75-hour Georgia Salesperson Prelicense Final Exam Flashcards by Jessica M

A woman purchased a home on a lake. A boat was included in the sale. What is most likely required at settlement to transfer ownership of that boat to her?

A. bill of sale
B. deed
C. purchase agreement
D. sales contract

A. bill of sale

How well did you know this?

Not at all

Perfectly

F signs an exclusive right to sell listing agreement with broker R. Before the listing expires, F terminates the agreement for no reason. The following day, F sells the property to a co-worker. Which statement is TRUE?

A. R can sue F to recover only the marketing expenses.
B. R can sue F for the full commission based on the list price.
C. R can sue F for the full commission based on the sales price.
D. R has no right to sue F, since a seller can terminate a listing at any time without cause.

C. R can sue F for the full commission based on the sales price.

How well did you know this?

Not at all

Perfectly

Which statement about lead paint is FALSE?

A. Issues arise when lead-based paint begins to chip or flake.
B. Lead paint disclosure must be made when selling a house built prior to 1982.
C. Lead poisoning occurs via the nose and mouth; it must be breathed in or ingested.
D. Lead present in water is colorless, odorless, and tasteless.

B. Lead paint disclosure must be made when selling a house built prior to 1982.

*LPD must be made when selling a house built prior to 1978.

How well did you know this?

Not at all

Perfectly

A developer purchases a foreclosed property for $96,000, intending to rehab it. Instead, he lets it deteriorate and finally sells it a few years later for $84,000. Calculate his loss.

A. 8.75%
B. 11.4%
C. 12.5%
D. 14.2%

C. 12.5%

$96,000 - $84,000 = $12,000 loss. $12,000 (lost) ÷ $96,000 (cost) = 0.125 or 12.5% loss. Chapter 19: Calculating Profit and Loss.

How well did you know this?

Not at all

Perfectly

A homeowner lists her property at $155,000. Her broker receives an offer from A for $135,000 cash and a closing in 30 days; another offer from B for $145,000, subject to the owner taking back a purchase money mortgage; and an offer from C at $150,000, subject to the buyer obtaining a mortgage. What should the listing broker do?

A. Present all of the offers to the seller, even if the seller accepts the first offer.
B. Present none of the offers, as they are all below the seller’s asking price.
C. Present only the first offer until the seller makes a decision; then present the next offer.
D. Present whichever offer is the highest and has the most favorable terms for the seller.

A. Present all of the offers to the seller, even if the seller accepts the first offer.

How well did you know this?

Not at all

Perfectly

K is a transfer student from Korea looking for a one- bedroom apartment. She asks for something near the university. Her rental agent L shows her apartments only in an area known as Chinatown, telling her she’d feel more at home there. L could be guilty of

A. blockbusting.
B. panic peddling.
C. redlining.
D. steering.

D. steering.

How well did you know this?

Not at all

Perfectly

A lender must provide the Closing Disclosure to a borrower at least ___________ prior to settlement.

A. 1 business day
B. 3 business days
C. 3 calendar days
D. 5 business days

B. 3 business days

How well did you know this?

Not at all

Perfectly

An investor is evaluating the performance of his duplex. If he subtracts debt service from the net operating income, what does he find?

A. cash flow before taxes
B. cash-on-cash return
C. effective gross income
D. reserves for replacement

A. cash flow before taxes

How well did you know this?

Not at all

Perfectly

Market value can be defined as the

A. amount a buyer paid to purchase a property.
B. cost in materials and labor necessary to construct
property.
C. most probable selling price in a typical transaction.
D. what a property actually sold for.

C. most probable selling price in a typical transaction.

How well did you know this?

Not at all

Perfectly

A real estate licensee has actual knowledge of structural damage to the floor boards of a home he has listed due to termite infestation. He informs the buyer’s agent that there are no termites or termite damage in the home. The buyer signs a contract to purchase the property. Is the listing agent susceptible to claims of fraud?

A. No, because the buyer should have discovered the termite damage.
B. No, because the buyer’s agent should have been looking out for the buyer.
C. Not as long as there is an as-is clause in the purchase agreement.
D. Yes, because he intentionally withheld a material defect.

D. Yes, because he intentionally withheld a material defect.

How well did you know this?

Not at all

Perfectly

A buyer offers a seller $189,500 for his house. The seller accepts. The appraisal comes in at $188,000. If the buyer’s lender requires a loan-to-value ratio of 80%, how much of a down payment must she make?

A. $37,600
B. $37,900
C. $39,100
D. $39,500

C. $39,100

The lender will use the lesser of the sales price or the appraisal to consider how much it is willing to lend. In this case, the appraisal is lower. With a loan-to-value of 80%, the lender will loan $150,400 ($188,000 x 0.80). That means she must make a down payment of $39,100 to purchase this house: $189,500 (sales price) - $150,400 (loan amount) = $39,100 (down payment).

How well did you know this?

Not at all

Perfectly

Legally, the presence of a sexual offender in the neighborhood is considered

A. confidential information that a licensee cannot disclose.
B. an immaterial fact that a licensee is not required to disclose.
C. a material fact that a licensee must disclose.
D. a material fact that the seller must disclose.

B. an immaterial fact that a licensee is not required to disclose.

How well did you know this?

Not at all

Perfectly

An investor paid $330,000 for a small strip mall, plus $20,000 in closing costs. The land on which it sits is valued at 45%. What is the total amount that he will be able to deduct next year as depreciation (rounded)?

A. $3,808
B. $4,038
C. $4,654
D. $4,936

C. $4,654

Depreciation does not count the land value, but is based on 55% of value of the improvements, or $181,500 ($330,000 x 0.55). Divide that by the recovery period of 39 years for nonresidential rental property to find $4,653.8461, rounded to $4,654.

How well did you know this?

Not at all

Perfectly

Which obligation has first priority in the event of a foreclosure sale?

A. ad valorem taxes
B. first mortgage
C. IRS tax lien
D. mechanic’s lien

A. ad valorem taxes

How well did you know this?

Not at all

Perfectly

Abandoned private property redeemed by the local government is an example of

A. eminent domain.
B. escheat.
C. police power.
D. taxation.

B. escheat.

How well did you know this?

Not at all

Perfectly

Which situation represents a blind ad?

A. A broker includes the NAR logo on his business card, but he is not a REALTOR®.
B. A broker includes a national franchise logo in an ad, but she has no affiliation with it.
C. A homeowner is selling her house FSBO but puts a local broker’s name on the yard sign.
D. A licensee places a for sale sign in his client’s yard with only his phone number on it.

D. A licensee places a for sale sign in his client’s yard with only his phone number on it.

How well did you know this?

Not at all

Perfectly

Which statement about FHA-insured loans is TRUE?
A. FHA loans are targeted to low-income borrowers.
B. FHA loans require a smaller down payment than conventional loans.
C. FHA provides funds directly to borrowers.
D. Only first-time homebuyers can qualify for an FHA loan.

B. FHA loans require a smaller down payment than conventional loans.

How well did you know this?

Not at all

Perfectly

A subject property has 4 bedrooms; a comparable property has 3. A bedroom in that neighborhood
is valued at $5,000. The comp does not have a basement; the subject does. The basement is valued at $8,000. The comp has a pool; the subject does not. A pool is valued at $4,000. The comp sold for $260,000. What is the subject’s estimate of value based on this comp?

A. $247,000
B. $264,000
C. $269,000
D. $273,000

C. $269,000

When making adjustments, add the value of a missing feature to the value of the comparable property, and subtract the value of any extra feature from the comp. The comp sold for $260,000. Add $5,000 for the bedroom and $8,000 for the basement that the subject has but the comp does not. Then subtract $4,000 for the pool the comp has but the subject does not. The adjusted value for the comp is $269,000, which is then an estimate of the subject’s value.

How well did you know this?

Not at all

Perfectly

A dual agent who represents both buyer and seller in the same transaction CANNOT

A. estimate the closing costs that each should expect to pay.
B. make arrangements to gather documentation in preparation for settlement.
C. recommend an amount to offer or counteroffer.
D. perform a comparative market analysis of similar properties and present it to both.

C. recommend an amount to offer or counteroffer.

How well did you know this?

