How Much Do You Really Know?

(Up-To-Date Cram Course Questions)

Knowledge Quiz
R0920

OWNERSHIP
1. How would an unmarried couple take ownership to real property if they wanted full ownership immediately upon
the death of the other co-owner?

A. Severalty.
B. Tenancy in common.
C. Joint tenancy.
D. Tenancy by the entirety.

2. A person bought three lots for $22,000 net each and divided them into four lots of equal frontage. The lots were
then sold for $18,000 each. What was the approximate percentage of gross profit?

A. 3%
B. 9%
C. 12%
D. 33%

3. In a trust, legal title to real property is transferred to a person to be held and managed by the person for the benefit
of the:

A. trustee.
B. trustor.
C. beneficiary.
D. grantor.

4. A person who purchases shares of stock in a corporation that owns a building and receives a proprietary lease to a
specific unit within the building has purchased a:

A. condominium.
B. cooperative.
C. timeshare.
D. limited partnership.

5. Several persons own property as tenants in common. One of the owners dies and the heirs want to sell the
property, whereas the other owners prefer to retain the property. If the parties cannot reach an agreement, which
of the following actions would most likely be taken by the heirs who want to sell?

A. Force the remaining owners to buy his or her interest.

B. File a partition action.
C. File a foreclosure action.
D. File a quiet title action.

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 6. A father conveyed the family property to his daughter by will as a pur autre vie estate for the life of her mother. If the
daughter should die before the mother, who gains possession of the property?

A. Remainderman.
B. Mother.
C. Father.
D. Daughter’s heirs

7. Under cooperative ownership the lease that grants occupancy of a specific unit to the stockholder is called a:

A. percentage lease.
B. proprietary lease.
C. sublease.
D. net lease.

8. Which of the following would best describe interval ownership?

A. A timeshare ownership in which the owner acquires title to a specific property for a certain period of each year.
B. An ownership interest in a limited partnership.
C. A leasehold interest in a cooperative.
D. Trust ownership, whereby legal title to the property is transferred to a trustee to be held and managed for the benefit
of another.

9. Which of the following transactions would most likely be subject to the state’s blue-sky laws?

A. Sale of a single family residential home.

B. Sale of a limited partnership interest or condominium.
C. Purchase securities in a timeshare ownership plan.
D. Rental of a commercial office building.

10. The owner of a residential condominium unit and a tenant under a lease both have:

A. a lien on the property.

B. an estate in the property.
C. a lis pendens.
D. the right of first refusal.

11. An item of personal property that, by the process of attachment and by intent, has become real property is called:

A. an estate.
B. a fixture.
C. an emblement.
D. chattel.

12. In Georgia, the legal description section of the listing agreement would NOT contain information about the
following items:

A. state and county.

B. city and state.
C. plat book and page.
D. range and townships.

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 13. In Georgia, the Georgia Time-Share Act requires developers of timeshare projects make disclosures to
prospective buyers of all material facts about the property, including the buyer’s right to rescind the contract
within seven days. This information would be contained in the:

A. purchase and sale agreement.

B. public offering statement.
C. seller’s property disclosure statement.
D. warranty deed.

14. In Georgia, the principal source of the legal description is:

A. the seller’s warranty deed.

B. public record.
C. the listing company.
D. the plat map.

15. In Georgia, when locating the point of beginning in a metes and bounds legal description which of the following
terms would NOT render the legal description void?

A. approximately.
B. more or less.
C. exactly.
D. about.

16. In Georgia, the prevailing legal description is:

A. lot and block method.

B. rectangular (government) survey.
C. metes and bounds.
D. Street address.

17. In Georgia, when a corporation owns property, the listing agreement must have the corporate seal affixed and the
signature of an authorized officer. In the absence of the corporate seal the listing must be signed by:

A. the corporate president and treasurer.

B. two authorized officers.
C. a notary.
D. a superior court judge.

18. The owner of a parcel of land leases the land to a farmer to grow crops. The crops would be considered:

A. the real property of the landowner

B. the real property of the farmer.
C. the personal property of the landowner.
D. the personal property of the farmer.

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ENCUMBRANCES
1. The owner in a residential subdivision gets a building permit from the county to put a fence on his property. The fence
is in violation of the subdivision’s restrictions (CC&R). An adjoining neighbor in the subdivision objects to the fence.
If the homeowner’s association (HOA) fails to enforce the restrictions the neighbor’s best action would be to:

