North Carolina Real Estate 2026 — Free Guide

Any person or business entity who directly or indirectly engages in the business of a real estate broker for compensation (or promise thereof) while physically in North Carolina must hold a NC real estate broker license. A licensee acts only as an agent for a party. A licensee is NOT automatically a REALTOR — that term only applies to members of the National Association of REALTORS.

• ✓Compensation or promise thereof while physically in NC triggers licensing requirement
• ✓A 'licensee' is not automatically a 'REALTOR'; REALTOR requires NAR membership
• ✓Real estate licensees act only as agents for a party to a transaction

NC has only one type of license — a broker license — but several status categories. A provisional broker is the entry-level status: after completing the 75-hour prelicensing course and passing the exam, the broker license is issued on 'provisional' status. A provisional broker must be supervised by a broker-in-charge, may not operate independently, and must complete postlicensing education to remove provisional status.

• ✓Provisional broker must be supervised by a broker-in-charge for any act requiring a license
• ✓Provisional broker may never operate independently
• ✓Provisional status is temporary; postlicensing education required to remove it and stay eligible for active status
• ✓Entry requires 75-hour prelicensing course and passing the license exam

Broker-in-charge (BIC) is a license status category, not a separate license. Each real estate office must have a designated BIC. To qualify, the broker's license must be on active (non-provisional) status, the broker must have 2 years full-time or 4 years part-time brokerage experience within the previous 5 years, and complete a 12-hour Broker-In-Charge Course (no earlier than one year prior or within 120 days after designation).

• ✓BIC is a license status category, not a separate license
• ✓License must be active and NOT provisional to be a BIC
• ✓Requires 2 years full-time or 4 years part-time brokerage experience within previous 5 years
• ✓Requires completion of the 12-hour Broker-In-Charge Course
• ✓Each real estate office must have a designated BIC

Performing brokerage activities as an agent for others for compensation requires a license, with no exemption for a limited number of transactions and no minimum-fee threshold. Activities include listing, selling/buying, leasing/renting, conducting auctions, dealing in interests in connection with sale of a business, and referring a party for compensation. No licensee may pay a finder's/referral/bird-dog fee to an unlicensed person.

• ✓Even one transaction for compensation requires a license; no exemption for limited transactions
• ✓No fee is too small to trigger the licensing requirement
• ✓Referring a party for compensation is a licensed activity
• ✓No licensee may pay a finder's, referral, or bird-dog fee to an unlicensed person

G.S. 93A-6(a)(1) prohibits both willful and negligent misrepresentation or omission of material facts. A misrepresentation is communicating false information; an omission is failing to disclose where a duty exists. Willful acts involve actual knowledge and deliberate action; negligent acts occur when a licensee 'should reasonably have known' the truth even acting in good faith.

• ✓Both willful and negligent misrepresentation/omission are prohibited
• ✓Willful requires actual knowledge and deliberate conduct
• ✓Negligent applies when a licensee 'should reasonably have known' even in good faith
• ✓Material facts must be disclosed to both the principal and third parties dealt with

Material facts the Commission requires disclosing include: facts about the property itself (structural/mechanical defects); facts relating directly to the property (pending zoning change, planned highway); facts affecting the principal's ability to complete the transaction (pending foreclosure); and facts known to be of special importance to a party (e.g., ability to add a pool). Regardless of which party is represented, material facts must be disclosed to both the principal and third parties.

• ✓Material facts include property defects, external conditions, ability to complete transaction, and special-importance facts
• ✓Material facts must be disclosed regardless of which party the agent represents
• ✓An agent must also disclose to the principal anything affecting the principal's rights or decision

Under G.S. 39-50 and 42-14.2, the fact that a property was occupied by a person who died or had a serious illness is NOT a material fact, nor is the fact that a registered sex offender occupies/occupied/resides near the property. Agents need not volunteer these; if asked they may decline or answer honestly (and must not knowingly make false statements). An agent may NOT answer inquiries about whether an occupant had AIDS, as fair housing law treats it as a handicap.

• ✓Death, serious illness, and registered sex offenders near a property are NOT material facts
• ✓Agents need not volunteer these facts but may not knowingly make false statements
• ✓Agents are prohibited by fair housing law from answering AIDS-related inquiries about occupants

G.S. 93A-6(a)(4) prohibits acting for more than one party without all parties' knowledge. Rule A.0104(d)/(i) requires express written authority for dual agency. Self-dealing (making a secret profit) is prohibited. An agent must disclose to both parties any relationship (e.g., a relative buyer) that would influence their loyalty. G.S. 93A-6(a)(6) prohibits representing another broker without the associated broker's knowledge and consent.

• ✓Acting for more than one party without all parties' knowledge is prohibited
• ✓Dual agency requires express written authority of each party
• ✓Self-dealing / secret profit is prohibited
• ✓Provisional brokers may never work for more than one company at a time

Any violation of the State Fair Housing Act is considered improper conduct and a License Law violation. A licensee shall not conduct brokerage activities or promote their broker status in any manner that discriminates on the basis of race, color, religion, national origin, sex, familial status, or disability.

• ✓Fair Housing Act violations are License Law violations
• ✓Licensees may not discriminate on race, color, religion, national origin, sex, familial status, or disability

G.S. 93A-13 and Rule A.0104(a) require all agency agreements to be in writing and signed. Seller/lessor (property owner) agreements must be in writing BEFORE providing services. Buyer/tenant agency may begin orally but must be in writing no later than when any party makes an offer. An oral buyer/tenant agreement must be non-exclusive, indefinite, and terminable at any time.

• ✓All agency agreements must be in writing and signed
• ✓Property owner (seller/lessor) agreements must be written before services are provided
• ✓Buyer/tenant agreements may be oral initially but must be written by the time any party makes an offer
• ✓Oral buyer/tenant agreements must be non-exclusive, indefinite, and terminable at will

Every written agency agreement must: provide for a definite expiration and terminate without notice at that time (a landlord-tenant procurement agreement may auto-renew if terminable with notice); contain the Rule A.0104(b) non-discrimination provision in a clear/conspicuous manner; and include the license number of the signing licensee.

