Georgia Real Estate U Final Exam Study

What is a lien theory state?

The homeowner holds the deed for the property throughout the entire loan.

There is a mixed-use property for sale in Cassie's community, and a buyer walks into her office looking for a residential space. Should Cassie consider showing him the property zoned mixed-use?

Yes, because mixed-use is a combination of commercial and residential real estate

An investor who bought a rental house needs someone to take care of the property, screen prospective renters, coordinate repairs, handle maintenance and tenant concerns, and evictions, if necessary. He's looking for a...?

Property manager

In economics, supply is...?

The quantity of goods or services available, whether in abundance or scarcity.

In economics, demand is...?

The supply of willing and able consumers, which can be few or numerous.

When the supply is limited and demand is high...?

Prices escalate

To become a real estate broker, a person must have...?

Experience as an agent, a broker's license, and additional education.

Real estate brokers are paid a commission for the sales, and...?

The commission, which can vary, is split between the broker and agent.

Property types are generally categorized by the ............ that applies to that property.

Zoning Law

A family is going to build their dream home, and they've looked at several house plans, but they haven't found one that is exactly right. They'd like to take some parts from one plan and combine it with parts from another, with some additional innovations of their own. They want someone who can design and plan their home and work with the contractors to build it. The person they need to find is ...?

An Architect

Single family homes are...?

Private freestanding residential houses

The effect of the first-time homebuyer's tax credit was to...?

Motivate people to buy homes

Real estate agents work with...?

Buyers and Sellers

When supply is plentiful and demand is low...?

Prices drop

Sam is looking for a warehouse, and he wants to find a real estate agent or broker who is knowledgeable in this area. He's starting a business, and it will require space for assembly and production, but he also needs to be able to use it for distribution, warehousing, and research and development. He needs to find...?

A agent that specializes in industrial property

Single-family homes and single-family lots are always considered...?

Residential Property

Fill in the blank. ............ represent both the buyer and seller or both the tenant and landlord in the same transaction.

Dual Agents

If you serve in the army reserve and are studying to be a broker, you effectively get 10 points added to your score. Which of the following is true?

5 points are added in each of Information Gathering and Decision Making sections.

If the Commission denies your application based on a conviction or disciplinary action, what rights do you have?

You have the right to a hearing for a final determination.

Every salesperson has to provide the Commission with evidence that they completed a ............ post-license course within one year of obtaining their license.

25 hours

Hans Rosenstein moved from Florida, where he was a sales agent, to Georgia. Hans completed his post-license course in Florida, a state considered similar to Georgia in terms of real estate law. Does Hans have to take the post-license course in Georgia?

No

Jolie Harper is a licensed real estate agent in a Georgia brokerage. She is offered a job selling condos for the unlicensed owner-developer. Jolie must ............ and will have to reapply if she decides to practice as a salesperson under a brokerage again.

Inactive her license

Any lapse longer than two years and under five years can be reinstated by paying back fees and taking the appropriate class. Which of the following is not a valid answer?

For appraisers, they must take the Salespersons Prelicense Course.

Prince Stover moves his Athens brokerage to a location with more foot traffic. He must notify the Commission within ............ days of his new address.

30

............ is required prior to advertising property for rent, sale, lease or exchange.

Written permission to advertise

If a licensee makes an offer on a property as part of a brokerage engagement or an extension of an engagement, the terms and conditions of the engagement must be set down in a...?

Written agreement

Fill in the appropriate amounts. The activation fee to apply for a license as an individual or associate broker, salesperson, or community association manager is ............. The activation fee for a new firm, school or instructor is ............. Both fees include $20 toward the Real Estate Education, Research and Recovery Fund.

$45 (Dollars) / $75 (Dollars)

Kit Benning is a sales agent who decides to buy a property currently listed for her clients, the Winstons. Kit finds a home that the Winstons wish to purchase. While drawing up the sales contracts, she makes her purchase of the Winstons home contingent on their extending the brokerage engagement by 60 days to allow time for the closings. Which of the following is true?

This meets the requirement of the rule.

A licensee cannot falsify a record, or knowingly allow a record to be falsified, either orally or in writing, by a third party. This rule covers the following misinformation, EXCEPT:

The actual real lease, sales, or exchange price

When representing the seller, a licensee is obligated to present ............ to procure a property for sale.

Any signed offer

A broker should keep copies of documents and records for...?

3 years

If a broker wants to open a brokerage under a fictitious name, the brokerage license must be under the...?

Fictious name

Every broker has to maintain an accounting system to include the following information, EXCEPT:

The name of the broker's lawyer.

............ involve licensees with property management relationships with their clients. Any written property management agreement must identify the property being managed and list the terms and conditions of the manager's responsibilities.

Management Agreements

Drew Fenstemaker writes a contract that guarantees seller Warren Wilson $100,000 for his property, while Drew walks away with any amount resulting from a sales price over $100,000. However, if the home sells for less than $100,000, Drew must make up the deficit. Which of the following statements is correct?

