Real Estate Test - State Portion VA - Escrow

If a broker receives a deposit for escrow, his handling of the deposit would be in violation of Virginia License Regulations if he: Select one: a. Does not advise the principals of exactly how the earned interest on the deposit will be distributed b. Places the money in a non-interest bearing account c. Places the money in an interest-bearing account d. Has the earned interest credited to his personal account, with permission from all parties involved in the transaction Feedback

A

Jim and his agent find a house that Jim would like to make an offer on. Jim tells his agent he wants to put an escrow deposit down on the property using savings bonds. Can Jim use his savings bonds as an escrow deposit? Select one: A. Yes, if the parties to the contract accept this form of deposit B.Yes, if the Broker approves this form of deposit C. No, deposits must be cash or check D.No, savings bonds are not negotiable

A

The Board believes that a broker is not properly managing her escrow account. Upon request, the court appoints a receiver to manage the account. After investigation, the Board finds that the broker is innocent of any wrong doing. Who is responsible for the expenses and fees of the court-appointed receiver? Select one: a. The Board, using money from its operating budget b. The Board, using money from the Transaction Recovery Fund c. The court that appointed the receiver d. The broker, as a necessary expense to establish her innocence

A

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

A

Who is primarily liable for escrow violations? Select one: a. the principal broker b. the listing agent c. the seller d. the buyer's attorney

A

Escrow records must be kept: Select one: a. for 1 year from the date of either contract ratification or closing, whichever is earliest b. for 4 years from the date of either contract ratification or closing, whichever is earliest c. for 2 years from the date of either contract ratification or closing, whichever is earliest d. for 3 years from the date of either contract ratification or closing, whichever is earliest

D

In which circumstance would a broker be guilty of commingling funds? Select one: a. Placing rental security deposits in the same escrow account as earnest money deposits b. Placing personal funds in the same account as funds belonging to salespersons and employees c. Using the same financial institution an escrow account and a personal account d. Placing rental security deposits in the same account as the property operating funds

D

Money or trust instruments received, accepted, or held on behalf of another pending consummation or termination of a real estate transaction are: Select one: a. Commissions b. Down payments c. Anticipated profits d. Escrow funds

D

The Board believes that a broker is not properly managing her escrow account. Upon request, the court appoints a receiver to manage the account. After investigation, the Board finds that the broker is innocent of any wrong doing. Who is responsible for the expenses and fees of the court-appointed receiver? Select one: a. The Board, using money from the Transaction Recovery Fund b. The broker, as a necessary expense to establish her innocence c. The court that appointed the receiver d. The Board, using money from its operating budget

D

Which of the following would NOT be a violation of Board Regulations? Select one: a. Paying for a CRV and a credit report out of the escrow account b. Placing an earnest money deposit into a regular operating account c. Turning the deposit over to a seller d. Placing an earnest money deposit into a separate escrow account

D

Which payment does NOT need to be held in an escrow account? Select one: a. An earnest money deposit, if closing is scheduled in less than 15 days b. Money received as a security deposit for rental property c. An earnest money deposit, if the amount is less than $250 d. A referral fee received from an out-of-state broker

D

While searching for a suitable property, the buyer requests that his broker submit a copy of the same earnest money check for multiple offers. May the broker do this? Select one: A. no, because this contradicts the broker's obligations to the parties B. yes, because the broker does not represent the seller C. yes, because the broker must obey all lawful instructions of his client D. no, because this is improper and dishonest conduct

D

A party defaults during the executory period of a valid real estate contract. As a condition of the contract, the broker must hold any funds in his possession until: Select one: a. A court of competent jurisdiction orders disbursement b. The attorney for the non-defaulting party orders a release of the funds c. The lending institution has advised the broker that the loan application was rejected d. The seller advises the broker that the contract has been breached

A

Which of the following actions is NOT a violation of Virginia License Law? Select one: a. Refusing to cooperate on the sale of property listed exclusively b. Placing an earnest money deposit in an interest-bearing account, but failing to advise all parties of that fact c. Showing a home to a prospective buyer before the owner has signed a listing agreement d. Accepting a net listing

A

A salesperson who receives an earnest money deposit is NOT required to place the money in an escrow account: Select one: a. Until 10 days prior to settlement b. With the written agreement of both parties c. With the permission of his or her broker d. With the knowledge and consent of the parties

