Practice Final 1

If a developer (declarant) wants to convert an existing rental property to a time share, how many days notice must be provided to the existing tenants? a. 30 days b. 120 days c. 90 days d. 60 days

30 days Existing structures may be converted to time share ownership by following the same steps above, and by providing notice (90 days) to any existing tenants of the intent to convert and the right to purchase their unit (exclusively in the 60 days following notice). Any month-to-month tenants have at least 120 days to vacate (if they choose not to purchase)

Federal Fair Housing Laws do NOT provide protection on the basis of: a. Marital Status b. Handicap c. Sexual preferance d. Both A and C

a. Marital Status Marital status is not a class protected under Federal Fair Housing Laws. The Federal Fair Housing Act of 1968 bans all preference, limitations, or discrimination based on race, color, religion, sex (including gender, gender identity, sexual orientation and sexual harassment ), or national origin and the Fair Housing Amendments Act of 1988 expanded protections to persons that are handicapped or have familial status (children).

Susan's Aunt Betty is leaving town for a month and has asked Susan to watch her home, pay the bills and take care of anything else that might come up while she is out of town. What will Aunt Betty need to provide Susan with in order for Susan to carry out these duties on her behalf? a. Lease agreement b. A Power of Attorney c. A bill of sale d. Deed of trust

b. A Power of Attorney It would be best if Aunt Betty gave Susan a Power of Attorney, which is a written document in which one person appoints another to be their attorney-in-fact, authorizing the attorney-in-fact to act on their behalf

If a broker purchases property through a "straw man" and does not disclose that information, which of the following statements is true? a. This is not a violation of the License Law b. This is permitted as long as the seller does not find out c. This is a violation of the License Law d. This is permitted if the "straw man" is also a broker

c. This is a violation of the License Law Disclosure of license status is required whenever a licensee buys or sells real property in his own name. Also, anytime a third person is a party to a contract, that fact must be disclosed.A straw buyer, or straw purchaser, is a person who purchases on behalf of another person.

A broker is representing a seller and discovers a puddle of water on the basement floor. When the broker confronts the seller, the sellers states: "Don't worry about that, I had it fixed long ago." Must the broker disclose this information to prospective buyers? a. Yes, because a failure to do so would violate the broker's duty of accounting b. No, because to do so would violate the broker's duty of confidentiality c. Yes, because the information is "material" d. No, because to do so would violate the broker's duty of obedience

c. Yes, because the information is "material" Most state license laws require brokers and other agents to disclose material facts that they know or should know to clients and customers.

In Virginia, what action is prohibited in an advertisement for real estate? a. Advertising property without client consent b. Failing to identify a general property description in a listing c. Advertising that a property listed by a firm is for sale by owner d. All of the above

d. All of the above All of the listed items are expressly prohibited in an advertisement.

The Do Not Call Registry rules applies to all EXCEPT: a. Business to Business calls b. Political organizations c. Charitable organizations d. All of the above

d. All of the above The Do Not Call Registry does not apply to business-to-business calls or calls to consumers from political/charitable organizations

What is not a valid method to describe real property? a. Metes and bounds b. Street address c. Government method of survey d. All of the above are valid methods

d. All of the above are valid methods Although a street address is not a legal method to describe real property and is not legally enforceable in a deed, a street address is sufficient to identify property informally. Note that the question does not ask you to identify LEGAL methods of describing property.

A salesperson could have his license suspended or revoked for which of the following reasons? a. Raising the price on a contract in order to influence a lender b. Giving a false address in order to obtain a license c. Encouraging a homeowner to sell since minorities are moving into the neighborhood d. Any of the above

d. Any of the above All of the answer choices are violations of the Real Estate Board Regulations.

Broker Jill just had her license revoked by the board for a fair housing violations, what will happen to Jill's independent contractors, Salesperson Mark and Salesperson Micki's, licenses? a. Their licenses are not affected b. Their licenses must be returned to the Board c. Their licenses will go inactive until a new broker is in place d. Their licenses will be put on an administrative suspension until they affiliate with a new broker

b. Their licenses must be returned to the Board In this instance, the licenses of the Mark and Micki will be returned to the Board and re-issued to the same firm when a new principal broker is named, or to the principal broker at another firm if Mark and/or Micki chooses to switch firms.

A lease where the tenant pays taxes and maintenance costs is a: a. Ground lease b. Percentage lease c. Gross lease d. Net lease

d. Net lease In a net lease, the tenant (lessee) agrees to pay a fixed rental amount along with a pro rata share of the landlord's building costs, including taxes, insurance, utilities, and repairs. In a gross lease, the tenant pays a fixed rental amount and the landlord pays his own building expenses. In a percentage lease, the tenant pays a fixed percent of the income earned through the rented space.

When a salesperson transfers from one broker to another, it is the salesperson's responsibility to: a. Pay a license transfer fee b. Send his/her license to the Board c. Apply for inactive status until affiliated under the new broker d. None of the above

d. None of the above The former broker (NOT the salesperson) must return the license to the Board if a salesperson transfers to another firm. None of the other options are required, therefore, none of the above are true.

A developer owns four parcels of land. He plans to sell one parcel for construction of an office building. The building plans will require 2 acres, which will include the actual building, landscaping, and parking. Which of the following is the smallest parcel that would accommodate this construction? a. Parcel D: 140 feet x 900 feet b. Parcel A: 83 feet x 950 feet c. Parcel B: 102 feet x 840 feet d. Parcel C: 120 feet x 860 feet

d. Parcel C: 120 feet x 860 feet First calculate the area needed for the construction: 2 acres x 43,560 (sq. ft. per acre) - 87,120 sq. ft. Then calculate the square footage of each of the lots. 83 x 950 = 78,850; This lot is too small. 102 x 840 = 85,680; This lot is too small. 120 x 860 =103,200; This lot is large enough. 140 x 900 =126,000; This lot is large enough. The question asks which is the smallest lot that would accommodate the construction. Therefore, the answer is Parcel C.

