Georgia Real Estate Exam Terms, by Content Area

Trust accountGA

No loss is required for commingling. The improper mixing itself creates the violation.

Real Estate Education, Research and Recovery FundGA

A disciplinary finding alone is not the same as an eligible unpaid court judgment.

Inactive licenseGA

Being licensed in name is not enough. The question asks whether the license is active at the time of the act.

Georgia Real Estate Commission (GREC)GA

Do not assign rulemaking, license discipline, or school approval to PSI.

Active licenseGA

Passing the exam or receiving a license number does not necessarily prove that the license is active for a particular transaction date.

Georgia salespersonGA

A salesperson may perform substantial transaction work, but that does not make the salesperson an independent broker.

Associate brokerGA

Do not infer qualifying-broker authority from the word broker in the title associate broker.

BrokerGA

Identify both the license level and the firm role. The word broker alone does not answer who is the firm's qualifying broker.

Qualifying brokerGA

Delegation of work is not delegation of ultimate legal responsibility.

Sponsoring brokerGA

A verbal job offer from a brokerage does not by itself establish active license status.

Firm licenseGA

An active individual broker license does not automatically license every corporation or LLC the broker owns.

Trust fundsGA

Compensation expected by the broker does not become brokerage money until it is earned and properly disbursed.

ComminglingGA

Good intentions, prompt replacement, or absence of consumer loss do not erase the violation.

ConversionGA

An intention to repay is not authorization to borrow entrusted money.

Unfair practiceGA

No completed sale or consumer loss is always required. The prohibited conduct itself may support discipline.

Post-license educationGA

Do not apply the 36-hour continuing-education cycle to the first-year post-license deadline.

Continuing educationGA

Completing enough general hours does not cure a missing mandatory subject component.

GCIC criminal-history reportGA

Measure the 60-day window backward from the license application date, not the course date or exam date.

Veteran preference pointsGA

Preference points do not appear on the initial score report and are not guaranteed merely by prior military service.

Certification of Accuracy StatementGA

Signing early or altering a mistake by hand can create a licensing delay. PSI controls its official record.

BRRETAGA

Time, effort, advice, and repeated contact do not replace the written engagement required to create a client relationship.

ClientGA

Do not infer client status from loyalty, advice, or the number of showings. Find the written engagement first.

CustomerGA

Honesty toward a customer does not authorize disclosure of a client's confidential bargaining position.

Designated agencyGA

Same firm does not always mean dual agency. Identify whether separate agents were properly designated.

Dual agencyGA

Consent must be both informed and written. Do not accept an answer that relies only on the parties knowing the broker works with both sides.

Due-diligence periodGA

A right to investigate or terminate is not automatically a right to force repairs, extend the deadline, or recover every fee paid.

Community association manager (CAM)GA

Do not assume a CAM license grants every authority of a salesperson or broker.

Brokerage engagementGA

A purchase contract is between transaction parties. It is not the same document as the brokerage engagement between client and broker.

Transaction brokerGA

Neutral assistance is not dual agency. First determine whether the broker ever agreed to represent the customer.

Ministerial actGA

Calling advice clerical does not make it ministerial. Look for discretion, advocacy, or strategy.

Adverse material factGA

Actually known is different from should have discovered. Do not invent an inspection duty unless the question provides one.

Earnest moneyGA

Do not assume the seller automatically receives the money after every buyer default or that the buyer automatically recovers it after every termination.

Security deedGA

Do not select mortgage or deed of trust merely because a national question bank used that vocabulary. Georgia stems usually expect security deed.

Title theoryGA

Title theory does not mean the lender has ordinary ownership rights to occupy or use the property while the loan is current.

Transfer taxGA

Using the loan amount or the intangible-tax rate produces a plausible but wrong answer.

Intangible recording taxGA

Candidates commonly use the sale price, round down a partial $500, or forget the statutory cap.

Assessment ratioGA

Applying mills directly to fair market value skips the assessment step and overstates the tax.

Power of saleGA

Nonjudicial does not mean unregulated or immediate. The absence of a foreclosure lawsuit does not remove statutory steps.