Not at all

Perfectly

A woman with a disability applies to rent a single- family house. She states that she needs to install grab bars in the shower and a ramp into the house from the garage. The landlord would violate federal fair housing laws if he

A. insists pay the woman make the renovations and remove them when her lease is up.
B. makes the renovations at his own expense.
C. makes the renovations but requires the woman to pay for the materials and labor.
D. refuses to allow the woman to make the
renovations.

D. refuses to allow the woman to make the
renovations.

How well did you know this?

Not at all

Perfectly

A is buying B’s house. A and B, their attorneys, and the settlement officer attend the closing where title is of the house is transferred to A. What must occur to provide constructive notice of A’s ownership?

A. The attorneys must sign an affidavit attesting to the fact.
B. The new deed must be recorded in the public records.
C. The settlement officer must file the new title with the county clerk.
D. Nothing; those attending the closing already have constructive notice.

B. The new deed must be recorded in the public records.

How well did you know this?

Not at all

Perfectly

For which property would the comparable sales approach be LEAST useful?

A. multi-family residential property
B. retail property
C. single-family residential property
D. special purpose property

D. special purpose property

How well did you know this?

Not at all

Perfectly

Buyer and seller have agreed to terms and signed a purchase agreement. Prior to settlement, the buyer has

A. escrowed title to the property.
B. equitable title to the property.
C. legal title to the property.
D. no legal claim on the property.

B. equitable title to the property.

How well did you know this?

Not at all

Perfectly

RESPA applies to ___________ financed by a federally regulated loan.

A. any commercial or residential property
B. any residential property
C. one- to four-family residences
D. only single-family dwellings

C. one- to four-family residences

How well did you know this?

Not at all

Perfectly

ABC Corporation purchases land on which it builds new office building. How does ABC own that land? A. corporate tenancy B. tenancy by the entirety C. tenancy in common D. tenancy in severalty

D. tenancy in severalty

A seller needs to pay an estimated $3,500 in closing costs, $96,000 on her current mortgage, and wants $45,000 in cash for a down payment on another house. Her listing agreement obligates her to pay 6.5% commission to the brokerage. What is the minimum selling price she can accept? Round your answer up to the nearest dollar. A. $148,835 B. $153,893 C. $154,546 D. $158,509

C. $154,546 First, add all of the expenses to find the desired net after commission: $3,500 + $96,000 + $45,000 = $144,500. Then determine the amount of the sales price left after commission: 100% - 6.5% = 93.5% or 0.935. Finally, divide the desired net by the commission: $144,500 / .935 = $154,545.45. She must sell her home for at least $154,546 to get the desired seller’s net and pay the contracted commission and other expenses.

The state has decided to widen the highway in front of J’s home. It will be necessary to use 15 feet of his front yard to do so. The taking of J’s land by the state is the act of A. condemnation. B. confiscation. C. eminent domain. D. right-of-way.

A. condemnation.

Agent S executes a buyer agency agreement with buyer B. S reads an ad placed by a FSBO seller, offering 3.5% commission to the broker who brings the buyer. What is the seller’s relationship to S if B makes an offer on the house? A. The seller is an agent. B. The seller is a client. C. The seller is a customer. D. The seller is a principal.

C. The seller is a customer.

A property owner wants to put in a wheelchair ramp to accommodate a disabled family member. The ramp’s proximity to the sidewalk would violate the setback requirements for the community. What should the property owner request of the zoning commission? A. a grandfather clause B. a nonconforming use C. a spot zone exception D. a variance

D. a variance

A parcel of ground described as the N 1/2, SE 1/4 of a section sells for $5,000 per acre. If the commission is 7% and it is split 50/50 between two brokerage companies, how much did each company receive? A. $7,000 B. $11,200 C. $14,000 D. $28,000

C. $14,000 Start with 640 acres per section and work back from the description of NE 1/2, SE 1/4: 640 ÷ 4 ÷ 2 = 80 Acres; 80 Acres x $5,000 = $400,000 Sale Price; $400,000 x 0.07 (Commission Rate) = $28,000 ÷ 2 (50/50 Split) = $14,000 Per Brokerage.

Which would LEAST LIKELY be considered functional obsolescence? A. home with crumbling roof B. home with low ceilings C. home with steep, narrow stairs D. geodesic dome home in neighborhood of ranches

A. home with crumbling roof

A homeowner enters into a listing agreement with a brokerage company. Several days into the listing, but before the broker begins actively marketing the property, the homeowner sells the property to a close friend. If the homeowner stills owes the broker a commission, what type of listing was it? A. exclusive listing B. exclusive right to sell listing C. net listing D. open listing

B. exclusive right to sell listing

A nursery and tree farm has been operating just outside of the city limits for 30 years. Over time, the area around the nursery is rezoned from agricultural to residential as the farmland is subdivided. What type of zoning exception would allow the nursery and tree farm to continue operation? A. area variance B. conditional use C. nonconforming use D. special exception

C. nonconforming use

A home sells for $327,650. If the state transfer tax is 50 cents per $500 of value or fraction thereof, what will the seller owe the state in transfer tax at closing? A. $327.65 B. $328.00 C. $490.50 D. $492.00

B. $328.00 First find the number of $500 units: $327,650 ÷ 500 = 655.3. You need to round up to 656 to account for the “fraction thereof.” The state portion is 50 cents for every unit, so the state transfer tax is $328 (656 x 0.50 = $328).

Which actions, if taken by the Federal Reserve Board, would MOST LIKELY cause an increase in interest rates? A. decrease the reserve requirement, increase the discount rate, buy government securities B. decrease the reserve requirement, decrease the discount rate, sell government securities C. increase the reserve requirement, increase the discount rate, buy government securities D. increase the reserve requirement, increase the discount rate, sell government securities

D. increase the reserve requirement, increase the discount rate, sell government securities

A small strip mall has an effective gross income of $44,000. Operating expenses are $26,000, and debt service is $8,800. If the desired capitalization rate is 10%, how much would a buyer be willing to pay for the property? A. $32,400 B. $92,000 C. $172,000 D. $180,000

D. $180,000 $44,000 - $26,000 = $18,000 NOI. $18,000 ÷ 0.10 = $180,000. Debt service is not considered when finding NOI.

A licensed real estate broker takes a seller’s listing, but later decides he wants to buy the property himself. He can purchase the property for himself A. if he gets someone else to represent the seller. B. if he discloses to the seller that he is the buyer. C. only after the listing agreement expires. D. never; a licensee cannot purchase one of his own listings.

B. if he discloses to the seller that he is the buyer.

A and B sign a purchase agreement. Prior to closing, it is discovered that A was legally incompetent when she signed the contract. What is the status of the contract? A. executory B. valid, unless there was fraud C. void D. voidable by A only

C. void

The idea that an informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with equal utility is based upon the principle of A. conformity. B. highest and best use. C. increasing and decreasing returns. D. substitution.

D. substitution.

An investor owns a small commercial building that he rents to a chef, who installs a pizza oven and opens a restaurant. Four years later, the owner sells the property to a different chef, who wants to start his own restaurant. When the tenant’s lease is up, who owns the pizza oven? A. the new owner, since the oven is an improvement that transfers with ownership B. the original owner, since the oven was attached when he owned the property C. the tenant who installed the pizza oven D. It’s impossible to tell without more information.

C. the tenant who installed the pizza oven

In an advertisement for a home, which of the following statements would MOST LIKELY be considered discriminatory? A. “beautiful home in an exclusive neighborhood” B. “cozy home with a fabulous view of the bay” C. “excellent location; lots of amenities; near bus stop” D. “four-bedroom charmer, fenced lot, on a quiet cul-de-sac”

A. “beautiful home in an exclusive neighborhood”

Local governments exercise control over the permitted use of private property primarily through A. building codes. B. covenants, conditions, and restrictions (CCRs). C. deed restrictions. D. zoning ordinances.

D. zoning ordinances.

Which element of an adjustable rate mortgage determines whether the interest rate goes up or down? A. cap B. index C. margin D. rate

B. index

A man signs a one-year lease on a high-rise apartment. Six months into the lease, he is transferred out of state. He signs over the remaining six months of his lease to a co-worker. She pays the property manager directly, relieving the original lessee of primary liability. This is an example of A. assignment. B. novation. C. sublease. D. surrender.

