Georgia Real Estate Final Prep Questions With Detailed Verified 100% Correct Answers

GEORGIA REAL ESTATE FINAL PREP QUESTIONS WITH DETAILED VERIFIED 100% CORRECT ANSWERS "The Georgia Real Estate Commission established and maintains a real estate education, research, and recovery fund. What is one of the primary purposes of the fund? a. For sellers to recover lost money on sales agreements. b. For widows to gain money if their spouses passed away. c. For people to get recourse of uncollected judgement against licensees. d. For sellers to recover escrow money that banks have handled improperly. - CORRECT ANSWER C." "Which of the following is allowed in Georgia? a. Joint Tenancy b. Tenancy by the Entirety c. Housing discrimination d. Housing discrimination if its under the reason of sex. - CORRECT ANSWER A." "Members of the Georgia Real Estate Commission are appointed by: a. The Governor b. The Districts Representative c. The National Real Estate Commission d. The Citizens of Georgia; its voted on every term. - CORRECT ANSWER A." "All real estate records in Georgia are maintained by the: a. The Commission b. The Commissioner c. The Clerk of Superior Court d. The Van Bueren Company in Association with the Georgia State Government - CORRECT ANSWER C." "To realize the maximum value of property, a reasonable degree of sociological and economic homogeneity is necessary, but it should not become monotonously uniform. In real estate, this concept is called the principle of - CORRECT ANSWER "conformity"" "If the borrower's LTV (loan to value ratio) is more than 80%, - CORRECT ANSWER the borrower's LTV (loan to value ratio) is more than 80%, the lender requires the borrower to set up a budget mortgage which will add 1 month of property taxes, 1 month of hazard insurance and 1 month of mortgage insurance to the principal and interest payment creating what is often called a PITI payment." "The mortgage insurance portion of the PITI payment may involve private mortgage insurance (PMI) or mortgage insurance for an FHA loan, MIP. Monthly PMI is calculated as follows: Loan Principal × PMI% (established by company) = Annual sum of PMI divided by 12 to determine the monthly portion for PMI in the PITI payment. - CORRECT ANSWER MIP on a FHA loan requires an up-front premium (UFMIP) as well as a monthly premium. The UFMIP is calculated by multiplying the FHA loan amount by 1.75%, and then adding that sum to the loan principal, establishing the total loan amount. That total is then multiplied by 1.75% to establish the monthly MIP as part of the PITI payment." "In addition to making a PITI payment, borrowers who have more than an 80% LTV will also be required by the lender to deposit funds at closing into the lender's escrow account - CORRECT ANSWER These escrow funds include 2 to 4 months of hazard insurance; 2 months of mortgage insurance; and whatever number of months of property tax that, when added to the number of months the lender has collected from the PITI payment before the property tax due date, will equal 14 months (one full year to pay the tax bill and 2 additional months in reserve)." "Though the CMA borrows from methods used by professional appraisers, license law in Georgia prohibits licensees from referring to this analysis as an appraisal. - CORRECT ANSWER In preparing the CMA for clients, licensees must emphasize to clients that the evaluations are offered strictly as a guide for establishing a listing price or a sales price offer." "In both the exclusive right to sell listing agreement and the exclusive buyer brokerage engagement, brokers earn commissions not on the actual sale of the property but when they perform the particular service indicated in the terms of the agreement. - CORRECT ANSWER For the seller's broker, performance means presenting a written contract offer to the seller within the terms of the engagement, fulfilling all requirements for such an offer indicated in the listing agreement; or when the seller enters into an enforceable contract for sale of the listed property during the term of the engagement with any buyer through the efforts of any party. For a broker representing a buyer, commission is earned when the client enters into an enforceable contract to purchase through the efforts of any party during the term of the brokerage agreement." "The exclusive right to sell listing agreement also points out specific reimbursement liabilities for a seller-client if the client defaults on the terms of the brokerage engagement. - CORRECT ANSWER These liabilities may include, but are not limited to, the broker's and affiliated licensees' costs for marketing the property, MLS advertising, and mileage fees. These reimbursements are separate from any other legal actions the broker might make against the seller, such as a claim for commission." "Brokers may also negotiate commission protection clauses (safety clauses) within brokerage engagements. Here, after an engagement terminates or expires without the performance called for in the contract, a listing broker would present the seller with a written list of individuals who were shown the property during the term of the agreement. If any of these identified persons returns to create a contract for sale directly with the seller during the period negotiated in the listing agreement, the broker will earn the commission specified in that original contract - CORRECT ANSWER For a buyer's agent who has negotiated this clause, including a specified period after expiration of the engagement, if the former buyer-client enters into a contract to purchase any property shown by the agent during the term of the engagement, the broker's commission will be earned pursuant to the terms of the original agreement." "Some brokerage firms in Georgia negotiate a retainer fee paid by the client at the time the parties enter into the engagement. This fee is deposited into the broker's trust account until the agency agreement expires or is terminated by a transaction's closing, at which point the fee is transferred into the broker's general account. - CORRECT ANSWER If the broker has collected a commission at closing, then the retainer fee will typically be credited to the seller against the commission paid to the broker." "If brokers are delinquent in providing the normal standard of care required to serve clients adequately, these agency agreements limit the broker's liability to the amount of the commission the broker actually receives in a transaction. - CORRECT ANSWER If no commission is received, the broker liability is limited to $100." "Aside from certain verbal agreements in which the parties