Satisfaction or cancellation of security deedGA

A zero loan balance and a clean public record are related but not identical facts. The recorded cancellation matters for title evidence.

Millage rateGA

Treating 28 mills as 28 percent or applying it to full market value creates a large error.

Assessed valueGA

Do not subtract an exemption from fair market value unless the problem or governing rule specifically instructs that order.

Ad valorem taxGA

Do not confuse property tax with Georgia's transfer tax, which is triggered by a taxable conveyance rather than annual ownership value.

Homestead exemptionGA

Do not memorize one local exemption amount as if it applied uniformly across all Georgia counties and tax districts.

Closing attorneyGA

The lender, brokerage, or title company may coordinate parts of the process, but that does not replace the Georgia attorney's closing role.

Specific performance

It is not an automatic self-help remedy. A party seeks it from a court and must satisfy equitable requirements.

Counteroffer

Do not treat a signed response as acceptance when handwriting or an addendum changes a term.

Option contract

Option consideration and earnest money serve different functions. Do not assume an unexercised option is already a purchase contract.

Statute of Frauds

A contract within the statute is generally described as unenforceable, not automatically void.

Void contract

A breach does not make a valid contract void. It creates a remedy question.

Voidable contract

Do not say both parties may cancel at will. Voidability belongs to the protected party under the relevant defense.

Unenforceable contract

Do not label every unenforceable agreement void. The reason enforcement fails determines the status.

Bilateral contract

The number of signatures does not decide the classification. Identify what was exchanged for what.

Unilateral contract

One party speaking first does not make a contract unilateral. Examine the method of acceptance.

Executed contract

A document signed today can be properly executed as a document but still be executory as a contract.

Executory contract

Executory does not mean defective, uncertain, or unenforceable. It describes performance status only.

Addendum

The title printed on a form is less important than function and timing. Ask whether it adds to the proposed contract or changes an existing one.

Amendment

One party's written request is not an amendment until the required parties agree.

Assignment

A new person performing does not prove the original party was released.

Novation

Performance by a substitute is not enough if the original party remains liable.

Rescission

Termination and rescission are often used loosely, but not every ended contract requires both sides to restore all prior benefits.

Liquidated damages

Earnest money is not automatically liquidated damages in every contract or termination.

Contingency

A contingency does not protect a party forever. Missing the notice or deadline can waive the right.

Right of first refusal

The holder cannot ordinarily force a sale before the triggering event merely because the right exists.

Agency

Do not assume every licensee in a transaction is every party's agent.

Fiduciary duty

Obedience never requires following an illegal instruction, and disclosure to a client does not authorize revealing another client's confidence.

Listing agreementGA

A listing does not transfer title or obligate a buyer to purchase.

Buyer brokerage agreementGA

Showing property or sending listings does not by itself prove the buyer signed a brokerage engagement.

Power of attorney

The agent cannot exceed the document's authority or treat the principal's property as the agent's own.

Puffing

The enthusiastic tone is irrelevant. Classify the statement by whether it is opinion or a verifiable fact.

Steering

A friendly motive does not cure discriminatory direction. The effect and protected-class basis control.

Fair Housing Act

A neutral-sounding policy can still violate fair housing through intentional treatment or unlawful effect, and a client's instruction is no defense.

Protected class

The law protects people from decisions based on covered characteristics, not properties or neighborhoods as protected classes themselves.

Blockbusting

No actual demographic change or completed sale is required for the prohibited solicitation technique.

Redlining

Lawful location-based underwriting must rest on legitimate, consistently applied risk evidence rather than protected-class composition.

Disparate treatment

A written neutral policy does not defeat a claim if the provider applies it differently based on protected class.

Reasonable accommodation

An assistance animal is not evaluated as an ordinary pet, and a provider should not demand unnecessary medical details.

Reasonable modification

Do not apply the ordinary no-alterations lease clause without analyzing the federal modification right.

Americans with Disabilities Act (ADA)

Do not apply one statute to the entire property without separating the use of each space and the conduct at issue.