A. assignment.

A brokerage practices designated agency. A licensee brings in a listing for a seller’s house. The seller then asks that same licensee to represent her in her search to find a new house, signing a buyer agency agreement with the brokerage. This makes the licensee a A. designated buyer’s agent only. B. designated seller’s agent only. C. designated seller’s agent and designated buyer’s agent. D. dual agent.

C. designated seller’s agent and designated buyer’s agent.

A homeowner makes up posters advertising his house for sale. He posts them on telephone poles around the neighborhood. On the poster, he indicates that he will pay 2% of the sales price to any broker who brings the buyer. What type of listing might this be considered? A. exclusive agency B. exclusive right to sell C. net listing D. open listing

D. open listing

A borrower’s stable monthly income is $4,200. She has three monthly debts: $350 car payment, $120 student loan payment, and $80 credit card payment. What is the maximum monthly mortgage payment she would qualify for on a conventional loan? A. $962 B. $1,042 C. $1,176 D. $1,512

A. $962 The front-end ratio for a conventional loan is 28%. The back-end ratio is 36%. Looking at the back end, or debt-to-income ratio: $4,200 (income) x 0.36, equals $1,512. She has total monthly debts of $550 ($350 + $120 + $80) that must be subtracted: $1,512 - $550 = $962. This is how much she has to spend each month for principal, interest, taxes, and insurance on a house

Which statement about a comparative market analysis is FALSE? A. A CMA can assist a buyer in determining a fair price to offer for a home. B. A CMA can assist a seller in determining an appropriate listing price. C. A CMA may be used to determine property value for a federally regulated loan. D. A CMA should evaluate properties currently listed, recently sold, or with expired listings.

C. A CMA may be used to determine property value for a federally regulated loan.

When an appraiser gets a new appraisal assignment, her first task is to A. adjust comparable sales. B. define the problem. C. gather data. D. reconcile the value.

B. define the problem.

What clause gives a lender the right to declare the entire loan balance due immediately because of borrower default or for violation of other contract provisions? A. acceleration clause B. alienation clause C. defeasance clause D. prepayment clause

A. acceleration clause

Which statement about title insurance is FALSE? A. Coverage of an owner’s policy runs for as long as the policyholder owns the property. B. A lender’s title insurance policy is known as a mortgagee policy. C. Standard title insurance covers hidden risks in title such as an error in a legal description. D. Title insurance covers the policyholder against a future event.

D. Title insurance covers the policyholder against a future event.

An appraiser is evaluating a 1,200-square foot log cabin, whose owner is refinancing. He determines that the cost to replace the building would be $80 per square foot. He estimates the depreciation of the cabin to be 20% and the value of the land to be $48,000. What is his estimate of value? A. $115,200 B. $124,800 C. $148,800 D. $163,200

B. $124,800 First, determine the cost of the improvement: 1,200 SF x $80 = $96,000. Then find the depreciation: $96,000 x 0.20 = $19,200. Then apply the formula for determining value using the cost approach: Replacement Cost - Accrued Depreciation + Site Value = Property Value. So the answer is: $96,000 - $19,200 + $48,000 = $124,800.

Before he put his house on the market, the seller installed paneling in the basement to cover up water damage. Under common law, this would be considered what kind of defect, and is the seller obligated to disclose it? A. This is a latent defect that he must disclose. B. This is a latent defect that he is not required to disclose. C. This is a patent defect that he must disclose. D. This is a patent defect that he is not required to disclose.

A. This is a latent defect that he must disclose.

Which home suffers from external obsolescence? A. Home A allows access to a back bedroom only from the adjoining bedroom. B. Home B has only a detached one-car garage in a neighborhood of three-car garages. C. Home C has a foundation that is cracking and allowing water into the basement. D. Home D is less than 500 yards from the nuclear power plant.

D. Home D is less than 500 yards from the nuclear power plant.

A material made with asbestos fibers is MOST dangerous when it is A. encapsulated. B. friable. C. heated. D. wet.

B. friable.

A property has gross annual income of $25,000, monthly expenses of $800, and recently sold for $200,000. What is the gross rent multiplier? A. 8 B. 12.5 C. 12.5% D. 12.9%

A. 8 $200,000 (Sales Price) ÷ $25,000 (Gross Annual Income) = 8 GRM.

A buyer’s agent submits a signed offer to purchase to a listing agent, indicating a price of $200,000 and a closing within 30 days. The seller accepts the price, changes the closing to 60 days, initials the change, and signs the offer. The listing agent gives it to the buyer’s agent, who delivers it to the buyer. Is this a valid contract? A. Yes; it is in writing and signed by both parties B. Yes; the seller initialed his changes. C. Yes; they agreed on the price. D. No; there was no meeting of the minds.

D. No; there was no meeting of the minds.

A deed contains the following property description: “Beginning at the northeast corner of Oak and Elm streets, thence 15 degrees East to the embedded steel pin, thence North 90 degrees ...” What type of legal description system is this? A. government survey B. lot and block C. metes and bounds D. plat map

C. metes and bounds

A homeowner lists his property through a licensee of ABC Realty. The brokerage charges 6.5% commission and offers a 40% split to a cooperating broker. The licensee gets 45% of what ABC earns. The house sells for $462,000. How much does the licensee make (round to the nearest dollar)? A. $8,108 B. $8,316 C. $9,910 D. $12,012

A. $8,108 First, determine the total commission: $462,000 x .065 = $30,030. ABC keeps 60% of that: $30,030 x 0.60 = $18,018. The licensee gets 45% of that: $18,018 x .45 = $8,108.  

What condition is required to claim title to land through adverse possession? A. The possessor must cultivate annual crops. B. The possession is hostile and continual. C. The possessor must pay consideration to the property owner. D. The property is possessed with the owner’s knowledge and consent.

B. The possession is hostile and continual.

Which best describes the process of judicial foreclosure? A. After advertising, a public auction of the property is held, and then the sale is confirmed. B. Debtors lose the property by mutual agreement and return it voluntarily before final court action. C. Debtors proactively deal with a personal financial situation that has become unmanageable. D. Lenders forfeit all interest charged past, present, and future to the borrower in exchange for the property.

A. After advertising, a public auction of the property is held, and then the sale is confirmed.

When the borrower repays a loan according to the terms in the note, what clause protects his rights to the property, making the mortgage null and void? A. cognovit B. defeasance C. habendum D. subordination

B. defeasance

A single woman buys a home. Several years later, she gets married and changes her name. Now she wants to sell the property. To clear the cloud on the title caused by having a different name on the deed used to convey the property to someone else, she can file a A. bargain and sale deed. B. limited warranty deed. C. quitclaim deed. D. referee’s deed.

C. quitclaim deed.

The primary value of leverage to an investor is that is allows her to A. avoid paying federal income tax. B. control the expenses on her property. C. get an accurate estimate of income. D. increase her profit by using borrowed money.

D. increase her profit by using borrowed money.

Which of these phrases would LEAST LIKELY be evidence of conspiracy to commit an antitrust violation if said by a licensee? A. “Every brokerage in town charges a standard 7% commission.” B. “Our brokerage won’t work with them because they discount all of their services.” C. “We would like to suggest that you use our attorney for the closing.” D. “Why don’t you handle the business on the west side of town and leave the east side to our brokerage?”

C. “We would like to suggest that you use our attorney for the closing.”

What is the purpose of requiring mortgagors to make payments into an escrow account? A. allow the borrower to obtain actual cash from the equity built up in the property B. ensure that hazard insurance and property taxes on the property are paid C. ensure the lender collects the additional interest on an adjustable rate loan D. provide a cushion for the borrower in the event of a job loss

B. ensure that hazard insurance and property taxes on the property are paid

A management agreement creates an agency relationship between a real estate broker and a(n) A. affiliated licensee. B. buyer. C. home seller. D. owner of investment property.

D. owner of investment property.

R wants to call D, a previous client, to see if she’s interested in retaining him for additional services. According to the established business relationship exemption in the Do Not Call Registry, R can call her ____________ from the time of their last business transaction. A. for up to 3 months B. for up to 6 months. C. for up to 18 months D. R cannot call her at all if she’s on the Do Not Call list.