The government requires a developer to provide off-street parking for tenants. The developer will suffer a loss because instead of building additional units, he must now set aside space for the parking area. This is an example of: a. Escheat b.Inverse condemnation c. Eminent domain d. Police powers

d. Police powers This is an example of police powers because it is a valid condition on the approval of his building permit and is in the best interest of public health and safety. Inverse condemnation doesn't apply because the regulation hasn't deprived the owner of all economic value from his property (he may still develop around that parking area). Eminent domain doesn't apply because the government isn't taking any property. Further, this is not escheat because the property isn't reverting to the state.

A broker is conducting a training class for her agents about property condition disclosure forms. Under State law, the ________________ must complete these forms to be provided to any potential buyers. a. Principal broker b. Buyer's agent c. Seller's agent d. Seller

d. Seller Seller property condition disclosure forms should never be filled out by the agent. It is the seller's responsibility to do so since the seller (not the agent) is most familiar with the property. Also, property disclosure forms do not relieve agents of their independent obligations to disclose material property defects to buyers

If a broker holds an earnest money deposit in an interest-bearing escrow account, what is the disposition of any earned interest? a. It is always credited to the seller at closing b.Escrow accounts cannot, by regulation, earn interest c. It is, by regulation, credited to the buyer d. The broker may keep the interest

d. The broker may keep the interest Interest earned from escrow account deposits can be kept by the broker, as long as there is written disclosure and agreement by all parties.

Due to a strike at the mill construction lumber is hard to come by lately. How could this shortage affect real estate prices in the area? a. The real estate prices will fall b. Real estate prices will stay about the same c. New construction never affects real estate prices d. The real estate prices will rise

d. The real estate prices will rise If there is a short supply of homes in an area, which could be due to a halt in construction real estate prices will rise. Supply and demand in real estate is not as easy to balance as it is for manufactured commodities. The construction of more buildings takes time, and there may not be room to build in any given area. You cannot move the buildings to where the buyers are.

In which instance is a broker justified in removing funds from the firm's escrow account? a. To collect their commission B. To pay employee salaries c. To pay the firm electric bill d. With a written agreement of all of the parties

d. With a written agreement of all of the parties Money can be removed from escrow with written permission of the principals to the contract (in the sales contract or otherwise), upon consummation of the transaction, interpleader, or by court order. Rescission (cancelling the contract) requires agreement from both the buyer and the seller

In the typical agency relationship between brokers and clients, commission is determined by: minimum fees based on the property type b. National Association of Realtors c. state law d. mutual agreement

d. mutual agreement Commissions are generally determined by an agreed upon percentage of the selling price. The rate of a broker's commission, and any fees he or she may charge, is always negotiable.

A salesperson listed a property where a murder recently occurred. If the salesperson shows the property without advising potential buyers of the murder, the salesperson would be guilty of: a.Nothing b. Puffery c. Fraud D. Misrepresentation

nothing The salesperson is not required to disclose occurrences (murder, suicide, haunted) which have no effect on the physical structure, the environment, the property, or its improvements.

An independent contractor is: a. not a real estate licensee b. the same as a standard agent c. only subject to duties the licensee and client agree upon d. subject to all agency duties and disclosures imposed by VA Law

only subject to duties the licensee and client agree upon An Independent Contractor is a Licensee who enters into a brokerage agreement with a client, which specifically states that the licensee is acting as an independent contractor and not as an agent. An independent contractor has the obligations agreed upon by the parties in the brokerage agreement, as well as some of the duties (but not all) that a standard agent has towards a client.

Which of the following amounts is NOT prorated between buyer and seller at closing? a. Real estate taxes b. Recording fees c. Rents d. Homeowner's insurance premiums

recording fees Recording fees are NOT prorated; each party pays his own. If insurance premiums have been paid in advance by the seller, they would be prorated if the buyer assumes the insurance policy. However, this is not a common practice.

Which action returns the parties of a contract to their original position? a. discharge b. rescission c. subordination d. novation

rescission A rescission or cancellation agreement is an agreed upon remedy in a contract that allows parties to terminate under specified conditions. Rescission allows the parties to return to their original positions from before the contract.

A condominium could be which of the following descriptions? a. Multi-story building b. Townhouse community c. Industrial office park d. Any of the above

d. Any of the above The best answer is D, condominium type ownership (single units in a multi-unit real estate development) can be created anywhere, for any type of property. Some residential neighborhoods (consisting of only single-family homes) are under condominium rules and regulations. Each person owns their own home, but shares an interest in common elements like playgrounds, swimming pools, etc. Industrial property COULD be created as a condominium; the tenants would own their own buildings and share ownership in drive ways and parking facilities.

Broker Adam is encouraging you to sell since your new neighbors will be Catholics. He says that once they move in, crime will increase and property values will tumble. Your broker is guilty of: a. Steering b. Redlining c. Puffery d. Blockbusting

d. Blockbusting This is a textbook example of blockbusting. Blockbusting is when a real estate agent induces the sale of property by overtly creating the impression that a neighborhood is about to undergo undesirable change.

100. If a deed transferring legal title from one party to another is NOT recorded in the public record, which of the following statements is correct? a. The deed is valid b. The grantor gives up all rights to the property conveyed c. The transfer is not valid d. Both A and B

d. Both A and B A deed is valid even if it is not recorded. However, because recording a deed offers protection against third party claims to ownership, it is the wise and prudent thing done by most people. In transferring title, the grantor gives up his or her rights.

Which item is personal property? a. Apartment lease b. Business reputation c. Tool shed attached to the brick foundation d. Both A and B

d. Both A and B Leases and business reputation are both intangible personal property. The tool shed is affixed/attached to the foundation so it is considered real property.

