Brokerage Practice
Consideration (Consideration (something of value) is required for transfer of this deed. In a traditional sale, the consideration is the purchase price stated in the deed. In deed transfers, "for love and affection" may be the consideration offered.)
A deed states, "For love and affection, the receipt and sufficiency of which is hereby acknowledged." What does this statement represent in the deed?
No, because it is discriminatory against sex/gender (Real property advertisements should not contain an explicit preference, limitation, or discrimination on account of sex.)
A rental property advertisement contains a phrase that reads, "Gentlemen's housing units." Is this acceptable under federal fair housing laws?
Gross rent multiplier (GRM is used for income-producing properties of four or fewer units. Properties with five or more units use GIM.)
An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value?
Screening new tenants (The primary services a property manager provides include screening and retaining new tenants, handling evictions, and collecting rent.)
As a property manager, Lisa most likely provides which of the following services?
Ivy is Camille's sub-agent and owes loyalty to the seller. (The sub-agent (Ivy) works for the seller's agent (Camille) and owes loyalty to the seller.)
Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille's listing. What's true about the agency relationships in this situation?
50 square yards (You need to find the area for this problem. Use this formula: area = 5 yards × 10 yards = 50 square yards.)
Cheryl wants new carpeting for her rectangular dining room. Her dining room is five yards by 10 yards. How much carpeting does she need to buy to cover her entire dining room?
Handling and managing trust funds such as tenant security deposits (Unlicensed employees may collect security deposits, as well as rent and other payments, but they must turn those funds over to the broker to manage.)
Drake, an unlicensed employee at The Best Nest Brokerage in Savannah, works with broker Allison's property management clients. Which of the following tasks can he NOT perform legally?
Total annual income (rents plus income from other sources, like coin laundries) (The gross annual income includes annual rents and annual income from sources like vending machines, laundry machines, etc.)
For a commercial residential property like an apartment building, the gross annual income is ______.
It defines how and how much the agent will be paid. {While better service and exclusive representation are buyer advantages, defining how (and how much) the agent will be paid is an important component of a buyer agency agreement for the agent.}
From an agent's perspective, what's one benefit of a buyer representation agreement?
10 years
Georgia broker Barb had her license revoked. How long must she wait to apply for a new license?
Inverse condemnation (Inverse condemnation occurs when government takes private property, either physically or by the effect of regulation on the property value, without offering the owner just compensation as is required by eminent domain.)
Government regulation of a property that deprives the landowner of the economic value of the property without compensation from the government is called ______.
30 days
How long does a broker have before notifying the commission that a trust fund account has been established?
Seven (There are a total of seven federally protected classes, but states can add to that number.)
How many total classes are protected by federal fair housing law?
sales price
In Georgia, upon what amount is the transfer tax calculated?
Statutory non-employees (Remember, a real estate agent working as an independent contractor for a broker is classified as a statutory non-employee by the IRS as long as the three IRS-specified requirements are met.)
In what worker classification are real estate agents placed as long as they meet the three requirements stipulated by the IRS?
Independent contractor agreement (Section 1981 of the Civil Rights Act of 1866 protects independent contractors' rights as a result of entering into a contractual agreement with the broker.)
Independent contractors maintain some degree of protection from discrimination by virtue of their ______.
140 (100%) (Deed restrictions can be placed on an individual property, an entire subdivision, or a neighborhood.)
Jason, your client, is developing a subdivision of 140 houses. He may place deed restrictions on as many as ______ properties.
Disposition (The right of disposition includes the right to determine how, when, and if the property is to be sold or transferred to another owner.)
LaTonya's aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya's sister was even married there. That's why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?
Trying to help his buyers determine affordability of a home purchase (Though buyers will eventually receive closing cost information from the lender and the closing agent, an early estimation of these costs helps buyers determine how much house they can afford.)
Oliver is a licensee who helps his buyers estimate their closing costs. Oliver is most likely ______.
Price Fixing
One of the actions that landed the Consolidated Multiple Listing service of South Carolina in court was prohibiting members from offering home sellers the opportunity to avoid paying a broker's commission if the seller located a buyer on their own. What type of antitrust violation does this exemplify?
Help them estimate closing costs (Though buyers will eventually receive closing cost information from the lender and the closing agent, an early estimation of these costs helps buyers determine how much house they can afford.)
One way licensees can help buyers determine the affordability of a home purchase is to ______.
Fran may be guilty of practicing law without a license. She should have worked with her broker and an attorney to make any necessary modifications. (Licensees may fill in blanks on a sales contract, but they shouldn't alter the contract without principal broker and attorney review.)
