ALL QUESTIONS AND PART STUDY Flashcards
(209 cards)
1
Q
DESCRIBE METES AND BOUNDS
A
. Metes are the direction and distance of a line forming the property’s boundary;
. bounds are physical features that define the boundaries of the property.
2
Q
DESCRIBE Monument
A
A physical marker used in a metes-and-bounds description that can be man-made or natural. It may be a tree, creek, rock, or a stake placed in the ground.
3
Q
DESCRIBE The rectangular government survey system
A
divides land into townships and further into sections and fractions called sections.
4
Q
DESCRIBE TYPE OF LIENS
A
General liens: judgment liens, federal and state tax liens, and decedent’s debts.
A mechanic’s lien is one a vendor of goods or services places on the property and creates a cloud on the property’s title.
ATTACHMENT LIEN IS the one a court places on a property, also known as judgment liens
5
Q
What is a quitclaim deed?
A
It just transfer the title from the grantor to grantee but offer no guarantees or warranties.
6
Q
Which legislative act prohibits certain types of electronic communication?
A
CAN-SPAM
The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM) prohibits junk email and requires an “unsubscribe” option in any email marketing messages.
7
Q
Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?
A
Housing for Older Persons Act of 1995
Under the Housing for Older Persons Act of 1995, housing must have one person who is 55 or older residing in at least 80% of its occupied units to be exempt from charges of familial status discrimination by age preference.
8
Q
Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?
A
HUD or Department of Housing and Urban Development
9
Q
DESCRIBE THE 7 STEPS OF APPRAISAL
A
- STATE THE PROBLEM
- Identify data needed.
- GATHER AND ANALYZE DATA
- Determine highest and best use (Imagine no comparables)
- Estimate the land value (as if the land were vacant).
- Use one or more of the three approaches to valuation
- Reconcile values to determine the final appraised value.
10
Q
What are the three approaches to valuation?
A
sales comparison: compare subject properties
The cost approach: based on the value of the land and investment to the land
Income approach: good for rental properties.
11
Q
What are some type of value in appraisal?
A
Highest and best use: the best to get the most profit
Value in use: What a property is worth to the person using it.
Insured value: Cost to replace or rebuild a property
12
Q
Four characteristics of value:
A
Demand: How popular or desirable a property is.
Utility: The property’s function.
Scarcity: Relates to market supply.
Transferability: The ease with which another person can purchase the property
13
Q
Property managers must recognize the federally protected classes under ADA and the federal Fair Housing Act. Which list most accurately lists these classes?
A
Race, color, religion, national origin, sex, familial status, or disability
14
Q
What must a licensee do when he wants to purchase a home listed by the brokerage where he’s affiliated?
A
Notify his broker in writing and disclose his intentions to the seller.
15
Q
Why might a licensee want a buyer to sign a buyer representation agreement?
A
It helps ensure buyer loyalty.
16
Q
Which of the following could indicate a problem with the chimney flue or ventilation?
A
Drafts (air) near the fireplace
17
Q
Security instrument clauses include:
A
The defeasance clause orders the lender or trustee to immediately release full title to the borrower once the loan is paid in full.
An acceleration clause makes the entire debt due immediately if there’s borrower default.
A due-on-sale clause (also known as alienation clause) requires the borrower to repay the loan when transferring ownership to another.
18
Q
Which of the following is a common chimney or fireplace problem?
A
Creosote (AN OIL DARK THICK LIQUID)
19
Q
Craig’s loan is secured by a mortgage. Who holds legal title when this security instrument is used?
A
Craig, the borrower
20
Q
While Martha’s paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item?
A
A promissory note is the borrower’s promise to repay the loan. When the loan is paid in full, the note is marked as paid in full and returned to the borrower.
21
Q
what is an A special agent (aka limited agent) ?
A
has limited authority to act on a client’s behalf, such as a real estate agent or an escrow officer.
22
Q
What is a general agent?
A
he is responsible for handling all dealings in a given area for a client, such as a property manager. This type of agent may bind a client to a contract.
23
Q
Designated/appointed agency (aka dual-licensed dual agency) is
A
when two separate licensees from a single firm each represent one party (buyer or seller) in the same transaction.
24
Q
What is an Exclusive agency agreements?
A
it allow only one brokerage to market and sell the property. However, if the seller finds her own buyer, she doesn’t pay commission to the brokerage.
25
what is an exclusive right-to-sell agreement ?
provides the listing agent with a commission no matter who brings the buyer to the transaction. Exclusive right-to-sell agreements include definite start and end dates.
26
Describe economic principles of value:
The principle of conformity: how well it conforms to its surrounding area (how similar it is to other properties in the neighborhood).
The principle of competition: what else is available
.
The principle of substitution: A reasonable person will not pay more for a property if a comparable one can be had for less.
The principle of contribution: the same improvement to different houses may result in an increase in value in one, while the other sees no appreciable change.