The alienation clause in a mortgage states: a. The loan may not be assumed by another person without lender approval b. The total balance of the loan is due upon the transfer of property c. Only US citizens are allowed to secure the loan d. Both A and B

d. Both A and B The due on sale clause--legally referred to as the alienation clause--allows the lender to demand immediate payment of the entire debt if the title to the property is transferred (sold). This would likely prevent an assumption without lender approval.

Usury laws have been established to: a. Regulate maximum interest rates b. Protect borrowers c. Regulate mortgage lenders d. Both A and B

d. Both A and B Usury laws establish maximum interest rates for real estate and any other type of credit extension, like credit cards or auto financing. The purpose of usury laws is to protect the borrower.

Which of the following statements is true if a broker has repaid the amounts awarded from the Transaction Recovery Fund? a. His license is automatically reinstated b. The Real Estate Board could deny reinstatement of his license, forever c. He may apply for license reinstatement d. Both B and C

d. Both B and C The Real Estate Board has the right to refuse issuance of a license to any person who has EVER had his license suspended or revoked. The license of a guilty licensee is automatically revoked if payment from the TRF is made (licensee may only reapply after reimbursing the TRF with interest).

What type of estate to time share owner have? a. Estate at will b. Freehold estate c. Estate for years d. Both B and C

d. Both B and C Time share estates are owned by multiple people who have a freehold estate or estate for years in the same property, with the right to occupy during different time intervals (5 or more time periods, which spread over at least 5 years).

These aid local zoning departments in enforcing zoning: a. Zoning plans b. Variances c. Police powers d. Building permits

d. Building permits Local building departments enforce most zoning through the issuance of building permits, which are required prior to specified construction. Building codes are also principally enforced by local governments through building permits and inspections scheduled at various stages of construction

An intermediary who arranges and closes loans in the name of a lender is called: a. Fiduciary b. Settlement agent c. Affiliate broker d. Mortgage Broker

d. Mortgage Broker Mortgage brokers are true intermediaries who arrange and close loans in the name of a lender-they neither close nor service loans in their own name.

Broker Antonio has been found guilty of blockbusting, of the potential penalties which should he not be concerned about ? a. Up to 1 year in jail b. Up to $100,000 in fines c. Suspension or revocation of his license d. Order to cease the violations

Up to 1 year in jail Penalties include fines (up to $50,000 for first violation and $100,000 for subsequent violations), injunctive relief (order to act or cease acting), attorney fees, punitive damages (money in addition to any fine), and licensee discipline by the Board (fine, suspension, or revocation). Jail time is not given for Fair Housing Law violations

Jennifer's property was just appraised for $350,000 and she still owes $250,000 on the mortgage, what is Jennifer's equity? a. $100,000 b.$350,000 c. $600,000 d. $250,000

a. $100,000 Equity is the difference between property value and debt. Jennifer's equity is $350,000 - $250,000 = $100,000

If a prospective minority buyer asks an agent to show her some available properties, the agent should: a. Show her any property for which she is financially qualified b. Advise her there are no available properties, even though there are some available c. Refer her to an agent with the same race or ethnicity d. Show her properties in areas that are predominantly of the same minority group

a. Show her any property for which she is financially qualified All of these choices describe violations of Fair Housing Laws, except showing property that a person is financially qualified to purchase.

A condensed history of the documents affecting real property is known as: a. an abstract of title b. the chain of title c. an abstract of judgments d. an affidavit of title

a. an abstract of title The condensed history is an abstract. A chain of title is similar, but not as complete. An affidavit of title is the swearing that there have been no encumbrances incurred since the title search.

The primary purpose of a deed is to: a. transfer title rights b. provide constructive notice c. prevent adverse possession d. prove ownership

a. transfer title rights A deed is a written document used to convey title to land.

What is the difference between a contract where a minor is a party to the contract vs. a contract that requires the kidnapping of a minor? a. voidable vs. void b. Invalid vs. valid c. void vs. voidable d. unenforceable vs. enforceable

a. voidable vs. void A voidable contract is valid but fairness may dictate one party (a minor or intoxicated person) may avoid liability vs. a void contract is for an illegal purpose (such as kidnapping) and one that never should be formed A minor may enter into a valid contract, but he may escape liability for the contract if he subsequently rejects it, which makes it voidable.

Harry gives his girl friend Megan a limited power of attorney to sign real estate documents for him while he out of town for work. Megan is best described as: An attorney-at-law b. A real estate agent c. An attorney-in-fact d. A helpful girlfriend

attorney in fact Megan COULD be any of the persons described. However, specifically regarding the role Megan plays being named in the limited power of attorney, she is functioning as an attorney-in-fact.

Under the Property Owners' Association Act, an association has how long after receipt to deliver a requested disclosure packet? a. 7 days b. 14 days c. 20 days d. 10 days

b. 14 days An association has 14 days to provide the disclosure packet after written request from the seller or authorized agent.

The statute of limitations as it applies to time-share properties is: a. 7 years b. 2 years c. 5 years d. 1 year

b. 2 years The statute of limitations for Time Share properties is 2 years. Any legal action based on inaccuracies in the project instrument, the POS, or any related contract must be brought within 2 years from the date of contracting.

