CE Shop Practice Test - GA
What information would the Loan Estimate NOT provide to buyers under the TRID-required disclosures law?
Final closing costs
All fair housing complaints must be filed with the Fair Housing Division within ______ of the alleged violation.
One year
ccording to the Georgia Brokerage Relationships in Real Estate Transactions Act, if no expiration date is provided in the brokerage engagement, then the engagement will terminate ______.
One year
The two primary purposes of which kind of budget are to help property managers maximize profitability and to avoid unforeseen major expenses.
Operating
Randa is trying to lower the vacancy rates for the commercial property she manages because her revenue targets have increased by 8% over the next year. What type of budget contains this revenue detail?
Operating budget
Hank leases 150 acres from Sara and Jesse. He has an option contract attached to his lease, with an option to purchase that can be exercised within the next two years. To gain that right, Hank paid Sara and Jesse $5,000. This is called a(n) ________.
Option fee
An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 2% rate represent?
Periodic cap
Whose role is it to develop the comprehensive master plan?
Planning board members
In a neutral market, what pricing strategy may generate interest in the property, possibly prompting multiple offers?
Pricing below market value
When the value of a property increases thanks to an adjacent higher-quality property
Progression
Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value. Because of this, you notice a bump in your property value. Which economic principle is at work here?
Progression
Which of the following duties is owed to both clients and customers?
Prompt presentation of all written offers and counter-offers
In Georgia, a party to a contract has ______ from the date of a contract breach to sue the other party.
Six years
Which source of law is created through legislation?
Statutory Law
Lewis and Elliot started a real estate investment business together. After much discussion with their attorney they decided to incorporate, but in such a way that they are treated like a partnership and don't have to pay corporate taxes. What form of business do they have?
Subchapter S corporation
Which of these statements most accurately represents existing federal antitrust legislation?
The Clayton Act supports the Sherman Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly
Who, or which entity, has the authority to bring injunctive action against a real estate licensee on the behalf of the commission?
The Georgia attorney general
Dana found a listing on the MLS that was perfect for her buyer. If blanket sub-agency existed, what would be true?
The buyer would be an unrepresented customer.
Which covenant requires the grantee to execute any necessary legal documents (within his power) necessary to fix title defects discovered after closing?
The covenant of further assurances
Colleen and Judy purchased a dilapidated townhome in an estate sale. Due to their fix-up work and the current economy, the property value has skyrocketed. They decide to sell it to get their equity out of it. After they list it, a woman comes forward, saying she is an heir to the previous owner and lays claim to the property. Which general warranty deed covenant protects Colleen and Judy?
The covenant of warranty
assures that the grantor will warrant and defend the title against the lawful claims of others.
The covenant of warranty
What's the best definition of land?
The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
Charlie represents Sue, a buyer. Charlie is being paid by Claude, the seller, through his brokerage. What's true about this situation?
This doesn't change the agency relationship
What provisions are standard when any security instrument is used but are included in the promissory note rather than the security instrument?
late charge
Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. These are collectively referred to as the ________.
nets
These three items together are known as the _________—or you can use the acronym TIM for taxes, insurance, and maintenance.
nets
Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What is Kendra in this scenario?
offeree
Which property type is excluded from coverage under the Commercial Real Estate Broker Lien Act?
A poultry farm and processing plant
Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin's equity?
A) $254,200 B) $187,700 C) $214,300 D) $114,300 Subtract the loan balance from the market value of the home to find the equity
Fallon is a broker who wants to ensure she is paid, regardless of whether a property sells. She asks for 4% of the listing price up front, which is lower than her colleague's 6% contingency fee. What type of fee is this?
Advance Fee
Albert wants to sell his house to his cousin, who's willing to assume the loan. What clause in Albert's mortgage requires him to obtain the lender's permission to do this?
Alienation clause
The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. A) $75.83 B) $90.57 C) $101.12 D) $121.98
$90.57 Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes.
