West Virginia Real Estate Practice Exam.
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Answer: D
Mineral rights can be severed from the surface estate and held or conveyed separately, creating two distinct property interests in the same tract. Once severed, the surface owner does not automatically gain the minerals just because they are physically part of the land, and severance by deed is a permanent conveyance, not a temporary leasehold arrangement.

Answer: D
A subagent works under the authority of the listing broker and therefore owes fiduciary duties of loyalty, confidentiality, and full disclosure to the seller, not to the buyer, even though the subagent is the one physically showing homes to that buyer. This arrangement differs from buyer's agency, where the duties would run the other way, and it is not the same as dual agency, which requires representing both sides at once with mutual consent.

Answer: B
Loan-to-value ratio is the loan amount divided by the property's value, so $328,000 divided by $410,000 equals 80 percent. Dividing the value by the loan instead inverts the ratio to 125 percent, the $82,000 difference between value and loan is the equity amount rather than a ratio, and 20 percent is the equity-to-value ratio, not the loan-to-value ratio being asked for.

Answer: C
Prorating an expense like property taxes at closing means dividing the annual amount according to how much of the tax year each party owned the property; since the seller owned the home for exactly half the year before closing, the seller's share is half of the annual tax bill, or $1,200. Charging the seller for the full year ignores that the buyer will own the property for the remainder of the year, while the other figures come from prorating by the wrong fraction of the year instead of the actual six months of ownership.

Answer: A
Paying discount points upfront to permanently reduce the note rate for the life of the loan is known as a permanent buydown, and it can lower monthly payments in exchange for a larger cash outlay at closing. A rate lock extension simply preserves a quoted rate for a longer period before closing, negative amortization describes a loan where unpaid interest gets added to the balance rather than reducing the rate, and a due-on-sale clause has nothing to do with points — it triggers full repayment when a property is sold.

Answer: B
Lenders commonly collect a monthly escrow, sometimes called an impound account, alongside principal and interest so that funds are available to pay property taxes and insurance premiums when they come due, protecting both the borrower and the lender's collateral from lapses in coverage or tax liens. A curtailment refers to an extra payment toward principal, and a subordination reserve or recapture fund are not standard terms for tax-and-insurance set-asides collected with a mortgage payment.

Answer: C
The income approach values a property by dividing net operating income by the market capitalization rate, so $74,400 divided by 8 percent (0.08) yields a supported value of $930,000. Dividing by 8 as a whole number instead of the decimal 0.08 produces $9,300, multiplying NOI by 0.08 instead of dividing produces $5,952, and using the wrong cap rate of 7.5 percent produces $992,000 — none of which reflects the actual percentage-of-NOI formula the income approach is based on.

Answer: C
Gross rent multiplier is calculated by dividing the sale price by the monthly gross rent, so $330,000 divided by $2,500 equals a GRM of 132. Dividing by annual rent instead of monthly rent produces 11, and misplacing a decimal point in the calculation produces figures like 1,320 or 13.2 rather than the correctly scaled multiplier.

Answer: B
The cost approach estimates value by calculating the cost to reproduce or replace the improvements, subtracting accrued depreciation, and adding the land value separately — it is especially useful for unique properties like custom homes where there simply aren't enough comparable sales to rely on the sales comparison approach. The income capitalization approach and gross rent multiplier method both rely on rental income data, which isn't the basis described in this scenario at all.

Answer: D
Gross rent multiplier is a quick, rough tool based solely on gross rent collected, without regard to operating expenses, vacancy, or other costs that affect actual profitability, while capitalization rate analysis starts from net operating income, which already subtracts those expenses, making it a more complete picture of a property's income-producing performance. GRM does not already account for expenses, cap rate analysis is very much income-based rather than ignoring income, and GRM is commonly used for smaller residential rentals as well as commercial property.

