Georgia Real Estate U Final Exam Study Correctly Answered Questions

GEORGIA REAL ESTATE U FINAL EXAM STUDY CORRECTLY ANSWERED QUESTIONS "In economics, supply is...? - CORRECT ANSWER The quantity of goods or services available, whether in abundance or scarcity." "In economics, demand is...? - CORRECT ANSWER The supply of willing and able consumers, which can be few or numerous." "When the supply is limited and demand is high...? - CORRECT ANSWER Prices escalate" "To become a real estate broker, a person must have...? - CORRECT ANSWER Experience as an agent, a broker's license, and additional education." "Real estate brokers are paid a commission for the sales, and...? - CORRECT ANSWER The commission, which can vary, is split between the broker and agent." "Property types are generally categorized by the ............ that applies to that property. - CORRECT ANSWER Zoning Law" "A family is going to build their dream home, and they've looked at several house plans, but they haven't found one that is exactly right. They'd like to take some parts from one plan and combine it with parts from another, with some additional innovations of their own. They want someone who can design and plan their home and work with the contractors to build it. The person they need to find is ...? - CORRECT ANSWER An Architect" "Single family homes are...? - CORRECT ANSWER Private freestanding residential houses" "The effect of the first-time homebuyer's tax credit was to...? - CORRECT ANSWER Motivate people to buy homes" "Real estate agents work with...? - CORRECT ANSWER Buyers and Sellers" "When supply is plentiful and demand is low...? - CORRECT ANSWER Prices drop" "Fill in the blank. ............ represent both the buyer and seller or both the tenant and landlord in the same transaction. - CORRECT ANSWER Dual Agents" "If you serve in the army reserve and are studying to be a broker, you effectively get 10 points added to your score. Which of the following is true? - CORRECT ANSWER 5 points are added in each of Information Gathering and Decision Making sections." "If the Commission denies your application based on a conviction or disciplinary action, what rights do you have? - CORRECT ANSWER You have the right to a hearing for a final determination." "Every salesperson has to provide the Commission with evidence that they completed a ............ post-license course within one year of obtaining their license. - CORRECT ANSWER 25 hours" "Hans Rosenstein moved from Florida, where he was a sales agent, to Georgia. Hans completed his post-license course in Florida, a state considered similar to Georgia in terms of real estate law. Does Hans have to take the post-license course in Georgia? - CORRECT ANSWER No" "Jolie Harper is a licensed real estate agent in a Georgia brokerage. She is offered a job selling condos for the unlicensed owner-developer. Jolie must ............ and will have to reapply if she decides to practice as a salesperson under a brokerage again. - CORRECT ANSWER Inactive her license" "Any lapse longer than two years and under five years can be reinstated by paying back fees and taking the appropriate class. Which of the following is not a valid answer? - CORRECT ANSWER For appraisers, they must take the Salespersons Prelicense Course." "Prince Stover moves his Athens brokerage to a location with more foot traffic. He must notify the Commission within ............ days of his new address. - CORRECT ANSWER 30" "............ is required prior to advertising property for rent, sale, lease or exchange. - CORRECT ANSWER Written permission to advertise" "If a licensee makes an offer on a property as part of a brokerage engagement or an extension of an engagement, the terms and conditions of the engagement must be set down in a...? - CORRECT ANSWER Written agreement" "A licensee cannot falsify a record, or knowingly allow a record to be falsified, either orally or in writing, by a third party. This rule covers the following misinformation, EXCEPT: - CORRECT ANSWER The actual real lease, sales, or exchange price" "When representing the seller, a licensee is obligated to present ............ to procure a property for sale. - CORRECT ANSWER Any signed offer" "A broker should keep copies of documents and records for...? - CORRECT ANSWER 3 years" "If a broker wants to open a brokerage under a fictitious name, the brokerage license must be under the...? - CORRECT ANSWER Fictious name" "Every broker has to maintain an accounting system to include the following information, EXCEPT: - CORRECT ANSWER The name of the broker's lawyer." "............ involve licensees with property management relationships with their clients. Any written property management agreement must identify the property being managed and list the terms and conditions of the manager's responsibilities. - CORRECT ANSWER Management Agreements" "The Georgia Real Estate Commission includes a chair and...? - CORRECT ANSWER Vice Chair" "The Commissioner and all Commission appointees who hold a real estate license...? - CORRECT ANSWER Shall maintain their license as inactive while serving on the Commission" "When taking funds from a client for deposits, prepaid taxes or insurance, or for any other reason a licensee...? - CORRECT ANSWER Must keep the funds segregated by opening a separate trust or escrow account" "Money received from a client as an earnest deposit, a security deposit and deposited in a trust account...? - CORRECT ANSWER Cannot be withdrawn to pay a Commission to the real estate professional unless the transaction is complete" "Disbursing funds from a trust account requires the authorization of...? - CORRECT ANSWER All parties to any contract where funds were collected" "Contracts issued to potential buyers or sellers must...? - CORRECT ANSWER Contain a start and finish date, be in compliance with Georgia law, and disclose any conflicts of interest" "If you have a real estate license, and you are faced with a disciplinary hearing because of something the Commission finds out, you have the right to...? - CORRECT ANSWER Judicial review of your case in the event the Commission suspends or revokes your license" "The Commission may request a court issue a cease and desist order when...? - CORRECT ANSWER Someone participates in a transaction by falsely representing they are licensed" "Applicants for a real estate license in Georgia must...? - CORRECT ANSWER Be 18 years of age, a resident of Georgia, and have a high school diploma or GED" "Any time you pay the Commission a fee, you can expect...? - CORRECT ANSWER No refund" "Which characteristic differentiates a Fee-simple time-share from a Leasehold time-share purchase? - CORRECT ANSWER A Fee-simple time-share is deeded in perpetuity" "All of the following are loan vehicles for a first mortgage, except? - CORRECT ANSWER HELOC" "The IBC classifies any structure with occupied living space higher than 75 feet above ............ as a high-rise building. - CORRECT ANSWER The lowest level of fire department access" "Which of the following offers a low down payment option for home buyers? - CORRECT ANSWER FHA insured loan" "............ cover the costs to the lending of funding the loan. - CORRECT ANSWER Loan Origination Fees" "Loan origination fees are usually equal to or less than ............ percent of the total loan amount. - CORRECT ANSWER 1" "Which housing accommodation is purchased as stock or shares in a corporation, and entitles the shareholder to occupy a particular unit? - CORRECT ANSWER Cooperative" "Katie owns 100 percent of her home and wants to add a small kitchen to a master suite to create a mini apartment she can rent out to help defray the costs of owning her home. Can she still deduct all eligible expenses as personal home expenses? - CORRECT ANSWER No. Renting a portion of a home that can be considered a complete home, makes some expenses ineligible." "Bill, who is unmarried, is selling his rental home and plans to put off buying another home for five years. He earns $325,000 annually, putting him in the highest tax bracket at 23.8 percent. If he nets $200,000 on the transaction, how much will his tax liability be for the capital gain portion of his return only? - CORRECT ANSWER 47600" "An investor has several multi-family buildings he wants to sell in the next year. His real estate agent tells him that he can force the appraised value to rise by...? - CORRECT ANSWER Adding amenity packages based on trends in the local area" "While talking to a client about non-federal tax liabilities, Dana mentioned local property taxes. She told her client that tax assessments are based on ............, but every district offers discounts to certain groups, such as people over 65 and permanently disabled individuals - CORRECT ANSWER Market value" "This refers to the trade or exchange of one real property for another without the need to pay income taxes on the gain at the time of trade? - CORRECT ANSWER Tax- deferred exchange" "Which federal agency oversees and manages the National Flood Insurance Program (NFIP)? - CORRECT ANSWER FEMA" "Most homeowners insurance policies cover specific events that fall into two different categories: - CORRECT ANSWER Perils and non-perils" "Lisa is a real estate agent who also helps clients lease single-family homes. She advises every potential tenant to purchase HO-4, also known as ............, because it is a perils content policy. - CORRECT ANSWER Tenant Coverage" "Christine is looking at an older home in a quiet neighborhood. She knows that it might be hard to repair or replace the dwelling if it was directly hit by a tornado or there was a fire. The best homeowner policy for her is probably an HO-8 policy specifically designed for older homes. Which statement most accurately gives - CORRECT ANSWER The plan doesn't cover water damage without an additional rider, but pays the actual cash value minus depreciation." "Improved lots are eligible for full exemption status, providing construction can be completed within ............ after the sales contract is executed. - CORRECT ANSWER 24 (According to the Act, construction must begin within 24 months of the executed sales contract. This helps ensure developers complete the project in a timely manner.)" "Housing inventory has reached a ten year low, primarily because a new plant in a nearby town brought in hundreds of workers from other parts of the state. City leaders are considering an application for a new subdivision development that would increase housing options. This is an example of ............, triggering change to the master plan. - CORRECT ANSWER Net Migration" "The Interstate Federal Land Sales Full Disclosure Act regulates all of the following, except? - CORRECT ANSWER Local transactions between residents of the same county" "Cathy wants to sell her house located outside the city limits. Buyers may want to have the well tested because...? - CORRECT ANSWER All of the choices provided are correct - EPA does not monitor private wells - Radon occurs naturally and may infiltrate ground water - Bacteria, viruses and other contaminates can pollute well water" "The EPA was originally established to...? - CORRECT ANSWER Stem the escalating negative impact on human health and the natural environment." "What is the maximum slope of a ramp under the ADA guidelines? - CORRECT ANSWER 1 inch vertical rise for every 12 inches in length" "According to the ADA, what is the minimum height requirement of handrails on ramps? - CORRECT ANSWER 34 inches" "Building codes establish guidelines for maximum occupancy...? - CORRECT ANSWER On a per floor and/or per use basis. (The maximum allowed number of people in a building is determined by the use (office space, for example) per floor. Each floor may have a different occupancy requirement.)" "The International Residential Code (IRC) recommends every room have an egress window that measures at least 4% of the square footage to allow safe egress and adequate ventilation. What is the minimum window opening requirement for an area that measures 15' X 20'? - CORRECT ANSWER 12 sq ft" "John is looking for an existing multi-story building zoned for mixed-use. He wants to open a small, by-reservation-only restaurant on the lowest floor. Local code requires 15 square feet per person in a commercial setting with non-concentrated seating. What is the minimum square footage he needs to serve 50 people? - CORRECT ANSWER 750 sq ft" "With only a few exceptions, structures built with only wood have a maximum height of...? - CORRECT ANSWER 2 floors" "Which agency establishes and enforces regulations to ensure safe removal and disposal of lead during rehabilitation projects in the United States? - CORRECT ANSWER The EPA" "The ............. helped the insurance industry develop a survey for municipalities to establish building guidelines in the early 20th century. - CORRECT ANSWER National Board of Fire Underwriters" "What is the first step a developer must take when creating a subdivision? - CORRECT ANSWER Survey the land" "Proposed developments must follow standards in the established municipal or county master plan; however,...? - CORRECT ANSWER Master plans may be modified under some circumstances." "Preliminary plans are ...? - CORRECT ANSWER Developer plans that have not been platted and recorded" "Who is responsible for assuming the financial burden and oversight of the construction of all roadways, sidewalks, alleys, nature trails, and other non-residential areas within a new subdivision? - CORRECT ANSWER The Developer" "Common uses for government land include all of the following, except? - CORRECT ANSWER Hunting Clubs" "If a building totals 5,000 square feet, and the building covers 100% of the property, what is the floor area ratio if the property measures 1,000 square feet? - CORRECT ANSWER 5" "When a building fully complies with the local zoning ordinances, it is referred to as...? - CORRECT ANSWER As-of-right" "used to determine the maximum allowed buildable square footage on a property - CORRECT ANSWER Floor area ratio" "What is the acronym to help you remember the government powers? - CORRECT ANSWER P-E-T-E" "When eminent domain powers are used, the property owner has the right to receive...? - CORRECT ANSWER Just Compensation" "Eminent domain can also be called...? - CORRECT ANSWER All of these are true - Expropriation - Appropriation - Condemnation" "When a property owner has a mortgage, property taxes can be paid easily through the use of what type of account - CORRECT ANSWER Escrow Account" "What type of laws protect homeowners from the types of issues that can come from an industrial building being built in a residential