Question 1

Which situation would be considered a material fact that a listing broker in North Carolina would be required to disclose to a prospective buyer?

AA previous occupant had a serious illness.

BA previous occupant manufactured methamphetamine on the property.

CA previous owner died on the property.

DThe current owner believes the property is haunted.

Answer : B

According to North Carolina law, brokers are not required to disclose psychological stigmas such as death, illness, or belief in haunting. However, the manufacture of methamphetamine is a material fact due to health and safety hazards and must be disclosed. Therefore, answer B is correct.

Question 2

[Parties and Property Description -- Water Rights]

A property owner owns 150 acres of land. Bordering one side of the property is a non-navigable river. Which statement about the owner's ownership rights is TRUE?

AThe owner can stop other people from using the river.

BThe owner has littoral, not riparian rights.

CThe owner's land ownership rights extend to the center of the river.

DThe owner owns the water and can build a dam to restrict its flow.

Answer : C

In North Carolina, if a property borders a non-navigable river or stream, the property owner holds riparian rights. This means the owner's property extends to the centerline of the watercourse. Littoral rights, by contrast, apply to properties bordering large, navigable bodies of water such as oceans and lakes. The owner does not own the water and cannot restrict its natural flow or public use where applicable. Therefore, the correct answer is C.

---

Question 3

[Broker's Authority and Duties -- Affiliation and Supervision]

A North Carolina broker has been practicing real estate for 10 years for a firm in Asheville. The broker just bought a home on Oak Island and would like to split their time between the mountains and the shore. Under what circumstances could the broker affiliate with two different brokers-in-charge?

AIf the broker gets the express consent of both brokers-in-charge

BIf the broker limits their practice to commercial transactions

CIf the broker operates as a sole proprietorship

DUnder no circumstances

Answer : A

NCREC rules allow a broker to be affiliated with more than one firm or broker-in-charge at the same time, but only with the express written consent of both BICs. This is often the case when brokers want to work in both commercial and residential markets or split their time between geographic locations. Therefore, the correct answer is A.

---

Question 4

[Broker's Authority and Duties]

What is the formula for calculating capital gain when a principal residence is sold?

AAmount Realized - Adjusted Basis

BAmount Realized + Adjusted Basis

CAdjusted Basis / Amount Realized

DAdjusted Basis - Amount Realized

Answer : A

Capital gain is determined by subtracting the adjusted basis (original cost plus improvements minus depreciation) from the amount realized (selling price minus selling costs). This matches Amount Realized -- Adjusted Basis as per the Broker N Financing and Taxation section.

Question 5

[Broker's Authority and Duties -- Postlicensing Requirements]

Which statement about postlicensing education requirements for North Carolina provisional brokers is TRUE?

AThe required postlicensing education must be completed before a provisional broker license can be activated.

BA new provisional broker has two years to complete the required postlicensing education.

CThe required postlicensing education program consists of three 30-hour courses.

DIf a provisional broker does not complete the required postlicensing education, their license is revoked.