QUIZ legal
BY JOHN WAIT, GENERAL COUNSEL
These questions are based on weekly Q&As published in the REALTOR® Rundown between September 2025 and February 2026.
1. Does the husband have to sign listing paperwork if the wife is sole owner of the property and the couple is getting divorced?
Answer
Yes. Unless you have a pre-nuptial agreement, court order, quitclaim deed, free-trader agreement or a power of attorney clearly showing that the husband has conveyed his marital life estate. Agents should be especially careful with pre-nups and court orders, because unlike the other items in this list, they are often insufficient on their own to convey a non-owner spouse’s marital life estate to the other spouse.
The marital life estate comes from N.C.G.S. § 29-30. As a simple example of how this statute works, let’s pretend a husband owned property before the marriage and later sells it during the marriage without his wife joining in the transaction. If the husband then dies, the wife can elect to take a life estate in that property.
Even though the property was owned by the husband before marriage, and even though the husband did not own the property at death, the wife never conveyed her right to a marital life estate which she obtained when she became married.
A marital life estate under section 29-30 is not an ownership interest in property, but it is an important right that can create an encumbrance on title, even while a couple is in the process of getting a divorce.
It is therefore very important to make sure that a nonowner spouse joins in the transaction unless proper documentation shows that the marital life estate has been properly, and completely, conveyed to the other spouse.
Q&A Release Date: 9/4/2025
2. Does my firm’s name need to appear in my posts when I advertise on social media?
Answer
Yes. Social media posts are a form of advertising. As such, they must comply with the North Carolina Real Commission’s advertising rule, which is 21 NCAC 58A .0105. Paragraph (a)(1) of that rule states all advertisements for brokerage services, or the sale, purchase, exchange, rent or lease of real estate for another, must include the name of the firm or sole proprietorship with which the broker is affiliated.
The Commission has made clear that it does not have a “one-click rule.” Therefore, brokers that use social media to advertise property must include the name of their firm somewhere in the post itself so a consumer can identify the name of the firm without clicking a link.
Q&A Release Date: 9/11/2025
3. Do I have to disclose things that impact the area around a listed home?
Answer
Yes. If the thing in issue is a material fact. A material fact is any fact that could affect a reasonable person’s decision to buy, sell or lease property. A material fact must be disclosed by a broker to the parties in the transaction and any interested third parties regardless of the broker’s agency role within the transaction.
Examples include nearby construction, substantial encroachments from neighboring properties, boundary issues and property access limitations. When in doubt, disclosure is almost always the best course.
Q&A Release Date: 9/18/2025
4. Can a seller accept a buyer’s offer after a listing agent makes a counteroffer in a text message?
Answer
No. Under North Carolina law, once an offer has been rejected or countered, it can no longer be accepted.
The same is true of counteroffers, which can also be rejected or countered themselves. A rejected or countered offer must be submitted again to renew the ability to accept it.
Real estate brokers have authority to communicate offers, counteroffers and even rejections of offers. Under the law of agency, these communications by agents are ordinarily binding on their clients, because the clients are directing their agents to communicate their desires and intentions.
Note, however, a broker’s authority to communicate offers, counteroffers, and rejections is not the same when it comes to acceptance of an offer. In most cases, a real estate broker does not have the authority necessary to bind their client to a real estate contract.
So, when a listing agent counters, even by text, the original offer is terminated.
Q&A Release Date: 10/30/2025
5. Does the seller’s signature on Form 350-T agreeing to release the Earnest Money Deposit mean the seller is agreeing with the buyer’s reason for termination?
Answer
No. In the Earnest Money Deposit release section at the bottom of Form 350-T, the last sentence, immediately above the signature block for a seller, says: “Seller reserves all rights to dispute or challenge Buyer’s alleged grounds for termination regardless of Seller’s decision to release the Earnest Money Deposit or not.”
This sentence means that the seller is only indicating whether they are agreeing to release the Earnest Money Deposit or not.
It also means that the seller has every right to dispute the buyer’s reasons for terminating if they wish later. Signing does not mean agreement with the buyers’ reasons for termination.