Answer: A
An agent's duty of obedience to a principal's lawful instructions does not extend to concealing a known material fact that affects a buyer's decision or the property's value and safety — instructions to hide such defects are not lawful instructions an agent may follow, so the defect must be disclosed regardless of what the seller prefers. Waiting for a buyer to happen to ask, or simply walking away from the listing without addressing the disclosure obligation, would still leave a known material defect concealed from people who need to know about it.

Answer: C
Advertising a materially inflated square footage figure the agent knows to be inaccurate is a false statement of fact, not a harmless approximation, and it violates the basic obligation to advertise truthfully and avoid misleading the public regardless of whether a particular buyer happens to rely on it for financing. A verbal correction offered later at a showing doesn't erase the harm already done by the false published figure, since many buyers form impressions or decide whether to even visit based on the advertised numbers.

Answer: B
Steering occurs when an agent guides buyers or renters toward or away from particular neighborhoods based on a protected characteristic like race, which is exactly what's happening when neighborhood recommendations are driven by assumptions about the buyer rather than the buyer's own stated preferences and needs. Blockbusting instead involves inducing panic selling by suggesting a neighborhood's racial makeup is changing, redlining describes lenders refusing to lend in certain areas, and this conduct is a fair housing violation rather than legitimate market expertise.

Answer: D
The Equal Credit Opportunity Act prohibits lenders from discriminating in credit decisions based on factors including marital status and the receipt of public assistance income, so denying an otherwise-qualified applicant's loan for those reasons implicates that law specifically. The Fair Housing Act addresses housing discrimination rather than credit underwriting criteria, and the Truth in Lending Act and Real Estate Settlement Procedures Act govern cost disclosures and settlement practices rather than prohibited grounds for denying credit.

Answer: A
West Virginia requires salesperson applicants to be at least 18 years old and to hold a high school diploma or its equivalent, so a 17-year-old cannot yet meet the basic eligibility threshold no matter how prepared they otherwise are. There is no requirement to already hold a broker-level license or a bachelor's degree just to become an initial salesperson, and age is very much a threshold eligibility factor rather than an irrelevant one.

Answer: D
A national criminal history background check is only valid for a limited window of time, so if an applicant lets too much time pass between completing the check and finishing the rest of the licensing process, the check may expire and have to be redone before the license can be issued. The exam itself and the background check are separate requirements, so an expired background check doesn't force a retake of the exam, and the expiration issue is about elapsed time generally, not conditioned on whether the applicant's name changed.

Answer: D
Passing the licensing exam starts a limited window during which the candidate must submit their license application, and letting that window lapse can mean having to go through the application and testing process again rather than simply submitting late paperwork whenever convenient. Claiming there's no deadline at all misstates how exam results are treated, and the time limit applies to candidates generally rather than being unique to one license level.

Answer: C
License law generally prohibits paying compensation for activities that require a real estate license — such as referring a buyer in connection with a transaction — to anyone who is not licensed, regardless of the dollar amount involved or where that unlicensed person happens to live. There is no exception simply because the fee falls under some dollar threshold, and residency has nothing to do with why an unlicensed referral fee is prohibited — the licensing status itself is the issue.

Answer: C
A remainder interest is a future interest — the holder gains no right to possess or use the property until the preceding estate ends. The life tenant retains exclusive possessory rights during their lifetime, so any answer suggesting the remainderman can occupy or use the land now confuses a present possessory right with a future interest that simply hasn't vested into possession yet.

Answer: D
When a single tract is divided and the split leaves one resulting parcel with no other way to reach a public road, the law implies an easement by necessity so the landlocked parcel remains usable — the necessity arises from the common origin of both parcels, not from years of use. A right built on adverse, hostile use for a statutory period describes a different implied easement entirely, and a revocable permission to cross land is not a property interest that runs with the land at all.

Answer: C
Riparian rights belong to land bordering a flowing watercourse such as a creek or river, giving the owner reasonable use of the adjacent water. Littoral rights instead describe land bordering standing bodies of water like lakes; an appurtenant easement is a right to use someone else's separate parcel; and prior appropriation is a use-it-or-lose-it water allocation system used in some jurisdictions, not the common-law riparian doctrine that applies here.

