NORTH CAROLINA REAL ESTATE
STATE PORTION ACTUAL
EXAMPREP 2026 SOLVED
QUESTIONS WITH FULL SOLUTION
◉ A seller named Joan gave a buyer named Bob an option for thirty
days to purchase her property for a consideration of $750. There is no
anti-assignment clause in the contract. Which of the following
statements is NOT true?
a. Joan can force Bob to purchase the property.
b. Bob is the optionee.
c. Bob can assign the option to a third party.
d. Joan is the optionor.. Answer: a. Joan can force Bob to purchase the
property.
Joan is the optionor, and Bob is the optionee. And Bob can assign an
option if he wants. Joan cannot force to purchase the property.
Remember, a seller cannot force a buyer to buy the property with an
option to purchase. It's worth noting that they can in a lease to purchase,
but in the question, it specifies it's an option contract.
◉ Tenants by the Entirety and Community Property both generally
pertain to:
a. cooperations
b. small businesses
c. spouses
,d. business owners. Answer: c. spouses
Tenants by the entirety Is a special form of co-ownership used in some
states that allow a husband or wife to inherit the other spouse's
ownership interest upon death. Community Property Laws are based on
the idea that husband and wife are equal, separate, partners rather than
one whole one like tenants by the entirety. Both terms pertain to
spouses.
◉ In the appraisal of a building constructed in the 1930s, the cost
approach would be the least accurate method because of difficulties in:
a. estimating depreciation.
b. estimating depreciation, estimating changes in the cost of
construction, and estimating changes in prices of building materials.
c. estimating changes in prices of building materials.
d. estimating changes in the cost of construction.. Answer: b. estimating
depreciation, estimating changes in the cost of construction, and
estimating changes in prices of building materials.
The cost approach is considered to be reliable when used on newer
buildings, and not as reliable with older. The cost approach becomes
nearly ineffective after 25 years or so because of the difficulty in:
estimating depreciation, estimating changes in the cost of construction,
and estimating changes in prices of building materials.
◉ Which business structure traditionally features a board of directors?
a. Sole Proprietorship
,b. Partnership
c. Corporation
d. Cooperative. Answer: c. Corporation
Corporations may be formed for profit or nonprofit purposes. A
corporation is managed and operated by a board of directors. A
corporation has certain rights, privileges, and liabilities beyond those of
partnerships. Doing business as a corporation has its advantages and
disadvantages. Because a corporation is a legal entity, it can purchase
property. One large disadvantage especially when it comes to
corporations is when owning income producing property they
experience double taxation. Since its a legal entity they must pay taxes
on profits. Dividends from the remaining corporate profits are then
distributed to the shareholders and then taxed again as part of the
shareholder's income.
◉ In a typical real estate market, if the demand for commercial office
space declines and the supply of office space also declines at the same
ratio, market rent per square foot should:
a. Remain the same
b. Reach thirty
c. Decrease
d. Increase. Answer: a. Remain the same
If demand increases more than supply does, we get an increase in price.
If supply rises more than demand, we get a decrease in price. If they rise
or decrease the same amount, the price remains the same.
, ◉ Which of the following real estate contracts is a service contract?
a. An option contract
b. A mortgage
c. A purchase agreement
d. A listing agreement. Answer: d. A listing agreement
Service Contracts are agreements between a customer or client and a
person or company who will be providing services. A listing agreement
is a service contract between the seller and the broker, or brokerage
company.
◉ The fact there is a limited amount of land on earth represents what
essential element of value?
a. Demand
b. Transferability
c. Utility
d. Scarcity. Answer: d. Scarcity
Remember DUST and your essential elements of value.
- Demand: This means the desire to buy and an ability to pay.
- Utility: The item satisfies a human need or desire; such as shelter,
income, or recreation.
- Scarcity: Limited in supply, as supply diminishes, value increases.
- Transferability: Able to transfer from one owner to another.
STATE PORTION ACTUAL
EXAMPREP 2026 SOLVED
QUESTIONS WITH FULL SOLUTION
◉ A seller named Joan gave a buyer named Bob an option for thirty
days to purchase her property for a consideration of $750. There is no
anti-assignment clause in the contract. Which of the following
statements is NOT true?
a. Joan can force Bob to purchase the property.
b. Bob is the optionee.
c. Bob can assign the option to a third party.
d. Joan is the optionor.. Answer: a. Joan can force Bob to purchase the
property.
Joan is the optionor, and Bob is the optionee. And Bob can assign an
option if he wants. Joan cannot force to purchase the property.
Remember, a seller cannot force a buyer to buy the property with an
option to purchase. It's worth noting that they can in a lease to purchase,
but in the question, it specifies it's an option contract.
◉ Tenants by the Entirety and Community Property both generally
pertain to:
a. cooperations
b. small businesses
c. spouses
,d. business owners. Answer: c. spouses
Tenants by the entirety Is a special form of co-ownership used in some
states that allow a husband or wife to inherit the other spouse's
ownership interest upon death. Community Property Laws are based on
the idea that husband and wife are equal, separate, partners rather than
one whole one like tenants by the entirety. Both terms pertain to
spouses.
◉ In the appraisal of a building constructed in the 1930s, the cost
approach would be the least accurate method because of difficulties in:
a. estimating depreciation.
b. estimating depreciation, estimating changes in the cost of
construction, and estimating changes in prices of building materials.
c. estimating changes in prices of building materials.
d. estimating changes in the cost of construction.. Answer: b. estimating
depreciation, estimating changes in the cost of construction, and
estimating changes in prices of building materials.
The cost approach is considered to be reliable when used on newer
buildings, and not as reliable with older. The cost approach becomes
nearly ineffective after 25 years or so because of the difficulty in:
estimating depreciation, estimating changes in the cost of construction,
and estimating changes in prices of building materials.
◉ Which business structure traditionally features a board of directors?
a. Sole Proprietorship
,b. Partnership
c. Corporation
d. Cooperative. Answer: c. Corporation
Corporations may be formed for profit or nonprofit purposes. A
corporation is managed and operated by a board of directors. A
corporation has certain rights, privileges, and liabilities beyond those of
partnerships. Doing business as a corporation has its advantages and
disadvantages. Because a corporation is a legal entity, it can purchase
property. One large disadvantage especially when it comes to
corporations is when owning income producing property they
experience double taxation. Since its a legal entity they must pay taxes
on profits. Dividends from the remaining corporate profits are then
distributed to the shareholders and then taxed again as part of the
shareholder's income.
◉ In a typical real estate market, if the demand for commercial office
space declines and the supply of office space also declines at the same
ratio, market rent per square foot should:
a. Remain the same
b. Reach thirty
c. Decrease
d. Increase. Answer: a. Remain the same
If demand increases more than supply does, we get an increase in price.
If supply rises more than demand, we get a decrease in price. If they rise
or decrease the same amount, the price remains the same.
, ◉ Which of the following real estate contracts is a service contract?
a. An option contract
b. A mortgage
c. A purchase agreement
d. A listing agreement. Answer: d. A listing agreement
Service Contracts are agreements between a customer or client and a
person or company who will be providing services. A listing agreement
is a service contract between the seller and the broker, or brokerage
company.
◉ The fact there is a limited amount of land on earth represents what
essential element of value?
a. Demand
b. Transferability
c. Utility
d. Scarcity. Answer: d. Scarcity
Remember DUST and your essential elements of value.
- Demand: This means the desire to buy and an ability to pay.
- Utility: The item satisfies a human need or desire; such as shelter,
income, or recreation.
- Scarcity: Limited in supply, as supply diminishes, value increases.
- Transferability: Able to transfer from one owner to another.
