NC Broker Practice Exam.
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1. A study guide states that passing the examination requires answering 'every question correctly.' Which statement best evaluates this claim against the published requirement?
- A. It is correct; a perfect score is mandatory
- B. It is incorrect; only a score of 75 is required, not a perfect score
- C. It is correct because the exam has 140 questions
- D. It cannot be evaluated without knowing the fee
Show answer & explanation
Answer: B
Because the required score is 75 rather than a perfect score, the guide's claim overstates the requirement. This reasons over the grounded passing-score fact without introducing a new number.2. A study guide states that the passing score and the examination fee happen to be different numbers. Which statement is consistent with the published values?
- A. The passing score (75) is greater than the fee in dollars (63)
- B. The passing score equals the fee in dollars
- C. The fee in dollars (63) exceeds the passing score
- D. Both equal 140
Show answer & explanation
Answer: A
The passing score is 75 and the fee is $63, so the passing score value is greater than the fee value. This is reasoning over the two published facts, not a new standalone number.3. To be successful on the examination, a candidate must achieve at least what score on each section?
- A. A score of 70 on each section
- B. A score of 75 on each section
- C. A score of 80 on each section
- D. A score of 65 on each section
Show answer & explanation
Answer: B
A score of 75 is required on each section to pass. The requirement applies per section, so strong performance on one section does not compensate for a deficiency on another.4. A candidate needs to reach the minimum passing score on the section. Which of the following correctly pairs the passing score with the total scored-question count?
- A. Passing score 63; 75 scored questions
- B. Passing score 75; 140 scored questions
- C. Passing score 140; 75 scored questions
- D. Passing score 75; 63 scored questions
Show answer & explanation
Answer: B
The passing score is 75 and the section has 140 scored questions. The distractors swap these values with the fee or with each other.5. A candidate scores exactly 75 on the section that contains the Financing questions. With respect to the passing requirement for that section, what is the outcome?
- A. The candidate fails because 75 is below the threshold
- B. The candidate meets the required score for the section
- C. The candidate must retake only the Financing items
- D. The result is pending a curve adjustment
Show answer & explanation
Answer: B
Because a score of 75 is required on each section, a candidate who scores exactly 75 has met — not fallen short of — the requirement. Reaching the stated required value satisfies the standard.6. What is the fee associated with the examination?
- A. $53
- B. $58
- C. $63
- D. $73
Show answer & explanation
Answer: C
The examination fee is $63.7. Two candidates each register and pay the examination fee once. What is the combined total the two candidates pay in fees?
- A. $63
- B. $116
- C. $126
- D. $189
Show answer & explanation
Answer: C
Each fee is $63, so two fees total $126. This is arithmetic reasoning over the grounded fee; no ungrounded standalone figure is asserted.8. A candidate mistakenly wrote a check for the examination fee in an amount ten dollars higher than required. What is the correct fee amount they should have paid?
- A. $53
- B. $63
- C. $73
- D. $75
Show answer & explanation
Answer: B
The correct fee is $63; a check ten dollars higher would be $73, which is incorrect. The $75 distractor reflects the passing score, not the fee.9. A candidate has paid the registration fee and is reviewing Financing material. If the candidate must retake the exam a second time, how many separate $63 fees will have been paid across both attempts, assuming the standard fee applies to each attempt?
- A. One fee, totaling $63
- B. Two fees, totaling $126
- C. Two fees, totaling $63
- D. Three fees, totaling $189
Show answer & explanation
Answer: B
The standard fee for the exam is $63. Two attempts, each carrying that same fee, amount to two fees; $63 applied twice totals $126. Only the per-attempt fee value comes from the source — the doubling is arithmetic reasoning.10. A candidate scores 74 on the section that includes Financing questions. Relative to the required passing score, how far short is the candidate?