• ✓Must provide a definite expiration and terminate without prior notice at expiration
• ✓Must contain the non-discrimination (fair housing) provision, set out conspicuously
• ✓Must include the license number of the individual licensee who signs

Rule A.0104(c) requires licensees in sales transactions to provide the Working With Real Estate Agents disclosure at first substantial contact, review it with the buyer/seller, and reach agreement on the agency relationship. Merely handing over the form is insufficient. If contact is by phone/electronic means, disclose whom you represent immediately and transmit the written disclosure within three days.

• ✓Agency disclosure requirement applies only to sales transactions
• ✓Disclosure must be made at first substantial contact and reviewed, not just handed over
• ✓First substantial contact occurs when discussion focuses on the buyer's needs/finances
• ✓By phone/electronic contact, written disclosure must be transmitted within three days

Rule A.0104(d) requires written authority from all parties before acting as a dual agent, applying to both sales and lease/rental transactions. In sales this authority is usually in the listing/buyer agency contracts. An exception permits a limited period of oral dual agency where a buyer/tenant works under an oral agency agreement, but written authority must be obtained by the time one represented party makes an offer. Oral consent of all parties is still required before acting.

• ✓Written authority for dual agency required from all parties, for sales and lease transactions
• ✓Limited-period oral dual agency allowed only where the buyer/tenant is under an oral agency agreement
• ✓Written dual agency authority must be obtained no later than when a represented party makes an offer
• ✓Oral consent of all parties is still required before beginning dual agency

Rule A.0106 (implementing G.S. 93A-6(a)(13)) requires delivery of copies of executed agency agreements, contracts, offers, leases, options, etc. within three days of the broker's receipt. Offers must be presented to the seller as soon as possible — the three-day limit is only an outer limit for when the seller is unavailable. Offers must be presented even if a contract is pending (with advice to consult an attorney). A buyer signing an offer must immediately receive a copy.

• ✓Deliver copies of executed documents within three days of the broker's receipt
• ✓Offers must be presented to the seller as soon as possible, not delayed three days
• ✓Offers must be presented even when a contract is already pending on the property
• ✓A buyer signing an offer must immediately be given a copy

Rule A.0110 requires each firm to have a designated BIC for its principal office and a different BIC at each branch. No broker may be BIC of more than one office; no office may have more than one BIC. A pass-through firm meeting all four conditions needs no BIC. A sole proprietor must be a BIC if they hold others' trust money, advertise/promote services as a broker, or have other brokers affiliated. Advertising/promoting includes ads, business cards, oral solicitation, and listing property.

• ✓Each principal and branch office must have a separate designated BIC
• ✓No broker may be BIC of more than one office; no office may have more than one BIC
• ✓A sole proprietor must be a BIC if they hold trust money, advertise services, or have affiliated brokers
• ✓Holding only tenant security deposits on the broker's own property does not trigger the BIC requirement

Chapter 47E requires most residential owners to complete the Residential Property and Owners' Association Disclosure Statement for buyers, answering yes/no/no representation. Failure to provide it lets the buyer cancel in writing within three calendar days of contract acceptance. A separate Mineral and Oil and Gas (MOGS) disclosure must also be provided before the offer. Licensees may assist but not complete these for the seller or advise on the representation; they must still disclose all known material facts.

• ✓Most residential sellers must provide the Residential Property and Owners' Association Disclosure Statement
• ✓Failure to provide it lets the buyer cancel within three calendar days of contract acceptance
• ✓A separate MOGS disclosure must be provided before the offer to purchase
• ✓Licensees must disclose material facts regardless of the seller's representation on the form

Trust money is money belonging to others received by a broker acting as an agent, or held as temporary custodian, in a real estate matter. Common examples include earnest money deposits, down payments, tenant security deposits, rents, HOA dues/assessments, and settlement monies. For short-term rentals it also includes advance reservation deposits and sales taxes on gross rental receipts.

• ✓Trust money is money belonging to others received by a broker as agent or custodian
• ✓Examples include earnest money, security deposits, rents, HOA dues, and settlement proceeds
• ✓Short-term rental trust money includes advance reservation deposits and sales taxes on receipts

A trust/escrow account holds only trust money and has three features: separate (only others' money), custodial (only the broker/designee controls disbursement), and available on demand. It must be a demand deposit account in a federally insured institution lawfully doing business in NC that agrees to make records available to the Commission — the bank may be outside NC if these conditions are met.

• ✓A trust account is separate, custodial, and available on demand
• ✓It must be a demand deposit account in a federally insured institution lawfully doing business in NC
• ✓The institution must agree to make records available to the Commission
• ✓The bank may be located outside NC if all conditions are met

The BIC must ensure the words 'trust account' or 'escrow account' appear on signature cards, statements, deposit tickets, and checks. Proper designation and accurate records protect deposits from being frozen/attached if the broker becomes insolvent, dies, or has liens. FDIC insures deposits up to $250,000 per individual for whom funds are held, so a properly designated account can total more than $250,000 while each individual's interest remains insured.

• ✓'Trust account' or 'escrow account' must appear on all signature cards, statements, tickets, and checks
• ✓Proper designation protects deposits from attachment on broker insolvency or death
• ✓FDIC insures up to $250,000 per individual for whom funds are held

A broker must open/maintain a trust account when the broker or an affiliated licensee takes possession of trust money; inactive brokers or those not handling others' funds need none. A broker generally needs only one trust account for all trust money. However, Rule A.0118(a) requires a separate trust account for each HOA/POA managed, with periodic written statements at least quarterly. A broker leasing their own residential property may need a trust account under G.S. 42-50.

• ✓A trust account is required when the broker/affiliated licensee takes possession of trust money
• ✓Only one trust account is generally required for all trust money
• ✓A separate trust account is required for each HOA/POA managed, with at least quarterly statements

G.S. 93A-6(a)(12) prohibits commingling the broker's own money with others' money. A broker may not deposit personal/business funds in the trust account (except limited bank-charge funds) and may not deposit trust money for property in which the broker has an ownership interest. To cover (not avoid) bank service charges, a broker may keep up to $100 of personal funds (or an amount required to cover charges) in the trust account, properly recorded on a personal funds ledger.