Antitrust

No written contract or successful price increase is required to make competitor coordination dangerous.

Price fixing

An agreement to keep prices low is still price fixing. The direction of the price movement does not cure coordination.

Market allocation

The agreement can be illegal even when clients still have firms available in each assigned area.

Group boycott

Calling the action a professional standard does not eliminate the competitor agreement.

Do-Not-Call Rule

A phone number appearing in public records or online does not equal consent.

Independent contractorGA

The label in a contract does not erase statutory duties or control every employment-law test.

Encroachment

Do not choose easement merely because another parcel is affected. Ask whether there is a legal right or an unauthorized object.

Fixture

Method of attachment is important but not the only test. Read intention, adaptation, relationship, and agreement facts together.

Trade fixture

Leaving a trade fixture past the permitted removal time can make it abandoned to the landlord even though it began as tenant property.

Bundle of legal rights

Ownership is not one indivisible power. A question may transfer one stick while the owner retains the others.

Severalty

One entity can have many members and still be the sole legal owner.

Tenancy in common

Undivided does not mean equal. Each owner has a right to possess the whole, while economic shares can differ.

Joint tenancyGA

The word jointly or the fact that interests are equal may not be enough. Find express survivorship language.

Life estate

The life tenant may transfer only the interest held. A buyer from the life tenant does not receive ownership beyond the measuring life.

Remainder

Do not call every future interest a reversion. Ask who receives possession after the life estate.

Reversion

A reversion does not wait for a breach. It becomes possessory when the prior estate naturally ends.

Easement appurtenant

The parcel using the easement is dominant even though it does not own the land being crossed.

Easement in gross

Do not invent a dominant estate simply because the easement holder owns other land nearby.

License in real property

Repeated use does not automatically transform permission into an easement.

Lien

A lienholder is not automatically the property's owner or occupant.

Adverse possession

Long use with the owner's permission is not hostile possession, and one missing element defeats the claim.

Metes and bounds

A street address or tax parcel number helps identify property but is not automatically a sufficient legal description.

Lot and block

A lot number without the subdivision and plat reference may identify the wrong parcel.

Rectangular survey system

Do not reject the term merely because the property in the stem is outside Georgia. The national exam can test all three description systems.

Loan-to-value ratio

Do not divide the down payment by the price or use the monthly payment as the numerator.

Discount point

Using the purchase price instead of the loan amount is the standard wrong-answer path.

Promissory note

Recording usually concerns the security instrument, not the borrower's private note itself.

Amortization

Equal payments do not mean equal principal reduction each month.

Balloon mortgage

A large final payment does not necessarily mean the borrower missed payments. It may be built into the original loan structure.

Acceleration clause

Acceleration does not itself transfer ownership or complete foreclosure.

Alienation clause

The clause does not prohibit every sale. It gives the lender the stated right regarding the loan balance.

Private mortgage insurance (PMI)

The party paying the premium is not necessarily the party receiving the insurance protection.

Real Estate Settlement Procedures Act (RESPA)

A referral payment is not lawful simply because it is disclosed to the consumer.

Truth in Lending Act (TILA)

The APR is not simply the note interest rate, and the right of rescission does not cover every real estate loan.

TILA-RESPA Integrated Disclosures (TRID)

Do not call every settlement statement a Closing Disclosure or apply TRID to a transaction excluded by the federal rules.

Equal Credit Opportunity Act (ECOA)

A lending decision can implicate both ECOA and fair housing law. Do not assume only one statute can apply.

Primary mortgage market

Classify the transaction taking place now, not the institution's later plan for the loan.

Secondary mortgage market

The borrower may send payments to a servicer after a loan sale, but servicing and ownership are separate roles.

Loan origination fee

Do not use the sales price or assume every point shown is a discount point.

Debt-to-income ratio

Using net take-home pay or excluding the proposed housing payment changes the ratio.

Capitalization rate

Using gross income, mortgage payments, or monthly NOI can make the arithmetic look correct while the setup is wrong.

Fair market value

Do not assume the latest sale price is automatically the correct value in every set of transaction conditions.