The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay? A) 1.71 B) .02 C) .017 D) 1.7
1.71 A point is 1% of the loan amount. The Smithwicks' loan is $360,000 ($400,000 x .90), and they paid $6,150 for points at closing. Divide the cost in points by the loan amount to get the number of points they paid: ($6,150 ÷ 360,000 = 0.0170833, or 1.71).
All lenders have different underwriting standards, but traditionally, the housing debt-to-income ratio has been ______%, with a total debt-to-income ratio of ______ %.
25 to 28; 33 to 36
Which of the following is an example of conversion?
A broker uses client trust funds without the client's permission.
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
Shannon doesn't understand why her agent wants her to add a contingency to her purchase offer. Her agent, Scott, explains that the property is in a transitional neighborhood, and it might be overpriced. What type of contingency is Scott recommending?
Appraisal
At what point in a real estate transaction will the deposits and the disbursements of the transaction need to reflect a zero balance?
As the closing of the real estate transaction
Dean is an experienced licensee whose career has focused on mineral, oil, and water rights, and the science behind soil cultivation. Based on this, what's Dean's likely real estate niche?
Farm Brokerage
Cambridge Apartments provides an open parking lot for their residents. There is adequate parking and all spaces are available on a "first-come, first-served" basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
Cambridge must allow an exception to the first-come, first-served policy for Alton
Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton's Great Aunt Matilda has agreed to pay any portion of Joan's commission the sellers don't cover. Teresa's father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?
Carlton and the Martins are the agents' principals in this transaction.
Which source of law establishes legal precedent?
Case law
Which act was the first to prohibit any exceptions for discrimination based on race or color?
Civil Rights Act of 1866
Property with ownership by more than one person is known as ______.
Co-ownership
Which section of the GAR F20 Purchase and Sale Agreement says that all of the parties must work together to move the contract along in a timely fashion?
Duty to cooperate
A part of your property is used by the local utility company to maintain its power lines. What's this an example of?
Easement
Which type of easement is commonly seen when land is landlocked with no access to roads?
Easement by necessity
Before applying for relief from the recovery fund, what must a member of the public do, after receiving a judgment against a licensee for wrongdoing?
Exhaust other legal remedies
New construction multifamily dwellings must provide basic accessibility to people with disabilities. This applies to which of the following?
Ground floor units in a 10-unit building with no elevator
The Office of Fair Housing and Equal Opportunity is a part of which federal department?
HUD
What should you do to avoid fair housing violations?
Have your broker review your qualification process.
When discussing brokerage compensation policies, brokers must disclose ______.
How brokers representing other parties will be paid
Genevieve, an unlicensed pre-licensing student, works for Peachtree Real Estate as an office assistant. She's very good at networking and bringing in new clientele. She receives a salary as a full-time employee of the firm. The qualifying broker wanted to reward Genevieve for her commitment to the firm and for drumming up great business. What do we know about this situation?
If the broker compensated Genevieve for her referrals to the firm, he would be in violation of the unfair trade practices law because he would be paying an unlicensed individual for referrals, which is prohibited in statute 43-40-25 of Georgia license law
Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?
If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed
A licensee must notify GREC of a conviction of a crime ______.
Immeadiately
A licensee must notify GREC of a conviction of a crime ______.
Immediately
Which physical characteristic of land contains the concept that the geographic location of a piece of land is fixed and can never be changed?
Immobility
What is a contractual shift of liability and obligations off of a given party?
Indemnification clause
Which clause in a contract states that one or more parties won't be held liable if there are losses or expenses related to the contract?
Indemnification clause
Because these types of properties have both specific physical and complex operational requirements, they are usually handled by more experienced real estate professionals.
Industrial
Which one of the following tasks helps Sherrod fulfill his property management duty of tenant marketing and acquisition?
Keeping vacancies to a minimum
What's the maximum penalty for each violation of federal do not call rules?
More than $40,000
In which of these situations has the licensee compromised the duties of loyalty and disclosure?
Nate didn't tell his client about a conflict of interest related to the sale of the client's property.
