I85PREP
⌘ K
VT Real Estate study materials
VT Real Estate study resources

VT Real Estate practice questions

One question at a time. Build your VT Real Estate understanding.

First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Vermont real estate statutes and Office of Professional Regulation rules

Under Vermont law, which of these activities requires a real estate license?

  1. A tenant renting an apartment from the owner.
  2. An investor buying property for their own portfolio.
  3. A homeowner listing and selling their own primary residence.
  4. A person who, for a commission, lists a neighbor's house for sale. Correct answer.

Explanation

Vermont requires a license for anyone who, for another person and for compensation, lists, sells, exchanges, purchases, rents, or negotiates a sale of real property. Acting on one's own behalf is outside the licensing statute. Collecting a commission to list someone else's property is core brokerage activity.

Question 2Vermont real estate statutes and Office of Professional Regulation rules

A Vermont salesperson closes a transaction in which the seller owes a commission. From whom may the salesperson collect that compensation?

  1. The employing broker, who collects it and pays the salesperson. Correct answer.
  2. The seller directly, because the salesperson personally earned the commission.
  3. The cooperating broker on the other side of the transaction.
  4. The Real Estate Commission's education fund.

Explanation

A salesperson is licensed under a supervising broker and may not be paid brokerage compensation directly by a member of the public. The commission is owed to and received by the brokerage, which then compensates the salesperson under their arrangement.

Question 3Vermont real estate statutes and Office of Professional Regulation rules

A broker receives a $10,000 earnest money deposit in connection with a pending sale. How must the broker handle the funds?

  1. Deliver the funds to the seller immediately, since the seller is the client.
  2. Apply the funds to marketing costs for the listing until the closing.
  3. Deposit the funds in the broker's general operating account and keep a separate ledger entry for each deposit.
  4. Hold the money in a separate escrow account apart from the broker's own funds. Correct answer.

Explanation

Trust funds belonging to others must be kept in a separate escrow account and may not be commingled with the broker's business or personal funds. The broker holds the deposit for the parties and disburses it according to the contract or their agreement.

Question 4Vermont real estate statutes and Office of Professional Regulation rules

When must a Vermont licensee provide a consumer with the written consumer information and agency disclosure?

  1. At the closing, as part of the settlement documents.
  2. At the first substantive contact with the consumer. Correct answer.
  3. Only when the consumer signs a written buyer agency agreement.
  4. Only if the consumer asks whether the licensee represents them.

Explanation

Vermont requires the agency disclosure to be delivered early in the relationship, at the first substantive contact, so consumers understand who the licensee represents before sharing confidential information. The obligation is affirmative and does not wait for a written agreement or a consumer's question.

Question 5Vermont real estate statutes and Office of Professional Regulation rules

A Vermont salesperson wants to advertise a listing on social media. The advertisement must do which of the following?

  1. Be placed only in media that serve the county where the property is located.
  2. Be approved in advance by the seller in writing.
  3. Include the salesperson's license number and the listing price.
  4. Display the licensed name of the salesperson's brokerage. Correct answer.

Explanation

Advertising by a licensee must identify the licensed brokerage with which the licensee is affiliated, so the public knows which firm stands behind the advertisement. A salesperson may not advertise in a way that suggests they are an independent broker.

Question 6Vermont real estate statutes and Office of Professional Regulation rules

Which body has authority to discipline a Vermont real estate licensee for unprofessional conduct?

  1. The local association of REALTORS to which the licensee belongs, through its grievance committee.
  2. The Consumer Protection Division of the Vermont Attorney General's Office, which handles all licensed professions.
  3. The Vermont Department of Financial Regulation.
  4. The Vermont Real Estate Commission, staffed by the Office of Professional Regulation. Correct answer.

Explanation

Real estate licensees are regulated through the Office of Professional Regulation, and disciplinary matters are decided by the Vermont Real Estate Commission. Private trade associations may enforce their own ethics codes, but that is separate from state licensing authority.

Question 7Vermont real estate statutes and Office of Professional Regulation rules

A firm's licensee represents the seller on a listing. A buyer whom the same firm also represents as a client wants to purchase the property. What does Vermont law require before the firm may act as a dual agent?

