Binder5.pdf

Georgia - State Exam Practice Your score: 67% You have failed the exam. Passing score: 80.0 SCORING BREAKDOWN Correct: 40/60 Incorre...

Georgia - State Exam Practice Your score: 67% You have failed the exam. Passing score: 80.0 SCORING BREAKDOWN Correct: 40/60 Incorrect: 20/60 Focus Here Needs Work Good Georgia Scores 10 7 Finance and Closing (59.0%) 19 5 Real Estate Practice In Georgia (79.0%) 11 8 State Laws and Rules (58.0%) Review answers below Question 1 What does BRRETA outline as a buyer broker's responsibility? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Disclose adverse facts related to the buyer's financial ability to meet the contract terms. Disclose adverse neighborhood conditions to potential buyers and tenants. Seek a lease at the price and terms stated in the brokerage engagement  Seek a property to lease at acceptable price and terms. The buyer's broker has a responsibility to disclose material adverse facts related to the buyer's financial situation. Question 2 Which of the following is an example of a net brokerage agreement? Topic: State Laws and Rules Subtopic: Substantive Regulations When a buyer offers a licensee a commission for brokerage services When a licensee adds his commission to a property's list price When a licensee agrees to a commission of any amount above a certain sales price When a licensee agrees to net a 4% commission on the sale of a property When a licensee agrees to be paid a commission equal to an amount above a specified sales price, it's a net brokerage agreement, and it's illegal in Georgia. Question 3 In Georgia, who manages the closing meeting and explains and presents documents for signatures? Topic: Finance and Closing Subtopic: Closing Procedures Buyer Closing attorney Lender's attorney Seller The closing attorney manages the closing process from start to finish and explains and presents documents to the buyer and seller for signatures. Question 4 According to the Georgia Brokerage Relationships in Real Estate Transactions Act, if no expiration date is provided in the brokerage engagement, then the engagement will terminate ______. Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency One year after initiation Six months after initiation Three months after initiation Three years after initiation The law states that a brokerage engagement without a termination date expires one year after the engagement began. Question 5 Henrietta lost escrow funds when she attempted to purchase a home four years ago. She learns about the GREC complaint process from her cousin, and decides to pursue a formal complaint. What will become of her complaint? Topic: State Laws and Rules Subtopic: Investigation and Hearing Process GREC will forward the complaint to the attorney general. GREC will investigate the complaint provided she signs a sworn complaint against the salesperson involved. GREC won't investigate the complaint because Henrietta doesn't live on the property for which she lost her escrow funds.  GREC won't investigate the complaint because it was filed too late. GREC won't investigate complaints for incidents that occurred more than three years ago. Question 6 Buyer duties outlined in the Exclusive Buyer Brokerage Engagement Agreement include ______. Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Accepting broker recommendations for legal and financial advice Agreeing to see all properties identified by the broker Being available during the agent's regular working hours to visit properties Taking responsibility for broker compensation Buyers who sign the Exclusive Buyer Brokerage Engagement Agreement are agreeing to be available during my regular working hours to visit properties, along other responsibilities. Question 7 Ansel holds a Georgia salesperson license. From whom may Ansel legally receive compensation? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice From any licensed broker From any licensee or consumer Only from another broker Only from his principal broker Both salespersons and associate brokers can only perform real estate activities in association with a principal broker, and can only receive compensation from their own principal broker. Question 8 If you're a licensee who's been brought up for a disciplinary hearing, what is the lesser penalty? Topic: State Laws and Rules Subtopic: Investigation and Hearing Process Citation Complaint Hearing Sanction If it helps, think of a traffic citation. It's a lesser penalty than being brought up on charges. Question 9 The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______. Topic: Finance and Closing Subtopic: Finance Contract for deed Deed of trust Mortgage Promissory note The mortgage and the deed of trust are security instruments that are attached to a promissory note. Question 10 Which type of broker performs ministerial acts for parties to a transaction but doesn't represent a client? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Broker non grata Material broker Ministerial broker Transaction broker A transaction broker doesn't represent any of the transaction parties, but instead performs ministerial acts on their behalf. Question 11 How's the Georgia intangible tax computed? Topic: Finance and Closing Subtopic: Closing Procedures It's a flat $10 fee for any mortgage subject to the Georgia Residential Mortgage Act. It's based on.1% of the sales price. It's based on the amount borrowed, and is $1.50 per each $500 or fractional part thereof, with a maximum of $25,000. It's based on the sales price, and is $1.50 per each $500 or fractional part thereof with a maximum of $25,000. The intangible tax is based on the loan amount and is $1.50 per each $500 or fractional part thereof with a maximum of $25,000. Question 12 Which entity administers license law in Georgia? Topic: State Laws and Rules Subtopic: Commission Organization and Procedures Attorney general's office Georgia Real Estate Commission Revenue office Secretary of state GREC is responsible for administering license law in Georgia. Question 13 Alistair has decided to work with you as a customer instead of a client. You explain to him the ministerial tasks you're permitted to perform on his behalf, including ______. Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Determining an offer price Identifying property and property information Negotiating inspection repair requests with the seller Preparing a comparative market analysis Ministerial tasks can include Identifying property and property information, preparing and conveying an offer to a seller using a pre-printed form, locating an inspector, and providing a list of real estate attorneys to the buyer. Question 14 What's required before an individual can perform real estate services for others for a fee, or for compensation of any kind? Topic: State Laws and Rules Subtopic: Required Licensure A master's degree in real estate science A real estate license issued by GREC Good intentions by a student working toward a real estate license The successful completion of the required education for real estate licensure With few exceptions, if you're negotiating a real estate activity on someone else's behalf for compensation of any kind, you must have a license. Doing so without one is illegal. Question 15 Which clause of the sales contract says that the contract is the one and only contract between the parties? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts Entire Agreement, Modification and Assignment Notice of Binding Agreement Date Survival of Agreement Time is of the Essence The Entire Agreement, Modification and Assignment section says the contract is the entire and only agreement between the parties. Question 16 Why is the recording of a deed so vital? Topic: Finance and Closing Subtopic: Closing Procedures It protects new owners from former sellers claiming they still own the property. It protects the seller from the buyer backing out of the deal. It protects the state from being sued. It's the only way attorneys and real estate agents can earn their commissions. Acknowledgment and recording of a deed are vital in protecting new owners from former sellers claiming they still own the property. Question 17 Which of the following conducts closings in Georgia? Topic: Finance and Closing Subtopic: Closing Procedures Buyer's broker Closing attorney Lender Listing broker Closing attorneys conduct closings in Georgia. Question 18 GREC may deny a license application for several reasons. Which of the following would likely NOT be a reason for an application denial? Topic: State Laws and Rules Subtopic: Qualifications and Fees An associate broker applicant was convicted of theft in high school 15 years ago. A non-resident applicant is nine months behind on child support payments in Tennessee. A salesperson applicant failed to disclose a criminal conviction on the application. A salesperson applicant's cosmetology license was suspended in North Carolina. GREC will deny broker or associate broker application when applicants were found guilty of moral turpitude crimes unless 10 years have passed since the conviction or the release, whichever is more recent. Question 19 Jacob lost his job in an economic slump and is behind on his mortgage. Georgia is a non-judicial foreclosure state. Which section of his security deed gives his lender to right to sell the property if he defaults? Topic: Finance and Closing Subtopic: Finance Acceleration of Release Assumption Due on Sale Transfer of Rights in Property The Transfer of Rights in Property section gives the lender power of sale, meaning the lender can sell the property without judicial proceedings if the borrower defaults. Question 20 There are two parties to the Georgia security deed. Who are they? Topic: Finance and Closing Subtopic: Finance The beneficiary and the trustee The borrower and the beneficiary The lender and the borrower The lender and the trustee Georgia doesn't have a neutral third party to serve as a trustee, so the two parties to Georgia's security deed are the lender and the borrower. Question 21 Which of the following is FALSE about GREC's members? Topic: State Laws and Rules Subtopic: Commission Organization and Procedures Broker members may continue to practice real estate during their term on the commission. Members receive a small per diem amount for days spent on official duties. Six members serve on the commission: five brokers and one member of the public. The governor appoints and the State Senate approves GREC members. Licensed commission members are required to place their licenses on inactive status during their term, and no fees for this status