C. for up to 18 months

Which federal law prohibits discrimination against borrowers whose source of income is public assistance? A. Equal Credit Opportunity Act (ECOA) B. Fair Housing Act C. Real Estate Settlement Procedures Act (RESPA) D. Truth in Lending Act (TILA)

A. Equal Credit Opportunity Act (ECOA)

A shopkeeper pays $1,200 in rent every month for her storefront. At the end of the year, the property owner evaluates her sales records to determine whether she owes any overage rent. What type of lease does she have? A. graduated lease B. gross lease C. net-net lease D. percentage lease

D. percentage lease

It is a violation of the federal Fair Housing Act to exclude potential tenants because of A. criminal history. B. having children. C. poor credit history. D. possession of pets.

B. having children.

A mortgage that is used to also finance personal property such as furniture or vehicles is called a A. blanket mortgage. B. package mortgage. C. purchase money mortgage. D. wraparound mortgage.

B. package mortgage.

Of these, which is LEAST LIKELY to be negotiable in a listing agreement? A. the broker’s cooperation with other brokers B. the commission to be paid to the listing broker C. whether or not there is an end date to the listing D. the scope of advertising and other marketing activities

C. whether or not there is an end date to the listing

A brokerage company represents the buyer in a cooperative transaction. The brokerage company is informed that the buyer’s earnest money deposit check has been returned for insufficient funds. What is the brokerage company’s responsibility? A. ask the buyer if it is okay to disclose the problem B. disclose the information to the listing brokerage immediately C. give the buyer reasonable time to resolve the problem D. maintain confidentiality of the client’s information

B. disclose the information to the listing brokerage immediately

A man is buying a house for $240,000. He makes a down payment of $48,000. If he pays three discount points, what is the total cost of the points? A. $3,000 B. $3,840 C. $5,760 D. $7,200

C. $5,760 Discount points are paid on the mortgage amount where one point is equal to 1%. After you subtract the down payment from the sales price of the home, the loan amount is $192,000: $192,000 x 0.03 = $5,760.

A property owner decides to deed 10 acres of the family farm to a cousin. In the deed, he indicates that no more than one single-family home can ever be built on the property. What type of estate has the property owner created? A. fee simple absolute estate B. fee simple defeasible estate C. leasehold estate D. life estate pur autre vie

B. fee simple defeasible estate

Which statement about general warranty deeds is TRUE? A. They are used most often to cure defects in title. B. They are used to transfer property after a foreclosure sale. C. They ensure that there are no encumbrances. D. They state the grantor will defend against all lawful claims.

D. They state the grantor will defend against all lawful claims.

A woman has a one-year lease in single-family home. Six months into the lease, the property owner dies. Which statement is TRUE? A. The property owner’s heirs must ask the county sheriff to remove the tenant from the premises at the end of the month. B. The property owner’s heirs must honor the lease and let the tenant stay another six months. C. The property owner’s heirs must post a notice on the door of the house giving the tenant 30 days to vacate. D. The tenant can move out at the end of the month without penalty.

B. The property owner’s heirs must honor the lease and let the tenant stay another six months.

A triangular lot has 380 feet of frontage and is 410 feet deep. What is the acreage of this lot? A. .89 acres B. 1.67 acres C. 1.78 acres D. 3.57 acres

C. 1.78 acres First, divide the base of the triangle by 2 (380 feet ÷ 2 = 190 feet) then multiply by depth (190 feet x 410 feet = 77,900 square feet). Finally, you can divide that by the number of square feet in an acre: 77,900 SF ÷ 43,560 = 1.78 acres.

How long must a licensee keep confidential information obtained from the client? A. Licensees have no duty to keep information confidential. B. Licensees must maintain confidentiality for three years after the transaction closes. C. Licensees must maintain confidentiality only until the relationship ends. D. This duty never ends, even when the relationship does.

D. This duty never ends, even when the relationship does.

Y buys a house from H, who still owes $40,000 on her loan. H is NOT released from liability for that loan if A. Y assumes the mortgage. B. Y buys the property subject to the mortgage. C. the lender has begun foreclosure proceedings. D. the lender agrees to a novation.

B. Y buys the property subject to the mortgage.

A woman is transferred out of state for her job and does not have time to sell her house. She signs a document granting her sister the authority only to list her house and negotiate with prospective buyers. The sister would most likely be considered what type of agent? A. general agent B. implied agent C. special agent D. universal agent

C. special agent

A homeowner wants to install a laminate floor in her cottage kitchen. The room measures 12’ x 18’, and the flooring will cost $18.50 per square yard. How much will the materials cost? A. $444 B. $1,332 C. $1,998 D. $3,996

A. $444 First, find the square footage: 12 feet x 18 feet = 216 square feet. Divide by 9 to find square yards: 216 ÷ 9 = 24. Now, multiply the square yards by $18.50 to find the cost: 24 x $18.50 = $444.

What would be the expected impact on the housing market of a large influx of people into a community? A. It would be impossible to predict. B. It would likely result in a buyer’s market. C. It would likely result in a seller’s market. D. It would not affect the market

C. It would likely result in a seller’s market.

J, K, and L co-own a property as joint tenants. J and K are killed in a car accident. What is L’s interest in the property? A. L is a joint tenant with 100% interest. B. L owns the property in severalty. C. L still owns 33%, and the rest is split between the J and K’s heirs. D. The estate ends at the death of the majority of the co-owners.

B. L owns the property in severalty.

As the net operating income of a rental property increases, what happens to the value of that property A. It decreases. B. It fluctuates. C. It increases. D. It stabilizes.

C. It increases.

Which of these is LEAST LIKELY to be a ministerial act when performed by a licensee for a buyer customer? A. advise a buyer on an appropriate offer price B. complete factual information for a buyer on a purchase offer C. provide a buyer with a list of home inspectors D. respond to questions about a property at an open house

A. advise a buyer on an appropriate offer price

Which of these tenancies could describe a landlord- tenant relationship? A. entirety B. freehold C. periodic D. severalty

C. periodic

To the owner of the land it runs across, an easement is considered a(n) A. attachment. B. encroachment. C. encumbrance. D. trespass.

C. encumbrance.

A borrower takes out a home equity loan for $50,000. This is a fixed rate loan with an interest rate of 12%. The borrower makes monthly payments of $514.31. What is the balance of the loan after TWO monthly payments? A. $49,985.69 B. $49,971.24 C. $49,956.64 D. $49,941.90

B. $49,971.24 $50,000 x 0.12 = $6,000 annual interest. $6,000 ÷ 12 months = $500 interest for month one. $514.31 payment - $500 interest = $14.31 in principal. $50,000 - $14.31 = $49,985.69 balance after first payment. $49,985.69 x 0.12 = $5,998.32 annual interest. $5,998.28 ÷ 12 months = $499.86 interest for month two. $514.31 payment - $499.86 interest = $14.45 in principal. $49,985.69 - $14.45 = $49,971.24 balance after second payment.  

Which buildings would NOT be exempt under Title III of the American with Disabilities Act? A. government buildings B. historical buildings C. places of worship D. private clubs

A. government buildings

The sale of a property will close on March 20. Property taxes are $3,450 per year and are paid in arrears. How will this be reconciled on the settlement statement, assuming a 365-day year? A. $746.71 Debit Seller / $746.71 Credit Buyer B. $746.71 Credit Seller / $746.71 Debit Buyer C. $2,703.29 Debit Seller / $746.71 Credit Buyer D. $746.71 Debit Seller / $2,703.29 Credit Buyer

A. $746.71 Debit Seller / $746.71 Credit Buyer First calculate the cost per day ($3,450 taxes / 365 = $9.4520 daily rate). Next, determine the number of days the seller owned the property (January=31 + February=28 + 20 days in March = 79 days). Multiply the number of days by the daily tax rate to find the amount the seller owes: 79 x $9.4520 = $746.71. The seller is debited and the buyer is credited for $746.71 in property taxes.

An option to purchase is considered binding on which party to the contract? A. buyer only B. seller only C. both buyer and seller D. neither buyer nor seller

B. seller only

A woman gets a deed of trust from a bank to finance the purchase of a house in a new subdivision. While the loan is outstanding, who holds the title to her property? A. the bank B. the borrower C. the developer D. the trustee

D. the trustee

Which statement about an oral lease is TRUE? A. An oral lease is enforceable only for commercial property, not residential property. B. An oral lease is enforceable only if it renews an earlier, written lease. C. An oral lease for less than one year is generally enforceable. D. An oral lease is never enforceable.

