Vermont Real Estate Salesperson Exam — All Questions

Regarding a known material defect in a property, a Vermont licensee must:

• a.Disclose it only if the buyer asks in writing
• b.Ignore it because of caveat emptor
• c.Conceal it if the seller requests
• d.Disclose the known material defect and deal honestly with the parties✓

Vermont licensees must disclose known material defects that could affect a reasonable buyer's decision and must deal honestly with all parties. A licensee may not conceal or misrepresent a known defect even at the seller's request.

Earnest money a Vermont salesperson receives from a buyer must be:

• a.Delivered promptly to the affiliated broker for deposit in the brokerage trust account✓
• b.Sent to the Office of Professional Regulation for safekeeping
• c.Held by the salesperson in a personal account until closing
• d.Given directly to the seller when the offer is written

Client funds such as earnest money must be handled through the brokerage's trust account, which the broker maintains and keeps separate from personal funds. A salesperson who receives money must deliver it promptly to the affiliated broker. Commingling or converting client money is a serious violation of Vermont license law.

A Vermont brokerage firm holding an earnest money deposit under a purchase and sale agreement must place it in the firm's trust or escrow account:

• a.Within fifteen days after both parties sign
• b.Any time before the scheduled closing date
• c.The same business day on which the firm receives the deposit
• d.Not later than five banking days after both parties sign✓

Every broker must deposit earnest money and contract deposits in a trust or escrow account within five banking days, and the rule fixes the deadline at not later than five banking days after the purchase and sale agreement is executed by both seller and buyer. Cite: 26 V.S.A. 2214(a) and Rule 4.7(b).

After opening a trust or escrow account, a Vermont broker must notify the Commission of the institution holding it:

• a.At the next biennial license renewal
• b.Only if the Commission requests the information
• c.Within ten days after opening the account✓
• d.Within sixty days after opening the account

The broker must notify the Commission, within 10 days after opening any trust or escrow account, of the bank or other financial institution in which the account is located. Cite: 26 V.S.A. 2214(a).

When a Vermont deposit is not reasonably expected to earn a substantial amount of interest, the broker places it in a pooled interest-bearing account and directs the interest to:

• a.The Office of Professional Regulation
• b.The buyer named in the contract
• c.The brokerage firm's operating account
• d.The Vermont Housing Finance Agency✓

If a deposit is not reasonably expected to earn a substantial amount of interest, the broker places it in a pooled interest-bearing trust or escrow account and directs that the interest be remitted to the Vermont Housing Finance Agency. Cite: 26 V.S.A. 2214(c).

A Vermont brokerage service agreement must contain a specific expiration date, and it may not exceed:

• a.Six months from the effective date
• b.One year from the effective date✓
• c.Three years from the effective date
• d.Ninety days from the effective date

Agreements for brokerage services must contain a specific expiration date not to exceed one year from the effective date, and may not contain any provision for automatic extension or renewal. Cite: Vt. Real Estate Commission Rule 4.8(b).

A Vermont seller proposes that the brokerage keep everything above a set net price as its fee. The licensee may:

• a.Not use the arrangement; net listings are prohibited✓
• b.Accept, if the net price is at least market value
• c.Accept, with the principal broker's written approval
• d.Accept, if the seller signs a written waiver

A net listing is a brokerage service agreement in which the benefit of negotiating a higher price for the seller or a lower price for the buyer accrues only to the agent or the firm. Use of a net listing or any variation of it is prohibited. Cite: Vt. Real Estate Commission Rules 4.8(e) and 1.8(q).

In every Vermont real estate advertisement, the most prominent and largest identifier must be:

• a.The team name used by the agents
• b.The web address of the listing
• c.The listing agent's personal name
• d.The brokerage firm's registered name✓

Every advertisement must conspicuously display the brokerage firm's registered name as it appears on the firm's registration, and that name must be the most prominent and largest identifier, larger than the agent's name, phone number, team name, or web address. Cite: Vt. Real Estate Commission Rule 4.12(a).