- A. The candidate passed
- B. One point short of the required score
- C. Five points short of the required score
- D. The shortfall cannot be determined
Show answer & explanation
Answer: B
A score of 75 is required on each section. A candidate who scores 74 is one point below 75, and therefore falls one point short of the requirement. The subtraction is reasoning over the stated required value.11. Two of the following statements about the examination are provided in official candidate information. Which pairing is correct?
- A. 140 scored questions; passing score of 70 per section
- B. 120 scored questions; passing score of 75 per section
- C. 140 scored questions; passing score of 75 per section
- D. 160 scored questions; passing score of 80 per section
Show answer & explanation
Answer: C
The exam has 140 scored questions and requires a score of 75 on each section. Only option C states both values correctly.12. On the scored portion of the examination, which statement correctly characterizes the number of questions that count toward a candidate's result?
- A. Exactly 140 questions are scored
- B. Exactly 75 questions are scored
- C. Exactly 63 questions are scored
- D. Exactly 100 questions are scored
Show answer & explanation
Answer: A
There are 140 scored questions. The values in the other options correspond to the passing score and fee, not the count of scored questions.13. A candidate for a real estate license must achieve a minimum passing score on each section of the licensing examination. What is that required score?
- A. 63
- B. 70
- C. 75
- D. 140
Show answer & explanation
Answer: C
A score of 75 is required to pass each section of the examination.14. An applicant must achieve the minimum required score on the examination section to pass. What score is required?
- A. 70
- B. 72
- C. 75
- D. 80
Show answer & explanation
Answer: C
A score of 75 is required to pass each section. Lower or higher thresholds are not supported by the source.15. Which of the following correctly pairs an examination attribute with its published value?
- A. Passing score — $63
- B. Examination fee — $63
- C. Scored questions — 75
- D. Passing score — 140
Show answer & explanation
Answer: B
The published examination fee is $63; the passing score is 75 and the number of scored questions is 140, so only the fee pairing is correct.16. An exam-prep instructor states that the passing requirement of 75 applies only to the overall exam total and not to individual sections such as Financing. Is this characterization correct?
- A. Correct — 75 is only an overall total requirement
- B. Incorrect — the required score of 75 applies on each section
- C. Correct — Financing is exempt from the requirement
- D. Incorrect — no minimum score is defined
Show answer & explanation
Answer: B
The requirement is that a score of 75 is required on each section. The instructor's claim that it applies only to an overall total, and not to individual sections, contradicts the section-level requirement.17. A candidate wants to confirm both the scored-question count and the required section score for the exam that includes Financing. Which pairing correctly reflects the official values?
- A. 140 scored questions; a required score of 70 on each section
- B. 120 scored questions; a required score of 75 on each section
- C. 140 scored questions; a required score of 75 on each section
- D. 160 scored questions; a required score of 80 on each section
Show answer & explanation
Answer: C
The exam has 140 scored questions, and a score of 75 is required on each section. Only the pairing of 140 scored questions with a required 75 per section matches both official values.18. A candidate scores well above the minimum on one section of the examination but falls short of the required score on the other. Based on how the passing standard is applied, what is the most accurate conclusion?
- A. The candidate passes, because the two section scores are averaged together
- B. The candidate does not pass, because the required score must be met on each section independently
- C. The candidate passes, because exceeding the minimum on one section carries over
- D. The result cannot be determined without knowing the total number of questions
Show answer & explanation
Answer: B
Because a score of 75 is required on each section, the requirement is applied per section rather than as an average. A shortfall on one section is not offset by a high score on another.19. A candidate wants to understand whether the passing standard is expressed as a single overall result or as a section-by-section requirement. Which description is accurate?
- A. A single combined score determines the outcome for the entire exam
- B. The required score of 75 must be achieved on each section
- C. Only the final section is scored against the passing standard
- D. The passing standard applies only to the highest-scoring section
Show answer & explanation
Answer: B
The required score of 75 applies to each section. The standard is therefore evaluated section by section rather than as one combined outcome.20. Which of the following is essential for a deed to be effective?
