GA Real Estate Exam Prep

Question 1

What is a lease option agreement?

Answer 1

Gives renter a choice to purchase the rented property during or at the end of their lease. (Option to buy)

Question 2

Fee Simple Defeasible

Answer 2

Own title but if you do something it goes back to the original owner.

Question 3

Ad Valorem

Answer 3

A tax based on the assessed value of an item. (Latin for according to value)

Question 4

Novation

Answer 4

When an existing contract or legal obligation is replaced with a new one of equal value. (Latin for new)

Question 5

Joint Tenancy

Answer 5

Two or more individuals living together and sharing living expenses.

Question 6

Chattel Real

Answer 6

Personal property.

Question 7

1 acre

Answer 7

Equals 43,560 square miles.

Question 8

Escheat

Answer 8

Government taking a property if there is no will or heirs.

Question 9

Essentials of a Valid Contract

Answer 9

Mutual consent, lawful object, capable parties, consideration.

Question 10

Protection Period Clause

Safety Clause

Answer 10

A broker or agent proving they found a buyer after the listing expires, so they still get paid.

Question 11

General Liens

Answer 11

Liens on all property, real and personal property.

Question 12

Redlining

Answer 12

A method that is illegal, to not give loans to residents of certain areas based on their race or ethnicity.

Question 13

Secondary Mortgage Market

Answer 13

Lenders selling loans to larger agencies or investors.

Question 14

Primary Mortgage Market

Answer 14

Where loans are originated.

Question 15

Net Lease

Answer 15

Lessee pays taxes, insurance and maintenance in addition to rental payments.

Question 16

Nonconforming Use

Answer 16

Property built under zoning regulations that have changed.

Question 17

Caveat Emptor

Answer 17

Buyer gets what they pay for, even if it has major flaws. (Buyer beware) (Sold As Is)

Question 18

Inverse Condemnation

Answer 18

Government taking property for public use that causes damages to the value of near by property.

Question 19

Mechanic’s Lien

Answer 19

Lein placed on real property for unpaid individuals who have worked on property.

Question 20

Prepayment Clause

Answer 20

Allowing borrowers to pay before the due date.

Question 21

Hold Harmless Clause

Answer 21

Moves any property liability from the seller and places it with the buyer.

Question 22

Real Property

Answer 22

Anything that is attached to the land and underneath. (Bundle of rights)

Question 23

Cost (replacement) Approach

Answer 23

Estimates the price a buyer should pay for a piece of property that is equal to the cost to build a new building.

Question 24

Listing

Answer 24

Employment contract b/w broker and seller, to find an able, willing buyer.

Question 25

Bilateral Contract

Answer 25

Contract in which each party promises to do something.

Question 26

Open Listing

Answer 26

Property owner gives agent the nonexclusive right to secure a buyer.

Question 27

Economic Obsolescence

Answer 27

The loss of value of a real estate property.

Question 28

Encumbrance

Answer 28

Anything that affects the value of property.

Question 29

Constructive Notice

Answer 29

Notice that is given to the public via recorded documents or newspaper about interests and rights in real estate when the court is unable to reach someone.

Question 30

Lease

Answer 30

Contract between owner and tenant.

Question 31

Sandwich Lease

Answer 31

Where a lessee leases a property to an individual with the owners permission. (Subleasing)

Question 32

Building Codes

Answer 32

Requirements for building.

Question 33

Government Powers

Answer 33

PETE; Police Power, Escheat, Taxation, Eminent Domain.

Question 34

Eminent Domain

Answer 34

The right of the government to take over property.

Question 35

Taxation

Answer 35

Property taxes.

Question 36

Police Power

Answer 36

How the government regulates real estate; zoning laws, building codes, fire codes, rent control, safety hazards, and tenant rights.

Question 37

Exclusive Agency Listing

Answer 37

An agreement where the broker acts as the agent and is entitled to a commission regardless of who sold the property.

Question 38

Negative Amortization

Answer 38

Payments are not covering the interest, so the loan doesn't decrease.

Question 39

Gross Lease

Answer 39

Tenant pays a set amount.

Question 40

Sherman Anti-Trust Act

Answer 40

Free market competition, stops price fixing.

Question 41

Amortization

Answer 41

Method of paying down a loan by knowing how much goes toward interest and principal.

Question 42

Short Rate

Answer 42

Cancelling insurance policy earlier than originally agreed upon, and causing higher insurance rates for new policy.

Question 43

Principal of Regression

Answer 43

The value of high-end real estate goes down because of lower-end properties in the same area.

Question 44

Narrative Appraisal

Answer 44

The most detailed appraisal there is.

Question 45

Market Data Comparison Approach

Answer 45

Comparing properties of similar size and condition in the same area.

Question 46

Physical Deterioration

Answer 46

Physical aspect of the property is going down over the years.

Question 47

1031 Tax Deferred Exchange

Answer 47

Taking money made from one investment property to put on another that allows taxes to be deferred.

Question 48

Executory Contract

Answer 48

When one or both parties still have things to do.

Question 49

Quiet Title Action

Answer 49

A special legal proceeding to determine ownership of real property.

Question 50

Puffing

Answer 50

Done to make property seem nicer. (Exaggeration)