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GEORGIA REAL ESTATE U FINAL EXAM STUDY
CORRECTLY ANSWERED QUESTIONS
"In economics, supply is...? - CORRECT ANSWER The quantity of goods or services available,
whether in abundance or scarcity."
"In economics, demand is...? - CORRECT ANSWER The supply of willing and able consumers,
which can be few or numerous."
"When the supply is limited and demand is high...? - CORRECT ANSWER Prices escalate"
"To become a real estate broker, a person must have...? - CORRECT ANSWER Experience as an
agent, a broker's license, and additional education."
"Real estate brokers are paid a commission for the sales, and...? - CORRECT ANSWER The
commission, which can vary, is split between the broker and agent."
"Property types are generally categorized by the ............ that applies to that property. -
CORRECT ANSWER Zoning Law"
"A family is going to build their dream home, and they've looked at several house plans, but they haven't found one that is exactly right. They'd like to take some parts from one plan and combine it with parts from another, with some additional innovations of their own. They want someone who can design and plan their home and work with the contractors to build it. The person they
need to find is ...? - CORRECT ANSWER An Architect"
"Single family homes are...? - CORRECT ANSWER Private freestanding residential houses"
"The effect of the first-time homebuyer's tax credit was to...? - CORRECT ANSWER Motivate
people to buy homes"
"Real estate agents work with...? - CORRECT ANSWER Buyers and Sellers"
"When supply is plentiful and demand is low...? - CORRECT ANSWER Prices drop"
"Fill in the blank. ............ represent both the buyer and seller or both the tenant and landlord in
the same transaction. - CORRECT ANSWER Dual Agents"
"If you serve in the army reserve and are studying to be a broker, you effectively get 10 points
added to your score. Which of the following is true? - CORRECT ANSWER 5 points are added in
each of Information Gathering and Decision Making sections." "If the Commission denies your application based on a conviction or disciplinary action, what
rights do you have? - CORRECT ANSWER You have the right to a hearing for a final
determination." "Every salesperson has to provide the Commission with evidence that they completed a ............
post-license course within one year of obtaining their license. - CORRECT ANSWER 25 hours"
"Hans Rosenstein moved from Florida, where he was a sales agent, to Georgia. Hans completed his post-license course in Florida, a state considered similar to Georgia in terms of real estate law.
Does Hans have to take the post-license course in Georgia? - CORRECT ANSWER No"
"Jolie Harper is a licensed real estate agent in a Georgia brokerage. She is offered a job selling condos for the unlicensed owner-developer. Jolie must ............ and will have to reapply if she
decides to practice as a salesperson under a brokerage again. - CORRECT ANSWER Inactive her
license" "Any lapse longer than two years and under five years can be reinstated by paying back fees and
taking the appropriate class. Which of the following is not a valid answer? - CORRECT ANSWER
For appraisers, they must take the Salespersons Prelicense Course." "Prince Stover moves his Athens brokerage to a location with more foot traffic. He must notify the
Commission within ............ days of his new address. - CORRECT ANSWER 30"
"............ is required prior to advertising property for rent, sale, lease or exchange. - CORRECT
ANSWER Written permission to advertise"
"If a licensee makes an offer on a property as part of a brokerage engagement or an extension of
an engagement, the terms and conditions of the engagement must be set down in a...? -
CORRECT ANSWER Written agreement"
"Contracts issued to potential buyers or sellers must...? - CORRECT ANSWER Contain a start
and finish date, be in compliance with Georgia law, and disclose any conflicts of interest" "If you have a real estate license, and you are faced with a disciplinary hearing because of
something the Commission finds out, you have the right to...? - CORRECT ANSWER Judicial
review of your case in the event the Commission suspends or revokes your license"
"The Commission may request a court issue a cease and desist order when...? - CORRECT
ANSWER Someone participates in a transaction by falsely representing they are licensed"
"Applicants for a real estate license in Georgia must...? - CORRECT ANSWER Be 18 years of
age, a resident of Georgia, and have a high school diploma or GED"
"Any time you pay the Commission a fee, you can expect...? - CORRECT ANSWER No refund"
"Which characteristic differentiates a Fee-simple time-share from a Leasehold time-share
purchase? - CORRECT ANSWER A Fee-simple time-share is deeded in perpetuity"
"All of the following are loan vehicles for a first mortgage, except? - CORRECT ANSWER
HELOC"
"The IBC classifies any structure with occupied living space higher than 75 feet above ............ as a
high-rise building. - CORRECT ANSWER The lowest level of fire department access"
"Which of the following offers a low down payment option for home buyers? - CORRECT
ANSWER FHA insured loan"
"............ cover the costs to the lending of funding the loan. - CORRECT ANSWER Loan
Origination Fees" "Loan origination fees are usually equal to or less than ............ percent of the total loan amount.
