practice test 1

A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal each month?

$1,110.64

A 4-bedroom, 4-bath 4,875 square feet house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?

$86.72

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?

$896.88

Broker engagement agreements must include all parties' signatures. Anyone who signs the agreement must receive a photocopy. What else is required?

A definitive end to the brokerage engagement agreement

Decatur licensee Alistair is working with buyer Evie as a transaction broker. According to Georgia law, Alistair may only perform ministerial acts for Evie, which are ______.

Administrative actions that don't rise to the level of client-level representation

How does the lender determine whether the property is worth the sales price?

Appraisal

In Georgia, buyer representation agreements ______.

Aren't limited to any a state-specified form

Why would a buyer want to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value.

SARA is an amendment to which environmental act?

CERCLA

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title?

Depending on his state's laws, Mario may have marketable title.

Regarding their employment classification, unlicensed assistants in Georgia are most often ___

Employees

Which entity services rural development loans?

FSA

Which of the following is an example of an agent exercising the duties owed to customers and other parties?

Francine disclosed information about the flooding basement to the buyer and buyer's agent.

The Georgia attorney general serves as the legal counsel for all state agencies. Which entity does the attorney general represent in real estate license law matters?

GREC

What economic principle is related to a property's most profitable use that is both legal and economically feasible?

Highest and best use

When the Sidells moved into their new home in Shady Acres, they were given a copy of a covenant document that listed restrictions on roofing, siding, fencing, and other visual components on their property. This type of covenant is likely enforced by what entity?

Homeowners' association

Which one of the following contract types defines the terms of the independent contractor's working relationship with the broker?

Independent contractor agreement

How does title insurance affect the lender?

It protects the lender from loss due to defective titles.

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Join tenancy

Luci's client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?

Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren't likely to lock in an interest rate for more than 90 days before closing.

Fair housing laws give homeseekers a legal right to which of the following?

No discriminatory limitations on communities or locations of housing

Under which types of agency agreement may a buyer and agent operate?

Open, exclusive right to represent, and exclusive agency

Similar to the deed of trust, the security deed contains a clause that allows lenders to foreclose on and sell the property non-judicially if the buyer is in default. What is this clause?

Power-of-sale clause

The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on _____

Religion

Sheila is unable to use her designated timeshare week this year. What will happen?

She can exchange the week for another.

Your buyer client, Christine, asks you when she'll have to pay the transfer tax. What do you tell her?

She'll pay it at closing.

Tagger has made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?

Sign the note, mark it "Paid in Full," and return it to Tagger.

Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn't take possession of or title to the property. What likely happened?

The previous owners redeemed the property by paying all mortgage payments and fees.

Which of the following best describes a net listing?

The seller specifies a desired price for the property and agrees to pay the broker any amount received that's more than that price

In order for her house to accommodate her inability to hear, Angela has made a request for the house to be equipped with a doorbell that also alerts occupants with a flashing light. Which statement is correct?

This is likely to be considered a reasonable accommodation, and Angela should be permitted to install it at her own expense.

Which of these is an example of antitrust violations common to real estate?

Tie-in arrangements, market allocation agreements, and group boycotting

Which of the following can be defined as what a property is worth?

Value

A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest?

$1,145.83

The Gomez family just moved into their dream home. They purchased the home for $264,985, and it appraised at $272,402. The assessment ratio for their area is 25%, and the tax rate for their area is 2.8%. What is their annual tax bill?

$1,907

Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?

$105,263.16

A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?

$3,200

The lender will charge a one-and-a-half-point origination fee and two loan discount points. What will be the total due for points on a $115,000 loan?

$4,025

Esme buys Steve's beach townhouse for $475,000. The transfer tax in the area is $2.00 for the first $1,000 and $0.10 for each additional $100. Calculate what Steve will pay for the transfer tax at closing.

$476

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

When advertising is placed on a property using the Internet and the information has changed, the ad must be updated or removed within how many days of being placed?

30 days

In Georgia, how many continuing education hours must licensees complete to maintain their real estate license?

36 hours every four years

What's the penalty for violating federal do not call rules?

A fine of more than $40,000 for each violation

Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of?

A land contract

What type of brokerage engagement agreement is against the law in Georgia?

A net brokerage engagement

Which of these is an example of blockbusting?

A real estate agent approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she'll never be able to sell.

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

Accepting partial performance

Marcy is found guilty of price fixing. This means she must have _______.

Agreed with a competitor to charge a specific amount

A fence that's placed two feet onto a neighbor's property line meets the legal definition of _______.

An enroachment

In Georgia, a person performing real estate activities under the judgment or order of a court, such as a trustee in a bankruptcy, is ______.

An exception to the real estate licensing requirement

Which of the following statements about independent contractors and taxes is tru

Brokers don't withhold income or Social Security taxes for independent contractors.

You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?

Buyer agency

What does the Exclusive Buyer Brokerage Agreement state about dual agency?

Buyers don't have to consent to dual agency

Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems?

Client data can be exposed when a brokerage's computer system is compromised.

Which approach to value measures the cost to produce a property, including land acquisition and construction costs?

Cost approach

Which of the following could be an indication of a foundation problem?