Harry the Homeowner buys a new home. The purchase is financed with a conventional, amortized loan equal to $67,000. The interest rate on the loan is 8%, payable over 30 years. Harry's first monthly payment is $500. What is the loan balance after Harry's first payment? a. $60,000.00 b. $65,088.65 c. $66,946.67 d. $64,557.00

c. $66,946.67 First, you must calculate the annual and monthly interest as follows: Interest (annual) = $67,000 x 0.08 = $5,360 Interest (monthly) = $5,360 / 12 = $446.67. Next, deduct Harry's monthly payment from the monthly interest to determine the principal amount, and then the new loan balance: Principal = $500 - $446.67 = $53.33. Loan balance = $67,000 - $53.33 = $66,946.67. The correct answer is: $66,946.67

Who has authority to implement the Do Not Call Rules? a. The FTC b. The FCC c. Both the FTC and the FCC d. HUD

c. Both the FTC and the FCC The National Do Not Call Registry can be enforced by the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and the Virginia Attorney General's Office among other governmental entities

Which of the following items would be disclosed by a metes and bounds survey? a. Easement b. Marketability c. Encroachments d. Both B and C

c. Encroachments The metes and bounds survey should definitely reveal any physical encroachments. Easements may not be obvious and would have to be checked in the county records. Marketability is not something the surveyor considers, a surveyor is only concerned with the physical characteristics of the property itself.

Which fact would a broker most likely be liable for if he failed to disclose it to a buyer? a. the pipes leak b. the neighbor has loud parties c. the doorbell does not work D. the sidewalk is cracked

the pipes leak Failing to disclose certain material information could result in a broker committing fraud or misrepresentation. The state law mandated disclosures includes plumbing systems defects.

A contract which calls for one party to misappropriate or steal money would be: a. Voidable b. Void c. Valid d. Enforceable

void Contracts for an illegal purpose are always VOID (because courts won't enforce an agreement to break the law). If parties enter into a contract and there was fraud in the inducement, a mutual mistake, or involved a minor or an intoxicated person, the contract would be VOIDABLE, not VOID.

Bob and Sue make a combined annual income of $80,000 and pay $1,200 in monthly rent. What percentage is the rent of Bob and Sue's annual income? a. 18% b. 33% c. 25% d. 17%

18% First, determine the annual rent as follows: Annual rent = $1,200 x 12 = $14,400. Next, determine the percentage of the annual rent to Bob and Sue's annual income as follows: $14,400 / $80,000 = 0.18 0.18 = 18%

Under the Truth In Lending Act (TILA) in certain circumstances there may be a period of rescission where a consumer can request to have the financial agreement canceled/voided, how long is the rescission period? a. 3 days b. 5 days c. 7 days d. 1 day (24 hours)

3 days The right of a consumer to rescind a financial agreement under certain circumstances is provided under the Truth In Lending Act. This 3 day right of rescission period (without penalty) does NOT apply to an original mortgage on real property.

In the market data appraisal approach the appraiser has to locate comparables; make comparisons (known as the adjustment process); and value the property. How many comparables need to be involved in the comparisons? a. 1-3 b. 3-5 c. 5-7 d. It doesn't matter how many

3-5 The adjustment process, or comparison process, is accomplished by adjusting the sales price of three to five (3-5) comparables, based on their differences from the subject property. Adjustments are based on the following four factors: market conditions, location, physical characteristics, and financing.

Which of the following choices is NOT subject to the Virginia Landlord-Tenant Act? a. The owner of 5 condominium rentals b. A motel room rented for a period of 30 days c. buildings d. The owner of 10 or more single-family rental homes

A motel room rented for a period of 30 days The Landlord-Tenant Act does not apply to hotels or motels (with limited exemptions), but would apply to all of the other listed choices.

ABC Realty has been found guilty of running deceptive ads. The Federal Trade Commission issued ABC Realty a cease and desist order on May 1, 2021 and on May 4, 2021 the ad was still running. What penalties/fines might ABC Realty be facing? a. A minimum of $30,000 and corrective advertising b. A minimum of $60,000 and corrective advertising c. A minimum of $45,000 and corrective advertising d. A minimum of $15,000 and corrective advertising

A minimum of $45,000 and corrective advertising The Federal Trade Commission may impose civil penalties and the amount would be based on the severity of the infraction. Once the FTC has issued a cease and desist order for an ad, if ABC Realty continues to run the ad they may be fined more than $15,000 for every day the deceptive ad runs. The FTC may also require ABC Realty to run corrective advertising. In this scenario, if the ad continues to run for 3 days after the cease and desist order they could be fined at least $45,000 and the order to run corrective ads.

The force of water on land is known as: a. Littoral b. Riparian c. Annexation d. Accretion

d. Accretion Accretion occurs where natural forces, like water, cause land to move from one parcel to another. Riparian and littoral refer to intangible interests in the use of water. Annexation is the addition or incorporation of a territory.

If an owner is under an open listing contract the owner has all of the following options, except? a. Not be liable for broker's commission b. Involve multiple brokers in the sale of the property c. Establish the open listing agreement orally D. Allow the broker to set the sales price and keep anything over $20,000 profit as commission

D. Allow the broker to set the sales price and keep anything over $20,000 profit as commission An open listing agreement is an agency agreement between a seller and any number of brokers where the owner is only obligated to pay a commission to a broker if she successfully sells the property. As an alternative, the owner may sell the property himself and owe no commission to any broker. The open listing contract may be oral or written. The owner allowing the broker to keep anything over a designated profit point describes a net listing agreement which are illegal.

Acting for more than one client in a transaction without first obtaining the written consent of all clients is: a. Dual agency in violation of the law and rules b. Designated agency in violation of the law and rules c. An example of unworthiness and incompetence d. Not a violation so long as there is no harm

Dual agency in violation of the law and rules Dual agency is a situation where the same agent (broker or firm) represents multiple parties (buyer and seller) with competing interests in the same transaction. Most of the states that permit dual agency require an agent to obtain proper client consent before entering into the relationship

Which of the following actions is an example of commingling? a. Placing earned commissions in the same account as earnest money deposits b. Using personal funds to open an escrow account c. Placing earnest money from two buyers into the same escrow account d. Placing earned commissions in the same account as referral fees

Earned commissions belong to the broker. The broker must not place his own money (earned commissions) in with escrow funds. To do so is to commingle.