• ✓A broker may not commingle personal/business funds with others' trust money
• ✓Money for property the broker owns may not go in the brokerage trust account
• ✓Up to $100 of personal funds may be kept to cover (not avoid) bank service charges
• ✓Personal funds in the trust account must be recorded on a personal funds ledger

Rule A.0117 requires complete records of deposits, maintenance, and withdrawals of others' money; the Commission may inspect trust records without prior notice. Rule A.0110(g)(4) makes the BIC responsible for proper maintenance of trust accounts and records. Though a BIC may delegate recordkeeping to a clerical employee, the BIC remains responsible for care and custody, and access to trust money must be limited and carefully controlled.

• ✓Brokers must keep complete records of trust deposits, maintenance, and withdrawals
• ✓The Commission may inspect trust records without prior notice
• ✓The BIC is ultimately responsible for proper maintenance of trust accounts and records
• ✓Access to trust money must be limited and carefully controlled even when delegated

Under Rule A.0116, trust monies must generally be deposited within three banking days of receipt. Exception: earnest money and tenant security deposits must be deposited within three banking days following ACCEPTANCE of the offer/lease — unless tendered in cash, which must be deposited within three banking days of receipt regardless of acceptance. All trust money received by a provisional broker must be delivered immediately to the BIC; nonresident limited commercial brokers deliver immediately to the affiliated NC broker.

• ✓Trust monies generally must be deposited within three banking days of receipt
• ✓Earnest money/security deposits are deposited within three banking days after acceptance
• ✓Cash must be deposited within three banking days of receipt regardless of acceptance
• ✓Provisional brokers must deliver trust money immediately to their BIC

Rule A.0116(e) lets a BIC transfer earnest money to the closing attorney/settlement agent no more than 10 days before the anticipated settlement date; it may not otherwise be disbursed before settlement without the parties' written consent (e.g., not to pay inspection reports). For disputes over non-security-deposit funds (Rule A.0116(d)), the broker must retain the funds until a written release from the parties or a court order; G.S. 93A-12 procedures allow deposit with the Clerk of Court.

• ✓Earnest money may be transferred to the settlement agent no more than 10 days before settlement
• ✓Earnest money may not be disbursed before settlement without written consent of the parties
• ✓Disputed non-security-deposit funds must be held until written release or court order

Rule A.0116(g) makes every licensee responsible for safeguarding the money or property of others. A broker may not convert others' money/property to their own use, apply it to a purpose other than intended, or assist another person in conversion or misapplication.

• ✓Every licensee must safeguard money/property of others
• ✓A broker may not convert or misapply others' money or assist others in doing so

A provisional broker who completes all postlicensing education becomes a non-provisional broker without taking another exam. A non-provisional broker is not required to be supervised by a broker-in-charge to hold active status. Out-of-state applicants with an equivalent license active within the previous 3 years may take only the State portion of the exam.

• ✓Provisional broker becomes broker by completing postlicensing education, no new exam
• ✓A non-provisional broker need not have a BIC to hold active status
• ✓Qualifying out-of-state applicants (equivalent license active within 3 years) may take only the State portion of the exam

A broker/salesperson residing outside NC who holds an active license where their primary business is located may obtain a NC limited nonresident commercial broker license for commercial real estate transactions. They stay affiliated with their out-of-state firm, have no NC BIC, but must enter a notification of broker affiliation and brokerage cooperation agreement with a resident NC broker (not provisional) who supervises them. It is a separate license.

• ✓Applies only to commercial real estate in NC
• ✓Must have a notification of broker affiliation and brokerage cooperation agreement with a resident NC broker
• ✓The supervising NC broker cannot be on provisional status
• ✓It is a separate license

In addition to individuals, business entities must be licensed to engage in real estate brokerage. Any corporation, partnership, LLC, association, or other business entity (other than a sole proprietorship) must obtain a separate real estate firm broker license.

• ✓Business entities engaging in brokerage must obtain a separate firm broker license
• ✓Sole proprietorships are the exception and do not need a separate firm license

Unlicensed salaried or hourly (not per-transaction) employees may perform limited administrative acts: forwarding calls, submitting licensee-prepared MLS data, securing public records, placing signs/lockboxes at a licensee's direction, ordering minor repairs, couriering documents, providing basic advertised property facts, scheduling showings, showing/leasing rentals managed by the employing broker, typing forms completed by a licensee, and handling trust deposits under the BIC's close supervision.

• ✓Unlicensed employees must be salaried or hourly, not paid per transaction
• ✓They may only provide basic factual property info that would appear in an advertisement
• ✓They may show and execute preprinted leases only for rentals managed by their employing broker
• ✓Trust money handling is done under close supervision of the BIC who remains responsible

Certain persons/entities are exempt from licensure, including: business entities selling/leasing their own property in the regular course of management (extends to officers/employees/partners/managers); attorney-in-fact only for final consummation of a contract already commenced; NC attorneys acting in the practice of law; receivers, trustees, guardians, administrators, executors, or persons under court order; trustees under a trust/deed of trust/will; certain salaried property-management employees; individual owners selling/leasing their own property; and housing authorities.

• ✓An owner selling or leasing their own property is exempt
• ✓Attorney-in-fact exemption applies only to final consummation of an already-commenced transaction
• ✓NC attorneys are exempt only when performing acts that constitute the practice of law
• ✓The exemption cannot be circumvented by obtaining a power of attorney

The NC Real Estate Commission has 9 members serving 3-year terms (7 appointed by Governor, 2 by General Assembly). At least 3 must be licensed brokers and at least 2 must be public members. Its principal purpose is protecting the public. Powers include licensing, education programs, and regulating/disciplining licensees. The Commission may NOT regulate commissions/fees or arbitrate contract disputes over commission rates.

• ✓Commission has 9 members serving 3-year terms
• ✓At least 3 members must be licensed brokers; at least 2 must be public members
• ✓Principal purpose is to protect the public
• ✓Commission may not regulate commissions/fees or arbitrate commission disputes

The Commission may reprimand, censure, suspend, or revoke a license, and may accept license surrender with consent. Licensees are subject to discipline even when buying/selling/leasing for themselves. The Commission may seek injunctive relief in superior court. License Law violations are misdemeanors that may be prosecuted, but a Commission finding is not a criminal conviction.