B

Under VA law, earnest money deposits must be placed in escrow within: Select one: a. The 2nd banking day of execution b. The 5th banking day of ratification c. The 10th banking day of ratification d. The 12th business day of signing

B

Which of the following contracts provides instructions for the distribution of escrow money? Select one: a. Listing contract b. Sales contract c. Mortgage d. Deed

B

Which of the following would NOT be a violation of Board Regulations? Select one: a. Turning the deposit over to a seller b. Placing an earnest money deposit into a separate escrow account c. Placing an earnest money deposit into a regular operating account d. Paying for a CRV and a credit report out of the escrow account

B

Brenda the Salesperson is employed by Broker Bob. She receives a check from Alex as a "thank you" for the excellent job she did in finding a buyer. In this instance, Brenda should: Select one: a. Cash the check, because it was a tough sale and she earned the money b. Put the check in her escrow account c. Endorse the check and give it to Bob d. Cash the check, but inform Bob

C

When can a broker remove money from his escrow account? Select one: a. At the time the buyer occupies the property b. When directed to do so by the seller c. When closing is completed d. Any of the above Feedback

C

Which of the following contracts provides instructions for the distribution of escrow money? Select one: a. Deed b. Mortgage c. Sales contract d. Listing contract

C

A broker receives an earnest money deposit from the buyer on Thursday. When is the latest day he can deposit into his escrow account without violating VREB rules? Select one: a. Within 2 banking days b. Within 3 banking days c. Within 4 banking days d. Within 5 banking days

D

Virginia escrow accounts: Select one: a. must be held by all brokers and salespersons b. must be held by all brokers c. need not be held at all d. must be held only by those brokers that hold money in escrow

D

Which of the following must establish an escrow account? Select one: a. All firms b. Firms holding money for others c. Firms holding property for others d. Both B and C

D

A party defaults during the executory period of a valid real estate contract. As a condition of the contract, the broker must hold any funds in his possession until: Select one: a. A court of competent jurisdiction orders disbursement b. The attorney for the non-defaulting party orders a release of the funds c. The seller advises the broker that the contract has been breached d. The lending institution has advised the broker that the loan application was rejected

a

Mitch, the principal broker at ZYX Firm, has reasonable suspicion that one of his associate brokers is stealing escrow funds. As a principal broker, Mitch must report this violation within how many business days? Select one: a. 5 b. 3 c. 4 d. 2 Feedback

B

Broker Paul realizes that he held an escrow deposit for 6 business days, causing the balance of Escrow Account A to dip below zero if he does not take immediate action. Broker Paul must: Select one: a. Contact the Board within 3 business days and inform them that a violation may have occurred b. Disburse funds from Escrow Account B to cover any shortages in Escrow Account A c. Deposit firm funds into Escrow Account A to cover any shortage d. Deposit personal funds into Escrow Account A to cover any shortage

A

Chuck, lives in a rural area and sells real estate on a part-time basis. He only goes into his broker's office twice a month because it is not near his home. Chuck obtains a valid contract for one of his listed properties. What should he do with the earnest money deposit supporting this contract? Select one: a. Mail it (special delivery) to his broker b. Keep it with the contract until his next visit to the broker's office c. Deposit it into the escrow account which he has established near his home d. Give it to the seller for safekeeping

A

Earnest money deposits may be placed in interest-bearing accounts if the: Select one: a. Contract specifies the beneficiary of any earned interest b. Interest is divided between the cooperating brokers c. Account earns a minimum of 5% interest d. Account is properly titled as escrow Feedback

A

Money or trust instruments received, accepted, or held on behalf of another pending consummation or termination of a real estate transaction are: Select one: a. Commissions b. Escrow funds c. Down payments d. Anticipated profits

B

Brenda the Salesperson is employed by Broker Bob. She receives a check from Alex as a "thank you" for the excellent job she did in finding a buyer. In this instance, Brenda should: Select one: a. Cash the check, because it was a tough sale and she earned the money b. Put the check in her escrow account c. Cash the check, but inform Bob d. Endorse the check and give it to Bob

D

A selling broker receives an earnest money deposit to support an offer to purchase. The deposit is exactly the same amount that the broker will receive when the sale closes. With the permission of the buyer, the broker deposits the check into his brokerage account. Which of the following statements is correct in this situation? Select one: A. the broker has not violated Board regulations B. the broker is commingling C. the broker may follow the buyer's instructions because of the fiduciary relationship D. such action is permissible if closing takes place within 6 months

