52-Question Georgia State Practice Exam

1. A.Is a voluntary best practice recommended by trade associations
2. B.Must be filed with and approved by GREC before the firm may operate
3. C.Is required by statute, and the broker must develop and enforce it
4. D.Applies only to firms with more than ten affiliated licensees

Why each choice works or fails

• A. It is a legal requirement, not a voluntary practice.
• B. The statute requires the policy but not a filing with or approval by GREC.
• C. Correct. The broker must both develop and enforce the policy.
• D. The requirement applies to every broker regardless of firm size.

Rule to remember: Every Georgia broker must develop and enforce an office policy that permits or rejects disclosed dual agency.

1. A.A CAM license or a real estate license
2. B.A real estate broker license only
3. C.No license, because no property is sold
4. D.A county business registration only

Why each choice works or fails

• A. Correct. A CAM license or a salesperson or broker license covers the activity.
• B. Misconception: only brokers may manage. A CAM or salesperson license also qualifies when working through a broker.
• C. Misconception: licensing is only about sales. Georgia treats community association management for a fee as licensed activity.
• D. Misconception: a local permit is enough. Counties do not license community association managers.

Rule to remember: Community association management for a fee requires a CAM license or a real estate license in Georgia.

1. A.Say it is unnecessary because the lender's policy protects the buyer
2. B.Promise that the policy will cover any title defect that arises
3. C.Explain the option and refer coverage questions to the closing attorney
4. D.Stay silent, since title insurance is outside brokerage duties

Why each choice works or fails

• A. Misconception: one policy covers both. The lender's policy protects the lender's loan, not the buyer's equity.
• B. Misconception: title insurance covers everything. Policies carry exclusions and exceptions, and an agent cannot promise coverage.
• C. Correct. Raise the option, then send coverage questions to the closing attorney or title insurer.
• D. Misconception: title is outside the agent's lane. Silence about a material protection is a failure of diligence.

Rule to remember: A lender's title policy protects only the lender; the owner's policy is optional and protects the buyer.

1. A.25 hours
2. B.36 hours
3. C.60 hours
4. D.75 hours

Why each choice works or fails

• A. Misconception: 25 hours is the post-license course due in the first year, not prelicense.
• B. Misconception: 36 hours is the continuing education required each renewal period.
• C. Misconception: 60 hours is the broker prelicense course, not the salesperson course.
• D. Correct. The Georgia salesperson prelicense course is 75 hours.

Rule to remember: Georgia salesperson prelicense education is 75 hours at a GREC-approved school.

1. A.Both taxes use $360,000
2. B.Both taxes use $288,000
3. C.Transfer tax uses $360,000; intangible tax uses $288,000
4. D.Transfer tax uses $288,000; intangible tax uses $360,000

Why each choice works or fails

• A. Wrong. Intangible tax does not use the price.
• B. Wrong. Transfer tax does not use the loan.
• C. Correct. Transfer on consideration; intangible on the note.
• D. Wrong. Reverses the two bases.

Work it through

1. Transfer event identifies consideration: $360,000
2. Secured-note recording identifies note amount: $288,000

Rule to remember: Transfer tax rides on the deed and uses the price; intangible tax rides on the security deed and uses the note.

1. A.Permitted, because the full deposit stays in the account
2. B.Permitted, if the broker discloses the interest at closing
3. C.A violation, because the parties never agreed in writing
4. D.A violation only if the interest exceeds $100 a year

Why each choice works or fails

• A. Misconception: only the principal matters. An intact deposit does not make the interest the broker's to keep.
• B. Misconception: after-the-fact disclosure cures it. The written agreement on interest must come before the deposit.
• C. Correct. The parties must agree in writing who receives the interest before the broker deposits into an interest-bearing account.
• D. Misconception: small amounts are excused. No dollar threshold excuses keeping interest without a written agreement.

Rule to remember: Interest-bearing trust account: get the parties' written agreement on who gets the interest before depositing.

1. A.Immediately, because the seller has signed and delivered the deed
2. B.Only once the lender's wire lands in the escrow account
3. C.Only after the deed is recorded and returned by the clerk
4. D.Only after a three-day waiting period that applies to all sales

Why each choice works or fails

• A. Misconception: signing equals funding. The attorney cannot pay out money the account does not yet hold.
• B. Correct. Disbursement follows receipt of good (collected) funds, such as a completed wire, in the escrow account.
• C. Misconception: recording comes first. Recording commonly follows disbursement and is not a precondition to paying the seller.
• D. Misconception: blending the Closing Disclosure timing or refinance rescission rules into sales. No general three-day wait applies.

Rule to remember: A Georgia settlement agent may disburse closing proceeds only after good (collected) funds are in its escrow account.

