GA Real Estate Exam Practice Questions

What is vicarious liability as it applies to real estate?

A broker is held responsible for the actions or omissions of the broker's licensees.

Which one of the following is an example of group boycotting?

Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and prohibit showings to Acme buyers to drive Acme out of business.

To help protect her affiliated licensees and herself from risk, what should Deanna include in her office policy manual?

Advertising guidelines

What could you get to protect yourself against covered claims involving errors in listings?

E&O coverage

Where must trust accounts be secured?

Federally insured financial institution

In case the seller won't allow an inspection, what should Judy recommend her buyer clients include to enable them to get out of the purchase agreement?

Home inspection contingency

What's the word for when a contract requires one or both of the parties to break the law?

Illegality

Which answer describes the best thing for Suzie to do with the response e-mail?

Keep a copy of the e-mail in the transaction file.

Determine which of the following statements regarding trust fund handling is true.

Keep separate books for each trust account.

For licensees' standards of care for clients, which of these activities is a common risk area?

Preparing contracts

All of the following are essential steps in curbing risk EXCEPT ________.

Retroactive management

What should Maggie do to avoid antitrust law violations?

Stress that she sets her own rates based on the services she provides.

Eldon, a rental property owner, decides he won't show Carlita a rental unit because she's a female, and he had problems with his last female tenant. What's this action considered?

Unacceptable, because it violates fair housing laws

Which of the following ads is acceptable under fair housing guidelines?

"Quiet street away from main roads"

Which of the following statements may indicate a price fixing violation?

"This is the standard price for a full-service listing."

What are the 4 steps in risk management?

1. 2. Estimate the likelihood of occurrence for each risk 3. 4.

What's the definition of suppression?

A licensee is asked a direct question and evades or doesn't answer truthfully.

Under RESPA's Section 8, which of the following scenarios would be considered a kickback?

A title insurance company buys you dinner to thank you for referring a client.

Once risk factors have been identified, what's the next step in risk management?

Analyze risks

When it comes to making a valid, enforceable contract, which of these elements is unnecessary?

Arbitration

Which of the following is true about a broker's recordkeeping responsibilities?

Brokers must keep records of signed dual agency consent forms for three years.

What's a state considered where the burden to determine the condition of the property rests on the buyer?

Caveat emptor This means "let the buyer beware," meaning that the burden to determine the condition of the property rests on the buyer.

Which of the following is a non-trust fund held in a non-trust account?

Commissions

Use of any copyright or trademark protected material without authorization ______.

Could give rise to liability

Which one of the following risk management tools involves putting issues in writing and doing so in a timely manner?

Disclosure

What type of agency occurs when an agent represents a seller and also represents a buyer who wishes to see or buy the seller's property?

Dual agency

When clients have legal questions, what should you do to avoid risking the unauthorized practice of law?

Encourage clients to speak with a legal professional

What may help offset the costs of defense attorneys, fines, and/or penalties for a claim brought against a licensee?

Errors and omissions insurance

The second step of risk management involves analyzing risks. Which of the following tasks would you complete as part of this second step?

Estimate the likelihood of occurrence for each risk.

Intentional misrepresentation is essentially the same as _______.

Fraud

What's the definition of negligent advice?

Giving advice that's incorrect and that the person giving it should have known was incorrect.

Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?

Group boycotting

Which of these actions related to pricing is permissible?

Jake's firm agrees to charge all clients a listing commission of between 2% and 2.5%.

Why is real estate as a business a balancing act?

Licensees need to balance business rewards with associated risks.

Doug and Robyn are involved in a heated dispute. They opt to resolve their dispute in front of a judge and jury. This is known as ______.

Litigation

Which of the following does NAR consider a fundamental fiduciary duty?

Loyalty

What should you do to get the most out of your E&O insurance policy?

Make sure you know what your policy does and doesn't cover

Which of the following tactics may reduce liability risk related to material fact disclosure?

Make sure your seller clients understand the legal consequences of withholding material facts about their property from prospective buyers.

What's a property issue that would negatively impact the property's value or pose an unreasonable risk to anyone residing there?

Material adverse fact

To resolve a dispute, what voluntary, non-binding approach can Steven and Maria use?

Mediation

What kind of ads gives buyers a wrong impression of a property?

Misleading ad

Saundra, a real estate licensee for 20 years, knows contracts well. Her buyer client has specific legal questions concerning the purchase contract. When is it appropriate for Saundra to offer purchase agreement-related legal advice?

NEVER

Make sure your communications are always ________, because it could be very easy for someone to forward your message on and tarnish your reputation.

Professional

For which of the following reasons occurring at the time of purchase do buyers file the most lawsuits?

Property conditions

Which of the following at the time of purchase leads to the largest number of buyer lawsuits?

Property conditions

What's it in your best interest to meet, and to ensure your clients and customers understand, to effectively manage risk?

Standard-of-care requirements

Ray thinks he knows which neighborhoods his new clients belong in, so he tries to guide them away from the neighborhood they like. What's this action considered?

Steering

Licensee Jillian loves using Facebook to connect with clients and customers. When posting about client details, what should she remember to do?

Stick to direct messaging to keep things private

Lana, a real estate professional, included an inaccurate property description in her client's contract. This mistake can make a contract ______.

Voidable

Under which circumstance may a licensee legally receive items of value from a real estate settlement service provider?

When actual services are performed

In order to ensure that everyone in the office understands the policies and acts accordingly, it's also essential for the broker to engage in four crucial actions:

planning, training, supervision, and enforcement.