROHIBITED in a North Carolina listing agreement?

19. Which duty does a seller's agent owe to a buyer who is a customer, not a client?

20. Which test is MOST important in determining whether an item is a fixture?

21. A licensee's advertising must generally:

22. Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

23. The mortgage clause that allows the lender to declare the entire balance due immediately upon the borrower's default is the:

24. As of October 2026, what is the status of the Commission's proposal to restrict dual agency?

25. The nondiscrimination provision required in North Carolina agency agreements lists which classes?

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