C. An oral lease for less than one year is generally enforceable.

What did the Supreme Court of the United States rule in the case of Jones v. Alfred H. Mayer? A. The doctrine of “separate but equal” is unconstitutional. B. Non-citizens have equal rights to own property. C. Persons with disabilities are a protected class. D. Race is a protected class with no exceptions.

D. Race is a protected class with no exceptions.

Which situation is LEAST LIKELY to terminate a relationship between a brokerage and a homeowner who is selling his house? A. the broker loses her license B. the designated listing agent dies C. the homeowner declares bankruptcy D. the property burns down

B. the designated listing agent dies

A resident has a proprietary lease on one of the residential units in a large complex. She also has use of the building’s common areas. She lives in a A. condominium. B. cooperative. C. timeshare. D. townhome.

B. cooperative.

A special tax levy passes for 5.2 mills annually to pay for new sewers. The levy will be in place for three years. A property has a market value of $296,000. Property is assessed for tax purposes at 45% of its appraised value. What will the 5.2 mill tax levy cost this property owner in total? A. $692.64 B. $1,539.20 C. $2,077.92 D. $2,539.68

C. $2,077.92 This is a three-part question. The first thing to do is calculate the assessed value: Percent (Assessment Ratio) x Whole (Market Value) = Part (Assessed Value), or 0.45 x $296,000 = $133,200. Next, complete the problem using the tax formula: Percent (Tax Rate) x Whole (Assessed Value) Part (Property Taxes). Insert the values known and calculate. 0.0052 x $133,200 = $692.64. The 5.2 mill tax levy will cost the property owner $692.64 annually. The levy will last for three years, so the total tax burden is $2,077.92 ($692.64 x 3).  

Which of these factors is LEAST LIKELY to be considered by a planning board when reviewing a developer’s proposal for a new subdivision? A. building codes B. environmental impact C. infrastructure needs D. zoned permitted use

A. building codes

Which of the following is NOT a protected class under Georgia fair housing law? A. Sexual preference B. Familial status C. Religion D. Race

A. Sexual preference

How many hours of continuing education must a licensee complete for each year of licensure? A. 8 hours B. 9 hours C. 5 hours D. 4 hours

B. 9 hours

Glenda is the office manager for a local real estate firm. She is responsible for coordinating the paperwork flow through the office, preparing ads and supervising the clerical staff. Glenda is A. required to have a salesperson's license. B. violating license law. C. required to have a broker license. D. exempt from the license law.

D. exempt from the license law.

Haru is working with his buyers to draw up a written offer on a property they want to purchase. Which of the following items is not required in the office? A. The property description B. The mortgage lender C. The method of payment D. Special stipulations the offer requires

B. The mortgage lender

Kezia just bought and closed on a new home that cost $195,000. her mortgage amount is $165,500. how much is the intangible recording tax on Kezia's property? A. $585 B. $195 C. $165.50 D. $496.50

D. $496.50 *An intangible recording tax is due and payable on each instrument securing one or more long-term notes at the rate of $1.50 per each $500 $165,500 ÷ $500 = 331 331 x $1.50 = $496.50

Salesperson Gordon refuse to accept an offer to purchase his home from buyer Juan Valdez of Columbia because Gordon feels the earnest money of $100 is not enough. Which of the following statements about Gordon's refusal is correct? A. Gordon is in violation of fair housing law because he discriminated on the basis of national origin. B. Since Gordon refused on the basis of the earnest money, he is not in violation of fair housing law. C. Gordon is in violation of civil rights law because he discriminated on the basis of race. D. Gordon is guilty of redlining

B. Since Gordon refused on the basis of the earnest money, he is not in violation of fair housing law.

Jada is a community association manager. Which of the following would be one of her duties? A. Advising an owner about his legal liability for a visitor's injury on his property. B. Following the instructions of all the owners in the community association. C. Lending $1,000 to the community association. D. Sending a monthly newsletter to the owners.

D. Sending a monthly newsletter to the owners.

Which of the following does NOT need to be included in a property management agreement? A. A specific description of the property B. The names of the owners C. The names of the tenants D. The terms of the management fee

C. The names of the tenants

Gary got his license in May of 2021. His birthday is September 28. When will his license expire? A. May 31, 2025 B. September 1, 2025 C. September 30, 2025 D. May 1, 2009

C. September 30, 2025 *Real estate licenses expire on the last day of the licensee's birth month, every 4 years.

A seller's agent must disclose any adverse physical conditions in the immediate neighborhood within _______ of a property. A. 1 mile B. 2 miles C. 5 miles D. 10 miles

A. 1 mile

Jadarius has had his license suspended. By law, Jadarius's name will b e published on the Georgia Real Estate Commission website if the licenses has been suspended for how long? A. 15 days B. 30 days C. 60 days D. 90 days

C. 60 days

Why was the Real Estate Education, Research and Recovery Fund established? A. To educate the public about real estate B. To fund courses for real estate agents C. To compensate consumers damaged by licensees' practices D. To conduct real estate research projects

C. To compensate consumers damaged by licensees' practices

Which of these persons would require a real estate license? A. Suresh is a full-time employee of a utility company. He negotiates and acquires leases for the company. B. Greta is an attorney who conveys real estate under a power of attorney. C. Jack refers clients to his licensed broker brother and receives a fee from the parties he refers. D. A partnership sells a building owned by the partners.

C. Jack refers clients to his licensed broker brother and receives a fee from the parties he refers.

Broker Larry received an earnest money check from a buyer for $3,000. He needed the money, so he cashed the check. At closing, he gave the seller a check for $3,180, the amount of the original check plus 6% interest. Which statement is true? A. Larry should have deposited the earnest money in a federally-insured account with other escrow funds. B. It was okay that Larry cashed the check, but he should not have given the interest to the seller. C. Larry should have deposited the check into his personal account and kept the interest. D. Larry should have discussed what to do with the interest with all of the parties involved in the transaction.

A. Larry should have deposited the earnest money in a federally-insured account with other escrow funds.

Which of the following is true of Georgia support personnel? A. They must be licensed. B. They may insert factual information into form contracts under the supervision of the employing broker. C. They may independently host open houses. D. They must always be unlicensed.

B. They may insert factual information into form contracts under the supervision of the employing broker.

Jake and Hal are partners in a real estate firm. Jake, the qualifying broker, dies unexpectedly. Which of the following statements is FALSE? A. Hal may temporarily saves as qualifying broker if the qualifying criteria are met. B. The designated partner can sign all documents that must filed with the Commission. C. Only Hal has the authority to disburse trust funds from the designated accounts. D. The firm has 60 days to secure a new qualifying broker.

C. Only Hal has the authority to disburse trust funds from the designated accounts.

Jim is a community association manager and Dick is a property manager. Which of the following statements is NOT true? A. Jim deals with multiple owners. B. Dick has a single client. C. Jim interacts with his owner frequently. D. Dick must have day-to-day contact with his client.

D. Dick must have day-to-day contact with his client.

Ben is a broker who is selling his own home. When advertising his home for sale, all of the following is true about the ad EXCEPT that it A. must use the firm's name. B. must be honest. C. must clearly indicate that Ben is a licensed broker. D. may use Ben's own name.

A. must use the firm's name.

Which of the following situations is NOT a proper situation for earnest money disbursal? A. Seller rejects the purchase offer. B. Buyer withdraws a purchase offer two days after acceptance. C. All parties to the transaction sign a written agreement allowing the disbursal. D. The transaction closes.

B. Buyer withdraws a purchase offer two days after acceptance.

Sarah wants to sell her own home. Which statement is true? A. She does not need a license to sell her own home. B. Sarah must have a real estate salesperson's license. C. She can get a temporary license from the Commission to sell her home. D. Sarah may sell her ;home without a license as long as she is an attorney.

A. She does not need a license to sell her own home.

Salesperson Martha has signed a brokerage engagement with tenant Gale to find her an apartment to rent. Martha doesn't charge her tenant clients a fee because she gets her commission from the landlords. Martha tells one of the landlords that Gale can pay more rent than what the landlord is asking for. Which statement is true? A. It's okay that Martha told that to the landlord, since he will be paying the commission. B. Martha violated her duty of confidentiality to her client, Gale. C. It was wise of Martha to disclose this information to the landlord. D. It's against the law for Martha to get her fee from landlords; she should be getting it from the tenants.