1. A.It counts as 9 hours of continuing education
2. B.It counts as all 25 hours of continuing education
3. C.It does not count toward continuing education at all
4. D.It replaces the continuing education requirement for that period

Why each choice works or fails

• A. Correct. The course counts as nine CE hours for the first renewal period.
• B. The course is 25 hours long, but only nine of them count as CE.
• C. It does count, as nine hours, when completed in the first year.
• D. It reduces the CE still owed. It does not replace the requirement.

Rule to remember: Post-license course in year one = 9 CE hours toward the first renewal, not 25.

1. A.Full fiduciary duties under general agency law
2. B.Whatever additional duties the client requests orally
3. C.Only the duties set out in BRRETA, unless the parties expressly agree to more in a signed writing
4. D.The same duties the broker owes every customer

Why each choice works or fails

• A. This is the common-law agency instinct. BRRETA states that the broker is not deemed a fiduciary.
• B. Extra duties require an express agreement in a signed writing, not an oral request.
• C. Correct. BRRETA's listed duties, plus anything expressly added in a signed writing.
• D. Clients are owed more than customers. A customer receives a narrower set of duties.

Rule to remember: BRRETA duties only, unless more are agreed in a signed writing. No fiduciary relationship.

1. A.Obtain an unsatisfied court judgment against the licensee
2. B.Exhaust the licensee's errors and omissions policy
3. C.Prove the licensee has been criminally convicted
4. D.File a complaint with the Commission and wait 30 days

Why each choice works or fails

• A. Correct. An unsatisfied court judgment against the licensee is the gateway to a fund claim.
• B. Misconception: the fund acts as excess insurance. Recovery is keyed to an unsatisfied judgment, not to private coverage.
• C. Misconception: the fund pays only for crimes. A civil judgment for a violation is enough; no conviction is needed.
• D. Misconception: a GREC complaint opens the fund. A complaint can lead to discipline, not compensation.

Rule to remember: The Recovery Fund pays only on an unsatisfied court judgment against a licensee, after collection efforts fail.

1. A.Place the license on inactive status
2. B.Keep the license active without a broker
3. C.Hold the license in escrow with GREC
4. D.Practice on their own as a salesperson

Why each choice works or fails

• A. Correct. Inactive status keeps the person licensed without a sponsoring broker.
• B. Misconception: paying fees keeps a license active. An active salesperson license requires a sponsoring broker.
• C. Misconception: borrowing another state's term. Georgia has no license escrow; inactive status serves that purpose.
• D. Misconception: a salesperson can work independently. A salesperson may practice only through a broker.

Rule to remember: No sponsoring broker means an inactive license, not no license.

1. A.Pay the Commission's day-to-day operating costs
2. B.Insure brokers against errors and omissions claims
3. C.Pay the fines the Commission imposes on licensees
4. D.Compensate consumers harmed by licensee violations

Why each choice works or fails

• A. Misconception: fund money runs the agency. Operating costs are not the fund's purpose.
• B. Misconception: the fund is licensee insurance. A payout leads to revocation and the licensee must repay the fund.
• C. Misconception: the fund covers discipline. Fines are the licensee's own obligation.
• D. Correct. The fund protects the public when a judgment against a licensee cannot be collected.

Rule to remember: The Recovery Fund protects the public, not the licensee.

1. A.Repeat the seller's statement, because it protects a client confidence
2. B.Disclose the price and terms of both offers to every buyer
3. C.Say nothing at all to buyers about offers, under any circumstances
4. D.Refuse to state that there are no other offers, because the broker may not give customers false information

Why each choice works or fails

• A. Confidentiality does not permit a false statement. The duty not to give false information prevails.
• B. Nothing requires the broker to reveal the other offers' prices and terms. The duty is not to lie.
• C. Silence is not required. The broker simply cannot make the false statement.
• D. Correct. The duty not to give customers false information wins over the client's instruction.

Rule to remember: When confidentiality and honesty conflict, the duty not to give false information wins.

1. A.Declare the entire unpaid balance immediately due
2. B.Increase the interest rate to the usury ceiling
3. C.Take possession of the property without a foreclosure sale
4. D.Charge the borrower a prepayment penalty

Why each choice works or fails

• A. Correct. Acceleration of the full balance is the remedy the clause provides.
• B. Misconception: the clause reprices the loan. It accelerates the debt; it does not rewrite the interest rate.
• C. Misconception: acceleration equals repossession. The lender must still foreclose under the power of sale with statutory notice.
• D. Misconception: confusing it with a prepayment clause. A prepayment penalty is a separate provision; this clause calls the loan due.

Rule to remember: A due-on-sale clause permits acceleration for an unprotected transfer without consent; federal exceptions still apply.

