Virginia Real Estate Testprep

A seller is willing to pay a broker a 6% commission if the broker can sell his house for enough money to pay off the existing loan of $75,300 and allow the seller to clear $10,000 cash on the deal. How much will the property sell for (to the nearest dollar)?

$90,745 $75,300. The amount needed to give the seller his cash = $10,000. Total needed before computing commission = $85,300. $85,300 is 94% (100%-6%) of the selling price. We know that SOMETHING x 94% = $85,300. Therefore $85,300 divided by 94% = $90,744.68 or $90,745.

A fuel oil tank on the site of a house that is being sold is half full. If the tank were 3 feet wide by 4 feet long and 3 feet high, how much would the buyer owe the seller for the oil if it were currently selling for $5.00 per cubic foot?

$90.00 Multiply 3 feet wide by 4 feet long and 3 feet high = 3 X 4 X 3 = 36 cubic feet. Now multiply by $5/cubic foot... 36 X 5 = $180 but don't forget to read the question again, it said the tank is half full, so divide by 2 OR 180/2 = 90. The buyer would owe the seller $90.00.

A homeowner makes monthly mortgage payments of $994.32. When the current payment was made, $871.40 was applied to interest and the balance was applied to principal. If the loan interest rate is 10-5/8%, what was the balance of the loan when the payment was made?

$98,416.94. $871.40 (monthly interest) X 12 = $10,456.80 annual interest. Convert 10-5/8% to a decimal by dividing 5 by 8 = .625 and then add the 10 to get 10.625% interest rate. $10,456.80 divided by .10625 (10-5/8%) = $98,416.94 loan balance

Which of the following statements is NOT correct?

. HUD establishes market-based interest rates for VA and FHA loans.

An owner lists a home with a broker for $172,000. Two days later, the broker brings an offer for $170,000. At this time, which of the following statements is true?

A ready and willing buyer has been found, but no commission is owed the broker at this time

An owner sells his property and immediately leases it back from the purchaser. This describes:

A sale and leaseback transaction

A salesperson wishes to charge a reduced commission to her sister. Where would the salesperson obtain approval for such an arrangement?

None of the above

A real estate licensee is required to:

Offer to sell, purchase or exchange real estate for others, for a fee.

Under Virginia law, a licensee acting as a limited service representative acts as agent for the consumer:

Only if the brokerage agreement specifies that the licensee is acting as agent.

The principal broker of a real estate firm is a broker who is:

Responsible for the activities of the firm and all of its licensees.

A family owns a home located on land which borders a stream. Their rights to the use of the stream are known as:

Riparian

A woman lived in a 4 family house and rented rooms to young college students. She would only rent to single white women but she did not care about their religion. Was this permissible?

No, discrimination based upon race is unlawful in all cases

A real estate broker wishes to deposit an earnest money check in his business operating account until settlement, so the purchaser can earn a higher rate of interest on his funds. Can he legally do this?

No, these funds must be placed in a separate escrow account

Many Korean families have purchased homes in an older neighborhood of your community. Most merchants in the area now cater to the Korean clientele. A Caucasian resident of the area has listed his house for sale with your firm. You list the property in the MLS. You also place a bi-lingual ad in the newspaper and a bi-lingual "For Sale" sign on the property. Are your actions discriminatory?

No, this is proper marketing practice

The term "caveat emptor," which still applies in Virginia with regard to the resale of real property, means:

"Buyer beware."

A new property was valued at $179,000 with an estimated life of 50 years. The value of the land has been estimated at $19,000. After allowing for depreciation, what is the value of the property at the end of 5 years?

$163,000.

A man buys a home for $42,000 with a 75% loan for a term of 25 years at 3/4% interest per month. The monthly PRINCIPAL payment remains constant throughout the term of the loan. What is the owner's first monthly payment?

$341. 3/4% = .75% represents the monthly interest rate. $42,000 X 75% = $31,500 The amount of the loan. $31,500 X .75% = $236.25 1st month's interest. $31,500 / 300 Mos. (25 yrs.) = $105.00 1st month's principal. $236.25 + $105.00 = $341.25 1st month payment.

The minimum balance for the transaction recovery fund is set at:

$400,000.

A parcel of land is divided into two lots. Each lot is 432 feet X 522 feet. What is the total acreage in the two lots combined?

10.35 acres.

Compliance with Virginia Consumer Real Estate Settlement Protection Act (CRESPA) would be required for settlement on a:

4-unit residential condominium building.

In the application for a broker's license, the term "actively engaged" is defined as performing real estate activities for an average of:

40 hours per week.

As of July 1, 2006, all applicants for a Virginia Real Estate Salesperson's license are required to have:

A high school degree or G.E.D..