  1. Nothing further, because dual agency is prohibited in Vermont.
  2. Written consent from both parties after full disclosure. Correct answer.
  3. Oral consent from the seller only, noted in the transaction file.
  4. Approval from the Real Estate Commission before the offer is presented.

Explanation

Dual agency is permitted in Vermont only after the licensee discloses the conflict and obtains the informed, written consent of both the buyer and the seller. Without that consent the firm must not represent both sides in the transaction.

Question 8Vermont real estate statutes and Office of Professional Regulation rules

A licensee is working with a buyer who has not entered into an agency agreement and is therefore a customer. Which duty does the licensee owe this buyer?

  1. Undivided loyalty, including negotiating the lowest possible price.
  2. Full confidentiality of the buyer's financial information.
  3. Honest and fair dealing and disclosure of known material facts. Correct answer.
  4. Obedience to the buyer's instructions about which homes to show.

Explanation

A customer is not a client, so the licensee owes honesty, fairness, and disclosure of known material facts about the property, but not fiduciary duties. Loyalty, confidentiality, and obedience are owed to clients under an agency relationship.

Question 9Vermont real estate statutes and Office of Professional Regulation rules

Which task may a licensed salesperson's unlicensed assistant perform?

  1. Schedule showings and deliver signed documents to the parties. Correct answer.
  2. Negotiate the repair credits requested after the inspection.
  3. Hold an open house and quote the seller's lowest acceptable price.
  4. Explain the terms of the purchase and sale contract to a buyer.

Explanation

Unlicensed assistants may perform clerical and administrative work, such as scheduling appointments and delivering documents, because those tasks do not involve negotiating or advising on the terms of a transaction. Any activity that requires explaining, negotiating, or advocating must be handled by a licensee.

Question 10Vermont real estate statutes and Office of Professional Regulation rules

A Vermont broker wants to pay $500 to an unlicensed friend who referred a buyer to the broker. What is the broker's obligation under Vermont rules?

  1. Do not pay it, because compensating an unlicensed person for a referral is prohibited. Correct answer.
  2. Pay the fee only if the friend is a Vermont resident.
  3. Pay the fee, but only after the transaction closes and the broker has been paid in full.
  4. Pay the fee, provided the friend signs a written referral agreement.

Explanation

A licensee may not share compensation with an unlicensed person for activity that requires a license, and paying a referral fee to an unlicensed individual is prohibited. A written agreement or the timing of payment does not make the payment permissible.

Question 11Vermont real estate statutes and Office of Professional Regulation rules

A licensee representing a seller learns that the basement has repeatedly flooded, though the seller has not mentioned it. What must the licensee do?

  1. Resign the listing so the licensee is not responsible for the information.
  2. Keep the information confidential because the seller is the client.
  3. Report it to the town zoning office and let officials notify buyers.
  4. Disclose the known flooding to prospective buyers. Correct answer.

Explanation

Licensees must disclose known material facts about the property to prospective buyers, even though the seller is the client. The duty of confidentiality does not extend to concealed physical defects that would influence a buyer's decision.

Question 12Vermont real estate statutes and Office of Professional Regulation rules

A Vermont broker wants to share part of the commission from a Vermont sale with a broker licensed only in New Hampshire who referred the buyer and performed no brokerage activity in Vermont. What does Vermont law allow?

  1. The payment, because the out-of-state broker only made a referral. Correct answer.
  2. The payment, but only if the New Hampshire broker registers with the Vermont Commission first.
  3. The payment, but only if the New Hampshire broker also holds an appraisal license.
  4. Nothing, because only Vermont licensees may receive any part of a commission.

Explanation

A licensee may pay a referral fee to a broker who is licensed in another state when that person's involvement is limited to the referral. Performing brokerage services in Vermont, however, would require a Vermont license.

Question 13Vermont real estate statutes and Office of Professional Regulation rules

A buyer asks her licensee to draft a special clause in the purchase and sale contract allocating water rights between the parties. What may the licensee do?

  1. Draft the clause and have the buyer initial it as part of permitted contract services.
  2. Fill in the standard form but refer the custom clause to an attorney. Correct answer.
  3. Draft the clause if both parties release the licensee from liability.
  4. Refuse to continue working with the buyer until the buyer hires an attorney.