agree on all essential terms or have already performed a substantial portion of these terms, Georgia's statute of frauds requires real estate contracts to be in writing and signed by the parties against whom the contract is being enforced. - CORRECT ANSWER Furthermore, these contracts must express all essential terms of the contract as follows: identify the buyer and the seller, legally describe the property, state the price of the property, and state how that price is to be paid." "The sellers acknowledge in the contract form a promise to deliver to the buyer good and marketable title for the property by a warranty deed. - CORRECT ANSWER Such title delivered to the buyer is one for which a title insurance company licensed in Georgia will provide for a title insurance policy for the buyer." "Earnest money deposits in real estate transactions are commonly held by brokers, who serve as escrow agents for the funds and are required to deposit funds in a Commission-registered trust account within a time frame identified in the contract. - CORRECT ANSWER Circumstances may also provide for the sellers to hold earnest money, in which case, absent any requirement under Georgia law, the seller may hold funds in a general operating account with discretion in the use of these funds; brokers involved in a real estate transaction have no responsibility or liability for earnest money funds held by the seller." "Upon ensuring that earnest money had been credited to the trust account where deposited, an escrow agent may disburse such funds as follows: - CORRECT ANSWER To the buyer if the contract is not accepted and is not in dispute To the buyer for credit at closing Pursuant to a separate written agreement executed by the seller and the buyer as to its disbursal Upon court order or an arbitrator's decision with jurisdiction over the disputed issue By the escrow agent's reasonable interpretation of the contract within 30 days after receiving notice of the contract's termination or notice of a failed closing" "Generally, the buyer will identify an attorney to close the transaction within the contract offer, though the selection is negotiable with the seller. - CORRECT ANSWER Regardless of who makes the selection, the closing attorney needs to be acceptable to the buyer's lender, whom the attorney represents in the transaction, as well as acceptable to the title insurance company who provides a policy for the lender at closing." "Seller contributions toward the buyer's closing costs are subject to the lender's underwriting criteria for such allowances. - CORRECT ANSWER The allowed contributions may be applied by the purchaser to offset any costs incurred in the closing of the transaction." "The contract form for the purchase and sale of residential real property includes three fundamental contingencies: - CORRECT ANSWER 1. Buyer's general right to terminate—subject to buyer's right to terminate the contract for any reason before the contingency expiration date 2. Appraisal contingency—in which the buyer has right to terminate the agreement if the property does not appraise for a least the contract before the expiration date of the contingency 3. Financial contingency—in which the buyer has the right to terminate the agreement if the buyer cannot show the ability to obtain a loan within the specific terms identified in the contingency before the expiration date of the contingency. Written termination under this circumstance requires the buyer to provide the seller with a notice in writing from the buyer's lender indicating reasons for loan denial." "If the loan identified in the financing contingency involves a loan assumption or seller financing— - CORRECT ANSWER or if buyer chooses FHA or VA financing as the contingency loan—appropriate exhibits for these respective loans must be attached to the contract." "The buyers will lose this contingency right if - CORRECT ANSWER they fail to provide proof of either the lender's approval or denial, or the lender's denial is based on the buyer's lack of sufficient funds to close, lack of timely loan application, failure to sell or lease current home, or conduct after contract acceptance date but before closing." "An inspection of real property for purchase is a right as well an obligation for a buyer, and if so indicated in the space provided on the contract form, - CORRECT ANSWER the purchaser, with reasonable notice to the seller, may conduct inspections on the property up until the time of closing." "Caveat emptor ("buyer beware") is the guiding principle in Georgia regarding the buyer's responsibility to address potential issues on the property and in the surrounding neighborhood. - CORRECT ANSWER Licensees may certainly be expected to advise clients on real estate matters subject to the agent's professional skill and training, but on issues that fall outside this scope, clients are expected to independently seek out appropriate expertise." "Regarding the purchase and sale of new construction, contracts commonly establish substantial protections for the seller's existing investment in such construction. Brokers representing buyers should urge buyers of new construction to exercise due diligence in carefully reviewing new construction contracts. Contracts for residential new construction typically allow a buyer to select interior options and make changes to selections solely at the seller- builder's discretion. - CORRECT ANSWER Plans and specifications for new construction are generally acknowledged as approximations in the contract, as well as the seller's rights to make changes in building components, such as insulation R-values. Brokers representing buyers should advise buyers of new construction that, absent proof of seller negligence or fraud, a buyer's failure or refusal to close constitutes a breach of contract performance." "With regard to a seller's contractual obligation for property repairs, contract language such as "good and workmanlike" lends itself to broad interpretations. - CORRECT ANSWER To minimize conflicts in this area, brokers might remind clients that language used to request property repairs should be particular and specific, carefully describing what is required to repair the property." "The seller must keep in force sufficient hazard insurance on the property until the sale of the property closes. If the property is materially damaged or destroyed before closing and the seller is unwilling or unable to restore property to its previous condition, the buyer has two options: to cancel the contract and have the earnest money returned or to accept the property in its damaged condition and