Practice Exam #3

What is the minimum age for someone to legally enter in a contract for the sale of real estate in Georgia?

16
21
17
25
18

Which of the following is the BEST source of information for determining the cost factor in the replacement cost method?

a cost estimate handbook printed at the time the house was built
an experienced, reputable builder who built similar houses when this house was built
a current cost estimate handbook
an experienced, local, reputable builder who is currently building similar houses

Can a seller give a licensee a bonus check?

No, it is illegal.
Yes, the licensee is entitled to any money given to him/her from the seller.
No, the licensee can only accept compensation from his/her broker unless they have consent from their broker to accept a bonus
Yes, if the licensee receives the bonus before the house/property is sold
No, the licensee will already be compensated through commission

What is a Broker in terms of Real Estate?

An individual or firm who is able to buy, sell, or lease real property on behalf of others
An individual or firm who serves as a private investor and privately funds the acquisition of real property
An individual or firm who visits properties and determines the value of it based on the property’s current condition
None of these answers are correct

Who ultimately decides the listing price in a brokerage engagement?

the real estate broker
the brokerage engagement salesperson
the seller
certified appraiser
the broker's agent

A Georgia broker who manages a community association must be covered by a fidelity bond or insurance policy

if at any time the broker controls more than $60,000 of association funds
only if the broker represents more than 60 owners
only if association funds are not maintained in a trust account
if at any time the broker collects or disburses any association funds

What is a promise that the grantee will not suffer interference from others having a superior claim to the tilte?

covenant of seisin
covenant against embraces
covenant of further or future warranty
covenant of encumbrances
covenant of quiet enjoyment

George is showing a property to first time home buyers. The home is overpriced for the location it’s in. He wants the property to seem more desirable so he invites a few friends to come by during the showing to give off the illusion that the home is in high demand. What behavior is George engaging in?

Fraud
Careless Misrepresentation
Puffing
Scam
Negligent Misrepresentation

Describe which of the following typically would NOT be considered when estimating sellers’ costs

escrow refund.
mortgage insurance.
transfer tax.
mortgage rate.
prepayment penalty.

According to common-law fiduciary principles, a real estate licensee acting solely as a buyer’s agent will not disclose any confidential information recieved from the

buyer
seller and buyer
listing agent
seller

Under what circumstances may a contract be terminated?

a third party intervenes
one of the parties decides not to go forward
both parties assign their rights to third parties
one party assigns their rights to another party
it is impossible for one of the parties to perform

There was a law that passed requiring sellers to disclose information about the use of lead based paint in properties in 1978, what was it called?

The Property Protection Laws of 1975
The 1970 Clean Air Amendment
The 1965 Air Pollution Act
The Lead Based Paint Act of 1992
The Clean Water Act

A natural break even point is featured in what type of lease agreement?

Sublease
Percentage lease
Index lease
Net lease
Gross lease

The GREC was created with the purpose of

assessing and collecting real estate tax on properties
enforcing the upkeep and appearance of properties in a given area
establishing and maintaining regulations to prevent the licensee from breaking the rules
promoting political dominance over a given territory of land
all of the answers are true

A ___________ is a person that provides a service to those who are interested in purchasing real estate and often influences their decisions by helping them determine the most viable option for a project or asset

Consultant
Broker
Salesperson
Real Estate Attorney
Real Estate Counselor

Which of the following is NOT one of the targeted responsibilities of the Georgia’s Real Estate Commission?

Communication
Staff Operations
Due Process
Social Responsibility
Fair Qualifying Process

What financing alternative can a borrower utilize if they want a temporary loan that provides funds in addition to an existing loan until permanent financing can be obtained?

blanket loan
package loan
bridge loan
purchase-money loan
wrap-around loan

In Georgia, who should ultimately determine the asking price in a seller’s brokerage engagement agreement?

the seller
the brokerage engagement broker
a fee appraiser
the brokerage engagement salesperson

Which of the following is a market price?

what the property sells for
the most probable price
the same as cost when used
the same as market value

Can a salesperson sign a listing as the agent if given permission in the affiliation agreement?

