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WorksheetsLicense Law 02
Total questions: 55
Worksheet time: 2hrs 50mins
The broker-in-charge of a real estate office is responsible for which of the following? I. The proper handling of all trust account related monies involving transactions at that office II. Assuring that all brokers and provisional brokers pay their annual NCREC renewal fee and complete continuing education classes by the required deadlines
I only
II only
Both I and II
Neither I nor II
In order to place trust monies in an interest-bearing account: I. The broker must have written permission from the client II. The written permission must stipulate who is to receive a portion of the interest
I only
II only
Both I and II
Neither I nor II
In North Carolina, the broker-in-charge must: I. Adequately supervise all activity of the provisional brokers in their office II. Adequately supervise all broker licensees in their office as to the handling of monies and compliance with agency, advertising and disclosure practices as well as compliance with all applicable laws.
I only
II only
Both I and II
Neither I nor II
Regarding nonresident commercial licensees, all of the following statements are TRUE, EXCEPT:
They must affiliate with an in-state brokerage firm.
They may enter North Carolina to assist a buyer or seller, but must sign a document allowing the NC Real Estate Commission to discipline the agent.
They must take and successfully pass the state portion of the NC Real Estate Commission licensing exam before conducting business in North Carolina.
They must place any trust monies they receive from clients or customers into the in-state brokerage firm's trust account.
A real estate agent is representing a buyer under a written buyer agency agreement. The buyer would like to see a builder's home. The builder is offering a $1,000 bonus to agents who sell at least 3 homes in the neighborhood. The real estate agent has not yet made a sale in that neighborhood. Which of the following actions should the agent take regarding disclosure of the bonus?
Because the agent has not made a sale, they are not required to notify the buyer of a bonus until they are eligible for it.
The agent should notify the buyer of the bonus at the time of contract.
If the buyer client requests the agent share a portion of the bonus with them, the agent is to instruct them that it is illegal for the agent to share bonuses with unlicensed entities.
The agent may notify the buyer of the bonus orally, but the bonus must be confirmed in writing before the client makes an offer to buy the home.
When dealing with multiple offers, which of the following is a correct statement regarding North Carolina statutes and rules?
The existence of multiple offers is a material fact and must be disclosed
An licensee is always permitted to disclose the terms of multiple offers to competing buyers
A seller may not accept an offer when multiple offers exist without giving the other buyers an opportunity to increase their offers
The existence of multiple offers is not a material fact and the terms and conditions of multiple offers can only be disclosed with the consent of the offeror.
A broker has received an offer from a prospective buyer on a property that the broker has listed for sale. How long does the broker have to deliver the offer to their seller/client?
Immediately, but never later than 5 banking days
Immediately, but never later than 5 calendar days
Immediately, but never later than 3 banking days
Immediately, but never later than 3 calendar days
Under the NC Machinery Act, which of the following is a TRUE statement about North Carolina real property taxes?
They are not levied on an ad valorem basis.
They become a lien on the property on September 1st.
They become a lien on the property on January 1st and are due on September 1st
The Machinery Act requires reappraisal of the property every four years.
All of the following are true regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT:
The consumer is not required to sign the brochure.
If the first substantial contact is by phone, the brochure must be provided within 3 calendar days.
The brochure's use is mandatory in all real estate transactions including residential sales, commercial transactions and lease transactions.
The brochure must be given in all sales transactions at first substantial contact.
The North Carolina Working With Real Estate Agents brochure must be given:
to property owners upon initial contact
to all consumers upon initial contact
only to clients in a real estate transaction at first substantial contact
to all consumers in a sales transaction no later than first substantial contact
Which of the following actions is allowed by NC Commission Rules and Licensing Laws when a real estate agent is preparing a preprinted Offer To Purchase and Contract?
l. A real estate agent is allowed to write on the Offer To Purchase and Contact the amount of the real estate brokerage fee the firms are to receive in this transaction.
ll. A real estate listing agent can write disclaimers on the Offer To Purchase and Contract stating that the real estate listing agent is not responsible and not liable for the information provided to buyers and seller in this transaction.
l only
ll only
Both l and ll
Neither l nor ll
The amounts of compensation and fees are properly contained in the:
agency employment agreements
contract between the seller and buyer
Which of the following individual(s) is/are required to have a NC real estate license?