A. have the county enforce the restriction.

B. apply to the court for an injunction.
C. have the permit revoked.
D. file a lis pendens as soon as possible.

2. Rules established by the local government to regulate building and construction standards are called:

A. building permits.
B. building codes.
C. certificates of occupancy.
D. building restrictions.

3. Which of the following statements best describes a lien on real property?

A. An encumbrance that affects the use of the property.

B. A monetary claim unsecured by real property.
C. An easement to use an adjoining property.
D. A monetary encumbrance affecting title to the property.
4. Nancy wants her neighbor Bill to give her the privilege to cross his property to access the lake. Bill is concerned
that if Nancy moves he might not want the new owner crossing his property. Bill should consider giving Nancy:

A. an easement.
B. a license.
C. an encroachment.
D. a lis pendens.

AGENCY
1. Broker Dole was showing a buyer different apartments for rent in a specific area of a city. The buyer asked Dole
to find an apartment that did not allow children as the buyer desired peace and quiet and felt that children would
destroy their privacy. Broker Dole should:

A. tell the buyer to look for ads that read “adults only” apartments.
B. inform the buyer that this would be “steering” and, therefore, illegal.
C. inform the buyer that only bona fide retirement communities can legally restrict children.
D. inform the buyer that all properties are now open to children due to the 1988 amendments to the Fair Housing
Act.

2. A salesperson is showing property in a racially changing neighborhood. Which of the following statements by the
salesperson would be appropriate in this situation?

A. I’ll show you the property but I would not live here.
B. Because of the changes happening I don’t think you will like the property.
C. I need to inform you this is a racially changing neighborhood.
D. Based on the information you have provided, I don’t think you can afford that property.

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 3. Under the Federal Fair Housing Act, familial status would apply to:

A. A single person.
B. A married person.
C. A pregnant woman.
D. A person 62 years of age or older.

4. In Georgia, two licensees affiliated with the same broker are assigned by the broker to represent the buyer and
seller respectively in the same transaction. Under BRRETTA this would be considered:

A. designated agency.
B. dual agency.
C. implied agency.
D. ostensible agency.
5. A licensee should search the National Do Not Call Registry on a regular basis and drop registered consumer
phone numbers from their call lists. This should be done at least once every:

A. 31 days.
B. 60 days.
C. 90 days.
D. 180 days.

6. Under the CAN-SPAM Act opt-out request must be handled within:

A. 10 business days.
B. 30 business days.
C. 31 business days.
D. 3 months.

7. A potential buyer attends an “open house” on a listed property and inquires about the sales price. The interested
buyer is registered on the Do-Not-Call Registry. Can the salesperson call the interested buyer?

A. No, registered buyers cannot be contacted.

B. No, only the buyer can call the agent.
C. Yes, the agent can call for up to three months after the consumer makes an inquiry.
D. Yes, the agent can call for up to 18 months after the consumer makes an inquiry.

8. A property sells for $195,000. The existing loan balance is $114,000 and the seller’s closing costs are $2,500.
What are the seller’s net proceeds if the brokerage fee is 6%?

A. $53,400
B. $57,700
C. $66,800
D. $78,500

9. A property was listed at $260,000 and sold for $245,000. The closing costs were $2,800. The listing broker
received a brokerage fee of $14,700. What was the rate of commission?

A. 5%
B. 6%
C. 7%
D. 8%

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 10. A brokerage company recently had a listing expire. The seller is on the Do-Not-Call list. After the end of the
transaction for many months may the agents in the listing office call the seller?

A. 6 months.
B. 12 months.
C. 18 months.
D. 24 months.

11. What type of agency relationship does a real estate sales associate usually have with their employing broker?

A. Special agency.
B. General agency.
C. Universal agency.
D. Dual agency.

12. An offer to purchase with a $500 earnest money check is received on Monday evening. The offer states the
salesperson is to hold the earnest money until the offer is accepted by the seller. Your broker requires all earnest
money deposits be turned over to the office manager during normal business hours (9AM to 5PM). The offer
does not expire until Thursday and the seller is out of town until Wednesday. The salesperson should:

A. hold the earnest money check and present the offer to the seller on Wednesday.
B. deposit the check into their personal checking account.
C. deliver the check to their broker Tuesday morning with instructions to hold the check until the offer is
accepted.
D. deliver the check to their broker after the offer is accepted.

13. Which of the following statements about an open listing is incorrect?

A. A listing given to any number of brokers who can put their “For Sale” signs on the property if they have
written authority.
B. The first broker to secure a buyer who is ready, willing and able to purchase at the terms of the listing earns
the commission.
C. In the case of a sale, the seller is not obligated to notify any of the brokers that the property has been sold.
D. In Georgia, open listings do not have to be in writing.