Appraisal

A detailed report prepared by a broker does not become an appraisal simply because it contains adjustments and comparable sales.

Comparative market analysis (CMA)

The use of comparable sales does not distinguish a CMA from an appraisal. Purpose, provider, standards, and representation do.

Broker price opinion (BPO)

The person paying for the report or the presence of a fee does not convert a BPO into an appraisal.

Automated valuation model (AVM)

Fast and data-heavy does not mean conclusive. An AVM is not automatically an appraisal or a guarantee of sale price.

Highest and best use

The use producing the highest gross revenue is not automatically highest and best if it fails legality, feasibility, or another threshold.

Depreciation

Age is not automatically depreciation. A well-maintained older improvement may have limited physical deterioration, while a newer design can have functional obsolescence.

Net operating income

Subtracting principal and interest from NOI is the standard setup error.

Gross rent multiplier

Mixing annual rent with a monthly multiplier produces an answer twelve times too large.

Effective gross income

Other income is added after vacancy loss, while operating expenses are not subtracted until the NOI step.

PITI

Do not add annual tax and insurance figures directly to a monthly loan payment.

Seller net proceeds

Do not subtract the buyer's new loan or down payment from the seller's price.

Buyer funds needed at closing

Subtracting earnest money twice or forgetting that a credit reduces cash to close produces common distractors.

Proration

Candidates often calculate the amount correctly and then reverse the debit and credit.

Equity

Use current loan balances, not original loan amounts, and include all liens stated in the problem.

Material fact

A fact need not make the property unusable to be material. The test is significance to a reasonable transaction decision.

Material defect

Do not merge the questions of importance and visibility. Material, latent, and patent describe different features.

Latent defect

Hidden does not automatically prove fraud. The question must also establish knowledge, duty, misstatement, or concealment as required.

Patent defect

Visible to an expert with special equipment is not always the same as patent to an ordinary buyer in the stem.

Stigmatized propertyGA

Not affirmatively required to disclose is not permission to lie when a protected direct question must be answered truthfully.

Lead-based paint disclosure

The construction year is the first trigger. A recently renovated home can still be covered if it was built before 1978.

Environmental hazard

A licensee should not diagnose safety or promise remediation outside the licensee's expertise.

Escheat

Dying without a will is not enough by itself. If legal heirs exist, intestate succession applies rather than escheat.

Deed

Recording provides notice and priority protection, but recording alone cannot cure a deed that was never validly delivered.

General warranty deed

A broad warranty does not guarantee property condition, market value, or freedom from every visible physical defect.

Limited warranty deed

Limited does not mean the deed transfers only part of the estate. It describes the scope of title covenants.

Quitclaim deed

The grantee receives no greater interest than the grantor actually had.

Marketable title

Insurability does not automatically prove marketability if the policy simply excludes the known defect.

Insurable title

Covered and clear are not synonyms. Read the policy exceptions.

Title insurance

A lender policy protects the lender even when the borrower paid the premium. It does not automatically protect the buyer's equity.

Constructive notice

Failure to search the record does not necessarily defeat constructive notice.

Actual notice

An unrecorded interest can still bind a person who actually knew about it.

Recordation

First signed and first recorded are different facts. Priority questions require the recording statute and notice facts.

Short sale

Seller acceptance does not create lender approval, and lender approval does not automatically release every borrower obligation.

Probate

Death does not itself give every heir power to sign a deed for the estate.

Eminent domain

Do not call the process eminent domain when the question asks for the court procedure, and do not confuse a taking with zoning regulation.

Nonconforming use

Grandfathered does not mean permanently immune from every local condition. Read for abandonment or expansion facts.

Zoning variance

Wanting a more profitable project is not automatically the hardship required for a variance.

Police power

A regulation that lowers a property's value is not automatically an eminent-domain taking.

Property management agreement

A manager's broad operational role does not create unlimited authority to sell, borrow against, or materially alter the property.

Security deposit

The landlord does not automatically own the deposit when received, and ordinary wear is not the same as tenant damage.