CORRECT ANSWER 1"
"Which housing accommodation is purchased as stock or shares in a corporation, and entitles the
shareholder to occupy a particular unit? - CORRECT ANSWER Cooperative"
"Katie owns 100 percent of her home and wants to add a small kitchen to a master suite to create a mini apartment she can rent out to help defray the costs of owning her home. Can she still
deduct all eligible expenses as personal home expenses? - CORRECT ANSWER No. Renting a
portion of a home that can be considered a complete home, makes some expenses ineligible." "Bill, who is unmarried, is selling his rental home and plans to put off buying another home for five years. He earns $325,000 annually, putting him in the highest tax bracket at 23.8 percent. If he nets $200,000 on the transaction, how much will his tax liability be for the capital gain portion of
his return only? - CORRECT ANSWER 47600"
"An investor has several multi-family buildings he wants to sell in the next year. His real estate
agent tells him that he can force the appraised value to rise by...? - CORRECT ANSWER Adding
amenity packages based on trends in the local area" "While talking to a client about non-federal tax liabilities, Dana mentioned local property taxes. She told her client that tax assessments are based on ............, but every district offers discounts
to certain groups, such as people over 65 and permanently disabled individuals - CORRECT
ANSWER Market value"
"This refers to the trade or exchange of one real property for another without the need to pay
income taxes on the gain at the time of trade? - CORRECT ANSWER Tax- deferred exchange"
"Which federal agency oversees and manages the National Flood Insurance Program (NFIP)? -
CORRECT ANSWER FEMA"
"Most homeowners insurance policies cover specific events that fall into two different categories:
- CORRECT ANSWER Perils and non-perils" "Lisa is a real estate agent who also helps clients lease single-family homes. She advises every
potential tenant to purchase HO-4, also known as ............, because it is a perils content policy. -
CORRECT ANSWER Tenant Coverage"
"Christine is looking at an older home in a quiet neighborhood. She knows that it might be hard to repair or replace the dwelling if it was directly hit by a tornado or there was a fire. The best homeowner policy for her is probably an HO-8 policy specifically designed for older homes. Which
statement most accurately gives - CORRECT ANSWER The plan doesn't cover water damage
without an additional rider, but pays the actual cash value minus depreciation."
"John is looking for an existing multi-story building zoned for mixed-use. He wants to open a small, by-reservation-only restaurant on the lowest floor. Local code requires 15 square feet per person in a commercial setting with non-concentrated seating. What is the minimum square
footage he needs to serve 50 people? - CORRECT ANSWER 750 sq ft"
"With only a few exceptions, structures built with only wood have a maximum height of...? -
CORRECT ANSWER 2 floors"
"Which agency establishes and enforces regulations to ensure safe removal and disposal of lead
during rehabilitation projects in the United States? - CORRECT ANSWER The EPA"
"The ............. helped the insurance industry develop a survey for municipalities to establish
building guidelines in the early 20th century. - CORRECT ANSWER National Board of Fire
Underwriters"
"What is the first step a developer must take when creating a subdivision? - CORRECT
ANSWER Survey the land"
"Proposed developments must follow standards in the established municipal or county master
plan; however,...? - CORRECT ANSWER Master plans may be modified under some
circumstances."