14. Under the Civil Rights Act of 1866 a property for sale by owner would NOT be exempt from:

A. national origin.
B. race.
C. familial status.
D. religion.

15. In Georgia, a seller says “I want $160,000 for my home and the brokerage company can have everything over that
amount.” This listing is considered:

A. a “net” listing which is prohibited by the Georgia Real Estate License Law.
B. a “net” listing which is a violation of antitrust laws.
C. an open listing which is prohibited by the Georgia Real Estate License Laws.
D. an open listing which violates the Fair Housing Law.

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 16. Those facts that a party does not know, could not reasonably discover, and would reasonably want to know
when making a decision best describes:

A. material facts and must be disclosed to clients only.

B. material facts and must be disclosed to all parties with whom the broker is working.
C. ministerial acts which require the exercise of the broker’s professional judgment.
D. ministerial acts which do not require the exercise of the broker’s professional judgment.

17. Which of the following is NOT a violation of the antitrust laws?

A. Price fixing.
B. Group boycotting.
C. Tying arrangements
D. Discrimination.

18. Net listing are illegal in Georgia because:

A. they are a violation of the Federal Fair Housing Law.

B. of the potential conflicts they can create between the interest of the principal and the broker’s self-interest.
C. they do not include an expiration date.
D. they are not in writing.

19. Which of the following laws requires the display of equal opportunity posters at real estate brokerage offices,
model homes, mortgage lenders’ offices, and other real estate locations?

A. Equal Credit Opportunity Act.

B. American’s with Disabilities Act.
C. Federal Fair Housing Act.
D. Georgia Real Estate License Law.

20. If a listing has expired, can the agents of the listing brokerage firm that handled the listing contact the seller, if the
seller’s name is on the “do not call list”?

A. Yes, for up to 12 months.

B. Yes, for up to 18 months.
C. No, only new agents from another brokerage company can call the seller.
D. No, the seller would have to remove their name from the “do not call list”.

21. A licensee sent out a broadcast fax to announce a reduced price of a listed property. The fax must include:

A. the name and phone number of the licensee.

B. the address of the listed property.
C. an opt-out process to prevent receiving future unsolicited advertising faxes.
D. the valid physical postal address of the sender.

22. Under the CAN-SPAM Act opt-out request must be handled within:

A. 30 business days.
B. 10 business days.
C. 31 business days.
D. 3 months.

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 23. A potential buyer attends an open house on a newly listed property. The buyer makes an inquiry with the listing
agent about the price of the property. At a later date the agent wants to follow-up with the buyer only to find the
buyer is listed on the Do-Not-Call list. Can the agent call the buyer concerning the property?

A. Yes, for up to three (3) months after the inquiry.

B. Yes, for up to eighteen (18) months after the inquiry.
C. No, if the number is on the list the agent cannot call.
D. No, the buyer would have to call the agent.

CONTRACTS
1. An intoxicated buyer made an offer on a seller’s property. The seller accepted the offer and communicated the
acceptance to the buyer. This contract would be:

A. valid and is binding in a court of law.

B. void and has no legal effect.
C. voidable by the offeree.
D. voidable by the offeror.

2. In a land contract (contract for deed), which of the following statements is correct?

A. The vendor holds equitable title.

B. The vendee holds legal title.
C. The seller retains legal title.
D. The buyer received legal title.

3. Under the Electronic Signatures in Global and National Commerce Act (E-Sign), which of the following
statements is correct?

A. A contract can be denied its legal effect because an electronic signature was used.
B. If a state’s law requires a signature on a contract, an electronic signature is not sufficient.
C. Contracts using e-mail have the same legal significance as those found on paper.
D. If the state’s statute of frauds law requires certain contracts to be in writing and signed by the parties involved
to be legally enforceable, an electronic contract and signature are not legally sufficient.

4. A borrower is in default on their loan. Rather than experiencing the delay and expense of a foreclosure action the
lender agrees to release the mortgage so the property can be sold to a new purchaser. If the sale produces less
money than is owed the lender the transaction would be referred to as a:

A. deed in lieu of foreclosure.

B. short sale.
C. land contract.
D. power of sale.

5. When adding special stipulations to a contract if there is a conflict between the wording in the stipulations and
portions of the preprinted contract the:

A. handwritten wording takes precedence over the typewritten wording which takes precedence over preprinted
wording.
B. preprinted wording takes precedence over typewritten wording which takes precedence over handwritten
wording.
C. typewritten wording takes precedence over preprinted wording which takes precedence over handwritten
wording.
D. handwritten wording will not be recognized under the law due to the statute of fraud.