Principal broker Jean is reviewing an agency agreement that Fran, an affiliated licensee, prepared for her buyer clients. Fran's clients weren't comfortable with some of the clauses in the agreement and asked Fran to modify them. Fran made the changes her clients requested and the buyers initialed the changes. Which of the following statements is true?
Recommend that the Arnolds review the sales contract with an attorney before signing it. (It's always a good idea for licensees to recommend that their clients review the sales contract with an attorney before signing it.)
Reggie has thoroughly reviewed the sales contract with his clients, the Arnolds, and has confirmed that they understand all of the terms and provisions. What should Reggie do next?
Period to period (This is a period to period lease since Robert's lease remain in force as long as he pays his rent monthly.)
Robert rents a small loft for $850 a month. He has no written lease and can move out by giving his landlord two week's notice. What type of lease is this?
Joint tenancy(Joint tenancy is equal ownership with unity of time, title, interest, and possession. Tenancy by the entirety (in states where it's used) also requires the same four unities, but requires that the owners be married.)
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?
The FHA appraisal amount will "stick" to the property for 120 days.
The FHA appraisal on Carson's home was lower than the sales price. If Carson's buyer terminates the contract and another FHA buyer makes an offer, which of the following statements is true?
Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate (The FTC is concerned with all ad claims, but it's most concerned by any ad that makes a health or safety claim or any claim that is difficult for the consumer to evaluate.)
The Federal Trade Commission is concerned with all ad claims but is most likely to be most concerned with ______.
GREC
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?
Part (The part is some, but not all, of something. "Part" is a math term, and it's one of the few that makes perfect sense!)
The ______ is some, but not all, of something.
New worker orientation
The ______ should introduce workers to the brokerage culture, mission, and values, and give them a good first impression of the firm.
Acknowledge good work from individual associates (Public recognition of individual work is an excellent use of time at a sales meeting, because it motivates individuals and builds a strong culture.)
The last few minutes of a sales meeting is a good time to ______, which supports good performance and builds a strong team dynamic.
Coercive (Coercive, or "do as I say," management works well in crisis situations.)
The management style that's most effective in a crisis situation is __________.
How well they influence the work of others (Brokerage managers work primarily by influencing the work of others, even though their compensation is often tied to their ability to help the brokerage meet revenue goals.)
The success of a brokerage manager measured primarily by ______.
The individual has a valid real estate license (The IRS requires a written agreement between the broker and the licensee. The agreement must include certain clauses, one of which is a statement confirming that the independent contractor has a valid real estate license.)
The written agreement between a broker and a licensee working as an independent contractor must have a clause that states ______ in order for the IRS to classify the licensee as a statutory non-employee.
Reasonable skill and care and obedience (Marla's skill and expertise tell her that listing the property on the MLS is best for the client because it will provide much more exposure for the property. Her duty of obedience, however, keeps her from going against her client's legal wishes.)
Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?
Controlling the Assault of Non-Solicited Pornography and Marketing Act
What does CAN-SPAM Act stand for?
Any ad likely to mislead consumers acting reasonably under the circumstances (Any ad likely to mislead consumers acting reasonably under the circumstances is considered a deceptive ad, according to the FTC's Deception Policy Statement.)
What does the FTC consider to be a deceptive ad?
Net lease (This is a net lease, there are several types of net leases such as net-net and triple net.)
What type of lease requires the tenant to pay the rent and all or part of the property expenses.
When it's intended to make a profit solely derived from the management effort of others
When is an investment a security?
Measure of central tendency (Any of the three measures of central tendency provide a single value that represents the average of the entire group.)
When real estate licensee Bridget reviews data for the square footage of all single-family homes in Castle Place, she analyzes it using a ______ because it provides a single number that represents all of the houses in the sample.
File a notice of hearing with the Office of State Administrative Hearings
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 ______.
Confidentiality policies
Which of the following agency-related disclosures does Georgia law require?
Paying off a loan over time (Amortization is the paying off of a loan over time.)
Which of the following describes amortization?
Describe the firm's history and its mission and values
Which of the following is an activity that should be conducted during a new worker orientation to help new people feel confident and excited about their decision to join the brokerage?
It essentially mirrors the federal Fair Housing Act. (It mirrors the federal Fair Housing Act. Because it's essentially the same, it's neither stricter nor more lenient than the federal equivalent.)
Which of the following is true about the Georgia Fair Housing Law?
The seller, who's lived in the home for the last three years, won't have to declare the capital gains as income for tax purposes if it is less than $250,000. (Capital gains are most definitely income for a home seller, but they'll only need to be declared as such if they're more than $250,000 (or $500,000 for couples), and if the seller has not lived in the home for at least two of the last five years.)
