Free North Carolina Math Practice Test — LicenseIQ

Question 1

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 2

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 3

Annual taxes are $3,650. Using a 365-day year, what is the daily proration amount?

Accepted Answer

$3,650 / 365 = $10 per day. (The course's default convention is a 360-day year; this question specifies 365.)

Question 4

The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

Accepted Answer

Daily rent = $1,800 / 30 = $60. Buyer owns days 11-30 = 20 days. 20 x $60 = $1,200, credited to the buyer because the seller collected rent for days the buyer will own.

Question 5

On a $250,000 loan, how much is 2 discount points?

Accepted Answer

1 point = 1% of the loan. 2 points = 0.02 x $250,000 = $5,000.

Question 6

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 7

Monthly rent for a small unit is $260. Rent is paid 7 days late. The maximum late fee is:

Accepted Answer

5% of $260 is $13, which is less than $15. The cap is the greater of the two, so $15.

Question 8

After a hearing, the North Carolina Real Estate Commission may impose all of the following EXCEPT:

Accepted Answer

G.S. 93A-6 authorizes reprimand, censure, suspension, and revocation, and the Commission may attach conditions. It does not authorize civil fines.

Question 9

A buyer paid a $2,500 due diligence fee and a $6,000 earnest money deposit. The buyer terminates by proper notice before the due diligence period ends. Which result is correct?

Accepted Answer

A timely termination entitles the buyer to a refund of the earnest money ($6,000). The DDF ($2,500) is the seller's property and non-refundable.

Question 10

A buyer paid a $3,000 due diligence fee and a $7,500 earnest money deposit. After the due diligence period ends, the buyer refuses to close with no legal justification. Under Form 2-T, what is the total the seller will typically retain or receive from these funds?

Accepted Answer

After the period ends, a buyer's default generally entitles the seller to the earnest money as liquidated damages ($7,500). The seller has already kept the DDF ($3,000). $7,500 + $3,000 = $10,500.

Question 11

The seller prepaid $4,320 in property taxes for the calendar year. Closing is April 20, and the seller owns the day of closing. Using a 360-day year (30-day months), what is the proration?

Accepted Answer

Daily = $4,320 / 360 = $12. Seller owned Jan 1-Apr 20 = 3 months + 20 days = 110 days, so the buyer owes for 360 - 110 = 250 days. 250 x $12 = $3,000, credited to the seller (who prepaid) and debited to the buyer.

Question 12

An 8-unit building rents for $1,100 per unit per month with 5% vacancy. Annual operating expenses are $28,320 (excluding debt service). At an 8% capitalization rate, what is the value?

Accepted Answer

PGI = 8 x $1,100 x 12 = $105,600; less 5% vacancy = $100,320; NOI = $100,320 - $28,320 = $72,000; value = $72,000 / 0.08 = $900,000.

Question 13

A broker moves to a new residence address. She must notify the Commission:

Accepted Answer

Commission rules require brokers to report changes of name and residence or business address within 10 days.

Question 14

A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?

Accepted Answer

Loan = $275,000 x 0.80 = $220,000; points = $220,000 x 0.025 = $5,500. ($6,875 wrongly applies points to the price.)

Question 15

Monthly rent is $1,400 and is paid 6 days late. The maximum late fee is:

Accepted Answer

G.S. 42-46: the fee may not exceed the greater of $15 or 5% of monthly rent. 5% x $1,400 = $70, which is greater than $15. The rent is at least five days late, so a fee is allowed.

Question 16

A tenant prepays $5,200 in total rent, a $400 security deposit, and $650 in occupancy taxes for a stay three months away. Before the tenancy begins, the managing broker may disburse to the landlord at most:

Accepted Answer

Under G.S. 42A-16, no more than 50% of the total rent may be disbursed before occupancy (aside from authorized third-party fees). 50% x $5,200 = $2,600. The security deposit and taxes may not be disbursed before the tenancy ends.

Question 17

A broker received a 4.2% commission totaling $12,600. What was the sale price?

Accepted Answer

Sale price = commission / rate = $12,600 / 0.042 = $300,000.

Question 18

A 275-gallon heating oil tank costs $168 to fill at $4.20 per gallon. The buyer will credit the seller for the oil remaining in the tank. What is the credit?

Accepted Answer

Gallons needed = $168 / $4.20 = 40; remaining = 275 - 40 = 235 gallons; credit = 235 x $4.20 = $987.

Question 19

Commission rates in North Carolina are:

Accepted Answer

The Commission has no jurisdiction over commission rates and will not arbitrate fee disputes (Rule 58A .0109). Fixed or association-set rates would raise antitrust problems.

Question 20

Under an open listing, the seller owes a commission to:

Accepted Answer

Open listings are non-exclusive; only the procuring broker is paid, and the owner owes nothing for a self-sale.

Question 21

A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $15,750 / $450,000 = 0.035 = 3.5%.

Question 22

One discount point equals what percentage of the loan amount?

Accepted Answer

One point = 1% of the loan amount (not the purchase price), paid to lower the interest rate.

Question 23

An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:

Accepted Answer

Only the building depreciates: $350,000 - $75,000 = $275,000; $275,000 / 27.5 = $10,000. Using the full price gives $12,727 (wrong).

Question 24

An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

Accepted Answer

Cap rate = NOI / value = $63,000 / $900,000 = 0.07 = 7%.

Question 25

A borrower paid $3,150 in points on a $210,000 loan. How many points were paid?

Accepted Answer

Points = cost / loan = $3,150 / $210,000 = 0.015 = 1.5 points (1 point = 1% of the loan).

North Carolina real estate math practice test

1. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

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

3. Annual taxes are $3,650. Using a 365-day year, what is the daily proration amount?

4. The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

5. On a $250,000 loan, how much is 2 discount points?

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

7. Monthly rent for a small unit is $260. Rent is paid 7 days late. The maximum late fee is:

8. After a hearing, the North Carolina Real Estate Commission may impose all of the following EXCEPT:

9. A buyer paid a $2,500 due diligence fee and a $6,000 earnest money deposit. The buyer terminates by proper notice before the due diligence period ends. Which result is correct?

10. A buyer paid a $3,000 due diligence fee and a $7,500 earnest money deposit. After the due diligence period ends, the buyer refuses to close with no legal justification. Under Form 2-T, what is the total the seller will typically retain or receive from these funds?

11. The seller prepaid $4,320 in property taxes for the calendar year. Closing is April 20, and the seller owns the day of closing. Using a 360-day year (30-day months), what is the proration?

12. An 8-unit building rents for $1,100 per unit per month with 5% vacancy. Annual operating expenses are $28,320 (excluding debt service). At an 8% capitalization rate, what is the value?

13. A broker moves to a new residence address. She must notify the Commission:

14. A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?

15. Monthly rent is $1,400 and is paid 6 days late. The maximum late fee is:

16. A tenant prepays $5,200 in total rent, a $400 security deposit, and $650 in occupancy taxes for a stay three months away. Before the tenancy begins, the managing broker may disburse to the landlord at most:

17. A broker received a 4.2% commission totaling $12,600. What was the sale price?

18. A 275-gallon heating oil tank costs $168 to fill at $4.20 per gallon. The buyer will credit the seller for the oil remaining in the tank. What is the credit?

19. Commission rates in North Carolina are:

20. Under an open listing, the seller owes a commission to:

21. A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

22. One discount point equals what percentage of the loan amount?

23. An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:

24. An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

25. A borrower paid $3,150 in points on a $210,000 loan. How many points were paid?

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