Answer: C
Adverse possession requires possession that is open, notorious, hostile, exclusive, and continuous for the length of time set by law — a single gap or interruption in occupancy can defeat the claim. Possession that occurs with the owner's consent is permissive rather than hostile and would never ripen into ownership no matter how long it continued, while sharing use with the record owner defeats the exclusivity requirement rather than satisfying it.

Answer: C
When a physical structure like a fence extends across a recorded boundary line onto a neighboring owner's land, it is an encroachment, and the survey is exactly the tool used to catch it before closing. An encroachment alone does not automatically ripen into a prescriptive easement — that requires proving hostile, continuous use for the statutory period, which the facts here don't establish — and nothing indicates the owners ever agreed to treat the fence as the true boundary.

Answer: C
The defining feature of joint tenancy with right of survivorship is that a deceased owner's interest passes automatically and immediately to the surviving joint tenants by operation of law, without going through probate or being controlled by the deceased's will. Distributing the share through the deceased's estate or will describes tenancy in common, a different form of co-ownership that lacks a survivorship feature.

Answer: C
Dual agency creates an inherent conflict because the broker owes fiduciary duties to two parties with opposing interests, so both the buyer and the seller must be told about the arrangement and knowingly agree to it before it can proceed. Consent from only one side leaves the other party unprotected, and simply splitting the commission evenly does nothing to address the underlying conflict of interest that disclosure and consent are meant to resolve.

Answer: D
Fiduciary duties owed to a principal include loyalty, obedience, disclosure, accounting, reasonable care, and confidentiality, and revealing the seller's confidential bottom-line price to a buyer breaches confidentiality specifically, since that duty protects sensitive information the principal shared in trust. Reasonable care concerns competent performance of tasks, obedience concerns following lawful instructions, and accounting concerns handling of client funds — none of which describes leaking a confidential negotiating position.

Answer: C
Because a salesperson operates under a supervising broker's license and authority, the broker can be held vicariously liable for misrepresentations or other misconduct the salesperson commits while acting within the scope of licensed duties, even if the broker never personally made or repeated the statement. This differs from a blanket rule that brokers are never responsible, and it isn't strict liability untethered to the scope of the agency relationship — the connection to licensed activity is what triggers it.

Answer: C
Agency authority created by a listing agreement is limited to the term specified in that agreement, so the agency simply ends when the stated expiration date arrives — no additional notice from either party is required to terminate it. It does not continue indefinitely absent notice, and expiration alone does not automatically renew the agreement or convert it into a different type of listing; any new arrangement would require a fresh agreement.

Answer: A
In designated agency, the firm assigns separate individual licensees to represent the buyer and the seller respectively, so each designated agent owes full, undivided fiduciary duties to only their own client — unlike dual agency, where a single licensee attempts to represent both parties at once and must therefore limit some duties to remain neutral. This structure isn't automatically banned just because both licensees share a broker, and it doesn't eliminate fiduciary obligations; it simply divides them cleanly between two individuals.

Answer: B
Setting one's own schedule, covering one's own expenses, and being paid strictly by commission are hallmarks of independent contractor status, which is the typical working arrangement between a real estate salesperson and a sponsoring broker even though the salesperson must still operate under the broker's license and supervision. This differs from an employee relationship, which usually involves employer-set schedules and benefits, and the salesperson remains affiliated with — not disconnected from — the broker's license.

Answer: B
Procuring cause disputes turn on which agent's efforts set in motion, without a meaningful break, the chain of events that directly led to the buyer's purchase — if the first agent's involvement genuinely ended and the buyer independently continued working with a second agent who completed the transaction, the second agent's efforts may be the procuring cause instead. Market share, attendance at closing, and holding the listing agreement with the seller are not the legal test for a commission dispute between cooperating buyer-side agents.