Explanation

Licensees may complete standard contract forms, but drafting custom legal language is the unauthorized practice of law. The proper course is to complete the form and advise the client to obtain legal advice on the custom provision.

Question 14Vermont real estate statutes and Office of Professional Regulation rules

A sale collapses and both the buyer and the seller demand the earnest money the broker is holding. What should the broker do?

  1. Split the deposit equally between the parties to end the dispute.
  2. Return the deposit to the buyer, since the buyer is the party who paid it.
  3. Turn the funds over to the listing firm as an earned commission.
  4. Hold the funds in escrow until the parties agree or a court orders disbursement. Correct answer.

Explanation

When entitlement to escrow funds is disputed, the broker must keep the money in escrow and disburse only on the parties' written agreement or a court order. The broker is a stakeholder and may not decide the dispute.

Question 15Vermont real estate statutes and Office of Professional Regulation rules

A Vermont salesperson's license expires on March 31 and is not renewed. May she continue showing homes and writing offers for her broker while renewal is pending?

  1. No, brokerage activity requires a current license. Correct answer.
  2. Yes, as long as she tells the consumers she works with about the lapse.
  3. Yes, for up to six months while the renewal paperwork is processed.
  4. Yes, if the supervising broker agrees to accept responsibility.

Explanation

Practicing brokerage without a current license is prohibited and constitutes unprofessional conduct, even for a licensee whose renewal is in process. The licensee must be reinstated before resuming licensed activity.

Question 16Vermont real estate statutes and Office of Professional Regulation rules

Both the seller and the buyer are clients of the same firm. The firm designates one licensee to represent the seller and a different licensee to represent the buyer. Which statement is accurate under Vermont law?

  1. The designated licensees must share all client information with each other because they are employed by the same firm.
  2. The buyer's designated licensee owes the seller the same fiduciary duties as the seller's licensee.
  3. Each licensee advocates for their own client without sharing that client's confidences. Correct answer.
  4. The firm is a dual agent, so neither licensee may advocate for their client's price.

Explanation

Under designated agency, one licensee represents the seller and another represents the buyer within the same firm, and each owes full fiduciary duties to their own client. Confidential information belonging to one client is not passed to the licensee representing the other side.

Question 17Vermont real estate statutes and Office of Professional Regulation rules

Six months after a buyer agency agreement ends, the former client's licensee is asked by a competing buyer whether the former client was preapproved for a larger loan. What is the licensee's obligation?

  1. Answer only if the competing buyer promises to keep the information private.
  2. Answer honestly, because the agency relationship has ended.
  3. Answer, because loan approval amounts are a matter of public record.
  4. Keep it confidential, because confidentiality survives the end of the agency. Correct answer.

Explanation

The duty of confidentiality regarding a client's personal and financial information continues after the agency relationship terminates. The licensee may not reveal a former client's loan information to another buyer.

Question 18Vermont real estate statutes and Office of Professional Regulation rules

A seller client tells her licensee, "I'll accept $30,000 below list because I must relocate." The buyer, who is not represented by this licensee, offers full list price. What must the licensee do?

  1. Tell the buyer only after the seller rejects the full-price offer.
  2. Keep the seller's motivation confidential and present the offer to the seller. Correct answer.
  3. Tell the buyer the seller will take less so the buyer can negotiate a lower price.
  4. Disclose it to the buyer because licensees must reveal all facts they know about a transaction.

Explanation

The seller's willingness to accept less is confidential client information that the licensee may not reveal to the buyer. The duty to disclose material facts concerns the condition of the property, not the client's negotiating position.

Question 19Vermont real estate statutes and Office of Professional Regulation rules

A licensee wants to buy a home that her own firm has listed, as her personal residence. What must she do?

  1. Have a licensee from another firm present the offer so her status is not raised.
  2. Nothing special, because licensees may buy listed property like any other buyer.
  3. Disclose in writing that she is a licensee and obtain the seller's consent. Correct answer.
  4. Wait until the listing expires so that no agency relationship exists.

Explanation

A licensee acquiring an interest in listed property must disclose in writing that she holds a real estate license and must obtain the seller's written consent. This ensures the seller knows the buyer has professional knowledge of the transaction.

