Free Vermont Real Estate Practice Exam

Q1.The Vermont Real Estate Commission is composed of members appointed by the Governor. Which of the following best describes the composition required under 26 V.S.A. Chapter 41?

• A.All members must be licensed real estate brokers with at least five years of active practice
• B.The Commission includes both licensed real estate professionals and at least one public member who is not engaged in the real estate profession
• C.The Commission consists entirely of public members with no industry representatives to avoid conflicts of interest
• D.Members are elected by Vermont licensed brokers and salespersons rather than appointed by the Governor

Q2.RESPA prohibits kickbacks and unearned fees in connection with federally related mortgage loans. Which of the following scenarios would MOST likely violate Section 8 of RESPA?

• A.A title company providing a free settlement software platform to a lender in exchange for referrals
• B.A lender charging a borrower a $50 document preparation fee that is disclosed on the Closing Disclosure
• C.A real estate agent referring a buyer to an affiliated lender after disclosing the relationship in writing
• D.An escrow officer splitting their own earned fee with a supervising escrow company

Q3.A Vermont brokerage wishes to act as a dual agent in a transaction. Under 26 V.S.A. Chapter 41, when must the informed written consent of BOTH parties to dual agency be obtained?

• A.At any point before the closing, as long as it is before the deed is recorded
• B.Before the dual agency relationship commences — that is, before the licensee begins representing both parties simultaneously
• C.At the time the offer to purchase is presented, because that is when dual agency technically begins
• D.Only after the seller has accepted the offer, to avoid prematurely disclosing the buyer's interest

Q4.A broker managing a residential rental portfolio in Vermont receives instructions from a property owner to avoid showing a vacant unit to applicants with school-age children because the owner believes families 'cause more wear and tear.' The broker's affiliated salesperson asks how to handle prospective tenant inquiries. As the supervising broker, what is the MOST legally and ethically appropriate response?

• A.Refuse the owner's instructions, explain that steering applicants away from families with children violates the Fair Housing Act's prohibition on familial status discrimination, and require the salesperson to show the unit to all qualified applicants regardless of family composition.
• B.Follow the owner's instructions because a property owner has the contractual right to set tenant selection criteria, and the broker's duty of loyalty to the client supersedes general fair housing principles in a private rental arrangement.
• C.Advise the salesperson to show the unit only to applicants who disclose they have no children, since this avoids discriminatory intent and limits the broker's direct liability under the Fair Housing Act.
• D.Permit the restriction only if the property qualifies as housing for older persons under the Housing for Older Persons Act (HOPA), deferring the investigation of that qualification to the salesperson.

Q5.A broker is reviewing her firm's lending referral practices after a federal audit notice arrives. One of her affiliated salespersons has been routinely steering minority applicants toward higher-rate loan products offered by a preferred lender, even when those applicants qualified for lower-rate conventional products available through the same lender. Which federal statute is PRIMARILY implicated by this conduct, and what is the broker's most significant exposure as the supervising principal?

• A.The Equal Credit Opportunity Act (ECOA) is primarily implicated; the broker faces vicarious liability for the salesperson's discriminatory steering because a broker's supervisory duty requires implementing written anti-discrimination policies and monitoring referral patterns of affiliated licensees.
• B.The Real Estate Settlement Procedures Act (RESPA) is primarily implicated; the broker's exposure is limited to the referral fee received by the salesperson, since RESPA governs all settlement service provider relationships exclusively.
• C.The Truth in Lending Act (TILA) is primarily implicated; the broker's exposure is confined to required disclosure corrections, because TILA places liability solely on the creditor rather than on referring brokers.
• D.The Fair Housing Act is primarily implicated, but the broker has no supervisory liability because federal law holds only the individual salesperson responsible for discriminatory acts taken without the broker's direct instruction.

