CE SHOP GA PRACTICE QUESTIONS

Gunther's gross monthly income is $3,800, and he has no monthly debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment Gunther can afford?

$1,064

Phoebe's gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment she can afford?

$1,152

Michael paid $385,000 for his home, which now has an assessed value of $392,000. His tax rate is 0.51%. How much with his monthly taxes be?

$166.60

A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?

$276,596

Jeffrey has accepted an offer of $310,000 for his house. The buyer is making a $50,000 down payment, and the buyer's appraisal came in at $300,000. On what number will the buyer's lender base the loan-to-value ratio?

$300,000

A buyer is securing a home loan for $500,000. The state mortgage recording tax rate is $0.115 per $100. What's the mortgage recording tax?

$575

Roland's farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan's monthly taxes?

$667.00

Joyce just closed on a condo for $366,900 and put down 20% to obtain an 80% loan and avoid having to pay for private mortgage insurance. How much equity does she have in her condo?

$73,380

In Georgia, how many years do we have to go back to trace the chain perfectly, with no gaps in ownership?

50 years

A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What's the amount of the loan origination fee if the lender charges one-and-a-half points?

6750

If the foreclosure sale doesn't satisfy the debt, ______.

A deficiency judgment against the borrower may be issued

Which of these areas would be included in the livable area calculation?

A pool house connected to the house by a hallway

Which of the following statements about the promissory note is true?

A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note's terms.

What legal agreement is required when a licensee guarantees the sale of a property?

A purchase agreement written at the same time as the listing agreement

Albert wants to sell his house to his cousin, who's willing to assume his FHA loan. What clause in Albert's mortgage requires him to obtain the lender's permission to do this?

Alienation clause

In Georgia, what does the Duty to Cooperate clause mean in a sales contract?

All involved parties agree to move the process along in a timely fashion.

Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.

An act of waste

Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?

Arbitration

When considering loan risk, which two items will lenders consider in equal measure?

Borrower and property

In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?

Bracketing

Sub-agency is a legal form of agency in Georgia, ______.

But it's rarely used

According to the rule of thumb, how can a borrower lower the interest rate on a loan by 1%?

By paying four points up front

You're showing a house when you notice piles of what looks like sawdust outside near the basement windows. This may be evidence of ______.

Carpenter ants

In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?

Comparables

Connor was the seller and Duke was the buyer when Connor sold his property. Who conveyed the title?

Connor, as grantor

Which of these situations represents the illegal practice of blockbusting?

Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.

Craig's loan is secured by a mortgage. Who holds legal title when this security instrument is used?

Craig

Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?

Defeasance

Which of the following terms describes the actions required to transfer a title by deed?

Delivery and acceptance

Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"

Demand

At the close of a real estate transaction, the ______ and the ______ of the transaction must reflect a zero balance.

Deposits, disbursements

You represent the buyer and seller in the same transaction. What type of agency relationship do you have with your clients?

Disclosed limited agency

What is true about seller disclosure in Georgia?

Disclosure is required even if the seller opts out of using the disclosure form.

Which clause of the sales contract says that the contract is the one and only contract between the parties?

Entire Agreement, Modification and Assignment

Your buyer clients, the Thompsons, told you about a problem they ran into with the lender that handled their mortgage. The Thompsons, who are African American, were given less favorable loan terms than a white couple they know who used the same lender. You know the Thompsons have excellent credit. Which act should you make them aware of?

Equal Credit Opportunity Act

GAFLA targets predatory lending by prohibiting which of the following?

Excessive late fees and financing of credit insurance

Which activity requires a license?

Explaining terms to a client

Local authorities lack police power over which of the following?

Federal government construction projects

When the Georgia attorney general's office finds that the investigation's evidence has legal grounds, the office will either propose a consent settlement for the commission to review and approve or ______.

File a notice of hearing with the Office of State Administrative Hearings

When you're using the sales comparison approach to value a property, which of the following is considered a category of adjustment?

Financing terms and cash equivalency

Which of the following statements about continuing education requirements is true for real estate licensees in Georgia?

For the first renewal cycle, 25 hours of continuing education must be completed within one year of license issuance, and another 27 hours of continuing education are required.

Katy's home that was listed for sale was destroyed by fire. Under which of these methods will her listing agreement terminate?

Force of law

The cost approach method Burt used before investing in his new community was highly dependent on his depreciation estimates. As they begin building the homes they realize the guest bedroom in each has a point of entry that prospective buyers do not like in the layout of the house. The depreciation of this design defect is ______.

Functional obsolescence

Which of the following is a true statement about Georgia's real estate education, research, and recovery fund?

Fund money may be invested and interest is deposited back into the fund.

Which Georgia agency houses the Fair Housing Division?

Georgia Commission on Equal Opportunity

What must Georgia's governor do in order to remove a commission member from GREC?

Give notice and a hearing opportunity to the member.

Licensee Doris is moving to Savannah and wants to transfer her license to a firm there. Her broker in Atlanta may/must do any of the following EXCEPT ______.

Hold her license until she repays all the money she owes

Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

Housing and Community Development Act of 1974

Marge's broker, Geoffrey, told her that the lease on the property she wants to buy runs with the land. What does that mean?

If property ownership changes, the new owner must abide by the lease terms.

What does a municipality do to verify that new construction meets building codes?

Issue building permits.

Why is the recording of a deed so vital?

It protects new owners from former sellers claiming they still own the property.

How's the Georgia intangible tax computed?

It's based on the amount borrowed, and is $1.50 per each $500 or fractional part thereof, with a maximum of $25,000.

Jane is selling her home to Micah. What must occur for Jane to effect a transfer of title to Micah?