B. Martha violated her duty of confidentiality to her client, Gale.

Melinda lives in South Carolina. She wants to get a Georgia real estate salesperson's license. Which of the following is NOT a requirement for Melinda? A. She must be at least 18 years old. B. Melinda must furnish proof of completion of 75 hours of approved real estate courses. C. She must establish residency in Georgia. D. Melinda must take and pass the Georgia real estate exam.

C. She must establish residency in Georgia.

Mike, a partner in a partnership, has a widely known reputation of being a liar and untrustworthy. Which of the following is true? A. Mike cannot apply for a license. B. The Commission can deny the partnership a license based on his bad reputation. C. The Commission cannot deny him a license based on reputation alone. D. Mike can apply for a salesperson license but not a broker license.

B. The Commission can deny the partnership a license based on his bad reputation. *The Commission may deny a license to a partnership if a partner who owns more Thant 20% interest in the firm does not have a good reputation for honesty, trustworthiness and integrity.

The term imputed knowledge could mean what an agent A. knows and must disclose about a property. B. should have known about a property because her broker knew it. C. knows but is not obligated to disclose. D. discovers by performing her own inspection.

B. should have known about a property because her broker knew it.

The phrase "engaging in the real estate business" means acting for another in exchange for a fee in all but which of the following situations? A. Building a home for another B. Reselling a mobile home C. Auctioning real estate D. Performing property management services

A. Building a home for another

Which type of agency is NOT recognized in Georgia? A. Single agency B. Undisclosed dual agency C. Designated agency D. Buyer's agency

B. Undisclosed dual agency

Broker Philippe has been found guilty of committing ten discriminatory housing practices over the past five years. The court may fine him up to A. $10,000 B. $25,000 C. $50,000 D. $100,000

C. $50,000

Theresa wants to apply for a CAM license. She must meet all BUT which one of the following requirements? A. She must pass the written real estate exam with a score of 70% or higher. B. She must have completed at least 25 hours of a community association manager course. C. She must be 18 years old. D. She must have a high school diploma or equivalency certificate.

A. She must pass the written real estate exam with a score of 70% or higher.

Broker Tara has an offer to purchase a home listed with her firm. After the buyers sign all the paperwork and Tara accepts their earnest money, what must she do? A. Deposit the earnest money in her personal account for safekeeping. B. Fill out a special earnest money form for the buyers to give to their lender. C. Hold the offer until she receives at least one more before presenting to the seller. D. Give the buyers a copy of the agreement right away.

D. Give the buyers a copy of the agreement right away.

What is true about brokerage engagements in Georgia? A. A brokerage engagement can only be drawn up by an attorney. B. A promise of compensation automatically creates a brokerage engagement. C. They must be on specially-designed and approved forms. D. They must be in writing to be enforceable.

D. They must be in writing to be enforceable.

Salesperson Mona is selling her own home. Which of the following is always true? A. Mona must list the property with her employing broker. B. The Commission will require that Mona list the property with a licensed broker. C. The employing broker must grant permission for Mona to sell her property. D. Mona's ownership of the property and licensed status must be disclosed to all parties to the transaction.

D. Mona's ownership of the property and licensed status must be disclosed to all parties to the transaction.

What happens to the wall license and pocket card when they are issued? A. They are mailed to the licensee's home address B. They are issued to the employing broker's business address. C. The license is mailed to the broker and the pocket card is mailed to the licensee. D. They are mailed to the employing broker's home address.

B. They are issued to the employing broker's business address.

According to the Sherman Antitrust Act, which of the following statements is legal? A. "Our company pays 3% of the sales price to subagents." B. "You can't sell properties on this side of town because your office is in another county." C. "We don't cooperate with Branson Realty because they discount their commissions." D. "Everyone charges the same, so you might as well list your property with me."

A. "Our company pays 3% of the sales price to subagents."

Broker Jackson has given salesperson Anantha permission to hold trust funds in a designated trust account that she owns. Jackson is obligated to give all of the following information the Commission EXCEPT A. Anantha's name. B. The account number of Anantha's trust account. C. A quarterly reconciliation statement on the account. D. The name of the bank where Anantha maintains the account.

C. A quarterly reconciliation statement on the account.

Broker Chelsea falsified proof of completion of continuing education to renew her license. The Commission can do any of the following EXCEPT A. refuse to renew her license. B. convict her of a crime. C. suspend her license. D. revoke her license.

B. convict her of a crime.

Commission members must be Georgia residents for at least how long before they are eligible for appointment? A. 2 years B. 5 years C. 8 years D. 10 years

B. 5 years

Money deposited in the Recovery Fund can come from all but which of the following sources? A. Excess funds transferred from the state treasury at the end of each year B. A yearly fee assessed to all licensees C. Funds received from redeeming security investments D. Fees for new licenses

A. Excess funds transferred from the state treasury at the end of each year

Which of the following situations would NOT result in the initiation of a licensing action against a licensee? A. A salesperson does not present an offer to a seller after the seller has accepted a previous offer. B. A broker waits for a higher offer before presenting an existing offer. C. A salesperson fails to present an offer to a seller. D. A broker holds all the offers to purchase so he can approach the seller with a single presentation.

A. A salesperson does not present an offer to a seller after the seller has accepted a previous offer.

The Georgia Real Estate Commission has the authority to A. make and enforce the rules for real estate licensees. B. compose the exam questions for the licensing exam. C. administer the Georgia Appraisal Act. D. enact the laws that govern real estate licenses.

A. make and enforce the rules for real estate licensees.

Broker Hammond has developed a web site to advertise his services. What does he need to include on his site? A. Brokerage name and office telephone number B. Name and address of his office and the firm license number C. names and addresses of all the firm's active licensees D. Whatever he wants, as there are no specific requirements for web advertising.

A. Brokerage name and office telephone number

When Janel, a new licensee, finishes her 25-hour post-license course, which of the following actions is NOT required? A. Submitting evidence of having completed the course. B. Taking 9 hours of continuing education during her first year of licensure. C. Passing an exam covering the material presented in the course. D. Providing the required proof to the Commission within one year of her original licensure.

B. Taking 9 hours of continuing education during her first year of licensure.

Under what conditions could Bill be affiliated with more than one broker? A. If the broker is in another country B. If the broker is in another Georgia county C. If the broker is in another state that allows affiliation in both states and Bill has his Georgia broker's written permission D. Under no circumstances, since affiliation with multiple brokers is prohibited by Georgia license law

C. If the broker is in another state that allows affiliation in both states and Bill has his Georgia broker's written permission

A tenant's broker knows that his client (the tenant) has recently lost his job and that his financial situation is less than perfect. The tenant is interested in a landlord's property but the rent is so high the broker does not think the tenant would be able to afford it for very long. Can the broker tell the landlord about the tenant's financial situation? A. Yes, the broker must tell the landlord. B. No, the broker must not tell the landlord. C. The broker may tell the landlord only if the landlord asks about the tenant's finances. D. The broker may tell the landlord only if the tenant permits the broker to do so.

A. Yes, the broker must tell the landlord.

A home sold for $175,000. The buyers assumed a $60,000 mortgage. What will the transfer tax be on this sale? A. $60 B. $175 C. $59 D. $115

D. $115 $175,000 - $60,000 = $115,000 $1 for the first $1,000 $114,000 ÷ $100 = $1,140 $1,140 x 0.10 = $114 $114 + $1 = $115

Broker James has a listing based on net price. Which statement is true? A) This will be a more profitable listing for James. B) This listing is illegal in Georgia C) This listing is legal if the seller agreed to do it. D) James must get permission from the Commission to have this listing

B) This listing is illegal in Georgia

Generally speaking a listing broker has earned his or her commission A) at the closing table. B) when the listing agreement is signed. C) when a ready, willing and able buyer is found on terms acceptable to the seller. D) when a sales contract is signed.

C) when a ready, willing and able buyer is found on terms acceptable to the seller.

Which of the following statements is NOT true? A) A transaction broker has an obligation to all parties in a transaction. B) A transaction broker does not represent either party in a transaction. C) Transaction brokers charge a flat fee instead of a commission. D) A transaction broker is not a dual agent.

A) A transaction broker has an obligation to all parties in a transaction.

