NCREC-Broker-N Exam Questions & Answers
North Carolina Real Estate Broker National • Real Estate Licensing
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Sample NCREC-Broker-N Questions
Practice with real exam-style questions, each with the verified correct answer and explanation.
A North Carolina real estate broker lists their vacation home for sale. A prospective buyer asks to see the property. Which statement is TRUE?
North Carolina rules prohibit a broker from representing a buyer in the purchase of property in which the broker has an ownership interest, regardless of whether the property is a vacation home, primary residence, or investment. The potential for conflict of interest is considered too great, and no form of dual or designated agency is permitted in such situations. Therefore, the broker cannot represent the buyer under any circumstances.
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[Compliance with Laws and Regulations -- FHA Mortgage Qualification]
A buyer's stable monthly income is $6,800. Every month they pay a $485 car payment, $200 in a revolving credit payment, and $1,500 in alimony. Using ratios of 31% and 43%, what is the maximum monthly mortgage payment they would qualify for on an FHA-insured mortgage loan?
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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[Compliance with Laws and Regulations -- Contract Capacity]
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?
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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To equalize each comparable property to the subject property when performing the sales comparison approach, the appraiser should make adjustments to:
In the sales comparison approach, appraisers always make adjustments to the comparable properties --- never to the subject property --- to reflect how they differ from the subject. This ensures that all comparables are on an equal footing with the subject being appraised. Thus, answer B is correct.
[Compliance with Laws and Regulations -- Zoning and Land Use]
The buyer of a long-vacant lot plans to build a home. The zoning ordinance for the town in which the property is located indicates that every lot with a structure must be at least 80 feet wide. When the buyer applies for a building permit, they are surprised to learn that the lot is only 76 feet wide. The property is worthless if they cannot build a home. To build a home on the lot legally, what must the buyer obtain from the local zoning board?
A variance is an exception to a zoning ordinance granted by the local zoning board when strict enforcement would cause undue hardship due to unique property conditions. In this case, the lot is too narrow for the minimum width requirement, but the buyer can seek a variance to proceed legally. A nonconforming use applies to existing properties that no longer comply after zoning changes. Therefore, the correct answer is D.
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