Q6.Under Vermont law, the agency responsible for overseeing the Real Estate Commission and providing administrative support to it is the:

• A.Vermont Department of Financial Regulation
• B.Vermont Office of Professional Regulation (OPR)
• C.Vermont Department of Commerce and Community Development
• D.Vermont Secretary of State's Office

Q7.At settlement, the buyer's lender collects two months of homeowner's insurance premiums into an escrow impound account. Under RESPA Section 10, what is the maximum cushion (reserve) a lender may require in a borrower's escrow account at any point during the year?

• A.One month's aggregate escrow payments.
• B.Two months' aggregate escrow payments.
• C.Three months' aggregate escrow payments.
• D.Six months' aggregate escrow payments.

Q8.A seller deliberately fails to disclose a known roof defect on the SPDS. After closing, the buyer discovers it and sues. What is the most likely legal theory?

• A.Strict liability — sellers are automatically liable for all undisclosed defects
• B.Fraudulent misrepresentation or concealment — the seller had knowledge and failed to disclose
• C.Breach of warranty — the SPDS operates as a warranty of property condition
• D.Negligence per se — any SPDS omission is automatically a statutory violation

Q9.A Vermont listing broker advertises a property on a public website listing only a phone number and the words 'Call Agent Sam.' The broker's brokerage name does not appear anywhere in the advertisement. Under Vermont Real Estate Commission rules, this advertisement is:

• A.Lawful, because salesperson-level identification is sufficient for online advertising in Vermont.
• B.Lawful, because Vermont only requires brokerage identification in print media, not on the internet.
• C.Unlawful, because all Vermont real estate advertisements must clearly identify the licensed brokerage under whose authority the salesperson operates.
• D.Unlawful only if the property is listed at a price exceeding $500,000.

Q10.When a buyer breaches a real estate contract by failing to close, what is the most common remedy available to the seller?

• A.Keeping the buyer's earnest money as liquidated damages
• B.Specific performance to force the buyer to complete the purchase
• C.Suing for the full purchase price
• D.Automatically transferring title to a backup buyer

Q11.Under the Truth in Lending Act (TILA), when must a lender provide the initial Truth in Lending disclosure to a mortgage applicant?

• A.Within 3 business days of receiving a completed application
• B.Within 7 business days of loan closing
• C.At the time the loan application is submitted
• D.Within 30 days of loan approval

Q12.A buyer's agent is asked by the listing agent what the buyer's 'highest and best' number is. The buyer's agent should:

• A.Share the number — buyer's agents should be transparent to facilitate transactions
• B.Share it only if the seller's agent discloses the seller's minimum acceptable price first
• C.Share it only if the listing agent requests it in writing
• D.Refuse — the duty of confidentiality prohibits sharing the buyer's negotiating position with the opposing party

Q13.A purchase contract includes a provision that the sale is contingent upon the buyer selling their current home within 60 days. If the buyer's home does not sell within this timeframe, what happens to the contract?

• A.The contract automatically renews for another 60 days
• B.The seller can sue for specific performance
• C.The buyer must proceed with the purchase regardless
• D.The contract becomes voidable at the buyer's option

Q14.Under Vermont Real Estate Commission rules, a licensed salesperson who changes her principal place of employment from Brokerage A to Brokerage B MUST ensure that:

• A.She completes a new 40-hour pre-license education course before activating her license with Brokerage B.
• B.Her license is transferred to Brokerage B through the Vermont Real Estate Commission before she engages in any licensed activity on behalf of Brokerage B.
• C.She provides written notice to all former clients of Brokerage A within 30 calendar days of the transfer.
• D.Brokerage B pays a non-refundable transfer fee directly to Brokerage A as required by Commission regulation.

Q15.Under the Truth-in-Lending Act (TILA), what is the primary purpose of the three-day right of rescission in certain real estate transactions?

• A.To allow buyers to inspect the property one final time
• B.To provide consumers time to cancel certain credit transactions secured by their home
• C.To give sellers time to review the purchase offer
• D.To allow lenders to verify the borrower's income