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 6. A prospective purchaser asked the seller to lease the house with an option to purchase. If the seller agrees to this
type of arrangement, when should you prepare to write the required sales contract?

A. Before you write the lease.

B. At the same time you write the lease, attach a copy to the lease, consult with your broker, and have both
contracts signed by the parties.
C. Before the “option to purchase” clause expires.
D. After the lease expires.

7. A buyer made an offer on a seller’s residential property. The offer included earnest money in the form of an
antique clock valued at $3,000. The agent should:

A. Advise the buyer that only cash or personal checks are acceptable forms of earnest money.
B. Advise the buyer that the clock cannot be deposited into the broker’s trust account and a cash deposit is
required.
C. Advise the seller of the form and value of the earnest money being offered.
D. Advise the seller the earnest money is $3,000 cash.

8. Due to an ambiguity in the financing terms, the sellers failed to understand they will be carrying a second
mortgage note for five years and wanted to cancel the contract. Might the court cancel the contract?

A. Yes, if the sellers can prove to the court that they are financially incapable.
B. Yes, if a contract contains any ambiguity the court will generally rule against the party who prepared it.
C. No, because a signed and accepted contract is valid.
D. No, because Regulation Z does not apply since no lender was involved.

9. A new home being sold is owned by a corporation. Which of the following statements concerning the sales
contract is INCORRECT?

A. The corporation should adopt a resolution authorizing the sale of the property and name the persons
authorized to sign the contract and attach the resolution to the contract.
B. The contract should have the corporate seal affixed and the signature of an authorized officer.
C. In absence of the corporate seal, the signature of two authorized officers will suffice.
D. The signature of at least two major stockholders will suffice.

10. Who generally orders the “termite clearance letter”?

A. The closing attorney

B. The lender.
C. The seller or purchaser.
D. The listing agent.

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APPRAISAL
1. What is the gross living area in the below diagram?

48’

30’
30’

Garage
20’
20’
11’

10’ Patio 10’

17’

A. 1440 sq. ft.

B. 1040 sq. ft.
C. 1260 sq. ft.
D. 1491 sq. ft.

2. When computing the square footage of a single family home an appraiser would measure:

A. the exterior dimensions of the house plus add the square footage of the garage.
B. the exterior dimensions of the house less the square footage of the garage.
C. the interior dimensions of the house plus add the square footage of the deck, pool, and garage.
D. the interior dimensions of the house less the square footage of the garage.

3. The gross rent multiplier (GRM) would be used when estimating the value of a:

A. industrial warehouse.
B. income producing residential duplex.
C. commercial office building.
D. vacant lot.

4. You are pricing a property and found four suitable comparables (I, II, III and IV) with the following adjusted sales
prices:

I. $127,000
II. $131,000
III. $133,000
IV. $128,000

In your opinion, property II was the most similar to the subject property. You decided to “weight” it with 60% of
the total value estimate. Accordingly, you decide to “weight” property I with 20%. Properties III and IV were
least like the subject property and you gave them each 10% for a total of 100%. What is your estimate of what
the property is worth?

A. $129,750
B. $131,000
C. $133,000
D. $130,100
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FINANCE
1. Truth In Lending / Regulation Z applies to which of the following real estate transactions?

A. Business.
B. Commercial.
C. Residential.
D. Agricultural.

2. Discount points on a loan are used by the lender to:

A. Pay the loan application fee.

B. Increase the yield on the loan.
C. Increase the loan to value ratio.
D. Reduce the down payment.

3. Which of the following statements is TRUE about a buy-down loan?

A. The buy-down period is usually six to ten years.

B. An initial payment is made to a lender at closing to lower the interest rate, and help the buyer qualify thus
reducing monthly payments.
C. The secondary market will not purchase a buy down mortgage.
D. Buy-down funds cannot be provided by a builder, developer or seller.

4. Which of the following loans best describes an interim loan?

A. A long term “take out” loan.

B. A short term “construction loan”.
C. A reverse mortgage.
D. FHA 203 B loan.

5. The interest or value remaining in property after payment of all terms or other charges on the property is called:

A. appreciation.
B. equity.
C. interest.
D. principal.

6. A financing technique whereby a seller or builder will make subsidy payments to the lender that will lower the
effective interest rate paid by the buyer, thus reducing the buyer’s monthly payments is called:

A. discount.
B. buy-down.
C. amortization.
D. equity sharing.

7. Under the TILA-RESPA Integrated Disclosure rule, the HUD-1 and final Truth In Lending disclosure have been
combined into a new form called:

A. Loan Estimate.
B. Closing Disclosure.
C. Seller’s Property Disclosure.
D. Buyer’s Loan Application.

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 8. A licensee runs the following credit ad “this property can be yours for only $950 a month”. Which of the
following items must be included?

