Focused Study

An agent submits a $250,000 offer with zero closing costs. The buyer gives a $5,000 personal note as earnest money. Is using a personal note as earnest money legal?

1. a.No, it must be cash
2. b.No, the agent should ask for certified funds
3. c.No, the contract is void
4. d.Yes, if the offer states that the earnest money is a personal note

A listing where the broker's commission is the difference between the selling price and the seller's requested net amount is what kind of listing?

1. a.An open listing
2. b.An exclusive listing
3. c.A net listing
4. d.A blind listing

In Georgia, all sales contracts for real property must be in writing according to which law?

1. a.License Law
2. b.Rules and Regulations
3. c.The Statute of Frauds
4. d.Contract law

Once a buyer and seller sign a sales contract, both are obligated. A sales contract must have all EXCEPT which of the following?

1. a.Be preprinted contracts
2. b.Be notarized
3. c.Have a signature
4. d.A reference to public records for legal description

Which of the following is NOT required for a deed to be valid?

1. a.Recorded with the county
2. b.Name of grantee
3. c.Description sufficient to identify the property
4. d.Signature of the grantor

Who pays for repairs found in an inspection report?

1. a.The buyer
2. b.The seller
3. c.The listing broker
4. d.The selling broker
5. e.Split between all parties
6. f.Whatever is stated in the contract

Susan sells her house to her brother Mark with a verbal agreement and a handshake. Is this transaction enforceable?

1. a.Yes, if both parties agree
2. b.No, it must be in writing to be enforceable
3. c.Yes, if the lease is for more than one year
4. d.Yes, if recorded with the county

Is the transaction in the previous question valid?

1. a.Yes, the transaction is valid
2. b.No, in Georgia all transactions must be in writing to be valid
3. c.Yes, if there is a witness
4. d.Yes, but it must be recorded with the county

Your client signed a sales contract but wants to void it because he was legally ruled incompetent before signing. Can the contract be voided?

1. a.No, he signed and must complete the transaction
2. b.Yes, he was ruled legally incompetent before signing
3. c.No, his guardian must follow through on the terms
4. d.Yes, a buyer can back out any time before closing

A clause in a deed that limits the amount of real property transferred is called the ____ clause, and it is not required.

1. a.Acknowledgment clause
2. b.Quantity clause
3. c.Habendum clause
4. d.Testimonium clause

Your client made an offer with three days for acceptance. On the morning of the third day they find another home and want to withdraw. Can they?

1. a.Yes, since the offer has not been accepted
2. b.Yes, but they will lose their earnest money
3. c.No, they must wait until the offer expires
4. d.Yes, because the offer has already expired

Your client wants to sell their home and buy another. What would you put in the offer on the new house to protect them?

1. a.A contingency saying the first house must sell
2. b.An amendment saying the first house must sell
3. c.An option saying the first house must sell
4. d.A clause saying the first house must sell

Recording a deed at the County Clerk's office gives:

1. a.Actual notice
2. b.Constructive notice
3. c.Physical notice
4. d.Legal notice

When should a buyer or seller receive a copy of anything they sign?

1. a.Within 24 hours of signing
2. b.Within 48 hours of signing
3. c.No copy required unless requested
4. d.Immediately upon signing

When a buyer's offer is accepted, what kind of interest do they now have in the property?

1. a.None, the property has not closed
2. b.An equitable interest in the property
3. c.A right of redemption interest
4. d.None, the buyer hasn't paid the seller yet

An uneducated person signs a sales contract with an "X" but understands its terms. Is the contract binding?

1. a.No, a guardian would need to sign
2. b.Yes, anyone over 18 is a legal adult
3. c.Yes, because he understands the terms of the contract
4. d.No, he is uneducated and legally incompetent

When can a salesperson sign a sales contract for their client?

1. a.When they have a listing agreement
2. b.When they are the client's attorney-in-fact
3. c.Never, the client must always sign
4. d.With written permission from the client
5. e.When related to the client

What is the purpose of the CC&Rs on a deed or plat map?

1. a.To annoy the future owner
2. b.To control future use of the land
3. c.To control who moves into the area
4. d.To prevent future use of police power

When does a contract become binding?

1. a.When earnest money is deposited
2. b.When an offer is made
3. c.When a counteroffer is made
4. d.When the offeror knows of the acceptance
5. e.When the offeree knows of the acceptance

Your neighbor is installing a pool, which violates the CC&Rs. What can you do?

1. a.Pay for half so you can use it
2. b.Nothing, it's their land
3. c.Call the police
4. d.File a court injunction to stop the work and have the pool removed

Your client has accepted an offer and is under a binding contract when another buyer brings you an offer. What should you do?

1. a.Present it to your clients as a backup offer
2. b.Accept it if the terms are better
3. c.Too bad, should have been earlier
4. d.Accept it as a backup offer

A buyer has a 3-month purchase option but decides after two weeks not to exercise it. What should the seller do to end the option?

1. a.Have an agent do a termination agreement
2. b.Nothing, an option expires automatically
3. c.Sue the buyer
4. d.Use the contingency clauses in the option

A valid real estate contract must have:

1. a.Contingencies
2. b.Earnest money
3. c.Due diligence
4. d.Consideration
5. e.Valuable consideration

Closing is set for 3/1/21, but loan delays push it to 3/21/21. What should you prepare?