A Vermont "for sale" sign, or several signs on the same premises taken together, may not have an area greater than:

• a.Four square feet in total area
• b.Six square feet, including panel, frame and riders✓
• c.Twelve square feet, not counting the frame or riders
• d.Sixteen square feet, including the post

Signs used in advertising must comply with Vermont state and municipal sign laws; a for sale sign, or multiple signs on the same premises taken together, may not have an area of more than six square feet including panel, frame and riders. Cite: Vt. Real Estate Commission Rule 4.12(c)(1).

A Vermont listing goes under contract and the agent wants to add a rider to the sign. Under the Commission's rules:

• a.A "sale pending" rider is permitted for thirty days
• b.A "sold" or "sale pending" rider is not permitted✓
• c.Any rider is permitted if it stays within the size limit
• d.A rider is permitted with the town clerk's approval

Signs attached to for sale signs stating sold, sale pending, sale under contract, or similar messages are not permitted. Cite: Vt. Real Estate Commission Rule 4.12(c)(2).

A Vermont brokerage firm must keep its records of brokerage services provided, at its usual place of business, for at least:

• a.Ten years
• b.Three years
• c.Five years
• d.Seven years✓

A brokerage firm must maintain for at least seven years, at its usual place of business, all paper or electronic records of brokerage services provided, and they must be available to the Commission and its agents during regular business hours. Cite: Vt. Real Estate Commission Rule 4.14(a).

The Vermont Property Transfer Tax on property to be used as the transferee's principal residence is imposed at:

• a.0.5 percent of the entire value transferred
• b.0.5 percent of the first $100,000 and 1.25 percent above that
• c.1.25 percent of the entire value transferred
• d.0.5 percent of the first $200,000 and 1.25 percent above that✓

The general rate is 1.25 percent of value, but for property to be used as the transferee's principal residence the tax is 0.5 percent of the first $200,000 in value and 1.25 percent of the value above $200,000. A larger $250,000 band applies where the purchaser obtains a qualifying assisted mortgage. Cite: 32 V.S.A. 9602(1).

Vermont imposes a Property Transfer Tax rate of 3.4 percent on the transfer of:

• a.Any commercial or industrial building located anywhere in the State
• b.Year-round housing that will not be the buyer's principal residence✓
• c.Undeveloped land of more than ten acres in size
• d.Any property bought by an out-of-state buyer or entity

The 3.4 percent rate applies to transfers of residential property that is fit for habitation on a year-round basis, will not be used as the transferee's principal residence, and for which the transferee will not be required to provide a landlord certificate. Cite: 32 V.S.A. 9602(4).

The Vermont Clean Water Surcharge on property subject to the Property Transfer Tax is:

• a.0.5 percent, collected only on commercial property sales
• b.0.22 percent, with the first $200,000 of a residence exempt✓
• c.0.22 percent of the entire value, with no exemption of any kind
• d.1.25 percent, collected only on second homes and camps

A surcharge of 0.22 percent applies to the value of property subject to the property transfer tax, except that there is no surcharge on the first $200,000 in value of property to be used as the transferee's principal residence, or on the first $250,000 where a qualifying assisted mortgage is used. Cite: 32 V.S.A. 9602a.

Under Act 250, no person may sell or offer for sale any interest in a Vermont subdivision:

• a.Without a written appraisal of the parcel
• b.Until the plat has been recorded in the land records
• c.Without a land use permit✓
• d.Until the town has issued a certificate of occupancy

Act 250 provides that no person shall sell or offer for sale any interest in any subdivision located in this State, or commence construction on a subdivision or development, or commence development, without a permit. Cite: 10 V.S.A. 6081(a).

A Vermont Act 250 land use permit, its amendments and any revocation are:

• a.Kept confidential until the development is complete
• b.Filed only with the District Environmental Commission
• c.Recorded in the local land records under the permittee✓
• d.Published in a newspaper of general circulation locally

So that adequate notice of permit terms and conditions is given, land use permits, permit amendments, and revocations must be recorded in the local land records and indexed as though the permittee were the grantor of a deed. Cite: 10 V.S.A. 6090(a).