Georgia Real Estate Salesperson Licensing
Exam Practice Questions And Correct
Answers (Ve
1. A Georgia salesperson receives a $5,000 earnest money check from a buyer on
Friday. The salesperson deposits it into their personal business account on Monday.
Which statement best describes the legal outcome under Georgia license law?
A. Permissible if the salesperson maintains a separate ledger for client funds.
B. Permissible if the salesperson remits the funds to the broker within 3 business days.
C. Prohibited; commingling and conversion violations may result in license suspension
or revocation.
D. Prohibited only if the buyer files a written complaint with GREC within 30 days.
Answer: C. Prohibited; commingling and conversion violations may result in license
suspension or revocation.
Rationale: Georgia law requires earnest money to be deposited into a trust account by the
broker, not a personal account; commingling and conversion are serious violations.
Options A and B incorrectly allow personal deposit under conditions, and D misstates
enforcement as complaint-dependent.
2. A seller signs a listing agreement with Broker A. Broker A then shows the property
to a buyer and acts as a dual agent without written consent. What is the most likely
consequence under Georgia agency law?
A. The listing agreement becomes voidable at the seller's option.
B. Broker A may be subject to disciplinary action and civil liability for breach of
fiduciary duty.
C. The buyer must pay Broker A a commission if the sale closes.
D. Dual agency is automatically permitted in Georgia if both parties are represented by
the same brokerage.
Answer: B. Broker A may be subject to disciplinary action and civil liability for
breach of fiduciary duty.
Rationale: Georgia requires written consent for dual agency; failure breaches fiduciary
duties and exposes the broker to GREC discipline and civil liability. A is incorrect because
the listing remains valid; C misstates commission liability; D is false because dual agency
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,is not automatic.
Page 2 of 88
,3. A buyer obtains a 30-year fixed-rate mortgage at 6% with 2 discount points. The
loan amount is $300,000. What is the approximate break-even period if the buyer
expects to save $150 per month due to the lower rate?
A. 24 months
B. 36 months
C. 48 months
D. 60 months
Answer: C. 48 months
Rationale: 2 points on $300,000 = $6,000 cost; $6,000 ÷ $150 monthly savings = 40
months, closest to 48 months among choices. A, B, and D are miscalculations of the
break-even period.
4. An appraiser using the income approach estimates a property's value at $500,000
with a capitalization rate of 8%. If the net operating income increases by 10% and the
cap rate remains constant, what is the new value?
A. $525,000
B. $540,000
C. $550,000
D. $560,000
Answer: C. $550,000
Rationale: Original NOI = $500,000 × 0.08 = $40,000; 10% increase = $44,000; $44,000
÷ 0.08 = $550,000. Options A, B, and D result from incorrect NOI or cap rate
applications.
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, 5. A property manager receives a security deposit from a tenant. Under Georgia law,
which action is required regarding the deposit?
A. Deposit must be placed in a federally insured escrow account within 3 business days.
B. Deposit must be held in a trust account and returned within 30 days after lease
termination.
C. Deposit may be commingled with the manager's operating funds if a separate ledger is
kept.
D. Deposit must be forwarded to the landlord within 7 days of receipt.
Answer: B. Deposit must be held in a trust account and returned within 30 days after
lease termination.
Rationale: Georgia law requires security deposits to be held in a trust account and
returned within 30 days after termination. A is incorrect because the timeframe is not 3
days; C violates commingling rules; D is not a statutory requirement.
6. A buyer signs a sales contract contingent on financing but later fails to obtain a
loan. The seller wants to keep the earnest money. Which legal principle best supports
the buyer's position?
A. Doctrine of anticipatory repudiation
B. Doctrine of impossibility
C. Doctrine of substantial performance
D. Doctrine of condition precedent
Answer: D. Doctrine of condition precedent
Rationale: A financing contingency is a condition precedent; if it fails, the buyer's
obligation to close is excused. A, B, and C do not apply to a contractual financing
contingency.
