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NCREC-Broker-N
NC Real Estate Broker National Questions and Answers

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Questions # 31:

Which statement about acknowledging a deed is TRUE?

Options:

Acknowledging a deed requires the signature of the listing agent.

A deed must be acknowledged to be valid.

A deed must be acknowledged to be recorded.

A deed must be acknowledged or the transaction cannot close.

Answer

Explanation

In North Carolina, a deed must be in writing, signed by the grantor, and delivered to the grantee to be valid. However, acknowledgment (notarization) is not required for validity—but it is required for the deed to be recorded at the county Register of Deeds. Recording provides constructive notice of ownership. Therefore, the correct answer is C.

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Questions # 32:

What clause in a mortgage would permit the lender to call the outstanding balance due and payable if the borrower sells the property or otherwise transfers ownership of the property?

Options:

Acceleration clause

Alienation clause

Balloon payment clause

Defeasance clause

Answer

Explanation

An Alienation Clause—also known as a due-on-sale clause—gives the lender the right to demand full repayment of the loan if the borrower transfers ownership or sells the property without the lender’s consent. This clause is standard in most modern mortgage agreements to protect the lender's interest.

[Reference:, NCREC Real Estate Finance Section, Federal Reserve Glossary – Alienation Clause Definition, Broker National (Broker-N) Financing Chapter, ]

Questions # 33:

A seller lists his home with a brokerage firm, allowing the brokerage to put a sign in the yard, list the property in the multiple listing service, and advertise it on social media. During the listing period, the seller sells the home to a co-worker and is not obligated to pay the brokerage any commission. What type of listing did the seller have with the brokerage?

Options:

Exclusive agency

Exclusive right to sell

Net listing

Open listing

Answer

Explanation

An exclusive agency listing agreement gives the listing brokerage the exclusive right to market the property, but if the seller personally finds the buyer (e.g., a co-worker), no commission is owed. In contrast, an exclusive right to sell agreement would entitle the brokerage to a commission regardless of who finds the buyer. Therefore, the correct answer is A.

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Questions # 34:

Under the North Carolina Timeshare Act, a timeshare developer must allow a buyer to cancel a purchase contract without penalty for how long after signing the contract?

Options:

3 days

5 days

10 days

Under the law, there is no right of cancellation

Answer

Explanation

According to the North Carolina Timeshare Act, a purchaser of a timeshare has the right to cancel the purchase without penalty within five (5) calendar days after execution of the contract. This right of rescission is non-waivable and must be disclosed in the contract. The cancellation does not require a reason and must be honored fully. Therefore, the correct answer is B.

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Questions # 35:

After a purchase agreement has been signed, but before the transaction closes, the buyer attempts to have the contract voided. The buyer was able to prove that, because of a mental disorder, they were incompetent at the time the contract was signed although later went on medication. Is the contract still valid?

Options:

Yes, because mental illness does not factor into questions of contractual capacity.

Yes, because the contract is still executory.

No, because buyers are entitled to rescind contracts before closing.

No, because the temporary incapacity allows them to void the contract.

Answer

Explanation

For a contract to be valid and enforceable, all parties must have legal capacity at the time of signing. If the buyer can prove they were legally incompetent due to mental illness at the time of execution, they may have the right to void the contract—even if they later regained competence. Temporary or situational incompetence at the time of contract formation is legally sufficient to make the contract voidable. Therefore, the correct answer is D.

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Questions # 36:

What is the primary purpose of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)?

Options:

To manage water pollution

To regulate air quality standards

To oversee wildlife conservation efforts

To address hazardous waste sites and establish cleanup requirements

Answer

Explanation

CERCLA, commonly known as Superfund, was enacted to address the cleanup of hazardous waste sites and to assign liability for the release of hazardous substances. It empowers the EPA to identify responsible parties and take remedial actions. Therefore, the correct answer is D.

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Questions # 37:

A loan is set up so that the borrower's loan payments are for the same amount each month. A portion of each payment goes to interest, and a portion goes to principal, and the loan balance will be zero at the end of the loan term. Which type of loan is this?

Options:

Fully amortizing

Negatively amortizing

Partially amortizing

Straight amortizing

Answer

Explanation

A fully amortizing loan is one in which the borrower makes equal monthly payments over the loan term, with a portion of each payment applied to interest and the remainder to principal. By the end of the loan term, the entire balance is paid off. Therefore, the correct answer is A — fully amortizing.

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