Georgia Real Estate Salesperson Exam — All Questions

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.

A Georgia home sells for $250,000. What is the Georgia real estate transfer tax on the deed?

• a.$25.00
• b.$750.00
• c.$2,500.00
• d.$250.00✓

The rate is $1 for the first $1,000 or fractional part, then 10 cents for each additional $100 or fractional part: $1 + (249,000/100 x $0.10) = $250.00. The $750 figure comes from applying the intangible recording tax rate, and $2,500 from applying a flat one percent. Cite: Georgia Department of Revenue, Real Estate Transfer Tax; O.C.G.A. 48-6-1.

Who is liable for the Georgia real estate transfer tax on a residential sale?

• a.The seller, though the contract often shifts it to the buyer✓
• b.The buyer, though the contract often shifts it to the seller
• c.The closing attorney, who remits it out of settlement funds
• d.The lender, which collects it with the borrower's prepaid items

The Department of Revenue states that the seller is liable for the real estate transfer tax, although the parties frequently agree in the sales contract that the buyer will pay it. The tax must be paid before the deed can be recorded with the clerk of the superior court. Cite: Georgia Department of Revenue, Real Estate Transfer Tax; O.C.G.A. 48-6-1.

Before a Georgia broker places earnest money into an interest-bearing trust account, what must the broker have?

• a.Approval of the account by the Commission's staff accountant
• b.A court order directing who is entitled to the interest earned
• c.Notice to the parties that interest will be paid to the broker
• d.A written agreement of the parties on who receives the interest✓

If a broker elects to deposit funds into an interest-bearing trust account, the broker must obtain the written agreement of the parties indicating to whom the interest will be paid before those funds are deposited. Keeping the interest without that written agreement is a separately citable violation. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(1)(d).

A Georgia salesperson takes a buyer's earnest money check on a Saturday. What does the rule require of the salesperson?

• a.Deposit it into the firm's trust account by the next business day
• b.Place it in the broker's custody as soon as practicably possible✓
• c.Hold it until the seller accepts, then deliver it to the broker
• d.Return it to the buyer if the broker's office is closed that day

A licensee must place all cash, checks or other items of value received in a brokerage capacity into the custody of the broker holding the licensee's license as soon after receipt as is practicably possible. The salesperson does not make the deposit; the broker does. Failing to turn funds over carries a $500 citation fine. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(1)(b); r. 520-1-.14(3)(a).

How long must a Georgia broker keep the written monthly trust account reconciliation statements?

• a.One year from the date each statement is prepared
• b.Two years from the date each statement is prepared
• c.Three years from the date each statement is prepared✓
• d.Seven years from the date each statement is prepared

A broker must cause a written reconciliation comparing total trust liability with the reconciled bank balances to be made at least monthly, must review it, and must keep copies in the broker's files for a period of three years. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(6)(a).

A Georgia broker opens a second designated trust account. What does the rule require?

• a.Notify the Commission of the institution and account within one month✓
• b.Obtain the Commission's written approval before accepting any deposit
• c.File a certified public accountant's report on the new account at once
• d.Register the account with the Commission at the next license renewal

Brokers may maintain more than one designated trust or escrow account but must notify the Commission of the name of the financial institution and each account's name or number within one month of opening each account. Failure to register an account is a $600 citation fine per account. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(1)(a); r. 520-1-.14(3)(n).

A Georgia broker disburses earnest money in a way one party has not expressly agreed to. What must the broker then do?

• a.File an interpleader action in court within three business days
• b.Hold firm funds equal to the amount that was disbursed
• c.Obtain the qualifying broker's countersignature on the check
• d.Immediately notify all of the parties of the disbursal in writing✓

When a broker makes a disbursal to which all parties to the contract do not expressly agree, the broker must immediately notify all parties in writing. Interpleader is one of the seven listed safe-harbour grounds for disbursing, not a follow-up obligation. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(3)(b)-(c).