Q&A Release Date: 11/13/2025
6.
Can I use AI to enhance listing photos?
Answer
Yes, but with caution. You must avoid misrepresenting the property and clearly disclose exactly how the photos have been changed.
North Carolina brokers are prohibited from using advertising in a manner that misrepresents a property. Under the License Law, a broker may not make false assurances, exaggerations, or engage in any conduct that creates a misleading impression about a listed property. That standard applies regardless of whether an image is produced through traditional photo editing tools or newer AI technology.
The Code of Ethics reinforces the same principle. Article 2 prohibits exaggeration or concealment of pertinent facts, and Article 12 requires REALTORS® to present a “true picture” in their advertising and representations to the public.
Accepted uses for virtual editing include correcting lighting, removing clutter, adjusting perspective, or adding virtual furnishings, provided those edits do not change the actual condition or features of the home.
Problems arise when edits alter reality, such as hiding damage, stains or cracks, making fixtures appear new, or digitally remodeling a space without disclosure. If a buyer walks into a home and reasonably feels that the photos painted a false picture of its condition, then an agent may face discipline under both the License Law and the Code.
Q&A Release Date: 11/27/2025
7. Does the protection period in the Exclusive Right to Sell Listing Agreement (Form 101) apply if the client hires another agent?
Answer
No. The last sentence of the protection period in Form 101 states: “However, if Seller signs a valid listing agreement with another real estate broker before Seller agrees to sell, option, or convey the Property, then this protection period will not apply.”
This means if a former client lists their property with another real estate broker, then the protection period will not apply, and a commission will not be due even if the buyer was procured by your firm during the term of your
listing agreement. However, if the seller does not hire a new firm, and you provide proper notice of buyer prospects, then the protection period will apply, and a commission will be due if the seller sells their property.
Q&A Release Date: 12/4/2025
8. Should my firm implement a policy that says we will not work with unrepresented buyers?
Answer
No. Refusing to work with unrepresented buyers presents Code of Ethics, License Law, and antitrust issues.
Real estate agents have a fiduciary duty to put their clients’ interests first. Brokers also have a duty to present all offers to their sellers, regardless of whether the offer comes from a represented buyer or not. A policy that simply states your firm will not work with unrepresented buyers may violate both the License Law and the Code of Ethics. And, while there is no law or rule that requires a buyer to hire an agent to represent them, it could be argued that firms that only work with represented buyers are limiting access to the marketplace and increasing costs for consumers in violation of antitrust laws.
If your firm is thinking about a policy on unrepresented buyers, consider shifting the focus to guidance instead. Help listing agents evaluate each situation by asking:
• Do buyers understand the local market?
• Are they experienced or likely to need more support?
• Have they completed transactions before?
• Can they show proof of funds?
• Do they have legal support if needed?
• Can they handle the offer process on their own?
The answers to these questions will help the seller evaluate the strength or weakness of a potential transaction with the unrepresented buyer.
Q&A Release Date: 1/22/2026
9. Does a lawyer have to refund the Earnest Money Deposit to a buyer who has terminated during the Due Diligence Period even if a seller will not sign to release it?
Answer
No. A closing attorney acting as escrow agent must remain impartial and owes duties to both parties. As a result,
attorneys are often cautious when funds are in dispute. It is also why some closing attorneys require a signed release from one party to the contract before releasing the Earnest Money Deposit to the other side.
If a seller will not sign to release the Earnest Money Deposit, but the buyer is clearly entitled to it, then a buyer has three options:
1. Demand the seller initiate file a dispute within a certain time frame;
2. File a claim in small claims court (if the deposit is $10,000 or less); or
3. Wait 90 days for the funds to be deposited with clerk of court and file a claim there.
Q&A Release Date: 1/29/2026
10. Can I pay a referral fee to a broker whose license went inactive after we fully executed a referral agreement?
Answer
Yes. As long as the referring broker did not provide any brokerage services while their license was inactive, the referral is still valid.
If the referral was made while the license was active and no additional services were performed after it became inactive, payment is still allowed under the agreement.
Q&A Release Date: 2/26/2026