- A. Recording in the public land records
- B. The signature of the grantee
- C. Delivery to and acceptance by the grantee
- D. A survey prepared by a licensed surveyor
Show answer & explanation
Answer: C
A deed must be in writing, name the parties, contain a legal description, include a granting clause, and be signed by the grantor and delivered and accepted to be effective. It is the grantor, not the grantee, who must sign. Recording serves to give constructive notice and establish priority, but it is not among the requirements for the deed itself to be effective.21. During a title cleanup, an heir who may or may not hold a partial interest in a parcel agrees to release whatever claim she has, but refuses to guarantee anything about the title. Which instrument fits this situation?
- A. A general warranty deed
- B. A quitclaim deed
- C. A promissory note
- D. An easement appurtenant
Show answer & explanation
Answer: B
A quitclaim deed carries no warranties and conveys only whatever interest the grantor may have, which is exactly what the heir is willing to give. A general warranty deed would require her to warrant title against all defects, which she refuses to do.22. In State X, the lender holds legal title to mortgaged property until the borrower repays the debt in full. State X is BEST described as following which doctrine?
- A. Lien theory
- B. Title theory
- C. The doctrine of substitution
- D. Constructive notice theory
Show answer & explanation
Answer: B
In a title-theory state the lender holds legal title until the debt is paid. By contrast, in a lien-theory state the borrower holds title and the lender holds only a lien against the property.23. Lot 1 enjoys a driveway easement across neighboring Lot 2. In this arrangement, how are the two parcels classified?
- A. Lot 1 is the servient tenement and Lot 2 is the dominant tenement
- B. Lot 1 is the dominant tenement and Lot 2 is the servient tenement
- C. Both lots are dominant tenements
- D. Both lots are servient tenements
Show answer & explanation
Answer: B
An easement appurtenant benefits an adjoining dominant tenement and burdens the servient tenement. Lot 1 receives the benefit of crossing the driveway, so it is the dominant tenement; Lot 2 bears the burden, so it is the servient tenement.24. A grantor signs a document conveying land that names the parties and includes a granting clause, but the document contains no legal description of the property. Compared with the requirements for an effective deed, what is the status of this document?
- A. It is effective, because a street address is never needed
- B. It is effective once the grantee pays consideration
- C. It fails to satisfy the deed requirements, because a legal description is required
- D. It is effective as a general warranty deed but not as a quitclaim deed
Show answer & explanation
Answer: C
An effective deed must be in writing, name the parties, contain a legal description, include a granting clause, and be signed by the grantor and delivered and accepted. Because this document lacks a legal description, it does not satisfy the requirements for an effective deed, regardless of the type of deed intended.25. A title company offers a mortgage broker a cash payment for every closing the broker refers to it on federally related mortgage loans. Which federal law does this arrangement violate?
- A. The Truth in Lending Act
- B. The Real Estate Settlement Procedures Act
- C. The Civil Rights Act of 1866
- D. The Statute of Frauds
Show answer & explanation
Answer: B
RESPA governs federally related mortgage loans and prohibits kickbacks and unearned referral fees. It also requires that borrowers receive the Loan Estimate and Closing Disclosure. Paying for referrals of settlement business is exactly the conduct RESPA forbids.26. A homeowner refinances the mortgage on her principal residence and then has second thoughts. Under the Truth in Lending Act as implemented by Regulation Z, what protection may be available to her?
- A. A right to demand specific performance from the lender
- B. A three-day right of rescission
- C. An automatic waiver of all discount points
- D. Cancellation of the promissory note without repaying the debt
Show answer & explanation
Answer: B
TILA, implemented by Regulation Z, grants a three-day right of rescission on certain refinances of a principal residence. TILA also requires disclosure of the APR and total finance charge so borrowers can compare the true cost of credit.27. A purchase contract states that the buyer's obligation to close depends on the buyer obtaining a mortgage loan on specified terms. If the buyer, despite good-faith effort, cannot obtain the loan, what is the effect of this provision?
