Real Estate Practice

If a first time offender is found to have violated the Virginia Fair Housing Laws, what is the maximum civil penalty that the Attorney General can impose?

$50,000

A broker may hold earned commissions in his or her escrow account and NOT be guilty of commingling, provided that such money is removed from the escrow account at regular intervals, not to exceed:

180 Days

The Equal Credit Opportunity Act makes it unlawful to refuse to grant credit to qualified applicants on the basis of:

Age, Religion, Marital Status

Which of the following is NOT an example of a real estate contract?

Bill of Sale

If a person is alleged to have violated the Civil Rights Act of 1866, the complainant would file suit in which of the following?

Federal Court

Building codes standardize all of the following features, EXCEPT:

Financing

Under which of the following conditions would a buyer most likely sue for specific performance?

If the seller defaulted on the contract before closing

An offer is written for a property late Friday night when the salesperson is getting ready to leave town for the weekend. What should the salesperson do?

Immediately present the offer

How would an appraiser normally appraise an office building?

Income.

What can a homeowner legally deduct on his or her personal income taxes?

Interest on the mortgage note

A builder selling tracts of land which he owns:

May employ unlicensed people, on a regular salary, to sell the tracts.

On an FHA insured loan, the money is provided by:

Qualified lending institutions.

According to the Virginia Residential Landlord and Tenant Act:

Security deposits are to be refunded, in whole or in part, within 45 days following termination of a lease.

The covenant whereby one warrants that he is the possessor and owner of property being conveyed is the covenant of:

Seizen

The act of recording a deed in the public record's office designated for that purpose, results in which of the following?

Serves as constructive notice to the public

If a licensee has placed his or her license on inactive status, it means:

That the licensee is not affiliated with a brokerage firm or sole proprietor

Which of the following may be itemized as a personal deduction when paying Federal income taxes? a. The amount of interest paid on a home mortgage. b. The amount of principal paid on a home mortgage. c. The cost of installing a fence around a residence. d. The cost of homeowner's insurance

The amount of interest paid on a home mortgage.

When a property is sold with an existing lease:

The entire lease interest is transferred.

In Virginia, a property may be sold to satisfy a real estate tax lien:

Three years from the date due with 30 days' notice to the owner.

An offer is written for a property late Friday night when the salesperson is getting ready to leave town for the weekend. What should the salesperson do?

31.5 mills.

Thelma, a widow, owns her home free and clear. She has a fixed income which does not meet her current financial needs. Thelma wants to borrow money on her house in order to supplement her income. What type of loan would Thelma most likely apply for?

A RAM (reverse annuity mortgage)

A tract of land which is owned and occupied as a family residence is known as:

A homestead

According to the 1988 Fair Housing law, which of the following is NOT considered to be handicapped?

A person addicted to a controlled substance

Which of the following would NOT be an agent?

A person working for a multiple listing service

If you buy property with a conventional loan, your loan can be insured by: a. FHA mortgage insurance. b. A VA guarantee. c. A private company which sells mortgage insurance. d. FNMA.

A private company which sells mortgage insurance.

When a broker establishes an account, or accounts, to hold money belonging to others, which of the following is true? a. All checks, deposit slips and bank statements must include the word "Escrow" as part of the account name. b. Accounts may be labeled either "Trust" or "Escrow". c. The money may not be held in the same bank as the broker's operating account. d. An individual account is required for each transaction.

All checks, deposit slips and bank statements must include the word "Escrow" as part of the account name.

Which of the following would diminish a fee simple estate? a. Death of the owner. b. Sale of the property. c. Rental of the property. d. All of the above.

All of the above

A loan with constant payments, where increasing amounts are credited to the principal and decreasing amounts are charged for interest, is called:

An amortized loan

To be valid, a contract for sale must contain all of the following EXCEPT:

An earnest money deposit

The clause in a lease that allows the rent to increase is:

An escalator clause

Which of the following statements BEST describes the difference between an exclusive right to sell listing versus an open or an exclusive agency listing?

An exclusive right-to-sell guarantees the broker a commission if sold; the others do not

A homeowner tells a broker that he would like to sell his house. The broker agrees to sell the house. This agreement would be considered:

An expressed contract

As a general rule, VA loans are fixed rate, fixed term loans. What would cause the monthly payment of a VA loan to increase?

An increase in the assessed value of the property.

A licensed real estate salesperson MAY be which of the following?

An independent contractor. An employee of the broker. Paid either on a salary or on commission.

Which of the following is used to determine annual real estate taxes?

Assessed value times tax rate.

A licensee contacts a homeowner in an attempt to obtain a listing for the property. When must agency disclosure be provided to the homeowner?

At the time the owner agrees to list the property.

