Free Vermont Real Estate Practice Exam

Q1.The most important thing a listing agent can ask a buyer's agent when reviewing a financed offer is:

• A.Whether the buyer has a pre-qualification, pre-approval, or loan commitment — and from what type of lender
• B.Whether the buyer has made offers before
• C.Whether the buyer's agent will reduce their commission
• D.Whether the buyer will waive the inspection contingency

Q2.Vermont's Fair Housing and Public Accommodations Act protects 'source of income' as a characteristic in housing. Which of the following scenarios would MOST likely constitute a source-of-income violation under Vermont law?

• A.A landlord requires all applicants to show proof of income equal to three times the monthly rent.
• B.A landlord refuses to rent to a tenant solely because the tenant intends to pay using a housing choice voucher (Section 8).
• C.A landlord requires a credit check for all prospective tenants.
• D.A landlord asks all applicants for references from prior landlords.

Q3.A Vermont licensed broker is the subject of a formal complaint filed with the Vermont Real Estate Commission alleging misappropriation of escrow funds. Under 26 V.S.A. § 2296 and the Commission's disciplinary framework, which of the following accurately describes the Commission's range of disciplinary authority upon finding a violation?

• A.The Commission may only revoke or suspend the broker's license; it has no authority to impose civil fines because monetary penalties require a separate action in Superior Court.
• B.The Commission may impose a combination of remedies including license revocation, suspension, probation, reprimand, and civil administrative penalties, but cannot order restitution to injured parties.
• C.The Commission may impose license revocation, suspension, probation, reprimand, and administrative fines, and may also require the broker to make restitution and complete additional education as conditions of continued or reinstated licensure.
• D.The Commission's disciplinary authority is limited to issuing a formal reprimand and referring the matter to the Vermont Attorney General for all monetary penalties.

Q4.A real estate office receives a loan application disclosure package from a lender. Under RESPA requirements, what must the lender provide to the borrower within three business days of receiving a complete loan application?

• A.Loan Estimate (LE) form
• B.Final HUD-1 Settlement Statement
• C.Closing Disclosure (CD) form
• D.Good Faith Estimate (GFE) form

Q5.Which federal law requires lenders to provide a Good Faith Estimate of closing costs to borrowers?

• A.Fair Housing Act
• B.Real Estate Settlement Procedures Act (RESPA)
• C.Truth in Lending Act
• D.Equal Credit Opportunity Act

Q6.A broker's affiliated salesperson refuses to show a duplex to a prospective tenant because the tenant has two minor children, citing the owner's stated preference for 'quiet tenants.' Which federal law is MOST directly violated, and what is the broker's responsibility?

• A.The Fair Housing Act's prohibition on familial status discrimination; the broker must correct the salesperson's conduct and may not implement or enforce the owner's discriminatory preference.
• B.The Equal Credit Opportunity Act; the broker must refer the tenant to a lender who will consider the application without regard to family composition.
• C.RESPA's anti-kickback provisions; the broker must disclose the owner's preference to the tenant in writing before any showing.
• D.The Americans with Disabilities Act; the broker must ensure the property has reasonable accommodations for children.

Q7.Under Vermont Real Estate Commission regulations, a licensed broker is required to maintain transaction records and trust account records for a minimum period after the closing or termination of a transaction. What is that minimum retention period?

• A.Three years from the date of closing or termination of the transaction.
• B.One year from the date of closing or termination of the transaction.
• C.Seven years from the date of closing or termination of the transaction.
• D.Five years from the date of closing or termination of the transaction.

Q8.Under Vermont's agency disclosure requirements (26 V.S.A. § 2296 and Vermont Real Estate Commission rules), at what point must a Vermont broker or their affiliated licensee provide a written agency disclosure to a prospective buyer or seller?

• A.At the first substantive contact with the prospective client, before confidential information is exchanged.
• B.Only at the time a purchase and sale agreement is signed by all parties.
• C.Only when the broker is representing both buyer and seller in the same transaction as a dual agent.
• D.Within five business days after a listing agreement or buyer representation agreement is executed.