Each closed real estate transaction requires a report to be filed with the IRS on form 1099. Required information includes the seller's name, social security number and:

A legal description of the property.

Which of the following is required to hold a real estate license?

A person who, for compensation, helps sell his neighbor's home.

Which of the following would NOT be an agent?

A person working for a multiple listing service

A person, other than the declarant, selling a condominium is required to provide the buyer with certain documents. Which of the following is not required?

A personal credit report of the seller

An estate at will is:

A tenancy of uncertain duration.

A nonresident who obtains a license as an active salesperson in Virginia is required to do which of the following?

Activate with a Virginia licensed broker

A person who has passed the state real estate license exam but wishes to affiliate with a company where he or she will not actively practice real estate is considered by the Real Estate Board as a(n):

Active agent.

Which of the following actions by a listing agent would be appropriate?

Advise the buyer on the amount of money necessary to assume a loan

Any relationship in which a licensee acts for, or represents, a person in a real estate transaction is defined as a(n):

Agency

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

An earnest money deposit

A quitclaim deed may be used to:

Any of the above a. Transfer ownership of a fee simple estate b. Transfer interest in a life estate c. Terminate an easement

Members of the Real Estate Board are:

Appointed by the governor for a four-year term.

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

Beneficiary

What type of contract is an exclusive right-to-sell listing agreement?

Bilateral

Joe gives Bill a quitclaim deed to 5 acres of land. A year later a court determines that Joe did not have any interest in the property. Which of the following is true with respect to Bill's interest in the land?

Bill has no interest in the land

A developer divides his property into 5 separate building lots. He pledges all 5 as security for a loan to obtain money for construction of a house on each parcel. When he sells one lot, with improvements, the bank will release that particular lot from the security so that the developer may convey title to the new purchaser. The loan obtained by the developer could be described as which of the following:

Blanket mortgage.

John Doe is trying to rent one bedroom in his house. An Hispanic applies and is told by the owner (Doe), "I will only rent to a Caucasian." Which law has John violated, if any?

Civil Rights Act of 1964.

Part of the purpose for the Consumer Real Estate Settlement Protection Act (CRESPA) is to:

Clearly define who can lawfully provide real estate settlement services.

A person has a fee simple ownership of one unit of a multi-story building and pays property taxes on this unit. What type of ownership does this situation describe?

Condominium ownership.

What type of loan would probably have an 80% LTV ratio?

Conventional.

A woman owns an apartment building which is losing money. Her accountant tells her she could make a profit if she sells the apartment units as condominiums. What would be the proper method to accomplish this?

Conversion

Real estate taxes for the calendar year are actually paid on June 30th of each year. If the annual property taxes are $2,580 and a property sells and closes on April 15th, what is the settlement sheet for the proration of taxes?

Credit to buyer of $752.50.

Which type of agency relationship is specifically designed to address the issues involved in "in-house" sales?

Designated agency.

Broker escrow accounts must be:

Designated and labeled as "escrow."

Nate rents a vacant lot from Zach for 30 years. Nate plans to erect a building on the land at his own expense. This type of lease is a:

Ground lease

The purpose of city planning is to:

Guide the future development of a city.

A licensee attempting to reactivate a license must:

Have completed the required continuing education course during the 24 months prior to the application for reactivating the license.

Broker Pannier is told by owner Kirks that he will list the property with Pannier if Pannier will guarantee him $23,000 when the sale is complete and all the expenses of sale are paid. Any amount above this guarantee and expenses Pannier may keep as his commission. Broker Pannier should tell owner Kirks that:

He (Pannier) cannot accept the listing because it violates Virginia License Law.

The principle of substitution is most centrally used in appraisal:

In the Market Data approach

A Virginia lender refuses to make a loan to purchase real property on the basis that the applicant was over 60 years old and would not live long enough to repay the loan. In this situation, the lender is:

In violation of Virginia Fair Housing Laws.

A graduated lease is defined as one:

In which there may be an increase or decrease in rent at a stated future time.

A salesperson receives an earnest money deposit on Monday while working with broker Allan. On Friday, the salesperson goes to work for broker Bob. What should be done with the earnest money deposit?

It stays with broker Allan

Virginia real estate offices are required, by regulations, to:

Keep records for a period of three years.

If a person who has the right to make a claim against another, but does NOT do so within a reasonable period of time, a court could determine that the person has lost their right to any claim. The denial of the claim is an application of the theory of:

Laches

Which is NOT a cloud on title?

Lack of a recorded certificate of title insurance.

Which legal instrument is used to convey a tenancy for years from one person to another?

Lease

Which of the following is established or set by Federal regulations as opposed to State or municipal governments?

Lending institution regulations.