If a payment is made from the Transaction Recovery Fund, the license of the licensee involved will be:

Automatically revoked

A licensee has refused to pay a special assessment of $20.00 to the Transaction Recovery Fund even after receiving a second notice. At this point, the licensee:

Automatically suspended after 30 days

A settlement agent is responsible for paying which of the following?

Balance due on the seller's mortgage, Title Insurance premium, Costs of recording

When a deed of trust is used to pledge real property as security for a loan, the lender is the?

Beneficiary.

Peyton wishes to buy a home within the city limits. His real estate broker tells him that he will not be allowed to keep his pet alligator in his swimming pool. Which of the following would most likely be responsible for the decision?

City Zoning Commission.

A developer is considering construction of a new subdivision in a rural area on a very hilly tract of land. What type of map will be most beneficial to the developer in making his decision to build?

Contour

David owns property along the banks of the Little Big Horn River. Scott owns property adjoining David's, and has access to the highway, but not to the river. Scott and David grant each other appurtenant easements to cross each others property to get to the road and the river respectively. The riparian rights associated with property ownership belong to:

David because his property abuts the river

Which of the following clauses would prevent a mortgage from being assumed by a subsequent buyer?

Due-on-sale clause

A home located in an area where there are factories with much smoke and dust experiences:

Economic/External obsolescence

Jones buys a lot that has no access by way of a public road. He can gain access to his land by way of his neighbor's land that has public road access:

Either if the grantor of the property caused the lot to be landlocked or if his neighbor agrees to give him an easement.

An action to oust someone who is not legally in possession of real property is called:

Ejectment

Salesperson Lynch receives a referral check from out-of-town broker Kirks for sending Kirks a prospective buyer. What is the first thing Lynch should do?

Endorse the check and give it to his employing broker.

An appraiser, compiling a neighborhood analysis, would NOT include information about which of the following: a. Price range of similar housing b. Traffic patterns c. Ethnic characteristics of the residents d. Conformity in the style of housing

Ethnic characteristics of the residents

A seller wants to list her home with a broker but would like the option to sell it herself and not pay a commission. Which type of listing should she AVOID signing?

Exclusive right-to-sell listing.

Jones died and left a will in which Titus was named to settle Jones' affairs. Titus would be called the estate's: Select one:

Executor

A real property owner leaves a life estate to one party and a remainder estate to another. The remainder estate is unrestricted. The type of estate that will be received by the remainderman is a:

Fee simple estate.

Three children are named in their father's will to receive his real property. Each is to receive an equal interest. Collectively, they agree to sell the property and split the proceeds. What should they do?

File the will for probate.

Which of the following would be an example of downzoning? a. From single family dwellings to multi-unit apartments b. From industrial use to high-rise office buildings c. From single family dwellings to a conservation area d. From agricultural use to single family dwellings

From single family dwellings to a conservation area

During a listing presentation, a seller asked a salesperson to give them an opinion on the list price, not disclose their pending divorce, contact them at least weekly and give them an opinion on the validity of the title. The salesperson may do all of the following EXCEPT:

Give them an opinion on the validity of the title

A broker obtains an open listing on a piece of property. In order to collect a commission on the sale of this property, the broker must be able to prove which of the following?

He was licensed at the time of the sale He was employed at the time of the sale He was the procuring cause of the sale

A broker would be in violation of the Federal Fair Housing Law for all of the following actions EXCEPT:

Hiring salespeople, on the basis of sex, regardless of experience or qualifications.

How may an appurtenant easement be terminated? a. If the servient estate is sold. b. When the dominant estate owner dies. c. The granting of a license. d. If the easement is released by the owner of the dominant estate.

If the easement is released by the owner of the dominant estate.

A seller listed property for sale. There were a limited number of houses available in the area. There were also a great number of buyers interested in purchasing homes in that area. What would MOST LIKELY happen to the value of the seller's property?

It would increase in value

The Real Estate Board receives a fair housing complaint on January 1. They must start the formal proceedings by:

January 31

A mother left her house in her will to her two children, Tom and Mary. Each child to receive a 50% interest with rights of survivorship. What type of ownership will Tom and Mary have?

Joint tenants.

Depreciation can be claimed on all of the following property EXCEPT: a. Land b. Office furniture c. Parking lots d. Shrubbery

Land

Which of the following would not be legally sufficient to support consideration in a sales contract?

Love and Affection

Every person who is licensed as a broker in Virginia and who is also a resident of Virginia, MUST:

Maintain an office in the state of Virginia

David, an independent broker, dies. His daughter, a licensed broker and only heir, inherits the brokerage business. If she intends to operate the brokerage and keep the listings, it is necessary that she:

Negotiate and receive new listing agreements from each client

Recognizing that property has experienced growth, stability and decline would be included in which part of an appraisal?

Neighborhood Analysis

In which type of listing is the commission least likely to be expressed in terms of percentage?

Net

Seller Pruitt signed an exclusive right-to-sell listing with broker Cook. The listing included a 7% commission and a clause stating the listing was in effect until the house was sold. Is this legal?

