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Knowledge Development Topic 4: Brokerage
Contracts and Procedures.
Q1. Under North Carolina law, a listing agreement must be in writing and signed by:
A) The broker only
B) The seller only
C) Both the seller and the broker (or the broker's firm)
D) The buyer and seller
✔ Correct Answer: C
The Statute of Frauds requires listing agreements to be in writing and signed by the party to be
charged (the seller) and the broker.
Q2. A listing agreement with no definite expiration date is:
A) Valid indefinitely
B) Void as against public policy
C) Valid for 6 months by default
D) Valid for 1 year by default
✔ Correct Answer: B
A listing agreement must have a definite termination date. An open-ended listing is
unreasonable and unenforceable.
Q3. The maximum reasonable term for a residential listing agreement is generally:
A) 1 month
B) 3 months
C) 6 to 12 months
D) 5 years
,✔ Correct Answer: C
While no statutory maximum exists, courts generally consider 6 to 12 months reasonable for
residential listings.
Q4. A listing agreement contains an automatic renewal clause. Under NC law, such a clause:
A) Is prohibited
B) Is permitted if the seller is given notice and the right to cancel before renewal
C) Is enforced automatically without notice
D) Is void for all real estate contracts
✔ Correct Answer: B
Automatic renewal clauses are allowed but must provide the seller with notice and an
opportunity to cancel before the renewal period begins.
Q5. Which of the following is an essential term of a valid listing agreement?
A) The seller's social security number
B) The broker's license number
C) The property address or legal description
D) The buyer's name
✔ Correct Answer: C
Essential terms include property identification, listing price, commission, term, and signatures.
Q6. A seller signs a listing agreement with Broker A. The seller then signs a listing agreement
with Broker B for the same property without terminating Broker A. This is:
A) Permitted; the seller can have multiple listings
B) An open listing (permitted) but the seller may owe commission to both brokers if they both
procure buyers
C) Illegal and may result in double commission liability
D) Permitted only if the property is commercial
✔ Correct Answer: B
An open listing allows multiple brokers. The seller pays only the broker who procures the buyer.
However, exclusive listings prohibit multiple listings.
, Q7. An exclusive right to sell listing agreement means:
A) The seller can sell the property themselves without paying a commission
B) The broker earns a commission regardless of who sells the property (including the seller)
C) The broker must sell the property within 30 days
D) The seller cannot sell the property
✔ Correct Answer: B
In an exclusive right to sell listing, the broker earns a commission if anyone (including the seller)
sells the property during the listing term.
Q8. An exclusive agency listing agreement means:
A) The broker earns a commission regardless of who sells
B) The broker earns a commission unless the seller finds the buyer themselves (without any
broker's help)
C) The broker is the only agent, but the seller can sell without paying a commission
D) The seller cannot sell the property
✔ Correct Answer: B
In exclusive agency, the broker has exclusive rights, but the seller reserves the right to sell the
property themselves without paying a commission.
Q9. An open listing agreement means:
A) The listing is open to the public
B) The seller may list with multiple brokers and pays only the broker who procures the buyer
C) The broker must share the commission with all other brokers
D) The seller cannot sell the property themselves
✔ Correct Answer: B
An open listing allows multiple brokers. The seller pays only the broker who is the procuring
cause of the sale.
Q10. In an exclusive right to sell listing, the seller finds a buyer on their own. The broker:
A) Is not entitled to a commission because the seller found the buyer
B) Is entitled to a commission because the broker has the exclusive right to sell
C) Is entitled to a reduced commission
D) Must split the commission with the seller
Vault: High-Quality Exam Practice
Questions with Expertly Written, Accurate &
Detailed Answers for Comprehensive
Knowledge Development Topic 4: Brokerage
Contracts and Procedures.
Q1. Under North Carolina law, a listing agreement must be in writing and signed by:
A) The broker only
B) The seller only
C) Both the seller and the broker (or the broker's firm)
D) The buyer and seller
✔ Correct Answer: C
The Statute of Frauds requires listing agreements to be in writing and signed by the party to be
charged (the seller) and the broker.
Q2. A listing agreement with no definite expiration date is:
A) Valid indefinitely
B) Void as against public policy
C) Valid for 6 months by default
D) Valid for 1 year by default
✔ Correct Answer: B
A listing agreement must have a definite termination date. An open-ended listing is
unreasonable and unenforceable.
Q3. The maximum reasonable term for a residential listing agreement is generally:
A) 1 month
B) 3 months
C) 6 to 12 months
D) 5 years
,✔ Correct Answer: C
While no statutory maximum exists, courts generally consider 6 to 12 months reasonable for
residential listings.
Q4. A listing agreement contains an automatic renewal clause. Under NC law, such a clause:
A) Is prohibited
B) Is permitted if the seller is given notice and the right to cancel before renewal
C) Is enforced automatically without notice
D) Is void for all real estate contracts
✔ Correct Answer: B
Automatic renewal clauses are allowed but must provide the seller with notice and an
opportunity to cancel before the renewal period begins.
Q5. Which of the following is an essential term of a valid listing agreement?
A) The seller's social security number
B) The broker's license number
C) The property address or legal description
D) The buyer's name
✔ Correct Answer: C
Essential terms include property identification, listing price, commission, term, and signatures.
Q6. A seller signs a listing agreement with Broker A. The seller then signs a listing agreement
with Broker B for the same property without terminating Broker A. This is:
A) Permitted; the seller can have multiple listings
B) An open listing (permitted) but the seller may owe commission to both brokers if they both
procure buyers
C) Illegal and may result in double commission liability
D) Permitted only if the property is commercial
✔ Correct Answer: B
An open listing allows multiple brokers. The seller pays only the broker who procures the buyer.
However, exclusive listings prohibit multiple listings.
, Q7. An exclusive right to sell listing agreement means:
A) The seller can sell the property themselves without paying a commission
B) The broker earns a commission regardless of who sells the property (including the seller)
C) The broker must sell the property within 30 days
D) The seller cannot sell the property
✔ Correct Answer: B
In an exclusive right to sell listing, the broker earns a commission if anyone (including the seller)
sells the property during the listing term.
Q8. An exclusive agency listing agreement means:
A) The broker earns a commission regardless of who sells
B) The broker earns a commission unless the seller finds the buyer themselves (without any
broker's help)
C) The broker is the only agent, but the seller can sell without paying a commission
D) The seller cannot sell the property
✔ Correct Answer: B
In exclusive agency, the broker has exclusive rights, but the seller reserves the right to sell the
property themselves without paying a commission.
Q9. An open listing agreement means:
A) The listing is open to the public
B) The seller may list with multiple brokers and pays only the broker who procures the buyer
C) The broker must share the commission with all other brokers
D) The seller cannot sell the property themselves
✔ Correct Answer: B
An open listing allows multiple brokers. The seller pays only the broker who is the procuring
cause of the sale.
Q10. In an exclusive right to sell listing, the seller finds a buyer on their own. The broker:
A) Is not entitled to a commission because the seller found the buyer
B) Is entitled to a commission because the broker has the exclusive right to sell
C) Is entitled to a reduced commission
D) Must split the commission with the seller