The principle of anticipation: Changes in value may be caused by the expectation of events.
27
What is Transfer of Rights in Property?
it gives the lender power of sale, meaning the lender can sell the property without judicial proceedings if the borrower defaults.
28
What makes a voided convey contract?
The grantor must be mentally competent and of legal age, though neither of these is essential for the grantee. The grantor is required to sign the deed, and the grantee must provide some sort of consideration.
29
In Georgia, upon what amount is the transfer tax calculated?
Sales price
30
Gina is buying a condo in Tybee Island. Unless otherwise negotiated, which of the following closing costs will she pay?
Intangible tax
31
What fiduciary duty remains for ever?
Confidentiality
32
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.
33
What fiduciary duties remain intact in dual agency?
Confidentiality
34
If you see sawdust that can’t be explained, it’s probably a sawdust-like material called frass created by which pest?
Carpenter ants
35
Who holds the promissory note while it’s being repaid?
The obligee (the lender)
36
In Georgia, what must be filed for the eviction process to begin?
An affidavit (he has sworn) or a written promise
37
What’s the transfer tax on a Georgia home sold for $215,000 with a mortgage loan of $180,000?
Remember two things:
1. Transfer tax is based on the SALES PRICE
2. the % per transfer tax is 0.1%
THEREFORE: $215,000 X 0.1% = $215
38
Which real estate finance instrument in Georgia may include the pledging of collateral and the release of that collateral in the same document?
Lenders may release the Georgia SECURITY DEED simply by noting the release on the deed itself.
39
Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay?
Yes, licensees can use standard forms originally created or approved by an attorney.
40
What forms the boundaries of a township?
Township lines and range lines
The boundaries of townships are township lines, which run parallel to baselines meridian, and range lines, which run parallel to principal meridians.
41
In Georgia, what’s the first step in the foreclosure process (sometimes called pre-foreclosure)?
The lender notifies the borrower and attempts to have the default cured.
42
What can be said about a designated agent’s duties?
They're the same as a single agent’s duties.
43
When a borrower fails to cure any default within 120 days of the lender’s original notification, the lender may begin the foreclosure process. In Georgia, borrowers may redeem the property ________________.
Up to five days before the scheduled foreclosure sale
44
Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under what federal law?
Fair Housing Amendments Act of 1988
45
Of the following, what is the main distinguishing feature between a mortgage, a deed of trust, and Georgia’s security deed?
Of the following, what is the main distinguishing feature between a mortgage, a deed of trust, and Georgia’s security deed?
46
what is extension clause in Georgia's brokerage agreements?
The extension clause adds time to the buyer brokerage agreement if the buyer is under contract and that falls through. The extension period equals the number of days the buyer was under contract.
47
What is biding acceptance and acceptance?
Biding acceptance is when the contract has been executed fully.
An acceptance is when a transaction is executory.
48
Which of the following is a requirement to obtain a Georgia broker’s license?
The successful completion of 60 hours of brokerage coursework
49
What option does a Georgia licensee have when a notice for a hearing has been received?
Reach a settlement with the commission, halting the hearing process.
50
When considering the sanctions to hand down to a licensee for an unfair trade practices law violation, what does GREC consider?
The licensee’s history in matters of deception, fraud, or unethical behavior
51
On a security deed in Georgia, what is the borrower referred to?
the grantor (borrower) and the grantee (lender).
52
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?
Financing terms and cash equivalency
53
What is a termination agreement?
it states what happens when the agent separates from the firm, such as who owns any active listings, how keys are to be returned, etc.
54
With the cost approach to value, what is the replacement cost?
Cost to build a functionally equivalent improvement
55
EXPLAIN THE TYPES OF ZONING:
Bulk zoning regulates the density of a given area by requiring certain building height limitations, lot width, setback requirements, etc. it applies commercial too
Aesthetic zoning is a way to ensure the visual and architectural consistency of an area.
Downzoning is the process of assigning a lower-density use zone to an area previously allowing a higher density. it refers to a number of things per unit, such as houses per acre.
Spot zoning rezones a specific property for use within another zoning area.
56
Zoning actions may include:
Nonconforming use: Deviates from current zoning but is grandfathered in (such as a home built years ago in an area that's now commercially zoned).
Moratorium: Temporarily halts new property development
Special use permit (aka conditional use permit): Allows use that’s not normally permitted but is considered an “allowable” use within that zoning, such as a church within a residentially zoned area.
Variance (aka use variance) Permitted deviation in the zoning ordinance requirements; typically granted when the zoning has created a hardship or burden on the property owner. Both special use permits and variances require a public hearing before they’re granted.
57
Where are option contracts on multiple properties commonly seen?
Commercial properties
58
What are the three type of depreciation?
External depreciation, also known as economic obsolescence, is caused by factors outside the property (e.g., an airport is nearby, causing noise).
Functional obsolescence is a form of depreciation or loss in value caused by defects in design
Physical deterioration occurs with wear and tear, damage, and improper maintenance.
