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GA REAL ESTATE PRACTICE QUESTIONS WITH CORRECT SOLUTIONS
“What fines may be imposed by the Commission for rules violations? - CORRECT ANSWER A
maximum of $1,000 for a single offence or $5,000 for multiple violations"
"Charging advance brokerage fees is - CORRECT ANSWER a duty of a broker."
"Agency can best be described as - CORRECT ANSWER a written representation agreement
between broker and client."
"Which is true concerning the Commission Chairperson? - CORRECT ANSWER He is appointed
by the Commission members annually."
"The Georgia Real Estate Commission is - CORRECT ANSWER comprised of 6 members
appointed by the governor and confirmed by the Senate."
"Which of the following best describes a brokerage agreement? - CORRECT ANSWER A
written compensatory agreement between broker and seller"
"The Commission's disciplinary authority includes - CORRECT ANSWER requiring periodic
accounting reports related to trust violations."
"One of the responsibilities of Commission members is to - CORRECT ANSWER monitor the
availability of licensure to the public." "Brokerage related activities not requiring the exercise of the licensee's own judgment best
describe - CORRECT ANSWER ministerial acts."
"The license period in Georgia is - CORRECT ANSWER 4 years for both salesperson and
brokers."
"Which of the following describes the property management licensing exemption? - CORRECT
ANSWER When any individual employed by a broker assists in property management services
on residential property"
"Concerning the Georgia licensing exam, which of the following is true? - CORRECT ANSWER A
passing grade of 75% or higher is required."
"The "innkeeper's" exemption is characterized by - CORRECT ANSWER a written agreement
with owner involving occupancy not exceeding 90 days."
"Which is true concerning a lapsed license? - CORRECT ANSWER The license must be
immediately surrendered to the Commission." "Once a salesperson has been issued his original license, he or she must satisfactorily complete a
mandatory ______ course of post-license study. - CORRECT ANSWER 25-hour"
"Signing a Consent to Jurisdiction form relates to - CORRECT ANSWER qualifying for non-
resident licensure in another state."
"qualifying for non-resident licensure in another state. - CORRECT ANSWER Both brokers and
associate brokers may serve as the qualifying broker with multiple licensed firms."
"Which is true concerning a non-resident licensee applying for a Georgia license. - CORRECT
ANSWER Must submit proof of current licensure from the applicant's state of residence"
"If a broker applicant does not apply for a license within one year of passing the exam, the
applicant must - CORRECT ANSWER retake the licensing exam."
"Which of the following is true concerning Georgia business licenses? - CORRECT ANSWER
One broker is designated as the company's qualifying broker."
"One broker is designated as the company's qualifying broker. - CORRECT ANSWER a lapsed
license requiring reinstatement and renewal fees." "A licensee on inactive status who changes his or her address must notify the Commission of the
new address - CORRECT ANSWER within 30 days."
"Which is correct concerning an original license activation? - CORRECT ANSWER Individual
and firm applicants must pay an activation fee and renewal fee." "If a licensee transfers from his or her current broker to a new broker, what must the current
broker do? - CORRECT ANSWER Sign a transfer and send the licensee's wall certificate to the
Commission."
"Which of the following may be filed online? - CORRECT ANSWER Renewing licenses"
"Under BRRETA, a tenant's broker must disclose to a prospective landlord - CORRECT ANSWER
all material facts in a timely manner."
"BRRETA requires the broker to disclose which of the following to a prospective tenant? -
CORRECT ANSWER All material facts within one mile of the subject property"
"Examples of readily available public records for review by prospective renter would include -
CORRECT ANSWER plat maps, zoning ordinances, and flood maps."
"Which statement is correct concerning responsibility for discovering and divulging adverse
material facts? - CORRECT ANSWER Obtaining information about the physical condition of the
property rests with the broker, landlord, and tenant."
