RE final exam

To which of the following borrowers might a lender be most likely to recommend an FHA loan?

A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores

Which of the following situations is the best example of designated agency?

Agent Devin represents seller Angie, and agent Denise represents buyer Alex. Alex is buying Angie's condo. Devin and Denise both work for Blue Skies Realty.

Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne then learned that she needs to move the closing date to June 15. She'll accomplish this with an ______ to the sales contract.

Amendment

Alberto is a real estate licensee. Assuming that none of the following are his clients but are parties to a potential transaction, to whom must he provide an agency disclosure form?

Any party

Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?

Are you aware of any structural issues with the property?

Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis' condo is worth much more two years later. Which economic characteristic does this demonstrate?

Area preference

Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City's property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?

As a property manager, Marissa owes fiduciary duties to her client and the apartment community.

Which of these statements about a conventional mortgage loan is true?

Borrowers with larger down payments and higher credit scores are most likely to select a conventional mortgage.

Which of these brokers is providing adequate supervision and training for their new licensees?

Brannon reviews and discusses licensees' work to make sure it meets regulations, and provides training opportunities to all associates.

Which of these is a rule that governs how escrow money can be disbursed?

Brokers can disburse escrow money at the conclusion of the transaction to settle the agreement between the parties.

Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?

Busy street

A local buyer is purchasing a property for $120,000. What will the seller pay in transfer tax if the rate is $.37 per $100?

$444

Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment?

$54,150

John and Amy purchased a builder's home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage?

10 years

Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. What is Jared's brokerage's commission rate?

6.5%

Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting construction of any building taller than one story. Ronesha wants a three-story house. What should she do?

Conform to the deed restriction.

Which of these situations represents the illegal practice of blockbusting?

Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

Correlation

Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt's newly built homes is the ______.

Cost approach

Jules is new to property management. Which of the following tasks may be one of her duties?

Creating a budget for next year's projected maintenance costs

What factors does the underwriter consider in reviewing a mortgage loan application?

Credit, capacity, and collateral

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement (round to the nearest dollar).

Credited $1,207

Virginia licensee Dale has just presented an offer to buy a condo on behalf of his buyer client Nelson. He files the written offer in his brokerage and sends copies to the seller, the Greason family, and their broker Gary. What, if anything, has he done wrong?

Dale has done nothing wrong; he's handled the paperwork properly.

Fewer buyers in a higher price range would create what kind of pressure on housing prices?

Downward

What must sellers provide prospective buyers of homes built prior to 1978, in addition to the federally required disclosure form?

EPA lead safety pamphlet

The Virginia Fair Housing Office's list of protected classes includes these groups in addition to the federally protected classes.

Elderliness, sexual orientation, and veteran status

Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, which Hank agreed was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?

Real estate contracts must be in writing.

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?

Refuse to rent to a female tenant.

Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?

SARA

Which of these statements about septic systems and disclosure are true?

Septic systems that don't involve additional maintenance requirements and a waiver don't have to be disclosed.

An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A?

Servient estate

The Virginia Condominium Act is concerned that condo owners and potential buyers have the information they need to make informed decisions. To that end, which of the following does this act regulate?

The information that must be included in public offering statements

Which of the following pieces of information does Linda, a Virginia real estate salesperson who works for Big Valley Realty, NOT have to include on her business cards?

The name and number of her sponsoring broker

Virginia's Big Valley Brokerage was just audited and the auditor found several instances of noncompliance. What happens next?

The principal broker must address the noncompliance or create a plan to do so.

Before conducting any work that involves ______________, the worker should call 811 so that flags can be put out to mark utility lines and avoid damage.

Excavation

According to the Virginia Property Owners' Association Act, which of the following is NOT one of POA members' rights?

The right to waive their POA fees during times of financial duress

Which of the following statements is true regarding HOA/POA disclosure laws?

HOAs/POAs are responsible to assemble their disclosure packets and deliver it when they receive a written request.

A landlord has an available unit but refuses to show it to several applicants. These applicants are all single women with children. The applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law?

He is discriminating against people based on familial status by refusing to show available housing.

Which of these questions or statements from an unrepresented party is substantive and requires the agent to provide the disclosure for unrepresented parties?

How firm is the seller on price?

Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?

If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed.

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______.

In writing, and in accordance with uniform standards

Which approach to value is typically used for investment property of two- to four-family units?

Income approach

Ashish is purchasing a bank-owned property. His real estate agent tells him the bank is offering insurable, not marketable, title. What does this mean to Ashish?

Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy.

What happens to an initial offer from the buyer after a seller counters?

It's no longer in play.

Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?

The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

Which of the following actions would result in the legal termination of an agency agreement?

The term specified in the agency agreement expired.

Assuming licensee Shannon has actual knowledge of all of the following property issues, which should she disclose to prospective buyers?

The upstairs bathroom has a leaky toilet.

What special concern do foreclosed properties often present?

There could be hidden title issues.

Which of the following is true about the Chesapeake Bay Preservation Act and its effects?

Those who want to buy a property in an area affected by this act should work to find out how the additional restrictions affect the property.

In which of these scenarios would the Virginian need a real estate license?

Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

Jim represents Joel in the sale of Joel's country acreage and house. Jim's business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?

Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.

Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?

Joint tenancy

To be an effective property manager, a licensee must be familiar with a variety of ______.

Lease agreements

Leo's client is looking for a property with at least 2,500 finished square feet. He finds a 2,200-square-foot property with all the other features the client is looking for and purposely fails to mention the square footage. His client agrees to look at the property, falls in love with it, and wants to make an offer. Which of these statements accurately represents Leo's level of misrepresentation in this situation?

Leo obviously knew about the square footage and intentionally didn't mention it. He's guilty of intentional misrepresentation.

