Free North Carolina Agency Practice Test — LicenseIQ

Question 1

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 2

A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

Accepted Answer

Latent (hidden) defects known to the seller or agent must be disclosed; failing to do so can create liability for both.

Question 3

The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

Accepted Answer

The duty of accounting requires the agent to track, report on and properly handle all funds and documents belonging to the client.

Question 4

An agency relationship can be terminated by all of the following EXCEPT:

Accepted Answer

Agency ends by performance, expiration, mutual agreement, operation of law, death or incapacity, or destruction of the property - not by the wish of an unrepresented customer.

Question 5

A buyer gives a broker an earnest money check with an offer on Friday. The seller accepts on Tuesday. The broker's firm is the escrow agent. The check must be deposited:

Accepted Answer

Earnest money tendered with an offer may be held uncashed until acceptance. The broker must then deposit it within three banking days after acceptance.

Question 6

A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

Accepted Answer

The duty of confidentiality bars disclosing information, like the seller's lowest acceptable price, that would harm the client's bargaining position.

Question 7

Which fiduciary duty continues even after the agency relationship has ended?

Accepted Answer

Most fiduciary duties end with the agency, but the agent must continue to keep the former client's confidential information private.

Question 8

A property manager owes fiduciary duties primarily to the:

Accepted Answer

The property manager is the owner's (general) agent and owes fiduciary duties to the owner, while dealing honestly with tenants.

Question 9

A consumer signs the acknowledgment on the Working with Real Estate Agents disclosure. This signature:

Accepted Answer

WWREA is a disclosure only. Agency arises from an agency agreement, which for buyers may be oral until it must be put in writing.

Question 10

A material defect that a seller/agent must disclose is one that:

Accepted Answer

Material defects significantly affect value or would influence a buyer's decision and must be disclosed.

Question 11

The client a broker represents is the:

Accepted Answer

The principal is the client to whom the agent owes fiduciary duties; a customer is a party the agent works with but does not represent.

Question 12

A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

Accepted Answer

Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.

Question 13

A buyer's agent wants to rebate $1,000 of her commission to her buyer client at closing. Under Commission rules, this is:

Accepted Answer

NCREC permits rebates or inducements to a party when they are properly disclosed to all parties and the lender, so the rebate typically appears on the closing statement.

Question 14

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.

Question 15

At an open house, a buyer begins telling the listing agent the most he could pay. The agent should first:

Accepted Answer

Agents must disclose up front whom they represent so customers don't mistakenly share confidential information - anything the agent learns must be shared with the client.

Question 16

During a listing walk-through, the agent notices fresh paint on one ceiling area and a musty odor. The agent should:

Accepted Answer

Agents are not inspectors, but must recognize red flags (stains, odors, cracks) and disclose them for further investigation.

Question 17

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 18

A seller is already under contract, and the listing agent receives a second offer. The seller has not given written instructions about other offers. The listing agent should:

Accepted Answer

Brokers must present all offers promptly unless the seller has instructed otherwise in writing. Revealing the first buyer's terms would breach duties to the seller and require seller consent.

Question 19

Under Commission rules, a broker-in-charge may not be designated to represent the seller when:

Accepted Answer

The rules bar a BIC from serving as a designated broker for one party when a PB under the BIC's supervision is designated for a party with competing interests. A supervisor on one side and their supervisee on the other side is a conflict.

Question 20

In a sales transaction, the Working with Real Estate Agents disclosure must be provided and reviewed:

Accepted Answer

Rule 58A .0104 requires WWREA at first substantial contact. The time of the offer is the deadline for a written buyer agency agreement, which is why that choice is tempting.

Question 21

Without permission, a dual agent may NOT disclose to the buyer:

Accepted Answer

Dual agents must keep each party's price flexibility, motivation, and confidential information private, but must still disclose material facts to both parties. The leak, flood zone, and special assessment are material facts.

Question 22

How did the 2024 NAR settlement affect North Carolina Real Estate Commission rules on buyer agency?

Accepted Answer

NCREC stated that the NAR changes apply only to NAR members and do not alter the License Law or Commission rules.

Question 23

When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

Accepted Answer

Designated agency assigns separate agents within one brokerage; the broker is still a dual agent and written consent is required.

Question 24

A buyer's agent learns that a registered sex offender lives two houses away from a listed home. Under North Carolina law:

Accepted Answer

G.S. 39-50 provides that the presence of a registered offender nearby, or a death or serious illness in the property, is not a material fact. Brokers may not knowingly make a false statement if asked.

Question 25

An agent authorized to perform a single specific act for a principal is a:

Accepted Answer

A special (limited) agent has authority for a specific task, typical of a listing agent. A property manager is usually a general agent.

North Carolina real estate agency practice test

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

2. A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

3. The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

4. An agency relationship can be terminated by all of the following EXCEPT:

5. A buyer gives a broker an earnest money check with an offer on Friday. The seller accepts on Tuesday. The broker's firm is the escrow agent. The check must be deposited:

6. A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

7. Which fiduciary duty continues even after the agency relationship has ended?

8. A property manager owes fiduciary duties primarily to the:

9. A consumer signs the acknowledgment on the Working with Real Estate Agents disclosure. This signature:

10. A material defect that a seller/agent must disclose is one that:

11. The client a broker represents is the:

12. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

13. A buyer's agent wants to rebate $1,000 of her commission to her buyer client at closing. Under Commission rules, this is:

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

15. At an open house, a buyer begins telling the listing agent the most he could pay. The agent should first:

16. During a listing walk-through, the agent notices fresh paint on one ceiling area and a musty odor. The agent should:

17. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

18. A seller is already under contract, and the listing agent receives a second offer. The seller has not given written instructions about other offers. The listing agent should:

19. Under Commission rules, a broker-in-charge may not be designated to represent the seller when:

20. In a sales transaction, the Working with Real Estate Agents disclosure must be provided and reviewed:

21. Without permission, a dual agent may NOT disclose to the buyer:

22. How did the 2024 NAR settlement affect North Carolina Real Estate Commission rules on buyer agency?

23. When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

24. A buyer's agent learns that a registered sex offender lives two houses away from a listed home. Under North Carolina law:

25. An agent authorized to perform a single specific act for a principal is a:

Sources