Filing a change of address with the Real Estate Board within 30 days of the change is the sole responsibility of the:

Licensee

One would normally use a survey to identify all of the following EXCEPT:

Liens on the property.

An elderly couple sells their property to a church under an agreement whereby the church allows the couple to occupy the property for the rest of their lives. The couple's interest is considered to be:

Life estate.

The most important factor influencing the value of real estate is?

Location of the property.

A builder selling tracts of land which he owns:

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

When the Board issues an active license, the license:

Must be made available to the public at the broker's main place of business.

The best example of rescission of a contract would be:

Mutual agreement of a landlord and a tenant to cancel a lease

The commission received by a listing broker who is a member of a multiple listing service is:

Negotiated between broker and seller.

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

Net

The principal broker must have readily available to the public, in the main place of business, the licenses of the:

Principal broker, firm, and all licensees affiliated with the firm.

A cooperative owner has exclusive use of her unit by reason of a:

Proprietary lease.

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

Qualified lending institutions.

The Civil Rights Act of 1866 prohibits discrimination on the basis of:

Race

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

Recorded

If a homeowner is in default on mortgage payments, the lender may foreclose. The right of the mortgagor to regain title by payment of all debts is known as the equity of:

Redemption

If an appraiser uses the Cost approach when appraising a property, she or he will consider:

Replacement cost

A broker may remove money from his or her escrow account in all of the following circumstances, except?

Rescission of the contract by the seller

A salesperson is showing a customer a unit in a newly developed condominium. The recreation areas of the project are not completed at the time the buyer is ready to make an offer. What should the salesperson do in this situation?

Research the condo documents to determine if the recreational areas are described and the plats indicate a scheduled completion date

When a mortgage has been completely paid off it is known as:

Satisfaction

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

Seizen

The Real Estate Board consists of:

Seven licensed brokers or salespersons and two citizens.

The maximum interest rate that can be charged for a home mortgage is determined by which of the following?

State usury laws.

A real estate licensee in West Virginia will be granted a license by reciprocity in Virginia if he or she:

Takes and passes a written exam on Virginia real estate license law within 12 months prior to making application.

A broker listed a vacant lot zoned for residential use. Later, an adjacent lot was rezoned causing an increase in value. What should the broker do?

Tell the seller of the zoning change and advise the seller to consider application for rezoning the property

Which of the following is true when a broker opens an office?

The Real Estate Board will issue a license for the firm.

An agent has the responsibility of care, obedience, accountability, loyalty and disclosure to which of the following?

The client

When a broker places a "For-Sale" sign on property, what must appear on the sign?

The firm's license name.

A country store located in a residential area burns down. Which of the following is most likely?

The owner may rebuild a store only if he obtains a variance or spot zoning.

Value is best described as?

The present worth of future benefits.

Which of the following contracts will provide instruction for the distribution and proration of escrow and impound funds?

The sales contract.

A listing agreement may be terminated by:

The seller

Salesperson Sam publishes a local newsletter about the real estate market in the area, which he uses for prospecting and marketing purposes. He recently obtained a listing on one of the finest homes in the neighborhood, and has been heavily promoting that property in the newsletter. The property recently sold at a price well below the listed price. In the next newsletter, he prominently displays an article about the sale of the property and overstates the actual sale price of the property. Which of the following statements is correct in this circumstance?

This would be considered a misrepresentation to third parties and would be a violation of law as well as an ethical violation.

How does a purchaser obtain equitable title to a property?

Through a valid contract.

Acting for more than one client in a transaction without obtaining the consent of all clients is considered to be:

Undisclosed dual agency.

When does a broker earn his commission?

When the offer to purchase has been signed and accepted by the seller

If neither a disclosure nor disclaimer statement is provided to the purchaser prior to acceptance of a purchase contract, the purchaser may terminate the contract:

With a written notice to the seller within three days after receipt of the disclosure/disclaimer if delivered in person or five days if delivered by mail.

A property manager who employs maintenance people for the property he manages would be responsible for all of the following EXCEPT:

Workers' personal liability

A buyer and seller entered into a contract for the sale of a house. The buyer applied for and was approved for a loan. At the last minute the seller backed out of the sale. Is the broker due a commission?

Yes, because the buyer was able to perform all of the requirements in the contract

Which of the following principles of value would a real estate salesperson consider first when doing a CMA (competitive market analysis)?

he principle of conformity

A "For Sale By Owner" placed an advertisement on their property which read, "couples only - no children, please." This advertisement is:

illegal because of Fair Housing Laws regarding familial status

Zelda wants to move into a subdivision with her giraffe. Which of the following would determine whether or not she could move into a home and keep her giraffe on the property?

zoning ordinances.