1. a.An extension form
2. b.A contingency
3. c.An amendment
4. d.A bilateral agreement

A minor leases an Atlanta apartment for $1,200 a month. The day he turns 18, he says he's ending the lease and moving out. Is this legal?

1. a.No, the minor is bound by contract
2. b.Yes, if the minor gives proper notice
3. c.Yes, a contract signed by a minor is voidable by the minor
4. d.No, he can only move out when the lease ends

What does a novation clause in a mortgage do for your client during a loan assumption?

1. a.The seller is still liable
2. b.The seller is released from liability
3. c.The seller is released as primary but still secondarily liable
4. d.A novation doesn't apply to an assumption

You get a six-month listing, but next week a family emergency forces you to move to Florida. What happens to the listing?

1. a.It is void
2. b.It is valid
3. c.It is voidable
4. d.It is terminated

Your client signs a deed to his niece and leaves it with his attorney to deliver on her 18th birthday. He dies hours before the party. The attorney delivers it in good faith. Who owns the property?

1. a.The niece
2. b.Your client's spouse
3. c.Your client's estate
4. d.The state, by escheat

Your client made several changes to the contract. Which wording takes priority?

1. a.Typed wording
2. b.Handwritten wording
3. c.Preprinted wording
4. d.Cursive handwriting

What clause in a sales contract makes terms survive the closing so the seller still has to meet them?

1. a.A repair clause
2. b.A contract clause
3. c.A closing clause
4. d.A survival clause

The county courthouse burned down with all its records. Where can you find the legal description of your listing?

1. a.Your broker's files
2. b.Have a new one done
3. c.The seller's deed
4. d.The GREC records

A quitclaim deed has which of the following?

1. a.All protections, covenants and warranties
2. b.Some protections and covenants
3. c.No protection, covenants or warranties
4. d.No protection, but all the covenants

What type of contract is an option contract?

1. a.A bilateral contract
2. b.A unilateral contract
3. c.A sales contract
4. d.A brokerage engagement

By operation of law, which of the following will terminate a sales contract?

1. a.Mutual agreement
2. b.Death of the seller
3. c.Destruction of the property
4. d.Death of the broker

What is the difference between bilateral and unilateral contracts?

1. a.The number of parties
2. b.The type of contract
3. c.The type of consideration
4. d.There is no difference

Before closing, the house your client is buying is struck by lightning and burns down. The contract is silent on who bears the risk. Which is true?

1. a.The seller bears the loss and the contract is void
2. b.The buyer bears the loss, as destruction does not terminate a sales contract
3. c.Buyer and seller split the loss
4. d.The seller is liable since it hasn't closed

You're working with a buyer (customer) on your seller client's house. The buyer gives you $2,000 earnest money; the offer expires in 48 hours. Next morning the buyer wants the money back. Can your broker release it?

1. a.Yes, if the seller agrees
2. b.Yes, if the offer has not been accepted
3. c.No, not until the offer has expired
4. d.No, you have a binding contract

Before a salesperson can become a broker or associate broker, they must have been actively licensed for how long?

1. a.Three out of five years
2. b.Two out of five years
3. c.Five years
4. d.Three years

If an affiliated licensee violates the rules or license law, must the broker notify the Commission?

1. a.Yes, only if money was involved
2. b.No, the broker can provide training
3. c.No, only consumers can file complaints
4. d.Yes, always

When advertising a property for sale, what information must be included?

1. a.Broker's name, street address and phone number
2. b.Name of the listing agent
3. c.Price of the property
4. d.Broker's name as registered with GREC

When can a broker NOT deposit earnest money in an insured trust account?

1. a.Never
2. b.Only with the permission of the buyer
3. c.Only with the permission of the seller
4. d.Only with permission from all parties

To get a salesperson license, an applicant must do all of the following EXCEPT:

1. a.Be 18 years of age
2. b.Take a 75-hour classroom real estate course
3. c.Have a high school diploma or equivalent
4. d.Pass the class and the state exam

When must earnest money be turned over to the broker?

1. a.As soon as practically possible
2. b.Immediately, unless the agent has written permission to hold it
3. c.When an offer is accepted
4. d.Within 72 hours

Your client asks that earnest money be held in a separate interest-bearing trust account. Is this legal?

1. a.No, it must be in the broker's trust account
2. b.Yes, with permission and notification to the Commission
3. c.Yes, if all parties agree and the Commission is notified of the account
4. d.Yes, since the seller is the client and is entitled to the earnest money

Georgia law requires a broker's license for which of the following?

1. a.Referring a potential client to another broker without a fee
2. b.Listing a property for sale for a fee
3. c.Advertising property for another for a fee
4. d.Managing a subdivision association for a community you live in

An agent may want to stop practicing for a while but return later. What is their best option?

1. a.Keep the license active with a broker
2. b.Surrender the license
3. c.Place the license on inactive status
4. d.Let the license lapse

A corporation's qualifying broker must be an officer. What must the qualifying broker of an LLC be?

1. a.An officer
2. b.A shareholder
3. c.A member
4. d.An investor

If the Commission finds a broker's trust account unsafe, what will it do?