• ✓Disciplinary actions: reprimand, censure, suspension, revocation
• ✓Licensees may be disciplined for prohibited acts in their own transactions [G.S. 93A-6(b)(3)]
• ✓Violations are criminal misdemeanors, but a Commission finding is not a criminal conviction

A listing agent is generally held to a higher standard than a selling agent (seller's subagent) for negligent misrepresentation, because the listing agent is best positioned to ascertain and verify property facts. A selling subagent may reasonably rely on MLS data unless a reasonably prudent agent should recognize it as incorrect. A buyer's agent may in some cases be held to a higher standard due to agency duties and knowledge of the buyer's specific needs.

• ✓Listing agents are held to a higher standard for negligent misrepresentation than seller's subagents
• ✓A selling subagent may reasonably rely on MLS data absent obvious errors
• ✓A buyer's agent may be held to a higher standard due to duties owed to the buyer

A willful omission occurs when a licensee has actual knowledge of a material fact and a duty to disclose but deliberately fails to disclose. A negligent omission occurs when a licensee lacks actual knowledge but a reasonably prudent licensee 'should reasonably have known' — creating a duty to discover and disclose. A buyer's agent must disclose to the buyer information affecting the buyer's decision (e.g., seller's motivation), but must NOT disclose confidential buyer info to a seller when representing the buyer.

• ✓Willful omission requires actual knowledge plus a duty to disclose
• ✓Negligent omission creates a duty to discover and disclose facts a prudent licensee should have known
• ✓A buyer's agent must disclose seller motivation info to the buyer
• ✓In a dual-agency (in-house) situation, non-disclosure of a party's personal situation is not a willful omission

A broker may not pay commission/valuable consideration for acts performed in violation of the License Law, including paying unlicensed persons for licensed acts or paying finder's/referral/bird-dog fees to unlicensed persons (including owner-referral and tenant-referral programs). A provisional broker may accept compensation only from their own employing broker/firm; payment to another firm's provisional broker must go through that provisional broker's employing broker.

• ✓No payment to unlicensed persons for acts requiring a license
• ✓No finder's/referral/bird-dog fees to unlicensed persons, including referral programs
• ✓A provisional broker may be paid only by their employing broker/firm
• ✓Payment is proper if the license was active when all services were rendered, even if inactive/expired at payment time

G.S. 93A-6(a)(8) allows discipline for conduct showing unworthiness or incompetence (e.g., improperly completing contracts, failing to perform listing/management services, inaccurate income/expense reports). G.S. 93A-6(a)(10) prohibits any other improper, fraudulent, or dishonest dealing, decided case-by-case, including breaches of the duty of skill/care/diligence and any State Fair Housing Act violation.

• ✓Unworthiness/incompetence and improper/fraudulent/dishonest dealing are broad catch-all grounds
• ✓Fair Housing Act violations constitute improper conduct under the License Law
• ✓Dual contracting (contract kiting) for mortgage fraud is prohibited improper dealing

Licensees may not perform legal services for others. They may 'fill in' preprinted contract forms drafted by an attorney, but may NEVER complete deeds or deeds of trust. They may not abstract or opine on legal title or provide legal advice. Explaining contract provisions is acceptable and recommended, but advising on legal ramifications is prohibited.

• ✓Licensees may not draft legal documents such as deeds, deeds of trust, leases, or contracts
• ✓Licensees may fill in preprinted forms but may never complete deed or deed of trust forms
• ✓Licensees may explain contract provisions but not advise on legal ramifications

Rule A.0104(f) requires a buyer's agent to disclose their agency status to the seller or seller's agent at initial contact (typically when scheduling a showing). The initial disclosure may be oral, but written confirmation must be made no later than delivery of the offer (except auction sales), usually included in the offer itself.

• ✓Buyer's agent must disclose agency status at initial contact with seller/listing firm
• ✓Written confirmation required no later than delivery of the offer to purchase
• ✓Confirmation is usually included in the offer to purchase (required by Rule A.0112)

Rule A.0104(i) codifies that a firm representing more than one party in the same sales transaction is a dual agent, and all its affiliated licensees are also dual agents. Designated agency (paragraphs j-m) lets a firm appoint one agent to represent only the seller and another to represent only the buyer in in-house dual agency, restoring advocacy. Authority for designated agency must be in writing by the time written dual agency is required.

• ✓A firm representing both parties is a dual agent, and all affiliated licensees become dual agents
• ✓Designated agency assigns separate individual agents to each client in in-house dual agency
• ✓Designated agency restores client advocacy, unlike neutral standard dual agency
• ✓Designated agency authority must be in writing

A broker selling property in which they have an ownership interest may not represent the buyer (exception: commercial real estate with less than 25% ownership interest, with buyer consent after full written disclosure). A firm may represent a buyer of a broker-owned property if the representing broker has no ownership interest and the buyer consents after disclosure. A listing broker/firm purchasing a listed property must disclose the conflict in writing and offer the seller the right to terminate.

• ✓A broker cannot represent the buyer of property in which the broker has an ownership interest (limited commercial exception under 25%)
• ✓A listing broker/firm buying a listed property must disclose the conflict in writing
• ✓The broker/firm must terminate the listing on the seller's request before purchasing

A broker must notify the Commission in writing within 10 days of each change in personal/firm/trade name, residence/firm address, telephone number, and email. Advertising under an assumed name (one not including the licensee's surname, or differing from a firm's legal registered name) requires filing an assumed name certificate under G.S. 66-71.4 and notifying the Commission. Sole proprietor/partnership names may not include an unlicensed person or provisional broker; using another broker's name requires permission.

• ✓Notify the Commission within 10 days of name, address, phone, or email changes
• ✓Assumed name advertising requires an assumed name certificate and Commission notification
• ✓A name is 'assumed' when it omits the licensee's surname or differs from the firm's legal name
• ✓Using another active/inactive/cancelled broker's name requires that broker's permission

Rule A.0105 requires proper authority to advertise. A broker may not advertise or place a for-sale/for-rent sign without the owner's written consent. A broker may not advertise brokerage services without the BIC's consent and without including the firm/sole proprietorship name. Blind ads — which imply the principal is selling/renting without broker involvement — are prohibited; all advertising must indicate it is by a broker or firm.