"Which is true concerning the broker-tenant relationship? - CORRECT ANSWER May assist the
landlord in ministerial acts" "According to BRRETA, a broker engaged by a seller has the duty to present all offers to and from
the seller - CORRECT ANSWER in a timely manner."
"Which of the following is true regarding client confidentiality versus conveying false customer
information? - CORRECT ANSWER The broker's duty to not give out false customer
information must always prevail." "What is the name of the Georgia law that governs the agency relationships of brokers with
sellers, buyers, landlords and tenants of rights and interests in real property? - CORRECT
ANSWER BRRETA"
"Which of the following is true concerning dual agency? - CORRECT ANSWER It must be by
written consent by all parties to a transaction."
"Which of the following is true pertaining to possible trust account violations? - CORRECT
ANSWER Which of the following is true pertaining to possible trust account violations?"
"Which of the following is true regarding earnest money accounts? - CORRECT ANSWER
Earnest money may be deposited into interest bearing accounts if the contract so stipulates."
"A broker may allow commissions due the broker that are being paid from funds of others held in the broker's designated trust or escrow account to remain in the account under certain conditions. One condition is that the broker removes from the account the broker's funds that
exceed the minimum necessary to comply with bank regulations. These must be removed -
CORRECT ANSWER every month."
"If an associate licensee owns rental property, which of the following is applicable according to
Georgia law? - CORRECT ANSWER Must deposit any security or trust funds into a broker
designated trust account"
"Concerning abandoned trust funds disbursal, which of the following is true? - CORRECT
ANSWER A licensee may disburse funds if in compliance with the Disposition of Unclaimed
Property Act."
"The illegal act of mixing the client's monies with the broker's or firm's funds is known as -
CORRECT ANSWER commingling."
"A broker's paid commission is considered in compliance with the Commission's trust account
laws under which circumstances? - CORRECT ANSWER When the broker has received a
separate written agreement signed by all interested parties" "Brokers must notify the Commission of the name of the bank in which each trust account is
maintained and each account's name or number within how long of opening each account? -
CORRECT ANSWER One month"
"Which of the following is true regarding the rules governing escrow accounts? - CORRECT
ANSWER A portion of the deposit may be transferred to the broker for commission payment."
"Does a licensee have to disclose that he or she is a licensed real estate agent when selling his or
her own home? - CORRECT ANSWER Yes, licensee must disclose on all contracts that they are
licensed in real estate."
"- Which of the following is true of trust accounts of brokers in Georgia? - CORRECT ANSWER
The license law in Georgia requires that all real estate licensees deposit all funds or place any valuables held on the behalf of others in a trust account." "When is it permissible for a broker to maintain the broker's own funds in a designated trust or
escrow account? - CORRECT ANSWER Only when the funds are clearly identified as the
"Which of the following disclosures are not required under BRRETA? - CORRECT ANSWER That
the broker has a duty to disclose any personal opinions to clients"
"Which of the following is false regarding property management agreements? - CORRECT
ANSWER The property management agreement does not have to be in writing to be
enforceable." "Any time there is a conflict between the broker's duty not to give false information and the
broker's duty of confidentiality to the owner, the duty - CORRECT ANSWER not to give false
information to a customer ALWAYS prevails." "Brokers are required to review all brokerage agreements and contracts within _____________.
CORRECT ANSWER 30 days"
"Which of the following is not permitted by unlicensed support personnel under the direct
supervision of a licensee affiliated with a broker? - CORRECT ANSWER Hosting open houses,
kiosks, home show booths, or fairs" "It is permitted under Georgia law for a licensee who is affiliated with a broker to hire unlicensed support personnel to assist the affiliated licensee in the conduct of the real estate brokerage
business. When this occurs, it is essential to realize that - CORRECT ANSWER both the firm and
the affiliated licensee are responsible for the acts of the support personnel." "Regarding community association management, a broker terminating a management contract must deliver required records to the community association within how many days of the
termination, unless the contract provides otherwise? - CORRECT ANSWER 30 days"
"____________ the money or other property of the licensee's principals with the licensee's own
is a violation of GA license law. - CORRECT ANSWER Commingling"
"Which of the following disciplinary actions cannot be imposed by the Commission? - CORRECT
ANSWER A fine of $10,000 for a single violation"
"Under Georgia law, brokers are required to keep a true and correct copy of all sales contracts, closing statements, any offer or other document that resulted in the depositing of trust funds for
CORRECT ANSWER three years."