No, the salesperson must have completed all of the education courses required of a broker
Yes, license law allows the salesperson to sign for the broker regardless of whether permission is granted.
No, because the sponsoring broker is the seller's agent.
Yes, because the salesperson was authorized to do so in the affiliation agreement
Yes, but the document would require a second signature of the broker for it to be legal.

One of the main goals of the FHA is to

provide homeowner's insurance
lend to veterans
develop low income housing
lend to low income people
insure home loans

An elderly homeowner paid off their mortgage and would like to convert the equity in their home to receive monthly payments. What would be their best option?

Open-end loan.
Monthly installment loan.
Blanket loan.
Reverse mortgage.
Growing-equity loan.

A licensee takes a listing of a family friend even though the property is 2 hours away. If the licenseee does not show the property, what has the agent violated?

Seller Disclosure Act
Consumer Protection Act
Fiduciary relationship
Statute of frauds
Marketing Disclosure Act

A ______ contract is what would be called when a minor and adult have entered into a written contract for the sale of a property.

legal
void
voidable
illegal
legally void

On a closing statement, earnest money will generally appear as which one of the following:

Credit the Seller.
Debit the buyer.
Credit the buyer.
Debit the seller.

What makes a bilateral contract different from a unilateral contract?

a unilateral contract requires only one party is required to perform, while in a bilateral contract, both parties must perform
a unilateral contract requires the performance of two parties, while the bilateral contract only requires the performance of one party
a bilateral contract gives a timeline of the events from the perspective of both sides, while the unilateral contract only provides the perspective of one of the parties
a bilateral contract gives a timeline of events from the perspective of one of the parites, while a unilateral contract requires the perfomance of two parties

Which of the following would be a violation of license law by a broker?

keeping multiple trust accounts
requiring that one of their agents not manage properties without their permission
not submitting records to GREC
refusing to let one of their salespeople take a listing with them
requiring a prospective agent to be an independent contractor in order to hold their license

What does it mean to have a low loan-to-value ratio?

there is more equity in the property
there is lower equity in the property
there is a greater risk of foreclosure
there is less cash tied up in the property than a high loan-to-value ratio
there is greater use of leverage

________ is a type of loan that is calculated based off of public index that fluctuates based on market conditions.

Budget mortgage
Graduated payment mortgage
Renegotiable rate mortgage
Reverse annuity mortgage
Adjustable rate mortgage

How long may Georgia licensees keep their license on inactive status?

for as long as their broker's policies allow
for as long as the Governor allows each individual to do so
for up to 3 years
for up to 5 years
as long as renewal fees are paid

The best way of eliminating a title defect on a property is

a quiet title lawsuit
estoppal
quick claim deed
conducting a quiet transfer on the property

How long is a broker in Georgia required to retain copies of sales contracts?

1 year
3 years
5 years
7 years
As long as the broker is licensed

Of the following, which must be included in a legal description of real estate in Georgia?

district number
land lot number
parcel ID number
the school district
name of the county

How long after the expiration of the listing must a Georgia licensee remove an advertisement from the internet?

7 days
10 days
14 days
30 days
As soon as possible

The practice of persuading owners to sell property cheaply because of the fear of people of another race or class moving into the neighborhood is called

redlining
steering
filtering
blockbusting
a common real estate practice

How are memembers of the Georgia Real Estate Commission selected?

appointed by the governor and confirmed by the Senate.
appointed by the Senate and approved by the governor.
appointed by the other members of GREC
appointed by the Senate Judiciary Committee and approved by the Governor
a licensed real estate broker who is a resident of the state of Georgia.

Which one of the following advertisements is not prohibited under the Fair Housing Act?

"Historically African-American neighborhood"
"Great for a large family"
"Traditional families preferred"
"Male seeking male roommate"
"No accommodations for wheelchairs provided"

At closing, who can pay the intangible taxes in Georgia?