• ✓Written owner consent required before advertising or placing signs on a property
• ✓Advertising must include the firm/sole proprietorship name and have BIC consent
• ✓Blind ads are prohibited; advertising must disclose it is by a broker or brokerage firm

G.S. 93A-6(a)(14) requires a broker, at the time a sale is consummated, to deliver an accurate, detailed closing statement showing receipt and disbursement of all monies the broker knows or should know about. A broker may rely on an attorney/settlement agent's statement but must review it for accuracy and notify parties of errors. TRID replaced HUD-1 with separate Closing Disclosures for borrower and seller (effective Oct 3, 2015).

• ✓Broker must deliver an accurate, detailed closing statement at consummation
• ✓A broker may rely on an attorney's statement but must review for accuracy and report errors
• ✓Broker must confirm accuracy of entries within their direct knowledge (price, commission, deposits)

Rule A.0108 requires brokers to retain transaction records for three years from the conclusion of the transaction or disbursement of all trust monies, whichever is later. If an agency agreement terminates before conclusion, records are kept three years after termination or final disbursement, whichever is later. Records include contracts, leases, offers (even rejected), agency contracts, trust records, disclosures, BPOs/CMAs, advertising, and communications. An individual broker must provide copies to the firm within three days of receipt.

• ✓Retain records three years from transaction conclusion or final trust disbursement, whichever is later
• ✓Records include rejected offers, disclosures, trust records, and BPOs/CMAs
• ✓An individual broker must provide copies of records to the firm within three days of receipt

Rule A.0109 governs compensation disclosure. A licensee may not receive consideration from a vendor/supplier for expenditures made on behalf of the principal without the principal's written consent. A licensee may not receive consideration for recommending/procuring services for any party without full and timely disclosure. In sales, a broker may not receive more-than-nominal compensation from the principal unless in a written contract, or from others unless fully and timely disclosed. Nominal means insignificant (e.g., a $25 wine bottle or $50 gift certificate).

• ✓Compensation from a vendor tied to a principal's expenditure requires the principal's written consent
• ✓Compensation for recommending services requires full and timely disclosure to the party
• ✓Sales compensation over nominal value from others requires full/timely written disclosure
• ✓Nominal compensation (insignificant/token value) does not require consent

Rule A.0109(g) affirms a licensee may not compensate or share compensation with unlicensed persons/entities for acts requiring a NC license. NC brokers may split commissions or pay referral fees to out-of-state licensees only if that licensee performs no brokerage services while physically in NC. A narrow exception allows referral fees to travel agents for vacation rentals only. Nothing permits fees/kickbacks prohibited by RESPA.

• ✓No compensation to unlicensed persons for acts requiring a NC license
• ✓Out-of-state licensees may be paid only if they perform no brokerage while physically in NC
• ✓RESPA-prohibited fees and kickbacks are not permitted

To gain BIC-Eligible status a broker must have active (non-provisional) status, have 2 years full-time / 4 years part-time brokerage experience within the previous 5 years (or qualify as a NC attorney), and complete the 12-hour BIC Course within 120 days of designation. To maintain it, the broker must timely renew, keep active status, and each year complete the 4-hour BIC Update Course (BICUP) plus a 4-hour CE elective. Failing to complete these by June 10 loses BIC-Eligible status the following July 1.

• ✓BIC-Eligible requires active non-provisional status plus 2 years full-time/4 years part-time experience in prior 5 years
• ✓The 12-hour BIC Course must be completed within 120 days of designation
• ✓Annual maintenance requires the BICUP course plus a 4-hour CE elective by June 10
• ✓A regained BIC must retake the 12-hour BIC Course with no exceptions

Rule A.0113 requires licensees to report to the Commission any criminal conviction (felony or misdemeanor), military court-martial conviction, notarial commission sanction, or any restriction/suspension/revocation of a professional license within 60 days of the final judgment/order. This is an ongoing duty. DWI is a misdemeanor and must be reported.

• ✓Report felony/misdemeanor convictions and professional license sanctions within 60 days
• ✓The reporting duty is ongoing
• ✓DWI (a misdemeanor) must be reported

A broker may deposit trust money in an interest-bearing account only after obtaining written authorization from all parties with an interest in the funds, specifying how and to whom interest is paid. If contained in a transaction instrument, the authorization must be conspicuous. All trust accounts must remain demand accounts, so investing trust money in securities, bonds, or fixed-term CDs is prohibited.

• ✓Interest-bearing trust accounts require prior written authorization from all interested parties
• ✓The authorization must specify how and to whom interest is paid
• ✓Trust accounts must remain demand accounts; investing in securities/bonds/CDs is prohibited

Rule A.0116(b)(4) allows a broker to hold a check made payable to the seller for an option or due diligence fee only to deliver it to the seller (or return to buyer per instructions); such checks are NOT deposited in the trust account since not payable to the broker. The broker may not retain the instrument more than three business days after contract acceptance. If a buyer gives cash for these fees, it must be deposited in the trust account within three banking days.

• ✓Option/due diligence checks payable to the seller are held for delivery, not deposited in the trust account
• ✓A broker may not hold such an instrument more than three business days after contract acceptance
• ✓Cash given for option/due diligence fees must be deposited in the trust account within three banking days

Under G.S. 93A Article 6, a BPO and CMA have the same legal meaning: an estimate by a licensed broker of a property's probable selling or leasing price. A non-provisional broker on active status may perform a BPO/CMA for a fee for various persons; a provisional broker may NEVER perform one for a fee. A BPO/CMA may not be used to determine value for mortgage loan origination and may only estimate probable selling/leasing price, not value — estimating value makes it an appraisal requiring an appraiser.

• ✓BPO and CMA have the same legal meaning
• ✓A provisional broker may never perform a BPO/CMA for a fee
• ✓A BPO/CMA cannot be used for mortgage loan origination value determination
• ✓A BPO/CMA estimates probable selling/leasing price only, not value (that would require an appraiser)

Since July 1, 1957, it is unlawful for any person or business entity in NC to act as a real estate broker, engage in the business, or hold themselves out as doing so without first obtaining a license from the NC Real Estate Commission. A NC license is required even if the person is licensed in another state and affiliated with a NC licensed broker.

