Real Estate Course FINAL

Trust Funds

Avoid violating Georgia license law by turning over ______ to your qualifying broker as soon as possible.

File a counter complaint against the commission.

What option does a Georgia licensee have when a notice for a hearing has been received?

Reconveyance

Which clause in the deed of trust and Georgia’s security deed is the equivalent of the defeasance clause in the mortgage?

 Authority to negotiate the contract

Darcy signed an exclusive right-to-sell agreement with licensee Shane, which gives Shane authority to ______.

Commission rates aren't standard; they're always negotiable.

Which of the following is true regarding standard commission rates in Georgia?

 GREC

To whom does Georgia's real estate commissioner report?

 A broker or qualifying broker of a brokerage firm

Who’s responsible for the proper management and recordkeeping of trust accounts?

Power of sale

The ______ clause in a deed of trust allows the lender to foreclose non-judicially.

  Time is of the Essence

Which clause in the sales contract says that all dates in the contract are strictly enforceable?

 A real estate license

Some exchanges of business interests may not require ______.

 A buyer may opt to “counter the counter” by submitting a counter-offer to the seller’s counter-offer.

The seller countered buyer Addie's initial offer. Which of these statements is true about the situation?

Sentence licensees to jail time

Which of these is NOT one of GREC's powers?

The Georgia attorney general

Who or which entity has the authority to bring injunctive action against a real estate licensee on the behalf of the commission?

 Borrower

In a deed of trust, who is the trustor?

Three

Jessica, a Georgia broker, has entered into a written agreement with a non-resident licensee, Janine, in order to serve a few of Janine’s clients who are moving from Tennessee to Georgia. According to license law, for how many years must Jessica maintain a copy of their written agreement?

The lender notifies the borrower and attempts to have the default cured.

In Georgia, what’s the first step in the foreclosure process (sometimes called pre-foreclosure)?

The Georgia attorney general

Who or which entity has the authority to bring injunctive action against a real estate licensee for the violation or the potential violation of Georgia license law and GREC’s established rules?

Andrea can cure the default and reinstate the loan.

Andrea’s lender has notified her of its intent to foreclose. Her loan is secured with a security deed. What rights does she have to redeem her property?

It’s in writing, signed by all parties, and communicated to the offeror.

What makes a binder a valid contract?

Buyers don’t have to consent to dual agency.

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

 Brokers are entitled to a commission if they identify the property that the buyer customer purchases

In Georgia, what's true about working with a buyer as a customer?

 Excessive late fees and financing of credit insurance

GAFLA targets predatory lending by prohibiting which of the following?

 Identifying property and property information

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 ______.

  This violates the Georgia Uniform Deceptive Trade Practices Act.

Valdosta licensees Ken, Sharon, and Kate dislike a lender in town and agree to direct business away from that lender and discourage their clients from using it. Which Georgia unfair trade practice act does this violate, if any?

The governor will appoint another member to fill the vacancy.

GREC members serve five-year terms. If a member ends her term early, what will happen?

A definitive end to the brokerage engagement agreement

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

Citation

Maury was brought up on a disciplinary action for a trust fund violation. GREC fined him and required him to take a course in trust fund accounting. This penalty is called a(n) ______.

To hold legal title to the property on behalf of the beneficiary until the loan is repaid

What is the trustee’s role when a deed of trust is used to secure property for a loan?

Those who are permitted to occupy the premises

Which of the following describes the GAR F913, Lease for Residential Property, use restrictions provision as shown in Section A?

Have written consent from all brokers involved.

What must Georgia associate brokers do in order to work independently as brokers?

 The note is endorsed and the mortgage is assigned.

When a mortgage is sold, what happens?

He’s exempt from real estate licensing requirements, as he’s the court-appointed executor of Mrs. Hamilton’s estate.

Stephen is an attorney, appointed by the courts to handle matters for Mrs. Hamilton’s estate, including the sale of her home. What can we conclude about Stephen?

Subpoena witnesses and documents.

An investigation found evidence that suggests Emmie may have violated Georgia license law and a hearing has been scheduled. What are Emmie's rights at the hearing?

Loan brokers, servicers, and purchasers or assignees

Which lenders are covered by GAFLA?

 The original owner

In situations where a leased property is sold and the tenants’ security deposits will be refunded, who's responsible for refunding those security deposits?

 States what happens when the agent separates from the firm

The termination agreement ______.

 The borrower is required to maintain the property and pay property taxes and insurance.

Which of these features is shared by the mortgage, the deed of trust, and Georgia's security deed?

Intangible tax

Gina is buying a condo in Tybee Island. Unless otherwise negotiated, which of the following closing costs will she pay?

The lender

Who's the mortgagee in a mortgage?

Late charge

What provisions are standard when any security instrument is used but are included in the promissory note rather than the security instrument?

Alienation

A due-on-sale clause is also known as a(n) ______ clause.

 Transfer of Rights in Property

Jacob lost his job in an economic slump and is behind on his mortgage. Georgia is a non-judicial foreclosure state. Which section of his security deed gives his lender to right to sell the property if he defaults?

30 days

How long does a broker have before notifying the commission that a trust fund account has been established?

0.1% of the sales price

What is the transfer tax?

Seller

In Georgia, who owns the property on the day of closing?

No, because it wasn’t an intentional misrepresentation. GRMFA only covers intentional misrepresentation of information

Kathy mistakenly duplicates reporting an asset on her mortgage loan application. Is she in violation of Georgia’s Mortgage Fraud Act?

Affidavit

In Georgia, what must be filed for the eviction process to begin?

Business Intermediary Endorsement (BIE)

Business brokers in Georgia can seek credentials such as all of the following EXCEPT ______.

A deficiency judgment against the borrower may be issued

If the foreclosure sale doesn't satisfy the debt, ______.