Only the lender
Who pays is decided between the buyer and seller
Intangible taxes cannot be paid at closing.
Only the buyer
Only the seller

Which deed gives the buyer the best assurance that the seller has good title to the property?

Quitclaim Deed
Security Deed
General Warranty Deed
Special Warranty Deed
Trustee's Deed

When Stacy’s brother passed away 6 years ago, she had him cremated and planted a tree on his property from his remains. The tree is an example of:

trade fixtures
chattels
real property
personal property
familial property

Once a Georgia salesperson’s license is issued, how long does the salesperson have in order to complete the 25 hour course and examination?

1 year of the issuance of the license.
3 months of the date of the examination.
2 years of the issuance of the license.
30 days of the issuance of the license
1 year of the last day of the applicant's birth month

Is it a violation to pay a referral fee to a licensed agent who is currently on inactive status?

While not a violation of license law, it is considered unethical.
Yes – it is a Regulation Z violation
Yes – it is an unfair trade practice
No – while an agent cannot collect a commission when their license is inactive, they can accept a referral fee
Yes – It is a violation of RESPA

Two relatives own a parcel of property. Under some circumstances, one passes and the other relative automatically becomes the sole owner. The type of tenancy these relatives hold is

joint tenancy with survivorship.
severalty.
partnership.
tenancy in common.

If a seller makes a counteroffer to a buyer, and she obtains a second offer from another buyer that is for a higher price, what can she do to accept the second offer?

rescind the counteroffer before accepting
raise the purchase price of the first buyer
let the counteroffer to the first buyer expire before accepting the second offer
wait until both parties run out of counter offers
do nothing

What homes qualify for a VA loan?

nonowner-occupied, single family unit
owner-occupied, quadplex
owner-occupied, five unit apartment
nonowner-occupied triplex
none of the answers are correct

What loan would yield the lowest loan value ratio?

$25,000 loan on a $100,000 house
$60,000 loan on a $300,000 house
$45,000 loan on a $200,000 house
$76,000 loan on a $80,000 house

32% to a decimal.

3.2
0.32
0.032
32

What is 1 square foot?

144 square inches
140 square inches
120 square inches
133 square inches

Equation for total commission?

Commission = Sales Price – Commission rate
Commission = Sales Price ÷ Commission rate
Commission = Sales Price x Commission rate
Commission = Sales Price + Commission rate

Your seller wants to net $65,000 after the 6% commission is paid, but before other closing costs are factored in. What price does the home need to sell for the seller to net this amount?

$69,149.94
$69,148.98
$69,128.94
$69,148.94

You have a property listed at $130,000. The commission rate listed in the listing agreement is 6%, which you will split evenly with the buyer’s representative. What’s your share.

$4,000
$8,000
$7,800
$3,900

In the Rectangular Survey System, what are the dimensions of a township?

One mile square
Six miles by Six miles, or 6 miles square
Thirty-six miles square
The north and south boundaries are one mile apart; the east and west boundaries are indeterminate

Which of the following is true regarding master planning and zoning?

The aggregate of zoning ordinances in the master paln.
A master plan eliminates the need for zoning ordinances.
Master planning is a county-level function; zoning is limited to the city level.
Zoning ordinances are a primary means of keeping land use in harmony with the master plan.

After receiving your real estate license, how long do you have to work under a broker?

1 year
2 years
3 years
4 years

This class must be taken after receiving a real estate license__

The Rules and Regulations class
Real Estate Law Class
A post-licensing course
Both A and B

Sanctions are most often given for

Not completing a post-licensing course
Conduct
License Law violations
Refusal to assist a seller/buyer

What’s 1 mile?

5,280 feet
4,820 feet
8, 420 feet
2, 580 feet

What’s 1 acre?

43,560 feet
42,560 feet
43,560 feet
42,630 feet

What’s 1 square mile?