neighborhood? - CORRECT ANSWER Zoning Laws" "What word describes the property owner's right to sell or transfer their property to someone else? - CORRECT ANSWER Alienable" "Which of the following is a permissible restriction on a fee simple estate? - CORRECT ANSWER All of the answer choices provided are correct - Homeowner's association covenant - Utility easement - Local zoning restrictions" "What is another name for a "fee simple determinable" estate? - CORRECT ANSWER Fee simple defeasible" "Which of the following is not a right that a fee simple property owner has? - CORRECT ANSWER There are no restrictions" "Rent controls are a type of police power that limits...? - CORRECT ANSWER The amount a landlord can charge for rent" "The power to escheat real property rests solely with...? - CORRECT ANSWER State governments" "Which of the following does not have the authority to tax real estate? - CORRECT ANSWER Federal Government" "Which of the following entities cannot exercise eminent domain powers? - CORRECT ANSWER A business owner wanting to expand their store" "An estate that will end automatically when the stated event or condition occurs is known as a/an...? - CORRECT ANSWER Fee Simple determinable estate" "The water rights associated with a lake are known as...? - CORRECT ANSWER Littoral Rights" "What is the term that describes a sudden and perceptible loss of land by action of the water that borders it? - CORRECT ANSWER Avulsion" "What is the term that describes an increase in property owners' rights because the land is gradually worn away by natural forces? - CORRECT ANSWER Erosion" "A life estate entitles the holder to occupy and use the underlying real property for...? - CORRECT ANSWER A lifetime" "The word that describes the legal preference for how liens will be handled when the property is sold is called...? - CORRECT ANSWER Priority" "What does the lienholder have when a lien is filed? - CORRECT ANSWER A claim to a portion of the property's value" "Deed restrictions can be created by...? - CORRECT ANSWER All of the answer choices provided are correct - Homeowner's association - Builder - Township" "Which of the following is not a type of deed restriction? - CORRECT ANSWER Reversion" "What is another common name for an easement? - CORRECT ANSWER right of way" "The property that is subject to an easement appurtenant is called the...? - CORRECT ANSWER Servient tenement" "The property that benefits from an easement appurtenant is called the...? - CORRECT ANSWER Dominant Estate" "An easement that gives a landlocked parcel access to a public road is an example of an...? - CORRECT ANSWER Easement by necessity" "How can an easement be terminated? - CORRECT ANSWER All of the answer choices provided are correct - The easement is released in writing - The dominant and servient estates are combined - The easement owner abandons the easement" "What happens if the dominant and servient estates with an existing easement are combined? - CORRECT ANSWER The easement is terminated (One way to terminate an easement is to combine the servient and dominant estates. By doing so, the easement is no longer necessary.)" "An easement can be described as...? - CORRECT ANSWER A right, privilege or interest in real property owned by someone else" "In most cases, encroachments are...? - CORRECT ANSWER Unintentional (Most encroachments occur accidentally. For example, a tree grows so large that it now overhangs into the neighboring property.)" "When one neighbor has been improperly using another neighbor's property for a long time, it is possible that the court could find...? - CORRECT ANSWER Adverse Possession" "Which of the following is not required for a prescriptive easement? - CORRECT ANSWER Lack of use of the land" "What is the shortest time period for an estate for years? - CORRECT ANSWER No minimum time period" "If the language of an estate at will lease says tenancy continues at the will or desire of the tenant, under what circumstances can the landlord terminate the lease? - CORRECT ANSWER The landlord may not be able to terminate the lease" "Lease contracts are used for...? - CORRECT ANSWER Both commercial and residential real estate" "Which of the following is NOT a requirement to create the legal capacity to sign a lease? - CORRECT ANSWER At least 21 years old" "A lease includes a provision saying that a tenant who needs to break their lease can find someone else to take over the remainder of the lease. What is the term for this? - CORRECT ANSWER Sublease" "What type of leasehold estate is created if a lease is for a definite, limited period of time? - CORRECT ANSWER Estate for years" "Who must sign a lease to make it valid? - CORRECT ANSWER The tenant and the landlord, or their authorized agent" "Which of the following is not likely to be included in the amount a tenant pays for rent? - CORRECT ANSWER Court costs associated with eviction proceedings" "True or False: If a lease does not specify any restrictions, the tenant can use the leased space for any lawful purpose? - CORRECT ANSWER True. If no restrictions are specified, the tenant can use the property for any lawful purpose." "Who is responsible for making sure local ordinances about occupancy controls are met when a property owner leases space to a tenant? - CORRECT ANSWER Property owner/landlord" "When a landlord leases space to a tenant, the landlord is expected to take whatever action is necessary, at the landlord's expense, to provide a habitable dwelling unit. This is also known as? - CORRECT ANSWER The covenant of habitability" "Which of the following repairs is the landlord NOT required to make under the covenant of habitability? - CORRECT ANSWER Repair a tenant's intentional damage to a wall" "Under which of the following circumstances can a landlord be absolved of their responsibility to provide a habitable dwelling unit? - CORRECT ANSWER None of these. - The tenant signed away the requirement through the lease. - The tenant inspected the unit before moving in and didn't find anything wrong. - The landlord inspected the unit before moving in and didn't find anything wrong." "What type of option is created if the lease says the tenants have the first right to purchase the property in the future if it is put up for sale? - CORRECT ANSWER Right of first refusal" "When a tenant signs over their rights and responsibilities to someone else, effectively terminating their own involvement in the lease, they have? - CORRECT ANSWER Assigned the lease" "Which of the following are provisions of the Uniform Residential Landlord and Tenant Act (URLTA)? - CORRECT ANSWER All of the answer choices provided are correct - The landlord's right to enter leased property - Landlord's right to maintain leased property - Remedies for tenants if landlord defaults on their obligations" "Under which of the following scenarios is a landlord generally entitled to enter a leased premises? - CORRECT ANSWER All of the answer choices provided are correct - To conduct required inspections - To make repairs - To show the unit to prospective tenants" "With this type of lease, the landlord negotiates to receive compensation based on a commercial tenant's sales in the leased space? - CORRECT ANSWER Percentage lease" "A type of lease for land that may be secured by improvements the tenant makes