"Regarding the following statements about disciplinary actions, which is most accurate? -
CORRECT ANSWER Suspensions are temporary."
"Which of the following activities does not fall under the heading of "unfair trade practices?" -
CORRECT ANSWER Acting as a dual agent under any condition"
"A broker may do which of the following? - CORRECT ANSWER Maintain and deposit in a
separate, federally-insured checking account all money received as escrow agent in a real estate transaction" "It is a violation of the license law to pay a commission or compensation to any person for
performing the services of a real estate licensee - CORRECT ANSWER if that person is not
appropriately licensed." "Acting for more than one party in a transaction without the express written consent of all parties
to the transaction is known as - CORRECT ANSWER undisclosed dual agency."
"The Commission does not have the authority to - CORRECT ANSWER impose a prison
sentence."
"It is mandated under Georgia law that - CORRECT ANSWER It is mandated under Georgia law
that"
"The minimum balance of the Recovery Fund must be at least - CORRECT ANSWER
"If at any time the money deposited in the Fund is insufficient to satisfy any claim, the
Commission will later pay the past due monies, plus accumulated interest - CORRECT
ANSWER at the rate of 4 percent a year."
"If the Commission must make a payment from the Fund in the settlement of a claim or judgment
against a licensee, - CORRECT ANSWER that licensee's license will be automatically revoked."
"The Commission cannot use any of the funds from new licensee payments to the Real Estate
Education, Research and Recovery Fund or from the accrued interest earned on the fund to -
CORRECT ANSWER pay real estate lobbyists."
"Bob is completing his listing presentation when the seller asks what commission he will be charging. Bob answers "Everyone charges the same so you can list with me and keep it simple."
Bob has - CORRECT ANSWER made a statement which violates the Sherman Anti-trust Act"
"Because of the 1866 Civil Rights Act you can never discriminate on _________ for any reason. -
CORRECT ANSWER race"
"If an agent states "this house has a fantastic view of the lake," when in fact the lake is not visible
from the property, this is - CORRECT ANSWER misrepresentation."
"Under antitrust laws, which of the following parties cannot be held liable? - CORRECT
ANSWER Lawyers"
"Security deposits must be held in trust for the tenants in _____________ account specifically for
that purpose. - CORRECT ANSWER a separate escrow"
"What is the name of the law, administered by the governor through the Office of Consumer
Affairs, that is designed to protect the public by focusing on deceptive advertising? - CORRECT
ANSWER The Georgia Fair Business Practices Act"
"Georgia law allows licensees to complete listing or sales contracts or leases - CORRECT
ANSWER whose form has been prepared by legal counsel."