A broker manages three separate properties for the same owner. One property is in need of emergency repairs, but there is no money in the management account to cover the cost. The broker "borrows" money from another property's escrow account to make the needed repairs. Assuming he restores the borrowed funds on the next business day, which of the following statements is true? a. The broker is in violation of License Law for improperly handling escrow funds b. The broker is required to make the repairs with his own funds, then receive reimbursement from the owner c. The broker acted properly by safeguarding his client's interests d. Such action by the broker is proper because all properties are owned by the same person

The broker is in violation of License Law for improperly handling escrow funds Brokers cannot combine money from different escrow sources because it probably contains security deposits belonging to tenants of multiple properties. Even if he pays it back the next day, the broker is still in violation of the regulations.

Which of the following items is a broker NOT required to disclose to a prospective purchaser? a. The property is haunted b. The property is subject to seasonal flooding c. The state plans to construct a new highway near the property d. The monthly fee charged by the homeowners' associaton

The property is haunted The broker must disclose all material adverse facts about the physical condition of the property that are known to the broker. The property being haunted is an event or occurrence that does not affect the physical or environmental integrity of the property or its improvement (stigmatized property) and is not a required disclosure.

Nancy and Kevin enter into a valid sales contract. Nancy makes all the required disclosures, but fails to mention that her home was the birthplace of a famous rock star. Fans trespass the premises on a daily basis because of that history. In fact, this is the reason Nancy decided to sell. How likely is it that Nancy has violated Virginia's disclosure laws? a. Unlikely, because Kevin may enjoy the attention b. Very unlikely, because the events do not physically impact the house c. Somewhat likely, because Nancy acted intentionally d. Very likely, because this will disturb the covenant of quiet enjoyment

Very unlikely, because the events do not physically impact the house Virginia laws exempt disclosure of an act or occurrence that had no effect on the physical condition of the property or its improvements. While there may be another cause of action for failing to disclose this potentially material fact (and accompanying nuisance), it cannot be pursued under the VA Property Disclosure Act.

Is a Virginia broker allowed to establish a firm office in her residential home? a. Not unless the home office is at least 500 square feet in size b. Yes, as long as there is a separate office parking area c. No, a firm office cannot operate on a residential property d. Yes, if the office is kept separate from the living space

Yes, if the office is kept separate from the living space A firm cannot operate on residential property unless the business office is completely separated from the living quarters (i.e., separate entrances).

Title to real estate can be transferred under the terms of all of the following documents except: a. A living will b. A simple will c. A living trust d. A deed

a living will living will, is the best answer because a living will is not actually a will at all so assets cannot be disposed of using a living will. A living will is only used to inform medical professionals of a person's life support wishes. The other three answers: deed, living trust and simple will are all used to convey property.

The current market value of a property is $288,000. For tax purposes, it is assessed at 40 percent of the market value. The tax rate is $4 per $100 of assessed value. What is the amount of the tax due? a. $4,608 b. $460.80 c. $1,152 d. $11,520

a. $4,608 The formula to calculate taxes owed is: Tax Rate x Assessed Value = Annual Taxes Solution: First, determine the tax rate as follows: $4.00 / $100 = 0.04 Tax Rate. Next, in this equation you have to calculate the assessed value so multiply $288,000 x 40% (.4) = $115,200 Finally, multiply the tax rate by the assessed value to arrive at the solution as follows: 0.04 x $115,200 = $4,608 The annual property taxes are $4,608.

A broker is NOT required to hold money in an escrow account if: a. All parties to the contract consent b. The deposit amount is less than his commission amount c. Closing is scheduled in less than 30 days d. The deposit amount is less than $1,000

a. All parties to the contract consent The only time that a broker can accept money and NOT put it into his escrow account is when all parties agree in writing.

Owner Kelly is leaving the area for a one year period. She asks Salesperson Boren to manage her rental home for $45 per month while she is gone. In this situation, which of the following statements is true? a. Boren must work through his broker b. Boren must put the $45 in an interest-bearing escrow account c. This is fine because the time element is not longer than one year d. This is fine because the compensation is less than $1,000

a. Boren must work through his broker Boren is "employed" by her broker and can only receive compensation through her broker for any act of real estate brokerage. Therefore, the arrangements must be made with the broker and Kelly. All brokerage activity must be through the employing broker (since salespersons cannot act alone).

An associate broker is described as a: a. Broker working for another broker b. Non-resident, licensed in another state as a broker c. Broker who is also licensed as a rental location agent d. A salesperson in training to become a broker

a. Broker working for another broker The regulations describe an associate broker as a broker working for another broker. Also, a licensed broker other than the person designated as principal broker at a firm.

The Property Disclosure Form advises a buyer to do her own due diligence since the seller isn't required to make any representations about any of the following items, EXCEPT: a. whether the parcel is located in a noise zone b.adjacent parcels c. Local school ratings d.applicability of any historic district ordinances

a. whether the parcel is located in a noise zone Under Virginia Law, the owner of residential real property in any locality where a military air installation is located MUST disclose to the purchaser (on a form provided by the Board) whether the subject parcel is located in a noise zone and/or an accident potential zone. Such disclosure must state the specific zone in which the property is located.

By virtue of a signed listing agreement, the broker will generally have authority to do all of the following actions without the seller's consent, EXCEPT: a. Use the services of another broker b. Accept a full price offer for the seller c. Use the MLS to market the property d. Use the services of the salespersons in his own brokerage firm

b. Accept a full price offer for the seller Through the listing agreement, the seller employs the broker to produce a ready, willing, and able buyer in exchange for a commission. The broker may use the services of other brokers or his own salespersons in order to accomplish this act without the consent of the seller. However, as a general rule, the broker cannot accept or reject any offer (even if it's a full price offer). The decision to accept or reject an offer always remains with the client.