59
What is a deed of trust?
conveys real estate to a trustee for the beneficiary named in the trust agreement. For example, in states that use a non-judicial foreclosure process, the deed is conveyed to a trustee who holds it until the mortgage loan is paid in full OR until the borrower defaults and the lender must foreclose.
60
name the covenants in a general warranty deed?
Covenant of seisin: The grantor holds title to and possession of the property.
Covenant of right to convey: The grantor has the right to convey both title to and possession of the property.
Covenant against encumbrances: The grantor assures the grantee that there are no encumbrances against the title other than those identified in public records or the deed itself.
Covenant of quiet enjoyment: The grantor assures that the grantee’s use and enjoyment of the property will be unimpaired and unrestricted, subject to public police powers and private deed restrictions.
Covenant of further assurances: The grantor promises to take whatever actions necessary (within his power) to correct any title defects.
Covenant of warranty or warranty forever: In this most important covenant, the grantor promises to protect and defend the title against lawful claims made by others.
61
During a site evaluation to determine property value, all of the following factors are important to consider EXCEPT ______.
Neighborhood demographics
Topography, utilities, and a property’s size and shape all are considered during a site visit to determine property value. Neighborhood demographics might be of interest to the buyer, but generally won’t be considered by an appraiser.
62
Which clause in the deed of trust and Georgia’s security deed is the equivalent of the defeasance clause in the mortgage?
Reconveyance
63
As a real estate licensee in Georgia, if you advertise or otherwise market using lies, deceit, misrepresentations, fraud, or other unethical practices, what are you in violation of?
The Georgia Fair Business Practices Act focuses primarily on deceptive advertising. Georgia license law 43-40-25 also addresses deceptive trade practices in real estate.
64
When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?
Competition
65
When negotiating the purchase of a property that's subject to an existing lease, it's critical for your client to clearly understand the lease terms, including the property management responsibilities, rent amount, renewal/purchase options, and the ______.
Lease duration
66
Which task is NOT the responsibility of an escrow officer?
Determine how earnest money is to be distributed in case of a dispute.
67
Describe Freehold and Leasehold Estates
A freehold estate is an interest in real property where the owner’s possession of the property isn’t of fixed duration
Fee simple estate (aka fee simple absolute) is a type of freehold estate that conveys the most rights available. Property held as a fee simple can be sold and is inheritable. ("AS LONG AS")
With a fee simple subject to condition subsequent estate, the current property owner conveys ownership to a new owner on a specific condition.
68
What is a leasehold estate?
| and what are the different types?
it is an estate in which the holder has a possessory interest in a property but no ownership.
An estate for years is a lease that ends on a specific date and must be renewed by mutual agreement between the landlord and tenant.
A periodic estate (aka estate from period to period) is a lease that automatically renews at the end of its term (such as a month-to-month lease).
An estate at will is a lease without an established ending that can be terminated by either party.
An estate at sufferance is one in which a tenant (referred to as a holdover tenant) didn’t leave when the lease expired.
69
What is an easy way to remember metes?
Measures
70
Charlie rented a single-family residence from Hal and Mary. The lease specifies that Charlie can't conduct any type of business out of the property. Which clause includes this prohibition?
The use clause
71
Georgia licensee Greg and buyer Sandra's exclusive buyer agency agreement was set to expire on March 1. On Feb 10, Sandra signed a contract with a seller, but it fell through 10 days later due to a home inspection issue. What’s the termination date of Greg and Sandra's buyer agency agreement?
March 11
Greg and Sandra's buyer agency agreement is extended to accommodate the 10 days they were under contract, so the new expiration date is March 11.
72
Which clause of the sales contract says that the contract is the one and only contract between the parties?
Entire Agreement, Modification and Assignment
73
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.
74
When discussing brokerage compensation policies, brokers must disclose ______.
How brokers representing other parties will be paid
75
Rental property owners are exempt from fair housing laws if which of the following conditions is met?
If the owner occupies a building with no more than four families, that owner is exempt.
76
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
77
Eduardo works in Fayetteville as a broker. How does Georgia license law define his status?
Eduardo works in Fayetteville as a broker. How does Georgia license law define his status?
78
what is sub-agency?
a situation in which a licensee brings an unrepresented buyer to a transaction.
79
Business brokers in Georgia can seek credentials such as all of the following EXCEPT ______.
The Business Intermediary Endorsement (BIE) is not a recognized credential for business brokers.
80
What are the two power of attorneys?
General: gives broad power
Special: gives specific power
81
What is an universal agent?
One that is appointed by the government
82
Wendell just listed Barb’s home. Barb told him that there weren’t any easements on the property, and Wendell hasn’t seen a copy of the survey. What is Wendell’s responsibility relative to the disclosure of any easements?
He only needs to disclose easements if they’re known.
83
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.
84
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.
GRMFA applies to loans secured by one- to four-unit residential properties.