"Preliminary plans are ...? - CORRECT ANSWER Developer plans that have not been platted
and recorded" "Who is responsible for assuming the financial burden and oversight of the construction of all roadways, sidewalks, alleys, nature trails, and other non-residential areas within a new
subdivision? - CORRECT ANSWER The Developer"
"Common uses for government land include all of the following, except? - CORRECT ANSWER
Hunting Clubs" "If a building totals 5,000 square feet, and the building covers 100% of the property, what is the
floor area ratio if the property measures 1,000 square feet? - CORRECT ANSWER 5"
"When a building fully complies with the local zoning ordinances, it is referred to as...? -
CORRECT ANSWER As-of-right"
"used to determine the maximum allowed buildable square footage on a property - CORRECT
ANSWER Floor area ratio"
"What is the acronym to help you remember the government powers? - CORRECT ANSWER P-
E-T-E"
"When eminent domain powers are used, the property owner has the right to receive...? -
CORRECT ANSWER Just Compensation"
"Eminent domain can also be called...? - CORRECT ANSWER All of these are true
- Expropriation
- Appropriation
- Condemnation" "When a property owner has a mortgage, property taxes can be paid easily through the use of
what type of account - CORRECT ANSWER Escrow Account"
"What type of laws protect homeowners from the types of issues that can come from an
industrial building being built in a residential neighborhood? - CORRECT ANSWER Zoning
Laws" "What word describes the property owner's right to sell or transfer their property to someone
else? - CORRECT ANSWER Alienable"
"Which of the following is a permissible restriction on a fee simple estate? - CORRECT
ANSWER All of the answer choices provided are correct
- Homeowner's association covenant
- Utility easement
- Local zoning restrictions"
"What is another name for a "fee simple determinable" estate? - CORRECT ANSWER Fee
simple defeasible"
- Homeowner's association
- Builder
- Township"
"Which of the following is not a type of deed restriction? - CORRECT ANSWER Reversion"
"What is another common name for an easement? - CORRECT ANSWER right of way"
"The property that is subject to an easement appurtenant is called the...? - CORRECT ANSWER
Servient tenement"
"The property that benefits from an easement appurtenant is called the...? - CORRECT
ANSWER Dominant Estate"
"An easement that gives a landlocked parcel access to a public road is an example of an...? -
CORRECT ANSWER Easement by necessity"
"How can an easement be terminated? - CORRECT ANSWER All of the answer choices
provided are correct
- The easement is released in writing
- The dominant and servient estates are combined
- The easement owner abandons the easement"
"What happens if the dominant and servient estates with an existing easement are combined? -
CORRECT ANSWER The easement is terminated (One way to terminate an easement is to
combine the servient and dominant estates. By doing so, the easement is no longer necessary.)"
"An easement can be described as...? - CORRECT ANSWER A right, privilege or interest in real
property owned by someone else"
"In most cases, encroachments are...? - CORRECT ANSWER Unintentional (Most
encroachments occur accidentally. For example, a tree grows so large that it now overhangs into the neighboring property.)" "When one neighbor has been improperly using another neighbor's property for a long time, it is
possible that the court could find...? - CORRECT ANSWER Adverse Possession"
"Which of the following is not required for a prescriptive easement? - CORRECT ANSWER Lack
of use of the land"
"What is the shortest time period for an estate for years? - CORRECT ANSWER No minimum
time period" "If the language of an estate at will lease says tenancy continues at the will or desire of the tenant,
under what circumstances can the landlord terminate the lease? - CORRECT ANSWER The
landlord may not be able to terminate the lease"
"Lease contracts are used for...? - CORRECT ANSWER Both commercial and residential real
estate"
"Which of the following is NOT a requirement to create the legal capacity to sign a lease? -
CORRECT ANSWER At least 21 years old"
"A lease includes a provision saying that a tenant who needs to break their lease can find
someone else to take over the remainder of the lease. What is the term for this? - CORRECT
ANSWER Sublease"
"What type of leasehold estate is created if a lease is for a definite, limited period of time? -
CORRECT ANSWER Estate for years"
"Who must sign a lease to make it valid? - CORRECT ANSWER The tenant and the landlord, or
their authorized agent"
"Which of the following is not likely to be included in the amount a tenant pays for rent? -
CORRECT ANSWER Court costs associated with eviction proceedings"
"True or False: If a lease does not specify any restrictions, the tenant can use the leased space for
any lawful purpose? - CORRECT ANSWER True. If no restrictions are specified, the tenant can
use the property for any lawful purpose." "Who is responsible for making sure local ordinances about occupancy controls are met when a
property owner leases space to a tenant? - CORRECT ANSWER Property owner/landlord"
"If a tenant agrees to pay rent, property taxes and insurance premiums, what type of lease do
they have? - CORRECT ANSWER Double Net Lease (In a single net lease, the tenant only pays
rent and property taxes. In a double net lease, the tenant also pays for insurance. In a triple net lease, the tenant pays for everything, including maintenance costs.)" "When a commercial tenant in a strip mall signs a double net lease, how is the amount of property
taxes and insurance they pay calculated? - CORRECT ANSWER Prorated based on the size of
the space they are renting (The amount they pay is proportional to the size of the tenant's space in relation to the square footage of the entire strip mall.)" "Which party or parties can transfer their rights under the Georgia "Lease for Residential Property
Agreement?" - CORRECT ANSWER The property owner/landlord (the landlord's rights may be
assigned to the new owner, if the landlord sells the property during the terms of the lease.)"