A. Sales price.
B. Property tax rate.
C. Annual percentage rate.
D. Address of the property.

9. Five years ago an owner purchased a parcel of property for $200,000 and financed the purchase with a $150,000
6% conventional loan. Today the value of the property is estimated at $239,000 and the loan balance is $146,000.
The owner’s equity is?

A. $50,000
B. $89,000
C. $93,000
D. $239,000

10. Which of the following is a similar characteristic of both a FHA and VA loan?

A. Both are government backed loans and non-assumable.

B. Both loans require down payments which can be financed.
C. Both loans have prepayment privileges and cannot be charged a prepayment penalty.
D. These loans must be paid within 20 years.

11. A mortgage that may be repaid in full at any time over the life of the loan without a prepayment penalty by the
lender is:

A. an open mortgage.
B. an open-end mortgage.
C. a non-recourse loan.
D. a purchase money mortgage.

12. In which of the following loans is the borrower not held personally liable on the note?

A. Wraparound loan.
B. Non-recourse loan.
C. Purchase money mortgage.
D. Open loan.

13. Which of the following agencies is responsible for implementation of the TILA-RESPA Integrated Disclosure Rule?

A. FHA.
B. VA.
C. HUD.
D. CFPB.

14. Under the TILA-RESPA Integrated Disclosure Rule, this form replaced the HUD-1 Settlement Statement and must be
provided to the consumer/borrower at least three business days before consummation (closing) of the loan?

A. Loan Estimate.
B. Closing Disclosure.
C. IRS Form 1099-S
D. IRS Form 8300

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 15. Under the TILA-RESPA Integrated Disclosure Rule (TRID), the Loan Estimate form is required to be provided to the
consumer/borrower no later than how many days after they submit a loan application?

A. 3 days.
B. 3 business days.
C. 7 days.
D. 7 business days.

16. Under the TILA-RESPA Integrated Disclosure (TRID) Rule, the initial Truth-in-Lending Statement and Good Faith
Estimate were replaced with the:

A. Closing Disclosure.
B. Loan Estimate.
C. HUD-1 Settlement Statement.
D. Uniform Settlement Statement.

17. In a loan assumption, a seller may be released from the debt and a new buyer substituted as the party permanently liable
for the mortgage debt. Who releases the seller?

A. Mortgagor.
B. Mortgagee.
C. Buyer.
D. Seller.

18. Which of the following is a characteristic of FHA?

A. Lends money to approved lenders.

B. Builds homes that meet HUD specifications.
C. Insures loans on real property including condominiums made by approved lenders.
D. Guarantees loans made for purchasing or constructing homes by eligible borrowers.

19. Which of the following loans would have a balloon payment?

A. A partial amortized second mortgage.

B. A fully amortized 30-year first mortgage.
C. A growing equity loan (rapid payoff loan).
D. A reverse mortgage.

20. In a sale-leaseback agreement between a buyer and seller, which of the following statements is true of the
arrangement?

A. The buyer becomes the lessor.

B. The seller is the lessor.
C. The buyer is the grantor.
D. The seller is the grantor.

21. The maximum term of a residential VA or FHA loan is?

A. 10 years.
B. 20 years.
C. 30 years.
D. 40 years.

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 22. Which of the following loans would most likely have the highest interest rate?

A. A 203B FHA loan to buy a single family house.

B. A VA loan with nothing down to buy a duplex.
C. A 80% conventional loan to buy a new home.
D. A construction loan to build a new lake house.

23. Which of the following forms of financing would enable elderly homeowners to borrow against the equity in their
home so they receive monthly payments needed to help meet living costs?

A. Purchase money mortgage.

B. Reverse annuity mortgage.
C. Wraparound mortgage.
D. Blanket mortgage.

24. An applicant for a loan has a stable gross monthly income of $6,500. The lender’s maximum housing expense to
income is 28% and maximum debt ratio is 36%. The monthly mortgage payment (PITI) is $1,638.00 and the
applicant has monthly obligations of $500 for car payment and $900 for student loan payment. Would the lender
most likely approve the loan?

A. No, the mortgage payment exceeds the housing expense to income ratio.
B. No, the applicant’s monthly obligations exceed the debt to income ratio.
C. Yes, the mortgage payment is within the housing expense to income ratio.
D. Yes, the total monthly obligations are within the debt to income ratio.

