Real Estate NCREC-Broker-N - NC Real Estate Broker National

Under North Carolina Real Estate Commission (NCREC) rules, a broker may begin working with a buyer under oral buyer agency but must have a signed, written buyer agency agreement in place before presenting any offer on behalf of that buyer. Oral agency cannot be exclusive or have a defined time frame. Additionally, the broker must provide the Working with Real Estate Agents Disclosure at first substantial contact. Therefore, oral buyer agency is permissible temporarily but must convert to a written agreement before drafting or presenting an offer, making option C correct.

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Tortious interference occurs when a person intentionally damages another party's contractual or business relationships. In real estate, this can happen if a broker actively tries to lure away a client who is currently under an exclusive agreement with another broker. It is an unethical and potentially illegal act. Therefore, the correct answer is A.

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Capital gain is determined by subtracting theadjusted basis(original cost plus improvements minus depreciation) from theamount realized(selling price minus selling costs). This matchesAmount Realized – Adjusted Basisas per the Broker‑N Financing and Taxation section.

According to North Carolina Real Estate Commission rules, any compensation—monetary or non-monetary—that a broker expects to receive from someone other than their client (e.g., a gift card from a seller) must be disclosed in writing before the broker shows the property. Brokers owe this duty of disclosure regardless of the form or source of the compensation. Therefore, Chris must disclose the offer of the $500 gift card before showing that home to Ike.

External obsolescence refers to a loss in property value caused by external factors beyond the property owner’s control. These could include undesirable neighboring properties, economic shifts, or environmental conditions. In this case, the unpleasant odor from the nearby chicken farm is an environmental factor reducing buyer interest. Therefore, the correct answer is B.

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Under North Carolina contract law, a real estate contract becomes binding at the moment the final acceptance is communicated to the offering party (or their agent). In this case, that happened on Friday morning when the listing agent communicated the seller’s acceptance to the buyer’s broker. Delivery of the documents is not required for formation of the contract; communication is sufficient.

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The Gross Rent Multiplier (GRM) is best suited for valuing small residential income properties, typically 1-4 units, where monthly rental income is a primary valuation factor. Among the options, a residential duplex (two units) fits this criteria perfectly. Larger multi-unit properties and commercial properties typically require more complex income capitalization approaches.

FHA mortgage qualification uses two ratios:

Housing ratio (Front-end): 31% of monthly gross income

Total debt ratio (Back-end): 43% of monthly gross income

Step 1: Calculate max housing (front-end)

31% × $6,800 = $2,108

Step 2: Calculate max total debts (back-end)

43% × $6,800 = $2,924

Subtract monthly debts: $485 + $200 + $1,500 = $2,185

Max mortgage payment allowed = $2,924 − $2,185 = $739

The borrower is limited by the back-end ratio, so the maximum housing expense is $739.

Correct Answer: A

Note: The initial selected answer choice “B. $1,763” would exceed the debt ratio when combined with existing monthly obligations. The correct final answer is A.

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North Carolina brokers are obligated to disclose all material facts to all parties in a transaction, regardless of representation. Planned infrastructure changes such as highway expansions may affect property value or desirability and are therefore material facts. The duty to disclose is not conditional on the buyer’s inquiry or seller’s permission. So the correct answer is C.

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A contingency is a clause in a contract that makes the agreement dependent upon a certain event or action occurring before the contract becomes fully binding. Common examples include financing, appraisal, or home inspection contingencies. An amendment modifies an existing contract, an option gives a party the right but not the obligation to act, and a stipulation may refer to a general condition but not necessarily a legal contingency. Therefore, the correct answer is B.