Lacey works for a government agency as an office space location specialist. Her role is to gather information and locate office space for government agencies. Does she need a real estate license?
No, government employees are an exception to the real estate license requirement.
What occurs after an investigation if the Georgia attorney general finds reason for disciplinary action?
Notification that the licensee is to appear at a hearing
What option does a licensee have when a notice for a hearing has been received?
Reach a settlement with the commission, halting the hearing process.
In the real estate business, which professional's primary role is to protect brokerages from litigation and to answer questions for licensees about legal matters regarding real estate transactions?
Real estate attorney
What does an equity Real Estate Investment Trust invest in?
Real estate property
You were just given information that the buyer found some issues during the walk-through. You immediately phone your seller client and let her know. This is an example of ______.
Reasonable skill and care
Which clause in the deed of trust and Georgia's security deed is the equivalent of the defeasance clause in the mortgage?
Reconveyance
Cheng is selling his property to Jericho. What's the best method Jericho can use to ensure his interest in the property?
Record the deed in his name
Marsha leases a ranch house in a bedroom community. When the owner decided to sell the house, Marsha was given the opportunity to purchase it but declined. What does Marsha have?
Right of first refusal
corporations that are taxed as partnerships
S corporation
A "Homes for Sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true?
The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms
The signature lines on the multi-state Fannie Mae promissory note are set up for ______ to sign.
The borrower
If the buyer is putting earnest money down, which of the following statements is true?
The buyer must specify the exact amount in the contract.
Which of the following actions occurs prior to closing?
The buyer obtains a binder for insurance coverage on the new home.
In which of these instances would a broker still be owed a commission, even after a listing agreement terminates
The eventual buyer inquired about the property during the agreement period.
Jeanine has an exclusive right-right-to-sell agreement with her listing agent, Tera. Which of these statements about Tera's compensation is true?
The exclusive-right-to-sell agreement guarantees procuring cause, which means that the broker will be paid no matter who brings the buyer to the transaction.
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.
Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?
The listing agent stops working on the listing.
If the buyer who's party to an Exclusive Buyer Brokerage agreement has an issue or claim, how should they resolve it?
The parties should mutually select an arbitrator.
Who is ultimately responsible for ensuring that any hazardous waste produced at an apartment complex is properly disposed of?
The property owner or manager
Jacqueline found a ready, willing, and able buyer for her client's condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?
The smaller number
Why is a fiduciary relationship between Georgia brokers and their clients not required?
The state attempts to protect brokers from an unreasonable legal standard.
An attorney receives a request to have an appraisal performed on a property inheritance that she is transferring from her deceased client's estate to his heir. Which of these statements is tru
This isn't a federally related transaction and under federal law an appraisal isn't required.
GREC will investigate a complaint if that complaint occurred within how many years?
Three years
Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?
To detail all costs Jennings will owe at closing
What is the purpose of a listing agreement?
To spell out the agreement between the listing broker and the seller
In the real estate business, which professional's primary role is to finance mortgage loans, while also funding development/construction projects if the risk is not too great?
Traditional Lenders
A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.
Transfer ownership before death and avoid probate
Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ________.
Trustor, creates trust
Of the following, which is a typical accrued adjustment?
Unpaid real estate taxes
What is imputed notice?
When actual knowledge received by an agent is deemed to have been given to the principal
When is an investment a security?
When it's intended to make a profit solely derived from the management effort of others
Manuel is selling his home to Selena. He has an existing loan that he'll continue to make payments on, and he's extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?
Wrap Around Loan
Which of the following types of claims would be covered by a property manager's professional liability insurance policy?
Wrongful eviction
Bernie is representing Oscar in the sale of Oscar's home. They have signed an exclusive right to sell listing agreement. If Oscar finds his own buyer, does he owe Bernie a commission?
Yes, because exclusive right to sell means Bernie gets paid no matter who finds the buyer
Under certain circumstances, an attorney may perform real estate services without holding a real estate license. This would be true for an attorney who employs up to ______ salespeople.
Zero