Under GREC's citation schedule, a trust fund deposit is treated as untimely when it is made more than how long after receipt, absent a contrary contract term?

• a.One business day after the licensee receives the funds
• b.Three business days after the licensee receives the funds✓
• c.Five business days after the licensee receives the funds
• d.Ten business days after the licensee receives the funds

The schedule of violations sets a $600 fine for failure to deposit trust funds promptly where the deposit was made more than three business days after receipt, unless the contract provides otherwise. Cite: Ga. Comp. R. & Regs. r. 520-1-.14(3)(t); O.C.G.A. 43-40-25(b)(3).

How long must a Georgia broker keep copies of sales contracts, closing statements and leases?

• a.One year from the date the transaction closes
• b.Two years from the date the transaction closes
• c.Three years from the date the transaction closes✓
• d.Five years from the date the transaction closes

Copies of sales contracts, brokerage engagements, closing statements, leases and other transaction documents must be kept in a broker's file for three years and made available to authorized agents of the Commission on reasonable request. They may be kept on paper, film or electronically. Cite: Ga. Comp. R. & Regs. r. 520-1-.10(4).

How may a Georgia broker return earnest money to a buyer?

• a.By check, or by crediting the amount at the closing✓
• b.By check only, and only after the seller signs a release
• c.In cash, if the buyer signs a receipt for the money
• d.By any means the sales contract expressly authorizes

All refunds of earnest money must be paid by check or credited at the closing of a transaction. A cash refund is not permitted even with a receipt, and the contract cannot authorize a method the rule forbids. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(3)(e).

A Georgia buyer signs a $400,000 note secured by a deed to secure debt with a fifteen-year term. What is the intangible recording tax?

• a.$1,200.00✓
• b.$800.00
• c.$400.00
• d.$25,000.00

The tax is $1.50 for each $500.00 or fractional part of the face amount of the note: $400,000 / $500 = 800 units x $1.50 = $1,200.00. The $25,000 figure is the statutory maximum on any single note, not the tax here. Cite: Georgia Department of Revenue, Intangible Recording Tax; O.C.G.A. 48-6-60 through 48-6-77.

Within what period must the security instrument for a Georgia long-term note be recorded, and with whom?

• a.30 days, with the county tax commissioner
• b.60 days, with the Clerk of the Superior Court
• c.90 days, with the Georgia Department of Revenue
• d.90 days, with the Clerk of the Superior Court✓

Every holder of a long-term note secured by real estate must record the security instrument within 90 days of the date of the instrument, and the collecting officer for the intangible recording tax is the Clerk of the Superior Court. Late payment draws a 50 percent penalty plus 1 percent interest per month. Cite: Georgia Department of Revenue, Intangible Recording Tax.

How much of a Georgia broker's own money may remain in the firm's designated trust account?

• a.Nothing; commingling of any amount is prohibited outright
• b.Only a required minimum balance and a service-charge cushion✓
• c.Up to one month of the firm's average commission receipts
• d.Any amount, so long as the ledger identifies it as the broker's

A broker may keep the broker's own clearly identified funds in a trust account only to satisfy a bank's required minimum balance and to cover service charges and similar account costs; earned commissions may sit there briefly but any excess must be removed each month, and only checks payable to the broker may withdraw them. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(1)(e).

A Georgia salesperson manages a duplex she owns and collects the tenants' security deposits. What does the rule require?

• a.She may post a surety bond instead of holding the deposits
• b.She must remit the deposits to the broker's operating account
• c.She must return the deposits to the tenants within thirty days
• d.She must hold them in a designated trust account, not a bond✓

A licensee who manages rental property which the licensee owns must maintain any security deposits collected in a designated trust account and may not post a bond in lieu of doing so. A non-broker licensee may open such an account only with the approval of the broker holding the license, and must report on it regularly. Cite: Ga. Comp. R. & Regs. r. 520-1-.08(4)(c); r. 520-1-.08(9).