Question 20Vermont real estate statutes and Office of Professional Regulation rules

A corporation owns an apartment complex and hires a resident manager paid a salary to show units, quote rents, and sign leases on the owner's behalf. The manager holds no real estate license. Is this permitted?

  1. Yes, a salaried employee of the owner may lease the owner's units without a license. Correct answer.
  2. No, signing leases for another always requires a Vermont real estate license.
  3. No, unless the manager is supervised by a licensed broker employed by the corporation.
  4. Yes, but only if the manager collects no rent from the tenants.

Explanation

Vermont's licensing statute exempts a regular salaried employee of an owner who performs leasing and management duties for that owner's property. The exemption is tied to the employment relationship with the owner and does not extend to brokering property for other owners.

Question 21Licensing, advertising, and recordkeeping requirements

Under Vermont law, advertising for a listed property by a licensed salesperson must include which of the following?

  1. The seller's full legal name
  2. The licensed name of the brokerage firm Correct answer.
  3. The commission rate negotiated with the seller
  4. The salesperson's home mailing address

Explanation

Vermont advertising rules require every advertisement to identify the licensed brokerage, because a salesperson advertises on behalf of and under the firm's name. Commission terms and the seller's identity are not required elements of an ad. Omitting the firm name is what creates a prohibited blind advertisement.

Question 22Licensing, advertising, and recordkeeping requirements

An advertisement that promotes a specific property and gives a phone number but omits the name of the brokerage is known in licensing practice as:

  1. A blind advertisement Correct answer.
  2. An open listing
  3. A net listing
  4. A pocket listing

Explanation

A blind advertisement omits the brokerage name, which hides who is licensed and responsible for the ad; Vermont prohibits this practice. Open, net, and pocket listings describe listing arrangements or compensation methods, not types of advertising. Every ad must identify the firm.

Question 23Licensing, advertising, and recordkeeping requirements

A Vermont broker receives an earnest money deposit from a buyer. The broker must:

  1. Use the funds for office expenses until closing
  2. Keep the funds in a separate trust account and not commingle them Correct answer.
  3. Deposit the funds in the broker's general business account
  4. Give the funds to the salesperson to hold

Explanation

Client and trust funds must be held in a trust account separate from the broker's personal and business funds. Commingling trust money with operating money is prohibited. Using deposits for office expenses would also be a conversion of client funds.

Question 24Licensing, advertising, and recordkeeping requirements

To act as a real estate salesperson in Vermont, an individual must:

  1. Hold an independent broker license
  2. Sponsor other salespersons
  3. Be associated with a Vermont-licensed broker Correct answer.
  4. Work only for out-of-state clients

Explanation

A Vermont salesperson license is tied to a supervising broker, and the salesperson may not operate independently. Sponsoring or supervising other licensees is a broker function. The license must be affiliated with a licensed Vermont brokerage.

Question 25Licensing, advertising, and recordkeeping requirements

Which statement best describes compensation for brokerage services in Vermont?

  1. An unlicensed person may collect a fee with the seller's written consent
  2. An unlicensed person may accept a fee if the amount is under $500
  3. An unlicensed attorney may accept a brokerage fee for a real estate closing
  4. An unlicensed person may not accept compensation for performing brokerage services Correct answer.

Explanation

License law prohibits unlicensed persons from accepting compensation for acts that require a real estate license. A small fee, seller consent, or a closing role does not cure the lack of a license. Attorneys may provide legal services but may not accept compensation for brokerage services.

Question 26Licensing, advertising, and recordkeeping requirements

Vermont brokers must retain transaction records, including listing and closing documents, for at least:

  1. Ten years
  2. Five years
  3. One year
  4. Three years Correct answer.

Explanation

Vermont recordkeeping rules require transaction records to be retained for three years so the Commission can inspect compliance. A shorter period fails the minimum, and a longer period is not the stated minimum. Records must remain available on request.

Question 27Licensing, advertising, and recordkeeping requirements

A salesperson posts a photo of a new listing on a social media account used for business. Under Vermont advertising rules, the post should:

  1. Include the firm name only if the post is a paid advertisement
  2. Identify the licensed brokerage firm Correct answer.
  3. Include only the salesperson's personal username
  4. Omit the firm name because social media is informal

Explanation

Advertising rules apply to all media, including social media, so the post must identify the licensed brokerage. Whether the post is paid or free does not change the requirement. A personal username alone does not identify the responsible firm.