25. After the last monthly payment the principal balance on a loan is $100,000 with an interest rate of 8% per year
and constant payments of $734, what is the principal portion of the next payment?

A. $67.33
B. 666.67
C. $587.20
D. $58.20

26. What is the maximum interest rate on a FHA loan?

A. 3 ½%
B. 5%
C. 10%
D. no limit.

27. Low closing costs are usually associated with a:

A. new FHA loan.

B. loan assumption.
C. buy-down loan.
D. purchase money mortgage.

28. A buyer is taking out a 90% conventional loan for 30 years at an interest rate of 7 ½%. The property is selling for
$150,000 and is appraised for $140,000. What is the monthly principal and interest payment to amortize the loan?
(Use the attached mortgage factor chart located at the end of the test).

A. $1,048.50
B. $978.60
C. $943.65
D. $880.74

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 29. Under TRID which of the following would NOT be considered a business day?

A. Saturdays only.
B. Sundays only
C. Holidays only.
D. Sundays and holidays.

30. In a loan assumption who is liable for the original debt?

A. Only the new buyer who assumed the loan.

B. Both the buyer and seller.
C. Only the seller.
D. The original borrower (seller) is never liable for the original loan.

31. What of the following loans is made by the seller of property to the buyer?

A. VA.
B. Purchase money mortgage.
C. Conventional.
D. FHA.

32. In Georgia, for new loans, the lender will require the purchaser to prepay the homeowner’s insurance premium for
a period of:

A. 3 months
B. 6 months
C. 1 year.
D. 3 years.

33. Which of the following would be considered a unique feature of a graduated-payment mortgage?

A. Initial loan payments are less than they would be under a fixed-payment loan.
B. Negative amortization cannot occur during the initial years.
C. Lower interest rate.
D. Lower down payment.

34. To protect consumers from unscrupulous lenders, many states have enacted laws limiting the interest rate that
may be charged on loans. Which of the following laws would accomplish this?

A. Truth-in-Lending acts.
B. Usury laws.
C. Equal Credit Opportunity Act (ECOA).
D. Fair Credit Reporting Act.

TRANSFER
1. A residential lease for real property under which the lessee pays $600 a month and the lessor pays the taxes,
insurance and other regular ownership charges is a:

A. ground lease.
B. net lease.
C. gross lease.
D. percentage lease.

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 2. The acquiring of title to real property owned by someone else by means of open, notorious, hostile and continuous
possession for a statutory period of time is an example of:

A. trespass.
B. adverse possession.
C. an easement.
D. accretion.

3. A court action to establish or settle the title to a particular property where there is a cloud on the title, such as an
adverse possession claim, is called a:

A. les pendens.
B. quiet title action.
C. judgment.
D. satisfaction.

4. The loss of land as a result of being washed away by a sudden act of nature, such as a flood, is referred to as:

A. accretion.
B. avulsion.
C. erosion.
D. reliction.

5. A deed in which the grantors warrant the title only against defects arising during their ownership of the property
and not against defects existing before that time is called a:

A. general warranty deed.

B. special warranty deed.
C. quit claim deed.
D. correction deed.

6. Can a homeowner use a capital gains taxation exclusion ($500,000 for married homeowners who file jointly and
$250,000 for single filers) on the sale of a principal residence more than once?

A. Yes, provided the home was used as their principal place of residence for two of the preceding five years.
B. Yes, provided the home was used as their principal place of residence for at least five years.
C. No, the capital gains exclusion can only be used one time by the homeowner.
D. No, the exclusion applies only to rental property.

7. A married couple rented an apartment for one year under a tenancy for years. The lease expired and the couple
remained in possession under a month to month periodic tenancy. Under the new lease, notice of termination by
either lessor or lessee is generally:

A. not required.
B. given at least 60 days prior to termination.
C. one year.
D. at least one rental period before termination.

8. A buyer wants assurance that the title is marketable. Which of the following is commonly accepted as the best evidence
of marketable title?

A. Title certificate.
B. Attorney’s opinion of the title abstract.
C. Title insurance policy.
D. Warranty deed.

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 9. A buyer of a home wants to purchase as insurance policy that would warranty against certain defects, such as a faulty
furnace, plumbing, etc. Which of the following insurance programs would satisfy this requirement?