l. A leasing agent who is a regular salaried employee, exhibits units, fills in the blanks of preprinted forms, does not negotiate tenant security deposits and does not negotiate rental rates
ll. The personal assistant of a real estate licensee who shows property to a buyer and who occasionally negotiates offers while the licensee is on vacation or is periodically out of town for the weekend
l only
ll only
Both l and ll
Neither l nor ll
After being active in the real estate business for three years, Broker Sallie wants to become a broker-in-charge. All of the following are requirements that Sallie must meet to become a BIC, EXCEPT:
have two out of the last five years of active real estate practice
complete the 12 hour BIC course prior to becoming a BIC
file a designation form with the NCREC
have completed all of her post-licensing requirements and not be in provisional status
A licensee can act as the Broker-in-Charge of more than one firm, when:
the office is an approved national franchise
the offices are affiliated and owned by the same person
the offices are in the same building
the offices are in the same city
In regard to the use of standard forms and contracts by real estate professionals and the role of the North Carolina Real Estate Commission, NCREC:
requires the use of specific forms and contracts
drafts specific forms and contracts but does not mandate their use
prescribes certain essential provisions that must be included in the forms and contracts
has no authority regarding the content of real estate forms and contracts
Real estate licensees and firms can create entities. Which of the following is INCORRECT regarding real estate entities in North Carolina?
Every entity, other than a sole proprietorship must have a firm license
Firm licenses must be renewed annually no later than June 30th
A licensed broker working for a firm cannot create their own legal entity
Partnerships create the most liability for the general partners involved
Which of the following is INCORRECT in regard to brokerage advertising?
Provisional brokers cannot advertise without broker-in-charge approval and consent.
Brokers-in-charge are not required to review and approve all firm advertising.
Real estate professionals cannot create blind advertising.
All real estate ads must include the name of the firm or the BIC
Which of the following does NOT need a firm license in North Carolina?
a national franchise that is licensed to do business in multiple states and has formed a corporation to do real estate business in North Carolina
a local sole proprietorship using a surname
a general partnership that consists of only two individuals
a corporation that is already approved by the NC Secretary of State
If a provisional broker terminates their affiliation with a BIC and does not reaffiliate with another BIC or firm, their license is considered:
terminated
expired
revoked
inactive
When can an unlicensed person receive fees for real estate referrals in North Carolina?
when the individual is a past client of the broker
when the individual is a licensee, but their license is inactive
when the individual is a travel agent making a vacation referral
when the individual is a family member of the broker
All of the following are required for an individual to become a broker-in-charge, EXCEPT:
They must complete a 12-hour BIC course taught by the Commission within 120 days of designation.
They must have at least 2 years full-time practice or the equivalent
The experience must have been attained within the last 5 years.
They must have completed at least 75% of their postlicensing requirements as a provisional broker.
A real estate licensee must notify the North Carolina Real Estate Commission of any changes in address within:
3 days
5 days
10 days
60 days
A real estate licensee in North Carolina must comply with which of the following rules in regard to any criminal activity:
report all arrests within 60 days
report all court proceedings within 15 days
report all convictions within 60 days of the conviction
report all criminal activity within 10 days whether convicted or not
When must a firm practicing "designated agency" disclose to the seller the name of the agent representing the buyer.
at first substantial contact with the seller
at initial contact with the seller
at the time the buyer's agent shows the seller's property
at the time the offer is submitted to the seller
When a provisional broker terminates their relationship with a firm or BIC, what is the requirement for notification of the termination to NCREC?
the provisional broker must notify the BIC within 10 days
the BIC must notify NCREC of the termination within 10 days
both the BIC and the provisional broker must notify NCREC immediately
the notification must be received by NCREC within 30 days
A real estate broker is aware that the highway department has adopted a long range plan for a new interstate beltway to be constructed. Anticipating that such actions will increase the surrounding land values, the broker seeks out buyers and encourages them to buy property in that area, suggesting they would be able to make substantial profits. The broker begins submitting offers, but never discloses the proposed developments with any of the property owners. Which of the following statements is true?
The broker must disclose this information as a material fact even though acting as a buyer's agent.
This information is only required to be disclosed if the broker were representing the sellers.
The broker would violate fiduciary duties owed to their buyer if they made such a disclosure.
The broker is only obligated to disclose such information if specifically asked about highway expansion by the seller or their agents.
Which of the following statements is correct regarding "designated agency?" I. If a broker-in-charge of a firm allows two of their agents to be "designated agents" in a transaction, the firm is no longer classified as "dual agent" because there are two agents involved. II. Even though a broker-in-charge allows "designated agency" within their firm with full disclosure and the consent of all parties, "designated agency" cannot be practiced between a broker-in-charge and provisional broker and cannot be practiced if either "designated agent" received confidential information about the other client in the transaction.