"If a tenant does not vacate the property at the end of the lease, they are said to be...? -
CORRECT ANSWER Holding over. (holdover tenant is a tenant who continues to occupy the
property after their lease has expired. Holdover tenants are subject to eviction by the landlord.)" "The Georgia Lease for Residential Property includes provisions for which of the following special
fees? - CORRECT ANSWER All of these fees may be included in the lease agreement.
- Fees for unauthorized pets.
- Fees for unauthorized smoking.
- Fees for unauthorized disconnection of utilities."
"If a tenant defaults on their lease obligations, the landlord may...? - CORRECT ANSWER
Terminate the lease and pursue legal remedies in court." "Which of the following types of routine maintenance are tenants typically responsible for
completing? - CORRECT ANSWER All of these.
- Replacing burned out lightbulbs.
- Dealing with clogged plumbing.
- Making sure smoke detectors work" "What is the usual effect of an estate at will tenant committing waste against the property
(whether intentional or not)? - CORRECT ANSWER The estate at will is terminated (Any tenant
cannot damage the property. Doing so can lead to their lease being terminated.)"
"The Georgia Residential Landlord-Tenant Act is only applicable to...? - CORRECT ANSWER
Residential Leases" "The landlord or their agent is required to inspect the property and make a list of any damages
and itemized costs within ..........days of the tenant moving out. - CORRECT ANSWER 3"
"The landlord is required to return the full security deposit within ...........days of the tenant
moving out. - CORRECT ANSWER 30"
"Article 3 of the Act deals with...? - CORRECT ANSWER Dispossessory Proceedings"
"Which of the following refers to the legal document which a court issues to allow one person or
group the legal right to take possession of real property by forcing those in possession out? -
CORRECT ANSWER Writ of possession"
"From the day a summons is delivered, the tenant has ............days to respond. - CORRECT
ANSWER 7"
"Which of the following refers to a legal document that allows a court officer to take back the
property of a tenant if the tenant fails to pay rent? - CORRECT ANSWER Distress Warrant"
"According to Article 4 of the Act, the landlord is paid the money they are owed from a granted
distress warrant through a...? - CORRECT ANSWER Lien (The landlord is paid the money they
are owed from a granted Distress Warrant through a lien. Section 80 describes this process. The lien is placed on the property at the time that they make their affidavit, but it does not take precedence before any older lien that has already been placed on the property, with the exception when the property in question is crops.)"
"In which of the following Articles is the relationship of the landlord and tenant defined? -
CORRECT ANSWER Article 1"
"According to Article 1 of the Act, the estate remains the property of the...? - CORRECT
ANSWER Landlord"
"What does GCA stand for? - CORRECT ANSWER Georgia Condominium Act"
"What are three duties of a CAM? - CORRECT ANSWER Managing social media, paying
association bills, and taking meeting notes (Some common administrative tasks that CAMs
"Buyers are purchasing a lot in a subdivision, and they want to see how it fits into the overall plan, where the streets are, how the blocks are laid out, and what the lots around them look like. Their
real estate agent suggests she needs a ...? - CORRECT ANSWER Plat map"
"Which is a significant rule of real estate transactions? - CORRECT ANSWER You can only
convey that which you own." "Stan sold his real property to Bella by Warranty Deed. A day later, Stan sold his real property
again to Len. Who owns the property? - CORRECT ANSWER Bella"
"What is considered legal capacity in relation to a deed? - CORRECT ANSWER - The ability to
sign the deed as the owner or on behalf of the owner."
"Why does the date on the deed matter? - CORRECT ANSWER - To know the order of when the
property was conveyed to determine ownership and lien rights."
"How do we know from a deed what property was transferred? - CORRECT ANSWER The legal
description."
"What is consideration? - CORRECT ANSWER Something of value exchanged for the deed.
(Purchase price/rent)"
"What is the grantor of a deed? - CORRECT ANSWER The party selling or conveying the
property."
"How does the world know that property is transferred through a deed? - CORRECT ANSWER
By recording the deed in the county real estate records."
"What is the grantee of a deed? - CORRECT ANSWER The party buying or receiving title to the
property."
"What causes a person to lose their real estate in bankruptcy? - CORRECT ANSWER Trustee
takes the property to pay off debts."
"How does a judgment lien cause involuntary alienation? - CORRECT ANSWER Property is sold
by judgment creditors to pay off debt."
"Under what circumstances can the government exercise eminent domain? - CORRECT
ANSWER For the public good, after paying the owner fair value."
"What is probate? - CORRECT ANSWER The court process of verifying a will and distributing
property according to the will."