Which situation is NOT EXEMPT from the provisions of federal fair housing laws, assuming no discriminatory advertising is used and a licensee is not involved? A) A developer of a condominium community who will sell only to persons age 62 or older. B) An owner-occupant of a duplex who will lease the other unit only to a white woman. C) A private club rents apartments in a building it owns only to members in good standing. D) a property owner rents his single-family home but refuses to allow children because there's a pool

B) An owner-occupant of a duplex who will lease the other unit only to a white woman.

Who would be obligated to complete a property disclosure report or notice? A) a builder B) a listing agent C) a seller D) a selling agent

C) a seller

An investor takes out a mortgage to buy a rental property he's able to repay the loan with the rent he collects while also earning income from the investment, this is an example of A) liquidity. B) leverage. C) depreciation. D) marketability.

B) leverage.

Seller Harry signs a contract with broker Barry that Barry will be paid a 6% commission even if Harry sells the house to a co-worker without any help from Barry. What type of listing agreement did Harry sign? A) exclusive agency B) exclusive right to sell C) open listing D) net listing

B) exclusive right to sell

Seller Vaughn is very pleased with the way his home sale was handled by salesperson Brad. Vaughn decides to give Brad a bonus. On what condition can Brad accept this bonus? A) Brad can receive this bonus if he is an independent contractor. B) Vaughn may pay the bonus directly to Brad. C) Vaughn may pay the bonus to Brad's broker, who may then pay Brad. D) Brad may not accept the bonus under any circumstance.

C) Vaughn may pay the bonus to Brad's broker, who may then pay Brad.

The Smiths and the Johnsons share part of a driveway. To ensure that each family can enjoy use of the driveway and share the maintenance costs, they most likely have what type of easement? A) Easement by necessity B) Easement by agreement C) Easement by implication D) Easement by condemnation

B) Easement by agreement

What should Hannah be aware of regarding the asbestos coating on her water pipes? A) Removal is required if asbestos is found in a residential property. B) Asbestos can contaminate the house further if removal is done improperly since airborne particles are the issue. C) Asbestos is dangerous only when wet and therefore should be encapsulated in waterproof material. D) Asbestos is inexpensive to remove.

B) Asbestos can contaminate the house further if removal is done improperly since airborne particles are the issue.

Cathy bought a house for $285,000. She made a $60,000 down payment. After 5 years the balance of the loan was $150,000. Assuming no depreciation in the property, how much equity does Cathy have? A) $225,000 B) $135,000 C) $160,000 D) $182,000

B) $135,000

Carla wants to buy Ben's house for $221,000. Carla included a contingency clause in the offer stating that she must sell her current house first. Ben agrees as long as Carla's house sells within 45 days. They sign the purchase agreement. During that 45 day period, the contract is A) voidable B) executory C) unenforceable D) executed

B) executory

Bert is showing his buyer a home in a historic district. She mentions in passing that she would like to place solar panels on the roof. Bert knows that the homeowner's association bylaws would prohibit this in order to protect the historic character of the neighborhood but doesn't tell the buyer for fear she'll lose interest in the house. Bert has committed A) actual fraud B) bait and switch C) negligence D) no error

C) negligence

On a settlement statement, a new mortgage loan generally appears as a A) credit to the buyer B) credit to the seller C) debit to the buyer D) debit to the seller

A) credit to the buyer

Alice conveys a life estate to youngest daughter Bonnie for as long as her husband Chris shall live and then to niece Darlene. Whose life is the measuring life? A) Alice B) Bonnie C) Chris D) Darlene

C) Chris

What is the purpose of requiring mortgagors to make payments into an escrow account? A) allow the borrower to obtain actual cash from the equity built up in the property. B) ensure that hazard insurance and property taxes on the property are paid. C) ensure the lender collects the additional interest on an adjustable rate loan. D) provide a cushion for the borrower in the event of a job loss.

C) ensure the lender collects the additional interest on an adjustable rate loan.

Which of the fiduciary duties owed by a real estate licensee to his or her client survives the termination of the agency relationship? A) confidentiality B) disclosure C) loyalty D) obedience

A) confidentiality

Agent Leo and his client Hannah have just signed an open listing agreement that will pay Leo a 6.5% commission if he finds a willing and able buyer for her house. Which option best describes this agreement at this time? A) express, bilateral, executed B) express, bilateral, executory C) express, unilateral, executory D) implied, bilateral, executed

C) express, unilateral, executory

You are driving through a suburb of a city and notice that all of the fast food signs are close to the ground. This is a result of A) building codes B) CC&RS C) variances D) zoning ordinances

D) zoning ordinances

Which of these is NOT considered when determining whether an item is a fixture or personal property? A) intention of the annexer B) manner of annexation C) value of the annexed item D) relationship of the parties

C) value of the annexed item

RESPA applies to ___________ financed by a federally regulated loan. A) any commercial or residential property B) any residential property C) one- to four-family residences D) only single-family dwellings

C) one- to four-family residences

Of these, which is LEAST LIKELY to be considered an example of puffing? A) "like being on vacation every day" B) "loveliest street in the whole town" C) "magnificent chef-inspired kitchen" D) "three-car garage with room for a workshop"

D) "three-car garage with room for a workshop"

Friable particles from asbestos are most likely to be a danger to one's health when they are A) encapsulated B) inhaled C) touched D) wet

B) inhaled

Kim is the title officer handling the transfer of Greg and Ashley's house to buyers Alex and Amanda. As they gather at the settlement table, Kim has stacks of documents that need to be signed in order to complete the transaction. Who signs the deed? A) Alex and Amanda B) Greg and Ashley C) Greg, Ashley, Alex and Amanda D) Greg, Ashley and Kim

B) Greg and Ashley

Which is an example of steering? A) a licensee tells homeowner that their property values will drop when a foreign family moves in. B) a mortgage banker refuses to make loans for a particular inner-city neighborhood. C) a property manager suggests a prospective tenant would be happier in a more diverse building. D) a seller tells his listing agent to find buyer prospects only of a specific ethnicity.

C) a property manager suggests a prospective tenant would be happier in a more diverse building.

Lester leases a storefront for his candy business. The rent the first six months was $500 and is set to increase 10% every month for the next 18 months as business takes off. Lester has what kind of lease? A) graduated lease B) ground lease C) index lease D) percentage lease

A) graduated lease

Baxter lists his property through Murray, a licensee at ABC Realty. Murray's broker charges 6.5% commission, offering a 40% split to a cooperating broker. Murray gets 45% of what ABC earns. The house sells for $462,000. how much does Murray make (round to the nearest dollar)? A) $8,108 B) $8,316 C) $9,910 D) $12,012

A) $8,108 $462,000 x 0.65 = $30,030 total commission $30,030 x .60 = $18,018 $18,018 x .45 = $8,108

Matthew lives in a house on the shores of Lake Erie. He has ________ rights, which means that he ________ the land under the water. A) littoral / does own B) riparian / does own C) littoral / does not own D) riparian / does not own

D) riparian / does not own

Licensee Hal is launching a new brokerage. He purchases a list of prospective clients and prepares to do his first mass email in an attempt to get some business in the door. To comply with the law, what must Hal include in his email solicitations? A) information about filing a complaint with the Federal Trade Commission B) a link to a scanned image of his real estate license C) an option to opt-out of receiving future email D) a price list of the services offered by his brokerage

C) an option to opt-out of receiving future email

Which form of real property ownership is the MOST comprehensive? A) defeasible fee estate B) fee simple estate C) leasehold estate D) life estate

B) fee simple estate

Licensee Patti is having lunch with an old school friend, Janet. Janet tells Patti, "It's time to downsize, I sure wish I could sell my house." Patti responds, "Well I have just the person for you. Make sure you're home at 7:00 this evening." Identify the statement that best describes the situation. A) Janet cannot assume any relationship B) Janet could be Patti's client through express agency C) Janet could be Patti's client through implied agency D) Janet has just made Patti her universal agent

C) Janet could be Patti's client through implied agency

Which statement about a comparative market analysis is FALSE? A) A CMA can assist a buyer in determining a fair price to offer for a home. B) A CMA can assist a seller in determining an appropriate listing price. C) A CMA may be used to determine property value for a federally regulated loan. D) A CMA should evaluate properties currently listed, recently sold or with expired listings.

C) A CMA may be used to determine property value for a federally regulated loan.