I only
II only
Both I and II
Neither I nor II
A real estate broker is working with a buyer as a seller's subagent. All of the following are duties that the broker owes to the buyer, EXCEPT:
confidentiality
fairness
honesty
disclosure of material facts
A real estate broker is working with a buyer client. The broker wants to show a property that is listed with a competing real estate firm. When must the real estate broker, working with the buyer disclose their agency status to the listing licensee?
first substantial contact with the firm when the buyer shows serious interest in the property
initial contact with the firm when the agent first calls to show the property
time of offer where the real estate broker gives confirmation of agency on the offer to purchase and contract
time of contract where there is a meeting of the minds and the brokers confirm their agency status in the contract
Charlene is an active sole proprietor independent broker who teaches school full time. Charlene gives referrals to brokers and she receives referrals. Charlene is not required to be a broker-in-charge so long as she does not: I. advertise in local newspapers and the internet II. hire a non-provisional broker to work for her III. have a trust account or escrow account IV. distribute her business cards to the public to solicit referrals
I and II
III and IV
I and III
all of the above
Full brokers is not required to affiliate with or be a BIC unless they
advertise or market in any way
maintain a trust account
hire other licensees to work for them
adverse, hire and maintain a trust
Nonresident commercial licensees are allowed to conduct business in North Carolina if they obtain a limited non-resident commercial brokerage license. Which of the following statements is NOT correct regarding nonresident commercial licensees?
A nonresident licensee may advertise in North Carolina, but must indicate in the advertisement "limited nonresident commercial real estate broker."
Commissions or fees earned by a nonresident commercial licensee shall be paid directly to the licensee if said licensee is employed by or working for a North Carolina real estate broker or firm.
No person shall enter North Carolina to perform real estate services unless he or she has first entered into a brokerage cooperation agreement and declaration of affiliation with an individual who is a resident in North Carolina licensed as a North Carolina broker.
A nonresident commercial licensee must agree to be subject to the jurisdiction and discipline of the NC Real Estate Commission.
Regarding nonresident commercial licensees, all of the following statements are false EXCEPT
A limited nonresident commercial licensee does not have to be affiliated with a NC resident broker. All monies may be paid directly to the non-resident licensee and does not have to pass through a firm.
A limited nonresident commercial licensee does not have to be affiliated with a NC resident broker. All monies must pass through the firm and may not be paid directly to the non-resident licensee.
A limited nonresident commercial licensee must be affiliated with a NC resident broker. All monies must pass through the firm and may not be paid directly to the non-resident licensee.
A limited nonresident commercial licensee must be affiliated with a NC resident broker. However, all monies may be paid directly to the non-resident licensee and does not have to pass through a firm.
With regard to brokers-in-charge, all of the following statements are correct, EXCEPT:
A broker-in-charge may supervise more than one firm as long as the firms are in the same building
A broker-in-charge is required to take the General Update update course and the Broker Update (BICUP) course each year before June 10th or their license is cancelled.
A broker-in-charge is required to have two years of experience out of the last five years and may not be a provisional broker.
A broker-in-charge is required to take the 12- hour initial broker-in-charge course either within the last three years or within 120 days of becoming the broker-in-charge.
Which of the following is NOT a correct statement when describing agents and firms responsibilities regarding pocket cards:
an agent must keep their pocket card on them at all times when conducting real estate business
all licenses expire on June 30th of each year. At that time, a new card will be issued once the agent pays their annual fee to the NCREC
once the licensee removes their provisional broker status, they will be issued a new card
a firm must display all pocket cards prominently
All of the following statements are correct regarding commission rules, EXCEPT:
should a broker or provisional broker change their name, address or broker affiliation, they must notify the NCREC within 30 days
a provisional broker may not be the Broker-in-Charge regardless of the years of experience they may have as a broker in another state
a broker must include the firm name in all advertising
should a broker or provisional broker be convicted of a DWI (driving while impaired) they must report this within 60 days of the conviction
Address changes by any licensee must be reported to the NCREC within ___ days.
10
20
30
5
In the event that a licensee fails to deliver, within a reasonable time, a completed copy of any purchase agreement or offer to buy and sell real estate to the buyer and to the seller, the NCREC may take all of the following actions, EXCEPT:
revoke the agent's license
suspend the agent's license
censure or reprimand the licensee
set the agent's license to inactive status
A real estate broker is working for more than one firm and more than one broker-in-charge. This would not be a violation of licensing law and commission rules as long as:
the broker has the consent of both firms and the broker is not a provisional broker
the broker works only in the property management field
the broker does not list properties for more than one firm
the broker only accepts their commission from one of the firms
Which of the following would result in a conflict of interest for which the licensee could be disciplined by the NCREC?