Crack in a basement wall

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement (round to the nearest dollar).

Credit $1,207

What are the two types of physical depreciation?

Curable and incurable

Three days ago, there was a severe thunderstorm in Shirley's town. Today, there's still a large puddle of water on her property, but it doesn't appear the neighboring properties have any puddles. This could indicate a(n) ______ problem.

Drainage

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

Entire Agreement, Modification and Assignment

Ginnie's Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What's the best way to terminate the agreement?

Ginnie and Becca can mutually agree to terminate the agreement.

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency.

Guaranteed loans

Marco, a buyer in Atlanta, wants to terminate his buyer's representation agreement with his agent. What is TRUE about this situation?

He may or may not owe an amount under the terms of the agreement.

A Georgia broker is responsible for verifying the ______ of a non-resident licensee when entering into a written agreement with that licensee.

Licensure

Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ________.

Method of annexation

Karen and Joe are purchasing a six-unit apartment complex for $450,000. The loan is secured by the property being purchased. Is this purchase subject to GRMFA provisions?

No, because of the number of units.

Your client is purchasing a single-family home with a conventional loan. The listing price is $150,000. Does this situation require a licensed or certified appraiser?

No, since the sales price is less than $400,000.

According to the Department of Justice, an agreement between competitors to establish or adhere to uniform price discounts is a type of which antitrust violation?

Price fixing

What does PITI stand for?

Principal, interest, taxes, insurance

Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?

Prior appropriation

Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first?

Property taxes

The buyer you're working with doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?

Ratify the implied agreement by getting a signed agency agreement.

Ron's company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures?

Ron may take the fixtures as long as he repairs any damage caused by removal.

In Georgia, the three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and note with ______.

Security deed

Elizabeth is financing a new home. She submitted her loan application on Monday, August 3. She's set to close on Thursday, September 21. By what date must her lender provide the Closing Disclosure?

September 18

The ______ is the federal act that deals with telephone solicitation.

Telephone Consumer Protection Act

In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement?

The client and agent mutually agree to terminate the listing.

What entity is allowed to charge a gross receipts tax to licensees on their earnings?

The county or municipality

John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted's property several years earlier. Which general warranty deed covenant does this represent?

The covenant against encumbrances

Which fiduciary duty requires agents to handle their clients' funds and paperwork properly?

The duty of accounting

In Georgia, who or what sets the requirements for security deposit disbursal when a lease terminates?

The lease terms

Who's the mortgagee in a mortgage?

The lender

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.

When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale?

The licensee is permitted to list other properties for sale, even if they're competing properties.

When a licensee is working with a property located near a Superfund site, what does that mean?

The licensee must disclose the existence of an environmental hazard in the area.

In pricing a property, what might expired listings tell the real estate professional?

The price at which a property won't sell

Dave's company just did some renovation work on a free-standing hobby store in order to ensure that it's ADA compliant. As Dave is doing the final walk-through, he notes that the aisles are now wider, the restrooms each have an accessible stall, and the water fountain near the restrooms is lower and has more clearance. But he notices that one critical renovation hasn't been made. Which of these is key for ADA compliance?

There should be a ramp in addition to steps for wheelchair accessibility.

In marketing her new listing, Alice asks the photographer to "touch-up" the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?

This is deceptive advertising for which both Alice and her broker may be disciplined.

Garrett wanted to move his real estate closing so that he can get through his wedding first. His broker and attorney encouraged him not to do it because of which contract clause?

Time is of the essence

Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document?

To detail the estimated closing costs for Lawrence's loan

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

Your client, Darnell, is interested in buying a rental property that has current tenants. He plans to rent the property to friends the month after he buys it. Which of the following statements is true and could affect Darnell's decision to buy the property?

Unless stated otherwise in the lease, the existing tenants usually have the right to retain possession of a property, even if it's sold during their lease term.

What's a good policy that a buyer's agent should employ regarding contingencies?

Use contingencies judiciously to protect the clients and the deal.

Kevin and Regina sold their property to Virginia using a general warranty deed. Which of these statements is true?

Virginia is the grantee.

When is a promissory note most often used in Georgia?

When an owner finance the sale of their property

Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?

When conditions are met at closing

Which of these is an example of legal single license dual agency?

You represent both the buyer and seller in a single transaction with appropriate consent from both.

You've listed a 1918 Craftsman with some significant foundation issues—so significant that the buyers walked away after the inspection. They provided you and your sellers with a copy of the inspection report, which also points out some wiring concerns. At today's open house, a prospective buyer asks to see a copy of any inspections done on the property. What should your response be?

You should disclose any adverse material facts, but you don't have to provide the report.

Zach wants to purchase a property that's subject to an existing lease agreement, which includes the tenant's right to renew the lease. What is Zach's obligation, if any, to uphold the terms of the lease agreement?

Zach must honor that right and allow the tenant to renew at the end of the term.

When Stacy's clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Is this legal or illegal under the Real Estate Settlement Procedures Act?

this is illegal under RESPA because it's considered a kickback between settlement service providers.

The best way to start comparative market analysis data collection is to use properties that sold in the last ______.

three to six months