Q9.When must a lender provide the Closing Disclosure under the TILA-RESPA Integrated Disclosure (TRID) rules?

• A.Within 3 business days of application
• B.No later than at the time of consummation
• C.Within 3 business days after consummation
• D.At least 3 business days before consummation

Q10.A landlord refuses to rent to a family with children under 18 years old. This practice violates which provision of the Fair Housing Act?

• A.Familial status discrimination
• B.Disability discrimination
• C.Age discrimination
• D.Sex discrimination

Q11.A purchase contract includes an earnest money deposit of $5,000 that is designated as liquidated damages in the event of buyer default. If the buyer defaults, what is the seller's most appropriate remedy under this clause?

• A.Sue the buyer for the full purchase price of the property
• B.Retain the $5,000 earnest money as full compensation for the breach
• C.Demand specific performance to force the buyer to complete the purchase
• D.Rescind the contract and return the earnest money to the buyer

Q12.A broker manages a 12-agent office and implements a designated agency policy. Two of the broker's affiliated agents — Agent Rivera and Agent Patel — are representing opposite sides of the same transaction. The broker is aware of material non-public information about the seller's financial distress that Agent Rivera obtained through a prior listing relationship. Under the principles of designated agency, which of the following most accurately describes the broker's obligation regarding that confidential information?

• A.The broker must establish an ethical wall (informational barrier) ensuring Agent Patel cannot access the seller's confidential financial information, while still fulfilling supervisory duties over both agents.
• B.Because the broker is an implied dual agent, the broker must immediately disclose the seller's financial distress to the buyer through Agent Patel as a material fact.
• C.The broker is relieved of all confidentiality obligations once designated agency is established, because each designated agent acts independently without imputing knowledge to the broker.
• D.The broker must withdraw Agent Patel from the transaction and personally represent the buyer to eliminate the conflict of interest created by the prior listing relationship.

Q13.A property is encumbered by a first mortgage of $300,000, a second mortgage of $50,000, and a mechanic's lien for $25,000 that was properly recorded before the second mortgage was executed. If the property sells at foreclosure for $350,000, how will the proceeds be distributed?

• A.First mortgage: $300,000, Second mortgage: $25,000, Mechanic's lien: $25,000
• B.Mechanic's lien: $25,000, First mortgage: $300,000, Second mortgage: $25,000
• C.All liens paid proportionally based on their amounts
• D.First mortgage: $300,000, Mechanic's lien: $25,000, Second mortgage: $25,000

Q14.A real estate salesperson's client is purchasing a property and asks the salesperson to explain the difference between an 'assumption' of the seller's existing mortgage and purchasing 'subject to' the existing mortgage. Which of the following statements accurately distinguishes these two financing arrangements?

• A.In an assumption, the buyer takes personal liability for the loan and the seller is typically released from liability by the lender; in a 'subject to' purchase, the buyer takes title with the mortgage intact but the seller retains personal liability on the original note
• B.Both assumption and 'subject to' arrangements require lender approval and release the seller from all personal liability upon closing
• C.In a 'subject to' purchase, the buyer obtains a new loan to pay off the seller's existing mortgage; in an assumption, the buyer continues paying the existing mortgage without lender approval
• D.An assumption is illegal under the Garn-St. Germain Act, while a 'subject to' purchase is the only permissible way to transfer a mortgage-encumbered property without triggering a due-on-sale clause

Q15.A lender denies a mortgage application from a borrower and provides a written notice of adverse action citing 'insufficient collateral.' The borrower suspects the true reason is their national origin. Under the Equal Credit Opportunity Act (ECOA), what right does the borrower have regarding the adverse action notice?

• A.The borrower has no additional rights because the lender provided written notice, fully satisfying ECOA requirements
• B.The borrower may request, within 60 days of receiving the adverse action notice, a statement of specific reasons for the denial, and the lender must provide it within 30 days
• C.The borrower must file a complaint with HUD within 30 days or permanently waive the right to challenge the denial under ECOA
• D.The borrower's only remedy is to reapply with additional documentation, as ECOA does not provide a right to challenge stated reasons for credit denial