"How is real property conveyed to heirs when a person dies without a will? - CORRECT
ANSWER By administrator's deed according to state law."
"What is constructive notice? - CORRECT ANSWER By recording a deed in the public land
records, everyone is deemed to have notice of the recording of the deed, even if they physically don't see it."
"What is the purpose of a lien? - CORRECT ANSWER To make sure a creditor gets paid either
by the debtor or when the property is sold."
"Who may file an involuntary lien? - CORRECT ANSWER A judgment creditor."
"Alex lives in a condominium that is governed by covenants and state laws. The state law says that anyone who does not pay assessments automatically has a lien on their property for the unpaid
balance. What type of lien is this? - CORRECT ANSWER Statutory lien."
"What is one thing that all parcels of real estate have in common? - CORRECT ANSWER They
all have title history."
"What is the abstract of title? - CORRECT ANSWER The written report of the chain of title."
"In reviewing the title history of a parcel of land, the closing attorney starts 50 years back and sees a deed from Smith to Jones, then Jones to Johnson, then Lincoln to Washington. What is the
problem? - CORRECT ANSWER There is a break in the chain of title."
"What is the simplest way to determine the owner of real estate? - CORRECT ANSWER Look
for the last grantee in the chain of title."
"How does a closing attorney state for certain who the owner of real estate is? - CORRECT
ANSWER Perform a title search"
"What is a promissory note? - CORRECT ANSWER A legally binding promise to pay"
"James bids on a home. His promissory note lists the principal amount. How much is this? -
CORRECT ANSWER The amount he agrees to borrow to buy the home minus any down
payment"
"Amy says she has an interest rate of 5%. Where is this located in her loan documents? -
CORRECT ANSWER The promissory note lists the interest rate, or cost to borrow the funds"
"Does a real estate agent help negotiate the terms of a promissory note? - CORRECT ANSWER
No, the agent isn't responsible for the financial aspects, but can offer explanations as needed."
"What role does the Federal Reserve play in the real estate mortgage industry? - CORRECT
ANSWER It creates rules to govern the industry."
"What is a secured loan? - CORRECT ANSWER A loan backed by some type of collateral,
usually the value of the home itself." "Zach needs to lower his monthly payment to feel comfortable buying a home. How can discount
points help? - CORRECT ANSWER Paying interest upfront in the form of points will reduce the
monthly payment."
"Max is selling his home to avoid the acceleration clause from impacting him. What's that? -
CORRECT ANSWER The lender is requiring payment in full due to a breach in the contract."
"What is a lien theory state? - CORRECT ANSWER The homeowner holds the deed for the
property throughout the entire loan."
"Does the mortgagor do more than promise to pay the monthly payment? - CORRECT
ANSWER Yes, he must meet all duties outlined in the mortgage document"
"Christopher's home was lost in foreclose, but no one bought it. Who gets ownership? -
CORRECT ANSWER The mortgagee has the right to take possession as a REO."
"How many missed payments does it take for the lender to send a notice of default? - CORRECT
ANSWER As few as one, but this depends on the state's laws."
"What is the alienation clause in a mortgage? - CORRECT ANSWER It gives the lender the right
to payment in full when the property is sold"
"Abigail paid off her loan in full. What happens with her title? - CORRECT ANSWER She
receives the title as a result of the Satisfaction of Mortgage."
"In simplistic terms, what is a deed of trust? - CORRECT ANSWER It's an IOU to the lender to
repay the debt."
"Who is the trustor in a deed of trust? - CORRECT ANSWER The home buyer."
"Who is the mortgagee in a mortgage contract? - CORRECT ANSWER The lender."
"Samantha wants to know if she lives in a deed of trust state. How do you find out? - CORRECT
ANSWER Her lender will know, but any title company can clarify this"
"Aside from interest rate fees, how do lenders in the primary mortgage market profit from the
home buying process? - CORRECT ANSWER "
"Sally wants to buy a home and has a job, but the lender says she's too risky. What does that
mean? - CORRECT ANSWER Sally's financial history indicates she's a high-risk borrower."
"Why doesn't Alex's lender send a pre-approval? - CORRECT ANSWER Most often, information
is missing or not completed." "Lou borrowed money to buy furniture for a new home. Will this impact his approval for a loan?
CORRECT ANSWER It could if it significantly reduces his credit score."
"Gabe's lender has a list of concerns before closing. What happens now - CORRECT ANSWER
Gabe must meet those concerns before moving forward"
"Jamie hasn't secured home insurance yet and closing is approaching. Is this a problem? -
CORRECT ANSWER It's likely to be a condition to closing the loan."