to the land is called a...? - CORRECT ANSWER Ground lease" "If a tenant agrees to pay rent, property taxes and insurance premiums, what type of lease do they have? - CORRECT ANSWER Double Net Lease (In a single net lease, the tenant only pays rent and property taxes. In a double net lease, the tenant also pays for insurance. In a triple net lease, the tenant pays for everything, including maintenance costs.)" "When a commercial tenant in a strip mall signs a double net lease, how is the amount of property taxes and insurance they pay calculated? - CORRECT ANSWER Prorated based on the size of the space they are renting (The amount they pay is proportional to the size of the tenant's space in relation to the square footage of the entire strip mall.)" "Which party or parties can transfer their rights under the Georgia "Lease for Residential Property Agreement?" - CORRECT ANSWER The property owner/landlord (the landlord's rights may be assigned to the new owner, if the landlord sells the property during the terms of the lease.)" "If a tenant does not vacate the property at the end of the lease, they are said to be...? - CORRECT ANSWER Holding over. (holdover tenant is a tenant who continues to occupy the property after their lease has expired. Holdover tenants are subject to eviction by the landlord.)" "The Georgia Lease for Residential Property includes provisions for which of the following special fees? - CORRECT ANSWER All of these fees may be included in the lease agreement. - Fees for unauthorized pets. - Fees for unauthorized smoking. - Fees for unauthorized disconnection of utilities." "If a tenant defaults on their lease obligations, the landlord may...? - CORRECT ANSWER Terminate the lease and pursue legal remedies in court." "Which of the following types of routine maintenance are tenants typically responsible for completing? - CORRECT ANSWER All of these. - Replacing burned out lightbulbs. - Dealing with clogged plumbing. - Making sure smoke detectors work" "What is the usual effect of an estate at will tenant committing waste against the property (whether intentional or not)? - CORRECT ANSWER The estate at will is terminated (Any tenant cannot damage the property. Doing so can lead to their lease being terminated.)" "The Georgia Residential Landlord-Tenant Act is only applicable to...? - CORRECT ANSWER Residential Leases" "The landlord or their agent is required to inspect the property and make a list of any damages and itemized costs within ..........days of the tenant moving out. - CORRECT ANSWER 3" "The landlord is required to return the full security deposit within ...........days of the tenant moving out. - CORRECT ANSWER 30" "Article 3 of the Act deals with...? - CORRECT ANSWER Dispossessory Proceedings" "Which of the following refers to the legal document which a court issues to allow one person or group the legal right to take possession of real property by forcing those in possession out? - CORRECT ANSWER Writ of possession" "From the day a summons is delivered, the tenant has ............days to respond. - CORRECT ANSWER 7" "Which of the following refers to a legal document that allows a court officer to take back the property of a tenant if the tenant fails to pay rent? - CORRECT ANSWER Distress Warrant" "According to Article 4 of the Act, the landlord is paid the money they are owed from a granted distress warrant through a...? - CORRECT ANSWER Lien (The landlord is paid the money they are owed from a granted Distress Warrant through a lien. Section 80 describes this process. The lien is placed on the property at the time that they make their affidavit, but it does not take precedence before any older lien that has already been placed on the property, with the exception when the property in question is crops.)" "In which of the following Articles is the relationship of the landlord and tenant defined? - CORRECT ANSWER Article 1" "According to Article 1 of the Act, the estate remains the property of the...? - CORRECT ANSWER Landlord" "What does GCA stand for? - CORRECT ANSWER Georgia Condominium Act" "What are three duties of a CAM? - CORRECT ANSWER Managing social media, paying association bills, and taking meeting notes (Some common administrative tasks that CAMs assume include: • Paying association bills • Sending meeting notices via email, paper-mail, text, telephone call or other communication channel. • Taking meeting notes • Maintaining common area elements and property • Managing social media and website platforms • Depositing payments received • Collecting assessments in person, online or through physical "drop boxes")" "Under which type of ownership do individual residents have to pay a monthly maintenance fee? - CORRECT ANSWER Both condominiums and cooperatives" "The right of a surviving tenant or tenants to succeed to the entire interest of the deceased tenant is known as...? - CORRECT ANSWER Right of survivorship" "The oldest system of land measurement in the U.S. is...? - CORRECT ANSWER Metes and bounds" "Surveying land depends on three basic things...? - CORRECT ANSWER distance, elevation, and angles" "Non-subdivision property or large tracts of land are generally described using ...? - CORRECT ANSWER Metes and Bounds" "The way the 36 sections are numbered is...? - CORRECT ANSWER From right to left, then left to right in alternating lines of 6 squares (right to left, top to bottom)" "Joe's buyers received a copy of the title and land description of the property they are buying, and they noticed the street address was different than what was in the sales agreement. Joe told them...? - CORRECT ANSWER To check the legal description because that's the most accurate way of identifying the property." "A group of developers purchased a quarter-quarter section, which is 40 acres, and they want to subdivide it into smaller residential lots with appropriate streets, easements, and access. In order to have a plan laid out of their new subdivision, they need to hire...? - CORRECT ANSWER A licensed surveyor, who will lay out the details of the subdivision using blocks." "If we were to survey a property by beginning at the southwest corner and going 120 feet north, then turn at a 90-degree angle, heading east, and going 160 feet, then take another 90-degree angle, going south, for the next 120 feet, and a finally make a 90-degree turn, going west for 160 feet to the POB, we would have described ...? - CORRECT ANSWER Property that is a 160 foot by 120 foot rectangle." "Buyers are purchasing a lot in a subdivision, and they want to see how it fits into the overall plan, where the streets are, how the blocks are laid out, and what the lots around them look like. Their real estate agent suggests she needs a ...? - CORRECT ANSWER Plat map" "Which is a significant rule of real estate transactions? - CORRECT ANSWER You can only convey that which you own." "Stan sold his real property to Bella by Warranty Deed. A day later, Stan sold his real property again to Len. Who owns the property? - CORRECT ANSWER Bella" "What is considered legal capacity in relation to a deed? - CORRECT ANSWER - The ability to sign the deed as the owner or on behalf of the owner." "Why does the date on the deed matter? - CORRECT ANSWER - To know the order of when the property was conveyed to determine ownership and lien rights." "How