No, because the listing has no termination date.

An owner has been using a parcel of land for heavy industrial purposes. The district in which the property is located is presently zoned for business/commercial use. If the owner is allowed to continue with the industrial use of the property, this is an example of a:

Non-conforming use

A couple buys a furnished home by assuming the existing loan. Which of the following papers would the settlement attorney NOT have to prepare? a. Note and mortgage. b. Bill of sale. c. Assumption papers. d. Warranty deed.

Note and Mortgage

Which of the following contracts is voidable?

One of the parties was drunk at the time the contract was signed

person was not allowed to rent an apartment in a large high-rise apartment project due to the fact that she uses a wheelchair. She could file a fair housing complaint with the Real Estate Board anytime within:

One year

All of the following are included in the Real Estate Board's definition of "advertising" EXCEPT a(n):

Owner telling fellow workers about a property

Lenders charge points to grant loans. Which of the following statements is NOT true regarding points charged?

Points are charged on the basis of the selling price.

In the capitalization approach, the appraiser considers all of the following EXCEPT:

Price of the property

One of the functions of the FHA is:

Provide insurance protection to lenders.

The buyer gives the salesperson a note, payable at settlement, as an earnest money deposit on the purchase of a house. The salesperson must do which of the following?

Put this information into the written offer.

In which of the following situations must institutional advertising for franchise brokerage firms clearly state that the service offered is real estate brokerage and that each office is independently owned and operated?

Radio, television, and newspaper ads.

It may be assumed that a deed has been delivered and accepted if it has been:

Recorded

A salesperson takes an exclusive-right-to-sell listing on April 1 for 90 days but moves out of the area on May 15 and has his license placed on inactive status on June 1. The listing would:

Remain in force

Which transactions are covered by RESPA? a. Residential first mortgage loans for owner-occupied homes. b. Residential first mortgage loans and owner financed loans. c. Commercial loans and residential first mortgage loans. d. All of these choices.

Residential first mortgage loans for owner-occupied homes.

ABC Incorporated was organized with five stockholders. How would ABC Incorporated take title to the property?

Severalty

A person owned several apartment houses. She hired an agent to sell only two of her apartment houses. What type of agency relationship was established?

Special

The enforcement of the Fair Housing Law of 1968 is the responsibility of:

The Department of Housing and Urban Development (HUD)

The listing price of a property is established by:

The Owner

When a seller and licensed salesperson agree to a listing, on terms acceptable to the broker, an agency relationship is established between:

The listing broker and the seller

Relative to the resale on a time-share interest, which of the following is not true?

The time-share association may charge up to $100 for the Certificate of Resale.

What is the greatest risk when a licensee assists a family member with the purchase of real property?

There is the potential of creating an undisclosed dual agency

Although a right of rescission for resale units is not included in the statute, it is common practice that a buyer may rescind the contract to purchase a resale condominium within:

Three days of contract ratification or receipt of condominium documents for any reason.

Written disclosure that a licensee has a brokerage relationship with another party to the transaction must be made to a landlord or tenant at the:

Time of application or lease, whichever comes first.

A listing broker has an agency relationship with his client (the seller). The broker also has a moral and statutory obligation to all prospective customers (buyers). One way to describe the relationship with the buyer would be:

To do what is right.

In Virginia, when a broker is a standard agent, which of the following is NOT an agency responsibility or duty?

To obey all instructions of the seller.

A quitclaim deed may be used to:

Transfer ownership of a fee simple estate Transfer interest in a life estate Terminate an easement

When a consumer signs a note that places a lien on his or her property, the owner, in certain instances, has the right to rescind the agreement within 3 days, without penalty. This right is provided to the consumer by virtue of which of the following laws?

Truth in Lending Act

Which of the following is subject to the Statute of Frauds?

Two-year lease for real property

When determining effective gross income, an appraiser subtracts which of the following from gross income?

Vacancy rates and bad debts. Management costs. Maintenance, utilities and taxes.

When security deposits are held more than 13 months, the interest rate to be paid to a tenant on the security deposit is set by the:

Virginia General Assembly

The Civil Rights Act of 1866: a. Is considered to be a part of the 14th Amendment to the U.S. Constitution. b. Was the underlying basis for the decision in Jones vs. Mayer. c. Declared it unlawful to discriminate in all matters, not just housing, on the basis of the race of an individual. d. All of these choices.

Was the underlying basis for the decision in Jones vs. Mayer.

Wilma lists her house with broker Fred under an exclusive right-to-sell agreement. Fred later abandons the listing. Which of the following is true in this situation?

Wilma will terminate the listing

An owner of a 12 unit apartment building lived in one of the apartments. The owner refused to rent to a person because of their national origin. Does the person have a valid complaint? Select one:

Yes, because it was a 12 unit apartment