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Exam Practice Questions And Correct
Answers (Ve
1. A Georgia salesperson receives a $5,000 earnest money check from a buyer on
Friday. The salesperson deposits it into their personal business account on Monday.
Which statement best describes the legal outcome under Georgia license law?
A. Permissible if the salesperson maintains a separate ledger for client funds.
B. Permissible if the salesperson remits the funds to the broker within 3 business days.
C. Prohibited; commingling and conversion violations may result in license suspension
or revocation.
D. Prohibited only if the buyer files a written complaint with GREC within 30 days.
Answer: C. Prohibited; commingling and conversion violations may result in license
suspension or revocation.
Rationale: Georgia law requires earnest money to be deposited into a trust account by the
broker, not a personal account; commingling and conversion are serious violations.
Options A and B incorrectly allow personal deposit under conditions, and D misstates
enforcement as complaint-dependent.
2. A seller signs a listing agreement with Broker A. Broker A then shows the property
to a buyer and acts as a dual agent without written consent. What is the most likely
consequence under Georgia agency law?
A. The listing agreement becomes voidable at the seller's option.
B. Broker A may be subject to disciplinary action and civil liability for breach of
fiduciary duty.
C. The buyer must pay Broker A a commission if the sale closes.
D. Dual agency is automatically permitted in Georgia if both parties are represented by
the same brokerage.
Answer: B. Broker A may be subject to disciplinary action and civil liability for
breach of fiduciary duty.
Rationale: Georgia requires written consent for dual agency; failure breaches fiduciary
duties and exposes the broker to GREC discipline and civil liability. A is incorrect because
the listing remains valid; C misstates commission liability; D is false because dual agency
Page 1 of 88
,is not automatic.
Page 2 of 88
,3. A buyer obtains a 30-year fixed-rate mortgage at 6% with 2 discount points. The
loan amount is $300,000. What is the approximate break-even period if the buyer
expects to save $150 per month due to the lower rate?
A. 24 months
B. 36 months
C. 48 months
D. 60 months
Answer: C. 48 months
Rationale: 2 points on $300,000 = $6,000 cost; $6,000 ÷ $150 monthly savings = 40
months, closest to 48 months among choices. A, B, and D are miscalculations of the
break-even period.
4. An appraiser using the income approach estimates a property's value at $500,000
with a capitalization rate of 8%. If the net operating income increases by 10% and the
cap rate remains constant, what is the new value?
A. $525,000
B. $540,000
C. $550,000
D. $560,000
Answer: C. $550,000
Rationale: Original NOI = $500,000 × 0.08 = $40,000; 10% increase = $44,000; $44,000
÷ 0.08 = $550,000. Options A, B, and D result from incorrect NOI or cap rate
applications.
Page 3 of 88
, 5. A property manager receives a security deposit from a tenant. Under Georgia law,
which action is required regarding the deposit?
A. Deposit must be placed in a federally insured escrow account within 3 business days.
B. Deposit must be held in a trust account and returned within 30 days after lease
termination.
C. Deposit may be commingled with the manager's operating funds if a separate ledger is
kept.
D. Deposit must be forwarded to the landlord within 7 days of receipt.
Answer: B. Deposit must be held in a trust account and returned within 30 days after
lease termination.
Rationale: Georgia law requires security deposits to be held in a trust account and
returned within 30 days after termination. A is incorrect because the timeframe is not 3
days; C violates commingling rules; D is not a statutory requirement.
6. A buyer signs a sales contract contingent on financing but later fails to obtain a
loan. The seller wants to keep the earnest money. Which legal principle best supports
the buyer's position?
A. Doctrine of anticipatory repudiation
B. Doctrine of impossibility
C. Doctrine of substantial performance
D. Doctrine of condition precedent
Answer: D. Doctrine of condition precedent
Rationale: A financing contingency is a condition precedent; if it fails, the buyer's
obligation to close is excused. A, B, and C do not apply to a contractual financing
contingency.
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