85
Who are the parties in a deed of trust?
a lender = beneficiary
borrower = trustor
and a third-party trustee
86
what is an agency couple with interest?
n agency relationship in which a licensee is given some sort of interest in or right to a principal’s property. A standard commission-based transaction isn’t agency coupled with interest.
87
Francine moved out of the Georgia property she was renting, and she left it in pristine condition when she returned the keys. How long after she moves out does the property manager have to return her security deposit?
One month
88
Drew and Hank were camping at Hank’s riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he’d buy it from Hank for $80,000, which Hank agreed was a fair price. It’s two months later, and Hank is upset that Drew now says he won’t buy it. Why isn’t this contract enforceable?
Real estate contracts must be in writing.
The statute of frauds requires that real estate contracts be in writing. Drew’s offer was oral and thus didn’t create an enforceable contract.
89
What is a township?
A 36-square-mile square formed in the use of the rectangular government survey system
90
What does the Federal Trade Commission regulate?
Advertising
91
A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?
The "Mrs. Murphy" exemption applies to owner-occupied buildings with no more than four units. The owner may choose to rent only to a like-sex tenant but may not discriminate on any other basis.
92
Describe the different type of tenancies
Tenancy in common is a form of co-ownership in which each co-owner is entitled to possession of the whole. An owner’s ownership is inheritable and, upon the owner’s death, doesn’t necessarily pass to the other owners.
Joint tenancy is a form of co-ownership in which equal ownership requires unity of time, title, interest, and possession. Joint tenancy includes the right of survivorship, which means that the surviving co-owner(s) will own the property of a joint tenant who dies.
With ownership in severalty, one person owns the property with no joint interest by any other person.
With the death of an estate owned in severalty, the estate passes either according to instructions in the owner’s will or according to state law.
93
What is the primary difference between a right of way and an easement?
A right of way provides a pass-through, but not a right to use the property.
A right of way doesn’t grant the right to use the property in any way, or to construct anything on it. It merely grants an individual or a business the right to pass through the property to get to another property.
94
GREC members serve five-year terms. If a member ends her term early, what will happen?
The governor will appoint another member to fill the vacancy.
95
How many post-licensing hours must licensees complete to continue their real estate license upon passing the licensing exam?
25 hours of post-licensing education
96
The court will order GREC to make a payment out of the Real Estate Education, Research, and Recovery Fund when applicable. What’s the maximum dollar amount one claim can be, including all fees and claimants attached to the transaction?
$25,000
97
What phrase or words are required on a deed and are considered an “act of conveyance”?
“Hereby conveys”
98
What must Georgia associate brokers do in order to work independently as brokers?
Have written consent from all brokers involved.
99
What is a binder?
A binder is a written outline of the sales transaction that’s used in place of a sales contract by licensees in some areas.
100
How many hours of post-licensing education and continuing education (nine hour credit of post-licensing deducted) must a licensee complete after license issuance, and before the four-year license renewal in Georgia?
Licensees must complete 25 hours of post-licensing education within their first year, and an additional 36 hours prior to their four-year license renewal. Nine of the 25 hour post-licensing hours count towards the 36 hours of continuing education. 25 + 36 - 9 =52.
101
Which of the following statements about the fiduciary duty of disclosure is true?
In most states, licensees are required to disclose material facts to all parties to the contract. However, the FIDUCIARY duty of disclosure is due only to the licensee's clients.
102
To whom does Georgia's real estate commissioner report?
GREC
103
Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now?
The lender tells the trustee to release the title to Olivia.
Because the property deed was held by a third-party trustee instead of the lender, the trustee grants a reconveyance deed to Olivia, which grants her the title.
104
When is an appraisal required?
when it is a federal transaction
105
Jaqueline is the qualifying broker for a bustling firm in Avondale Estates, and she has many salespeople to oversee. The firm’s licensees’ advertisements must be done under her name as it appears on her license. What else is required?
Her supervision and approval
All advertising done by a brokerage firm’s licensees must be done under the qualifying broker’s name and under that broker’s direct supervision and approval.
106
The Richards family farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards’ property?
Utility
Although large parcels in the area are scarce, buyers are unwilling to buy and wait to live in a property that needs significant repairs, which is affecting the value.
107
Which of the following is a reason a lender might charge a prepayment penalty?
To recover the money lost in anticipated interest
Lenders expect to make a certain amount of interest when making loans. If the loan is paid off before the interest is paid, a lender may reserve the right to charge a prepayment penalty.
108
Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?
In both open listings and exclusive agency listings, the seller doesn’t have to pay a listing agent commission if the seller finds a buyer.
109
When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?
The lender holds the mortgage and the note.
110
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.
111
Which of these would most likely be an implied contractual condition in a real estate sales contract?
Freedom from fraud and misrepresentation
Contracts should specifically define the purchase price, the property being sold/purchased, and buyer and seller names. It likely won't spell out that the contract should be free from fraud or misrepresentation as this is implied under contract law.