do we know from a deed what property was transferred? - CORRECT ANSWER The legal description." "What is consideration? - CORRECT ANSWER Something of value exchanged for the deed. (Purchase price/rent)" "What is the grantor of a deed? - CORRECT ANSWER The party selling or conveying the property." "How does the world know that property is transferred through a deed? - CORRECT ANSWER By recording the deed in the county real estate records." "What is the grantee of a deed? - CORRECT ANSWER The party buying or receiving title to the property." "What causes a person to lose their real estate in bankruptcy? - CORRECT ANSWER Trustee takes the property to pay off debts." "How does a judgment lien cause involuntary alienation? - CORRECT ANSWER Property is sold by judgment creditors to pay off debt." "Under what circumstances can the government exercise eminent domain? - CORRECT ANSWER For the public good, after paying the owner fair value." "What is probate? - CORRECT ANSWER The court process of verifying a will and distributing property according to the will." "How is real property conveyed to heirs when a person dies without a will? - CORRECT ANSWER By administrator's deed according to state law." "What is constructive notice? - CORRECT ANSWER By recording a deed in the public land records, everyone is deemed to have notice of the recording of the deed, even if they physically don't see it." "What is the purpose of a lien? - CORRECT ANSWER To make sure a creditor gets paid either by the debtor or when the property is sold." "Who may file an involuntary lien? - CORRECT ANSWER A judgment creditor." "Alex lives in a condominium that is governed by covenants and state laws. The state law says that anyone who does not pay assessments automatically has a lien on their property for the unpaid balance. What type of lien is this? - CORRECT ANSWER Statutory lien." "What is one thing that all parcels of real estate have in common? - CORRECT ANSWER They all have title history." "What is the abstract of title? - CORRECT ANSWER The written report of the chain of title." "In reviewing the title history of a parcel of land, the closing attorney starts 50 years back and sees a deed from Smith to Jones, then Jones to Johnson, then Lincoln to Washington. What is the problem? - CORRECT ANSWER There is a break in the chain of title." "What is the simplest way to determine the owner of real estate? - CORRECT ANSWER Look for the last grantee in the chain of title." "How does a closing attorney state for certain who the owner of real estate is? - CORRECT ANSWER Perform a title search" "What is the purpose of title insurance? - CORRECT ANSWER To cover losses that result from problems with real estate title after closing." "What does a standard title insurance policy cover? - CORRECT ANSWER Mistakes made during the real estate closing, like things missed in a title search." "What does an extended coverage title insurance policy cover? - CORRECT ANSWER Matters not found in a search of the written title records." "What power does a court use to involuntarily convey real property? - CORRECT ANSWER Equity Power" "A home buyer's purchase goes through, but he or she finds their loan was sold to another lender, and now they have another bank servicing their loan. Where was their loan sold? - CORRECT ANSWER Secondary Mortgage Market" "What Is Ginnie Mae? - CORRECT ANSWER An organization that's government-owned and managed through HUD offering mortgage security guarantees" "Mary wants to avoid foreclosure but she's behind on payments. How can she determine what her options are? - CORRECT ANSWER The lender will send a letter outlining what the homeowner must do to avoid foreclosure." "What will happen to a homeowner in the event of a non-judicial foreclosure? - CORRECT ANSWER The trustee involved will sell the home at an auction. The home may revert back to the lender if no buyer is found." "A worried client walks into your office with a notice of auction of her home. What does this mean? - CORRECT ANSWER The trustee plans to sell the home in a non-judicial foreclosure due to nonpayment." "When is a notice of default sent to a homeowner in a non-judicial state? - CORRECT ANSWER As soon as 30 days past due, sometimes even sooner." "In a lien theory state, who services as the mortgagee? - CORRECT ANSWER The lender" "What is a promissory note? - CORRECT ANSWER A legally binding promise to pay" "James bids on a home. His promissory note lists the principal amount. How much is this? - CORRECT ANSWER The amount he agrees to borrow to buy the home minus any down payment" "Amy says she has an interest rate of 5%. Where is this located in her loan documents? - CORRECT ANSWER The promissory note lists the interest rate, or cost to borrow the funds" "Does a real estate agent help negotiate the terms of a promissory note? - CORRECT ANSWER No, the agent isn't responsible for the financial aspects, but can offer explanations as needed." "What role does the Federal Reserve play in the real estate mortgage industry? - CORRECT ANSWER It creates rules to govern the industry." "What is a secured loan? - CORRECT ANSWER A loan backed by some type of collateral, usually the value of the home itself." "Zach needs to lower his monthly payment to feel comfortable buying a home. How can discount points help? - CORRECT ANSWER Paying interest upfront in the form of points will reduce the monthly payment." "Max is selling his home to avoid the acceleration clause from impacting him. What's that? - CORRECT ANSWER The lender is requiring payment in full due to a breach in the contract." "What is a lien theory state? - CORRECT ANSWER The homeowner holds the deed for the property throughout the entire loan." "Does the mortgagor do more than promise to pay the monthly payment? - CORRECT ANSWER Yes, he must meet all duties outlined in the mortgage document" "Christopher's home was lost in foreclose, but no one bought it. Who gets ownership? - CORRECT ANSWER The mortgagee has the right to take possession as a REO." "How many missed payments does it take for the lender to send a notice of default? - CORRECT ANSWER As few as one, but this depends on the state's laws." "What is the alienation clause in a mortgage? - CORRECT ANSWER It gives the lender the right to payment in full when the property is sold" "Abigail paid off her loan in full. What happens with her title? - CORRECT ANSWER She receives the title as a result of the Satisfaction of Mortgage." "In simplistic terms, what is a deed of trust? - CORRECT ANSWER It's an IOU to the lender to repay the debt." "Who is the trustor in a deed of trust? - CORRECT ANSWER The home buyer." "Who is the mortgagee in a mortgage contract? - CORRECT ANSWER The lender." "Samantha wants to know if she lives in a deed of trust state. How do you find out? - CORRECT ANSWER Her lender will know, but any title company can clarify this" "Aside from interest rate fees, how do lenders in the primary mortgage market profit from the home buying process? - CORRECT ANSWER " "Sally wants to buy a home and has a job, but the lender says she's too risky. What does that mean? - CORRECT ANSWER Sally's financial history indicates she's a high-risk borrower." "Why doesn't Alex's lender send a pre-approval? - CORRECT ANSWER Most often, information is missing or not completed." "Lou