have any insurance proceeds paid to the seller applied to the purchase price or otherwise paid to the buyer. - CORRECT ANSWER If after the buyer accepts the contract and before closing, the seller receives notice of an eminent domain action against the property, the buyer has the right to terminate the contract with the earnest money returned or to close the transaction and have the seller assign any condemnation proceeds to the buyer." "As identified on the signature page of the contract form, the seller's broker and the buyer's broker refers collectively to all persons working with these parties, whether through a client engagement or just as customers. If the designated agency box is checked on the contract form, all parties consent to the existence of this type of agency in the transaction, while also acknowledging that one of the licensees identified in this section will exclusively represent the seller and the other licensee identified will exclusively represent the buyer. - CORRECT ANSWER By checking the dual agency box in the contract form, the parties acknowledge that they have consented to dual agency and acknowledge that that the parties' interests may be adverse." "Broker commissions in a real estate transaction in Georgia are commonly paid according to the terms of a separate agreement between broker and seller, broker and buyer, or both. - CORRECT ANSWER This separate commission acknowledgment form signed only by the brokers involved in the transaction instructs the closing attorney as to the particular distribution of the commission funds to the brokers, as well as any other distributions of the funds indicated in the contract between the parties." "Before the closing, if the seller receives eminent domain notice against the property, the seller must notify the buyer within 30 days, giving the buyer the option of canceling the contract with a full refund of the earnest money or assigning the buyer any condemnation monetary rights under that law. - CORRECT ANSWER True" "While most residential leases are written to protect landlords, state and local statutes such as the Georgia residential landlord-tenant law commonly include protections for tenants as well. - CORRECT ANSWER This law prohibits residential leases from negatively impacting a landlord's responsibility to: keep the property in good repair; comply with local ordinances; comply with Georgia regulations regarding security deposits; follow statutory process for eviction of tenant; pay a tenant's legal costs for disputing the landlord's breach of lease if the lease requires the tenant to pay the landlord these costs as a result of a breach by the tenant." "Enforcement of legal rights in tenant-landlord disputes that cannot be resolved by the parties find resolutions through the Georgia court system. - CORRECT ANSWER The basis for judicial decisions in these matters comes from two sources: legislative codes and case law, in which resolutions issued by the state courts of appeal and the Georgia Supreme Court clarify application of the law." "An estate for years in Georgia, unlike in common law, generally applies to leases greater than a five-year term (typically for commercial use) and do not establish a tenant-landlord relationship between the parties. What is conveyed here is an estate that includes the rights and powers of ownership for a time period of five or more years. - CORRECT ANSWER Georgia Code identifies residential leases, for the most part, as conveying only the rights of possession for a particular use within a time period specified in the rental agreement." "Residential lease forms in Georgia commonly include provisions, absent notices of termination from either party, that generate automatic lease renewal with options for a month-to-month or otherwise agreed-upon term of renewal. Additionally, any rent increases for the renewal term are identified. - CORRECT ANSWER Residential leases in Georgia usually provide tenants with a right of possession at the beginning of the lease rather than a guarantee of actual possession. The contract form will commonly identify a number of days from the start of the lease term by which, if possession is not granted to the tenant, that party has the right to cancel the contract with a full refund of any security deposit. Within that designated period, the tenant will receive prorated reductions according to when actual possession is granted." "Under Georgia Code, if brokers or other third parties engaged by landlord hold tenant security deposits as escrow agents or if a landlord, spouse, or minor children own more than 10 rental units and hold security deposits, such funds must be placed in trust accounts. A landlord, spouse, or minor children owning fewer than 10 such properties may hold such funds in a general operating account with sole discretion for use of such monies. - CORRECT ANSWER Georgia law also allows landlords to post a bond in superior court in the county where the property is located, as a substitute for establishing escrow/trust accounts for security deposits." "A tenant's security deposit may not be applied to offset rental payments. Security deposits will be returned to the tenant at that party's last known mailing address within 30 days of lease expiration. - CORRECT ANSWER Such funds become property of the landlord after 90 days if reasonable efforts to deliver the money have been unsuccessful." "A security deposit will be returned to a tenant in full, provided that all monies due the landlord have been paid, the tenant has vacated the property, and the tenant is not in default under the lease. - CORRECT ANSWER " "The landlord is entitled, under Georgia law, to withhold from the security deposit any sums under the lease, including, but not limited to, the following: Final rental payment Amount owed for repairs (normal wear and tear excepted) Amount paid by the landlord to remove the tenant's personal property Delinquent utility bill paid on behalf of the tenant Cleaning fees due to the tenant's failure to return property to same degree of cleanliness present upon the tenant's occupancy of property - CORRECT ANSWER If the landlord breaches these requirements for return of the tenant's security deposit, Georgia law holds the landlord liable for three times the amount of improperly handled funds and legal fees. If the mishandling is not intentional, and occurred through bona fide error, then the landlord's liability is limited to the exact sum of funds." "Other miscellaneous charges commonly found in residential leases not regulated by Georgia statute include late payment fees, rekeying fees, utility