an agent working for the buyer notifies the listing agent that the buyer is their sister
a licensee notifies the listing agent that they are self-representing and are interested in purchasing the listing
a sub-agent to the seller assists their sister in the purchase of a home but keeps the information confidential because they are representing the seller
an agent working as a sub-agent of the seller notifies the seller of confidential information the buyer shared
A buyer's representative is required to reveal their agency status to the seller or listing agent:
no later than time of offer
at "initial contact"
no later than contract
at "first substantial contact"
The WWREA brochure must be provided to consumers at:
no later than time of offer
at "initial contact"
no later than contract
at "first substantial contact"
An agent is working under an oral buyer's agency agreement. The agent knows the buyer is strongly interested in one of the homes seen by the buyer. The buyer is ready to write the offer, but refuses to sign a buyer's agency agreement. At this point, the agent may:
write the offer, but advise the buyer they are now a sub-agent of the seller and anything the buyer has revealed must be provided to the seller
not write the offer because the agent may not proceed without a written buyer representation agreement
write the offer, but advise the buyer that they are a sub-agent of the seller, but they are not allowed to reveal to the seller what they have already learned about the buyer
write and present the offer under an oral buyer's agency agreement, but reduce the buyer's agency agreement to writing prior to contract
With regard to advertising, which of the following is INCORRECT?
a licensee must have a client's permission before placing a sign in a yard yard
In order for a nonresident commercial licensee to advertise their services in North Carolina, they must conspicuously identify themselves as "Limited non-resident Commercial Real Estate Broker"
All real estate ads must contain the name of the firm or BIC
A licensee may advertise a home as "Coming Soon" before they have a written listing agreement
Which of the following ads would be considered a blind ad? I. A provisional broker advertises: "Call Sam Johnson at XYZ Realty to find out more about this home. II. a non-provisional broker advertises: "Call Mike Smith for your home buying needs.
I only
II only
Both I and II
Neither I nor II
With regard to a real estate agent's pocket card, all of the following are CORRECT, EXCEPT:
The card indicates whether the agent is a provisional broker or broker.
The card indicates the postlicensing education the agent has taken and whether the agent is active or not.
The pocket card displays the license expiration date.
The pocket card displays the license number and the agent's signature.
All of the following would constitute an illegal action by an inactive broker who is not affiliated with a firm, EXCEPT:
telling members of a networking club that they are a broker and offering members of the club their services
handling out business cards at a social gathering
telling a new acquaintance that they are a broker, but they are on inactive status
hosting an open house for another agent
An agent must discuss agency with a prospective buyer or seller at "first substantial contact." This is the moment the consumer begins talking about confidential information, motivation, personals wants, needs and desires or any terms and conditions they would accept regarding purchase of the home. All of the following information is required to be discussed/provided, EXCEPT:
the agent must discuss their compensation
the agent must provide the Working with Real Estate Agents brochure immediately if the meeting is face to face or within 3 calendar days if the meeting is over the phone or by email
the agent must get the consumer's signature on the brochure's panel before proceeding forward in a transaction
the agent must disclose, discuss and decide they type of agency relationship the consumer wishes to have with the agent and the agent is to warn the consumer not to say anything the consumer would not want another party to know prior to hiring the agent
In a NC real estate development subject to the NC subdivision requirements all of the following can occur prior to approval or recordation of the final plat map, EXCEPT:
offers to purchase and contract may be written and accepted
reservations may be taken and accepted
deposits may be accepted and held
transfer of title can occur
John, a North Carolina licensee has completed all of his required post-licensing courses and is currently an active and current North Carolina Broker. He just terminated his affiliation with a BIC. Which of the following is TRUE regarding John.
He must reaffiliate with a BIC in order to engage in the practice of real estate and in the meantime his license is inactive
If John does not affiliate with a BIC he must become a BIC
John may not remain a sole proprietor. If he does not affiliate with a BIC he must at least obtain a firm license
John may engage in the practice of real estate and receive compensation so long as he does not perform any activities which would require him a BIC.
A BIC must retain records for the firm for how long?
5 years
3 years from the date of closing
3 years from the termination of the relationship
3 years from the date of closing, the termination of the relationship or the distribution of all funds, whichever is later.
Under the NC Residential Property Disclosure Act, a licensee should inform and request that all of the following sellers complete the Mineral, Oil & Gas (MOG) disclosure, EXCEPT:
an investor selling a SFR vacation rental unit
a seller who is selling a parcel of vacant land
a developer selling a new home in a subdivision
a couple selling their primary residence
A buyer has requested that their real estate broker make substantial changes to the offer to purchase and contract. What should the licensee do?
make certain that any and all changes properly reflect the direction and instructions of their client
make the changes, submit the offer and recommend that the buyer seek legal advice regarding the document
only make those changes and alterations if the licensee believes they have sufficient experience or knowledge of the contract
recommend that any and all such changes and alterations be done by an attorney
How long does a provisional broker have to dispose of the earnest money check once it has been delivered to them?
the provisional broker must deposit the money in the trust account no later than 3 banking days from the date of receipt of the money
the provisional broker must deposit the money in the trust account no later than 3 calendar days from the acceptance of the offer
the provisional broker must deliver the earnest money to the BIC immediately
the provisional broker must deposit the money within 3 banking days from the receipt of acceptance of the offer