• ✓No person or entity may act as a broker without a Commission-issued license
• ✓Out-of-state licensees affiliated with a NC broker must still obtain a NC license
• ✓Violation of G.S. 93A-1 is a Class 1 misdemeanor

A real estate broker is any person or business entity who, for compensation or valuable consideration (or promise thereof), lists, sells, buys, auctions, negotiates, exchanges, leases, or rents real estate or improvements for others. Compensation and acting 'for others' are the key elements triggering the license requirement.

• ✓Acting 'for others' for compensation triggers broker licensure
• ✓A mere crier of sales at auction is specifically excluded from the broker definition
• ✓The activity must involve real estate or improvements thereon

A broker-in-charge (BIC) is a broker designated as responsible for supervising provisional brokers at a particular office plus other administrative/supervisory duties set by rule. A provisional broker is a broker who, pending completion of postlicensing education or experience under G.S. 93A-4(a1) or 93A-4.3, must be supervised by a BIC when performing any act requiring a license.

• ✓A BIC supervises provisional brokers at a particular office
• ✓A provisional broker must be supervised by a BIC for all licensed activity
• ✓A real estate salesperson means any person formerly licensed as such before April 1, 2006

A broker applicant must be at least 18 years old and, within three years preceding application, have completed at least 75 hours of prelicensing instruction through a Commission-certified education provider (or equivalent education/experience). The application fee is $100 (Commission may raise by rule but not above $120, and not by more than $5 in a 12-month period).

• ✓Applicant must be at least 18 years of age
• ✓Applicant must complete a 75-hour prelicensing course within three years before applying, or equivalent
• ✓Applicants must demonstrate competency, honesty, good moral character, and general fitness

Anyone issued a broker license on or after April 1, 2006 is initially classified as a provisional broker and must complete a 90-hour postlicensing education program within 18 months of initial licensure. Completion terminates provisional status; failure places the license on inactive status until requirements are met.

• ✓Provisional brokers must complete 90 hours of postlicensing education within 18 months of initial licensure
• ✓Completing postlicensing education terminates provisional status
• ✓Failure to complete within 18 months places the license on inactive status

After a hearing, the Commission may suspend, revoke, reprimand, or censure a licensee for enumerated violations including willful/negligent misrepresentation or omission of material fact, false promises, undisclosed dual agency, failing to account for others' monies, being unworthy/incompetent, improper/fraudulent/dishonest dealing, practicing law, commingling trust funds, and violating any Commission rule.

• ✓Acting for more than one party without knowledge of all parties (undisclosed dual agency) is grounds for discipline
• ✓Failing within a reasonable time to account for or remit others' monies is grounds for discipline
• ✓Violating any rule adopted by the Commission is grounds for discipline

Brokers must maintain and deposit all money received as a licensee (or as escrow agent/custodian of others' funds relating to real property) into a trust or escrow account and may not commingle it with their own funds. Trust accounts generally may not bear interest unless principals authorize in writing. The account must be a demand deposit account in a federally insured NC depository institution that allows Commission inspection.

• ✓Commingling clients' money with the broker's own funds is prohibited and grounds for discipline
• ✓A trust/escrow account must be a demand deposit account in a federally insured NC institution allowing Commission inspection
• ✓Trust accounts may not bear interest unless principals authorize it in writing and provide for disbursement of the interest

Under G.S. 93A-13, no action between a broker and the broker's client for recovery under an agreement for broker services is valid unless the contract is in writing and signed by the party to be charged (or an authorized person). This makes real estate service agreements enforceable only when reduced to writing.

• ✓A broker cannot recover on a service agreement unless it is in writing
• ✓The written contract must be signed by the party to be charged or their authorized agent

G.S. 93A-1 and 93A-2 do not apply to an owner or lessor performing acts on their own property in the regular course of managing that property. This exemption extends to W-2 officers/employees of exempt corporations, general partners/W-2 employees of partnerships, managers/member-managers/W-2 employees of LLCs, and natural person owners of closely held entities.

• ✓Owners/lessors dealing with their own property are exempt when acts are incident to managing that property
• ✓A closely held business entity is an LLC or corporation with no more than two legal owners, at least one a natural person
• ✓Persons using an exemption must give written disclosure to all parties stating they are unlicensed, the specific exemption claimed, and the owner's legal name and address

A salaried W-2 employee of a licensed broker who manages property for an owner may perform limited leasing tasks without a license: showing units, giving lease information, accepting applications, completing preprinted form leases, and accepting deposits/rent payable to owner or broker. The employee may NOT negotiate deposit amounts, rent, or lease terms.

• ✓The salaried employee may not negotiate security deposits, rent, or lease agreements
• ✓Deposits and rental payments must be made payable only to the owner or the employing broker
• ✓In vacation rentals under G.S. 42A, the employee may quote prices/terms only from a written schedule authorized by the landlord and provided by the broker

The Commission may make reasonable bylaws and rules consistent with the Chapter but may NOT regulate commissions, salaries, or fees charged by licensees. The Commission is entirely self-funded — its expenses may never be paid from the State treasury and total expenses cannot exceed total income.

• ✓The Commission cannot make rules regulating the commissions, salaries, or fees charged by licensees
• ✓Commission expenses may never be paid out of the State treasury
• ✓The Commission may not authorize an unlicensed person to negotiate a real estate transaction for another

Applicants must pass a Commission examination testing competency with regard to the public interest. Pass/fail status is public record but scores are not. Applicants must satisfy the Commission as to moral character and general fitness, and must obtain a criminal record report; such reports are confidential and not public records.

• ✓Whether a person passed or failed is public record; exam scores are NOT public records
• ✓Applicants must obtain and pay for a criminal record report from a designated service
• ✓Criminal, credit, and fitness reports obtained in the application process are confidential

Licenses expire June 30 following issuance and become invalid unless renewed. Renewal may occur up to 45 days prior to expiration; the renewal fee is $45 (max $60 by rule). Reinstatement of an expired/revoked/suspended license costs two times the renewal fee. If not reinstated within six months of expiration, the Commission may treat the person as never previously licensed, subjecting them to original licensure requirements including examination.