reconnect fees, costs associated with enforcement of the landlord's rights, and pet fees. - CORRECT ANSWER Georgia law limits the fee for dishonored checks to $30, or 5% of the payment, whichever is greater." "Residential lease forms will commonly allow early termination of a lease by either party, subject to a contractually established notice and payment of an earlier termination fee typically equal to one month's rental payment. - CORRECT ANSWER As prescribed under federal and state laws, early termination of leases is afforded to military service members who are assigned elsewhere for periods of more than 90 days." "Except for landlords owning 10 or fewer rental units, Georgia landlord-tenant law requires the landlord and the tenant, either together or separately, to conduct an initial walk-through inspection of the property and complete a property condition report to be attached to lease. The tenant has the responsibility for noting any damage not included in landlord's initial report; failure to do so may create tenant liability for such damage at the end of the lease term. - CORRECT ANSWER Though not responsible for routine maintenance of a tenant's rental property, after receiving notice from a tenant of damage to the property, landlord must, within a reasonable time after receiving the notice, repair any defect that would create a safety or health hazard to occupants of the property." "As prescribed in Georgia Code and incorporated into residential lease forms, within five days after a tenant no longer occupies the property, the landlord is obligated to provide the tenant with a copy of an updated rental property condition report, indicating damages not noted on the initial property inspection and for which the tenant will be responsible. - CORRECT ANSWER The tenant has the right to inspect the property within three banking days of the report to confirm or dispute the landlord's assessment. The tenant will have five banking days from receipt of the report to notify the landlord in writing of any disputed items." "With a 24-hour advance notice, this lease form gives the landlord right to inspect the property for the tenant's compliance with the lease, as well as to make repairs and improvements deemed necessary. - CORRECT ANSWER Within the last 30 days of the lease, the landlord has the right to market the property for rent or sale with signs on the property. The tenant agrees to cooperate with the landlord in making the property available to prospective purchasers and tenants within reasonable hours." "he law requires two disclosures from the landlord that involve property flooding and whether the property contains lead-based paint. If a property has flooded three times in the previous five years from natural forces, Georgia code requires disclosure to the tenant. - CORRECT ANSWER The lead-based paint disclosures required by federal law are the same for the landlord as those required by a seller of real property." "A landlord in Georgia is prohibited from engaging in self-help eviction and may be subject to legal action by the tenant because of a landlord's wrongful conduct in this matter. The statutory process required of the landlord in dispossessory action against a tenant in default of a lease is as follows: 5. If judgment is issued against the tenant, a writ of possession is issued by court order, which authorizes removal of the tenant and the tenant's possessions within seven days of the writ. - CORRECT ANSWER 1. The landlords demand, by written notice, possession of the property from a tenant in breach of the lease. 2. The landlord files dispossessory action in the county where the rental property is located; such action in Georgia is typically filed in magistrate court. 3. A dispossessory affidavit is delivered to the tenant by the sheriff, with a seven-day notice to answer summons. 4. If the tenant does not respond, the landlord is awarded dispossessory judgment; if the tenant responds, a court date is scheduled. The tenant is allowed to occupy the property until the court's final disposition, and the landlord is prohibited from suspending utilities during that period." "The terms and provisions of the following items from the lease form, with the exception of the parties identified in this form as tenant and landlord, are the same as those reviewed in the corresponding section descriptions of the purchase and sale of residential real property contract form: - CORRECT ANSWER item 24 Notices and item 25 Miscellaneous Provisions and Definitions." "Lease contract forms in Georgia may also be used in residential lease/purchase agreements and as part of option sales contracts to purchase leased property. - CORRECT ANSWER True" "Concluding that traditional common law agency no longer adequately served real estate relationships between licensees and the public in the state, the Georgia General Assembly in 1994 passed the Brokerage Relationships in Real Estate Transactions Act (BRRETA). Intending to provide guidance for brokers and their sales affiliates, BRRETA - CORRECT ANSWER classified and clarified broker duties and obligations to all parties in real estate transactions, and required licensees to disclose to clients and customers whose interests they were protecting." "Responding to the recommendations of a Georgia Real Estate Commission task force, the Legislature amended BRRETA in 2000 in five areas: 1. Establishing that real estate client relationships could only be created by written contract 2. Creating designated agency as separate from dual agency - CORRECT ANSWER 3. Creating transaction brokerage and identifying the duties in this type of relationship 4. Clarifying duties of real estate agents to disclose offsite adverse neighborhood conditions 5. Clarifying duties of real estate agents to keep information confidential BRRETA was intended to regulate relationships between real estate brokers and sellers, buyers, landlords, and tenants, only to the extent these parties did not establish these relationships through a written agreement. BRRETA does not regulate the agency agreement between brokers and their sales affiliates, nor was the statute intended to change or limit the Georgia Real Estate Commission's authority to regulate licensee activities through the statutory license law or the Commission's rules and regulations. Also under BRRETA, a broker's membership in a common source information organization such as an MLS does not create an agency relationship between the broker and the organization." "BRRETA imposes the following duties owed to clients by brokers: Perform the terms of the brokerage engagement Promote