Answer: A
Minors generally lack full contractual capacity, so a contract they sign as a seller is voidable — meaning the minor may choose to disaffirm and walk away from it, but it isn't automatically unenforceable if the minor chooses to honor it instead. This differs from a contract that is void from inception, which could never be enforced by anyone, and turning 18 doesn't automatically transform a voidable contract into a binding one without some affirmative act of ratification.

Answer: C
The statute of frauds requires that contracts for the sale of an interest in real property be in writing and signed to be enforceable, so a purely verbal agreement to sell land — no matter how sincerely both parties intended it — generally cannot be enforced in court. A witness confirming the handshake doesn't cure the missing writing, and the requirement is about the form of the contract, not about whether a broker happens to be involved in the deal.

Answer: D
A quitclaim deed transfers whatever interest, if any, the grantor actually holds without making any promises or warranties about the quality of that title — which makes it well suited for heirs with uncertain or overlapping claims to sign away their interests without vouching for a title history they can't verify. A general or special warranty deed would obligate each signing heir to guarantee title they may not actually be able to stand behind, and a sheriff's deed applies only to court-ordered foreclosure sales, not a family transfer like this one.

Answer: C
A financing contingency protects a buyer by making the contract's performance conditional on successfully obtaining a mortgage, allowing the buyer to cancel and recover earnest money if financing cannot be secured by the deadline. An acceleration clause instead lets a lender demand full loan repayment upon default, a subordination clause changes lien priority between loans, and an escalation clause automatically raises a buyer's offer to beat competing bids — none of which describe a financing-related exit condition.

Answer: B
Assigning a contract means transferring one's rights and, typically, obligations under that agreement to another party, which is exactly what happens when a buyer hands off their purchase contract to another party before closing. Unless the seller specifically agrees to release the original buyer through a novation, the original buyer may still remain responsible if the assignee fails to perform, and an assignment of contractual rights has nothing to do with creating an easement or automatically voiding the agreement.

Answer: C
A missing signature from an heir with a legal interest in the property creates a cloud on title — an unresolved claim that makes the title unmarketable — and resolving it typically requires a legal proceeding such as a quiet title action to formally establish clear ownership. Title insurance can protect a buyer against loss from title defects but doesn't itself clear the defect, a recorder's office cannot unilaterally fix a substantive ownership gap, and an heir's legal interest doesn't simply vanish with time absent some independent legal basis like adverse possession.

Answer: C
Recording a deed gives constructive notice to anyone searching the public record of the interests it describes, which protects the parties' priority against later claims or competing conveyances. The deed itself is what legally settles the boundary between the parties even before recording; recording doesn't guarantee a lien-free title going forward, and signing necessarily happens before a deed can be recorded, not after.

Answer: C
In an installment land contract, also called a contract for deed, the seller retains legal title as security for the payments while the buyer takes possession and gains only equitable title during the payment period; legal title transfers to the buyer only after all contract payments are completed. Neither a neutral third party nor a fifty-fifty split describes how title works under this arrangement — the seller's retained legal title is precisely what secures the seller's right to be paid.

Answer: A
Each point equals one percent of the loan amount, so 3.4 points on a $297,300 loan is calculated as the loan amount multiplied by 3.4 percent, which comes to $10,108.20. Using the wrong percentage, treating points as a flat dollar fee unrelated to the loan size, or applying ten percent instead of the stated 3.4 percent are the kinds of calculation slips that produce the other figures, but none of them reflects the actual percentage-of-loan-amount formula points are based on.

Answer: A
FHA-insured loans are backed by the federal government and generally allow a lower minimum down payment than a typical conventional loan, which is why they're popular with first-time or lower-down-payment buyers, though borrowers pay mortgage insurance premiums in exchange. A conventional loan without special down payment assistance often requires a larger down payment to avoid private mortgage insurance, and bridge loans or blanket loans serve entirely different financing purposes unrelated to a first-time buyer's minimum down payment question.

Answer: D
An owner's title insurance policy protects the buyer's own ownership interest against title defects, and buyers customarily pay for it, though who pays can shift by local custom or negotiation, separately from the lender's policy, which protects the lender's security interest and serves a different beneficiary. Recording fees are a government charge unrelated to insurance premiums, and title insurance costs are not paid out of an agent's commission.