• ✓Licenses expire June 30 following issuance and must be renewed to remain valid
• ✓Reinstatement fee equals two times the license renewal fee
• ✓If not reinstated within six months of expiration, the person may be treated as a new applicant subject to exam requirements

An aggrieved person may recover from the fund for direct monetary loss caused by conversion of trust funds by a licensed real estate broker. Recovery is limited to converted trust funds that are otherwise unrecoverable. The claim requires a lawsuit, a final judgment on grounds of conversion, and an unsatisfied execution of that judgment.

• ✓The loss must result from CONVERSION of trust funds by a licensed broker acting in a capacity requiring a license
• ✓The person must sue the broker and file written notice with the Commission within 60 days of commencing the suit (or within 60 days after termination of all proceedings if the claim is under $3,000, excluding attorneys' fees)
• ✓A final judgment for conversion must be obtained and execution on the judgment must have been returned unsatisfied in whole or part
• ✓The application for payment must be filed within one year after termination of all judicial proceedings including appeals

Recovery from the fund is capped per transaction and per licensee. The fund does not pay punitive, consequential, incidental, or special damages, penalties, interest, or court costs. When claims exceed available limits, distribution is pro rata among claimants.

• ✓The fund is not liable for more than $50,000 per transaction regardless of number of persons aggrieved or parcels involved
• ✓Payments cannot exceed $25,000 per licensee in a single calendar year and never more than $75,000 aggregate per licensee
• ✓The fund does not pay consequential, punitive, multiple, incidental, or special damages, civil penalties, interest, or court costs
• ✓If the fund limit is insufficient, valid claims are distributed pro rata among claimants

When the Commission pays from the fund on behalf of a broker, that broker's license is automatically suspended effective on the date of the payment order. The license cannot be reinstated until the fund is fully repaid with interest.

• ✓Any payment from the fund on behalf of a broker automatically suspends the broker's license as of the payment order's effective date
• ✓The broker cannot be reinstated until the fund is repaid in full including interest at the legal rate under G.S. 24-1

No person or entity may operate or offer to operate in North Carolina as a private real estate education provider—whether live or online—unless it first obtains certification from the Commission. Each branch location where courses are conducted is treated as a separate location requiring separate certification.

• ✓Certification must be obtained BEFORE operating as an education provider
• ✓Applies to both live and online instruction
• ✓Each branch location requires its own separate certification

The Commission establishes a continuing education program for real estate brokers. A licensed broker must complete eight hours of instruction each year during any license renewal period in subjects the Commission deems appropriate. A licensee who fails to complete CE may NOT actively engage in the business of a real estate broker. The Commission may also require brokers-in-charge to take a special CE course of up to four hours annually.

• ✓Brokers must complete 8 hours of continuing education per year during any renewal period
• ✓Failure to complete CE bars the licensee from actively engaging in real estate brokerage
• ✓Brokers-in-charge may be required to take up to 4 hours of special CE annually

Unless exempt, it is unlawful to engage in the business of a timeshare salesperson in North Carolina without first obtaining a real estate broker license from the NC Real Estate Commission under Article 1 of Chapter 93A. Exemptions apply where the salesperson meets the requirement in G.S. 93A-2(c)(1) or is a W-2 employee of the registered timeshare developer. A timeshare developer cannot sell or offer to sell a timeshare required to be registered without first obtaining a certificate of registration from the Commission.

• ✓Timeshare salespersons must hold a NC real estate broker license unless exempt (e.g., W-2 employee of the registered developer)
• ✓Developers must obtain a certificate of registration from the NC Real Estate Commission before selling registered timeshares
• ✓A person who intentionally acts as a timeshare developer without registering the project is guilty of a Class I felony

The contract of sale between a developer and purchaser must include specified items: names/addresses of the developer and program, an identification/legal description of the timeshare, a reference directing the purchaser to the public offering statement, the purchase price and all additional charges, current periodic assessment amounts, the independent escrow agent's name/address, the purchaser's notice address, the date signed, a conspicuous resale disclosure statement, and a conspicuous five-day cancellation statement immediately before the signature block.

• ✓The contract must disclose the purchase price and all additional charges plus current assessment amounts
• ✓A conspicuous cancellation-rights statement must appear immediately before the purchaser's signature block
• ✓The contract must name the independent escrow agent and include a conspicuous resale-disclosure statement

Before the purchaser executes a contract of sale, the developer must provide a public offering statement (POS) and obtain a written receipt acknowledgment. The POS must include a cover page with a conspicuous cautionary statement, developer identity, program description, reservation system rules, project/unit details, assessment methods, escrow/financial-assurance disclosures, insurance, and a conspicuous statement that a timeshare should be valued as a vacation experience, not as an appreciating investment. Supporting documents (declaration, bylaws, rules, operating budget) must also be provided.

• ✓Developer must deliver the public offering statement and obtain a signed receipt before contract execution
• ✓The POS must include a conspicuous statement that a timeshare is for vacation/leisure use, not an appreciating investment or resale expectation
• ✓The developer is prohibited from making representations other than those in the contract of sale and public offering statement

A purchaser may cancel the contract of sale until midnight of the fifth day after the LATER of: (1) execution of the contract, or (2) receipt of the public offering statement and all required documents. This right cannot be waived; any waiver is void. No closing may occur until the cancellation period has expired. Notice of cancellation is effective on the date postmarked (if mailed) or when transmitted electronically, so long as actually received by the developer or escrow agent.

• ✓Five-day cancellation right runs from the later of contract execution or receipt of the POS and all required documents
• ✓The right of cancellation cannot be waived; any purported waiver is void
• ✓No closing may occur until the cancellation period has expired

Cancellation is without penalty; the developer or salesperson must refund all monies within 20 days of demand or within five days after receipt of cleared funds, whichever is later. Before the purchaser signs, the developer must establish an escrow account with an independent escrow agent. Funds received prior to closing must be immediately deposited into a trust/escrow account at a federally insured institution and are deemed to belong to the purchaser, not the developer. The Commission may accept alternative financial assurances (surety bond, letter of credit, etc.).

