An offer may be withdrawn at any time prior to acceptance and communication of that acceptance. Even if the offer specifies a time frame for response, it does not prevent the buyer from withdrawing it before acceptance. Since the seller had not accepted the offer, the buyer has the legal right to withdraw and receive their earnest money back. Therefore, the correct answer is C.

According to North Carolina Real Estate Commission policy, as long as the broker was actively licensed at the time the transaction was originated (i.e., while performing licensed activity), the broker is legally entitled to compensation—even if their license becomes inactive before closing. The commission is paid through the firm. Therefore, the correct answer is A.

In North Carolina, a deed must be in writing, signed by the grantor, and delivered to the grantee to be valid. However, acknowledgment (notarization) is not required for validity—but it is required for the deed to be recorded at the county Register of Deeds. Recording provides constructive notice of ownership. Therefore, the correct answer is C.

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External obsolescence refers to a loss in property value caused by external factors beyond the property owner’s control. These could include undesirable neighboring properties, economic shifts, or environmental conditions. In this case, the unpleasant odor from the nearby chicken farm is an environmental factor reducing buyer interest. Therefore, the correct answer is B.

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According to NCREC advertising rules, any advertisement by a broker must clearly identify the firm with which the broker is affiliated. Failing to do so results in what is considered a “blind ad,” which is prohibited. Josh’s ad does not include his brokerage firm’s name—Atlantic Realty—so it is a blind ad. Therefore, the correct answer is D.

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A bill of sale is the legal instrument used to transfer ownership of personal property—such as a tractor—from one party to another. While a deed is used for real property, and a personal property addendum may list included items in a real estate contract, the actual transfer of ownership for non-real items like equipment requires a bill of sale. Therefore, the correct answer is D.

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The cost approach to value involves three primary steps: (1) estimate the replacement or reproduction cost of the improvements, (2) subtract accrued depreciation, and (3) add the market value of the land. In this case, the appraiser has already estimated the cost to rebuild the structure. The next steps are to subtract any depreciation from the improvements and then add the land value to derive the final opinion of value. Labor costs are already factored into the reconstruction estimate and are not added again.

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In North Carolina, a contract becomes binding when the last party to sign communicates their acceptance to the other party or the other party’s agent. Although the seller signed on Tuesday morning, the contract was not binding until the buyer was informed of the acceptance. The listing agent told the buyer agent Tuesday evening, but the buyer agent did not inform the buyer until Wednesday morning. Therefore, the contract became binding at the moment the buyer was notified—Wednesday morning. Correct answer: C.

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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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Any change to the terms of an offer—regardless of how small—constitutes a rejection of the original offer and the creation of a counteroffer. In this case, the seller changed the earnest money amount, which is a material term of the offer. Therefore, the original offer is void and the seller has made a counteroffer that the buyer can now accept or reject. Correct answer: D.

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