1. a.Close the account
2. b.Report it to the Attorney General
3. c.Appoint a receiver
4. d.Close the brokerage

In Georgia, an associate broker can do which of the following?

1. a.List property in their own name if registered
2. b.Advertise property in their own name
3. c.Review contracts if authorized by the qualifying broker
4. d.Hire a salesperson of his/her choosing

Can a licensee work under a brokerage other than the one holding their license?

1. a.No, this violates license law
2. b.Yes, with permission from both brokers
3. c.Yes, with permission of their qualifying broker
4. d.Yes, with permission from GREC

If an agent lets their license lapse, how can they reinstate it?

1. a.Go through the application process again
2. b.Within 2 years, by paying renewal fees, reinstatement fee and late charges
3. c.Within 10 years, by paying all fees
4. d.Once lapsed, you can never get it back

A new licensee must complete __ hours of training, which equals __ hours of continuing education.

1. a.20 and 9
2. b.25 and 9
3. c.36 and 9
4. d.25 and 6

To renew, a licensee (unless grandfathered) must complete ___ hours of CE every ___ years.

1. a.24 and 4
2. b.24 and 2
3. c.36 and 3
4. d.36 and 4

A listing where the broker's commission is the difference between the selling price and the seller's requested net is what kind of listing?

1. a.Open listing
2. b.Exclusive listing
3. c.Net listing
4. d.Blind listing

The Georgia Real Estate Commission has the authority to:

1. a.Revoke an already issued license
2. b.Refuse to issue a license
3. c.Set fees for licensees
4. d.All the above

Your buyer offers $490,000 and asks for the stove and smart fridge. The seller agrees to the price and stove, crosses out the fridge and initials it. What do you have?

1. a.Binding agreement
2. b.Terminated offer
3. c.Accepted offer
4. d.Counteroffer
5. e.Both B and D
6. f.Both A and C
7. g.Voided contract
8. h.None of the above

Broker Smith had associate broker Brown manage the trust account. GREC suspended Brown's license. What should Smith do?

1. a.Nothing
2. b.Suspend Brown
3. c.Terminate Brown
4. d.Remove Brown from the trust account but let him buy & sell

The Research, Education and Recovery Fund must hold at least $1,000,000. If it drops below that, what does GREC do?

1. a.Charge all agents a fee immediately
2. b.Charge a fee at license renewal until restored
3. c.Charge a fee on every transaction
4. d.Add a fee on property tax

Your listing sold. How long can advertising stay up after a contract is terminated or closed?

1. a.Internet ad and sign removed within 10 days
2. b.Both removed within 30 days
3. c.Sign within 10 days; no limit online
4. d.Sign within 10 days; internet within 30 days

A salesperson receives earnest money on Friday evening. When should it be turned over?

1. a.Friday evening
2. b.Saturday morning
3. c.Monday morning

An agent wants to work for GREC and must go inactive. How long can a license stay inactive?

1. a.Three years
2. b.Five years
3. c.Forever
4. d.They must surrender the license

The Recovery Fund pays how much per violation, and how much total per licensee?

1. a.$25,000 and $75,000
2. b.$25,000 and $50,000
3. c.$50,000 and $75,000
4. d.$25,000 and $100,000

Your client says not to present offers below $250,000. A buyer offers $200,000. What should you do?

1. a.Counter before presenting
2. b.Present the offer to the seller
3. c.Accept but don't present it

How much can GREC fine for a violation of license law?

1. a.$2,000 each, up to $10,000
2. b.$1,000 each, up to $5,000
3. c.$2,500 each, up to $25,000
4. d.$2,000 each, up to $5,000

A builder offers a $2,000 bonus to the first agent who brings a qualified buyer. Can you accept it?

1. a.Yes, with disclosure to the purchaser
2. b.No, it's a kickback
3. c.Yes, with disclosure and permission from your broker
4. d.Yes, with disclosure to GREC

How long can an agent leave a sign up at an expired listing that didn't sell?

1. a.0 days
2. b.5 days
3. c.7 days
4. d.10 days

A neighbor is about to sell. You start lining up buyers to make offers before it's listed. Can you do this?

1. a.Yes, it's common practice
2. b.No, this is offering an unlisted property
3. c.Yes, if you don't use public advertising
4. d.No, this creates a dual agency

Which is an example of an unfair practice?

1. a.Encouraging a buyer to get an inspection
2. b.Encouraging a buyer to break their contract with another agent, with your broker's permission
3. c.Showing an open house to a couple who has an agent
4. d.Encouraging a customer to list with your broker instead of another
5. e.All the above

Your cousin brings you a listing and wants only a $25 Starbucks gift card in return. Is this legal?

1. a.Yes, nominal value
2. b.Yes, if the broker is informed
3. c.Yes, it's a gift card not money
4. d.No! Unlicensed people can't receive any referral

Your client gives you $1,000 earnest money Monday night. The offer is accepted Wednesday at noon. When do you turn it over?

1. a.Probably Monday night
2. b.Probably Tuesday morning
3. c.Probably Wednesday afternoon
4. d.Probably Thursday morning

Can your broker put earnest money in an interest-bearing trust account?