will apply. Question 22 Barb is a qualifying broker in Georgia. She must ensure that all contracts prepared by her licensees are reviewed ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice By GREC By licensed assistants only Within 30 days Within three business days Brokers should review contracts for compliance at least every 30 days. Brokers should review the paperwork of associated licensees as needed. Question 23 Which of the following is a true statement about Georgia's real estate education, research, and recovery fund? Topic: State Laws and Rules Subtopic: Real Estate Education, Research and Recovery Fund Fund money may be invested and interest is deposited back into the fund. GREC isn't legally permitted to increase licensees' renewal fees to increase the fund's balance when it dips below the minimum set by law. Licensees aren't required to pay interest when they pay back disbursements made on their behalf. The fund pays for licensees' legal costs. Fund money may be invested in the state treasury, and from there, anywhere it's legal for a domestic insurance company to invest. Interest is deposited back into the fund. Question 24 An investigation found evidence that suggests Emmie may have violated Georgia license law and a hearing has been scheduled. What are Emmie's rights at the hearing? Topic: State Laws and Rules Subtopic: Investigation and Hearing Process File a counter complaint against the commission. File a motion to have the charges dismissed. Not show up for the hearing, leading to a delay in the hearing process. Subpoena witnesses and documents. At an administrative hearing, the licensee has the right to counsel and may present evidence and subpoena witnesses and documents. Question 25 What can be said about a designated agent's duties? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency They must be negotiated ahead of time. They're the same as a dual agent's duties. They're the same as a single agent's duties. They're the same as the duties to a customer. A designated agent and a traditional single agent both owe the same duties to their clients. Question 26 Georgia's license law allows ______ the opportunity to practice real estate in Georgia while residing in another state. Topic: State Laws and Rules Subtopic: Qualifications and Fees Non-resident licensees Non-resident property managers Unlicensed non-residents Unlicensed residents Georgia's license law allows a licensee from another state to practice real estate in Georgia when licensing requirements are met. Question 27 Elisa is an unlicensed assistant for the Jefferson Team at Best Nest Realty. Tom is an associate broker on the team. Which of these activities must be performed by Tom and not Elisa? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Assembling documents for closing Following up on a loan's processing status with a mortgage broker Negotiating a commission with a client Writing advertisements for broker approval Negotiation is an activity that must be performed by a licensed real estate professional. Question 28 Jaqueline is the qualifying broker for a bustling firm in Avondale Estates, and she has many salespeople to oversee. The firm's licensees' advertisements must be done under her name as it appears on her license. What else is required? Topic: State Laws and Rules Subtopic: Substantive Regulations Her alias that she uses for security purposes Her own license number Her supervision and approval Her telephone number All advertising done by a brokerage firm's licensees must be done under the qualifying broker's name and under that broker's direct supervision and approval. Question 29 Which Georgia agency houses the Fair Housing Division? Topic: State Laws and Rules Subtopic: Fair Housing Laws Department of Administrative Services Georgia Commission on Equal Opportunity Georgia Department of Community Affairs Georgia Department of Human Services The Georgia Commission on Equal Opportunity houses the Fair Housing Division. Question 30 Which of the following may be exempt from Georgia fair housing discrimination prohibition?  Topic: State Laws and Rules Subtopic: Fair Housing Laws A housing complex with a section of one-story homes specifically for disabled persons A housing development for senior citizens An apartment building designated for Sikh families A planned community for those of a certain religion Housing for older people may be exempt from the discrimination prohibition if it meets certain requirements. Question 31 Decatur licensee Alistair is working with buyer Evie as a transaction broker. According to Georgia law, Alistair may only perform ministerial acts for Evie, which are ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Actions provided at the highest level of representation Administrative actions that don't rise to the level of client-level representation Any real estate actions that require a license Tasks necessary to complete a real estate transaction Transaction brokers don't represent the consumers they assist. Ministerial acts are administrative in nature and don't rise to the level of client representation. Question 32 Genevieve, who's taking a pre-licensing course, works as an unlicensed salaried employee at a Decatur brokerage. She's very good at bringing in new clientele, and the broker wants to reward her for her commitment to the firm. What do we know about this situation? Topic: State Laws and Rules Subtopic: Unfair Practices Because Genevieve is a salaried employee of the firm, the broker may pay her an annual bonus for her referrals, per Georgia license law. If the broker compensates Genevieve for her referrals to the firm, he'd be paying an unlicensed individual for referrals, which is prohibited under Georgia law. If the broker compensates Genevieve, he'd be in violation of unfair trade practice law based on undisclosed compensation for real estate services, per Georgia license law. It's okay for the broker to compensate Genevieve for referrals because she's a pre- licensing student, which is an exception to the law. The broker would be in violation of Georgia law because he would be compensating an unlicensed individual for a real estate business referrals. Only a licensee may receive referral fees. Question 33 In Georgia, who owns the property on the day of closing? Topic: Finance and Closing Subtopic: Closing Procedures Buyer Depends on the closing attorney Depends on the county Seller The seller owns the property through the day of closing in Georgia. Question 34 When discussing brokerage compensation policies, brokers must disclose ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice How brokers representing other parties will be paid How much compensation the broker collected in the last year The average out-of-pocket expenses required in an engagement The guaranteed maximum commission the client will pay The broker is required to disclose how other brokers will be compensated. Question 35 What is true about seller disclosure in Georgia? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency A seller who doesn't complete a disclosure form isn't legally liable for any issues. Disclosure is required even if the seller opts out of using the disclosure form. There's a required state disclosure form. The seller's agent should complete the form if the seller can't or won't. Disclosure of any known issues is required, even without a disclosure form. Remember that a licensee should never complete and sign the form. Question 36 When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage? Topic: Finance and Closing Subtopic: Finance The lender executes and records a deed of reconveyance and returns the note to the borrower. The lender executes and records a satisfaction of mortgage and returns the note to the borrower. The lender files for a release of lien and returns the note to the borrower. The lender returns the note and mortgage to the borrower. When a borrower has paid the loan in full, it's the lender's responsibility to execute and record a satisfaction of mortgage. Question 37 At the close of a real estate transaction, the ______ and the ______ of the transaction must reflect a zero balance. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Checks, balances Deposits, account fees Deposits, disbursements Interest, disbursements At the close of a real estate transaction, the deposits and the disbursements of the transaction must reflect a zero balance. Question 38 Who possesses the legal title to the property serving as collateral for the loan when a mortgage instrument is utilized? Topic: Finance and Closing Subtopic: Finance A third-party trustee The borrower The borrower's lender The seller The borrower holds legal title to the property that secures the loan when a mortgage instrument is used. Question 39 Who or which entity has the authority to bring injunctive action against a real estate licensee for the violation or the potential violation of Georgia license law and GREC's established rules? Topic: State Laws and Rules Subtopic: Investigation and Hearing Process GREC The commissioner The Georgia attorney general The U.S. attorney general The Georgia attorney general has the authority to bring injunctive action against a licensee. GREC can make the request, but the attorney general has the authority. Question 40 Roger needed to unload an investment property and paid the appraiser an additional fee for appraising at a value that would allow Roger to come out ahead on the property. Is the appraiser in violation of GRMFA? Topic: Finance and Closing Subtopic: Finance No, because the appraisal isn't directly related to the mortgage application process. No, because the property is an investment property. Yes, because Roger's loan was secured by the property being appraised. Yes, because the appraiser fraudulently received funds in connection with a residential mortgage. Remember that anyone involved in the intentional misrepresentation of data in relation to the mortgage lending process may be held liable for fraud under the Georgia law. Question 41 Damon and Kristine were returning from their baby shower when they ran into their property manager, Jimmy. "I didn't know you were pregnant, I just thought you were getting fat," Jimmy said with a scowl. The next day, the couple received an eviction notice. On what grounds can they contest the eviction? Topic: Real Estate Practice In Georgia Subtopic: Property Management Discrimination Incomplete repairs Property manager rudeness Self-help Although the property manager was definitely rude, that's not grounds enough for an eviction challenge … but discrimination based on familial status is. Question 42 As a real estate licensee in Georgia, if you advertise or otherwise market using lies, deceit, misrepresentations, fraud, or other unethical practices, what are you in violation of? Topic: State Laws and Rules Subtopic: Unfair Practices Business Opportunity Act Deceptive Trade Practices and the Consumer Protection Act Georgia Fair Business Practices Act Georgia fair housing law The Georgia Fair Business Practices Act focuses primarily on deceptive advertising. Georgia license law 43-40-25 also addresses deceptive trade practices in real estate. Question 43 In Georgia, who or what sets the requirements for security deposit disbursal when a lease terminates? Topic: Real Estate Practice In Georgia Subtopic: Property Management GREC State license law The landlord The lease terms The lease terms will typically lay out how the security deposit is to be disbursed upon lease termination, but it should be within 30 days of the tenant vacating. Question 44 On a security deed in Georgia, what is the borrower referred to? Topic: Finance and Closing Subtopic: Finance Beneficiary Grantee Grantor Trustor Two parties are involved in Georgia's security deed: the grantor (borrower) and the grantee (lender). Question 45 What is a binder? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts A document that ties a real estate licensee to a potential buyer A file that contains real estate sales contracts Another name for a sales contract A written outline of the sales transaction A binder is a written outline of the sales transaction that's used in place of a sales contract by licensees in some areas. Question 46 Sub-agency is a legal form of agency in Georgia, ______.  Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency And buyer's agents can be a sub-agent in the same transaction in which they represent the seller And it's preferred over dual agency But it's rarely used Which means buyer's agents can submit offers directly to sellers Sub-agency is a legal form of agency in Georgia, but it's rarely used. Some firms forbid their licensees from practicing sub-agency, which is almost extinct because of presumed buyer's agency. In the absence of a contract to the contrary, such as a listing agreement, it's assumed that a licensee assisting a buyer represents that buyer. Question 47 Which option must be included on a deed for it to be valid? Topic: Finance and Closing Subtopic: Closing Procedures A named beneficiary for inheritance purposes County treasurer's approval and signature List of all neighboring property owners Names of grantor/grantee The names of the grantor and grantee are required for a deed to be considered valid. Question 48 What information is considered optional when placing any form of advertisement in Georgia?  Topic: State Laws and Rules Subtopic: Substantive Regulations The broker or brokerage's address The broker or brokerage's name The licensee's license status The licensee's telephone number Including the licensee's telephone number in advertisements is optional, and is not a requirement in Georgia. Question 49 Phil is a Georgia qualifying broker. He may do all of the following activities EXCEPT ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Delegate trust account supervision to his assistant Ensure everyone at the firm is trained to comply with license laws, rules, and regulations Have a written agreement in place that specifies the compensation agreement between the broker and licensees Maintain transactional documents and all other required records The qualifying broker is responsible for reviewing trust account procedures and monitoring trust account disbursements. Question 50 Clara has been called to be an official witness to a deed signing. Who is Clara?  Topic: Finance and Closing Subtopic: Closing Procedures A notary public A title company employee The grantor's wife The real estate broker overseeing the transaction They key word here is "official." While any of these individuals can be a witness, only a notary public can act in an "official" capacity. Question 51 In Georgia, what can a broker do for a buyer customer, as compared to a client? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Advocate for the buyer's best interests Everything except for negotiation Only ministerial tasks Provide advice on all aspects of the real estate purchase process In Georgia, brokers can only perform ministerial actions on behalf of buyer customers. Question 52 In general, exceptions to real estate license law ______. Topic: State Laws and Rules Subtopic: Required Licensure  Don't apply Generally apply, provided the property is of little value Only apply to attorneys Only apply under very specific circumstances Exceptions exist under very specific circumstances. Question 53 The seller countered buyer Addie's initial offer. Which of these statements is true about the situation? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts A buyer may opt to "counter the counter" by submitting a counter-offer to the seller's counter-offer. A buyer must accept a seller's counter-offer to the buyer's initial offer. A seller can counter a buyer's initial offer, but a buyer can't counter the seller's counter-offer. Each counter-offer is considered an addendum to the original offer. Georgia law doesn't limit the number of counter-offers that may go back and forth between the buyer and seller during negotiations. Question 54 What's the purpose of the Transfer and Assignment clause in the purchase agreement? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts It indicates that sellers must pay for an onsite inspection if they accept the offer.  It indicates that the sellers don't accept the offer and want to terminate and transfer the sales contract. It indicates the form of communication the parties can use to send and receive notices. It permits either party to assign interest in the contract to another person who will perform the contract's terms. It permits either party to assign interest in the contract to another person who will perform the contract's terms, although some contracts prohibit transfer or assignment. Question 55 All business that a licensee of a brokerage firm conducts must be in ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Electronic form Hard copy form The brokerage's name as it appears on the license The licensee's own name as it appears on her license One of the qualifying broker's many responsibilities is to ensure all licensees conduct all business under the brokerage's name as it appears on the license. Question 56 Broker Mandy hires Jake to be an assistant at her firm. She would like to compensate Jake on a completed-transaction basis. For this to be permissible, Jake must ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Be licensed  Be paid in cash Receive no more than $4,000 in a single month Report the income on his taxes Basing compensation on closed transactions would be compensating an unlicensed person for activities requiring a license, and it would be illegal. Question 57 Which of these features is shared by the mortgage, the deed of trust, and Georgia's security deed? Topic: Finance and Closing Subtopic: Finance In the case of foreclosure, the borrower has a statutory right of redemption. Non-judicial foreclosure is standard. The borrower is required to maintain the property and pay property taxes and insurance. There are three parties involved: a lender, a borrower, and a party who hold title to the property. Regardless of the security instrument used, it's the borrower's responsibility to maintain the property during the term of the loan. Question 58 In Georgia, which of the following closing costs is usually paid by the seller? Topic: Finance and Closing Subtopic: Closing Procedures Intangible tax  Lender's title insurance Loan doc fee Transfer tax The loan doc fee is related to the new mortgage loan, so it's paid by the buyer. Lender's title insurance protects the new lender against title claims, so it's also paid by the buyer, and the intangible tax is also generally paid by the buyer. Question 59 Which of the following is a true statement about when a promissory note is sold? Topic: Finance and Closing Subtopic: Finance Promissory notes cannot be sold. The note must be notarized. The promissory note is endorsed to the new owner of the loan. When the note is sold, the attached security instrument is assigned to the lender. When a note is sold, the promissory note is endorsed to the new owner of the loan. Question 60 A licensee must notify GREC of a conviction of a crime ______. Topic: State Laws and Rules Subtopic: Qualifications and Fees Immediately Within 30 days  Within 60 days Within seven days A licensee is required to notify GREC of a conviction of a crime immediately. The license will be revoked within 60 days, unless the licensee requests a hearing. Georgia - State Exam Practice Your score: 73% You have failed the exam. Passing score: 80.0 SCORING BREAKDOWN Correct: 44/60 Incorrect: 16/60 Focus Here Needs Work Good Georgia Scores 12 5 Finance and Closing (71.0%) 18 7 Real Estate Practice In Georgia (72.0%) 14 4 State Laws and Rules (78.0%) Review answers below Question 1 GREC may deny a license application for several reasons. Which of the following would likely NOT be a reason for an application denial? Topic: State Laws and Rules Subtopic: Qualifications and Fees An associate broker applicant was convicted of theft in high school 15 years ago. A non-resident applicant is nine months behind on child support payments in Tennessee. A salesperson applicant failed to disclose a criminal conviction on the application.  A salesperson applicant's cosmetology license was suspended in North Carolina. GREC will deny broker or associate broker application when applicants were found guilty of moral turpitude crimes unless 10 years have passed since the conviction or the release, whichever is more recent. Question 2 Which of these statements is true regarding counter-offers? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts A counter-offer can be retracted only once. Once a counter-offer has been made, the prior offer is cancelled. Only the seller can make a counter-offer. To be legal, counter-offers must be numbered or lettered and dated. Once a counter-offer has been made, the prior offer is cancelled. There is no retracting a counter-offer and returning to the prior offer, although a new counter-offer can do that if both parties agree and sign. Question 3 What's true about the extension clause in Georgia's brokerage agreements? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency It extends the agreement term if a binding contract that falls through for any reason. It's only valid if the parties agree to the extension. It's the same thing as the protected period.  The parties decide on the extension period when signing the agreement. The extension clause adds time to the buyer brokerage agreement if the buyer is under contract and that falls through. The extension period equals the number of days the buyer was under contract. Question 4 When a mortgage is sold, how is the transfer made? Topic: Finance and Closing Subtopic: Finance A bill of sale is attached to the note and the mortgage. The note and mortgage are re-issued and the payee/mortgagee's name is replaced. The note is assigned and the mortgage is endorsed. The note is endorsed and the mortgage is assigned. The note is negotiable and is transferred by endorsement. The attached security instrument (mortgage) will be assigned and recorded. Question 5 Which of the following tasks can an unlicensed assistant perform for a broker? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Assemble closing documents. Call prospective clients to solicit business. Host an open house. Interpret contract information for a client. Unlicensed assistants may perform administrative tasks only. Solicitation of business is an activity that requires a license. Question 6 In Georgia, which of these people must obtain a real estate license before performing real estate activities? Topic: State Laws and Rules Subtopic: Required Licensure Alethea, an apartment resident manager or her employees Ellen, who's selling her mother's house under a duly executed power of attorney Heidi, an attorney-at-law performing legal services for a client Mickey, who's going to earn a flat fee of $1,000 for representing his cousin in the sale of her home Apartment resident managers, attorneys performing legal services, and those acting as a power of attorney are exempt from obtaining a real estate license. Question 7 Damon and Kristine were returning from their baby shower when they ran into their property manager, Jimmy. "I didn't know you were pregnant, I just thought you were getting fat," Jimmy said with a scowl. The next day, the couple received an eviction notice. On what grounds can they contest the eviction? Topic: Real Estate Practice In Georgia Subtopic: Property Management Discrimination Incomplete repairs Property manager rudeness Self-help Although the property manager was definitely rude, that's not grounds enough for an eviction challenge … but discrimination based on familial status is. Question 8 Why is the recording of a deed so vital? Topic: Finance and Closing Subtopic: Closing Procedures It protects new owners from former sellers claiming they still own the property. It protects the seller from the buyer backing out of the deal. It protects the state from being sued. It's the only way attorneys and real estate agents can earn their commissions. Acknowledgment and recording of a deed are vital in protecting new owners from former sellers claiming they still own the property. Question 9 According to the Georgia marketable title acts, the statutory limit is 50 years. Marketable title legislation ______. Topic: Finance and Closing Subtopic: Closing Procedures Allows claimants to file once the time limit has passed Automatically quiets any title claims after a certain amount of time Invalidates adverse possession claims Is considered legal notice Marketable title acts automatically quiet any title claims after a certain amount of time. These laws don't take the place of legal notice, nor do they count against adverse possession claims. Question 10 The termination agreement ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Lists provisions regarding copyright protection of items such as photos, videos, or virtual tours for listings Provides proof that the licensee has completed all required continuing education States that all proprietary firm and client confidential information is to remain confidential States what happens when the agent separates from the firm The termination agreement states what happens when the agent separates from the firm, such as who owns any active listings, how keys are to be returned, etc. Question 11 What does the acronym GAFLA stand for? Topic: Finance and Closing Subtopic: Finance Georgia Act for Fair Lending Activities Georgia Fair Lending Act Georgia Fair Loan Administration Georgia Financing and Loan Act GAFLA, the Georgia Fair Lending Act, designed to eliminate predatory lending, was enacted in 2002 and substantially revised in 2003. Question 12 In situations where a leased property is sold and the tenants' security deposits will be refunded, who's responsible for refunding those security deposits? Topic: Real Estate Practice In Georgia Subtopic: Property Management No one. Tenants must forfeit their security deposits. The new owner The original owner The original owner and new owner share joint responsibility. If the property's sold, the former owner is responsible for making arrangements to either transfer the security deposit to the new owner or refund it to the tenants. If the former owner fails to take either of these actions, the tenants can sue the former owner to recover their money. Question 13 What's the transfer tax on a Georgia home sold for $215,000 with a mortgage loan of $180,000? Topic: Finance and Closing Subtopic: Closing Procedures $180 $215 $2,150 A flat $150 The transfer tax is.001 (.1%) of the sales price, so $215,000 x.001 = $215. Question 14 Which of the following describes the GAR F913, Lease for Residential Property, use restrictions provision as shown in Section A? Topic: Real Estate Practice In Georgia Subtopic: Property Management How the tenant will pay the rent The term of the lease Those who are permitted to occupy the premises Whether the lease is automatically renewable The use restriction provision describes who's permitted to occupy the property and how the tenant will use the property, including allowable activities. Question 15 In Georgia, who owns the property on the day of closing? Topic: Finance and Closing Subtopic: Closing Procedures Buyer Depends on the closing attorney Depends on the county Seller The seller owns the property through the day of closing in Georgia. Question 16 Which type of broker performs ministerial acts for parties to a transaction but doesn't represent a client? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Broker non grata Material broker Ministerial broker Transaction broker A transaction broker doesn't represent any of the transaction parties, but instead performs ministerial acts on their behalf. Question 17 When discussing brokerage compensation policies, brokers must disclose ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice How brokers representing other parties will be paid How much compensation the broker collected in the last year The average out-of-pocket expenses required in an engagement The guaranteed maximum commission the client will pay The broker is required to disclose how other brokers will be compensated. Question 18 What's the reason for using employee and independent contractor agreements? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice To define the terms of the broker and worker's professional relationship To ensure that the worker is not working outside the firm To set the number of days the worker will have to travel on business To verify that the worker has read and agrees to the policies and procedures outlined in the employee manual Employee and independent contractor agreements define the terms of the worker's professional relationship with the broker, to include compensation and responsibilities. Question 19 Marco, a buyer in Atlanta, wants to terminate his buyer's representation agreement with his agent. What is TRUE about this situation? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency He can not terminate the agreement under any circumstances. He can only terminate after the protected period has ended. He may or may not owe an amount under the terms of the agreement. He's not allowed to terminate until the terms of the contract have been performed. Termination of the agreement may or may not relieve the buyer of any amount owed under the terms of the agreement; this will be up to the parties to determine. Question 20 Joe Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Joe Bob do in order to satisfy delivery and acceptance of the deed to Frank? Topic: Finance and Closing Subtopic: Closing Procedures Deliver the deed to Frank, his agent or attorney, or the title company issuing the title Get Frank's signature on the official acceptance letter notarized and recorded at the county clerk's office. Send the deed via certified mail so that the shipment is officially tracked Submit delivery and acceptance paperwork to the Board of Submission and Acceptance Joe Bob has to deliver the deed to Frank, his agent or attorney, or the title company issuing the title and acceptance is presumed. Question 21 A Georgia broker is responsible for verifying the ______ of a non-resident licensee when entering into a written agreement with that licensee. Topic: State Laws and Rules Subtopic: Qualifications and Fees Brokerage Client list Licensure Name When entering into a written agreement with a non-resident licensee, a Georgia broker must verify the licensure of the non-resident licensee. Question 22 In Georgia, which of the following closing costs is usually paid by the seller? Topic: Finance and Closing Subtopic: Closing Procedures Intangible tax Lender's title insurance Loan doc fee Transfer tax The loan doc fee is related to the new mortgage loan, so it's paid by the buyer. Lender's title insurance protects the new lender against title claims, so it's also paid by the buyer, and the intangible tax is also generally paid by the buyer. Question 23 Which of the following is a violation of unfair trade practice law? Topic: State Laws and Rules Subtopic: Unfair Practices Disclosing a commission payment to a salesperson Documenting a ledger for trust funds received Treating all clients fairly Using intentionally misleading advertising Using advertising that is intentionally misleading is a violation of unfair trade practice law. Question 24 In Georgia, who or what sets the requirements for security deposit disbursal when a lease terminates? Topic: Real Estate Practice In Georgia Subtopic: Property Management GREC State license law The landlord The lease terms The lease terms will typically lay out how the security deposit is to be disbursed upon lease termination, but it should be within 30 days of the tenant vacating. Question 25 Which of the following statements about continuing education requirements is true for real estate licensees in Georgia? Topic: State Laws and Rules Subtopic: Qualifications and Fees For each renewal cycle, 25 hours of post-licensing education and 36 hours of continuing education are required. For the first four-year renewal, only the 25 hours of post-licensing are required. For subsequent renewals, 36 hours of continuing education are required. For the first license renewal, licensees may opt to complete the 25 post-licensing hours and the 36 hours of continuing education at any time during the four-year renewal period. For the first renewal cycle, 25 hours of continuing education must be completed within one year of license issuance, and another 27 hours of continuing education are required. The requirement for the first year is 25 hours of post-licensing education, and nine of those hours count toward the 36-hour CE requirement for the first four-year renewal cycle, leaving 27 hours of CE to be completed. Question 26 Regarding buyer representation agreements, Georgia REALTORS® ______. Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Offers several forms, but only to association members Offers several sample agreements that a brokerage can use as is or adapt Offers some guidance but no actual forms Provides the the Exclusive Buyer Brokerage Agreement, which brokerages are required to use Georgia REALTORS® provides several sample buyer representation agreements that a brokerage can use as is or adapt. Question 27 Which of these statements is NOT true regarding a licensee who wants to transfer to another broker? Topic: State Laws and Rules Subtopic: Required Licensure Both the original broker and the new broker may charge the licensee a $50 fee to cover administrative costs of the transfer. The broker must notify GREC of the transfer. The licensee has 30 days to affiliate with a new broker or risk a lapsed license. The original broker must transfer the license even if the licensee owes the broker money. Neither broker may charge the licensee a fee to transfer brokerage firms. Question 28 Which clause in the deed of trust and Georgia's security deed is the equivalent of the defeasance clause in the mortgage? Topic: Finance and Closing Subtopic: Finance Acceleration Alienation Power of sale Reconveyance The reconveyance clause and the defeasance clause stipulate that the borrower receive full title to the property when the debt has been repaid. Question 29 What's a major disadvantage of a non-exclusive buyer brokerage agreement? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency Agents are more likely to put the client's needs behind those of their clients who have signed exclusive buyer brokerage agreements with them. It can get confusing working with several different agents at a time. No disadvantages exist. The commission rate is higher. The disadvantage of of a non-exclusive agreement is that agents are more likely to put your needs behind those of their clients who have signed exclusive buyer brokerage agreements with them. Question 30 In Georgia, what does GREC stand for? Topic: State Laws and Rules Subtopic: Commission Organization and Procedures Georgia Real Estate Commission Georgia Real Estate Council Georgia REALTOR® Exchange Cooperative Georgia's Real Estate Coalition The Georgia Real Estate Commission (GREC) administers Georgia real estate license law. Question 31 A beneficiary, trustor, and trustee are the parties involved when the finance instrument is a ______. Topic: Finance and Closing Subtopic: Finance Contract for deed Last will and testament Note with deed of trust Note with mortgage The beneficiary is the lender, the trustor is the borrower, and the trustee is the third party who reconveys title when the loan is paid off. Question 32 Elisa is an unlicensed assistant for the Jefferson Team at Best Nest Realty. Tom is an associate broker on the team. Which of these activities must be performed by Tom and not Elisa? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Assembling documents for closing Following up on a loan's processing status with a mortgage broker Negotiating a commission with a client Writing advertisements for broker approval Negotiation is an activity that must be performed by a licensed real estate professional. Question 33 What option does a Georgia licensee have when a notice for a hearing has been received? Topic: State Laws and Rules Subtopic: Investigation and Hearing Process File a counter complaint against the commission. Inform the commission of other violations the licensee has witnessed and have the charges dismissed. Not show up for the hearing, leading to a delay in the hearing process. Reach a settlement with the commission, halting the hearing process. The licensee can reach a settlement with the commission, resulting in disciplinary actions of the commission's choosing. This will end the licensee's hearing process. Question 34 How many hours of post-licensing education and continuing education (nine hour credit of post- licensing deducted) must a licensee complete after license issuance, and before the four-year license renewal in Georgia? Topic: State Laws and Rules Subtopic: Qualifications and Fees 25 36 52 61 Licensees must complete 25 hours of post-licensing education within their first year, and an additional 36 hours prior to their four-year license renewal. Nine of the 25 hour post-licensing hours count towards the 36 hours of continuing education. 25 + 36 - 9 =52. Question 35 Buyer Allen's brokerage agreement with Atlanta licensee, Maria, states that he must pay an $800 non- refundable retainer fee that will be deducted from her 2.5% commission at closing. Allen buys a FSBO property for $100,000 and the seller won't pay the commission. Since Allen has already paid the retainer, how much will be responsible for paying Maria at closing? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency $1,700 $2,500 $3,300 $800 Since the seller won't pay Maria's commission, Allen is responsible for the entire 2.5%, or $2,500. He deducts the $800 retainer fee, and is left owing $1,700. Question 36 Andrea's lender has notified her of its intent to foreclose. Her loan is secured with a security deed. What rights does she have to redeem her property? Topic: Finance and Closing Subtopic: Finance Andrea can cure the default and reinstate the loan. Andrea can negotiate a new loan with the trustee of her current loan and regain title to the property. Andrea can purchase the property from the auction winner who is required to transfer title for 102% of the sale price. Andrea has a statutory right of redemption; she can redeem the property after the foreclosure sale. The security deed gives Andrea the right to cure the default and reinstate the loan, but no rights of redemption after the sale. Question 37 Dolcita is an unlicensed assistant for licensee Glynnis at Acme Realty. Which of the following best describes how Dolcita can be compensated for her work? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice As a percentage of Glynnis's earned commission Hourly, salaried, or as a percentage of Glynnis's earned commission Hourly, salaried, or per activity Hourly, salaried, per activity, per transaction closed, or as a percentage of Glynnis's earned commission An unlicensed assistant can't be paid a percentage of commissions. Only licensed real estate professionals can be paid this way. Question 38 Which of the following practices would put a Georgia licensee at risk of a fair housing violation? Topic: State Laws and Rules Subtopic: Fair Housing Laws Informing buyers that a house they're interested in is under contract. Refusing to show a young, first-time home buyer a condo in a registered senior community Showing buyers all homes they're interested in, even if the homes don't meet their stated needs. Telling a buyer that a condo isn't available for lease when it actually is. You shouldn't falsely deny that a house is available for sale. Informing your buyers of transactional facts isn't illegal, nor is showing them all homes they're interested in seeing. Question 39 Similar to the deed of trust, the security deed contains a clause that allows lenders to foreclose on and sell the property non-judicially if the buyer is in default. What is this clause? Topic: Finance and Closing Subtopic: Finance Acceleration clause Alienation clause Novation clause Power-of-sale clause The power-of-sale clause in any security instrument we've discussed (mortgage, deed of trust, or security deed) gives lenders the right to foreclose on and sell the property if the buyer defaults. Question 40 What can be said about a designated agent's duties? Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency They must be negotiated ahead of time. They're the same as a dual agent's duties. They're the same as a single agent's duties. They're the same as the duties to a customer. A designated agent and a traditional single agent both owe the same duties to their clients. Question 41 James has just received his salesperson's license. Which of the following statements is true regarding his need for additional education? Topic: State Laws and Rules Subtopic: Qualifications and Fees He must take 25 hours of post-licensing education in his first year. He must take 25 hours of post-licensing education in his first year, and an additional 15 hours of continuing education before his four-year renewal. He must take 60 hours of continuing education within his first two years. He must take a 36-hour post-licensing course within his first year as a licensee. Licensees must complete 25 hours of post-licensing education within their first year. Nine of the 25 post-licensing hours will count towards the first renewal CE hours. Question 42 Regarding their employment classification, unlicensed assistants in Georgia are most often ______. Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Dependent contractors Employees Independent contractors Unpaid interns Because unlicensed assistants may not work on commission, they must be paid a salary. Question 43 Sheila was subject to a GREC disciplinary hearing and a final decision was made. She has 30 days to ______. Topic: State Laws and Rules Subtopic: Investigation and Hearing Process File an appeal Pay her fine Relinquish her license Request a new hearing A licensee has 30 days to file an appeal once the decision has been made. Question 44 Seller Simone, who's 48, signs a sales contract with her nephew Ted, who's a 17-year-old rock guitarist sensation, for Ted to buy her house in Buckhead. What type of contract is this? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts Executed Valid Void Voidable A voidable contract is missing one or more essential elements. Ted's not of legal age, so he's not considered a competent party. Question 45 Business brokers in Georgia can seek credentials such as all of the following EXCEPT ______. Topic: State Laws and Rules Subtopic: Substantive Regulations Accredited Business Intermediary (ABI) Business Intermediary Endorsement (BIE) Certified Business Intermediary (CBI) State association credentials The Business Intermediary Endorsement (BIE) is not a recognized credential for business brokers. Question 46 Jackson, a broker, regularly places his client's trust funds in the brokerage firm's business checking account and keeps a clean record of the deposit and the disbursement of the funds. What's the problem with this approach? Topic: Real Estate Practice In Georgia Subtopic: Real Estate Practice Jackson is being too cautious with his tedious recordkeeping. As long as the account reflects the amounts deposited and disbursed, it's acceptable to the commission. Jackson is commingling funds, which is a violation of Georgia license law. Jackson is committing conversion, which is a violation of Georgia license law. Jackson needs to record the deposit and the disbursement of the trust funds electronically. Jackson is violating Georgia license law by commingling funds that should be deposited into a trust account with funds that are used in the daily operation of the brokerage. Question 47 In Georgia, what are the requirements for security deposits when a landlord owns 10 or more units? Topic: Real Estate Practice In Georgia Subtopic: Property Management Deposit the funds in a checking account and provide all tenants access to a secure online ledger showing all deposits and withdrawals from the account. Deposit the funds in a money market account with an FDIC insured bank and notify the tenant in writing of the bank's name and address and the amount of the deposit. Deposit the funds in an escrow account and notify each tenant in writing what bank holds the deposit. Deposit the funds in separate, designated, interest-bearing accounts for each unit and provide the tenants in writing with the bank's name and address and the applicable account numbers. In many states, a landlord who uses a property manager or owns 10 or more units must place security deposits in an escrow account and notify each tenant in writing of the bank's name, but doesn't have to release the account number. Question 48 Who possesses the legal title to the property serving as collateral for the loan when a mortgage instrument is utilized? Topic: Finance and Closing Subtopic: Finance A third-party trustee The borrower The borrower's lender The seller The borrower holds legal title to the property that secures the loan when a mortgage instrument is used. Question 49 Regina has defaulted on the terms of her mortgage, and now her lender has foreclosed. The property was sold at a sheriff's sale three months ago. Regina suddenly learns that she has inherited a great deal of money. She wants her property back. Under a judicial foreclosure, what right might allow her to buy her property from the winner of the foreclosure auction? Topic: Finance and Closing Subtopic: Finance Equitable right of redemption Mortgagor right of redemption Power of sale  Statutory right of redemption The statutory right of redemption may be available for Regina, depending on the laws of the state where the property is located. It's a right that's only available with judicial foreclosure, which is standard when a mortgage instrument is used. Question 50 According to the Georgia Brokerage Relationships in Real Estate Transactions Act, if no expiration date is provided in the brokerage engagement, then the engagement will terminate ______. Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency One year after initiation Six months after initiation Three months after initiation Three years after initiation The law states that a brokerage engagement without a termination date expires one year after the engagement began. Question 51 All of these EXCEPT one depict licensee Claudia's adherence to Georgia license laws. Which one does NOT? Topic: State Laws and Rules Subtopic: Substantive Regulations Claudia identified herself as a licensee in the ad she created to market her own home. Even though Claudia's seller client had accepted an offer already, she continued presenting him with offers that came in.  In an addendum to a listing agreement, Claudia guaranteed her seller client that she'd sell his condo in two months or buy it herself. To be on the safe side at her brokerage firm, Claudia kept all transactional records for three-and-a-half-years. Licensees who guarantee they'll sell a property by a certain date and then buy it themselves if it fails to sell must first enter into a purchase agreement with the seller as a safeguard to the seller if the property doesn't sell. Question 52 In the complaint investigation process, a "respondent" is ______. Topic: State Laws and Rules Subtopic: Fair Housing Laws The Fair Housing Division employee performing the intake The mediator assigned to the complaint The person accused of a violation The person filing the complaint The person accused of a violation is a respondent. The person filing the complaint is known as a complainant. Question 53 Which section of the sales contract says that certain unmet obligations will continue or be completed even after closing? Topic: Real Estate Practice In Georgia Subtopic: Sales Contracts Binding Agreement Date Duty to Cooperate  Survival of the Agreement Time is of the of Essence The Survival of Agreement section says that paying commission, providing warranties, and seller representations will continue or be completed even after closing. Question 54 Jaqueline is the qualifying broker for a bustling firm in Avondale Estates, and she has many salespeople to oversee. The firm's licensees' advertisements must be done under her name as it appears on her license. What else is required? Topic: State Laws and Rules Subtopic: Substantive Regulations Her alias that she uses for security purposes Her own license number Her supervision and approval Her telephone number All advertising done by a brokerage firm's licensees must be done under the qualifying broker's name and under that broker's direct supervision and approval. Question 55 There are two parties to the Georgia security deed. Who are they? Topic: Finance and Closing Subtopic: Finance The beneficiary and the trustee The borrower and the beneficiary  The lender and the borrower The lender and the trustee Georgia doesn't have a neutral third party to serve as a trustee, so the two parties to Georgia's security deed are the lender and the borrower. Question 56 The mortgage, security deed, and the deed of trust are ______ that pledge property as collateral for a loan. Topic: Finance and Closing Subtopic: Finance Amortization plans Promissory notes Security instruments Title documents The security instrument pledges the property as collateral for the loan, which is described in the promissory note. Question 57 In Georgia, the three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and note with ______. Topic: Finance and Closing Subtopic: Finance Contract for deed Finance deed  Promissory note Security deed The security deed is the primary security instrument used in Georgia. Question 58 What legal agreement is required when a licensee guarantees the sale of a property? Topic: State Laws and Rules Subtopic: Substantive Regulations A contingency written into the listing agreement A listing agreement that includes a special stipulation A purchase agreement written at the same time as the listing agreement A temporary lease to allow the licensee time to find a buyer A purchase agreement is required in writing at the time of listing the property when a licensee chooses to guarantee the sale of a property. Question 59 Who or which entity has the authority to bring injunctive action against a real estate licensee for the violation or the potential violation of Georgia license law and GREC's established rules? Topic: State Laws and Rules Subtopic: Investigation and Hearing Process GREC The commissioner The Georgia attorney general  The U.S. attorney general The Georgia attorney general has the authority to bring injunctive action against a licensee. GREC can make the request, but the attorney general has the authority. Question 60 Sub-agency is a legal form of agency in Georgia, ______. Topic: Real Estate Practice In Georgia Subtopic: Listings and Agency And buyer's agents can be a sub-agent in the same transaction in which they represent the seller And it's preferred over dual agency But it's rarely used Which means buyer's agents can submit offers directly to sellers Sub-agency is a legal form of agency in Georgia, but it's rarely used. Some firms forbid their licensees from practicing sub-agency, which is almost extinct because of presumed buyer's agency. In the absence of a contract to the contrary, such as a listing agreement, it's assumed that a licensee assisting a buyer represents that buyer. National Exam (PSI) Your score: 58% You have failed the exam. Passing score: 80.0 SCORING BREAKDOWN Correct: 58/100 Incorrect: 42/100 Focus Here Needs Work Good National Scores 11 3 Contracts (79.0%) 4 6 Financing (40.0%) 10 4 General principles of agency (71.0%) 2 3 Land use controls and regulations (40.0%) 2 1 Leasing and property management (67.0%) 7 6 Practice of real estate (54.0%) 5 1 Property disclosures (83.0%) 4 6 Property ownership (40.0%) 4 6 Real estate calculations (40.0%)  Transfer of title 5 3 (63.0%) 4 3 Valuation and market analysis (57.0%) Review answers below Question 1 Neighboring firms agree that leads in one part of town will all be sent to only one of the firms. What type of antitrust violation is this? Topic: Practice of real estate Subtopic: Antitrust laws Group boycotting Market allocation Price fixing Tie-in arrangements This agreement is a market allocation antitrust violation, and it unfairly limits consumers' options. Question 2 When Gillian looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "Beginning at the corner of State Route 61 and Hallowell Road" represent? Topic: Property ownership Subtopic: Land characteristics and legal descriptions A benchmark Bounds  Metes Monuments Bounds are physical features that define the boundaries of the property. Combined with directions and distances (metes), these form the basis of a metes and bounds legal