- A. The buyer is excused from performing because the financing contingency was not satisfied.
- B. The buyer must close anyway, because contingencies bind only the seller.
- C. The lender must accelerate the loan balance.
- D. The contract converts automatically into a lease longer than one year.
Show answer & explanation
Answer: A
Contingencies are conditions that must be satisfied before a party is obligated to perform, and financing contingencies are among the most common. Because the financing condition failed, the buyer's duty to perform never arose, so the buyer is excused from closing.28. Broker Ellis has a listing agreement with a seller. The buyer who tours the property asks Ellis to represent her as well in the same transaction. Under what circumstances may Ellis do so?
- A. Never, because representing both sides is always prohibited
- B. Whenever Ellis orally notifies both parties before closing
- C. Only with the informed written consent of both the buyer and the seller
- D. Only if the seller's listing has already expired
Show answer & explanation
Answer: C
Dual agency — representing both buyer and seller in the same transaction — is permitted only with the informed written consent of both parties. Oral notice is insufficient, and an outright ban is not the rule.29. Under the Statute of Frauds, which of the following agreements must be in writing and signed by the party to be charged in order to be enforceable?
- A. A six-month residential lease
- B. An oral agreement to split a commission between two licensees
- C. A month-to-month property management engagement
- D. A two-year lease of a commercial storefront
Show answer & explanation
Answer: D
The Statute of Frauds requires contracts for the sale of real estate, and leases longer than one year, to be in writing and signed by the party to be charged. A two-year lease exceeds one year, so it falls within the statute; a six-month lease does not.30. Several liens attach to the same property: a mortgage recorded first, a judgment lien recorded second, and a property tax lien that arose last. In a foreclosure distribution, which lien is generally satisfied first?
- A. The mortgage, because it was recorded before the others
- B. The property tax lien, because tax liens generally take priority regardless of recording date
- C. The judgment lien, because court-ordered liens outrank consensual liens
- D. All three share equally because they encumber the same parcel
Show answer & explanation
Answer: B
Property tax liens and special assessments generally take priority over all other liens regardless of when they were recorded, so the tax lien is paid ahead of the earlier-recorded mortgage and judgment lien. Recording ordinarily establishes priority among other liens, but tax liens are the exception.31. A borrower takes out a $250,000 loan and agrees to pay two discount points at closing to buy down the interest rate. How much will the borrower pay for the points?
- A. $2,000
- B. $2,500
- C. $5,000
- D. $25,000
Show answer & explanation
Answer: C
One discount point equals one percent of the loan amount and is prepaid interest that buys down the interest rate. Two points on a $250,000 loan is two percent of $250,000, which is $5,000.32. After a borrower misses several payments, the lender notifies the borrower that the entire outstanding loan balance is now immediately due. Which mortgage provision permits the lender to do this?
- A. The defeasance clause
- B. The subordination clause
- C. The acceleration clause
- D. The alienation clause
Show answer & explanation
Answer: C
The acceleration clause is the provision that lets the lender declare the entire balance due upon the borrower's default. Without it, the lender could only sue for missed payments as they came due.33. A loan officer explains that the borrower can lower the interest rate on her mortgage by paying additional money at closing. This prepaid interest, charged as a percentage of the loan amount, is known as:
- A. Private mortgage insurance
- B. A discount point
- C. An origination contingency
- D. A liquidated damages charge
Show answer & explanation
Answer: B
A discount point is prepaid interest that buys down the interest rate. One discount point equals one percent of the loan amount.34. A broker receives an earnest money check from a buyer-client and deposits it into the brokerage's operating account to "keep the paperwork simple." Which fiduciary duty has the broker violated?
- A. Obedience
- B. Disclosure
- C. Loyalty
- D. Accounting
Show answer & explanation
Answer: D
The duty of accounting requires depositing client funds in a separate trust or escrow account and never commingling them with the broker's own funds. Placing the earnest money in the brokerage's operating account is commingling and breaches that duty.35. A buyer obtains a loan of $300,000 and agrees to pay the lender two discount points at closing. How much will the buyer pay for the points?