Stephanie recently became a licensed real estate agent and wants to have business cards made to hand out to potential clients. When Stephanie designs her new business cards which of the following can she choose to omit? a. Licensee Name b. Agent's License Number c. Contact Information d. Firm Name

b. Agent's License Number Business cards must include the firm name, licensee's name, and contact information. She does not have to have her real estate license number printed on the business cards.

A licensee is reviewing the property disclosure form with their client, which of the following should be highlighted as most concerning? a. Bedroom window lock broken b. Lead based paint in the basement c. Driveway needs to be sealed d. Garage door opener doesn't work

b. Lead based paint in the basement Although all material defects about a property should be discussed, hazards to health and safety and/or defects that can be very costly to repair should be highlighted by the licensee to any potential buyer. Lead based paint not only poses a health risk but can be costly to remove while all other choices are problems that are usually fairly inexpensive to fix.

Manteo and Ginnie are parties (buyers) to a real estate sales contract when Manteo loses his job and they decide to back out of the contract. They had provided a $1,500 earnest money deposit at the time the contract was signed and are now requesting their deposit back. Can the Broker simply return the deposit? a. Yes, as long as the buyer and seller agents agree b. Yes, If the sales contract stipulated the deposit must be returned c. Yes, as long as the real estate board approves d. No, the deposit must go to the seller since the buyer breached the contract

b. Yes, If the sales contract stipulated the deposit must be returned Manteo and Ginnie have breached the sales contract. In the event of a breach, the broker must hold the escrow funds until the parties (not the agents) agree on how they should be disbursed, the funds are successfully interpleaded into court, or until a court orders disbursement. The broker can also disburse according to the specific terms of the sales contract (requires written notice and a minimum waiting period).

Tom shows a house with a faulty furnace. Should he tell the buyer/customer after finding out about this condition? a. yes, because there is an agency relationship b. yes, because it is material c. no, unless he is a dual agent d. no, unless he has the permission of the seller

b. yes, because it is material A faulty furnace is a material defect and a mandatory disclosure and must be disclosed to all parties in the transaction, regardless of type of agency or permission.

Broker Sam lists a house and sells it 2 months into the listing period. Sam tries to collect his commission after closing, but the seller refuses and correctly asserts that she has no legal obligation to pay. What type of listing did Sam have? a. Exclusive right-to-sell listing b. Open listing c. Net listing d.Exclusive agency listing

c. Net listing With a net listing (which is illegal in most states), the seller specifies the NET amount that he must receive and the broker gets anything over and above that amount. If the property did not give the seller his specified net, then the broker would not be entitled to a commission (even though he sold the property). In all of the other listings, the commission would be due if the broker sold the property.

"For rent by owner. Share townhouse, 3 bdrm. 2 ba. conv. to shops and trans. Call 123-4567 for details. No handicap or males applicants." Is this ad in violation fair housing laws? a. Yes, handicap cannot be excluded b. Yes, gender types cannot be excluded c. No, this is a legal ad d. Both A and B

c. No, this is a legal ad Owners who occupy their homes, but sell or rent rooms or units, are exempt from the non-racial aspects of the Fair Housing Act provided their home contains four (4) or fewer units. The owner must actually maintain one of the units as his legal residence for this exception to apply. Where the Fair Housing Act applies, race is never an exemption.

Escrow agents hold money or documents for a third party until the transaction is complete, who would not be allowed to act as an escrow agent? a. Principal broker b. Attorney c. Salesperson d. Both B and C

c. Salesperson Most states require real estate agents (brokers) — that hold money or documents on behalf of another until specified terms and conditions have been satisfied—to place such items in an escrow account. Attorneys are often permitted to act as escrow agents, but this will vary by state. Generally, salespersons may not act as escrow agents, although they may accept money and documents for escrow on behalf of their employing broker (firm).

The Federal National Mortgage Association (Fannie Mae), The Government National Mortgage Association (Ginnie Mae) and The Federal Home Loan Mortgage Corporation (Freddie Mac) are all part of the: a. Primary Mortgage Market b. Federal Reserve System c. Secondary Mortgage Market d. Commercial Banking System

c. Secondary Mortgage Market The Federal National Mortgage Association is also known as Fannie Mae; The Government National Mortgage Association is also known as Ginnie Mae; and The Federal Home Loan Mortgage Corporation is also known as Freddie Mac and they are all part of the secondary mortgage market. The secondary mortgage market participants buy mortgages and re-sell them to provide funds to the primary market lenders so they can originate loans (lend money).

Stewart incurred serious injuries during a vehicle accident and due to major hospital bills was unable to continue house payments, which eventually resulted in foreclosure. Just after the lender began auction procedures, Stewart was awarded a monetary settlement from the vehicle accident and wanted to get his house back. Does Stewart have any right to his house after foreclosure? a. Stewart cannot redeem title rights after foreclosure b. Stewart automatically has the right to redeem his title up to 1 year after foreclosure c. Stewart may be able to reclaim title rights even after foreclosure d. Stewart would have to file suit in court to redeem title rights

c. Stewart may be able to reclaim title rights even after foreclosure The right of redemption is a limited period of time following a judicial foreclosure sale in which an owner can pay his debt and reclaim title to his property.

In Virginia, sellers of residential property must disclose that the: a. previous owner was murdered b. neighbor is a registered sex offender c. basement floods during heavy rain d. current occupant is afflicted with HIV

c. basement floods during heavy rain On the required Disclosure Form that the Seller must give to a Buyer, the Buyer is advised to do his own due diligence ("buyer beware"), because the Seller is only required to disclose material defects in the property. The seller is not required to (along with other information) provide information on any registered sexual offenders in the area and HIV (illegal to disclose) and murder are not things that effect the physical condition of the property and are not mandatory disclosures.