the client's interests in the following ways: - CORRECT ANSWER o Seek a buyer or a tenant to purchase or lease property o Or seek property for a buyer or a tenant to buy or lease o Timely present offers to and from clients o Disclose to clients known adverse material facts o Advise clients to obtain expert advice for matters beyond broker's expertise o Timely account for all monies or property received in which the client has an interest o Exercise ordinary skill and care in the performance of duties s o Comply with all BRRETA requirements, as well as all other applicable statutes and regulations o Keep information confidential per the requests of clients, unless such disclosures are required by law" "BRRETA requires the following disclosures from brokers to clients: - CORRECT ANSWER Advise prospective clients of the types of agency relationships offered by the brokerage company Advise prospective clients if the broker holds any other brokerage relationships known to the broker which may conflict with the interests of prospective clients Advise prospective clients how the broker will be compensated and if the broker will share such compensation with other brokers who cooperate in the transaction Advise prospective clients of the broker's obligation to keep information confidential" "Brokerage engagements may be terminated in the following ways: - CORRECT ANSWER By the performance of duties stipulated in brokerage engagement By the expiration date of the brokerage engagement By termination of the agreement as authorized in the language of the brokerage engagement" "BRRETA considers any buyer, seller, landlord, or tenant working with a broker without a written brokerage engagement to be a . - CORRECT ANSWER customer" "A broker engaged by sellers or landlords must timely disclose to prospective buyers and tenants all known material facts relating to existing adverse physical conditions in the neighborhood within 1 mile of the property and which could not reasonably discovered by buyers or through review of reasonably available public documents. - CORRECT ANSWER True" "Since the enactment of BRRETA, brokerage companies in Georgia have moved from only practicing seller's agency to offering clients multiple choices in brokerage relationships. - CORRECT ANSWER True" "BRRETA permits three basic types of broker-client relationships - CORRECT ANSWER Single agency Dual agency Designated agency" "The written consent that brokers must provide for clients under BRRETA includes six disclosure requirements: 1. Description of the transaction in which the broker serves as a dual agent 2. Statement that as a dual agent, the broker represents two clients whose interests are often adverse 3. Statement that duel agents will disclose all known adverse material facts relevant to the transaction to all parties, except for information held in confidence at the instruction of another client that is not to be disclosed under BRRETA or that must be disclosed under BRRETA - CORRECT ANSWER 4. Statement that the broker or affiliated licensees will disclose to each client in the transaction all known material relationships they may have with other clients in the transaction 5. A statement that the client does not have to consent to dual agency 6. A statement that the client voluntarily gave consent and understands the engagement" "BRRETA deems that informed consent has been given by the client when the client signs the written consent. - CORRECT ANSWER Moreover, consent to dual agency must be given before a broker performs any non-ministerial service for a party." "In its 2000 revision, BRRETA created designated agency, which allowed a broker to assign two affiliated licensees, each one to exclusively represent one of two clients in the same transaction. - CORRECT ANSWER Before the enactment of designated agency, this circumstance would have created only dual agency." "Designated agency provides a viable brokerage alternative to dual agency that greatly reduces undisclosed dual agency claims and their resulting litigation. A brokerage firm may establish dual agency either by direct assignment by the broker or by automatic establishment through company policy. - CORRECT ANSWER Under BRRETA, designated agency is a completely separate brokerage relationship from dual agency. As in dual agency, designated agents do not possess imputed knowledge, only actual knowledge." "A broker acting as a transaction broker may provide assistance to any customers by performing ministerial acts. - CORRECT ANSWER Ministerial services are those that do not require the broker's judgment, discretion, or advice." "A broker acting as a transaction broker does the following: - CORRECT ANSWER 1. Timely present all offers 2. Timely account for all trust monies held for parties in the transaction 3. Timely disclose to all buyers and tenants with whom the broker is working all adverse material facts that are known to them pertaining the physical condition of the property and the neighborhood within a mile from the property; these adverse material facts are facts that buyers and tenants could not discover by a diligent inspection of the neighborhood or examination of public records." Legal competency age in Georgia is: a. 15 b. 18 c. 21 d. 16 - CORRECT ANSWER B." "The Georgia Real Estate Commission is composed of: a. Three brokers, two salespersons, and a district representative and a representative of the public at large. b. Two brokers, two salespersons, and a district representative and a representative of the public at large. c. Six members, five licensees and the sixth member someone with no connection to the real estate industry. d. Eight members, seven licensees and the eighth member someone with no connection to the real estate industry. - CORRECT ANSWER C." "What are the license renewal requirements in Georgia for a real estate salesperson and broker? Choose the best answer. a. Hold an active license. b. Hold an active license and complete the appropriate hours of continuing education. c. Just complete 20 hours of commission approved continuing education. d. None, as long as you have had a real estate license within the last ten years. - CORRECT ANSWER B." "All of the following are agency relationships in Georgia EXCEPT: a. the attorney-client relationship b. the real estate salesperson-buyer relationship c. the real estate broker-buyer relationship d. none of the above - CORRECT ANSWER B." "Under what circumstances can a real estate salesperson conduct closing? a. Never. b. With the signatures of the buyer and seller. c. With the signatures of the buyer, seller and broker. d. Only if a real