"Which of the following is not prohibited by the Sherman Antitrust Act? - CORRECT ANSWER
Which of the following is not prohibited by the Sherman Antitrust Act?" "____________ was created to ensure that the buyer and seller in a residential real estate
transaction involving a new first mortgage loan have knowledge of all settlement costs. -
CORRECT ANSWER The Real Estate Settlement Procedures Act"
"An investor just purchased a rectangular 1-acre retail lot for $250 a frontage foot. If she paid
$100,000 total, what was the depth of the lot? - CORRECT ANSWER 109 feet"
"Jamie Spiffup advised her clients they needed to paint their living room before showing the property. The walls of these rooms were all 10' high. The wall lengths were 16', 20', 16', and 20'. If
a gallon of paint covers 200 SF, how many whole gallons would the sellers have to buy? -
CORRECT ANSWER 4"
"John bought an odd-shaped lot that was 100 feet deep, but the front footage was 160 feet and
the length of the back side of the lot was 80 feet. What is the square footage of his lot? -
CORRECT ANSWER 12,000 SF"
"A rancher has a rectangular 40 acre piece of property fronting a highway. He wants to put a barbed-wire fence along his road frontage. How much fence does he need if his property depth is
1,200'? - CORRECT ANSWER 1,452'"
"An A-frame house has a front facade measuring 30' across and 20' in height. What is the area of
the facade? - CORRECT ANSWER 300 SF"
"If a rectangular house is 50 feet wide and contains 2,500 sq/ft, what is its depth? - CORRECT
ANSWER 50'"
"A house is being appraised using the sales comparison approach. The house has four bedrooms, three bathrooms, and no pool. The appraiser selects a comparable house that has three bedrooms, three bathrooms, and a pool. The comparable house just sold for $280,000. A bedroom is valued at $18,000, and a pool at $15,000. Assuming all else is equal, what is the
adjusted value of the comparable? - CORRECT ANSWER $283,000"
"The subject property has a no pool and a $5,000 screen porch. A comparable property that sold for $300,000 has no porch, one less $9,000 bathroom, and a small $4,000 pool. Assuming all else
is equal, what is the adjusted value of the comparable? - CORRECT ANSWER $310,000"
"What is the GIM of a gas station with Annual rent of $104,400 and a value of $970,000? -
CORRECT ANSWER 9.3"
"What is the GRM of a condominium with monthly rent of $1,700 and a value of $240,000? -
CORRECT ANSWER 141.2"
"A property is being appraised using the income capitalization approach. Annually, it has potential gross income of $40,000, vacancy and credit losses of $3,500, and operating expenses of $16,000. Using a capitalization rate of 8%, what is the indicated value (to the nearest $1,000)?
CORRECT ANSWER $256,000"
"A property's value is $400,000 and its land value is $75,000. Assuming a depreciation term of 39
years, what is the amount of annual depreciation? - CORRECT ANSWER $8,333"
"Brittany bought a house five years ago for $100,000 and obtained an 80% loan. Now the home is worth $125,000, and her loan balance has gone down $5,000. What is Brittany's current equity?
CORRECT ANSWER $50,000"
"Seller Jones signed an exclusive right to sell listing on her home with Muller Realty for $155, at a commission rate of 5% to be paid to broker Muller at closing. As part of the agreement, broker Muller will split the commission equally with any other broker that can bring a buyer for
Jones' property. If another broker sold the property, how much will broker Muller receive? -
CORRECT ANSWER $3,875"
"A homeseller wants to net $75,000. The commission is 9%, the loan payoff is $450,000, and
closing costs are $36,000. What must the price be (to the nearest $100)? - CORRECT ANSWER
"A $340,000 property sells at a 7% commission with a 50-50 co-brokerage split and a 50% agent
split with her broker. What is agent's commission? - CORRECT ANSWER $5,950"
"A homeowner receives a tax bill that includes an amount for the library district, taxed at $2. per $1,000, and the fire protection district, taxed at $3.00 per $1,000. How much does the
taxpayer have to pay for these two items if the property's taxable value is $78,000? - CORRECT
ANSWER $390"
"A home sells for $125,000 in United County. The agent's commission is 7.4%, and the mortgage balance is $98,000. The seller has $5,900 in other closing costs. If the seller pays all of these
expenses, what will she net at closing? - CORRECT ANSWER $11,850"
"A home sells for $330,000 and has a loan balance of $260,000 at closing. The commission is 6%
and other closing costs are $14,000. What is the seller's net? - CORRECT ANSWER $36,200"
"If an item is paid in arrears, use - CORRECT ANSWER Seller Days
Items paid in arrears will use seller days from the timeline to determine the amount to debit the seller and credit the buyer when the item comes due for payment." "Seller Andy requires a 2.5% deposit on all offers. Buyer Josh wants to offer $452,000 for the property. The property was appraised at $465,000. What must the earnest money deposit be if
Josh presents his current offer? - CORRECT ANSWER $11,300"
"The taxes on a property were $4,800. The closing took place on June 15th. What is the seller's share of the taxes? Use the 30-day/12 month method to derive your answer and assume the
seller owns on the day of closing. - CORRECT ANSWER $2,200"
"If the taxes for the current year WERE NOT paid and the property sold during the year, how
would the entry appear on a full settlement statement? - CORRECT ANSWER Debit the seller
and credit the buyer"
"How does the judicial system influence real estate ownership? - CORRECT ANSWER By
making decisions based on case law and common law."