A buyer and a seller entered into a valid contract. For personal reasons that developed, the buyer no longer agreed with the terms of the contract and asked to be released. The seller agreed to enter into a new contract with the buyer and released the buyer from any obligation to the original contract. This would be an example of: a. redemption b. implied consent c. novation d. Assignment

c. novation Novation is where contracting parties agree to substitute one agreement in part or in full for another agreement. Through novation, the old agreement terminates and is replaced by the new agreement.

Which of the following terms is not an element of value? a. scarcity b. transferability c. obsolescence d. Utility

c. obsolescence Elements of Value (DUST): Regardless of its purpose, an item has some value if it satisfies the following four (4) essential elements: Demand (desire to buy and an ability to pay), Utility (item satisfies a human need or desire, such as shelter, income, or recreation), Scarcity (limited in supply—as supply diminishes, value increases), and Transferability (ability to transfer from one owner to another).

Which of the following is not a mandatory disclosure under Virginia law? a. Loud noise zone b. Tourism zone c. Construction zone d. Flood zone

construction zone Under Virginia Law, the owner of residential property located partially or wholly within a designated tourism zone must disclose in writing to the purchaser that the subject parcel is located within a tourism activity zone. This disclosure must include a description of potential impacts associated with the location, such as: special events, parades, temporary street closures, and indoor/outdoor entertainment activities. Loud noise areas (such as airport flight paths) also must be disclosed to potential buyers. Property located in specially regulated area (flood plain, waterfront) must be disclosed.

A seller wants to sell his property and net $14,000 from the proceeds of the sale. He must pay off his existing mortgage debt of $83,500, closing costs of $3,250, and has agreed to pay a 7% commission to his broker. How much must the property sell for to realize that $14,000? a. $100,750 b. $104,839 c. $107,803 d. $108,333

d. $108,333 Start by adding all of the pay-outs: Existing mortgage = $83,500; Pay closing costs = $3,250; Seller's desired net =$14,000. Amount required (not including commission) = $83,500 + $3,250 + $14,000 = $100,750. In addition, the broker will receive a 7% commission on the sales price. Using that information, we can assume that $100,750 is 93% of the selling price. 100% - 7% = 93% So, we know that "something" times 93% is equal to $100,750. 0.93X = $100,750 Therefore, dividing $100,750 by 93% will allow us to figure out what that "something" is. X = $100,750 / 0.93 X = $108,333

If a person has been discriminated against in a real estate transaction, they could file a complaint with the HUD within: a. 180 days b. 2 years c. 90 days d. 1 year

d. 1 year Federal Fair Housing Laws fall under the direction of the Department of Housing and Urban Development (HUD). Any person who believes he has been discriminated against (aggrieved party) may file a complaint with HUD within one year of the alleged act, or HUD may initiate its own complaint

A final disciplinary decision by the Board is NOT subject to an appeal or a hearing if it involves which of the following: a. A licensee found guilty of conversion b. A licensee found guilty of steering c. A licensee who accepted an offer on behalf of a seller d. A licensee who didn't pay the Transaction Recovery Fund assessment

d. A licensee who didn't pay the Transaction Recovery Fund assessment There is no appeal of suspensions for failing to pay transaction recovery fund assessments or for revocations due to transaction recovery fund payments.

"Dig with C.A.R.E.—Keep Virginia Safe!" is a message established by the Virginia State Corporation Commission (SCC) to assist in educating Virginia citizens about the Underground Utility Damage Prevention requirements. What does C.A.R.E stand for? a. Call, Avoid, Respect, Excavate B. Call, Allow, Respect, Examine c. Care, Allow, Respect, Excavate d. Call, Allow, Respect, Excavate

d. Call, Allow, Respect, Excavate C - Call Miss Utility at 811 before you dig. Your Miss Utility ticket's life is fifteen (15) working days beginning at 7:00 a.m. the following working day after Miss Utility is notified. A - Allow the required time for marking. The waiting period is 48 hours and begins at 7:00 a.m. the next working day after you contact Miss Utility. This does not include Saturdays, Sundays, or legal state and national holidays. R - Respect the marks. Marking underground utility lines is the way utilities show the approximate horizontal location within two feet of either side of their facilities. E - Excavate carefully. Prior to excavating, conduct a site inspection that includes verifying the correct location, finding the markings, and to the best of your ability, checking for clear evidence of unmarked utility lines.

Which agency administers and enforces the Real Estate Settlement Procedures Act (RESPA)? a. State License Laws b. National Association of Realtors (NAR) c. Federal Reserve Board d. Consumer Financial Protection Bureau (CFPB)

d. Consumer Financial Protection Bureau (CFPB) RESPA (Real Estate Settlement Procedures Act) is a Federal law administered and enforced by the Consumer Financial Protection Bureau (CFPB), that regulates closing procedures to ensure that lenders fully inform buyers and sellers of all settlement costs, and that lenders do not engage in unfair practices.

One of the principal purposes of zoning is to: a. Restrict building b. Generate revenue through taxes c. Restrict business activities d. Effectively plan

d. Effectively plan Zoning ordinances are the tools city planners use to implement a master plan. Through zoning, a master plan enables more effective planning and consistency in regards to a variety of uses.

When a buyer makes an offer and a seller accepts the offer, what is created? a. A contract b. A purchase agreement c. An agency relationship d. Either A or B

d. Either A or B An offer is a promise from one party to enter into a binding agreement with another party, subject to specified terms or conditions ("I will buy your house for $200,000"). Once presented, an offer becomes a contract if it is accepted, supported by consideration, and has a lack of any contractual defenses.

