Georgia Real Estate Salesperson Exam — All Questions

An item of personal property that has become permanently attached to real estate, such as a built-in bookcase, is called a:

• a.Chattel
• b.Fixture✓
• c.Trade fixture
• d.Emblement

A fixture is personal property that has been permanently affixed to real estate and is treated as part of the real property. Courts consider the method of attachment, adaptation, and intent to determine fixture status.

Two unmarried business partners take title so that each owns a 60% and 40% share with no right of survivorship. This is:

• a.Joint tenancy
• b.Tenancy by the entirety
• c.Tenancy in common✓
• d.Ownership in severalty

Tenancy in common allows co-owners to hold unequal shares and has no right of survivorship, so each owner's interest passes to their own heirs. Joint tenancy requires equal shares and includes survivorship.

A homeowner wants to operate a small hair salon in a residential zone. The best way to seek permission for this specific departure from zoning is to request a:

• a.Variance
• b.Building permit
• c.Deed restriction
• d.Special-use (conditional-use) permit✓

A special-use or conditional-use permit allows a specific use that the zoning ordinance permits under conditions, such as a home business. A variance instead addresses hardship deviations like setback relief.

An appraiser is valuing a new special-purpose building, such as a church, with few comparable sales. Which approach is most appropriate?

• a.Cost approach✓
• b.Sales comparison approach
• c.Gross rent multiplier
• d.Income capitalization approach

The cost approach is best for special-purpose or newer properties that rarely sell and produce no income, because it estimates replacement cost minus depreciation plus land value. Comparable sales and income data are scarce for such properties.

When an appraiser adjusts for differences between a comparable property and the subject, adjustments are always made to the:

• a.Subject property's value
• b.Both properties equally
• c.Comparable property's sale price✓
• d.Listing price of the subject

In the sales comparison approach, adjustments are made to the comparable properties, never to the subject. If the comparable is superior, its price is adjusted downward; if inferior, upward.

A loan that is insured by the federal government to protect the lender against borrower default, allowing lower down payments, is a(n):

• a.Conventional loan
• b.FHA-insured loan✓
• c.Purchase-money mortgage from the seller
• d.Blanket mortgage

An FHA-insured loan is insured by the Federal Housing Administration, protecting the lender and allowing lower down payments and more lenient qualifying. A conventional loan carries no government insurance or guarantee.

Which federal law prohibits lenders from denying credit based on race, religion, sex, marital status, or age?

• a.RESPA
• b.Truth in Lending Act
• c.Fair Housing Act
• d.Equal Credit Opportunity Act✓

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction based on protected characteristics. It applies to all lending, not just housing.

A contract in which one party has begun performance but obligations remain on both sides is best described as:

• a.An executory contract✓
• b.An executed contract
• c.A void contract
• d.A unilateral contract

An executory contract is one that is not yet fully performed, with obligations remaining. Once all parties have completed performance, the contract becomes executed.

A seller receives an offer and returns it with a higher price. This response is legally a:

• a.Valid acceptance
• b.Counteroffer✓
• c.Contingency
• d.Novation

Changing any material term of an offer creates a counteroffer, which rejects the original offer and creates a new offer the original offeror may accept or reject. No contract exists until an offer is accepted without changes.

Earnest money in a purchase contract primarily serves to:

• a.Pay the listing agent's commission
• b.Replace the down payment entirely
• c.Show the buyer's good-faith commitment to the purchase✓
• d.Guarantee the seller will accept the offer

Earnest money demonstrates the buyer's good-faith intent to complete the purchase and is typically applied to the purchase price or closing costs at closing. If the buyer defaults without a valid contingency, the seller may be entitled to it.

A contract signed by a minor is generally:

• a.Void from the start
• b.Automatically enforceable
• c.Illegal
• d.Voidable by the minor✓

A contract with a minor is generally voidable at the minor's option because minors lack full contractual capacity. The adult party is bound unless the minor chooses to disaffirm the contract.

An agent's duty to promptly account for and deliver all money and property belonging to the client reflects which fiduciary duty?

• a.Loyalty
• b.Obedience
• c.Accounting✓
• d.Confidentiality

The duty of accounting requires the agent to properly handle, report, and promptly deliver all funds and documents belonging to the client. Trust funds must be kept separate and never commingled.