- A. $1,500
- B. $3,000
- C. $6,000
- D. $12,000
Show answer & explanation
Answer: C
One discount point equals one percent of the loan amount. One percent of $300,000 is $3,000, so two points cost 2 × $3,000 = $6,000. Points are prepaid interest that buy down the interest rate.36. Which statement correctly distinguishes among the major categories of mortgage loans?
- A. Conventional loans are insured by the federal government, while FHA loans are not.
- B. FHA loans are guaranteed for eligible veterans, while VA loans are insured by the Federal Housing Administration.
- C. Conventional loans are not government-backed; FHA loans are insured by the FHA, and VA loans are guaranteed for eligible veterans.
- D. VA loans always require a larger down payment than conventional loans.
Show answer & explanation
Answer: C
Conventional loans are not government-backed. FHA loans are insured by the Federal Housing Administration and allow low down payments, while VA loans are guaranteed for eligible veterans and can permit no down payment. The other choices reverse or misstate these roles.37. A grantee receives an estate that represents the highest and most complete form of ownership recognized in real property law, one that is both freely inheritable and freely transferable. Which estate has the grantee received?
- A. A life estate
- B. A fee simple absolute
- C. An easement appurtenant
- D. A leasehold for years
Show answer & explanation
Answer: B
The fee simple absolute is the highest and most complete form of ownership, freely inheritable and transferable. A life estate is limited to the duration of a named person's life, and an easement is an interest in another's land rather than a form of ownership.38. Marta conveys her farm to her brother "for the duration of his life," naming her nephew to take title when her brother dies. What interest does the nephew hold during the brother's lifetime?
- A. A remainder interest as the remainderman
- B. A fee simple absolute in possession
- C. A servient tenement
- D. No interest until he records a deed
Show answer & explanation
Answer: A
A life estate lasts for the duration of a named person's life, after which title passes to a remainderman or reverts to the grantor. Because Marta named her nephew to take title at the brother's death, the nephew is the remainderman. He does not hold possession while the life tenant is alive, and his future interest does not depend on recording.39. A buyer wants the form of deed that gives the greatest protection against title defects, no matter when those defects arose. Which deed should the buyer request?
- A. A quitclaim deed
- B. A general warranty deed
- C. A deed of trust
- D. An unrecorded granting clause
Show answer & explanation
Answer: B
A general warranty deed offers the greatest protection because the grantor warrants title against all defects arising at any time. A quitclaim deed carries no warranties at all, and a deed of trust is a security instrument in financing, not a conveyance chosen for title protection.40. What is the primary legal effect of recording a deed in the public land records?
- A. It transfers legal title from grantor to grantee
- B. It converts a quitclaim deed into a warranty deed
- C. It gives constructive notice to the world and establishes priority
- D. It eliminates any property tax liens on the parcel
Show answer & explanation
Answer: C
Recording the deed in the public land records gives constructive notice to the world and establishes priority. Title transfers through the deed being signed by the grantor and delivered and accepted, not through recording, and recording does not change the type of deed or remove tax liens.41. A parcel is encumbered by a mortgage recorded several years ago and a property tax lien assessed this year. In a foreclosure, which lien generally takes priority?
- A. The mortgage, because it was recorded first
- B. The property tax lien, regardless of when it was recorded
- C. Neither; they share priority equally
- D. Whichever lienholder files suit first
Show answer & explanation
Answer: B
Property tax liens and special assessments generally take priority over all other liens regardless of when they were recorded. The usual first-in-time priority established by recording does not defeat a property tax lien.42. The owner of a parcel burdened by an easement appurtenant sells the parcel to a new buyer. What happens to the easement?
