GA MLS Real Estate Practical Final
Exam 2025
Safety Clause - CORRECT ANSWER-A negotiated period after the termination of the
listing during which the listing broker may still be entitled to a commission if the property
is sold to a buyer who was shown the property during the listing period
Survival Clause - CORRECT ANSWER-A clause in the contract for purchase and sale
that , unless otherwise expressly agreed to in writing by the buyer and seller, allows
certain contractual obligations to be performed after closing
Ratification - CORRECT ANSWER-Method of creating an agency relationship in which
the principal accepts the conduct of someone who acted without prior authorization as
the principal's agent
Net Operating Income (NOI) - CORRECT ANSWER-The income projected for an
income-producing property after deducting losses for vacancy and collection and
operating expenses.
Straight Term Loan - CORRECT ANSWER-A loan in which only interest is paid during
the term of the loan, with the entire principal amount due with the final interest payment.
Loan Origination Fee - CORRECT ANSWER-A fee charged to the borrower by the
lender for making a mortgage loan. The fee is usually computed as a percentage of the
loan amount.
Adjustable Rate Mortgage - CORRECT ANSWER-A loan characterized by a fluctuating
interest rate, usually one tied to a bank or savings and loan association cost-of-funds
index.
Fully Amortized Loan - CORRECT ANSWER-A loan consisting of equal, regular
payments satisfying the total payment of principal and interest by the due date.
Purchase Money Mortgage - CORRECT ANSWER-A note secured by a mortgage or
deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the
purchase price of the real estate.
Debit - CORRECT ANSWER-On a closing statement, an amount charged; an amount
the party must pay at settlement.
, Credit - CORRECT ANSWER-On closing statement, an amount entered in a person's
favor, a party that must be reimbursed.
Acceleration Clause - CORRECT ANSWER-The clause un a mortgage or deed of trust
that can be enforced to make the entire debt due immediately if the borrower defaults
on an installment payment or other obligation
Addendum - CORRECT ANSWER-Any provision added to an existing contract without
altering the content of the original
Amendment - CORRECT ANSWER-A change to the existing content of the contract,
and must be initialed by all parties.
Prepayment Penalty - CORRECT ANSWER-A charge imposed on a borrower who pays
off the loan principal early. This penalty compensates the lender for interest and other
charges that would otherwise be lost
Private Mortgage Insurance (PMI) - CORRECT ANSWER-Insurance provided by a
private carrier that protects a lender against a loss in the event of a foreclosure and
deficiency.
Mortgage Insurance Premium (MIP) - CORRECT ANSWER-An insurance policy
premium used in FHA loans that the borrower is charged. The premium depends on the
length of the loan and the loan-to-value (LTV) ratio.
Defeasance Clause - CORRECT ANSWER-A clause used in leases and mortgages that
cancels a specified right upon the occurrence of a certain condition, such as
cancellation of a mortgage upon repayment of the mortgage loan.
Regulation Z - CORRECT ANSWER-Implements the Truth in Lending Act requiring
credit institutions to inform borrowers of the true cost of obtaining credit.
Contingencies - CORRECT ANSWER-Provisions in a contract that require a certain act
to be done or a certain event to occur before the contract becomes binding.
Graduated Payment Mortgage - CORRECT ANSWER-A loan in which the monthly
principal and interest payments increase by a set amount each year for a certain
number of years and then level off for the remaining loan term; probable negative
amortization in early years.
Interest-Only Loan - CORRECT ANSWER-A loan that only requires the payment of
interest for a stated period of time with the principal due at the end of the term.
Arms Length Transaction - CORRECT ANSWER-
Exam 2025
Safety Clause - CORRECT ANSWER-A negotiated period after the termination of the
listing during which the listing broker may still be entitled to a commission if the property
is sold to a buyer who was shown the property during the listing period
Survival Clause - CORRECT ANSWER-A clause in the contract for purchase and sale
that , unless otherwise expressly agreed to in writing by the buyer and seller, allows
certain contractual obligations to be performed after closing
Ratification - CORRECT ANSWER-Method of creating an agency relationship in which
the principal accepts the conduct of someone who acted without prior authorization as
the principal's agent
Net Operating Income (NOI) - CORRECT ANSWER-The income projected for an
income-producing property after deducting losses for vacancy and collection and
operating expenses.
Straight Term Loan - CORRECT ANSWER-A loan in which only interest is paid during
the term of the loan, with the entire principal amount due with the final interest payment.
Loan Origination Fee - CORRECT ANSWER-A fee charged to the borrower by the
lender for making a mortgage loan. The fee is usually computed as a percentage of the
loan amount.
Adjustable Rate Mortgage - CORRECT ANSWER-A loan characterized by a fluctuating
interest rate, usually one tied to a bank or savings and loan association cost-of-funds
index.
Fully Amortized Loan - CORRECT ANSWER-A loan consisting of equal, regular
payments satisfying the total payment of principal and interest by the due date.
Purchase Money Mortgage - CORRECT ANSWER-A note secured by a mortgage or
deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the
purchase price of the real estate.
Debit - CORRECT ANSWER-On a closing statement, an amount charged; an amount
the party must pay at settlement.
, Credit - CORRECT ANSWER-On closing statement, an amount entered in a person's
favor, a party that must be reimbursed.
Acceleration Clause - CORRECT ANSWER-The clause un a mortgage or deed of trust
that can be enforced to make the entire debt due immediately if the borrower defaults
on an installment payment or other obligation
Addendum - CORRECT ANSWER-Any provision added to an existing contract without
altering the content of the original
Amendment - CORRECT ANSWER-A change to the existing content of the contract,
and must be initialed by all parties.
Prepayment Penalty - CORRECT ANSWER-A charge imposed on a borrower who pays
off the loan principal early. This penalty compensates the lender for interest and other
charges that would otherwise be lost
Private Mortgage Insurance (PMI) - CORRECT ANSWER-Insurance provided by a
private carrier that protects a lender against a loss in the event of a foreclosure and
deficiency.
Mortgage Insurance Premium (MIP) - CORRECT ANSWER-An insurance policy
premium used in FHA loans that the borrower is charged. The premium depends on the
length of the loan and the loan-to-value (LTV) ratio.
Defeasance Clause - CORRECT ANSWER-A clause used in leases and mortgages that
cancels a specified right upon the occurrence of a certain condition, such as
cancellation of a mortgage upon repayment of the mortgage loan.
Regulation Z - CORRECT ANSWER-Implements the Truth in Lending Act requiring
credit institutions to inform borrowers of the true cost of obtaining credit.
Contingencies - CORRECT ANSWER-Provisions in a contract that require a certain act
to be done or a certain event to occur before the contract becomes binding.
Graduated Payment Mortgage - CORRECT ANSWER-A loan in which the monthly
principal and interest payments increase by a set amount each year for a certain
number of years and then level off for the remaining loan term; probable negative
amortization in early years.
Interest-Only Loan - CORRECT ANSWER-A loan that only requires the payment of
interest for a stated period of time with the principal due at the end of the term.
Arms Length Transaction - CORRECT ANSWER-
