NC Post Licensing Questions WITH Correct Answers.pdf.docx

NC Post Licensing - 303 Exam Questions & Answers
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NC Post Licensing - 303 Exam: Law, Rules, and Legal Concepts Practice Test


Section 1: Licensing Status, Compensation, and Firm Requirements (Questions 1-
20)
*1. A licensee may NOT earn compensation when their license is: *
 A) Active
 B) Inactive or Expired
 C) On provisional status
 D) Affiliated with a broker-in-charge
Answer: B
Rationale: A license must be current and active to earn compensation. If a license
is inactive or expired, the licensee cannot legally receive payment for brokerage
services .


*2. A licensee CAN receive compensation that was earned: *
 A) Only if the license has been inactive for less than 6 months

,  B) When the license was current and active, even if it later becomes inactive
or expired
 C) Only if the license is still active at the time of payment
 D) Never after the license status changes
Answer: B
Rationale: A licensee can receive compensation for services rendered while their
license was current and active, even if the license becomes inactive or expired
after the work was performed .


*3. A Broker-in-Charge (BIC) may NOT pay a licensee's entity unless: *
 A) The entity has a firm license
 B) The licensee has been active for at least 2 years
 C) The entity is a sole proprietorship only
 D) The payment is for a referral fee
Answer: A
Rationale: A BIC may only pay a licensee's entity if that entity has obtained a firm
license from the NCREC .


4. A licensee can share a commission with parties under which conditions?
(Select all that apply)
 A) Must be in writing as part of the agreement
 B) Must be subject to lender approval in case of loans
 C) Must be disclosed on the Closing Disclosure
 D) Is considered a gift
Answer: A, B, C, D

,Rationale: Commission sharing requires written agreement, lender approval for
loans, disclosure on the Closing Disclosure, and is considered a gift. Sharing is only
permitted with the principal or client, not with others .


*5. Compensation ALWAYS flows through the firm: *
 A) Directly from the buyer to the licensee
 B) From the BIC, with NO payment directly by the firm
 C) Directly from the seller to the licensee
 D) Through an independent escrow account
Answer: B
Rationale: All compensation must flow from the BIC to the licensee. Brokers may
NOT pay brokers directly except in the case of sole proprietorships .


*6. When paying non-affiliated brokers or firms, documentation in the broker's file
must include: *
 A) Written documentation regarding the fee
 B) Proof of licensure
 C) Copy of a W9 for Brokerage Insurance or a 1099
 D) All of the above
Answer: D
Rationale: The broker's file must contain written documentation of the fee, proof
of the referral source's licensure, and a copy of a W9 or 1099 for tax reporting
purposes .


7. When receiving bonuses or incentives, what is REQUIRED?

,  A) Disclosure to the principal
 B) Consent by the principal
 C) Both disclosure AND consent by the principal
 D) Notification to the NCREC only
Answer: C
Rationale: All bonuses and incentives received by a broker require both disclosure
to the principal and the principal's consent .


8. RESPA prohibits which of the following?
 A) Affiliated business arrangements
 B) Kickbacks to settlement service providers
 C) Disclosure of relationships
 D) Use of a title company of choice
Answer: B
Rationale: RESPA prohibits kickbacks and referral fees between settlement service
providers, including banks, appraisal companies, title officers, and attorneys .


*9. RESPA applies to: *
 A) Vacant land transactions
 B) All real estate transactions
 C) 1-4 unit residential properties with a federally related loan
 D) Commercial properties only
Answer: C