Which of the following scenarios best describes how capital gains affect the taxes of a home seller?
A new licensee who is going to work as an independent contractor must complete an independent contractor agreement, a W-9, and a broker sponsorship form. (Independent contractors must complete these three forms, while new employees must each complete a W-4 for tax-withholding purposes, personnel records, and an employment agreement.)
Which of the following statements regarding independent contractors is true?
The Occupational Safety and Health Act doesn't cover independent contractors; it only covers a business's employees. (While this act doesn't cover independent contractors, it does apply to any business that has at least one employee.)
Which of the following statements regarding the Occupational Safety and Health Act is true?
Must be for the purpose of public health, safety, and general welfare
Which of these requirements must zoning ordinances meet in order to pass the validity test?
The deed includes an act of conveyance. (The grantor is the seller; the grantee is the buyer. The grantor must sign the deed, be of legal capacity, and be positively identified. The deed must include an act of conveyance.)
Which of these statements accurately represents one of the required elements in a deed?
A person who receives a $500 gift certificate for performing real estate activities on a friend's behalf must have a real estate license. (With limited exceptions, a license is required for someone to receive compensation of any kind, including a gift card, for performing real estate activities for others.)
Which of these statements is true regarding licensing requirements in Georgia?
Use realistic task lists. (New licensees often need help with productivity and time management strategies. Using realistic task lists and time blocking are both good tips the broker can give.)
Which one of the following is a recommended productivity and time management strategy that brokers should share with new licensees?
Land trusts generally continue for a specified term, such as 10, 20, or 30 years. (Land trusts generally continue for a specified term, such as 10, 20, or 30 years. At the end of the term, the trustee can extend the term or sell the land and provide the proceeds to the beneficiary.)
Which one of the following statements is true about land trusts?
Joint tenancy (This is joint tenancy. If one joint tenant dies, that tenant's interests go to the remaining joint tenants. If only one tenant is left, she owns the property in severalty.)
Which type of ownership requires unities of time, title, interest, and possession?
Hybrid REIT (Hybrid REITs are a combination of mortgage lending and equity investing. They derive their income from the rent or sale of property and interest dividends.)
Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?
Seller (The seller wants to know value of the property to determine the selling price. An appraisal can provide the seller with this information.)
Who or which of the following uses an appraisal to determine what the selling price should be?
Buyer The buyer wants to pay no more than necessary. The appraisal presents an unbiased opinion of the value of the property.
Who or which of the following uses the appraisal to determine how much to pay for the property?
An associate broker at the same office (It can be difficult for someone who was formerly seen as a peer to transition into a supervisory position over their colleagues.)
Who would likely have the most difficult time creating a new relationship with the sales staff when transitioning into a managing broker role?
The Georgia governor (The governor appoints all six GREC members and the state senate confirms them._
Who, or which entity, appoints the members of the Georgia Real Estate Commission?
Why are managers at a brokerage usually salaried employees? (Brokerage managers are responsible for helping the business achieve its goals, but since they do this through the work of others, they're typically salaried employees.)
Why are managers at a brokerage usually salaried employees?
Borrowers who can't afford loan payments may have taken out other loans against the property. (Borrowers who are unable to pay the mortgage may also have been unable to make property tax and secondary mortgage payments.)
Why is a foreclosure more likely to have title issues than a non-foreclosure?
Requires board approval (The transfer of cooperative ownership requires approval of the cooperative board.)
With a cooperative, the transfer of ownership ______.
Deductible on personal income tax returns (The cooperative resident's share of mortgage interest and real estate taxes is deductible on personal income tax returns.)
With cooperatives, the resident's share of mortgage interest and real estate taxes is ______.
Table (Tables make use of columns and rows to allow comparison of many different bits of data, which is necessary in an amortization chart.)
Your first-time buyer, Abigail, is extremely nervous that she won't be able to afford the loan payments on her new home. Although she has a job that pays well, she's not great with numbers and she's never had to live within a budget. Which of the following could you use to present Abigail with a sample amortization schedule?
Passive fraud (You not only should have known better, but you did know better and intentionally remained silent, so you're guilty of passive fraud.)
Your seller client has listed a beautiful piece of land on the water. You know this property would be a great investment if it were subdivided and developed, but you don't mention the potential investment value to the seller because you want the property for yourself. You also don't market it or present any offers. After several months, you buy the property at a deep discount. You're guilty of ______.
Community property (This is community property. It's similar to joint tenancy in that it has the right of survivorship and includes unity of time, title, interest, and possession, but with marriage added.)
______ rights mean real estate acquired by either spouse during the marriage (with a few exceptions) is considered community property.