Answer: B
In the sales comparison approach, adjustments are always made to the comparable, not the subject, and the rule is to adjust for what the comparable has that the subject lacks by subtracting that feature's value, since the comparable is superior in that respect and its price must be adjusted downward to be equivalent to the subject. Adjusting the subject property directly, leaving a real feature difference unadjusted, or adding value to a superior comparable would all misstate what the subject property is actually worth relative to that sale.

Answer: C
Highest and best use analysis identifies the reasonably probable use of a property that is legally permissible, physically possible, financially feasible, and maximally productive, and appraisers rely on it to determine how vacant land like this lot should be valued. Functional obsolescence describes a design or feature that reduces a structure's value, plottage refers to the added value created by combining smaller parcels into one larger one, and economic life refers to how long an improvement is expected to remain useful — none of which match this four-part test.

Answer: C
Known conditions like documented settling cracks tied to past underground mining are material facts that can affect a buyer's decision or the property's value and safety, and an agent who is personally aware of them must disclose that information rather than waiting to be asked or waiting for a formal inspection to confirm what the agent already knows firsthand. Claiming the topic is outside the agent's expertise does not excuse withholding a known, observed defect from prospective buyers.

Answer: B
Even where disclosure rules on purely psychologically stigmatizing facts vary, an agent may never affirmatively misrepresent the truth when directly asked a question — honesty in response to a direct inquiry is a baseline ethical and legal obligation regardless of whether the topic would otherwise have to be volunteered unprompted. Refusing to engage, falsely claiming a legal prohibition on the topic, or giving a knowingly false reassurance all involve either evasion or outright misrepresentation, neither of which satisfies the duty of honesty owed once the buyer has asked directly.

Answer: A
Even a licensee who represents only the seller still owes any other party in the transaction basic honesty and fair dealing, which means not misrepresenting the property or concealing material facts from an unrepresented buyer, even though the agent is not that buyer's fiduciary and does not owe them full undivided loyalty. Claiming zero obligation ignores this baseline duty, extending the seller's fiduciary duties to the buyer would create an impossible conflict, and advocating for the buyer's financial interest directly contradicts the agent's actual role representing the seller.

Answer: D
Selling a property "as-is" generally means the seller won't be obligated to make repairs, but it does not erase the separate duty to disclose known material defects such as a basement that reliably floods — a buyer can still be misled into overpaying or facing unexpected costs if that kind of known problem is hidden behind an as-is label. Waiving inspection rights addresses a different issue, and as-is sales themselves are a legally common and permitted way to sell residential property; they just don't function as a shield against disclosure duties.

Answer: B
When an agent wants to personally purchase a property they have listed, the resulting conflict of interest must be fully and promptly disclosed to the seller so the seller can make an informed decision, since the agent's personal financial interest could otherwise compromise the objective advice and negotiating effort the seller is entitled to expect. Simply relying on inside knowledge of the property, waiving the commission, or moving the listing to another firm does not address the core problem, which is the seller's right to know about the agent's competing personal interest.

Answer: B
Familial status — the presence of children under a certain age in a household — is one of the classes protected under federal fair housing law, so refusing to rent to a family specifically because they have young children is discrimination based on familial status, not a permissible personal preference a landlord is free to act on. Nothing in the scenario involves a disability, and the Equal Credit Opportunity Act governs credit decisions rather than rental housing decisions like this one.

Answer: D
A service or assistance animal request tied to a documented disability is generally treated as a reasonable accommodation under fair housing law, meaning the housing provider must waive an otherwise-applicable no-pets policy to allow it rather than treating the animal as an ordinary pet subject to standard pet rules or fees. Charging a pet deposit or fee for a service animal, or enforcing a blanket no-exceptions policy against a legitimate accommodation request, would itself run afoul of the reasonable accommodation requirement.

