Sample practice questions

A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.

1. 1. Property Ownership

   Two people own a property as joint tenants with right of survivorship. When one owner dies, that owner's share:

   • a.Passes to the deceased owner's heirs through probate
   • b.Automatically passes to the surviving joint tenant
   • c.Reverts to the state through escheat
   • d.Is divided among all creditors first

   Answer: b

   Explanation: Joint tenancy includes the right of survivorship, so a deceased joint tenant's interest passes automatically to the surviving joint tenant(s) outside of probate. In a tenancy in common, by contrast, a share passes to the deceased owner's heirs.

2. 2. Valuation and Market Analysis

   Which appraisal principle holds that the value of a property tends to be set by the cost of acquiring an equally desirable substitute?

   • a.Substitution
   • b.Anticipation
   • c.Conformity
   • d.Contribution

   Answer: a

   Explanation: The principle of substitution states that a buyer will pay no more for a property than the cost of an equally desirable substitute. It underlies the sales comparison approach. Anticipation relates to expected future benefits; conformity to compatibility with surroundings; contribution to the value added by a component.

3. 3. Financing

   In a deed of trust, which party holds legal title to the property as security until the loan is repaid?

   • a.The trustor (borrower)
   • b.The trustee
   • c.The beneficiary (lender)
   • d.The county recorder

   Answer: b

   Explanation: In a deed of trust there are three parties: the trustor (borrower), the beneficiary (lender), and a neutral trustee who holds legal title as security and can conduct a nonjudicial foreclosure sale if the borrower defaults.

4. 4. Contracts

   The legal requirement that contracts for the sale of real estate be in writing to be enforceable comes from the:

   • a.Doctrine of laches
   • b.Parol evidence rule
   • c.Rule against perpetuities
   • d.Statute of frauds

   Answer: d

   Explanation: The statute of frauds requires certain contracts, including those for the sale of an interest in real estate, to be in writing and signed to be enforceable. The parol evidence rule limits use of outside evidence to change a written contract.

5. 5. Agency

   A licensee assists a buyer and a seller in a transaction but does not represent either as a fiduciary. This arrangement is best described as:

   • a.Dual agency
   • b.An independent (non-agent) or transaction relationship
   • c.Subagency
   • d.Universal agency

   Answer: b

   Explanation: When a licensee helps parties complete a transaction without representing either as an agent, the licensee acts as an independent or transaction-type intermediary, providing services without owing full fiduciary duties. Dual agency, by contrast, means representing both parties as clients.

6. 6. Practice of Real Estate

   A licensee tells prospective buyers of a particular background that a certain neighborhood 'would be a better fit for them' and steers them away from others. This practice is called:

   • a.Farming
   • b.Puffing
   • c.Novation
   • d.Steering

   Answer: d

   Explanation: Steering is directing prospective buyers toward or away from particular neighborhoods based on a protected characteristic. It violates fair housing law. Puffing is nonfactual sales talk; novation substitutes a new contract or party.

7. 7. Property Management

   A lease in which the tenant pays a base rent plus a share of the property taxes, insurance, and maintenance is known as a:

   • a.Net lease
   • b.Gross lease
   • c.Ground lease
   • d.Percentage lease that ignores expenses

   Answer: a

   Explanation: In a net lease the tenant pays base rent plus some or all of the property's operating expenses such as taxes, insurance, and maintenance. In a gross lease the landlord pays those operating expenses out of the rent.

8. 8. Virginia License Law

   Real estate licensees in Virginia are regulated by the Virginia Real Estate Board, which operates under which state department?

   • a.The Virginia Department of Housing
   • b.The Department of Professional and Occupational Regulation (DPOR)
   • c.The Federal Housing Finance Agency
   • d.The Virginia Department of Taxation

   Answer: b

   Explanation: The Virginia Real Estate Board is one of the regulatory boards within the Department of Professional and Occupational Regulation (DPOR). The Board licenses salespersons and brokers and enforces Virginia real estate law and regulations.

9. 9. Virginia Agency Rules

   Virginia's Residential Property Disclosure Act is best described as a system in which:

   • a.The seller warrants the property is defect-free
   • b.The seller must repair all defects before closing
   • c.The seller provides a disclosure statement and buyers are advised to exercise due diligence and inspect
   • d.No disclosure of any kind is allowed

   Answer: c

   Explanation: Virginia follows a buyer-beware approach: under the Residential Property Disclosure Act the seller provides a disclosure statement notifying buyers that the property is sold as is with respect to certain matters and that buyers should exercise due diligence, including obtaining inspections.

10. 10. Virginia Practice & Closing

    In many Virginia residential closings, the settlement is conducted by:

    • a.The buyer alone with no third party
    • b.A real estate appraiser
    • c.The listing agent personally holding all funds
    • d.A settlement agent or attorney who handles the closing and disburses funds

    Answer: d

    Explanation: Virginia closings are commonly handled by a licensed settlement agent or a real estate attorney who prepares documents, handles the escrow and title work, and disburses funds. This neutral party helps ensure the transaction is completed correctly.