Which is NOT a necessary element for a valid and enforceable purchase contract? A) consideration B) contractual capacity C) earnest money deposit D) mutual agreement

C) earnest money deposit

All of these are necessary to a valid deed EXCEPT A. recital of consideration B. words of conveyance C. the grantee's signature D. delivery

C. the grantee's signature

When Dave and Lucy get married, they decide to sell each of their homes and buy one house together. Lucy's house sells for $700,000; Dave's house sells for $300,000, and they're going to buy a $1 million house. If Lucy wants a 70% interest in the new house, what form of ownership must they take? A) joint tenancy B) tenancy in common C) tenancy by the entirety D) tenancy in severalty

B) tenancy in common

A property is listed for $200,000. The broker gets an offer from Gina for $150,000 cash with a closing in 90 days, one from Tim at $155,000, subject to the buyer getting a first mortgage for $130,000, an offer from Shari at $190,000 subject to the owner taking back a purchase money mortgage with closing in 30 days. The broker should disclose which offer(s)? A) all of the offers B) none of the offers, as they are all below the asking price C) only the first offer until the seller makes a decision to accept or reject, then present the next offer D) whichever offer is the highest and has the most favorable terms to the seller

A) all of the offers

An acceleration clause in a mortgage allows the lender to A) charge a penalty if the borrower misses a payment. B) charge a penalty if the borrower pays off the loan early. C) declare the loan due if the borrower defaults. D) declare the loan due if the borrower sells the property.

C) declare the loan due if the borrower defaults.

Ad valorem taxes are assessed A) based on a person's income. B) based on the property's value. C) on a decedent's estate. D) to covert costs of specific improvements to a neighborhood.

B) based on the property's value.

The lead paint disclosure deals with homes built prior to A) 1978 B) 1982 C) 1992 D) 2001

A) 1978

Any salesperson can legally receive her share of the commission on a sale from A) her employing broker only. B) any cooperating broker with whom she completes a sale. C) a builder she represents in a sale D) the purchaser of the home in a successful sale.

A) her employing broker only.

Syed is an inactive licensee. He just moved to a new home across town. What must he do? A) Call the Commission and give it his new address. B) Report the address change when he's ready to reactivate his license. C) Send a written notice to the Commission within 30 days. D) Notify the post office to send a change of address notice to the Commission.

C) Send a written notice to the Commission within 30 days.

Broker Jane has been accused of a law violation regarding commissions. Which of the following might result in her being found guilty? A. Jane paid a commission to her licensed personal assistant. B. Jane paid a commission to the wife of one of her licensees who was recently killed in an auto accident. The deceased licensee had earned the commission prior to his death. C. Jane paid a commission plus a bonus to one of her licensees. D. Jane paid a commission to a Florida licensee who is not licensed in Georgia for licensing activity in Georgia.

D. Jane paid a commission to a Florida licensee who is not licensed in Georgia for licensing activity in Georgia.

A home is appraised at $125,000 and the assessment level is 35%. There are a total of 40 mills in the taxing area. What are the annual taxes? A. $1,750 B. $1,853 C. $2,361 D. $3,215

A. $1,750 Find the assessed value: $125,000 x 0.35 = $43,750. Multiply the assessed value by 40 mills (or 0.040): $43,750 x 0.040 = $1,750 in annual taxes.

D wants to net $132,000 for his home. He has to pay off an existing mortgage of $19,700. His closing costs will run $5,400 and he owes the broker a fee of 7%. For D to get the net figure he wants, what must he sell the home for? A. $141,935 B. $157,100 C. $163,118 D. $168,925

D. $168,925 Add the required costs to the desired net (excluding commission): $132,000 + $19,700 + $5,400 = $157,100. This is 93% of the total amount he needs to net (100% - 7% commission). Divide amount by 93% to find the minimum selling price: $157,100 ÷ 0.93 = $168,925.

Mr. and Mrs. W want to net $90,000 when they sell their home. They have to pay closing costs of $3,200 and the broker a 6% commission. What is the least the home can sell for to net $90,000? A. $93,200 B. $98,945 C. $99,149 D. $99,500

C. $99,149 Add the desired net and costs: $90,000 + $3,200 = $93,200. Divide that by 94% (100% - 6% commission): $93,200 ÷ 0.94 = $99,149.

A house costs $100,000. The buyer is making a down payment of $32,000 and getting a $68,000 loan. If there are 4 points, how much money will be paid out of the closing for the points? A. $400 B. $1,280 C. $2,720 D. $4,000

C. $2,720 Points are paid on the loan amount. One point = 1%. If the loan amount is $68,000, each point costs $680. Four points, therefore, is $2,720 ($680 x 4).

How many square feet are there in the S 1/2, SW 1/4, NE 1/4 of Section 28? A. 136,125 B. 435,600 C. 720,480 D. 871,200

D. 871,200 First, determine the acreage of the parcel: 640 ÷ 4 ÷ 4 ÷ 2 = 20 acres. Each acre is 43,560 square feet. Multiply to find the square footage of the parcel: 20 x 43,560 = 871,200 SF.

Mr. and Mrs. M sold the lot adjoining their home for $15,000. If the lot measures 300 feet by 500 feet, how much did they get per front foot? A. $30 B. $50 C. $300 D. $500

B. $50 When discussing dimensions, front feet is always the first number, so 300 feet. Divide the sales price by the frontage to find the price per front foot: $15,000 ÷ 300 = $50/front foot.

A property has a gross monthly income of $12,600 and a vacancy and collection loss rate averaging 11%, with monthly expenses of $1,500 and depreciation of 6% a year. What would be the highest offer the prospective buyer should come up with if he insists on a 15% rate of return and the asking price is $850,000? A. $723,293 B. $730,493 C. $777,120 D. $833,293

C. $777,120 Find the NOI: $12,600 x 12 months = $151,200 annual potential gross income. Subtract 11% for vacancy/collection losses to find the effective gross income: $151,200 - $16,632 = $134,568. $1,500 x 12 months = $18,000 annual expenses. Subtract that from EGI to find the net operating income: $134,568 - $18,000 = $116,568. Divide NOI by the cap rate of 15% to find the price the buyer is willing to offer: $116,568 ÷ 0.15 = $777,120

B expects a return of 8% on his investments and is considering a property with an asking price of $670,000. The records show a potential income of $6,200 a month, expenses of $1,500 a month, and a vacancy factor of 10%. With this information in mind, what would B's highest bid be? A. $137,000 B. $343,250 C. $612,000 D. $818,250

C. $612,000 Find the NOI: $6,200 x 12 months = $74,400 annual potential gross income. Subtract 10% for vacancy/ collection losses to find the effective gross income: $74,400 - $7,440 = $69,960. $1,500 x 12 months = $18,000 annual expenses. Subtract that from EGI to find the net operating income: $69,960 - $18,000 = $48,960. Divide NOI by the cap rate of 8% to find the price B is willing to offer: $48,960 ÷ 0.08 = $612,000.

Detailed building diagrams used to evaluate design, determine feasibility, and guide construction of a structure are called A. blueprints. B. building codes. C. plot plans. D. specifications.

A. blueprints.

Which statement about commercial real estate is TRUE? A. The Civil Rights Act of 1866 does not apply to commercial transactions. B. Commercial and residential real estate share the same basic provisions for contract law. C. Commercial transactions are usually less complicated than residential transactions. D. A special license is required to broker commercial real estate transactions.

B. Commercial and residential real estate share the same basic provisions for contract law.

Who are the parties to a management agreement? A. landlord and property manager B. tenant and landlord C. tenant and property manager D. tenant, landlord, and property manager

A. landlord and property manager

J is being transferred. Using the ABC Realty website to look at photos of listed houses, he makes an offer on one. The seller accepts and settlement is handled with a long-distance conference call. When J arrives in town, nothing looks familiar. ABC determines that its website was linking to photos of another house. This could best be described as an example of A. actual fraud. B. bait and switch. C. culpable negligence. D. puffing.

C. culpable negligence.

Which list of items related to a primary residence may someone deduct from income taxes? A. interest paid on home equity loan, new roof, in- home office B. mortgage interest, losses not covered by insurance, maintenance costs C. mortgage interest, property taxes, in-home office D. mortgage interest, property taxes, losses covered by insurance

C. mortgage interest, property taxes, in-home office

Which document is the most critical to settlement, basically laying the foundation for the closing? A. abstract of title B. bill of sale C. mortgage D. purchase agreement

D. purchase agreement