112
Define Blockbusting, Steering, and Redlining
blockbusting: homeowners to sell because of an influx or expected influx of minorities into the area
redlining: a lender refuses to lend in a specific area,
steering: nudging buyers away or toward a specific area
113
This act added familial status and disability (both physical and mental) to the existing federally protected classes.
The Fair Housing Amendment Act
114
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the purchase price in closing costs. How much money should he bring to closing?
Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs $106,250 to close ([$125,000 – $50,000] + $31,250).
115
The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31, and the buyers own the day of closing (pay prorated expenses through the day of closing). Using the calendar year proration method (assume that it's not a Leap year), how much of the pre-paid property tax was the Davises' responsibility?
The daily tax rate is $5 ($1,825 ÷ 365). The Davises owe taxes for January 1 through July 31 (212 days), minus the closing day (paid by buyers). Therefore, the Davises owe for 211 days, which is $1,055 ($5 x 211).
116
Which type of deed conveys real property from a decedent’s estate to a buyer?
Executor’s deed
An executor is the person in charge of administering the estate according to the will of the deceased. An executor's deed conveys real property from a decedent’s estate to a buyer.
117
A lot measuring 108,900 square feet is for sale. How many acres is this?
2 and half
One acre is = 43560 square feet
118
What are the 3 Physical characteristics of land?
Immobility: The geographic location of land is fixed and can’t be changed.
Indestructibility: Improvements may deteriorate over time, but not land itself.
Uniqueness: One piece of land is never exactly like another.
119
what are the 4 Economic characteristics of land?
Scarcity: You can’t make more land
Improvements: A land’s value can be positively or negatively affected by the improvements made on it.
Permanence of investment: Some improvements are long-term, stable investments with stable returns over time.
area preference: A property’s value depends in large part on its location.
120
What are the 5 bundle or rights?
Possession: titleholder may possess the property.
Control: The owner controls the use of the property.
Exclusion: The owner may decide who may or may not access the property.
Enjoyment: The owner may use the property in any legal matter.
Disposition: The owner has the right to sell or convey the property.
121
Describe natural process of water rights
Accretion: water carries rock, sand, and soil and causes land build-up
Alluvion: New deposits of land that are the result of accretion
Erosion: Gradual loss of land due to a natural force
Avulsion: A sudden loss of land by a swift, large-scale change in water flow
Reliction: When water gradually recedes and uncovers new land
122
What are the 3 water rights?
Riparian rights address water that moves through a property, such a river or stream.
Littoral rights address static water, such as a pond, lake, or ocean.
Prior appropriation says that the first party to physically take water from a source and put it to beneficial household, agricultural, or industrial use will continue to have a claim to the water.
123
Simon recently passed away. He owned title to his property in severalty, as a fee simple absolute estate. What will happen to his property?
His heirs, as described in his will or the state law of descent, will get the property.
124
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn’t allow him to do so. What type of ownership do they have?
Joint tenancy
125
When Gillian looked at the legal description of the property she was interested in purchasing, she read the following: “Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet.” In this description, what does “Beginning at the corner of State Route 61 and Hallowell Road” represent?
Bounds
Bounds are physical features that define the boundaries of the property. Combined with directions and distances (metes), these form the basis of a metes and bounds legal description.
126
Katelyn wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency will document which of the following?
The date by which all inspection issues must be addressed
127
Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can’t reach her. At this point what does Casey have?
An offer
Until the terms are negotiated and the contract is signed by both parties, acceptance hasn't occurred and the sales contract is considered an offer.
128
Tom and Jim are neighbors. Jim wants to buy Tom’s rental property. In the contract they sign, Jim is identified only as “the neighbor.” Which statute or contract element does this violate?
The statute of frauds
The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.
129
James has just received his salesperson's license. Which of the following statements is true regarding his need for additional education?
He must take 25 hours of post-licensing education in his first year, and an additional 36 hours of continuing education before his four-year renewal.
130
Which parties must be identified on the promissory note?
The borrower and the lender
131
The ______ clause is also known as a due-on-sale clause.
Alienation
132
Licensee Kennie Mae's neighbor, Buzz, wants to sell his house but doesn't want to sign an agency agreement. Kennie Mae works with Buzz to list and show the property and negotiate offers. After the property sells, Buzz discovers that Kennie Mae didn't present all offers to him, and he sues Kennie Mae. Kennie Mae claims that because she didn't have an agency agreement with Buzz, she wasn't required to perform all fiduciary duties. What legal principle applies here?
The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz.
The doctrine of estoppel prohibits an individual from making an assertion that’s in opposition to actions or to a previous statement. Kennie Mae acted as if she was Buzz’s agent, so she can’t later disavow that behavior.
133
In Georgia, what's true about working with a buyer as a customer?
Brokers are entitled to a commission if they identify the property that the buyer customer purchases.
134
Adrian doesn't have a real estate license. What real estate activity can he legally perform in Georgia?