Jane must deliver the deed to Micah.

Kate allowed her license to lapse more than two years ago. What does she need to do to reinstate her license?

Kate will need to complete the pre-licensing course requirements and pay all applicable fees for her license to be reinstated.

Representing the sales price on a home as an amount greater than what it actually sold for is considered ______.

Kiting

What's the name of the clause in a promissory note where this language appears: "If the Note Holder has not received the full amount of any monthly payment by the end of ______ calendar days after the date it is due, I will pay a late charge to the Note Holder"?

Late charge provision

What's the relationship between the Loan Estimate and the Closing Disclosure?

Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate.

The Georgia Association of REALTORS® has created sample agreements to cover most agency situations and relationships. What's true about the forms?

Licensees can use GAR forms or other attorney-written and approved forms, as long as key information is included.

Which of the following could be a sign of a plumbing problem?

Low water pressure

Most often, what's the first course of action for disputed home warranty claims?

Mediation

Paula provided her seller client, Amy, with a property disclosure form. Amy didn't claim any known structural or mechanical defects. One of the visitors at Paula's open house was a plumbing contractor who had repaired some pipes in the house and knew there was a major underlying problem. He was very upset that the issue wasn't disclosed. Is Paula legally liable for providing fraudulent information?

No, licensees are not responsible for providing false information if they didn't know it was false.

All fair housing complaints must be filed with the Fair Housing Division within ______ of the alleged violation.

One year

Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?

Partition

A county may not charge brokers a fixed tax unless they maintain a ______ in the county.

Physical office

A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a _______.

Plat map

What can water damage on a ceiling or wall indicate?

Plumbing issues

Which clause is standard in a deed of trust or security deed and affects the foreclosure process that can be used if the borrower defaults?

Power of sale

In Georgia, lenders use one of two methods to release the security deed when the promissory note is paid in full. One method is to simply note on the original deed that it's being released. What's the second method?

Prepare a Cancellation of Debt Secured by Deed form

Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

Promissory note

Property managers must recognize the federally protected classes under ADA and the federal Fair Housing Act. Which list most accurately lists these classes?

Race, color, religion, national origin, sex, familial status, or disability

What's the purpose of a quiet title suit?

Remove any claims against a property's title

Which real estate finance instrument in Georgia may include the pledging of collateral and the release of that collateral in the same document?

Security deed

In Georgia, who owns the property on the day of closing?

Seller

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

Sex

With a security deed in Georgia, how may a lender release the deed when the loan is paid off?

Sign the security deed verifying release of the collateral and re-recording the security deed.

Which one of the following could be a clue that a property was formerly a waste disposal site?

Soft spots, mounds, and discolored soil

Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What's the role of the note?

States who owes money to whom, how much, and how it will be repaid

Which of these statements about statutory duties and fiduciary duties is true?

Statutory duties spring from state statutes and tend to be more specific than fiduciary duties.

Which section of the sales contract says that certain unmet obligations will continue or be completed even after closing?

Survival of the Agreement

Alicia is about to sign an exclusive buyer agency agreement with her new client, Eric. Which form will she use?

The form approved in the brokerage policy and procedure manual

When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage?

The lender executes and records a satisfaction of mortgage and returns the note to the borrower.

Carly's closing on an REO property was suddenly delayed due to an internal audit. What does this mean?

The lender has requested a title audit to ensure that the foreclosure was properly handled.

What information is considered optional when placing any form of advertisement in Georgia?

The licensee's telephone number

What's the difference between a Georgia exclusive and a non-exclusive buyer's agreement?

The only difference is whether the buyer is working with one broker or multiple brokers.

Your buyer clients have access to property tax information for each listing that you've given them. Why are they asking you about county tax assessment schedules?

The property taxes may change drastically after reassessment.

What is a statutory right of redemption?

The right of a borrower to redeem the property by paying amounts owed plus costs, even after the foreclosure sale

Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and a previously unknown title defect has been revealed. What happens now?

The seller may not be required to attempt to clear the defect before closing.

What would happen if you bought a house and later found out that there were unpaid liens against the property?

The unpaid liens could trigger a foreclosure on your property.

What does GAFLA require regarding late fees?

They must be clearly specified in loan documents.

Valdosta licensees Ken, Sharon, and Kate dislike a lender in town and agree to direct business away from that lender and discourage their clients from using it. Which Georgia unfair trade practice act does this violate, if any?

This violates the Georgia Uniform Deceptive Trade Practices Act.

In which of these situations would the property most likely be conveyed with a trustee's deed?

Tim's property will be sold at auction in a foreclosure action.

What is the trustee's role when a deed of trust is used to secure property for a loan?

To hold legal title to the property on behalf of the beneficiary until the loan is repaid

Jacob lost his job in an economic slump and is behind on his mortgage. Georgia is a non-judicial foreclosure state. Which section of his security deed gives his lender to right to sell the property if he defaults?

Transfer of Rights in Property

In Georgia, which of the following closing costs is usually paid by the seller?

Transfer tax

Regarding documentation, which of the following actions can help a licensee avoid being accused of unauthorized practice of law?

Using approved fill-in-the-blank forms

After a fierce bidding war with three other potential buyers, the Carsons enter into an agreement that includes $2,000 earnest money. When the sale is later terminated, the earnest money goes to ______.

Whichever party it belongs to based on the agreement terms

Roger needed to unload an investment property and paid the appraiser an additional fee for appraising at a value that would allow Roger to come out ahead on the property. Is the appraiser in violation of GRMFA?

Yes, because the appraiser fraudulently received funds in connection with a residential mortgage.

In Georgia, upon what amount is the transfer tax calculated?

sales price