1. a.No, violates license law
2. b.Yes, if the buyer agrees
3. c.Yes, if all parties agree
4. d.No, violates rules

Is giving your seller client a $100 gift card as a closing gift a violation of Georgia law?

1. a.No, with the listing broker's permission
2. b.No, if the buyer is a licensee
3. c.No, with GREC's permission
4. d.No, if the agent pays for it

Before GREC starts an investigation, the complaint must:

1. a.Have a sworn written statement
2. b.Have supporting evidence
3. c.Be filed online
4. d.Involve a closed sale

A person practicing real estate without a license could be found guilty of a:

1. a.Felony
2. b.License law violation
3. c.Misdemeanor
4. d.Federal license law

When must an agent notify GREC of an address change?

1. a.Within 10 days
2. b.Within 24 hours
3. c.Within 60 days
4. d.Within 30 days

Fees and fines collected by GREC must be held where?

1. a.Insured trust account
2. b.Insured business checking
3. c.The state treasury
4. d.Insured operating account

A salesperson applicant must complete all the following EXCEPT:

1. a.Take a 75-hour in-seat class
2. b.Pass a background check
3. c.Pass the state exam
4. d.Pass the class final
5. e.Be 18
6. f.All apply

Unless renewed, a license expires on:

1. a.Their birthday
2. b.The end of the year
3. c.The end of their birthday month
4. d.December 31st of the expiration year

To manage a community association, a licensee needs at minimum what license and training?

1. a.Real estate license and 25 hours
2. b.Real estate license and 75 hours
3. c.CAM license and 25 hours
4. d.CAM license and 75 hours
5. e.Broker's license and 60 hours

A new applicant who just passed the exam has how long to activate their license or retake the exam?

1. a.One year
2. b.18 months
3. c.3 months
4. d.No time limit

How many CE hours must be license law (and paid for by the broker)?

1. a.6 hours
2. b.No minimum
3. c.3 hours
4. d.9 hours

Which of the following must be reported to GREC?

1. a.Agent arrested for murder
2. b.Agent arrested for theft
3. c.Agent arrested for assault
4. d.Agent arrested and found innocent of reckless driving
5. e.All the above

Which is considered a blind ad?

1. a.An ad using your broker's name
2. b.An ad without the property address
3. c.Selling a house without your license number on the contract
4. d.A blind agent exempt from advertising rules

A salesperson wants to perform brokers' duties for an unlicensed developer. Which is true?

1. a.Can't, developer is unlicensed
2. b.Must go inactive
3. c.Needs broker's permission
4. d.Must surrender their license

Can earnest money held by the broker pay for inspections and appraisals?

1. a.Never
2. b.Yes, that's its purpose
3. c.Yes, with seller's written permission
4. d.Yes, with written permission from buyer and seller

A CAM handling funds over $60,000 must have:

1. a.Homeowner insurance
2. b.Fidelity bond insurance
3. c.E&O insurance
4. d.Hazard insurance

An agent accused of violating license law has the right to:

1. a.A jury trial
2. b.A hearing before the Commission
3. c.A lawyer
4. d.Arbitration

How many members does GREC have?

1. a.5
2. b.5, 4 licensed
3. c.6, 5 licensed
4. d.6

What terms do Commission members serve?

1. a.5 years
2. b.6 years
3. c.5 years, staggered
4. d.6 years, staggered

After closing, the buyer finds the seller took the light fixture. What should they do?

1. a.Contact their agent
2. b.Contact the seller and state the light was a fixture
3. c.Sue the seller
4. d.Call the listing broker

Does license law apply to an agent whose license is inactive?

1. a.No, they're inactive
2. b.Yes, it applies to anyone with a license
3. c.No, only active agents
4. d.Yes, to everyone with or without a license

Which statement about the Real Estate Commissioner is not false?

1. a.Must be a licensed agent
2. b.Is part of the Commission
3. c.Is not part of the Commission
4. d.Is appointed by the Governor

Who appoints the Commission?

1. a.Governor with House confirmation
2. b.Governor with Senate confirmation
3. c.Governor only
4. d.Governor with a public vote

A buyer offers $375,000 if the seller signs a general warranty deed. The seller counters with a special warranty deed. This counteroffer is best described as:

1. a.A binding contract
2. b.A qualified or conditional acceptance
3. c.A terminated agreement between all parties
4. d.Binding once sent to the buyer

What is the broker responsible for over a licensed real estate agent?

1. a.Controlling the amount of work the salesperson does
2. b.Ensuring affiliates are properly licensed
3. c.Nothing, each person is responsible for themselves
4. d.Providing no instructions to licensees

When an agent leaves one broker for another, how are they paid for work still open during the transfer?

1. a.Based on the broker's opinion
2. b.Nothing, you left the broker
3. c.Based on your listing contract
4. d.Based on the employment contract you signed when you joined the broker

When can a broker be paid for a transaction when they did not represent either the buyer or the seller as a client?

1. a.They can't be paid
2. b.If they were a transactional broker
3. c.If they were a situational broker
4. d.With notice to GREC

When an agent enters an agency relationship with a buyer, they have entered a _____ and now represent the buyer as a ___ agent.

1. a.Buyer protection and selling agent
2. b.Buyer agency and selling agent
3. c.Buyer protection and buying agent
4. d.Buyer agency and buying agent

When an agent enters an agency relationship with a seller, they have entered a _____ and now represent the seller as the ___ agent.