Even if Warren is happy with this arrangement, net brokerage agreements are illegal in Georgia and Drew is risking his license with this rather shady deal.

The Georgia Real Estate Commission includes a chair and...?

Vice Chair

The Commissioner and all Commission appointees who hold a real estate license...?

Shall maintain their license as inactive while serving on the Commission

When taking funds from a client for deposits, prepaid taxes or insurance, or for any other reason a licensee...?

Must keep the funds segregated by opening a separate trust or escrow account

Money received from a client as an earnest deposit, a security deposit and deposited in a trust account...?

Cannot be withdrawn to pay a Commission to the real estate professional unless the transaction is complete

Disbursing funds from a trust account requires the authorization of...?

All parties to any contract where funds were collected

Should any licensee be accused of fraudulent representation the Commission may...?

Conduct a thorough investigation including a review of their books and trust accounts

Contracts issued to potential buyers or sellers must...?

Contain a start and finish date, be in compliance with Georgia law, and disclose any conflicts of interest

If you have a real estate license, and you are faced with a disciplinary hearing because of something the Commission finds out, you have the right to...?

Judicial review of your case in the event the Commission suspends or revokes your license

The Commission may request a court issue a cease and desist order when...?

Someone participates in a transaction by falsely representing they are licensed

Applicants for a real estate license in Georgia must...?

Be 18 years of age, a resident of Georgia, and have a high school diploma or GED

Any time you pay the Commission a fee, you can expect...?

No refund

Which characteristic differentiates a Fee-simple time-share from a Leasehold time-share purchase?

A Fee-simple time-share is deeded in perpetuity

All of the following are loan vehicles for a first mortgage, except?

HELOC

Many factors can increase or reduce monthly mortgage payments. Assume that a buyer is planning to buy a $150,000 home, and any loan payments will not include closing costs or insurance. Which scenario will produce the highest monthly payment?

Taking out a 20 year fixed rate private owner mortgage at 4.25 percent with 5 percent down

A seller has accepted an offer from John. John wants to remodel and add an outdoor pool when he has enough equity built up to cover the project. Which loan arrangement will help him build equity faster than the others?

Make a 40 percent down payment upfront.

The IBC classifies any structure with occupied living space higher than 75 feet above ............ as a high-rise building.

The lowest level of fire department access

Which of the following offers a low down payment option for home buyers?

FHA insured loan

............ cover the costs to the lending of funding the loan.

Loan Origination Fees

Loan origination fees are usually equal to or less than ............ percent of the total loan amount.

1

Which housing accommodation is purchased as stock or shares in a corporation, and entitles the shareholder to occupy a particular unit?

Cooperative

Katie owns 100 percent of her home and wants to add a small kitchen to a master suite to create a mini apartment she can rent out to help defray the costs of owning her home. Can she still deduct all eligible expenses as personal home expenses?

No. Renting a portion of a home that can be considered a complete home, makes some expenses ineligible.

Bill, who is unmarried, is selling his rental home and plans to put off buying another home for five years. He earns $325,000 annually, putting him in the highest tax bracket at 23.8 percent. If he nets $200,000 on the transaction, how much will his tax liability be for the capital gain portion of his return only?

47600

An investor has several multi-family buildings he wants to sell in the next year. His real estate agent tells him that he can force the appraised value to rise by...?

Adding amenity packages based on trends in the local area

What type of real estate transaction allows owners to swap property under certain conditions without creating a capital gain tax liability?

Business to business 1031 Exchanges for like-kind properties

Katlin told her real estate agent that she is looking for an investment property. She recently took a class on buying low and selling high, so she plans to buy a home in a low-income neighborhood, furnish it with high-end appliances and all the latest in home technology. Her real estate agent cautions her against this strategy, because...?

Over renovating doesn't guarantee a quick and high-profit turnover.

While talking to a client about non-federal tax liabilities, Dana mentioned local property taxes. She told her client that tax assessments are based on ............, but every district offers discounts to certain groups, such as people over 65 and permanently disabled individuals

Market value

This refers to the trade or exchange of one real property for another without the need to pay income taxes on the gain at the time of trade?

Tax- deferred exchange

Which federal agency oversees and manages the National Flood Insurance Program (NFIP)?

FEMA

Most homeowners insurance policies cover specific events that fall into two different categories:

Perils and non-perils

Lisa is a real estate agent who also helps clients lease single-family homes. She advises every potential tenant to purchase HO-4, also known as ............, because it is a perils content policy.

Tenant Coverage

Christine is looking at an older home in a quiet neighborhood. She knows that it might be hard to repair or replace the dwelling if it was directly hit by a tornado or there was a fire. The best homeowner policy for her is probably an HO-8 policy specifically designed for older homes. Which statement most accurately gives

The plan doesn't cover water damage without an additional rider, but pays the actual cash value minus depreciation.

Improved lots are eligible for full exemption status, providing construction can be completed within ............ after the sales contract is executed.