A. Errors and Omissions (E&O).

B. Hazard insurance.
C. Homeowner’s warranty program (HOW).
D. Homeowner’s insurance.

10. Which of the following is NOT a duty of the closing attorney?

A. To represent the lender and conduct the closing.

B. To give the seller or the buyer legal advice.
C. To prepare all the necessary documents and explain each document to the buyer and seller when they sign it.
D. Deliver a complete detailed closing statement to the buyer and seller.

11. Calculate the Georgia intangibles tax on a property that sold for $94,500 with a new 30-year, 70% conventional loan.

A. $283.50
B. $661.50
C. $198.45
D. $199.50

12. The real estate sales associate’s primary rule at the closing table is to:

A. assist the closing attorney and refund the earnest money.

B. conduct the closing and deliver closing statements to all parties.
C. represent the broker, complete their duties as agent for the client, and secure a copy of the closing statement for the
broker.
D. pick up the commission check and deliver it to the broker.

13. In Georgia, before terminating a tenancy at will:

A. the landlord must give a tenant sixty day notice and a tenant must give a 30-day notice.
B. both the landlord and tenant must give a 30-day notice before terminating.
C. both the landlord and tenant must give a 60-day notice before terminating.
D. the landlord must give a tenant a thirty-day notice and a tenant must give a 60-day notice.

14. The closing date is April 6 and the property taxes of $650 are unpaid. The tax proration to the seller would be?

A. A credit of $170.96
B. A credit of $479.04
C. A debit of $170.96
D. A debit of $479.04

15. Which of the following forms is used in the majority of residential real estate closings?

A. Lead-based paint disclosure.

B. Agency disclosure.
C. Seller’s property disclosure.
D. Uniform settlement statement.

16. A property was listed for $160,000. Cathy purchased the property for $150,000 and received a 90% loan with 3 points
closing costs, 1 point discount, and 1 point prepayment penalty. The property appraised for $155,000. The total cost of
the loan is:

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 A. $5,400
B. $6,000
C. $4,500
D. $4,050

17. A salesperson would like to review any title issues on a seller’s property. This information could be found:

A. on the general warranty deed.

B. in the abstract of title.
C. on the seller’s property disclosure.
D. in the chain of title.

18. The most commonly used form required by TRID at settlement is:

A. the seller’s property disclosure.

B. the lead-based paint disclosure.
C. the closing disclosure (CD).
D. the loan estimate (LE).

19. A lease which is indefinite in duration and requires notice from either party to terminate is most likely:

A. an estate for years.

B. a periodic estate.
C. an estate at will.
D. an estate at sufferance.

GEORGIA LICENSE LAWS, RULES AND REGULATIONS / GEORGIA REAL

ESTATE PRACTICE
1. In Georgia, a property sells for $216,000 and the buyer assumes the seller’s $187,000 loan. How much is the
transfer tax?

A. $648
B. $561
C. $216
D. $29

2. Violations of the Georgia Residential Mortgage Fraud Act are a felony and can be punishable by:

A. a fine up to $1,000.
B. a fine up to $3,000.
C. imprisonment for up to 5 years.
D. imprisonment for up to 10 years, a fine up to $5,000 or both.

3. In Georgia a property sells for $187,000. The buyer obtains a 90% conventional loan for 30 years. How much
will be owed in intangibles taxes?

A. $168.30
B. $187.00
C. $505.50

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 D. $561.00

4. In Georgia, a property sells for $292,560. How much will be owed in transfer tax?

A. $292.56
B. $292.60
C. $877.68
D. $879.00

5. In order to qualify for a Georgia salesperson license, an applicant must be:

A. A resident of the state of Georgia.

B. A high school graduate.
C. At least 18 years old.
D. A citizen of the United States.

6. The Georgia Real Estate Commission may impose a necessary fine, but for a single violation that fine
must not exceed:

A. $100
B. $500
C. $1,000
D. $5,000
7. A licensee must give all earnest money received (cash, checks or items of value) to his/her broker:

A. within 3 days of receipt.

B. as soon as practically possible.
C. when the offer is accepted.
D. at closing.

8. Any firm using a trade name on for sale signs, business cards, contracts or other documents relating to a
real estate transaction must include:

A. the firm’s name and address.

B. the firm’s name, address and phone number.
C. the firm’s name as it is registered with the Commission.
D. the firm’s owner’s name.

9. Any outdated information on a website that a licensee maintains must be updated or removed from the
website within ___ days.

A. 15
B. 30
C. 45
D. 60

10. Regarding internet advertising, if a licensee has a website they must disclose the:
A. address of the licensee’s firm on every page of the website.
B. name of the licensee’s firm on every page of the website.
C. name and phone number of the licensee’s firm on every page of the website.
D. name, phone number, and address of the licensee’s firm on every page of the website.

