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GA REAL ESTATE ACADEMY FINAL EXAM
WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS)
ALREADY GRADED A+
"A retailer installs special display counters to exhibit her products. At the end of the lease term, the retailer moves to another state, leaving the counters in the store. At this point the counters
are considered which of the following? - CORRECT ANSWER Real property, since the trade
fixtures were abandoned"
"How is a legal life estate created? - CORRECT ANSWER By operation of law"
"Which of the following is true of a homestead? - CORRECT ANSWER A homestead interest is
a form of legal life estate." "Three people have identical rights in a property, share an indivisible interest, but may sell or
transfer their interest without consent of the others. This type of ownership is - CORRECT
ANSWER tenancy in common."
"In a lien-theory state - CORRECT ANSWER the lender records a lien while the borrower
retains title to the mortgaged property" "Five liens have been recorded against a certain house, in the following order: first mortgage, mechanic's lien, second mortgage, real estate tax lien, special assessment lien. Which lien will be
the last one to be paid from the proceeds of the sale of the house? - CORRECT ANSWER
Second mortgage lien" "A tenant obtains a low rental rate for a building, but agrees to pay all operating expenses. This is
an example of a - CORRECT ANSWER net lease"
"In accordance with the statute of frauds, - CORRECT ANSWER a five-year lease must be in
writing to be enforceable." "A property owner in a development is required to have a shake roof. This requirement is most
likely to come from - CORRECT ANSWER a deed restriction"
"A master plan can be best described as - CORRECT ANSWER a fusion of land use laws and
local land use objectives and strategies."
"A zoning board of adjustment might give favorable consideration to a land use variance if -
CORRECT ANSWER compliance would cause the owner undue and unjustified hardship."
"A critical determinant of commercial and residential property demand in a market is -
CORRECT ANSWER employment"
"Two important tasks in identifying value through the cost approach are - CORRECT ANSWER
estimating the cost of the land and the depreciation of the improvements."
"In evaluating a loan application, a mortgage lender is most concerned about - CORRECT
ANSWER the applicant's financial capability and the value of the collateral."
"Lenders use the loan-to-value ratio as a guideline in underwriting because - CORRECT
ANSWER the loan amount needs to be less than the property's value."
"In the past, borrowers were often surprised by unexpected financing costs and charges at closing. This situation has been largely corrected through disclosure requirements mandated by
which of the following laws? - CORRECT ANSWER Truth-in-Lending laws"
"An important function of the secondary mortgage market is to - CORRECT ANSWER sell
mortgage-backed securities in order to buy pools of loans."
"The Veteran's Administration assists numerous qualified mortgage loan applicants because it -
CORRECT ANSWER guarantees loans made by approved lenders."
"A $300,000 loan has monthly payments of $2,000. Its annual interest rate is: - CORRECT
ANSWER 8%"
"Which of the following items would affect a homeowner's adjusted basis? - CORRECT
ANSWER Installing a new furnace"
"A principal instructs an agent to inform any minority buyer that the property was just put under
contract an hour ago and is no longer available. The agent refuses to comply. In this case, -
CORRECT ANSWER the agent has not violated fiduciary duty"
"A buyer representative locates a suitable property through an owner broker. The buyer buys the property, the seller pays a commission, and the two agents split the commission. In this instance,
the owner broker is acting as - CORRECT ANSWER a single agent for the owner."
"Under a special agency agreement, a broker is not authorized to - CORRECT ANSWER execute
a contract for sale agreement." "Spenser, who works for selling broker Smith, sells a house listed by listing broker Adams. The house sells for $425,000. The cobrokerage split between Smith and Adams is 50-50. Spenser is on a 65% commission schedule with Smith. If the total commission rate is 7%, what is Spenser's
commission? - CORRECT ANSWER $9,669"
"A broker and salesperson agree to a 40-60 commission split. This commission rate - CORRECT
ANSWER is probably a reflection of competitive commission rates"
"The primary jeopardy of overpricing a property is that - CORRECT ANSWER the client's
expectations may not be achieved"
"Commingling is the practice of - CORRECT ANSWER mixing escrow funds with the broker's
operating funds." "A business buyer wants to acquire a business in its totality, including the business identity and all rights, obligations, liabilities, and assets. The type of transaction that would accomplish this aim is
- CORRECT ANSWER a stock sale"
"In which of the following situations would Fair Housing laws allow discrimination? - CORRECT
ANSWER A retirement community whose residents are all over 62 refuses to allow families with
children to buy in the community."
"During the executory period of a sale contract, the buyer enjoys which of the following interests?
- CORRECT ANSWER equitable title" "A sale contract contains a onemonth financing contingency to allow the buyer to procure a loan.
Thirty- two days later, the buyer still has no loan commitment. At this point the seller may -
CORRECT ANSWER put the property back on the market."