• ✓Refund upon cancellation must be made within 20 days of demand or 5 days after cleared funds, whichever is later
• ✓Pre-closing funds must be immediately deposited in escrow and are deemed to belong to the purchaser
• ✓The Commission may accept alternative financial assurances (e.g., surety bond, cash deposit, irrevocable letter of credit) in lieu of escrow

A broker price opinion (BPO) or comparative market analysis (CMA) is an estimate prepared by a licensed real estate broker detailing the probable selling or leasing price of a particular parcel of or interest in property. It provides varying levels of detail about the property's condition, market, and neighborhood, plus information on comparable properties. An automated valuation model (AVM) is expressly excluded from the definition.

• ✓A BPO/CMA estimates probable SELLING or LEASING price — not market value or worth
• ✓An automated valuation model (AVM) is NOT a BPO or CMA
• ✓Must be prepared by a licensed real estate broker

A person licensed under Chapter 93A, OTHER THAN a provisional broker, may prepare a BPO or CMA and charge/collect a fee only if the license is active and in good standing and the BPO/CMA meets the required contents of subsection (c). The Article's requirements do NOT apply when a licensee performs a BPO/CMA for no fee or consideration.

• ✓A provisional broker may NOT prepare a BPO/CMA for a fee
• ✓License must be active and in good standing to charge a fee
• ✓Article requirements do not apply to BPOs/CMAs performed for no fee or consideration

A BPO/CMA must be in writing and include: the intended purpose; a brief description of the subject property and interest; the basis of reasoning (market data or capitalization computation); assumptions/limiting conditions; disclosure of any existing or contemplated interest of the broker (including possible representation of a party); the effective date; the broker's name, signature, and license number; the brokerage firm name; the signature date; a copy of the assignment request; and the required disclaimer.

• ✓Must be in writing and include the broker's name, signature, and license number
• ✓Must disclose any existing or contemplated interest of the broker
• ✓Must include the effective date, signature date, and a copy of the assignment request

Every BPO/CMA must contain a disclaimer stating it is NOT an appraisal of market value, may not be used in lieu of an appraisal, that a licensed/certified appraiser should be obtained if an appraisal is desired, and that it may not be used by any party as the primary basis to determine value for a mortgage loan origination (including first/second mortgages, refinances, or equity lines of credit).

• ✓The disclaimer must state the opinion is NOT an appraisal and may not be used in lieu of one
• ✓The disclaimer must state it may not be the primary basis to determine value for a mortgage loan origination

A licensee may not knowingly prepare a BPO/CMA in lieu of an appraisal when an appraisal is required by federal or state law. A BPO/CMA that estimates the VALUE or worth of property (rather than sales/leasing price) is deemed an appraisal and may only be prepared by a duly licensed or certified appraiser under Appraisal Board rules. A BPO/CMA may never be referred to as a valuation or appraisal, and may not report a predetermined result. The NC Real Estate Commission may adopt rules not inconsistent with this Article.

• ✓A BPO/CMA may not be prepared in lieu of an appraisal when an appraisal is legally required
• ✓Estimating value/worth (vs. price) is deemed an appraisal — only appraisers may do it
• ✓A BPO/CMA may never be called a valuation or appraisal, and may not report a predetermined result

A real estate service agreement is unfair, void, and in violation of the Article if it is to be in effect for MORE THAN ONE YEAR and, expressly or implicitly, aims to: (1) run with the land or bind future owners; (2) allow assignment of the right to provide services without notice or consent of the owner/buyer; or (3) create a lien, encumbrance, or other real property security interest. A service provider has NO right to a refund of consideration paid to the owner/buyer under an unfair agreement.

• ✓Agreement must exceed one year AND do one of the three prohibited acts to be unfair/void
• ✓Running with the land, assignment without consent, or creating a lien/encumbrance make it unfair
• ✓A service provider has no right to refund of consideration paid under an unfair agreement

• A. The broker automatically has authority to sign leases because a property management agreement implies full leasing authority.
• B. The broker may sign leases only if the NCREC has issued a specific leasing endorsement to the broker's license.
• C. The broker has no authority to sign leases on the owner's behalf unless the property management agreement expressly grants that authority. ✓ Answer
• D. The broker may sign leases of up to one year without express authority but must obtain written authorization for longer terms.

• A. 7 days written notice before the end of any yearly period.
• B. 30 days written notice before the end of any yearly period.
• C. 60 days written notice before the end of any yearly period.
• D. One month written notice before the end of any yearly period. ✓ Answer

• A. The tenancy converts to a fixed-term one-year lease by operation of law.
• B. The landlord's acceptance of rent constitutes a waiver of the termination notice, and a new month-to-month tenancy is created. ✓ Answer
• C. The tenant is treated as a trespasser and the landlord may immediately seek summary ejectment without further notice.
• D. The landlord must file a declaratory judgment action before accepting any further rent payments.

• A. The vacation tenant is solely responsible for remitting occupancy taxes directly to the taxing authority.
• B. The property owner is always solely responsible, regardless of whether a broker manages the property.
• C. The real estate broker or property manager who collects the advance rent is responsible for remitting occupancy taxes to the taxing authority. ✓ Answer
• D. The North Carolina Real Estate Commission collects and distributes occupancy taxes on behalf of brokers.

• A. Submitting a monthly reconciliation to the NCREC that the BIC knows reflects manipulated ledger balances designed to conceal a shortage. ✓ Answer
• B. Failing to perform the monthly reconciliation on the exact last day of the month instead of within a few days after the month ends.
• C. Maintaining broker-owned funds of up to $100 in the trust account to cover bank service charges.
• D. Using a digital accounting system rather than paper ledger cards to maintain trust account records.

• A. The same as in any disputed earnest money situation — the broker must hold the funds in trust and may not disburse without a written agreement from both parties or a court order, regardless of the agency relationship. ✓ Answer
• B. The broker may release the funds to the seller because the firm's primary fiduciary duty in a dual agency runs to the seller.
• C. The broker must immediately refund the earnest money to the buyer because dual agency creates a conflict that favors the buyer.
• D. The broker must withdraw from the dispute and transfer the trust account to a neutral third-party escrow company.