borrowed money to buy furniture for a new home. Will this impact his approval for a loan? - CORRECT ANSWER It could if it significantly reduces his credit score." "Gabe's lender has a list of concerns before closing. What happens now - CORRECT ANSWER Gabe must meet those concerns before moving forward" "Jamie hasn't secured home insurance yet and closing is approaching. Is this a problem? - CORRECT ANSWER It's likely to be a condition to closing the loan." "Why does Martha's lender need to know about her recent expense on her savings account? - CORRECT ANSWER They want to ensure there's no hidden concern or drop in creditworthiness." "Why do longer loan terms cost more in interest? - CORRECT ANSWER During a longer term, the lender maintains the same risk but for a longer time." "Jacob is ready to buy a home. How does he know what type of loan he should obtain? - CORRECT ANSWER He meets with a mortgage lender to see what type of loan he is best suited for." "If Nora fails to make a payment on her loan, the private mortgage insurance pays the lender, and there's no need for foreclosure. Is this true? - CORRECT ANSWER No, PMI pays a fee to the lender, but it does not stop foreclosure nor compensate for the entire amount lost" "What is an FHA loan? - CORRECT ANSWER A loan backed by the Federal Housing Administration with easier qualifications." "Your home buyer has a credit score of about 600. What type of loan should they apply for? - CORRECT ANSWER FHA loans require credit scores of at least 500" "Are FHA loans available for 100 percent financing? - CORRECT ANSWER No, most will need to have a loan to value ratio of 90 percent or less, but more if the borrower has good credit." "Your buyer has an FHA loan pre-approval. What concerns do you have about the home he is purchasing? - CORRECT ANSWER It will need to meet safety standards set by FHA and those homes without this could be hard to get approval for." "What is a Certificate of Eligibility? - CORRECT ANSWER A document from the VA saying a person qualifies for a VA loan based on his or her service." "Ellen has a good income, but has missed payments on her credit report. What impacts her credit score more? - CORRECT ANSWER Missed payments will hurt the borrower more than any other factor." "If Jeff wants to obtain a VA loan, where does he apply for it? - CORRECT ANSWER After getting a Certificate of Eligibility from the VA, he can work through any VA approved lender.A" "Tim can no longer make payments on the home he's purchasing in an installment land sales contract. Will he lose his equity? - CORRECT ANSWER Yes, if a forfeiture clause is present in the contract." "Who decides what credit score is good enough to secure a loan? - CORRECT ANSWER Lender" "What is the collateral in a blanket mortgage? - CORRECT ANSWER the land itself" "What happens when your home buyer purchases a home where a blanket mortgage is in place? - CORRECT ANSWER The person buying the home obtains a new loan that pays off the blanket mortgage on just their property." "Can Glenn negotiate with the mortgage banker about a lower interest rate? - CORRECT ANSWER To some point, but often this is set by the lending company, not the broker on the phone" "Is Toby able to obtain a loan to cover some of the furnishings in his new home? - CORRECT ANSWER Yes, in a package loan, the buyer can purchase real and personal property." "Who benefits from owner financing? - CORRECT ANSWER Both the buyer and seller - since the buyer may not qualify for traditional loans and the seller can collect interest." "Is a real estate agent able to direct financial questions from buyers to lenders? - CORRECT ANSWER You can make recommendations, but may not want to offer financial advice." "If a home buyer wants an FHA loan, can he get it through a savings and loan association? - CORRECT ANSWER Most offer them, but not all favor these loans" "With a low-down payment, is a savings and loan association best for a borrower? - CORRECT ANSWER It may be one option, but these loans tend to offer only 95 percent of the home loan as financing." "Peter says he needs a national lender because his parent's bank is just too old fashioned. Is that true? - CORRECT ANSWER Most savings and loan organizations have modernized to offer more options than ever." "James wants to choose the least affordable loan term. What should he look for? - CORRECT ANSWER The shortest term loan." "Nick received an offer from a mortgage broker. Will his loan come from that broker? - CORRECT ANSWER Typically, mortgage brokers work with numerous lenders, not just one. Nick's loan could come from multiple sources" "Thomas has been a member of a credit union for 10 years. Should he get a loan here? - CORRECT ANSWER Generally, yes, because rates can be lower. However, he should consider all options." "Can Zach's insurance company give him a mortgage loan? - CORRECT ANSWER No, insurance companies often invest in mortgage-based securities, but do not lend directly to borrowers." "Should your home buyer really care where the funding from his loan comes from? - CORRECT ANSWER Yes, he should know who the lender is, but not be too worried about the underlying investors." "If Jessica wants a stable monthly payment, what should she look for in a loan? - CORRECT ANSWER A fixed interest rate loan." "What is an indication your home buyer is serious about buying? - CORRECT ANSWER He's pre-approved for a loan." "What is a pre-qualification letter? - CORRECT ANSWER It says the lender has done basic levels of determining if a home buyer is qualified to buy" "The Truth-In-Lending Act is also referred to as? - CORRECT ANSWER Regulation Z" "How many different types of loans are covered by TILA? - CORRECT ANSWER 5" "For first-tier violations under TILA, lenders can pay up to ............ in fines. - CORRECT ANSWER 5000" "A lender requires which of the following information from a borrower in order to prepare the loan estimate? - CORRECT ANSWER All of the answer choices provided are correct - Legal name - Social security number -,Home address" "The Equal Credit Opportunity Act became law in which year? - CORRECT ANSWER 1974" "A lender can deny a credit application based all but the following? - CORRECT ANSWER Applicant receives public assistance" "Lenders may ask about alimony payment in which of the following scenarios? - CORRECT ANSWER Lender has provided notice that the applicant is not required to provide this information" "If a commercial applicant generates more than $1 million in revenue, and asks about an adverse credit decision, the lender must provide a response within how many days? - CORRECT ANSWER 60" "One of the largest penalties a bank has been charged is $33 million for redlining. That bank was called...? - CORRECT ANSWER Hudson City Savings Bank" "The Federal Housing Act prohibits lenders from denying a loan based all the following, except? - CORRECT ANSWER Income" "Lenders must carefully review their policies on a regular basis in order to avoid inadvertently discriminating against people. Inadvertent discrimination is called? - CORRECT ANSWER Disparate Impact" "RESPA was enacted in which year? - CORRECT ANSWER 1975" "Under RESPA, how many days does the borrower have to review the Closing Disclosure? - CORRECT ANSWER 3 business days" "Section 10 of RESPA covers what part