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 11. A licensee is transferring to another brokerage company. Which of the following statements is correct
concerning the application for transfer?

A. Only the licensee’s broker may sign the application.

B. The licensee’s broker or an associate broker may sign the application, if the associate broker is
authorized in writing by the broker.
C. The Real Estate Commissioner must sign the transfer application.
D. The signature of the transferring licensee is all that is required.

12. In advertising a specific property or properties for sale or rent, all real estate firms must include in the
advertisement:

A. only the name of the firm that is registered with the Commission.
B. the name of the firm that is registered with the Commission and the firm’s address.
C. the name of the firm that is registered with the Commission and the firms license number.
D. the name of the firm that is registered with the Commission and a telephone number for the firm.

13. If a Georgia real estate broker is required to maintain a trust account or escrow account, they must
provide the Commission with:

A. only the name of the bank in which the trust account is held.
B. only the account number or name of the account.
C. both the name of the bank and the number or name of the account within 10 days of opening the
account.
D. both the name of the bank and the number or name of the account within one month of opening the
account.

14. Which of the following statements regarding brokerage agreements is false?

A. Each exclusive brokerage agreement must fully set forth its terms and have a definite expiration
date.
B. At the time of securing a brokerage engagement, the licensee securing such engagement must
furnish each person signing it a true copy thereof.
C. The Commission prohibits the acceptance by brokers of net brokerage engagements.
D. Each exclusive brokerage engagement must include the street address of the property.

15. If a licensee is convicted of a felony offense the Commission must be notified:

A. within 30 days.
B. within 60 days.
C. within 90 days.
D. immediately.

16. In Georgia, any licensee who intentionally uses fraudulent or misleading information in an effort to
encourage the sale of real property could violate the:

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 A. federal antitrust law.
B. fair housing law.
C. the fair business practice act.
D. truth in lending act.

17. A licensee uses the fact that minorities are moving into the neighborhood as a reason to attempt to list
his or her property for sale. This would be considered:

A. steering.
B. blockbusting.
C. a stigmatized property.
D. sexual harassment.

18. BRRETA requires each brokerage firm to develop and maintain an office brokerage relationship policy.
The broker or affiliated licensee must disclose this policy to a prospective seller:

A. when they first meet.

B. before entering into a listing agreement.
C. after entering into a listing agreement.
D. at closing.

19. Which of the following is a credit on the estimated purchaser’s cost worksheet?

A. Purchase price.
B. Loan assumed.
C. Survey.
D. Hazard insurance escrow.

20. The sales price of a property is $89,900. The buyer assumed a $46,500 loan at 4%. How much is the Georgia
transfer tax?

A. $43.40
B. $89.90
C. $130.50
D. $270.00

21. Which of the following is NOT considered a seller’s cost?

A. Accrued interest.
B. Unpaid property taxes.
C. Broker’s fee.
D. Mortgage insurance.

22. A purchaser obtains a new 90% conventional loan in the amount of $68,500 for 30 years at 7% interest (loan
factor 6.66). The estimated principal and interest monthly payment is:

A. $410.59
B. $425.00
C. $456.21
D. $666.00

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 23. The purchase price is $310,000. The purchaser pays $18,600 down. The loan would be considered a ____
conventional loan.

A. 80%
B. 90%
C. 95%
D. 100%

24. Who pays the Georgia intangible tax?

A. Buyer only.
B. Seller only
C. Lender only
D. Agreed upon parties.

25. The sales price is $87,000 with a 30 year 90% conventional loan. How much is the Georgia intangibles tax?

A. $78.30
B. $87.00
C. $235.50
D. $261.00

26. Which of the following items would a licensee most likely give to a seller when getting a listing and also prior to
closing?

A. Seller’s property disclosure statement.

B. Seller’s estimated costs of sale worksheet
C. Seller’s loan information forms.
D. HUD uniform settlement statement.

27. A property listed for $250,000. The seller accepts an offer for $240,000. The property appraisers for $235,000
and a lender agrees to make a 90% conventional loan. How much is the buyer’s downpayment?

A. $20,000
B. $23,500
C. $28,500
D. $38,500

28. Using the mortgage factor chart on the back of this page, what is the monthly payment for a $150,000 loan at
5½% for 30 years?

A. $852
B. $1,032
C. $1,227
D. $1,629

29. In Georgia, no action by a claimant which could result in an order for the collection from the real estate education,
research, and recovery fund shall be started later than how long from the cause of action?

A. 1 year.
B. 2 years.
C. 3 years.
D. 4 years.

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