B

An escrow account is required to: Select one: a. Be an interest-bearing account b. Be opened by a broker to hold money that belongs to another party c. Have a minimum balance of $500 d. Be opened to ensure that all affiliates and employees will be paid regularly

B

An escrow account is required to: Select one: a. Be opened to ensure that all affiliates and employees will be paid regularly b. Be opened by a broker to hold money that belongs to another party c. Be an interest-bearing account d. Have a minimum balance of $500

B

Broker Paul realizes that he held an escrow deposit for 6 business days, causing the balance of Escrow Account A to dip below zero if he does not take immediate action. Broker Paul must: Select one: a. Disburse funds from Escrow Account B to cover any shortages in Escrow Account A b. Contact the Board within 3 business days and inform them that a violation may have occurred c. Deposit firm funds into Escrow Account A to cover any shortage d. Deposit personal funds into Escrow Account A to cover any shortage Feedback

B

Earnest money deposits may be placed in interest-bearing accounts if the: Select one: a. Account is properly titled as escrow b. Contract specifies the beneficiary of any earned interest c. Account earns a minimum of 5% interest d. Interest is divided between the cooperating brokers

B

How long must a broker keep copies of escrow records? Select one: a. 3 years from the date the transaction was originated b. 3 years from the date of consummation or ratification of the contract c. 5 years from the date the transaction was originated d. 2 years from the date of consummation or ratification of the contract

B

Mitch, the principal broker at ZYX Firm, has reasonable suspicion that one of his associate brokers is stealing escrow funds. As a principal broker, Mitch must report this violation within how many business days? Select one: a. 5 b. 3 c. 2 d. 4

B

Broker Tom can remove money from his escrow account in all of the following circumstances, except: Select one: a. When a court orders the broker to do so b. With written permission of all parties to the contract c. Termination of the contract, by performance d. Rescission of the contract by the seller

D

Escrow may be used in which of the following situations? Select one: a. when property is purchased and secured by a deed of trust b. in an exchange of property c. with a contract for sale d. all of the above

D

Broker Foster manages an apartment building for Owner Smith. Foster used the security deposits of two tenants (Petri and Gonzales) for general maintenance on the apartment building. Was this action permissible? Select one: a. Yes, as long as the owner is aware of it b. Yes, because deposits are held to cover the cost of repairs c. No, security deposits are held for tenants in an escrow account and are not part of the operating funds d. No, using these deposits for repairs would eliminate the need to charge damage repairs when tenants move out Feedback

C

Jim and his agent find a house that Jim would like to make an offer on. Jim tells his agent he wants to put an escrow deposit down on the property using savings bonds. Can Jim use his savings bonds as an escrow deposit? Select one: A.No, savings bonds are not negotiable B.Yes, if the Broker approves this form of deposit C. Yes, if the parties to the contract accept this form of deposit D. No, deposits must be cash or check

C

Under VA law, earnest money deposits must be placed in escrow within: Select one: a. The 12th business day of signing b. The 2nd banking day of execution c. The 5th banking day of ratification d. The 10th banking day of ratification

C

Which funds would NOT need to be held in an escrow account? Select one: a. An earnest money deposit of less than $500 b. An earnest money deposit, if closing is scheduled in less than 15 days c. A commission received from an out-of-state broker d. Money received as a security deposit for rental housing

C

A selling broker receives an earnest money deposit to support an offer to purchase. The deposit is exactly the same amount that the broker will receive when the sale closes. With the permission of the buyer, the broker deposits the check into his brokerage account. Which of the following statements is correct in this situation? Select one: A. such action is permissible if closing takes place within 6 months B. the broker may follow the buyer's instructions because of the fiduciary relationship C. the broker has not violated Board regulations D. the broker is commingling

D

A real estate transaction does not go to settlement. Under what circumstances can the escrow funds be released? Select one: a. An attorney handling the settlement may release the funds b. A broker may disburse the funds with permission of the seller c. A court must order disbursement d. A broker may disburse the funds with written approval of all parties

D

As a property manager, a broker should maintain a bank account for money that belongs to the owner. How is this account identified? Select one: a. Miscellaneous account b. Operating account c. Reserve account d. Escrow account Feedback

D