"Littoral rights concern which of the following bodies of water? - CORRECT ANSWER
Navigable lakes, seas, and oceans."
"What is characteristic of the allodial system of ownership? - CORRECT ANSWER Individuals
own land directly."
"The right to build a taller structure on top of an existing structure is an example of - CORRECT
ANSWER air rights."
"If a tenant farmer's lease expired, but several months later he is able to go back and harvest the
corn crop, the crops would be known as what? - CORRECT ANSWER Emblements"
""Real estate" includes such things as - CORRECT ANSWER fences, sidewalks, and piers on a
parcel of land."
"The legal concept of land does NOT include - CORRECT ANSWER man made improvements."
"What is a "fixture?" - CORRECT ANSWER An item of personal property that has been
converted to real property"
"All property in the United States is owned under the - CORRECT ANSWER allodial system."
"A lease is an example of a(n) - CORRECT ANSWER transfer of a portion of the bundle of
rights."
"Which of the following is considered to be real property? - CORRECT ANSWER Permanent
fixtures."
"What is a guide meridian? - CORRECT ANSWER A meridian every 24 miles east or west of a
principal meridian to correct for the curvature of the earth"
"To make it easier to describe elevations, surveyors refer to standard elevation points called -
CORRECT ANSWER benchmarks."
"As a legal descriptor of land, a township area consists of - CORRECT ANSWER thirty-six square
miles."
"How are directions described in a metes and bounds survey? - CORRECT ANSWER In terms of
degrees east or west of an imaginary north-south axis"
"A range is defined by - CORRECT ANSWER two consecutive meridians."
"The recorded plat method is used to describe what? - CORRECT ANSWER Properties in
residential, commercial, and industrial subdivisions."
"A parcel's street address is an insufficient legal description because - CORRECT ANSWER it
lacks permanence and sufficient data for a surveyor to locate it."
"Which is NOT one of the four main types of leasehold estate? - CORRECT ANSWER Estate in
holding"
"An interest in real estate that includes the right to possess is considered - CORRECT ANSWER
an estate in land." "What is the difference between a fee simple determinable estate and a fee simple condition
subsequent estate? - CORRECT ANSWER Reversion of ownership is automatic in the
determinable estate."
"Which of the following rights is conveyed with a leasehold estate? - CORRECT ANSWER The
right to possess and use the premises."
"Which best describes a tenancy at sufferance? - CORRECT ANSWER When the tenant stays
beyond her lease without consent."
"When the tenant stays beyond her lease without consent. - CORRECT ANSWER Passage of
zoning ordinances to control land use"
"What is "escheat?" - CORRECT ANSWER The process by which ownership of real estate
reverts to the state when there are no legal owners." "The process by which ownership of real estate reverts to the state when there are no legal
owners. - CORRECT ANSWER Each owns fifty percent of the estate represented by the real
property, but no physical portion of the real property."
"States that do not have dower and curtsey usually have - CORRECT ANSWER Community
property laws and elective share laws." "Of the two kinds of fee simple estate, the kind that is a perpetual estate with no usage
restrictions is the - CORRECT ANSWER fee simple absolute."
"Which of the following is NOT an example of an interest in real estate? - CORRECT ANSWER A
real estate agent's right to advertise a property for sale."