1. a.Seller protection and selling agent
2. b.Listing agreement and selling agent
3. c.Seller protection and the listing agent
4. d.Listing agreement and the listing agent

A client wins a $35,000 judgment against their agent, but the agent only has $20,000. Can the client place a lien against the agent's real and personal property?

1. a.No, they must go after the Recovery Fund
2. b.No, they must go after the broker
3. c.Yes, an attachment lien against all property
4. d.Yes, a judgment lien against all real and personal property

A lender tells the agent to reduce the contract price by $1,000 or the buyer won't qualify. What should the agent do?

1. a.Amend the contract to reduce the price
2. b.Tell the seller and listing agent the buyer can't qualify
3. c.Explain you need written authorization by both parties
4. d.Find a new lender

A salesperson shows their buyer client a house listed by their own firm. When they submit an offer, what kind of agency is created?

1. a.A general agency
2. b.An implied agency
3. c.A special agency
4. d.A dual agency

According to BRRETA, all agency relationships must be _____.

1. a.Verbal or in writing
2. b.In writing and with an ending date
3. c.Verbal or in writing with an ending date
4. d.In writing and notarized

In Georgia, why are net listings illegal?

1. a.They drive prices down
2. b.It is mortgage fraud
3. c.It takes advantage of the consumer
4. d.The broker's commission is usually smaller

A buyer and seller wait until their agency agreements expire before transferring the property to avoid paying commission. Is the broker due a commission?

1. a.No, the agreements expired
2. b.Yes, if they can prove they showed it
3. c.Yes, if there is a protection clause
4. d.Yes, if they were the procuring cause

Shawna sells her business under an open listing with brokers XYZ, ABC and Smith. Each brings prospects, but she sells to her co-worker. Who gets a commission?

1. a.XYZ
2. b.ABC
3. c.Smith
4. d.No commission is due
5. e.All brokers share it

You owe a client full fiduciary duties but a customer only a few. Which do you owe both a customer and a client?

1. a.Confidentiality
2. b.Loyalty
3. c.Accountability
4. d.Accounting

A rental owner doesn't want his home advertised in the local paper because his ex works there. You know the paper would find a renter quickly. What should you do?

1. a.Advertise; the agreement says any means
2. b.Advertise but don't tell him
3. c.Don't advertise; you owe confidentiality
4. d.Don't advertise; you owe obedience

An agent describes the property line to a client without saying it's only an estimate. The client builds a fence and the neighbor sues for encroachment. Is the agent liable?

1. a.Yes, because the agent sold the house
2. b.No, agents must submit a survey at closing
3. c.Yes, since the agent didn't disclose the boundaries weren't exact
4. d.No, Georgia is a buyer-beware state
5. e.No, the broker is liable

Which of the following violates an agent's duty of confidentiality?

1. a.Telling a buyer the property was listed two days ago
2. b.Telling a buyer they get earnest money back if the offer isn't accepted
3. c.Telling a buyer the seller will take less because they're in a hurry
4. d.Telling a buyer someone died in the house when asked
5. e.All the above

A landlord hires you to manage his properties. When is the agency relationship created?

1. a.When the landlord interviews you
2. b.When the landlord signs a management agreement with your broker
3. c.When a renter signs a lease
4. d.Only when units are available

What type of agency was created in the previous question?

1. a.A universal agency
2. b.A general agency
3. c.A special agency
4. d.An implied agency

You listed at $1.5M though your CMA said $1.25M. After price cuts it sold for $1.3M, and the client wants to reduce your commission. Can they?

1. a.No, the client must comply with license law
2. b.No, an agreed commission can only change if both parties agree
3. c.No, it can never change once agreed
4. d.Yes, since it sold for less than list

At a listing appointment you notice roof patches. The seller says there was a leak, now repaired, and tells you not to mention it. What should you tell buyers?

1. a.Nothing; you owe obedience
2. b.Nothing; you owe confidentiality
3. c.There was a leak but it's fixed, no reason to worry
4. d.There was a leak that's been repaired, and they have the right to an inspection

Your clients tell you they need a two-car garage to convert into a hair salon. After closing, they learn a covenant bans home businesses. Who is liable?

1. a.No one; the buyer should have checked
2. b.The seller
3. c.The agent, since the client disclosed their needs
4. d.No one; they can get a variance

You're preparing a unique or complex contract because of terms the parties agreed to. What should you do?

1. a.Fill in a preprinted contract
2. b.Create a new contract yourself
3. c.Consult a real estate lawyer
4. d.Make the parties fit existing forms

If a listing agreement has no ending date, what law says it ends in one year?

1. a.BRRETA
2. b.License law
3. c.Rules and regulations
4. d.State or federal law
5. e.The Federal Contract Act of 2009

An investor selling "as is" tells you about minor termite damage he had treated. If you don't disclose the treatment, could you be liable for future termite damage?

1. a.No, the seller would be responsible
2. b.Both seller and agent
3. c.Yes, only the agent
4. d.Yes, but protected if the seller shows proof of treatment

Which of the following is a licensed agent allowed to do?