In Georgia, a promissory note is most often used when an owner finances the sale of their property and records and holds the note. The lender in this case is the owner.

Promissory Note

When the real estate services they’re providing aren’t incidental and they’re charging a fee

When does an attorney need a real estate license?

52 - 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

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?

Broker applicants must take an additional 60 hours of education prior to applying for a broker’s license. - Broker applicants must complete 60 hours of education in addition to what they took before applying for their salesperson license, plus 15 quarter hours or nine semester hours of college coursework eligible for a major in real estate. Then, they'll also need to take and pass the broker’s exam.

Which of the following is a true statement about license qualifications in Georgia?

Calendar year (365 days)

In Georgia, real estate taxes are prorated on the basis of what kind of year?

The person accused of a violation

In the complaint investigation process, a “respondent” is ______.

One who holds a salesperson’s license

Susan is a real estate salesperson in Americus. How does Georgia license law define her status?

It’s based on the amount borrowed, and is $1.50 per each $500 or fractional part thereof, with a maximum of $25,000.

How’s the Georgia intangible tax computed?

A voidable contract is missing one or more essential elements. Ted's not of legal age, so he's not considered a competent party.

Seller Simone, who's 48, signs a sales contract with her nephew Ted, who's a 17-year-old rock guitarist sensation, for Ted to buy her house in Buckhead. What type of contract is this?

Transfer tax

In Georgia, which of the following closing costs is usually paid by the seller?

 Promissory note - The mortgage and the deed of trust are security instruments that are attached to a promissory note.

The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______.

Deposits, disbursements

At the close of a real estate transaction, the ______ and the ______ of the transaction must reflect a zero balance.

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

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

The promissory note is endorsed to the new owner of the loan.

Which of the following is a true statement about when a promissory note is sold?

 Hourly, salaried, or per activity

Dolcita is an unlicensed assistant for licensee Glynnis at Acme Realty. Which of the following best describes how Dolcita can be compensated for her work?

 Tenants looking solely for rent-to-own situations

Forms provided by the Georgia Association of REALTORS® cover all of the following situations EXCEPT ______.

Whichever party it belongs to based on the agreement terms

After a fierce bidding war with three other potential buyers, the Carsons enter into an agreement that includes $2,000 earnest money. When the sale is later terminated, the earnest money goes to ______.

50 years

In Georgia, how many years do we have to go back to trace the chain perfectly, with no gaps in ownership?

 To define the terms of the broker and worker’s professional relationship

What's the reason for using employee and independent contractor agreements?

Within 30 days

Barb is a qualifying broker in Georgia. She must ensure that all contracts prepared by her licensees are reviewed ______.

$25,000

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?

 License status and license number

Aside from your name, what else must be included on every page of your website, according to GREC’s rules?

Which of the following is an example of a net brokerage agreement?

When a licensee agrees to a commission of any amount above a certain sales price (Illegal in Georgia)

GREC will deny broker or associate broker application when applicants were found guilty of moral turpitude crimes unless 10 years have passed since the conviction or the release, whichever is more recent.

Application Denial

Three years

GREC won’t investigate a complaint unless the incident prompting the complaint occurred within the past ______

The licensee must turn the trust funds over to their broker as soon as practically possible.

What’s required of a licensee who receives trust funds from a client?

Calculate prorations

Which of the following is the responsibility of a Georgia closing attorney?

GREC

What agency is charged with ensuring the balance of the Real Estate Education, Research, and Recovery Fund is maintained at $1 million or higher?

GREC may grant, sanction, suspend, revoke, or deny both individual and firm licenses.

Which of these is true regarding the Georgia Real Estate Commission's licensing power?

Sex

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

Acceleration

After getting into a fender bender, Parker had to buy a new car. To make the down payment on the car, he had to skip a couple of his mortgage payments. He received a notice from his lender indicating the remaining amount of his loan is due immediately and in full. What clause in his mortgage stipulates this?

Conversion of Funds

Licensee or brokerage firm uses trust funds for personal or operating purposes

Purchase Money Mortgage

Allows the buyer to retain title to the property, but the seller has security interest in the property

Rescind

Stan decides to not sell his property to Crandall, even after they've signed a legal sales contract. Crandall found a property he likes better, so they mutually agree to ______ the contract.

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.

The Richards family farm is located on a 10-acre parcel of land, which is very rare 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?

A home warranty often covers appliances and major systems. Also, even the systems that WERE inspected are subject to problems or failure.

What does a home warranty cover?

Gross income - operating expenses = net operating income

Net operating Income Formula…

The city or other governing authority establishes the air lot's height.

How do you determine air lot size?

Lower-priced option of two properties of equal quality will likely sell first.

Principle of Substitution

Her heirs, as described in her will or according to state law, will receive the property.

Gladys and her husband, Ralph, owned their home as joint tenants. After Ralph died, Gladys owned the home in severalty. When she dies, which of these will happen to her home?

Increase

As interest rates fall, what is the number of buyers in the market likely to do?

43,560 SF

Number of SF in AC

Closing

When do buyers have to pay transfer tax?

Moratorium - temporary prohibition of an activity

New Day Corporation’s application to build a new mixed-income housing development was denied, because the town of Springfield has halted all new development until after city elections. What did Springfield enact?

The Market Value

The price at which a willing buyer and a willing seller would strike a deal, given normal market conditions

Spot Zoning

Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

Yes, if it’s for the public good

Can police power ever be used in a way that restricts citizens' freedom?

Property Income/Property Value = Cap Rate

Cap Rate Formula

Assessed Value

What value are property taxes based upon?

 Parties to the contract decide whether or not to accept the use of electronic signatures and documents.

Use of Electronic Documents and Signatures

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.

What are generally the length of land trust terms?