estate salesperson is also licensed as an attorney. - CORRECT ANSWER D." "What steps if any does a salesperson have to take to hold an active license with more than one Georgia broker? a. First they have to be verified by the commission and then by their current broker. b. First they have to be verified by their current broker and then must apply to the second broker. c. No steps. In Georgia, a salesperson may not hold a license with more than one Georgia broker. d. They must send the appropriate paperwork to the commission and after two weeks they will be verified. - CORRECT ANSWER C." "According to BRRETA, a brokerage engagement without a termination date will automatically end after: a. 30 Days b. 60 Days c. One Year d. Two Years - CORRECT ANSWER C." "Georgia has real estate license reciprocity agreements with which states? a. Florida Only b. All States c. No States d. Some States - CORRECT ANSWER B." "A salesperson may be in violation of Fair Housing laws in all of the following circumstances EXCEPT: a. A salesperson charging more because of the client's disability. b. A salesperson charging more to work for a minority couple than a non-minority. c. A salesperson refusing to sell a property to a minority because they want to sell property to only a specific race. d. A salesperson refusing to work for a minority couple because they are looking in an outside area of town in which the agent is unfamiliar. - CORRECT ANSWER D." "What does GCA stand for? a. The Georgia Contract Act b. The Georgia Condominium Act c. The Georgia Community Property Act d. The Georgia Condominium and Commons Act - CORRECT ANSWER B." "Ideally, the Georgia Real Estate Education, Research, and Recovery Fund should be at: a. $200,000.00 b. $250,000.00 c. $500,000.00 d. $1,000,000.00 - CORRECT ANSWER D." "Under Georgia law lenders are required under the Truth-in-Lending Act (Regulation Z) to furnish an applicant for a real estate loan with a copy of a/an: a. Finance statement b. Disclosure statement c. Amortization statement d. Debt Authority statement - CORRECT ANSWER B." "If a broker changes the address of their place of business, how many days does the broker have to notify the Georgia Real Estate Commission? a. 7 b. 30 c. 60 d. 120 - CORRECT ANSWER B." "Should the commission pay from the real estate education, research, and recovery fund any amount in settlement of a claim or toward satisfaction of a judgment against a licensee, the license of such licensee shall be automatically: a. Revoked b. Suspended c. Terminated d. Cancelled - CORRECT ANSWER A." "According to license law in Georgia when must a broker deposit transactional funds into a trust account? a. After 3 business days. b. After 5 business days. c. As soon as possible unless the contract states otherwise. d. After the signature of all parties are received and the broker sends the paperwork to the commission. - CORRECT ANSWER C." "All of the following, exist in Georgia EXCEPT: a. Ad valorem Taxation b. Special Assessments c. Statutory Right of Redemption d. Equitable Right of Redemption - CORRECT ANSWER C." "A Georgia licensee managing community associations that handles more than $60,000 is required to have: a. Trust Insurance b. Fidelity Bond Insurance c. Errors and Omission Insurance d. Community Management Insurance - CORRECT ANSWER B." "The property tax assessment rate in Georgia is: a. 40.00% b. 50.00% c. 60.00% d. 80.00% - CORRECT ANSWER A." "A written notice that a lawsuit has been filed concerning real estate is called a: a. Lis Pendens b. Treaty of Transfer c. Warranty Deed Claim d. Real Estate Lawsuit Claim - CORRECT ANSWER A." "In Georgia the amount a broker may charge for a commission is: a. 6.00% b. Up to 6% c. Up to 7% d. Negotiable in the listing contract - CORRECT ANSWER D." "Which of the following may receive compensation from the Georgia Real Estate Education, Research, and Recovery Fund? a. A nanny who is robbed by a group of teenagers. b. A broker who is let go from his firm because he is an atheist. c. A buyer who is robbed because he was on his way to view a house. d. A seller who pays a commission to a broker under false pretenses. - CORRECT ANSWER D." "If the Georgia Real Estate Commission decides to revoke a salesperson's license, state law gives the licensee the right to: a. Counter sue the commission for misappropriation of valor. b. Counter sue the commission for negligence. c. Appeal the decision for judicial review. d. Practice real estate for another month. - CORRECT ANSWER C." "A real estate salesperson in Georgia can receive compensation from: a. A Buyer b. A Seller c. A Buyer or Seller d. Their Employing Broker - CORRECT ANSWER D." "Most states, including Georgia have abolished which of the following? a. Dower and Curtesy Law b. The Fair Housing Act c. The Fourteenth Amendment d. The Comprehensive Environmental Response, Compensation, and Liability Act - CORRECT ANSWER A." "Housing discrimination is illegal in Georgia. Which of the following are protected classes under Georgia Fair Housing Law? a. Color b. National origin c. Familial status d. All of the above - CORRECT ANSWER D." "Georgia law requires that all real estate contracts must be in writing to be enforceable but there are two exceptions to this law. Which one of the options below is an exception? a. Double Net b. Closed Listing c. Leases for one year or less d. Leases for two years or less - CORRECT ANSWER C." "Which State Agency is responsible for the implementation of the Georgia Lead Paint Prevention Act of 1994? a. The Georgia Department of Design b. The Georgia Department of Real Estate c. The Georgia Real Estate Commission d. The Georgia Department of Natural Resources - CORRECT ANSWER D." "Georgia law requires; anyone who lists, sells, leases, or deals in real estate transactions to a. live in Georgia. b. hold an active driver's license. c. hold an active real estate license. d. hold an active commissioner approved dealing license. - CORRECT ANSWER C." "How many hours of continuing education are required for Georgia real estate salespersons? a. 14 b. 15 c. 36 d. 45 - CORRECT ANSWER C." "In terms of financing involved for a real estate purchase, which custom is practiced in Georgia? a. Title Theory b. Lien Theory c. Trust Theory d. Common Theory - CORRECT ANSWER A." "Under agency law in Georgia dual agency is: a. illegal. b. legal with the consent of one party. c. legal with the consent of the broker. d. legal with the consent of all parties. - CORRECT ANSWER D." "The law in all states that provides contracts for the sale of real estate or an interest in real estate are unenforceable unless they are