of the loan process? - CORRECT ANSWER Lender escrow requirements" "Under RESPA, after the initial escrow report, lenders must provide borrowers with updated reports on a/an ............. basis. - CORRECT ANSWER Annual" "RESPA would apply to all the following transactions, except? - CORRECT ANSWER Sale of a commercial lot" "Under TILA, all of the following are considered business days, except? - CORRECT ANSWER Sundays" "Which of the following is not considered a trigger phrase under the TILA guidelines? - CORRECT ANSWER " "The organization in charge of enforcing TILA is...? - CORRECT ANSWER Consumer Financial Protection Bureau" "Under TILA, all of the following are considered business days, except? - CORRECT ANSWER Sunday" "If your brokerage has an affiliated business arrangement with a settlement provider, you should...? - CORRECT ANSWER Require your clients to sign the appropriate disclosures" "If a title company offers you money in exchange for bringing your business there, they are in violation of which Section of RESPA? - CORRECT ANSWER 8" "Section 8 of RESPA is designed to protect borrowers against ............ in the settlement process. - CORRECT ANSWER Kickbacks" "Section 10 of RESPA covers what part of the loan process? - CORRECT ANSWER Lender escrow requirement" "RESPA was enacted in which year? - CORRECT ANSWER 1975" "One way the FHA attempts to ensure discrimination does not occur is by not allowing lenders to apply ............ standards to the application process. - CORRECT ANSWER Excessively burdensome" "Which of the following should not be included in a lender's advertisement? - CORRECT ANSWER A picture of a group of Latinos" "The Federal Housing Act prohibits lenders from denying a loan based all the following, except? - CORRECT ANSWER Income" "If a lender pushes a borrower toward a particular neighborhood, the lender may be guilty of which prohibited act? - CORRECT ANSWER Steering" "Which of the following is not considered a prohibited act? - CORRECT ANSWER Testing" "The Federal Fair Housing Act prohibits lenders from using which of the following in their advertisements? - CORRECT ANSWER Racially exclusive images" "After a borrower submits a loan application, the lender has three days to provide which document to the borrower? - CORRECT ANSWER Loan Estimate" "Which of the following cannot be used as a factor for making a credit decision? - CORRECT ANSWER All of the answer choices provided are correct - Race - National Origin - Religion" "For how many months must a lender keep the applicants records on file? - CORRECT ANSWER 25" "If a commercial applicant generates more than $1 million in revenue, and asks about an adverse credit decision, the lender must provide a response within how many days? - CORRECT ANSWER 60" "Lenders may ask applicants about which of the following? - CORRECT ANSWER Dependent care costs" "Which of the following is NOT required to be on a license application according to the GRMA? - CORRECT ANSWER Telephone number of the applicant" "If convicted of a pattern of residential mortgage fraud, a defendant will be imprisoned for...? - CORRECT ANSWER Not less than three years nor more than 20 years" "Violation of the Georgia Residential Mortgage Fraud Act is a felony. If convicted, a defendant will be imprisoned for...? - CORRECT ANSWER Not less than one year nor more than 10 years." "All of the following are prohibited in a high-cost home loan, except...? - CORRECT ANSWER A scheduled payment that is adjusted to the seasonal or irregular income of the borrower." "A refinancing transaction shall be presumed to be a flipping if all of the following are true, except...? - CORRECT ANSWER A low-cost home loan refinances an existing home loan that was consummated at least ten years ago." "With regard to late payments, all of the following are true, except...? - CORRECT ANSWER The amount of a late payment can increase the longer the payment remains late." "For a loan processor or underwriter who is an independent contractor, which of the following is true? - CORRECT ANSWER They must obtain and maintain a mortgage broker or mortgage lender license and must have and maintain a valid unique identifier issued by the NMLSR." "When accepting an application fee, or third party fee, such as property appraisal fee or credit report fee, what must occur...? - CORRECT ANSWER A disclosure must be made of the fees payable and the conditions under which such fees may be refundable." "The system used to license and register people working in the mortgage industry in Georgia is called what? - CORRECT ANSWER Nationwide Multistate Licensing System and Registry" "For a corporation to qualify as a bona fide nonprofit corporation under the GRMA, the nonprofit corporation must meet all of the following requirements, except...? - CORRECT ANSWER Pay a fee to register as a non-profit" "A person transacting a mortgage business in or from the State of Georgia is specifically prohibited from all of the following, except...? - CORRECT ANSWER filing a state tax return" "For an exemption to exist under the licensing requirement of the GRMA based on an exclusive written independent contractor agreement with anyone that is a wholly owned subsidiary of a financial holding company , the subsidiary must do all of the following, except...? - CORRECT ANSWER Be paid by W-2" "What determines how much a property owner pays in taxes? - CORRECT ANSWER Local tax laws" "How much do homeowners pay in property taxes? - CORRECT ANSWER It depends on property tax rate" "The income method is commonly used to assess what property types? - CORRECT ANSWER Commercial properties" "What is a tax rate? - CORRECT ANSWER The amount of tax levied on a home" "What defines how much the tax rate is? - CORRECT ANSWER The amount the taxing jurisdiction needs to fund necessary services" "What happens if there is a tax for the city and the school district? - CORRECT ANSWER The tax rate is equal to the city tax plus the school tax" "What things can change the tax rate from year to year? - CORRECT ANSWER The budget needs of the local taxing jurisdiction" "The local tax assessor is responsible for which of the following? - CORRECT ANSWER Establishing assessed values" "Can the assessed value change significantly year-to-year? - CORRECT ANSWER Yes, if there are changes to the area surrounding the property or the condition of the property" "What is the purpose of paying property taxes overall? - CORRECT ANSWER To fund schools, county and city services, and other needs" "Who should the property owner call to determine the value of their property? - CORRECT ANSWER Third party appraiser" "When should a property owner challenge an assessed value? - CORRECT ANSWER When he or she can back up the value of the home in another way" "When can a property owner appeal the decision of an assessed value? - CORRECT ANSWER Most jurisdictions set a time limit to initiate the appeals process" "What is a special assessment tax? - CORRECT ANSWER An extra tax paid by the homeowner" "Does a property owner have to pay a special assessment tax? - CORRECT ANSWER Yes, if the property lies within the jurisdiction of that property tax" "What is a tax lien? - CORRECT ANSWER A tax lien occurs when taxes are not paid" "What is an example of a preferential assessment property? - CORRECT ANSWER A