Question 28Licensing, advertising, and recordkeeping requirements

A licensed team wants to advertise under a team name. What is required?

  1. The team name may be used alone if it is registered with the state
  2. The team name must include the word "LLC"
  3. The team must obtain a separate brokerage license
  4. The team name must be accompanied by the licensed brokerage name Correct answer.

Explanation

A team is not a separate licensee, so any team-name advertising must also identify the licensed brokerage. Registering a team name or forming an LLC does not substitute for brokerage identification. The public must be able to tell which licensed firm is responsible.

Question 29Licensing, advertising, and recordkeeping requirements

A "for sale" yard sign placed by a licensee is:

  1. Permitted to show only the salesperson's name
  2. Advertising that must identify the brokerage Correct answer.
  3. Exempt from firm-name rules if it is smaller than two square feet
  4. Not advertising because it is on private property

Explanation

A yard sign is advertising and must include the brokerage name. The sign's size or its location on private property does not exempt it from the rule. It may include the salesperson's name, but not only that name.

Question 30Licensing, advertising, and recordkeeping requirements

A brokerage opens a second office in another Vermont town. What is required for the new location?

  1. A license only if the office is outside Vermont
  2. A separate license for the branch office Correct answer.
  3. A license only if more than two licensees work there
  4. No additional license if the main office is licensed

Explanation

Each office location must be licensed and supervised by a broker; a branch office is not covered by the main office license. The number of licensees working there does not determine the requirement. Vermont offices must comply regardless of location within the state.

Question 31Licensing, advertising, and recordkeeping requirements

An unlicensed assistant working for a Vermont brokerage may:

  1. Solicit new listings at an open house
  2. Explain and interpret contract contingencies to a buyer
  3. Negotiate the terms of a purchase and sale agreement
  4. Schedule appointments and perform clerical tasks Correct answer.

Explanation

Unlicensed assistants may perform clerical and scheduling work but may not perform acts that require a real estate license. Negotiating terms, interpreting contract contingencies, and soliciting listings are licensed activities. Supervising licensees must handle those tasks.

Question 32Licensing, advertising, and recordkeeping requirements

A Vermont salesperson wants to pay part of a commission to a friend who referred a buyer but is not licensed. This is:

  1. Permitted because referrals are not brokerage services
  2. Permitted if the payment is less than the salesperson's share
  3. Permitted if the friend signs a written referral agreement
  4. Prohibited because commissions may not be shared with unlicensed persons Correct answer.

Explanation

Compensation for brokerage services may not be shared with an unlicensed person. A written referral agreement or a smaller share does not make the payment lawful. Referral fees tied to real estate transactions are part of the licensed compensation system.

Question 33Licensing, advertising, and recordkeeping requirements

Before advertising a property as available for sale, a licensee must:

  1. Have the owner's consent, typically through a listing agreement Correct answer.
  2. Advertise every FSBO in the area to find buyers
  3. Obtain verbal permission from any occupant
  4. Wait until the property is in the MLS

Explanation

A licensee may advertise property only with the owner's authorization, usually through a listing agreement. Advertising another person's property without consent is misleading and violates licensing rules. MLS entry is not a legal prerequisite to advertising a properly listed property.

Question 34Licensing, advertising, and recordkeeping requirements

Regarding transaction records, a Vermont broker must:

  1. Destroy records immediately after closing
  2. Release records to the Commission only after a court subpoena
  3. Make records available to the Commission for inspection on request Correct answer.
  4. Keep records only if a complaint is filed

Explanation

The Commission has authority to inspect brokerage records, so the broker must produce them on request. A court subpoena is not the only mechanism for review. Records must be retained rather than destroyed at closing.

Question 35Licensing, advertising, and recordkeeping requirements

Vermont real estate licenses are renewed:

  1. Every four years
  2. Every three years
  3. Every year
  4. Every two years Correct answer.

Explanation

Vermont uses a biennial renewal cycle for real estate licenses. Licensees must renew on schedule and satisfy applicable continuing education requirements. Annual, triennial, and quadrennial cycles do not match Vermont's renewal period.