in writing and signed by the parties: a. Statute of frauds b. Statute of transfer c. Statute of real estate d. Statute of transgression - CORRECT ANSWER A." "In Georgia, at closing a lender may require a borrower to pay a hazard insurance premium in advance for how long? a. 30 Days b. 60 Days c. One Year d. Two Years - CORRECT ANSWER C." "A metes-and-bounds legal description: a. can be created for areas excluded from the rectangular survey system b. is not acceptable in a court in most jurisdictions c. must commence and finish at the same identifiable point d. is used only in extreme cases where there is no recorded subdivision plats - CORRECT ANSWER C." "Jason asks a licensed salesperson to find someone to lease his home. The salesperson would NOT be in violation of Fair Housing laws if he refused to rent to which of the following? a. A set of college students b. A woman in a wheelchair c. An African American couple d. A Russian American family who speaks broken english. - CORRECT ANSWER A." "Regardless of the case, what is the most that one can be paid out of the Georgia Real Estate Education, Research, and Recovery Fund? a. $5,000.00 b. $7,000.00 c. $10,000.00 d. $25,000.00 - CORRECT ANSWER D." "Any application for compensation from the Georgia Real Estate Education, Research, and Recovery Fund must be brought within ____ days from the final determination of, or expiration of appeal rights concerning, any judgment. a. 7 b. 30 c. 60 d. 120 - CORRECT ANSWER B." "Is Georgia a Community Property state? a. No b. Yes, since 1983. c. Yes, as long as there is written consent from the homeowners. d. Yes, as long as there is written consent from the applicable brokers. - CORRECT ANSWER A." "In Georgia, which of the following is exempt from continuing education? a. None b. Agents c. Brokers d. Brokers who have tenure (15+ years as broker) - CORRECT ANSWER A." "In Georgia, brokerage agreements are classified as: a. Implied Contracts b. Express Contracts c. Voidable Contracts d. Unenforced Contracts - CORRECT ANSWER B." "When can a broker in Georgia pay an unlicensed assistant a commission for helping with a residential transaction? a. Whenever applicable as long as its under a fee of 3%. b. Only when the buyer and seller and broker sign the commission check. c. Never because its residential, if it was commercial it would be okay. d. Never, under no circumstances are unlicensed assistants allowed to be paid commissions. - CORRECT ANSWER D." “Valid contract elements needed: - CORRECT ANSWER 1. competent parties 2. mutual consent (offer/acceptance) 3. legal consideration (promises, an act) 4. legal object" "An existing 1st mortgage loan can generally be changed to a 2nd or junior lien by: - CORRECT ANSWER a subordination agreement signed by the 1st mortgagee." "When a property is sold ""as-is,"" the seller must disclose: - CORRECT ANSWER any known material facts." "Timeshare - CORRECT ANSWER Form of real property ownership with the right of occupancy and use of specific property for a specific portion of each year for either a fixed number of years or forever" "The basis of the CMA is to evaluate a fair market price for a subject property by using nearby, recently sold similar properties. In this process, the CMA will adjust the values of these comparable properties to account for differences in specific features with the subject property. - CORRECT ANSWER The goal in the adjustments is to make these comps, as much as possible, just like the subject property. Once the adjusted prices of each comp are calculated, each value is correlated or reconciled by assigning it a percentage for reliability. The resulting dollar totals for each comp are then added together to establish a fair market price for the subject property." "The initial disclosures in the agency agreements conclude with notices of dual and designated agency. Clients are informed that dual agency is permitted in Georgia only if the clients give informed consent in writing after receiving all required disclosures in this brokerage engagement relationship. - CORRECT ANSWER Clients are also informed that in a potential dual agency situation, brokers may provide each client with separate, exclusive representation through the appointment of designated agents for each client. Brokers must also provide clients with a written office policy regarding the types of agency offered by their firms. Clients are finally advised that in signing the brokerage engagement, they are consenting to the broker acting as a dual or a designated agent in the transaction." "The listing engagement indicates that the seller will provide for the broker a written property condition report that will disclose material defects known to the seller— a report the broker may convey to perspective buyers; moreover, the seller will hold the broker harmless from liability in conveying to third parties inaccurate information in this report provided by the seller. - CORRECT ANSWER For properties constructed before 1978, agents are required to give sellers an informational pamphlet on the dangers of lead-based paint and inform sellers of their responsibility to disclose any known information regarding lead-based paint used on their properties." "Contracts for the purchase and sale of residential real property commonly used by GAMLS and FMLS create a basic framework for the essential components of the contractual agreement and incorporate into the agreement by reference a document of standard terms that becomes part of the contract. - CORRECT ANSWER Many real estate firms in Georgia use contract forms available from the Georgia Association of REALTORS® (GAR). The GAR forms are prepared by attorneys and revised or updated each year to reflect changes in real estate law or practice." "Real estate contract forms must include a legal description of the property, which may be attached to the contract form, - CORRECT ANSWER copied into the spaces provided for a short-form legal description, or simply referenced by page number in the deed book of the county in which the property is located." "If a new property under construction is being sold, or the seller has agreed to construct a home on the property before closing, - CORRECT ANSWER the seller will comply with appropriate guidance and provisions dictated by the Interstate Land Sales Act (ILSA)." "The seller bears responsibility for the financial expenses of clearing the title of any defects or "clouds" presenting obstacles for the issuance of any title insurance policy for the buyer. - CORRECT ANSWER Absent any guidelines to the contrary from the buyer's lender—property taxes, homeowners