Which of these situations does the Americans with Disabilities Act address?

Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.

Assuming that dual agency is legal where these scenarios occur and that the licensees' brokerages permit it, which of these situations demonstrates illegal dual agency?

Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.

In a real estate transaction in which you represent the seller, your duty to other parties is to ______.

Treat them honestly and fairly

Which of the following is an example of price fixing?

Two brokerages determine a standard commission rate.

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

Use variance

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Voidable

Hope's mortgage created a lien against the property she purchased with the mortgage. What kind of lien is this?

Voluntary

Agent Toby represents his seller clients, Mr. and Mrs. Poole. Which of these actions would violate one of the statutory duties he owes them?

When the house is under contract, Toby receives three more offers that he doesn't present to the Pooles.

Which of the following factors helps the IRS determine whether a licensee is classified as an employee or an independent contractor?

Whether the licensee receives benefits from the brokerage firm

Chelsea's mother owns several rental properties and intends to keep them to pass on to the family. Chelsea holds a special power of attorney to manage the rental properties, including working with the property manager to place and evict tenants as necessary. Which of these would violate the POA?

Without consulting her mother, Chelsea decides to completely refurbish one of the properties.

Bernie represented Oscar in the sale of Oscar's home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?

Yes, because "exclusive right to sell" means Bernie gets paid no matter who finds the buyer.

Doug is a real estate licensee. He is a property manager for Julie. He is approached by Jessica to manage one of her new properties. Can Doug do this?

Yes, licensees can perform property management activities for multiple owners.

Jared wants to purchase property. One of the properties his agent shows him was formerly zoned for commercial use. It has a steep drop off at the back of the property, as well as some soft spots and mounds. Should Jared's agent recommend that he have a home inspector investigate it?

Yes, these are clues that the property may have been used as a waste disposal site.

As a Virginia licensee, what is the maximum outcome if you're convicted of having committed a serious violation and your broker is found to have knowledge of it?

You and the broker may both be fined, and you may both have your licenses suspended or revoked.

Which of the following is an example of commingling?

Mixing earnest money with personal funds

Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

Pending

Because there were no deadlines specified in the contract, Myron didn't think there was a problem with his waiting to apply for a loan to help purchase the property. He was therefore a little surprised and not very happy when the seller sued him for breach of contract, stating that the delay was impacting the seller's ability to purchase a new home. What did Myron fail to do?

Perform his contractual obligations within a reasonable time.

An example of this type of leasehold estate is a month-to-month lease.

Periodic estate

Marilyn is reviewing the inspection report with her buyer clients. Which of the following issues in the report should Marilyn flag as most significant?

Presence of mold

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control

Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

Promissory note

Molly is going over her disclosure responsibilities with her agent, Tim. "You know, I think I might be in a military aircraft noise zone," she tells him. "But I don't know. How can I find out?" What should Tim say?

"We can find this information in this area's official zoning map."

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?

$1,335.67

Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $201,500. Their tax rate is 0.63%. How much will their monthly taxes be?

$105.79

A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?

$315,789

Salesperson Nicola just told her principal broker Carter that she's going to transfer to another brokerage. What duties, if any, does Carter have in this transaction?

Carter must return Nicola's license to the VREB within 10 days.

Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA?

Get a low 4.925% APR

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?

75%

What is the best description of a deed?

A document to transfer ownership/interest in real estate

Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of agreement do Desmond and the Harpers have?

Bilateral

Chrissy lives in Lake Ridge Estates, a neighborhood in which vinyl siding may not be used on homes. This HOA regulation is what kind of private land control?

CC&R

Which of the following activities requires an agency agreement to be in place before performing it?

Licensee Ben helps his client Clint negotiate a better deal on the house he wants to buy.

Which of the following best describes post-licensing education (PLE) requirements in Virginia?

Licensees must complete 30 hours of PLE in the first year after receiving their license.

Molly has entered into an agreement with Gil, a real estate licensee. Gil is performing only a few duties for Molly and is representing her as an agent. In what capacity is Gil acting?

Limited service agent

Which of these is NOT an example of improper escrow account handling?

Lou maintains all account-related records for three years after the transactions close.

Trevon's landlord Lucia is pretty good, but she isn't doing one thing that must be done. For which of these infractions can Trevon take action or seek restitution, according to the Virginia Residential Landlord and Tenant Act?

Lucia hasn't fixed the electric panels in Trevon's building, which are definitely not up to code.

Marcus, a Virginia listing agent, told a potential buyer that his seller client's property had no flooding issues, though the seller had mentioned water in the basement a few years back before the yard was properly graded. Which of these statements is true?

Marcus committed intentional misrepresentation because he knew his statement was false.

In which of the following situations can the state use its power of escheat?

Nadine died with no heirs and no debt.

You're representing Abe and Ben in a dual agency situation. Abe tells you something that would give Ben a distinct advantage if he knew. Do you tell Ben?

No, because you can't share one client's confidential information with another client.

Sheila, a salesperson, is changing brokerages. What does she have to do?

Notify the VREB of her transfer.

Examples of real property include which of the following?

Shelves attached to the wall with brackets

Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

Tenancy in common

Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?

The agency agreement is terminated if the property is destroyed.

A seller tells his agent that he has to sell his house quickly because of a divorce proceeding and that he's willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?

The agent has breached his duty of confidentiality to his client.

There's a registered sex offender living in Al's neighborhood. If Al wants to sell his house, who is responsible for uncovering or disclosing the information about the presence of a registered sex offender?

The buyer

The Real Estate Board has issued a charge of discrimination against a real estate licensee in Virginia. What should the licensee expect to happen next?

The charge will be referred to the Attorney General's office