"While a property is under a contract for deed, the buyer, or vendee, takes possession of the property and makes timely payments of principal and interest. At the end of the term, the vendee obtains a loan and uses the funds to pay off the vendor. Given these circumstances, what option
does the seller have? - CORRECT ANSWER He may offer to repurchase the property after
conveying title." "Which of the following transactions requires a large lender (more than five loans per year) to use
the CFPB Closing Disclosure form? - CORRECT ANSWER The loan is for a 30- year fixed first
mortgage secured by a house."
"The Real Estate Settlements and Procedures Act prohibits - CORRECT ANSWER a lender from
paying a fee to a broker for referring a borrower to the lender" "Which of the following are examples of items typically prorated between seller and buyer at
closing? - CORRECT ANSWER Real estate taxes"
"Which of the following items are paid in arrears? - CORRECT ANSWER Interest and taxes"
"A sale transaction on rental property closes on December 16. The landlord received the December rent of $713 on December 1. Assuming the closing day is the buyer's, and that the 365- day method is used for prorating, which of the following entries would appear on the settlement
statement? - CORRECT ANSWER Credit buyer $368.00"
"The risk management strategy that aims to decrease the probability or the severity of a potential
loss is called - CORRECT ANSWER risk reduction."
"Exceeding the limits of the authority granted is a major risk in - CORRECT ANSWER the
fulfilling of listing agreements." "To shift some of the risk inherent in recommending vendors to consumers, a licensee is advised
to - CORRECT ANSWER present a broad range of choices and allow the consumer to make the
selection."
"A major employer relocates, leaving many homes in an area vacant and unmaintained. This is an
example of - CORRECT ANSWER incurable economic obsolescence."
"A lender determines that a homebuyer can afford to borrow $120,000 on a mortgage loan. The lender requires an 80% loan-to-value ratio. How much can the borrower pay for a property and
still qualify for this loan amount? - CORRECT ANSWER $150,000"
"A borrower grosses $4,000 per month and pays $600 monthly for debt obligations. What monthly payment for housing expenses (principal, interest, taxes, insurance) can this person
afford based on an FHA debt ratio of 41%? - CORRECT ANSWER $1040"
"What is meant by "opportunity cost" when speaking of real estate as an investment? -
CORRECT ANSWER The return an investor could reasonably expect to earn from competing
investments." Approximately how much too high or too low is the price of this property for the investor to
obtain her desired return exactly? - CORRECT ANSWER $15,000 overpriced"
"The function of a board of equalization is to - CORRECT ANSWER minimize wide
discrepancies of assessed values within the district."
"A tax rate is derived by - CORRECT ANSWER dividing the tax requirement by the tax base."
"A special assessment tax differs from other tax levies in that - CORRECT ANSWER properties
that receive no benefit do not pay the tax." "A homeowner's rented residence has an assessed valuation of $150,000, and a market value of $170,000. The homestead exemption is $25,000. Tax rates for the property are 7 mills for schools; 3 mills for the city; 2 mills for the county; and 1 mill for the local community college. What is the
homeowner's tax bill? - CORRECT ANSWER $1,625"
"An agent fails to discover crumbling wallboard on the basement ceiling beneath a bathroom. The agent sells the property, and the buyer later sues the agent for not discovering and disclosing a
clearly visible and obvious problem. In this case, the agent - CORRECT ANSWER has an
exposure to negligent misrepresentation."
"The nature and import of the agency relationship should be disclosed to the client - CORRECT
ANSWER prior to completing a listing agreement."
"A landlord agrees to pay a broker for procuring a tenant unless someone else finds the tenant
first. This is an example of a(n) - CORRECT ANSWER open listing"
"A property owner wants to put $240,000 in the bank after selling a property and accounting for all expenses. A broker finds a buyer and sells the property for $280,000. Closing costs come to $10,000, not including the broker's commission. According to agreement, the remainder of the amount over $240,000 goes to the broker as commission. The listing agreement is probably a(n)
CORRECT ANSWER net listing"
"A family is looking for a home in a certain price range. The wife suggests several listings on the east side of town, and the agent agrees to show the family the suggested properties. En route to the targeted neighborhood, the agent drives a certain route to show the family certain retail