Question 36Licensing, advertising, and recordkeeping requirements

A Vermont salesperson with two years of experience wants to advertise as "John Doe, Broker." This is:

  1. Permitted if the ad also includes the firm name
  2. Permitted because experience equals a broker license
  3. Permitted if the salesperson uses the word "associate"
  4. Prohibited unless the salesperson holds a broker license Correct answer.

Explanation

License titles in advertising must be accurate, and a salesperson may not hold out as a broker. Experience and inclusion of the firm name do not authorize the use of a broker title. Only a person licensed as a broker may advertise as a broker.

Question 37Licensing, advertising, and recordkeeping requirements

A broker maintains a trust account. Which recordkeeping practice satisfies Vermont requirements?

  1. Relying on the bank's online statement as the sole record
  2. Keeping only canceled checks for the trust account
  3. Recording each deposit and disbursement and reconciling the trust account Correct answer.
  4. Recording trust funds in the same ledger as office expenses

Explanation

Trust account records must show each receipt and disbursement and must be reconciled to the account balance. Canceled checks or bank statements alone do not provide a complete ledger. Trust funds must be tracked separately from office expenses to avoid commingling.

Question 38Licensing, advertising, and recordkeeping requirements

A licensee's website advertises the firm's services statewide. To comply with Vermont advertising rules, the website should:

  1. List only the salespersons' names and cell numbers
  2. Omit firm information because websites are not advertising
  3. Identify the licensed brokerage firm and its licensed office Correct answer.
  4. Use a fictitious business name without the firm's name

Explanation

Website content that promotes brokerage services is advertising and must identify the licensed brokerage and its office. Listing only individual salespersons' contact information does not identify the responsible licensee. A fictitious name alone is also insufficient.

Question 39Licensing, advertising, and recordkeeping requirements

Salesperson S is licensed with Broker A. A seller listed with Broker B asks S to advertise the property on S's social media. What should S do?

  1. Decline unless the ad is placed under Broker A's authority and with proper listing cooperation Correct answer.
  2. Advertise it under Broker B's name without telling Broker A
  3. Advertise it because the seller gave permission
  4. Advertise it under S's personal name only

Explanation

A salesperson advertises only on behalf of the supervising broker, so S may not independently market another firm's listing. Proper cooperation between the brokerages and correct brokerage identification are required. The seller's personal permission does not resolve the brokerage affiliation issue.

Question 40Licensing, advertising, and recordkeeping requirements

An advertisement states: "We guarantee the lowest commission in Vermont." Under licensing rules, this ad is:

  1. Acceptable if the claim is true for one client
  2. Acceptable because commission rates are negotiable
  3. Acceptable if the firm's name appears in the ad
  4. Prohibited because it is misleading and cannot be substantiated Correct answer.

Explanation

Advertising must be truthful and not misleading, and an unverifiable superlative about commission rates violates that duty. Including the firm name or noting that commissions are negotiable does not cure a deceptive claim. A claim that is true for only one client is still misleading as a general statement.

Question 41Agency relationships and disclosure obligations

In Vermont, at what point must a licensee provide a consumer with the written agency relationship disclosure?

  1. When a written purchase offer is submitted
  2. At closing, when commissions are disbursed
  3. Only after the consumer asks to be represented
  4. At the first substantive business contact with the consumer Correct answer.

Explanation

Vermont requires the agency disclosure to be given at the earliest practicable time, generally understood as the first substantive business contact and before any brokerage agreement is signed. The purpose is to let consumers choose representation before they reveal confidential information or commit to a transaction.

Question 42Agency relationships and disclosure obligations

A buyer tours a listing with the seller's agent but has signed no brokerage agreement with anyone. The buyer is best described as which of the following with respect to the listing firm?

  1. A customer of the listing firm Correct answer.
  2. A client of the listing firm
  3. A subagent of the listing firm
  4. A dual agent of the listing firm

Explanation

A person who receives services from a licensee but has no brokerage agreement is a customer, not a client. The listing firm represents the seller only and owes the customer honesty and disclosure of known material facts, but not fiduciary duties such as loyalty or advocacy.

Question 43Agency relationships and disclosure obligations

Which duty does a Vermont licensee owe to a client but not to a customer?