Sell his dad's house under a power of attorney.
People selling property under power of attorney are exempt from license requirements.
135
Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached?
Against encumbrances
The previous property owner failed to disclose to Li Meng that there was an easement (which is an encumbrance) across the property.
136
Which act was the first to prohibit any exceptions for discrimination based on race or color?
Civil Rights Act of 1866
Unique among anti-discrimination law, the Civil Rights Act of 1866 recognized all U.S.-born persons as citizens and allowed no exceptions for discrimination based on race or color.
137
The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.
Letters of apology to all affected consumers
The Federal Trade Commission may require the Perfect Home to run corrective ads, notify consumers of deceptive claims it made, include specific disclosures in future ads, or provide consumers with other information.
138
Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. When will the check be deposited?
After the seller accepts the purchase offer
Earnest money funds are typically deposited after the seller accepts the buyer's offer.
139
To which of the following are most of the buyer’s closing costs typically related?
The mortgage loan the buyer’s obtaining
A large part of the buyer’s closing costs will be associated with the new mortgage loan, including origination fees and points, the appraisal, and the credit report.
140
Conrad just closed on the house he’s buying to fix up. Why should he follow up to be sure the deed has been recorded?
Recording provides constructive notice that he owns the property.
Ownership officially transfers when the grantor delivers the deed to the grantee, but recording provides constructive notice that Conrad owns the property, thereby permitting anyone who does a public records search to see the ownership information.
141
Datums and benchmarks are used for ______.
Measuring elevations
142
You represent the buyer and seller in the same transaction. What type of agency relationship do you have with your clients?
Disclosed limited agency
You are in a disclosed agency relationship with your clients because you represent both the buyer and the seller.
143
Why does the closing agent review the purchase contract?
To gather closing-related information agreed to in the contract
The closing agent uses the purchase contract to be sure that the closing process and prorations follow the parties’ wishes as agreed to in the contract.
144
What’s the continuing education requirement for a community association manager?
36 hours every four years
145
Barb is a qualifying broker in Georgia. She must ensure that all contracts prepared by her licensees are reviewed ______.
Within 30 days
146
Macon licensee Gloria's license has been lapsed for six years. What must she do to reinstate it?
Retake the pre-licensing course, successfully pass the state exam, submit an application, and pay all required application fees.
147
Which of the following is a common element of a buyer representation agreement?
Description of the property being sought
148
You've just signed a listing with a new seller client. What’s true about electronic delivery of written notice or contract forms to your seller?
It’s allowed if the seller consented to it in the listing contract.
A notices clause may provide an opportunity for the parties to consent to electronic document delivery in lieu of physical delivery.
149
John is considering purchasing an office building and is trying to determine whether or not it’s a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which?
Market or sales comparison
150
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.
When the debt is fully repaid, the lender is required to sign the document verifying release of the collateral and re-recording the security deed. Or the lender may instead execute and record a document called a Cancellation of Deed to Secure Debt.
151
Which of these circumstances does NOT require agent disclosure?
Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.
A licensee must disclose any situation that presents a conflict of interest. There’s no inherent conflict of interest with one licensee representing a client in both the sale and purchase of property.
152
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
The power-of-sale clause is standard in a deed of trust and Georgia's security deed, and allows the non-judicial foreclosure process to be used in case of default. Georgia is a non-judicial foreclosure state.
153
A small duplex sold for $550,000. Each unit can gross $2,500 in monthly rent for the owner, and there are no additional income sources from the property. What’s the GRM?
To find the GRM, divide the sales price by the gross monthly rent, remembering that there are two units, so a total monthly rent of $5,000. So, $550,000 ÷ $5,000 = 110.
154
Which of these items around the fireplace could be a clue that there is a problem?
Cracked or sloping firebox or hearth
A cracked or sloping firebox or hearth can indicate a problem. Buyers will need to know the condition of the fireplace and chimney, since they may face issues after they buy the home.
155
Which of these statements about statutory duties and common law fiduciary duties is true?
Statutory duties spring from state statutes and tend to be more specific than fiduciary duties.
Fiduciary duties are based in common law, and statutory duties arise from state statutes. Designed to be more specific than fiduciary duties, statutory duties may make it easier for licensees to understand their responsibilities.
156
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
Assessed value + improvements = total value of $2,000,000. Multiply 2 million by 4 (mills/millage rate) then divide by 1000 = $8,000 in annual taxes . Divide $8,000 by 12 to give you the monthly tax amount ($8,000 ÷ 12 = $667.00).
157
If a private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
Single-family housing sold or rented without the use of a broker
158
How many acres are in a parcel described as, "The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM"?
20
This legal description defines half of a quarter-quarter section. A quarter-quarter section is 40 acres; half of a quarter-quarter section is 20 acres. Alternatively, multiply the three fractions’ denominators (2 × 4 × 4) and divide into 640 (640 ÷ 32 = 20).
159
The seller and _______ must approve a short sale.