Answer: B
Blockbusting is the practice of inducing panic selling by suggesting that a neighborhood's racial or ethnic composition is changing and that this change will harm property values, and it is illegal under fair housing law regardless of whether the underlying claim is even true. This differs from steering, which guides buyers toward or away from neighborhoods rather than pressuring current owners to sell, from redlining's lending-area practices, and it is not a protected or legitimate market opinion — inciting panic selling based on ethnicity is exactly what the law prohibits.

Answer: B
Fair housing advertising rules prohibit statements that indicate a preference, limitation, or discrimination based on protected classes such as religion, and describing an ideal tenant as a "young Christian couple" does exactly that by signaling religious and familial preferences that could discourage others from applying. The violation exists in the advertisement's language itself — it doesn't require a complaint to be filed or an actual rejection to occur before the advertising itself becomes a fair housing problem.

Answer: B
License law requires licensees to keep client funds such as security deposits in a separate trust or escrow account rather than commingling them with personal or business funds, protecting tenants and owners if the licensee faces financial trouble. Depositing the money into a personal account, holding it as uninvested cash on hand, or forwarding it straight to the owner before it is due all violate the basic principle that client trust funds must be safeguarded separately until properly disbursed.

Answer: D
A sponsoring broker is responsible for supervising the licensed activities of salespersons affiliated with the brokerage, since the salesperson operates under the broker's license and authority — supervision doesn't disappear just because the salesperson holds their own individual license. The Commission regulates and disciplines licensees but does not supervise the day-to-day conduct of every individual transaction, and supervision is an ongoing broker obligation rather than something that ends after a fixed early period.

Answer: D
State real estate commissions, including West Virginia's, have regulatory authority to investigate licensee misconduct and impose discipline ranging up to suspension or revocation of a license when a licensee engages in serious violations such as knowingly falsifying documents. This civil regulatory authority exists independently of any separate criminal proceedings that might also result from the same conduct, and the Commission's response is not limited to merely requiring more education or simply informing the brokerage with no further recourse.

Answer: C
Real estate licenses are not automatically recognized across state lines, so an out-of-state agent generally must go through some form of licensure in West Virginia, such as a nonresident license application process, before lawfully conducting licensed real estate activity within the state. Simply notarizing and mailing a home-state license, or assuming a client's origin exempts the agent from local licensing, does not satisfy the requirement that the activity itself be authorized under West Virginia licensing law.

Answer: A
When a brokerage opens an additional office, license law typically requires a licensed broker to be designated as being in charge of that office and accountable for the licensed activity conducted there, since supervision must be tied to an identifiable, responsible license holder present at or responsible for each location. Supervision doesn't automatically follow the original broker's license to every new location without a designated person actually assigned to it, and there's no such thing as a deal-volume exemption from having a responsible broker or a rule that only a part-time assistant suffices.

Answer: C
A licensee who is not actively practicing should place their license on inactive status, which keeps their licensure record accurate and avoids improperly continuing to engage in licensed activity like listing or selling property without being genuinely engaged and supervised. Continuing to act as if fully active despite a genuine break misrepresents the licensee's actual status, and inactive status is a reversible administrative step, not a permanent surrender or an automatic transfer to someone else.

Answer: B
A trade or team name used in real estate advertising generally must be properly registered or approved and remains subject to the supervising broker's oversight and license law's advertising rules, since advertising under an unapproved or unaffiliated-sounding name can mislead the public about who is actually responsible for the licensed activity. A team name is a marketing label operating under, not a replacement for, the brokerage's actual license, and simply listing personal license numbers doesn't substitute for properly registering or approving the trade name itself.

Answer: D
A state real estate commission's role extends well beyond the initial act of issuing a license — it sets and administers licensing standards, enforces the state's real estate license law, and regulates ongoing licensee conduct through complaint investigation and discipline, functioning as a continuing regulatory body rather than a one-time gatekeeper. It is not a trade association advocating for licensees' business interests, and while a third-party vendor may administer the exam itself, the Commission's broader regulatory authority over the profession goes far beyond simply routing paperwork to that vendor.