VA Real Estate cheat sheet

The Virginia Real Estate Board (VREB), housed within the Department of Professional and Occupational Regulation (DPOR), licenses and disciplines brokers, salespersons, and rental location agents.

Salesperson pre-license education is 60 classroom hours; broker pre-license education is 180 hours plus at least 36 months of active experience as a salesperson within the preceding 5 years.

Virginia licenses are biennial and expire two years from the last day of the month in which they were issued.

Renewal requires 16 hours of continuing education per term, including at least 3 hours of ethics, 2 hours of fair housing, and 1 hour of Virginia legal/regulatory updates.

The Board may impose a monetary penalty of up to $2,500 per violation in addition to reprimand, suspension, or revocation of a license.

A salesperson or associate broker may be compensated only by the employing broker; paying a commission to an unlicensed person is a violation.

All advertising must include the licensed broker's name, and a salesperson may not advertise in a manner implying independent brokerage status.

Brokers must maintain escrow accounts for client funds; commingling escrow funds with operating funds is prohibited.

Exemptions from licensure include attorneys acting in the ordinary course of law, court-appointed trustees and receivers, and persons disposing of property by will or intestacy.

Virginia requires written disclosure of the brokerage relationship at the time the brokerage agreement is formed, using the Board-approved statement of the duties owed.

Virginia recognizes standard agency, limited service agency, and no-agency (transaction) relationships; dual and designated agency are permitted only with the written consent of all parties.

A standard agent owes the fiduciary duties of care, obedience, loyalty, disclosure, accounting, and confidentiality.

Confidentiality survives termination of the brokerage relationship; the remaining fiduciary duties end when the relationship ends.

A standard agent must disclose material adverse facts about the property that are known to the agent and not readily observable, even when the seller has not disclosed them.

Information about a client's financial position or motivation is confidential and may not be revealed to the other party without consent.

A buyer or tenant broker may be paid by the seller or listing broker only with the client's written consent and full disclosure of the arrangement.

Simply showing a property, quoting a price, or discussing financing does not by itself create a brokerage relationship in Virginia.

A dual or designated agent may not disclose one party's confidential information to the other party in the transaction.

Statute of Frauds: contracts for the sale of real property and leases longer than one year must be in writing and signed by the party to be charged.

Essential contract elements: competent parties, mutual assent, lawful objective, consideration, identified property, price and terms, and signatures.

Earnest money is deposited into the broker's escrow account and is applied to the purchase price at closing or disbursed on default per the contract or by agreement/court order.

Under the Virginia Residential Property Disclosure Act, the seller delivers a disclosure or disclaimer statement; the Act itself does not create a general buyer rescission right.

The Virginia Property Owners' Association Act and the Condominium Act let the purchaser cancel the contract within three days after receiving the disclosure packet or resale certificate.

Common contingencies are financing, appraisal, home inspection, sale of the buyer's home, and title review; a contingency must be satisfied or waived within its stated deadline.

Offers may be revoked any time before acceptance; a counteroffer terminates the original offer, and acceptance must be communicated to be effective.

Time is of the essence clauses make deadlines enforceable, so a late exercise of a contractual right can be treated as a waiver.

Virginia does not require an attorney at a residential closing, but the contract may designate a settlement agent and legal representation may be used by either party.

Fee simple absolute is the largest estate of ownership; a fee simple defeasible may end automatically (determinable) or on the grantor's exercise of a right of re-entry (condition subsequent).

A life estate lasts for the life of a named person; the remainderman holds a future interest, and the life tenant may not commit waste.

Tenancy in common carries no right of survivorship; joint tenancy requires unity of time, title, interest, and possession plus survivorship; tenancy by the entirety is limited to married couples in Virginia.

Virginia adverse possession requires 15 years of actual, hostile, open, notorious, exclusive, and continuous possession.

A prescriptive easement in Virginia requires use that is adverse, open, notorious, and continuous for 20 years.

Easements appurtenant benefit a dominant parcel and run with the land; easements in gross benefit a person or entity rather than a parcel.

Leasehold estates include tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance.

Encumbrances such as liens, easements, covenants, conditions, and encroachments burden the property without necessarily preventing transfer of title.

Condominium ownership pairs a fee simple interest in a unit with a tenancy-in-common interest in the common elements; a cooperative pairs corporate shares with a proprietary lease.