460 acres
640 acres
430 acres
650 acres

the court proceeding that generally settles a descendent’s estate is called

testate
probate
escheat
distribution

An owner transfers title to a property to a buyer in exchange for a motorcycle. This is an example of

voluntary alienation
involuntary liquidation
hypothecation
1031 exchange

A tenant transfers a portion of the leasehold interest to another party. The instrument that accomplishes this transfer is a

sublease
deed
novation
reconveyance

______ contaminate water supplies.

Improper water disposal
Agricultural runoff
Leaking landfills
Underground Storage Tanks (USTs)
All of the above

_____ established National Ambient
Quality Standards (NAAQS) for
seven pollutants to regulate air quality.

"1970 Clean Air Amendment"
"1955 Air Control Act "
"1990 Clean Act Amendment "
"1970 Resource Recovery Act"
"1965 Air pollution"

Process in which a past owner has the opportunity to get their sold property back is called

Redemption
Auction Redemption
Foreclosure Redemption
Tax Lien Redemption

Who has claim over a property after a tax lien has been placed on the property?

Property owner
Employers
Government
Agency

Public land use planning strives to balance which of the following potentially conflicting interests?

individual property rights and the public's interest
public policy makers and community business leaders
tenant occupancy specifications and construction contractors
individual property owners and municipal planning agencies

Zoning, building codes, and environmental restrictions are forms of local land use control known as

master planning
preemption
police power
concurrency

Which is a general lien

Judgement lien
Property Tax lien
Mechanic lien
Attachment lien

A lienee is a(n) ___

Agent
Creditor
Government employee
Judge
Debtor

Which entity enforces Fair Housing Law?

The Office of Fair Housing Complaints
Law enforcement officials
The Office of Fair Housing and Equal Opportunity
The Civil Rights Coalition

When working with an African American client, Nancy makes an effort to show them homes in primarily African American communities. Based on this fact, Nancy is guilty of

Steering
Redlining
Nancy is guilty of nothing
Blockbusting

Which statement is false: MLS violations:

include failure to update MLS data in a timely manner
include posting false or misleading information
do not include time limits on when listings need to be posted
affect both the licensee and the broker
none of the above

What did the Federal Trade Commission Act want to encourage?

Truthful ads
Non-deceptive ads
Fair advertising
All of the above
none of the above

What kind of interest does the buyer acquire once a real estate contract is signed by the principal parties?

legal title
lienholder interest
reversionary interest
equitable title

A contingency in a sale contract is _____________

a promise by buyer or seller to perform a specific action
a condition that, if unmet, renders the contract unenforceable
one of the several atlernative actions that buyer or seller may take to satisfy contract requirements
an optional, unilateral action that either party may take at the request of the other party

When having Joint-Tenancy one cannot transfer their interest in a property in what way?

A tenant can transfer interest in a property leaving it to their heirs when they die
As a tenancy of common interest
By way of survivorship, dying and leaving interest to other surviving tenants
By selling their physical part of the property for their exclusive use
Both A and D

What is the highest form of ownership interest one can acquire in real estate?

Fee simple estate
Estate in land
Eminent domain
Joint tenancy
None of the above

How often can a consumer receive a free credit report?

Every four months from different credit reporting companies
Once a year from one credit reporting company
Monthly from all credit reporting companies
Credit reports are never free
Every six months from different credit reporting companies

What does FICO stand for?

Fair Isaac and Corporation
Fawn Issac Company
Fair Iceland Company
Fawn Isaac Corporation
Fair Iceland Corporation

A licensed individual employed by or associated with the broker to perform real estate related services which include but not limited to buying, listing, leasing, and/or renting real property is a _______.

