North Carolina Brokers Owe a Broad Material Fact Duty

North Carolina is widely regarded as one of the hardest state real estate exams in the country, and generic prep tools are a primary reason candidates fail it.

The PSI exam covers 80 national and 40 state specific questions with a 75% passing threshold, one of the more demanding state real estate exams in the Southeast. Material fact disclosure duties, the Working With Agents brochure, and closing statement math are the areas where candidates who prepared on national materials consistently fall short.

Material Fact Disclosure

North Carolina imposes a broader material fact duty than most states teach. The broker's obligation extends to facts the broker reasonably should know, not just facts already disclosed by the seller. Let me be direct about this: the seller's silence doesn't protect you. If you knew, or should have known, disclosure is your obligation regardless of what your client wants to do.

North Carolina requires brokers to disclose any material fact they know or reasonably should know, even if the seller refuses to disclose it, students fail because they assume the seller's silence protects the agent.

The NCREC exam will test scenarios where the seller refuses to disclose a known defect. The correct answer is always that the broker still owes disclosure, regardless of what the seller wants.

Working With Agents Brochure

North Carolina's Working With Agents brochure has a delivery trigger that's more precisely defined than what most national courses describe, and getting the timing wrong costs candidates points on an otherwise straightforward topic. Here's the thing most people miss: "first substantial contact" isn't the same as "first contact." The brochure fires when the conversation shifts to personal or financial information, not the moment you say hello.

Agency disclosure forms differ across the Carolinas and Tennessee. South Carolina requires its own agency relationships disclosure at first meaningful contact, and Tennessee mandates a separate form under its own agency law. North Carolina's Working With Agents brochure has a specific delivery timing and content requirement that neither neighbor replicates.

The brochure must be provided at "first substantial contact" when conversation shifts to personal or confidential information, the exam tests the exception that buyer's agents must disclose agency at first contact with sellers.

Know the phrase "first substantial contact," understand that it's triggered when conversation shifts to personal or financial information, and understand the specific exception for buyer's agents meeting sellers. All three are tested directly.

Closing Statement Math

North Carolina uses the 360-day banker's year for proration calculations, and with up to 8 math questions on the state portion, candidates who practiced with 365 days consistently lose those points. Those are free points, if you used the right calendar. Do yourself a favor and practice with 360 days so you're not doing the math twice on test day.

North Carolina tests up to 8 math questions using the 360-day calendar method for prorations, students who practiced with a 365-day method consistently lose easy points.

Practice every proration type, taxes, rent, HOA dues, using the 360-day method, and know which items debit the seller versus credit the buyer at closing. The math questions on the NCREC exam are straightforward if you have the right calendar, and wrong every time if you don't.