1. a.Bind the client to a contract
2. b.Submit all offers immediately
3. c.Hold earnest money in their own savings account
4. d.Withhold known defects if the client says to
5. e.A and B

During a listing presentation, what should you discuss with the seller?

1. a.How much you'll spend on advertising
2. b.How long it will be on the market
3. c.The market conditions
4. d.Lead paint in the house down the street

Which of the following do you owe a customer?

1. a.Honesty
2. b.Confidentiality
3. c.Accounting
4. d.Nothing unless they sign

Your client says they only need $220,000 and you can keep anything above that, and to list near market price. Is this a legal listing?

1. a.Yes, if the price covers commission
2. b.No, this is a net listing
3. c.Yes, if the client gets $220,000
4. d.Yes, with your broker's permission
5. e.No, unless GREC approves

Several Lithonia homes fit your client's needs, but you steer them toward Decatur because more churches there match their religion. This is:

1. a.Looking out for their best interest
2. b.Blockbusting
3. c.Steering
4. d.Guiding

You sold a home to a Cuban client in a mostly white subdivision. Should you tell neighbors and see if they now want to sell?

1. a.No, confidentiality
2. b.No, that's blockbusting
3. c.No, that's steering
4. d.No, that's inducing
5. e.Yes, they have a right to know

Which is dual agency, legal in Georgia but highly discouraged?

1. a.An agent representing two parties in a home sale
2. b.An agent working with buyer and seller, both as customers
3. c.An agent working with buyer and seller, both as clients
4. d.An agent representing their broker

What recourse does an agent have if their broker isn't following the employment contract on commission?

1. a.File a complaint with GREC
2. b.Sue the broker
3. c.Go to the courts or an arbitrating body such as the Realtor board
4. d.File against the Recovery Fund

Under BRRETA, what must a licensee do about environmental problems?

1. a.Disclose only when asked
2. b.Disclose what they already know
3. c.Discover problems only
4. d.Discover and disclose immediately

In what name must a property be advertised?

1. a.The broker's name
2. b.The agent's name
3. c.The name registered with GREC

What is the first thing a broker must prove in any claim for commission?

1. a.They were the procuring cause
2. b.The salesperson was licensed
3. c.They were actively licensed at the time
4. d.They had a signed agreement

What is the purpose of earnest money?

1. a.To provide a down payment
2. b.To assure the seller the buyer will meet the terms
3. c.To assure the buyer the seller will meet the terms
4. d.As prepaid closing costs

When would earnest money NOT be released?

1. a.After closing when terms are met
2. b.Before the offer was accepted
3. c.When demanded by the buyer or seller
4. d.Upon agreement by all parties

License law requires every broker to keep copies of all records for ____ years.

1. a.5 years
2. b.3 years
3. c.6 years
4. d.10 years

Your client wants to give you a check as a tip. Can you accept it?

1. a.Yes
2. b.Yes, but it must be payable to the broker
3. c.Yes, with GREC's permission
4. d.No, it violates license law

Your buyer client must leave town and you can't reach the listing agent. What should you do?

1. a.Call your broker
2. b.Call the listing broker
3. c.Become the client's attorney-in-fact
4. d.Stall the sale

What fiduciary duty do you owe a client?

1. a.Loyalty
2. b.Confidentiality
3. c.Disclosure
4. d.Obedience

You have three offers at the same price with the same terms. What should you advise?

1. a.Accept all three
2. b.Accept one, reject one, one as backup
3. c.Accept one, reject two
4. d.Accept one and put the other two as backups

What is the most common disclosure on a listing?

1. a.A seller disclosure form
2. b.Latent defects
3. c.Lead-based paint disclosure
4. d.Radon disclosure

A licensee under investigation for discrimination could have all of the following used against them EXCEPT:

1. a.No equal housing sign in the office
2. b.The broker's transaction file
3. c.The undercover investigator's statement
4. d.The agent's intent

Fannie Mae is now a privately held company and does all the following EXCEPT:

1. a.Buy conventional loans
2. b.Buy VA loans
3. c.Buy FHA loans
4. d.Lend money to low-income residents who can't qualify for a traditional loan

What is the only government-owned secondary mortgage buyer?

1. a.Fannie Mae
2. b.Freddie Mac
3. c.Ginnie Mae
4. d.MGIC

Your low-income client can't qualify for any loans. Who might lend them money?

1. a.Ginnie Mae
2. b.MGIC
3. c.No one
4. d.I didn't pay attention in class

Your client is buying with a 100% VA loan and must pay a funding fee. Who collects it?

1. a.The lender
2. b.The VA
3. c.The closing attorney
4. d.The broker

Which closing cost would your seller client pay?

1. a.Prorated interest
2. b.Accrued interest
3. c.Inspection fee
4. d.Appraisal fee

In which loan does the interest rate stay the same, but the payment increases over the term?

1. a.Adjustable-rate mortgage
2. b.A term loan
3. c.A graduated payment mortgage
4. d.A fully amortized loan

Regulation Z covers all of the following EXCEPT:

1. a.A loan for a single-family home
2. b.A loan for an owner-occupied duplex
3. c.Mortgage loan advertising
4. d.A $52,000 car loan

The power of sale clause allows a lender to:

1. a.Sell after default by going to court
2. b.Sell after default without going to court
3. c.Sell the loan to another bank
4. d.Collect the balance after a sale

What fees can be charged before the borrower receives the Loan Estimate?