The seller's lender
160
In states where full disclosure isn't required, it’s the ______ responsibility to perform due diligence on the property.
Buyer’s
In states without full disclosure requirements, “let the buyer beware” indicates it’s the buyer’s responsibility to proactively check out the property’s condition and the licensee's responsibility to encourage buyers to get all necessary inspections.
161
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.
In states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee's deed.
162
Virginia is finally living her dream—she bought a coffeehouse in a charming college town. After she closed on it, her attorney sat down with her to discuss various business licensing and legal requirements she’ll have to meet. Virginia was surprised to learn that her five-table establishment is affected by the Americans with Disabilities Act. What must be true about the coffeehouse?
It’s a commercial enterprise that’s open to the public.
If a business in a constructed building serves the public, then it falls under the ADA.
163
Categories of easements include:
Easement appurtenant: Attached to a specific parcel of land, transfers (“runs”) with the land, and gives the “dominant tenement” rights to use adjoining property/servient tenement
Easement in gross: Granted to a specific individual or business rather than attached to the property itself
Easement termination by merger occurs when the owner of either the servient or dominant estate purchases the other property.
Easement by necessity: This easement type can only be created for the purpose of ingress and egress.
Easement by prescription: This easement isn’t legal, and is created through the continued, uninterrupted, obvious, exclusive, and adverse use of someone’s property without permission.
164
Life Estate Ownership:
An ordinary life estate is based on the life of the estate holder/life tenant. For example, Christine gives her son an ordinary life estate in a property, and the estate lasts until her son’s death.
Pur Autre Vie is based on the life of someone other than the holder of the life estate/life tenant. For example, Jarrod grants his ex-wife, Margo, a life estate pur autre vie in a house where Jarrod’s mother Rose and Margo, who cares for Rose, both reside. The life estate stipulates that Margo’s interest in the property will cease when Jarrod’s mother dies.
165
The Walton family got a great deal on their new home. They bought it for $101,295, and it appraised at $187,000. Using an assessment ratio of 25%, what is the assessed value of their new home?
$46,750
Assessed value is based on the appraised value of the home. So, in this case, $187,000 × 0.25 = $46,750.
166
Which of these statements most accurately represents existing federal antitrust legislation?
The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.
167
Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter?
Add two times the length to two times the width.
The perimeter equals the sum of the lengths of each side of the shape (240 × 2) + (130 × 2).
168
What is a bargain and sale ?
is most often used in tax or foreclosure sales. It generally has no expressed warranty against encumbrances but does typically imply a warranty that the grantor has title and the right to covey.
A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties.
169
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
The covenant of warranty assures that the grantor will warrant and defend the title against the lawful claims of others.
170
To make valid computations of adjustments for the market comparison approach to value, elements of comparison must be applied in a specific order. Which of these elements has the highest priority?
Conditions of sale
171
Which statement most accurately describes the type of notice provided by recording a change of ownership document?
Recording the deed provides constructive notice of the property sale.
172
Eileen is preparing a report pursuant to the terms of a property management agreement. This report attempts to predict the income and expenses associated with running the property over the next year. What report is she preparing?
Operating budget
Operating reports project the income and expenses of operating the property, usually over a one-year period.
173
When a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they are addressed?
The buyer’s agent
The licensee representing the buyers is responsible for tracking any issues the inspection uncovers and the sellers agree to repair, to ensure that they are repaired prior to closing.
174
What is Bracketing?
is a process in which an appraiser uses both superior and inferior units of comparison such as age, transaction price, etc., to determine a probable range of values for a property.
175
How much would a lot that is 400 feet wide by 500 feet long cost at $900 per acre?
$4,132
The lot would cost approximately $4,132. Find the area of the lot by multiplying 400 by 500 (this equals 200,000 sq feet). Convert the area to acres by dividing 200,000 by 43,560 (the number of sq feet in an acre). Multiply this number by $900 per acre.
176
John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property?
Multiply 185 by .5; multiply your answer by 225.
You can calculate the area of a triangle in several ways. One way is to multiply the triangle's base measurement by .5, then multiply that answer by the triangle's height [(185 × .5) x 225].
177
Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax?
$255,000
Transfer tax is calculated based on the purchase/sales price ($255,000).
178
Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine’s transaction covered by the Real Estate Settlement Procedures Act?
No; commercial and business loans are exempt from RESPA requirements.
179
Kate allowed her license to lapse two and a half years ago. What does she need to do to reinstate her license?
Kate will need to complete all required continuing education as well as pay all applicable fees for her license to be reinstated.
For a license that's lapsed more than two but fewer than five years, the licensee must pay all required fees as well as prove completion of all required continuing education courses.
180
Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?
Alda’s engagement of an inspector isn’t confidential in any way and would be expected by the buyer, so it’s not a potential breach of a fiduciary duty for Marge to share that information with the seller.
181
Which statement best describes the criteria that would permit Tristan to legally engage in dual agency?