rehabbed historic home" "What is the Georgia tax rate based on? - CORRECT ANSWER One mill tax rate is equal to $1 for every $1,000 of assessed value" "If a property owner doesn't live in the county, what millage rate is used? - CORRECT ANSWER The rate associated with the location of the property" "Who collects tax revenue in Georgia? - CORRECT ANSWER The Tax Commissioner in the county" "What happens if taxes are not paid on time? - CORRECT ANSWER Georgia has a 10 percent penalty on the assessed value" "Why should real estate agents understand property taxes? - CORRECT ANSWER To inform buyers about expected costs regarding property taxes" "How long does a property owner have to appeal an assessment? - CORRECT ANSWER 45 days from the Assessment Notice" "Who is responsible for updating the assessed value of a property? - CORRECT ANSWER Local tax assessor" "Which of the following principles states that the worth of a lesser valued residence tends to be enhanced by association with higher valued residences in the same area... - CORRECT ANSWER Principle of Progression" "A new employer opens up in the area and wants to hire 500 people. What happens to property values? - CORRECT ANSWER Values will likely increase because of the new demand for homes." "How does the lack of internet access in remote areas impact property values? - CORRECT ANSWER The values are likely to be lower due to the lack of service." "What does the acronym DUST stand for? - CORRECT ANSWER Demand, utility, scarcity, transferability" "What is the Sales Comparison Approach? - CORRECT ANSWER Sales comparison approach means comparing one property against recent sales of properties in a neighborhood" "If three properties in a neighborhood were sold to the original owner's cousins and siblings, can they be used for a sales comparison? - CORRECT ANSWER These are not arms length transactions and the values may not be accurate" "Does a brand new roof make a property more valuable? - CORRECT ANSWER Yes, the new roof should increase the value." "Can all property be valued using the sales comparison approach? - CORRECT ANSWER Typically, this approach is used for residential property." "What is the formula used when using the income capitalization approach? - CORRECT ANSWER Net Operating Income/Capitalization Rate = Market Value" "What happens if a seller is going through a divorce and is forced to sell a home? - CORRECT ANSWER The theory of equal motivation would apply; the seller will accept less." "There are 12 buyers looking for homes in the same neighborhood. There are only 8 homes in the neighborhood. What happens to the property value? - CORRECT ANSWER The value of the properties are higher because of demand." "Half of the residents are employed by a large employer in a nearby city, and the employer shutters their doors. What happens to the property in the area? - CORRECT ANSWER Typically lower prices because people are moving out." "What happens to property values if lenders freeze lending? - CORRECT ANSWER Property values drop because of a lack of capital." "This principle affirms the value is created by anticipated benefits to be derived in the future...? - CORRECT ANSWER Principle of anticipation" "A new employer opens up in the area and wants to hire 500 people. What happens to property values? - CORRECT ANSWER Values will likely increase because of the new demand for homes." "Do higher property taxes impact home values? - CORRECT ANSWER Yes, the properties will be less valuable." "What is the principle of change? - CORRECT ANSWER Changing market conditions such as supply and demand, interest rates, and property conditions." "According to this principle, the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution? - CORRECT ANSWER Principle of substitution" "Are property improvements always a good idea? - CORRECT ANSWER No, there is the possibility of diminishing returns." "What is the principle of substitution? - CORRECT ANSWER The ability to acquire another property that is both desirable and similar in a short period of time." "A Victorian home is built in a neighborhood that is almost all split level ranches. Is the Victorian more valuable? - CORRECT ANSWER No, the property does not conform and therefore will be worth less than it might otherwise be." "A town has decided to build a school and a playground in a neighborhood. Property values are increasing. Why does this occur? - CORRECT ANSWER In anticipation of the school and playground, more families are interested in homes." "If the home for sale has more bathrooms or additional bedrooms than the homes sold, what does the appraiser do? - CORRECT ANSWER The value of the subject property will have to be adjusted upwards." "If all the homes sold recently have finished basements and the appraised property has an unfinished basement, what happens? - CORRECT ANSWER The appraiser takes the cost of finishing and deducts from the value." "Which valuation method is commonly used to value residential properties? - CORRECT ANSWER Sales comparison approach" "An appraisal comes in at $300,000, and the seller has the property listed for $350,000. What should he do? - CORRECT ANSWER The sales price should be reduced to be in line with the value." "What is a cost approach appraisal? - CORRECT ANSWER Cost of building a property to given specifications." "In what cases is the cost approach to appraisal used? - CORRECT ANSWER FNMA Manufactured Housing loans, special use buildings, property in the process of being built, or property to be rebuilt" "What types of properties are appraised using the income capitalization approach? - CORRECT ANSWER Property that is expected to generate income for the owner." "What property expenses are fixed? - CORRECT ANSWER Taxes and insurance" "Are mortgage payments deducted from net income when using the income approach? - CORRECT ANSWER No, they are not included." "What is the insured value? - CORRECT ANSWER The assessment done by an insurance company." "A large apartment complex collects parking fees, pet fees, and laundry fees. Are these included in gross operating income? - CORRECT ANSWER Yes, all fees along with rental income is taken into consideration." "Which of the following numbers is used to calculate the value of a property using the income capitalization approach - CORRECT ANSWER Net operating income" "The income capitalization approach is primarily used to value which of the following properties? - CORRECT ANSWER Office buildings" "What is reconciliation? - CORRECT ANSWER The final step in reaching a market value after the appraisal process." "What is the last stage in the appraisal process? - CORRECT ANSWER Reconciliation" "What value is used during the reconciliation process? - CORRECT ANSWER All three values -The value derived from the sales comparison approach. -The value derived from the cost approach. -The value derived from the income capitalization approach." "What are the total expenses of a property with an effective gross income of $850,000 and an NOI of $400,000? - CORRECT ANSWER $450,000 (Dollars)" "What is the NOI of a property that was purchased for $2,400,000 at a capitalization rate of 10%? - CORRECT ANSWER $240,000 (Dollars)" "An investor's down payment on a property is equal to their initial ........... in the property. - CORRECT ANSWER Equity" "Is real est