24 (According to the Act, construction must begin within 24 months of the executed sales contract. This helps ensure developers complete the project in a timely manner.)

Housing inventory has reached a ten year low, primarily because a new plant in a nearby town brought in hundreds of workers from other parts of the state. City leaders are considering an application for a new subdivision development that would increase housing options. This is an example of ............, triggering change to the master plan.

Net Migration

Certain industrial and commercially zoned properties are exempt from ISLA rules, providing all of the following conditions are met, with the exception of...?

The buyer agrees to pay an exemption fee in the amount equal to 5% of the purchase price. (Buyer should never pay an exemption fee)

Michael is working with a business investor who wants to buy several lots in a new subdivision to build houses for sale. When the client asks for a copy of the comprehensive report, Michael tells him it isn't required, but he will ask if the developer is willing to provide one. Why wasn't the report automatically available?

This type of business to business transaction is exempt from ISLA regulations.

The Interstate Federal Land Sales Full Disclosure Act regulates all of the following, except?

Local transactions between residents of the same county

Cathy wants to sell her house located outside the city limits. Buyers may want to have the well tested because...?

All of the choices provided are correct

- EPA does not monitor private wells

- Radon occurs naturally and may infiltrate ground water

- Bacteria, viruses and other contaminates can pollute well water

Ken is showing a property in an older neighborhood to a family with three children under the age of ten. He notices that the window sills and baseboards have several thick coats of paint on them. He recommends the buyers ask for ............. tests before making an offer.

Lead-based paint

The EPA was originally established to...?

Stem the escalating negative impact on human health and the natural environment.

What is the maximum slope of a ramp under the ADA guidelines?

1 inch vertical rise for every 12 inches in length

According to the ADA, what is the minimum height requirement of handrails on ramps?

34 inches

Building codes establish guidelines for maximum occupancy...?

On a per floor and/or per use basis. (The maximum allowed number of people in a building is determined by the use (office space, for example) per floor. Each floor may have a different occupancy requirement.)

The International Residential Code (IRC) recommends every room have an egress window that measures at least 4% of the square footage to allow safe egress and adequate ventilation. What is the minimum window opening requirement for an area that measures 15' X 20'?

12 sq ft

John is looking for an existing multi-story building zoned for mixed-use. He wants to open a small, by-reservation-only restaurant on the lowest floor. Local code requires 15 square feet per person in a commercial setting with non-concentrated seating. What is the minimum square footage he needs to serve 50 people?

750 sq ft

With only a few exceptions, structures built with only wood have a maximum height of...?

2 floors

Which agency establishes and enforces regulations to ensure safe removal and disposal of lead during rehabilitation projects in the United States?

The EPA

The ............. helped the insurance industry develop a survey for municipalities to establish building guidelines in the early 20th century.

National Board of Fire Underwriters

What is the first step a developer must take when creating a subdivision?

Survey the land

Proposed developments must follow standards in the established municipal or county master plan; however,...?

Master plans may be modified under some circumstances.

What percentage of government land assets, including lakes, rivers, and streams, are set aside as public lands designated for recreational use or managed to protect natural resources?

95 Percent

Rebekah is a real estate broker preselling tracts in a subdivision. She has a client who wants to buy an improved lot to establish an assisted living home that will accommodate four live-in-resident-clients. Which subdivision regulations does Rebekah review with her client before making a formal offer?

Developer restrictions and local zoning ordinances

Preliminary plans are ...?

Developer plans that have not been platted and recorded

Who is responsible for assuming the financial burden and oversight of the construction of all roadways, sidewalks, alleys, nature trails, and other non-residential areas within a new subdivision?

The Developer

Common uses for government land include all of the following, except?

Hunting Clubs

If a building totals 5,000 square feet, and the building covers 100% of the property, what is the floor area ratio if the property measures 1,000 square feet?

5

When a building fully complies with the local zoning ordinances, it is referred to as...?

As-of-right

used to determine the maximum allowed buildable square footage on a property

Floor area ratio

Which of the following yard requirements may be found in the local zoning ordinances?

All of the answer choices provided are correct

- Front yard requirements

- Rear yard requirements

- Side yard requirements

Becca, a real estate agent who serves a semi-rural area, recently learned that ............ of all post office locations are owned by individuals and leased back to the USPS. This information may be helpful when she works with investors looking for a stable, guaranteed return on investment.

75 percent

What is the acronym to help you remember the government powers?

P-E-T-E

When eminent domain powers are used, the property owner has the right to receive...?

Just Compensation

Eminent domain can also be called...?

All of these are true

- Expropriation

- Appropriation

- Condemnation

When a property owner has a mortgage, property taxes can be paid easily through the use of what type of account

Escrow Account

What type of laws protect homeowners from the types of issues that can come from an industrial building being built in a residential neighborhood?

Zoning Laws

What word describes the property owner's right to sell or transfer their property to someone else?

Alienable