The Functioning of the North Carolina Real Estate Commission

A career in real estate in the United States is like a rollercoaster ride - filled with exciting and challenging opportunities. 

Home to many of the world’s most popular and preferred real estate markets, the industry attracts thousands of new and aspiring professionals every year. 

Being a salesperson, agent or broker is a good opportunity to earn a stable income and make commissions while helping people buy and sell real estate. 

Currently, the real estate market in North Carolina is on a high and you can earn handsomely by working in the top markets like Charlotte, Raleigh, Durham, Fortville, and Wilmington. 

However, you must learn the rules, regulations, and laws governing the industry and know how to get a North Carolina real estate license.  

How do you get a real estate license in North Carolina? The important steps are to complete the 75-hour NC real estate licensing course and pass the licensing exam in North Carolina. The coursework can be completed online from any state-approved course. 

The rules of the licensing exam and the real estate industry in general in the state are established by the North Carolina Real Estate Commission (NCREC).  

We will walk you through everything you need to know about NCREC in this article so you can make the right professional decisions. 

An Overview of the North Carolina Real Estate Commission

Definition and Purpose

The North Carolina Real Estate Commission (NCREC) is responsible for every aspect of the functioning of the real estate industry in the state. This includes enforcing the relevant rules and regulations for obtaining a license and the conduct of real estate professionals.    

All real estate professionals in North Carolina are required to follow the state and federal rules and obtain their licensure after approval from the NCREC. 

In summary, NCREC has been established to protect the interests and safeguard the investments of NC consumers in real estate transactions. 

Mission and Responsibilities

• Awarding real estate licenses to eligible aspiring agents in the state.  
• Establishing and enforcing North Carolina real estate laws, rules, and regulations
• Safeguarding the best interests of consumers in real estate transactions
• Promoting best practices, ethics, and fair trade guidelines for real estate professionals
• Setting the standards for maintaining trustworthy and transparent dealings
• Establishing the education and training guidelines for aspiring and existing professionals

In summary, the NCREC performs administrative, operational, and judicial functions about various functions and aspects of the state’s real estate industry. 

NCREC is the state’s highest authority on managing and resolving real estate conflicts, cases, and disputes.

Real Estate Laws Established by the NCREC

Overview of Real Estate Laws in North Carolina

All real estate professionals should be aware of North Carolina real estate laws. 

Especially the ones that are concerned with aspects like real estate regulation, homestead protection, tenant-landlord relations, and adverse possession. 

Real estate laws ensure that any disputes related to property such as easements, non-payment, false claims, boundary issues, and encroachments are resolved. 

Furthermore, the North Carolina Real Estate Commission (NCREC) has also established laws for rental agreements concerning every residential and commercial property in the state. 

These laws are concerned with various aspects of the tenant-landlord relationship, such as - discrimination and bias, security deposits, lease agreements, and financing. 

These laws outline the general rules and regulations concerning tenant and landlord rights and conflict resolution. 

Next in the list of real estate laws in North Carolina comes the Civil Statute of Limitations which is concerned with the matters of financial fraud, personal injury, defamation, false imprisonment, and other professional malpractices such as trespassing. 

Any disputes related to property are resolved using these laws which are used for carrying out civil actions and legal proceedings.

Relationship with the North Carolina General Statutes

General Statutes is the single source of truth that binds all the citizens, residents, personnel, professionals, and property within the state.

All the people and property laws governing and concerning real estate are termed NC real estate laws and form a part of Chapter 93A of the North Carolina General Statutes.  

Chapter 93A outlines the real estate license laws, rules, and guidelines in their entirety. It is mandatory for every active real estate professional operating in the state. 

The Working of the NCREC 

If you are an aspiring real estate agent or broker, you might have thought about a common question - how does real estate commission work and how do agents get paid?

Real estate agents and brokers work on a commission basis i.e. they earn a certain percentage after a transaction is completed or the deal is closed. 

A real estate commission is decided before the deal is closed and is agreed upon by the seller, buyer, and the agent involved in the transaction. 

Real estate agents and brokers can earn commissions from both sellers as well as buyers for their services. 

This means if you are an aspiring real estate broker, you too will earn your commission on every deal you close. 

The commission amount is typically 5-6 percent of the sale price and is automatically deducted from the selling price when the transaction is legally completed. 

This means if the average median selling price for a house is around $318K, you can earn around $17K in commission. 

Similarly, if the average selling price of a home in Durham is around $425K, you can earn around $23K in commission. 

Commissions in real estate are calculated based on how many agents are involved in the transaction and whether they are representing the buyer or the seller. 

There are two components to commissions payable. 

First is the commission earned on the selling/listing price of the property and the next is that earned from the seller. 

Typically, the commission is paid from the seller’s pocket and the seller may choose to split the commission amount with the buyer in the later stages of a deal.  

Many aspiring real estate agents presume that they get to take the entire commission earned on closing a deal. 

However, this is not always the case, as agents often have to pay a specific share of their commission earned to the broker or brokerage firm they are employed with. 

Role of Real Estate Commission in North Carolina

The main function of the NCREC is to issue, renew, and regulate licenses for: 

• Brokers
• Sales associate
• Instructors
• Appraisers
• Real estate companies
• Appraisal management companies

The NCREC is responsible for ensuring the license renewal guidelines and updates are being sent to active real estate agents.

It is committed to providing a safe, inclusive, and diverse environment for real estate professionals, companies, consumers, and commission members. 

Calculation and Payment of Real Estate Commission

As mentioned above, a commission earned on closing a real estate deal is divided between the agent and the broker or brokerage firm. 

Generally, the industry standard for the commission split is a 70/30 agreement between the agent and the employer broker. 

To understand this, let us take an example - presuming the total listing price of a North Carolina home is $300,000. 

In this case, if you are working as an agent with a brokerage firm or a supervising broker, then your commission on the listing price will be cut from the total commission which is calculated at around 5.5% of the price.