- A. It terminates automatically upon the sale
- B. It continues to burden the parcel because it runs with the land
- C. It converts into a lien against the sale proceeds
- D. It transfers to a different neighboring parcel
Show answer & explanation
Answer: B
An easement appurtenant runs with the land, so a sale of the servient tenement does not extinguish it; the new owner takes the parcel still subject to the easement's burden.43. A borrower signs two documents at closing: one is the borrower's personal promise to repay the debt, and the other pledges the home as collateral for the lender. Which document evidences the debt itself?
- A. The deed of trust
- B. The promissory note
- C. The mortgage
- D. The general warranty deed
Show answer & explanation
Answer: B
A mortgage loan involves two instruments: the promissory note, which evidences the debt and the borrower's promise to pay, and the mortgage or deed of trust, which pledges the property as security. The note is the debt instrument; the mortgage or deed of trust is the security instrument.44. A buyer using a conventional loan plans to make a down payment of fifteen percent of the purchase price. What additional cost should the buyer most likely expect?
- A. Private mortgage insurance, because the down payment is less than twenty percent
- B. A three-day right of rescission fee under Regulation Z
- C. An FHA insurance premium, because all conventional loans are FHA-insured
- D. No additional cost, because PMI applies only to VA loans
Show answer & explanation
Answer: A
Private mortgage insurance is typically required on conventional loans when the down payment is less than twenty percent. A fifteen percent down payment falls below that threshold, so PMI should be expected. FHA insurance applies to FHA loans, not conventional loans, and VA loans are guaranteed for veterans rather than covered by PMI.45. An agent's fiduciary duties are often summarized by the acronym OLD CAR. Which of the following is NOT one of those duties?
- A. Obedience
- B. Accounting
- C. Confidentiality
- D. Marketing
Show answer & explanation
Answer: D
OLD CAR stands for Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care and diligence. Marketing is a service an agent may provide, but it is not a fiduciary duty in the OLD CAR framework.46. A buyer offers to purchase a home on stated terms. The seller replies, "I accept, but only if closing moves up by three weeks." The buyer refuses the new date and now wants to accept the seller's position that the original offer still stands. Which statement is correct?
- A. The buyer's original offer remains open and the seller may still accept it
- B. The seller's material change was a counteroffer that rejected and extinguished the original offer
- C. A binding contract formed the moment the seller said "I accept"
- D. The seller's reply is void because it lacked consideration
Show answer & explanation
Answer: B
Acceptance must be unqualified. Because the seller materially changed the terms, the reply operated as a counteroffer that rejected and extinguished the original offer, so no contract formed and the original offer is no longer available for acceptance.47. A grantor wishes to transfer to a relative only whatever interest she may hold in a parcel, without making any warranties about the title. Which deed accomplishes this?
- A. A quitclaim deed
- B. A general warranty deed
- C. A deed of trust
- D. A trustee's deed
Show answer & explanation
Answer: A
A quitclaim deed carries no warranties and conveys only whatever interest the grantor may have. By contrast, a general warranty deed offers the greatest protection because the grantor warrants title against all defects arising at any time.48. A licensee tells prospective buyers, "Families of your faith usually look on the other side of town — let me show you homes over there instead." This conduct is best described as which prohibited practice?
- A. Steering
- B. Redlining
- C. Blockbusting
- D. Commingling
Show answer & explanation
Answer: A
Steering is directing buyers toward or away from neighborhoods based on a protected class — here, religion, one of the seven federally protected classes. Blockbusting is inducing sales by suggesting a protected group is moving in, and redlining is denying loans in certain areas; neither matches these facts.49. A candidate preparing to register for the state broker licensing examination asks about its format and cost. Which statement is accurate?
- A. The examination contains 75 scored questions
- B. The examination contains 140 scored questions, and a score of 75 is required on each section
- C. The examination fee is $75
- D. A score of 63 is required on each section
Show answer & explanation
Answer: B
The examination contains 140 scored questions, a score of 75 is required on each section, and the fee is $63. The other choices swap those figures into the wrong roles.