description. Question 3 Is a certified appraisal required for the purchase of a single-family home listed at $150,000 using a VA loan? Topic: Valuation and market analysis Subtopic: Appraisals It's at the buyer's discretion. No, since the buyer is using a VA loan. No, since the sales price is less than $400,000. Yes, and since the purchase is financed with a VA-guaranteed loan, the appraiser must be VA certified. A VA-guaranteed loan requires an appraisal by a VA-certified appraiser, who must also be licensed or certified by the state. Question 4 Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests? Topic: Property ownership Subtopic: Types of ownership Control  Enjoyment Exclusion Possession The right of exclusion gives Elvin the right to refuse others the use of his own property. Question 5 Marlon and Leah are interested in buying a home in a new homeowner opportunity area. The 100-year- old row house was renovated and is like new on the inside. The property taxes decreased by more than $5,000 last year. What's the likely reason for this? Topic: Property disclosures Subtopic: Property condition Introductory rates Seller error Tax abatement Tax reassessment A tax abatement program will lower the property taxes on a given property for a set amount of time. This is typically in response to some sort of improvement or rehabilitation, or for some new construction properties. Question 6 In a trust, the trustee is the person who ______. Topic: Property ownership Subtopic: Property ownership held in trust (Broker only) Creates the trust  Is empowered to void the trust for any reason Makes sure the terms of the trust are carried out Receives the benefits of the trust The trustee is the person in charge of carrying out the terms of the trust. Question 7 Your new home listing has some minor condition issues, most of which the seller Barry disclosed properly when filling out the disclosure form. However, you noticed that he didn't disclose the test results that showed E. coli bacteria in his well water. You don't say anything, since it's not your role to fill out the disclosure form. If the buyer discovers issues with the well after closing, who is legally liable for this omission? Topic: Land use controls and regulations Subtopic: Government controls Both you and Barry Neither you nor Barry Only Barry, as the property owner Only you, as the licensee Licensees are responsible for disclosing known environmental issues. To not disclose something that you know about leaves you, as well as the seller, open to a lawsuit. Question 8 Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?" Topic: Valuation and market analysis Subtopic: Estimating value Demand  Scarcity Transferability Utility Demand looks at the market and the number of buyers vs. sellers. Question 9 Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them? Topic: Financing Subtopic: Types of loans A conventional loan combined with a seller carry back. A conventional loan using the admiral's retirement money as a down payment. An FHA 203(k) loan to fix their new home up. A VA loan, which requires no down payment. Current and former members of the military may be eligible for a VA loan. Although the FHA 203K loan allows for renovation financing, VA loans require no down payment. Question 10 If a seller lists a house with you and a relative of the seller pays your commission, will that establish an agency relationship between you and the relative? Topic: General principles of agency Subtopic: Creation of agency and non-agency agreements; disclosure of conflict of interest  No, because your agency relationship is with the seller No, your agency relationship is with the buyer Yes, the relative becomes your client Yes, the seller and the relative are both your clients Agency is created through either an express or an implied agency agreement such as a listing agreement and if a relative pays the commission, that does not alter the nature of your agency relationship with the seller in this example. Question 11 Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non- discriminatory in its effect? Topic: Practice of real estate Subtopic: Advertising and technology Ensuring that the letter was given to neighbors on both sides of the street Giving the letter to at least 20 neighbors Listing the property on the MLS Providing the letter in multiple languages for non-English speakers If the "Choose Your Neighbor" letter is used as one part of a complete marketing campaign, its effect is not restrictive. Question 12 Kiley Ann is thrilled to have her real estate license and to be hired on at New Beginnings Brokerage. She's not positive about Luis, her employing broker, though. He seems a little sketchy. For example, when she looks at her independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do?  Topic: Practice of real estate Subtopic: Licensee and responsibilities Consult with a more experienced licensee at New Beginnings Brokerage to find out if this is standard practice for independent contractors at the firm. Contact the state's labor department and report Luis for attempting to avoid his legal obligations as her employer. Find a new broker to work for; Luis is trying to take advantage of her inexperience. Review the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance. Independent contractors aren't given the same benefits as individuals who are actual employees of a firm. Luis isn't required to pay unemployment insurance or withhold taxes. In fact, if he does this, he might be putting Kiley Ann's independent contractor status at risk. Question 13 Lauren obtained a loan that's insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has? Topic: Financing Subtopic: Government Programs Conventional FHA Home equity line of credit VA With FHA loans, the Federal Housing Authority insures the loan for the lender, because the down payment amount can be so low-as little as 3.5%-with an FHA-insured loan. Question 14 Gina is in the county assessor's office looking at the maps of her county. She sees several areas that are one mile square, or 640 acres each. What are these areas? Topic: Property ownership Subtopic: Land characteristics and legal descriptions Quarter-quarter sections Quarter sections Sections Townships Townships are divided into 36 one-mile-square sections. Question 15 Which statement best describes the criteria that would permit Tristan to legally engage in dual agency? Topic: General principles of agency Subtopic: Agency and non-agency relationships His firm and the state permit it. His firm and the state permit it and he obtains the proper consent. His firm permits it and it's an inadvertent dual agency situation. The state permits it and he discloses the dual agency to all parties. Tristan must be practicing in a state that permits dual agency; his brokerage firm must allow it, and he must obtain informed consent from all parties to the contract (buyers and sellers). Question 16 Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest? Topic: General principles of agency Subtopic: Creation of agency and non-agency agreements; disclosure of conflict of interest It's still in place because it doesn't terminate on the death or incompetence of the principal. Max has no recourse; the agency relationship is terminated and he receives no compensation. Max now owns the subdivision as a result of the principal's death or incapacity. Rufus must now pay Max the commission that he didn't get from the original listing, and the agency relationship is terminated. Agency coupled with interest is irrevocable. Question 17 Interest rates determine buying power. Which of the following is a true statement? Topic: Valuation and market analysis Subtopic: Estimating value When interest rates are high, buyers are often priced out of the market. When interest rates are high, buyers will be able to afford higher-priced homes. When interest rates climb, more buyers are encouraged to buy. When interest rates shift higher, buyers can still buy in the same price range. Interest rates impact affordability. Higher rates mean higher mortgage payments, pricing some buyers out of certain markets. Question 18 Which of these is what a buyer has paid for a property and what the seller has accepted? Topic: Valuation and market analysis Subtopic: Estimating value Appraisal Cost Price Value Price is the actual amount that a buyer pays for a property. It may be the same as the market value, or it may not. Question 19 The primary component you look for when building a short list of qualified lenders is ________. Topic: Financing Subtopic: Financing and lending High prices Inconsistency Prestigious degree Real-world experience The primary component of building a short list is experience. You want to refer your clients to those lenders who deliver exceptional service, competitive prices, and consistent delivery on their promises. Question 20 A real estate ad states: "Custom homes for sale with scenic mountain views. Easy financing and low down payments." What else must be included in the ad in order for it to comply with TILA? Topic: Financing Subtopic: Financing and lending A full disclosure, including the APR and other loan terms Nothing The number of payments and APR The specific down payment amount and APR Under TILA, ads that mention general financing terms, such as "low down payment" or "easy financing," do not require additional disclosure. If the ad had gotten more specific (e.g., "10-year loan with 0% down") it would need to include more information. Question 21 When it comes to landlord-tenant relations, a property manager needs to know ______. Topic: Leasing and property management Subtopic: Basic concepts/duties of property management Architectural trends Fair housing laws How much money all tenants have in their bank accounts The names of the tenants' children When it comes to landlord-tenant relations, a property manager needs to know fair housing, local, and lease laws. Question 22 Marion gave her granddaughter Sheila the deed to a brand new home, on the condition that Sheila complete her PhD in astronautics. When Sheila dropped out of school and got a job as a greeter at a big box store instead, Marion ______ to regain ownership of the property. Topic: Property ownership Subtopic: Types of ownership Had no recourse Had to purchase the property from Sheila Had to take legal action Wasn't required to take any action The estate granted to Sheila describes a fee simple subject to a condition subsequent, since it uses the phrase "on condition that." Marion's right of reentry requires her to take legal action to regain ownership if the condition