His firm and the state permit it and he obtains the proper consent.
Tristan must be practicing in a state that permits dual agency; his brokerage firm must allow it, and he must obtain informed consent from all parties to the contract (buyers and sellers).
182
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.
Housing providers may inquire as to the nature of the disability if it's not apparent, and they must permit assistance animals for tenants with documented disabilities without charging an additional pet deposit.
183
What title guarantees will Jody have if her property is deeded to her after a foreclosure?
The covenant of seisin
Foreclosed property may be conveyed with a referee's deed, which offers only the covenant of seisin.
184
It's 12,280 feet from Missy's house to the nearest coffee shop. Approximately how far is this?
Just over two miles
A mile is 5,280 feet, and two miles is 10,560 feet.
185
Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions?
The local cable company's easement through the property for underground wiring. Marsha disclosed this to the title company.
Title insurance typically covers events or claims filed on the public record before the title insurance policy’s effective date but excludes disclosed and undisclosed easements.
186
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
The Closing Disclosure, provided at least three business days before closing, details the buyer's closing costs, as well as other loan terms, such as the projected monthly payment.
187
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
Partition is the term used to describe a specific, divided portion of property that's created as part of a co-ownership termination.
188
The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?
Sex
189
Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
Reconciliation
Through the reconciliation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term correlation is often synonymous with reconciliation.
190
Forms provided by the Georgia Association of REALTORS® cover all of the following situations EXCEPT ______.
Tenants looking solely for rent-to-own situations
191
When considering loan risk, which two items will lenders consider in equal measure?
Borrower and property
The property's value (as underlying collateral) and the borrower's ability to repay the loan will be equal considerations for the lender.
192
Alistair has decided to work with you as a customer instead of a client. You explain to him the ministerial tasks you're permitted to perform on his behalf, including ______.
Identifying property and property information
Ministerial tasks can include Identifying property and property information, preparing and conveying an offer to a seller using a pre-printed form, locating an inspector, and providing a list of real estate attorneys to the buyer.
193
The appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent?
State the problem.
The first step in the appraisal process is to state the problem. This includes a description of the rights associated with the property.
194
The first step in the appraisal process is to state the problem. This includes a description of the rights associated with the property.
Put it in the property management agreement.
The property manager may disburse funds from a trust account if the property management agreement states that the manager may do so without getting explicit permission each time a disbursement is made.
195
What does BRRETA outline as a buyer broker’s responsibility?
Disclose adverse facts related to the buyer’s financial ability to meet the contract terms.
196
Jim represents Joel in the sale of Joel's country acreage and house. Jim's business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?
Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.
Jim must disclose all material facts of which he has actual knowledge. This includes the conflict of interest presented because Rolly is his business partner, and the fact that Rolly and intends to buy the property and then subdivide it, as that may affect Joel's decision.
197
Which of these features is shared by the mortgage, the deed of trust, and Georgia's security deed?
The borrower is required to maintain the property and pay property taxes and insurance.
Regardless of the security instrument used, it's the borrower's responsibility to maintain the property during the term of the loan.
198
All fair housing complaints must be filed with the Fair Housing Division within ______ of the alleged violation.
One year
199
What must Georgia associate brokers do in order to work independently as brokers?
Have written consent from all brokers involved.
Associate brokers may work independently as a qualifying broker with written consent of all brokers involved.
200
Which of these is an example of illegal market allocation?
Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes.
Illegal market allocation involves an implied, oral, or written agreement between competing firms to allocate markets or customers.
201
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed is applied last?
Physical characteristics
The elements considered in the sales comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.
202
Which of these statements about the size of a section of land is NOT true?
A section is 43,560 square feet.
An acre is 43,560 square feet. A section is one square mile, or 640 acres. A hectare is a 100-acre measurement.
203
Which of the following is the price a lender believes the property will bring at a foreclosure sale?
Mortgage value
Lenders won't lend on what they can't recoup. Therefore, the loan amount will be based on what a lender would hope to recoup, should a foreclosure sale be necessary.
204
Select the statement that accurately describes an abstract of title.
Few states require an abstract of title when conveying property.
The abstract of title process is costly and lengthy; only a few states require this process when conveying property.
205
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?
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.
206
Supply and demand determine competition within a market. Which of the following is a true statement?
When there are fewer houses on the market, sellers can demand more for their properties.
Lower supply equates to increased demand, which increases prices. When there’s less to go around, buyers end up competing over the same properties.
207
“I understand why you want a buyer representation agreement,” your buyer tells you. “But what’s in it for me?” You answer:
“Without it, you're unrepresented.”
Without a buyer representation agreement, a buyer is unrepresented. This means the buyer won't receive all the fiduciary duties of a client, just those due to a customer.
208
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 APR can be included in an ad without requiring disclosure of all credit terms. APR figures allow consumers to make an informed comparison between loans, which is TILA’s goal.
209
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?
Rectangular government survey
Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.