A general warranty deed contains six covenants, including seisin, right to convey, freedom from encumbrances, quiet enjoyment, warranty, and further assurances.

A special warranty deed limits the grantor's warranty to defects arising during the grantor's period of ownership.

A quitclaim deed conveys whatever interest the grantor may hold with no warranties and does not guarantee marketable title.

Valid deed requirements: a writing, a competent grantor, an identifiable grantee, words of grant, a legal description, the grantor's signature, delivery, and acceptance.

Virginia is a race-notice recording jurisdiction: a later purchaser prevails only by recording first and taking without notice of the prior unrecorded interest.

Deeds are recorded in the clerk's office of the circuit court for the city or county where the property is located.

Virginia recordation tax is $2.50 per $1,000 of consideration and the state grantor tax is $1 per $1,000, subject to local add-ons and statutory exemptions.

Virginia security instruments are typically deeds of trust: the borrower (trustor) conveys title to a trustee to secure the lender (beneficiary), with nonjudicial foreclosure by trustee sale on default.

Virginia recognizes the transfer on death deed, which is revocable during the owner's life and conveys the property at death without probate.

Loan-to-value ratio = loan amount divided by the lesser of the sales price or appraised value; private mortgage insurance is generally required when LTV exceeds 80%.

One discount point equals 1% of the loan amount and buys down the interest rate; origination fees compensate the lender for making the loan.

Under TILA-RESPA, the Loan Estimate must be delivered within three business days of application and the Closing Disclosure at least three business days before consummation.

The APR combines the interest rate with certain finance charges to express the true cost of credit for comparison shopping.

FHA loans permit 3.5% down with a 580 minimum credit score and carry mortgage insurance premiums; VA loans offer 0% down with a funding fee for eligible veterans.

Adjustable-rate mortgage components: initial rate, index, margin, periodic adjustment caps, and a lifetime cap.

PITI = principal, interest, taxes, and insurance; escrow or impound accounts collect tax and insurance amounts monthly with the payment.

Conventional, FHA, VA, USDA, and Virginia Housing programs differ in down payment, insurance requirements, and borrower eligibility.

A due-on-sale (alienation) clause allows the lender to accelerate the loan when the property is transferred without approval, which affects assumptions and seller financing.

In the sales comparison approach, comparable sales are adjusted to the subject; the subject property is never adjusted.

Adjustment rule: if the comparable is superior to the subject, subtract value; if inferior, add value.

Gross rent multiplier = sale price divided by monthly rent; indicated value = GRM multiplied by the subject's monthly market rent.

Capitalization rate = net operating income divided by value; indicated value = NOI divided by the cap rate.

The cost approach estimates value as replacement or reproduction cost minus depreciation plus land value, and is most reliable for new or special-purpose property.

Highest and best use is the use that is legally permissible, physically possible, financially feasible, and maximally productive.

Principle of substitution: a buyer will pay no more for a property than the cost of an equally desirable substitute.

A comparative market analysis prepared by a licensee is not an appraisal and must not be represented as one; federally related transactions require a state-certified appraiser.

Absorption rate = sales in a period divided by available inventory; a low absorption rate signals a buyer's market.

Federal Fair Housing Act protected classes: race, color, religion, sex, national origin, familial status, and disability.

The Virginia Fair Housing Law adds elderliness, marital status, sexual orientation, gender identity, source of income, military status, and status as a victim of domestic violence.

Prohibited practices include refusing to sell or rent, offering discriminatory terms, discriminatory advertising, blockbusting, steering, and redlining.

The federal Mrs. Murphy exemption covers owner-occupied buildings of four or fewer units; housing for older persons (55+/62+) is exempt from the familial status provisions.

For disability, housing providers must permit reasonable modifications at the tenant's expense and provide reasonable accommodations in rules, policies, and services.

A fair housing complaint may be filed with the Virginia Fair Housing Office within one year of the discriminatory act.

RESPA Section 8 prohibits fees or things of value for referral of settlement service business; affiliated business arrangements require written disclosure.

Antitrust law bars licensees from agreeing with competitors on commission rates or dividing markets or customers.

Advertising must not express a preference or limitation based on a protected class and should include equal housing opportunity language.