1. A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?
Answer & explanation
Answer: B. LTV is applied to the LESSER of price or appraised value: $290,000 x 0.75 = $217,500. Using the $300,000 price ($225,000) is the common mistake.
2. A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?
Answer & explanation
Answer: B. Rate = commission / sale price = $6,000 / $150,000 = 0.04 = 4%.
3. An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:
Answer & explanation
Answer: C. Only the building depreciates: $350,000 - $75,000 = $275,000; $275,000 / 27.5 = $10,000. Using the full price gives $12,727 (wrong).
4. The seller prepaid $4,320 in property taxes for the calendar year. Closing is April 20, and the seller owns the day of closing. Using a 360-day year (30-day months), what is the proration?
Answer & explanation
Answer: B. Daily = $4,320 / 360 = $12. Seller owned Jan 1-Apr 20 = 3 months + 20 days = 110 days, so the buyer owes for 360 - 110 = 250 days. 250 x $12 = $3,000, credited to the seller (who prepaid) and debited to the buyer.
5. An 8-unit building rents for $1,100 per unit per month with 5% vacancy. Annual operating expenses are $28,320 (excluding debt service). At an 8% capitalization rate, what is the value?
Answer & explanation
Answer: D. PGI = 8 x $1,100 x 12 = $105,600; less 5% vacancy = $100,320; NOI = $100,320 - $28,320 = $72,000; value = $72,000 / 0.08 = $900,000.
6. On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?
Answer & explanation
Answer: D. $20,000 x 0.50 = $10,000 to the buyer's broker.
7. A buyer purchases a $300,000 home with a $60,000 down payment. What is the loan-to-value (LTV) ratio?
Answer & explanation
Answer: B. Loan = $300,000 - $60,000 = $240,000; $240,000 / $300,000 = 80% LTV. (20% is the down payment percentage.)
8. A Vermont agent offers to serve as a neutral 'transaction facilitator' for both buyer and seller. Under Commission rules this is:
Answer & explanation
Answer: C. Rules 4.3(d)(3) and 4.4(e)(3) bar offering intermediary, transaction broker, facilitator or other non-fiduciary forms of representation; referrals remain allowed. Disclosure does not cure a prohibited relationship.
9. A licensee receives a written inquiry from the Commission about a complaint. Under Rule 4.15, the licensee must respond:
Answer & explanation
Answer: A. Rule 4.15 requires a response as soon as reasonably practicable or within 30 days, whichever is sooner. Ignoring or impeding an investigation is also unprofessional conduct under 3 V.S.A. §129a.
10. Under an open listing, the seller owes a commission to:
Answer & explanation
Answer: C. Open listings are non-exclusive; only the procuring broker is paid, and the owner owes nothing for a self-sale.
11. A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?
Answer & explanation
Answer: A. Loan = $275,000 x 0.80 = $220,000; points = $220,000 x 0.025 = $5,500. ($6,875 wrongly applies points to the price.)
12. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):
Answer & explanation
Answer: D. In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.
13. A buyer pays $400,000 for a year-round house that will be a vacation home, not a principal residence and not a long-term rental. What is the total transfer tax including the clean water surcharge?
Answer & explanation
Answer: D. Year-round residential property that is neither a principal residence nor a long-term rental is taxed at 3.4%, plus the 0.22% surcharge: 3.62% × $400,000 = $14,480. $13,600 omits the surcharge, and $5,880 applies the 1.47% general rate.
14. An owner withdraws 30 acres of forest land from current use but does not develop it. Under §3757, the land use change tax is:
Answer & explanation
Answer: C. Section 3757(a) states that land becoming ineligible does not by itself trigger the tax if no development has occurred. The tax attaches to development, and the lien runs with the land.
15. Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:
Answer & explanation
Answer: B. Article 17 requires REALTORS to mediate or arbitrate contractual and specific non-contractual disputes with other REALTORS through the association.
16. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):
Answer & explanation
Answer: B. In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)
17. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?
Answer & explanation
Answer: D. Area = 330 x 660 = 217,800 sq ft; 217,800 / 43,560 = 5 acres.
18. A home sells for $400,000 with a 5% total commission. What is the total commission?
Answer & explanation
Answer: B. $400,000 x 0.05 = $20,000.
19. A commercial space of 2,400 rentable square feet is quoted at $27 per square foot per year. What is the monthly rent?
Answer & explanation
Answer: B. Annual rent = 2,400 x $27 = $64,800; monthly = $64,800 / 12 = $5,400. Commercial rates are quoted per square foot per YEAR.
20. Which of the following describes the licensed seats on the Vermont Real Estate Commission?
Answer & explanation
Answer: B. Section 2251 seats three brokers (each with at least four years as a broker, at least one not in a professional association) plus one salesperson, along with one attorney and two public members. The four-broker, five-year option is a different state's model.
21. Which office administers licensing for Vermont real estate brokers and salespersons on behalf of the Real Estate Commission?
Answer & explanation
Answer: C. OPR, a division of the Secretary of State, handles applications, renewals and the licensing portal for the Commission. Financial Regulation is a plausible guess because it oversees lenders, but it does not license real estate brokers.
22. A buyer pays $120,000 for a parcel of unimproved woodland. What is the total transfer tax including the clean water surcharge?
Answer & explanation
Answer: D. Land that is not a principal residence is taxed at 1.25% plus the 0.22% surcharge, or 1.47% × $120,000 = $1,764. $600 wrongly applies the principal-residence 0.5% rate.
23. Under which seller agreement does the owner owe the firm a commission even if the owner finds the buyer?
Answer & explanation
Answer: B. Rule 1.8(l) defines the exclusive right to market agreement as the one where the owner owes compensation even on the owner's own sale. Under the exclusive agency marketing agreement, the owner keeps the right to sell commission-free.
24. A Massachusetts resident sells a Vermont ski condo for $325,000. No exemption or reduced-withholding certificate applies. How much must the buyer withhold?
Answer & explanation
Answer: B. 2.5% × $325,000 = $8,125, remitted within 30 days. $19,500 uses the 6% installment-election rate.
25. A 4-acre portion of enrolled forest land with a fair market value of $30,000 per acre is developed. What land use change tax is due?
Answer & explanation
Answer: D. Fair market value of the changed land is 4 × $30,000 = $120,000, and 10% of that is $12,000. $3,000 takes 10% of just one acre's value, and $120,000 is the value itself.
Sources
Source verification pending. Confirm current requirements with your state regulator.