1. a.Credit report and appraisal fee
2. b.Loan fees
3. c.A lock-in fee
4. d.A credit report fee

The Federal Truth in Lending Act requires which of the following?

1. a.Simple interest rate on all ads
2. b.Purchase money mortgages in writing
3. c.Disclosure of the annual percentage rate
4. d.Full disclosure on personal sales under $30,000

Georgia is what kind of theory state?

1. a.Title theory
2. b.Lien theory
3. c.Deed theory

In a lien theory state, what must the lender do to foreclose?

1. a.Advertise the property
2. b.Take the owner to court
3. c.Have the sheriff evict the owner
4. d.Call the balance due next month

In Georgia, what must a lender do before foreclosing?

1. a.Advertise the property
2. b.Get an appraisal and inspection
3. c.Evict the occupants
4. d.File a court action
5. e.Get a broker's price opinion

RESPA requires all the following EXCEPT:

1. a.Use of the HUD-1 / Closing Disclosure
2. b.Delivering a settlement cost booklet
3. c.Allowing two extra months of escrow reserves
4. d.Allowing four extra months of escrow reserves

Mortgage fraud can lead to which of the following?

1. a.Higher loan processing fees
2. b.Higher foreclosure rates
3. c.More crime in the neighborhood
4. d.All the above

What is the purpose of the Truth in Lending Act and Regulation Z?

1. a.To let borrowers know the true cost of credit
2. b.To let borrowers know the true cost of real estate
3. c.To limit lenders' activities
4. d.To set a minimum interest rate

A lender makes many loans, holds them, and then packages them to sell to an investor or the secondary market. This is:

1. a.Discounting
2. b.Warehousing
3. c.Package financing
4. d.Loan discounting

A client's mortgage is an example of what?

1. a.An executed contract
2. b.An executory contract
3. c.A unilateral contract
4. d.An implied contract

A builder buys 25 acres to build 25 homes and wants to sell lots as they're finished and pay down the loan. What mortgage is this?

1. a.Conventional loan
2. b.Blanket loan
3. c.Open-ended loan
4. d.Pledge loan

RESPA applies to which transaction?

1. a.Purchase of a new farm
2. b.A gift deed of a home
3. c.The first mortgage on a home
4. d.A land sales contract
5. e.All the above

A homeowner gets a new loan to update her kitchen and get a better monthly payment. What did she do?

1. a.A reverse mortgage
2. b.An equity line of credit
3. c.A second mortgage
4. d.A refinance

Your client has a blanket mortgage on 20 acres and wants to sell homes as they're finished. What should they ask the lender to include?

1. a.A developer's clause
2. b.A builder's clause
3. c.A power of sale clause
4. d.A partial release clause

Which loans can't have a prepayment penalty by law?

1. a.All loans can
2. b.Lenders decide
3. c.VA loans
4. d.FHA loans
5. e.Conventional loans
6. f.C, D and E
7. g.C and D only

Which can usually be deducted on a client's annual taxes?

1. a.Landscaping and maintenance
2. b.All closing costs
3. c.Discount points
4. d.Their down payment
5. e.Home improvements

You miss a mortgage payment after a bad trip to Vegas. With an acceleration clause, what can your lender do?

1. a.Nothing, it's one payment
2. b.Demand the full balance at your next payment
3. c.Demand immediate payment of the entire balance
4. d.Raise the rate

What is the main purpose of the Real Estate Settlement Procedures Act (RESPA)?

1. a.To prevent mortgage fraud
2. b.To ensure all parties understand the cost of the transaction
3. c.To ensure the buyer understands the cost
4. d.To protect the public from dishonest lenders

When a buyer defaults, what clause lets the seller keep the earnest money?

1. a.Defeasance clause
2. b.Subordination clause
3. c.Forfeiture clause
4. d.Rescinding clause
5. e.Earnest money clause

What is used as security for an equity loan?

1. a.Nothing, it's unsecured
2. b.The borrower's property
3. c.The borrower's vehicle
4. d.I'm not a loan officer

Does a promissory note have to be attached to the mortgage?

1. a.No, it's an internal lender record
2. b.Yes, it's part of the agreement
3. c.No, it is a contract in itself
4. d.No, it's for the broker's records

What is a promissory note?

1. a.A promise to buy a home
2. b.A promise to pay a future debt
3. c.Part of a mortgage
4. d.A private deal between buyer and seller

Lenders often require the top 20–25% of a loan to be insured in case a foreclosure sale falls short. Who insures loans for lenders?

1. a.The FHA
2. b.Mortgage Guarantee Insurance Corp (MGIC)
3. c.Both A and B
4. d.Neither

A buyer using a conventional loan with no PMI must put how much down?

1. a.10%
2. b.20%
3. c.3.5%
4. d.0%

A lender denies your well-qualified client only because it no longer lends in the Covington area. Is this legal?

1. a.Yes, lenders must protect themselves
2. b.No, Fair Housing
3. c.No, this is redlining
4. d.No, Sherman Antitrust

In Georgia, closings can only be conducted by a ____ representing the lender. Your client may have their own representation.