An owner entered into a valid listing agreement. During the agreement period, the owner sells the property himself. The seller is not legally required to pay a commission to any broker. What type of listing agreement did the seller have? a. An open listing b. An exclusive agency c. An exclusive right-to-sell listing d. Either A or B

d. Either A or B In an open listing, the only person that gets paid is the broker that sells the property. So, if the owner sells the property, no commission is due to anyone. In an exclusive agency, the owner reserves for himself the right to sell the property and NOT pay a commission to the listing broker. In an exclusive right-to-sell listing, the broker gets her commission regardless of who procures the sale (even if the seller finds her own buyer). Therefore, the seller could have either an open listing or an exclusive agency.

Which of the following firm names is in compliance with board regulations? a. Zen Realty b. Salesperson Sally Homes c. Broker Bill Realty d. Either A or C

d. Either A or C All firms may operate under fictitious names (Zen Realty instead of Bill Bower Realty) . However, non-broker owned firms can only be licensed in the company's legal name. The name of a salesperson cannot appear in the firm name.

The Federal Fair Housing Act prohibits discrimination on the basis of all of these protected classes, except: a. Sex b.Family c.Religion d. Elderly

d. Elderly Elderly is not a Federally protected class but is a protected class added under Virginia Fair Housing laws. Familial status, religion and sex are all protected classes under Virginia AND federal fair housing laws

Salesperson Vida has been working with her clients, Amy and Aaron, for about two weeks when she has a family emergency that she knows will take her out of town for at least a month. She advises her clients to find a new agent and they agree, but they also give Vida $200 for her help the last couple weeks. Vida uses the gift to buy her plane ticket back home. Such action is: a. Illegal, unless properly disclosed b. Legal, if Vida performed as agreed for the past two weeks c. Legal, if Vida maintains a record of the gift d. Illegal, because Vida can only accept money from her broker

d. Illegal, because Vida can only accept money from her broker As a salesperson, you may only accept money or other valuable consideration from your employing broker.

Mel is a real estate agent with ABC Corp. Mel is selling his home and has an interested buyer on the phone, what is something Mel must tell the potential buyer? a. No disclosures are required until a formal disclosure form is presented to the buyer b. Mel must disclose the square footage of the home c. Mel must disclose when the last survey on the property was completed d. Mel must disclose he is a real estate licensee

d. Mel must disclose he is a real estate licensee Disclosure of license status is required if the agent is selling his own property, property owned by a relative, property owned by his employer, or property owned by a business in which he has ownership interest. Mel must disclose his license status on the phone whether the buyer asks or not, all other choices may be disclosed on the phone, or at a later date when the buyer asks or there is a formal disclosure form presented to the buyer.

According to the Virginia Time-Share Act, advertisements that include a free gift or prize must disclose all of the following details, EXCEPT: a. expiration date of the offer b. odds of winning c. retail value d. start date of the offer

d. start date of the offer Time Share Initial sale (new construction by the declarant) must include a public offering statement (similar to condominium POS, discussed below); a contract containing disclosure of the purchaser's right of rescission (7 days after contract ratification), and must conform to minimum marketing standards (no pre-registration offers; limited marketing permissible; no false or misleading statements; and proper disclosure of the nature, value, odds, conditions, and expiration of any prizes or promotions).

Transfer taxes are generally paid by the: a. Seller b. Grantor c. Lessor d.All of the above

d.All of the above Transfer taxes are usually paid by the seller, grantor or lessor and are due when the deed is recorded.

Which of the following actions is NOT an act of real estate brokerage? a. Renting 1/2 of a duplex for a friend b.Helping a friend sell his house for a fee c.Taking a listing d.Selling a business for a relative

d.Selling a business for a relative Note that businesses are classified as personal property. You do not need a real estate license to sell personal property.

Which of the following statements is correct in relation to deed and zoning restrictions? a. zoning regulations are imposed by the Federal government b. deed restrictions are imposed by individuals c. if there's a conflict between a deed restriction and zoning regulation, the deed restrictions will apply d. None of the above

deed restrictions are imposed by individuals Both restrictive covenants and zoning impose restrictions on private property uses. However, zoning is established/enforced by local governments and is based on law and restrictive covenants arise from contractual agreements (developer and all subsequent purchasers). In the event of a conflict, zoning laws must be followed over deed covenants.

Which of the following is the most common type of lease agreement? a. Gross lease b. Ground/Land lease c. Percentage Lease d. Graduated Lease

gross lease In a gross lease (also called a fixed lease or flat lease), the lessee pays rent at a fixed rate. In turn, the lessor pays taxes, insurance, and all other expenses such as maintenance and repairs. The Gross Lease is the most common type of rental agreement.

Using the _____________ approach to valuation would be most effective in the appraisal of a shopping center. a. Income b. Cost c. Market Data d. Substitution

income The income capitalization approach is used for valuation of income-producing properties such as apartment buildings, office buildings, shopping centers, and industrial parks.

Which legal instrument could convey a tenancy for years? a. Deed b. Land contract c. Lease d. Either A or B

lease A lease is the instrument of conveyance because a tenancy for years (or estate for years) is a type of leasehold.

The Virginia Residential Landlord and Tenant Act does not apply to which of the following dwellings: a. All apartment complexes b. All duplexes c. single family houses when the owner rents 2 or fewer homes d. All residential rentals

single family houses when the owner rents 2 or fewer homes The VA Residential Landlord Tenant Act does not apply to: commercial or other non-residential tenancies; public and private institutions (prisons, religious, educational, etc.); social organizations (fraternity houses); occupancy in a campground; non-paying tenants (those living rent free); landlord employees (maintenance persons living on-site); transient housing (hotels, motels, boarders) if it is a person's primary residence for less than 90 consecutive days or if a lease was not signed; and landlords with few holdings (2 or fewer single-family houses for rent) if the lease includes an opt-out statement. In such case, general landlord and tenant statutes will apply