services and two schools. What has this agent done wrong? - CORRECT ANSWER He has done
nothing wrong" "At the direction of a seller-client, an agent tells a pregnant working woman that the property is not in a good neighborhood for a single woman, particularly if she regularly works late hours. The neighborhood has an increasing crime rate, and people are moving out. What has this agent done
wrong? - CORRECT ANSWER Engaged in steering"
"state, leaving the - CORRECT ANSWER "
"counters in the - CORRECT ANSWER "
"store. At this point - CORRECT ANSWER "
"the counters are - CORRECT ANSWER "
"considered which of - CORRECT ANSWER "
"the following? - CORRECT ANSWER "
"Actual Answer Answer Given - CORRECT ANSWER "
"Weight: 1 Trade fixtures, and - CORRECT ANSWER "
"therefore real property - CORRECT ANSWER "
"Trade fixtures and - CORRECT ANSWER "
"therefore personal - CORRECT ANSWER "
"By operation of law - CORRECT ANSWER "
"Through the four unities Through the four unities - CORRECT ANSWER "
"Through a defeasible - CORRECT ANSWER "
"conveyance - CORRECT ANSWER "
"Question Type: - CORRECT ANSWER "
"Multiple Choice - CORRECT ANSWER "
"Incorrect - CORRECT ANSWER "
"Which of the - CORRECT ANSWER "
"following is true of a - CORRECT ANSWER "
"homestead? - CORRECT ANSWER "
"Actual Answer Answer Given - CORRECT ANSWER "
"Weight: 1 - CORRECT ANSWER "
"A homestead interest - CORRECT ANSWER "
"can be conveyed by - CORRECT ANSWER "
"one spouse. - CORRECT ANSWER "
"A homestead interest - CORRECT ANSWER "
"cannot be exempt from - CORRECT ANSWER "
"creditors. - CORRECT ANSWER "
"A homestead interest is - CORRECT ANSWER "
"a form of legal life - CORRECT ANSWER "
"estate. - CORRECT ANSWER "
"A homestead is any - CORRECT ANSWER "
"privately owned singlefamily residence. - CORRECT ANSWER "
"A homestead is any - CORRECT ANSWER "
"privately owned singlefamily residence. - CORRECT ANSWER "
"Multiple Choice - CORRECT ANSWER "
"Correct - CORRECT ANSWER "
"Three people have - CORRECT ANSWER "
"identical rights in a - CORRECT ANSWER "
"property, share an - CORRECT ANSWER "
"indivisible interest, - CORRECT ANSWER "
"but may sell or - CORRECT ANSWER "
"transfer their - CORRECT ANSWER "
"interest without - CORRECT ANSWER "
"consent of the - CORRECT ANSWER "
"others. This type of - CORRECT ANSWER "
"ownership is - CORRECT ANSWER "
"interest in airspace and - CORRECT ANSWER "
"common areas of the - CORRECT ANSWER "
"property. - CORRECT ANSWER "
"fee simple ownership of - CORRECT ANSWER "
"a unit and an undivided - CORRECT ANSWER "
"share of the common - CORRECT ANSWER "
"areas. - CORRECT ANSWER "
"fee simple ownership of - CORRECT ANSWER "
"a unit and an undivided - CORRECT ANSWER "
"share of the common - CORRECT ANSWER "
"areas. - CORRECT ANSWER "
"fee simple ownership of - CORRECT ANSWER "
"an equal share of the - CORRECT ANSWER "
"entire property. - CORRECT ANSWER "
"Question Type: - CORRECT ANSWER "
"Multiple Choice - CORRECT ANSWER "
"Incorrect - CORRECT ANSWER "
"An easement by - CORRECT ANSWER "
"prescription - CORRECT ANSWER "
"requires that - CORRECT ANSWER "
"Actual Answer Answer Given - CORRECT ANSWER "
"Weight: 1 - CORRECT ANSWER "
"the use be continuous, - CORRECT ANSWER "
"known, and permitted - CORRECT ANSWER "
"by the owner for a - CORRECT ANSWER "
"period of time. - CORRECT ANSWER "
"the use be continuous, - CORRECT ANSWER "
"known, and permitted - CORRECT ANSWER "
"by the owner for a - CORRECT ANSWER "
"period of time. - CORRECT ANSWER "
"the use be continuous, - CORRECT ANSWER "
"open, and hostile for a - CORRECT ANSWER "
"required period of time. - CORRECT ANSWER "
"the owner of an - CORRECT ANSWER "
"adjoining property be - CORRECT ANSWER "
"landlocked. - CORRECT ANSWER "
"the owner of the - CORRECT ANSWER "
"mortgaged property. - CORRECT ANSWER "
"liened properties are - CORRECT ANSWER "
"foreclosed by strict - CORRECT ANSWER "
"foreclosure. - CORRECT ANSWER "
"trustees retain title - CORRECT ANSWER "
"during a mortgage - CORRECT ANSWER "
"period. - CORRECT ANSWER "
"Question Type: - CORRECT ANSWER "
"Multiple Choice - CORRECT ANSWER "
"Incorrect - CORRECT ANSWER "
"Five liens have been - CORRECT ANSWER "
"recorded against a - CORRECT ANSWER "
"certain house, in the - CORRECT ANSWER "
"following order: first - CORRECT ANSWER "
"mortgage, - CORRECT ANSWER "
"mechanic's lien, - CORRECT ANSWER "
"second mortgage, - CORRECT ANSWER "
"real estate tax lien, - CORRECT ANSWER "
"special assessment - CORRECT ANSWER "
"lien. Which lien will - CORRECT ANSWER "
"be the last one to be - CORRECT ANSWER "
"paid from the - CORRECT ANSWER "
"proceeds of the sale - CORRECT ANSWER "
"of the house? - CORRECT ANSWER "
"Actual Answer Answer Given - CORRECT ANSWER "
"Weight: 1 Special assessment lien - CORRECT ANSWER "
"Mechanic's lien Mechanic's lie - CORRECT ANSWER "