  1. Loyalty and advocacy Correct answer.
  2. Disclosure of known material facts
  3. Fairness in negotiations
  4. Honest dealing

Explanation

Fiduciary duties such as loyalty, advocacy, and confidentiality arise from the agency relationship and run only to clients. Honesty, fairness, and disclosure of known material facts are owed to every party in the transaction, represented or not.

Question 44Agency relationships and disclosure obligations

Before a Vermont firm may act as a dual agent in a transaction, it must obtain which of the following?

  1. Written consent from the seller only
  2. Approval from the Vermont Real Estate Commission
  3. Written informed consent from both parties Correct answer.
  4. Verbal consent from both parties at the showing

Explanation

Dual agency creates an inherent conflict because the firm cannot advocate fully for either side. Vermont therefore requires informed written consent from both the buyer and the seller before the firm represents both in the same transaction.

Question 45Agency relationships and disclosure obligations

A Vermont seller's agency relationship with a listing firm is ordinarily created by which of the following?

  1. Advertising the property in the MLS
  2. A written brokerage agreement signed by the seller Correct answer.
  3. An oral promise to pay a commission
  4. Cooperating with a buyer's broker

Explanation

Agency is created by a written brokerage agreement in which the seller engages the firm and agrees to compensation. Advertising and cooperation are activities that follow the agreement; they do not by themselves create the fiduciary relationship.

Question 46Agency relationships and disclosure obligations

A licensee's obligation to protect a former client's confidential information does which of the following?

  1. Ends when the listing agreement expires
  2. Continues after the brokerage relationship ends Correct answer.
  3. Ends when the transaction closes
  4. Applies only to information the client put in writing

Explanation

Confidentiality is one of the fiduciary duties that survives termination of the brokerage relationship. Information such as the client's motivation or financial limits remains protected after closing or after the listing expires.

Question 47Agency relationships and disclosure obligations

In a firm practicing designated agency, the broker-in-charge assigns one licensee to represent the seller and a different licensee to represent the buyer in the same transaction. Which statement describes this arrangement?

  1. Only the broker-in-charge owes duties to either party
  2. The firm must withdraw because it represents both sides
  3. Both licensees become dual agents for both parties
  4. Each acts as a full agent for one side Correct answer.

Explanation

Designated agency allows one firm to represent both sides through separate licensees, each owing full client-level duties to their own principal, while the broker-in-charge supervises neutrally. Written consent from both parties is still required for the arrangement.

Question 48Agency relationships and disclosure obligations

A seller privately tells the listing agent, "I would take $40,000 under asking for a clean offer." A buyer then asks the agent what the seller will really accept. The agent should do which of the following?

  1. Reveal the figure to encourage a clean offer
  2. Report the conversation to the buyer's agent
  3. Tell the buyer only that the seller is motivated
  4. Keep the information confidential and not reveal it Correct answer.

Explanation

The seller's willingness to discount is confidential client information that the listing agent must not disclose without authorization. Revealing it, even indirectly, would undercut the seller's negotiating position and breach loyalty.

Question 49Agency relationships and disclosure obligations

A buyer's agent knows the buyer is pre-approved to $500,000 but plans to offer $430,000 on a home. The listing agent asks what the buyer's ceiling is. The buyer's agent should do which of the following?

  1. Withhold the ceiling unless the buyer authorizes release Correct answer.
  2. Disclose it only if the seller counters above the offer
  3. Disclose it because financing is a material fact
  4. Disclose the ceiling to prove the buyer is qualified

Explanation

The buyer's financial capacity and bargaining strategy are confidential client information. The buyer's agent may confirm the buyer is pre-approved only to the extent the buyer permits, and must not volunteer the maximum price.

Question 50Agency relationships and disclosure obligations

A Vermont licensee wants to buy a home that is listed by another firm. Which action is required of the licensee?

  1. Nothing, because another firm represents the seller
  2. Use a straw buyer to avoid any conflict
  3. Disclose licensed status in writing to all parties Correct answer.
  4. Ask the listing firm to rebate the commission

Explanation

A licensee acting as a principal must disclose their licensed status in writing so the other parties know they are dealing with a real estate professional. This disclosure prevents an unfair information advantage and is required even when another firm represents the seller.