Broker
Investor
Lender
Real estate salesperson

What are real estate related financial transactions?

permanent dweling places for individuals and/or families that includes apartments, condominiums, and co-ops but not motels or hotels.
The provision, for a valuable consideration, to another of marketing, including referrign prospective tenants: leasing: physical, administrative, or finanical maintenance; and overall management of real property; or supervision of the foregoing activites for another pursuant to a property management agreement.
Real estate related financial transaction: Any transaction involving: The sale, lease, purchase, or exchange of or investment in real estate or real property or the financing thereof; The refinancing of real estate or real property; the use of real estate or real property as secuirty for a loan or investment. including mortgage backed securities.
None of these answers are correct

Which of the following is not included in the management agreement

Restrictions regarding ages of children
Compensation
A description of the property
The extent of the manager's authority
None of the above

One of the main responsibilities of a Property manager is to

Find a buyer for the property
Finance reporting to the owner
Obtain construction loans for the owner
All of the Above
None of the above

What is the difference that the consideration of a variance and exception may be based on?

Variance is based on hardship while special exceptions may be based on the interest of the governing authority
Variance is based on the public interest and special exceptions are based on hardship
Variance is based on hardship while special exceptions may be based on the public interest
Both variances and special exceptions are based on the public interest

A seller tells a buyer that they will not sell them the house unless the buyer uses a particular title insurance company. This is _____

According to Regulation Z this is illegal.
If no fee is paid directly to the seller, this practice is legal.
a violation of the Real Estate Settlement Procedures Act
According to Regulation Z this is legal.
violation of the Truth in Lending Act

According to real estate license law, a broker may be sanctioned for which one of the following?

not submitting records to GREC
requiring that one of their agents not manage properties without their permission
refusing to let one of their salespeople take a listing with them
keeping multiple trust accounts
requiring a prospective agent to be an independent contractor in order to hold their license

A high loan-to-value ratio indicates

a lower equity in the property
a lower risk of foreclosure
a lower use of leverage
lower risk of foreclosure
None of the above

Which of the following may be an advantage of a buydown for a borrower?

loan is paid off more quickly
smaller interest rate after the buydown period has ended
smaller interest rate for the buydown period
saves the buyer money on their income taxes
reduces private mortgage insurance

The type of loan where the interest rate is determined by adding the margin to a publicly available index rate is _____________

Reverse annuity mortgage
Adjustable rate mortgage
Budget mortgage
Package mortgage
Graduated payment mortgage

A Georgia real estate license can stay inactive for

4 years
For as long as thier broker has an active license
5 years
3 years
as long as renewal fees are paid

If there is a title defect on a property, what would be the BEST option in the means of getting it eliminated?

estoppel
transfer the property with a quick claim deed
waiting 7 years for the issue to expire.
a quiet title lawsuit

When a property in good condition value declines because it is in a declining neighborhood, what type of depreciation would that be considered?

functional obsolescence
deferred maintenance
standard depreciation
external obsolescence
social depreciation

A broker in Georgia must keep copies of all of their past engagements for how long?

2 years
5 years
6 years
3 years
30 years

In Georgia, what description of the land must be included in every legal land description?

name of the county
land lot number
the school district
the region
parcel ID number

A broker advertises a property for rent only on a Portugeese website. The advertisement contains the fair housing logo and no discriminatory language. This is _____

the only appropriate way to market property in this neighborhood.
acceptable if the advertisement includes no preferential language.
acceptable because it is not print media
illegal because it is sellecting where to advertise based on a protected class.
Unacceptable because it is not print media

The lead based paint addendum…

requires the removal of any lead from property prior to occupancy
lead paint is safe and shouldn't be a concern
establishes the seller's responsibility for any of the buyer's medical problems as a result of lead
establishes the buyer's responsibility for any of the buyer's medical problems as a result of lead
allows the buyer a chance to waive the lead paint inspection

Once a listing expires, how long does an agent have to remove an advertisement from the internet?

30 days
48 hours
15 days
10 days
As soon as possible

What is it called when an agent overemphasizes a property’s positive attributes?

overstating
puffing
negligent misrepresentation
disclosure
understating

A method of psychological manipulation to make residents sell their property because of changing demographics is called __________?

blockbusting
redlining
filtering
A common real estate practice
none of the above

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Practice Exam #3

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