association dues, and property utility costs are prorated between the parties as of the date of closing." "Notice is considered given on the date of such hand delivery or courier, confirmed fax transmission, deposit with overnight courier, next business day delivery, or deposit in the U.S. mail. - CORRECT ANSWER True" "The seller must keep sufficient hazard insurance on the property until the closing. If the property is damaged or destroyed before closing, and the seller is unwilling or unable to restore it, the buyer has two options: - CORRECT ANSWER to cancel the contract and have the earnest money returned or to accept the property in damaged condition and have any insurance proceeds paid to the seller applied toward the purchase price or paid to the buyer." "A tenant "at will" under Georgia Code is a party who occupies a property with the landlord's consent and makes rental payments without a written lease. - CORRECT ANSWER This type of lease is subject to eviction and security deposit regulations under the landlord- tenant law and requires notice by either party (30 days from the tenant, 60 days from the landlord) to terminate such lease." "Verbal leases in Georgia for a year or less are enforceable; - CORRECT ANSWER enforceable rental agreements for more than one year must be in writing and include an adequate legal description." "Under constructive eviction rights, tenants in Georgia are allowed to vacate property and suspend rental payments if the landlord allows the property to become uninhabitable. - CORRECT ANSWER In such action, the tenant must show that the landlord's failure to make repairs has made the property unfit for inhabiting, not just uncomfortable." "Upon a landlord's default through no cause of tenant, this lease form entitles the tenant to terminate the lease, to have security deposit reimbursed, and to receive a fee from the landlord equal to any early termination fee stipulated in the contract. - CORRECT ANSWER These actions constitute the tenant's sole and exclusive remedy and serve as full liquidated damages for the tenant." "With the exception of the parties to the contract for the lease of residential property identified as tenant and landlord, the terms and conditions in item 22 Brokerage, are the same as those previously reviewed in item 8 Brokerage in the contract for purchase and sale of residential real property and the corresponding standard term (SDTM-8). - CORRECT ANSWER True" "Brokerage engagement: - CORRECT ANSWER written agency contract in which a seller, buyer, landlord, or tenant becomes a client of the broker. The client of the broker promises either to compensate or allow the broker to be compensated by another party for services the broker provides in the transaction" "Absent any provision for termination in the brokerage agreement and no termination having occurred, - CORRECT ANSWER BRRETA mandates that the agreement terminate within one year from its origination." "Upon termination of a brokerage engagement, a broker owes no further duties to a client except as follows: - CORRECT ANSWER To account for all monies relating to the engagement To keep confidential, where requested by the client, all information received during the brokerage engagement unless the client subsequently permits disclosure and such disclosures are required by law The information becomes public from an outside source" "In single agency relationships, brokers exclusively represent sellers, buyers, landlords, or tenants. When the broker is representing sellers and landlords, buyers and tenants are treated as customers. - CORRECT ANSWER When the broker is representing buyers and tenants, sellers and landlords are treated as customers." "Traditionally, dual agency may be created for the broker and all affiliated licensees in two basic circumstances: - CORRECT ANSWER One affiliate licensee represents two different clients of the broker in the same transaction Two affiliated licensees each represent a different client of the broker in the same transaction" "What does BRRETA stand for? a. The Brokerage Real Estate Training Act b. The Brokerage Real Estate Transactions Act c. The Brokerage Relationships in Real Estate Transactions Act d. The Georgia Basic Relationships in Real Estate Transactions Act - CORRECT ANSWER C." "If a real estate agent is found guilty of misrepresenting their client and is forced to pay back $10,000 that came from the Georgia Real Estate Education, Research, and Recovery Fund. Can they practice Real Estate again? a. No, once an agent is found guilty of misrepresenting their client by law they can never practice real estate again. b. No, because the amount taken was higher than the minimum recovery fund withdrawal threshold. c. Yes, when the amount is paid back in full not including interest. d. Yes, when the amount is paid back in full as well as the interest. - CORRECT ANSWER D." "What is TRUE about an Associate Broker in Georgia? a. An Associate Broker is the same as a salesperson. b. An Associate Broker typically makes less than other real estate agents. c. An Associate Broker has to be commissioned directly by the acting commissioner. d. An Associate Broker may perform any real estate brokerage act that requires a license. - CORRECT ANSWER D." "Who is the Real Estate Commissioner? a. Supreme Leader of The Georgia Senate b. Majority Leader of The Georgia Congressional District c. Chief Administrator of The Georgia Real Estate Commission d. Chief Administrator of The National Real Estate Commission - CORRECT ANSWER C." "According to Georgia Law, are condominiums referred to as "Real Estate"? a. Yes. b. No. c. No, unless voted on by the applicable county. d. No, unless the owner declares "Association by Land" via A.G.G.A. - CORRECT ANSWER A." "The Georgia Real Estate Commission has the power to regulate the issuance of licenses, which of the following is included in their powers? a. Revoking a license. b. Granting a license to someone based on merit. c. Transferring an applicable license to another state. d. Launching an investigation of fraud for an escrow firm. - CORRECT ANSWER A." "A real estate company located in downtown Atlanta hires an office manager. The office manager's duties include clerical duties, and making sure agents adhere to office policy in filling out their independent contractor compensation forms. According to this description: a. The office manager needs a salesperson's license. b. The office manager needs a broker's license. c. The office manager needs an associate brokers license. d. The office manager does not need a real estate license of any type. - CORRECT ANSWER D."