A licensee who assists a buyer in a transaction but represents the seller is acting toward the buyer as:

• a.A customer, owing honesty and fairness but not full representation✓
• b.A client with full fiduciary duties
• c.A dual agent
• d.A designated agent

A person the agent does not represent is a customer, owed honesty, fairness, and disclosure of material facts, but not full fiduciary representation. Fiduciary duties are reserved for the client (principal).

An agent tells a buyer, 'This is the best home in the whole city.' This statement is generally considered:

• a.Fraud
• b.Puffing✓
• c.Misrepresentation
• d.A breach of fiduciary duty

Puffing is an exaggerated opinion or sales talk that a reasonable buyer would not take as a statement of fact. It is legal, unlike misrepresentation or fraud, which involve false statements of material fact.

A latent defect is best described as:

• a.A defect the buyer can easily see on a walkthrough
• b.A cosmetic issue that does not affect value
• c.A hidden material defect not readily observable by the buyer✓
• d.A defect the seller is never required to disclose

A latent defect is a hidden, material problem not discoverable through ordinary inspection, such as a cracked foundation behind a wall. Sellers and agents generally must disclose known latent defects.

A grantor conveys whatever interest they may have in a property with no warranties of title. This is accomplished with a:

• a.Quitclaim deed✓
• b.General warranty deed
• c.Special warranty deed
• d.Bargain and sale deed

A quitclaim deed conveys only whatever interest the grantor holds, if any, and provides no warranties of title. It is often used to clear clouds on title or transfer between family members.

A lender refuses to make loans in a particular neighborhood based on its racial composition. This illegal practice is:

• a.Steering
• b.Redlining✓
• c.Blockbusting
• d.Puffing

Redlining is the illegal practice of denying loans or insurance in specific areas, often based on the racial or ethnic makeup of the neighborhood. It violates the Fair Housing Act and fair lending laws.

Under the federal Fair Housing Act, which of the following is a protected class?

• a.Occupation
• b.Political affiliation
• c.Level of education
• d.Familial status✓

Familial status (having children under 18 or being pregnant) is one of the seven federally protected classes, along with race, color, religion, national origin, sex, and disability. Occupation and education are not federally protected.

An investment property generates $24,000 in net operating income and is valued at $300,000. What is the capitalization rate?

• a.6%
• b.8%✓
• c.12%
• d.4%

Cap rate equals net operating income divided by value: $24,000 / $300,000 = 0.08, or 8%. The cap rate expresses the property's return independent of financing.

A buyer obtains an 80% loan-to-value mortgage on a home priced at $350,000. What is the loan amount?

• a.$70,000
• b.$300,000
• c.$280,000✓
• d.$350,000

An 80% loan-to-value ratio means the loan equals 80% of $350,000, which is $280,000. The remaining $70,000 is the buyer's down payment.

Real estate licensees in Georgia are regulated by which body?

• a.The Georgia Association of Realtors
• b.The Georgia Department of Banking
• c.The Georgia Real Estate Commission (GREC)✓
• d.The county probate court

The Georgia Real Estate Commission (GREC) licenses and regulates real estate brokers and salespersons in Georgia. Trade associations such as the Georgia Association of Realtors do not issue or govern licenses.

In Georgia, a newly licensed real estate salesperson must:

• a.Work under the supervision of a licensed broker✓
• b.Immediately open an independent brokerage
• c.Hold client funds in a personal account
• d.Practice without any continuing education

A Georgia salesperson (associate) must be affiliated with and supervised by a licensed broker, who is responsible for the salesperson's activities and trust funds. Independent practice requires a broker license.

Under Georgia's Brokerage Relationships in Real Estate Transactions Act (BRRETA), a licensee who represents a client owes that client:

• a.Only a duty of honesty
• b.Statutory duties including loyalty and confidentiality✓
• c.No duties until closing
• d.Duties only to the broker

BRRETA sets out the statutory duties a Georgia licensee owes to a client, including loyalty, obedience to lawful instructions, disclosure, confidentiality, and accounting. Customers are owed a more limited set of duties such as honesty and disclosure of material facts.

In a typical Georgia residential closing, the settlement is generally conducted by or under the supervision of:

• a.The listing agent
• b.The buyer's lender directly
• c.A licensed Georgia attorney✓
• d.The Georgia Real Estate Commission

Georgia is an attorney-closing state, meaning the closing must be conducted by or under the supervision of a licensed Georgia attorney. This differs from states that permit escrow or title-company closings without an attorney.