1. a.Licensed broker
2. b.Commission member
3. c.Licensed attorney
4. d.Brokers and attorneys

Usury laws do what?

1. a.Say who can use the property
2. b.Set a maximum loan amount
3. c.Set the maximum interest rate
4. d.Deal with possession

Your client wants an income-producing property with a 100% VA loan. What can they buy?

1. a.Up to 5 units, one owner-occupied
2. b.Up to 4 units, one owner-occupied
3. c.Single-family only
4. d.Up to 2 units, one owner-occupied

What does an owner's title insurance policy cover?

1. a.The entire loan
2. b.The loan balance
3. c.The equity
4. d.The market price

What does a lender's title insurance policy cover?

1. a.The entire loan
2. b.The purchase price
3. c.The loan balance
4. d.The equity

A promissory note is:

1. a.The buyer's evidence of the debt
2. b.The lender's evidence of the debt
3. c.The seller's evidence
4. d.The buyer's evidence of ownership

Who pays transfer and intangible taxes at closing?

1. a.Always the buyer
2. b.Always the seller
3. c.Split 50/50
4. d.Based on the closing disclosure given before closing

How does earnest money appear on the closing statement?

1. a.Credit to the seller
2. b.Credit to the buyer
3. c.Debit to the seller
4. d.Debit to the buyer

A buyer assumes the seller's loan and later defaults. Who is liable?

1. a.Only the buyer
2. b.Only the seller
3. c.The seller, who can get a judgment lien against the buyer
4. d.The seller, who can get an attachment lien

In Georgia, a buyer would receive a ____ as security for the debt.

1. a.Promissory note
2. b.Security deed
3. c.Security title
4. d.Title

Under Georgia foreclosure law, a sale of a defaulting borrower's property may result in which?

1. a.No sale until a court order
2. b.The borrower receives funds over the loan and foreclosure fees
3. c.Sale only after 14 days of ads
4. d.The bidder gets a deed giving equitable title

What is a CAM license for?

1. a.Listing property
2. b.Managing apartment buildings
3. c.Managing building projects
4. d.Managing a community association

A manager of a Georgia subdivision association handling over $60,000 in dues must have:

1. a.A licensed CAM agent
2. b.General insurance
3. c.Fidelity bond insurance
4. d.Hazard insurance

In Georgia, a lease must be in writing to be enforceable EXCEPT:

1. a.If it's for more than one year
2. b.If it's for less than one year
3. c.If it's for one year or more
4. d.If it's for one year or less

How much notice must be given to end a rental in Georgia?

1. a.30 days from either party
2. b.60 days from either party
3. c.30 days landlord / 60 days tenant
4. d.60 days landlord / 30 days tenant

A tenant calls to say their shower is leaking. What kind of repair is this?

1. a.Preventative maintenance
2. b.Corrective maintenance
3. c.Property maintenance
4. d.Proactive maintenance

You're hired to oversee a residential property: supervising employees, collecting rent and monitoring maintenance. You are a:

1. a.Community association manager
2. b.Association broker working for a broker
3. c.Property manager working for an owner
4. d.Leasing agent managing a rental community

A restaurant owner installed booths in a small shop and later moves to a larger location. Can he take the booths?

1. a.No, the booths are attached
2. b.Yes, they are trade fixtures and can be removed before the end of the lease
3. c.Yes, they are trade fixtures and can be removed any time
4. d.No, they're fixtures since they're attached

A lease starts January 15, 2018 and ends July 1, 2018. What kind of lease is it?

1. a.An estate for years
2. b.An estate at sufferance
3. c.An estate from period to period
4. d.An Airbnb

A lease starts January 15, 2018, ends July 1, 2018, and renews for another six months. What kind of lease is it?

1. a.An estate for years
2. b.An estate at sufferance
3. c.An estate from period to period
4. d.An Airbnb

Which commercial lease has the tenant pay utilities, taxes and operating expenses, while the landlord pays property insurance?

1. a.A step-up lease
2. b.A utility lease
3. c.A net lease
4. d.A ground lease

Having a furnace serviced every year to keep it from breaking down is what kind of maintenance?

1. a.Constructive maintenance
2. b.Yearly maintenance
3. c.Corrective maintenance
4. d.Preventative maintenance

Josh's estate for years ended on 2/21/21. Today is 3/10/21 and he hasn't moved out. Josh is:

1. a.A trespasser, and the police can be called
2. b.A stay-over tenant who exercised their right of renewal
3. c.An estate at sufferance, who can be evicted
4. d.An estate at will, who can stay if he likes

You've been hired to manage a property for your broker's client. What are you responsible for?

1. a.Fix anything that is broken
2. b.Maximizing net income and economic life
3. c.Maintain full occupancy
4. d.Adjust rent to keep units occupied

A tenant signed a lease with a 10/5 move-in date. On 10/1 they're told the new date is 10/15. What can the tenant do?

1. a.Nothing, they signed the lease
2. b.Issue an eviction notice
3. c.Issue a constructive eviction notice
4. d.Move in on 10/5 even if the unit isn't ready

A property bought and renovated to be leased out had what kind of maintenance done?

1. a.Property maintenance
2. b.Construction maintenance
3. c.Corrective maintenance
4. d.Home improvement maintenance