"Which of the following statements about eminent domain is TRUE? - CORRECT ANSWER No
private property is exempt from the exercise of this power."
"Why is a fee simple estate called the highest form of ownership interest? - CORRECT
ANSWER It includes the complete bundle of rights with virtually unlimited duration."
"If a party has an interest in real estate that includes the right of possession, the party owns -
CORRECT ANSWER an estate in land."
"A life estate is classified as which of the following? - CORRECT ANSWER A freehold estate"
"A partition suit is used for which of the following? - CORRECT ANSWER To force a division of
property without all the owner's consent"
"A kind of trust that can only be used with real property is the - CORRECT ANSWER land trust."
"How many owners can there be in a tenancy in severalty? - CORRECT ANSWER One"
"In a condominium, who is responsible for maintaining the internal systems of an individual unit?
- CORRECT ANSWER The individual unit owner"
"An improvement which crosses over the property line without permission is called a(n) -
CORRECT ANSWER encroachment."
"A film company wants to rent a farm from the farm owner for a two-week film shoot. What type
of agreement should be used? - CORRECT ANSWER License"
"Which would terminate an easement? - CORRECT ANSWER Merger of the two properties"
"How can a junior lien's priority be changed? - CORRECT ANSWER A lienor can voluntarily
agree to subordinate its lien to another lien."
"A court might grant an easement by prescription if - CORRECT ANSWER an intruder has been
using an owner's property for a certain period with the owner's knowledge but without permission."
"An encroachment is - CORRECT ANSWER an unauthorized physical intrusion of one property
into another." "Property A and property B share a common wall along the property boundary. To ensure that
neither owner destroys the wall, the owners of A and B should create - CORRECT ANSWER a
party wall easement." "A homeowner wants to give a neighbor seasonal permission to cross her yard to reach a public
basketball court. What kind of lien or encumbrance should she use? - CORRECT ANSWER
License" "Other than its categorization as inferior or superior, a lien's priority is generally determined by
the - CORRECT ANSWER date of recordation."
"How is a lien terminated? - CORRECT ANSWER Payment of the debt that is the subject of the
lien and recording of the satisfaction"
"Which of the following circumstances is likely to render a will invalid? - CORRECT ANSWER
The will is unsigned."
"Where would one find information based on constructive notice? - CORRECT ANSWER Court
House Records"
"In general terms, a person who possesses the complete bundle of rights to a property owns -
CORRECT ANSWER legal title."
"What document shows legal alienation of a property? - CORRECT ANSWER Deed"
"What are the two forms of owner's title insurance? - CORRECT ANSWER Standard and
Extended" "A person receives defective title to a property. The grantor of the title later cures the defect and tries to reclaim the property. The doctrine that may prevent the grantor from succeeding in
reclaiming the property is - CORRECT ANSWER estoppel."
"Which record would show you who owned a property back in 1940? - CORRECT ANSWER
Chain of Title" "Title to a certain real property is being held in a trust as collateral for a loan. What kind of deed
will the trustee use to convey the title to the borrower when the loan terms are satisfied? -
CORRECT ANSWER Reconveyance deed"
"Someone who possesses all ownership interests in real property owns - CORRECT ANSWER
legal title to the real property."
"The property transferred by a will is called the - CORRECT ANSWER devise."
"The owner of a property creates a deed, leaving the name of the grantee blank, and puts it in a drawer, where it is forgotten for several years. One day, a visitor finds the deed, fills in his name as grantee, and attempts to record it. However, the owner will probably have no trouble disputing
the validity of the deed because - CORRECT ANSWER there was no intent to deliver it, and no
consideration was given."
"What is "color of title?" - CORRECT ANSWER Defective title, or title received by defective
means" "A municipality wants to build a water treatment facility, and requires some privately owned land to do so. What procedure enables the municipality to buy the property, even against the owner's
wishes? - CORRECT ANSWER Eminent domain"