is violated. Question 23 When a marketable title is conveyed to a property buyer, does a title insurance policy also need to be furnished? Topic: Transfer of title Subtopic: Title insurance No. Marketable title isn't insurable. No. Marketable title is perfect title, so there's no need for title insurance. Yes, because marketable title may have known defects that buyers could find unacceptable; title insurance will cover these defects. Yes, because title defects not revealed in a title search can crop up even with marketable title. Even though marketable title carries a higher standard of assurance than insurable title, unknown defects can occur. A marketable title that carries title insurance is the safest option for buyers. Question 24 Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this? Topic: Financing Subtopic: Basic concepts and terminology Acceleration Alienation Defeasance Due-on-sale The acceleration clause gives the lender the right to accelerate payment of the loan if the borrower defaults. Question 25 Who typically prepares a comparative market analysis? Topic: Valuation and market analysis Subtopic: Competitive/Comparative Market Analysis Appraiser Inspector Loan servicer Real estate licensee A real estate licensee typically performs a comparative market analysis (CMA) as part of the listing process with a seller. A CMA can also assist buyers in determining offer price. Question 26 How would you calculate the transfer tax if it's $0.35 per $1,000 of the sales price, which was $400,000? Topic: Transfer of title Subtopic: Escrow or closing; tax aspects of transferring title to real property (400,000 ÷ 1,000) × 35 (400,000 ÷ 1,000) ×.35 400,000 ÷ 35 × 1,000 400,000 x.35 × 1,000 Divide the sales price by 1,000 (400,000 ÷ 1000 = 400), then multiply by.35 (400 ×.35 = 140). Question 27 In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement? Topic: General principles of agency Subtopic: Termination of agency The agent abandons the listing. The client and agent mutually agree to terminate the listing. The client revokes the listing agreement to sell the property to a family member. The seller withdraws the listing, deciding instead to stay in the property. Mutual agreement to terminate a listing typically doesn't result in any penalty to either party. Question 28 A property's rental income for the month was $16,000 and expenses were 40% of that income. The property's owner has a $5,000 monthly mortgage payment. What would the profit and loss statement show for the month? Topic: Leasing and property management Subtopic: Setting rents and lease rates (Broker only) A monthly cash flow of $4,600. A monthly cash flow of $5,000. A monthly cash flow of $9,600. You can't determine this from the information provided. Similar to the cash flow report, the profit and loss statement shows actual income received and expenses paid. However, the profit and loss statement doesn't include the owner's financial activities (such as the mortgage). This property had a profit of $9,600 for the month ($16,000 - $6,400). Question 29 A four-bedroom, four-bath, 4,875-square-foot house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house? Topic: Property ownership Subtopic: Land characteristics and legal descriptions $45.64 $82.15 $86.72  $93.00 The price per square foot = price ÷ area. So first, find the sale price. $445,000 ×.95 = $422,750. Then, to find the price per square foot, $422,750 ÷ 4875 sq. ft. = $86.7179, or $86.72 per sq. ft. Question 30 Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time. Topic: Contracts Subtopic: General knowledge of contract law Efficiency Fairness Limitations Timeliness The statute of limitations is a law that states that if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time. Question 31 Demographics impact the housing market. Which of the following is a true statement? Topic: Valuation and market analysis Subtopic: Appraisals An increase in the number of retirees in a given population would negatively impact the demand for large, single-family homes. An increase in the number of retirees in a given population would positively impact the demand for large, single-family homes. An influx of higher wage earners to a given area would create a price decrease for lower-valued homes.  An influx of higher wage earners to a given area would decrease the demand for higher-priced housing. Downsizing retirees usually look for smaller homes or condos. Question 32 The appraisal on a seller's property came in at $22,000 less than the agreed-upon sales price, so the buyer wants to renegotiate the terms. If they can come up with a new price that is satisfactory to both parties, what will they use to document this? Topic: Contracts Subtopic: Contract clauses; including amendments and addenda Addendum Amendment Annotation Appendix A change to an existing sales contract is called an amendment, which changes one or more of the contract's original terms. Question 33 Which one of the following could indicate a problem with the chimney flue or ventilation? Topic: Property disclosures Subtopic: Property condition Damage around the fascia Doors that won't open Drafts near the fireplace  Holes in the soffit Drafts near the fireplace can indicate a problem with the flue or ventilation. Buyers will need to know the condition of the fireplace and chimney since they may face issues after they buy the home. Question 34 When you're representing a client in a real estate transaction, what's your responsibility regarding tax advice? Topic: Transfer of title Subtopic: Escrow or closing; tax aspects of transferring title to real property You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale. You must not address tax aspects of a transaction in any way, since this would be working outside your area of expertise. You're obligated to answer all questions the clients have regarding property taxes and general tax advice. You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional. Real estate licensees can educate clients about the general ways that taxes interact with a property sale or purchase, but should otherwise encourage them to contact a tax professional for specific advice. Question 35 Serena is working with buyer clients interested in purchasing undeveloped land that includes wetlands. They ask Serena whether specific activities and development are permitted. What should Serena do? Topic: Land use controls and regulations Subtopic: Government controls Advise the clients not to purchase this land if they plan to do any development in the future.  Consult with her broker. Refer the clients to an expert who can provide advice on permitted activities. Review laws related to wetlands in order to best answer the clients' questions. Real estate licensees should seek expert advice when dealing with these special land types and should NOT provide advice on environmental issues. Question 36 A landlord has an available unit but refuses to show it to several applicants. These applicants are all single women with children. The applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law? Topic: Practice of real estate Subtopic: Federal fair housing laws and the ADA He is advertising the unit in a restrictive way that discriminates against those with children. He is discriminating against people based on familial status by refusing to show available housing. He is discriminating by offering special terms for rental based on a protected class status. He is sexually harassing potential tenants. This landlord's action discriminates by refusing to show available housing to prospective tenants based on protected class status. Question 37 Which real property ownership right protects the owner from harassment or interference?  Topic: Property ownership Subtopic: Real versus personal property; conveyances Control Disposition Enjoyment Possession The right of enjoyment provides the right to possess the land without harassment or interference. Question 38 Which amendment to CERCLA says that "innocent landowners" aren't responsible for the cleanup of hazardous contamination? Topic: Land use controls and regulations Subtopic: Government controls Environmental Responsibility Amendment Hazardous Contamination Amendment Superfunds Amendments and Reauthorization Act The Fair Housing Act The Superfund Amendments and Reauthorization Act, or SARA, says that innocent landowners aren't responsible for cleanup of hazardous contamination. Question 39 Ken, Dale, and James were brothers who owned more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result was that the court gave each brother a designated set of acres to own. What did the court grant? Topic: Property ownership Subtopic: Types of ownership Bifurcation Parcel Partition Severalty Partition is the term used to describe a specific, divided portion of property that's created as part of a co-ownership termination. Question 40 A quitclaim deed does which one of the following? Topic: Transfer of title Subtopic: Title insurance Transfers a property with only the covenant of warranty. Transfers the property with full covenants. Transfers without warranty any interest or title the grantor has when conveying it. Transfers with warranty any interest or title the grantor has in the property when conveying it. A quitclaim deed provides no warranties or covenants; it only guarantees that the grantor is transferring any interest or title he or she may have in the property. Question 41 John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which? Topic: Valuation and market analysis Subtopic: Estimating value Market or sales comparison The capitalization method The gross income multiplier The gross rent multiplier Properties that rely heavily on rental income often use the income approach to estimate their value. Three ways to estimate value are the capitalization method, the gross income multiplier, and the gross rent multiplier. Question 42 John and Amy purchased a builder's home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage? Topic: Transfer of title Subtopic: Warranties 10 years Five years One year Three years Structural damage can take a while to appear, so homeowners will want to file a claim if it's a decade or less. Question 43 Renee listed her property for three months starting on March 13. By August, the property hasn't sold. This is after lots of marketing and effort from the agent, a price adjustment, and several showings. Renee decided to list the property with another firm. Under which of these conditions can Renee list the property with another firm without breaching her agreement? Topic: General principles of agency