1. A.30 days before application
2. B.90 days before application
3. C.60 days before application
4. D.180 days before application

Why each choice works or fails

• A. Misconception: guessing the strictest window. The rule allows a report up to 60 days old.
• B. Misconception: 90 days is a common validity window for other documents, but the GCIC report expires at 60.
• C. Correct. The GCIC report may be no more than 60 days old when the applicant applies.
• D. Misconception: a six-month-old report is stale. It must be reordered once it passes 60 days.

Rule to remember: The GCIC criminal history report must be issued no more than 60 days before the license application.

1. A.A Georgia-licensed attorney
2. B.A title company's closer
3. C.The listing broker's office
4. D.An independent escrow officer

Why each choice works or fails

• A. Correct. A Georgia-licensed attorney must conduct the closing.
• B. Misconception: title companies close everywhere. They may insure title, but a nonlawyer cannot run a Georgia closing.
• C. Misconception: the broker who coordinates the deal also closes it. Conducting the closing is the practice of law.
• D. Misconception: escrow-officer closings, common in other states, do not apply in Georgia.

Rule to remember: Georgia closings are conducted by Georgia-licensed attorneys.

1. A.$228.00
2. B.$684.00
3. C.$285.00
4. D.$2,850.00

Why each choice works or fails

• A. Wrong. $228.00 uses the loan amount as the base.
• B. Wrong. $684.00 is the intangible recording tax on the $228,000 note.
• C. Correct. $1 + 2,840 x $0.10 = $285.00.
• D. Wrong. $2,850.00 moves the decimal, charging $10 per $1,000.

Work it through

1. $285,000 - $1,000 = $284,000
2. $284,000 / $100 = 2,840 units x $0.10 = $284.00
3. $1.00 + $284.00 = $285.00

Rule to remember: Transfer tax follows the price ($1 first $1,000, $0.10 per added $100). Intangible tax follows the loan.

1. A.24 hours, including 3 hours of license law
2. B.36 hours, including 3 hours of license law
3. C.36 hours, with no license-law minimum
4. D.18 hours, including 3 hours of license law

Why each choice works or fails

• A. Too few hours. The requirement is 36 per renewal period.
• B. Correct. 36 hours per renewal period, 3 of them on license law.
• C. The hour total is right, but 3 of those hours must be on license law.
• D. 18 hours is the broker education that active brokers and associate brokers must fit inside their 36 hours. It is not the salesperson total.

Rule to remember: Active renewal: 36 hours of CE per period, including 3 hours of license law.

1. A.Loyalty and obedience to lawful instructions
2. B.Truthful information and known adverse material facts
3. C.Confidentiality and promotion of the customer's interests
4. D.No duties, because there is no brokerage engagement

Why each choice works or fails

• A. Misconception: common-law agency duties apply. Georgia's brokerage law replaces them, and customers are not owed advocacy.
• B. Correct. A customer is owed honesty and disclosure of known adverse material facts about the property.
• C. Misconception: customers get client duties. Confidentiality and promoting interests are owed only to clients.
• D. Misconception: no engagement means no duties. The broker still may not give false information and must disclose known adverse facts.

Rule to remember: Customers get honesty and known adverse material facts. Clients also get confidentiality and advocacy.

1. A.At least 21 years old with an associate degree
2. B.At least 18 years old with no schooling beyond the prelicense course
3. C.At least 19 years old with a bachelor's degree
4. D.At least 18 years old with a high school diploma or its equivalent

Why each choice works or fails

• A. Georgia's minimum age is 18, and no college degree is required.
• B. The age is right, but a high school diploma or its equivalent is also required.
• C. The age is wrong, and no college degree is required.
• D. Correct. At least 18, with a high school diploma or its equivalent.

Rule to remember: Salesperson applicant: 18 or older, with a high school diploma or equivalent.

1. A.Mortgage
2. B.Deed of trust
3. C.Security deed
4. D.Land contract

Why each choice works or fails

• A. A Georgia mortgage creates a lien rather than making the legal-title conveyance described.
• B. A deed of trust uses a third-party trustee; this question expressly excludes one.
• C. Correct. Georgia uses the security deed (deed to secure debt).
• D. Wrong. A land contract is seller financing where the seller keeps title, not a lender's security instrument.

Rule to remember: A Georgia security deed conveys legal title as security for the debt; a Georgia mortgage creates a lien.

1. A.Must keep it confidential unless the seller allows disclosure or another exception applies
2. B.May disclose it, because the engagement has ended
3. C.Must disclose it, because the buyer asked directly
4. D.May disclose it to other licensees, but not to the buyer

Why each choice works or fails

• A. Correct. Confidentiality survives the end of the engagement, subject to the statute's exceptions.
• B. Ending the engagement ends most duties, but not confidentiality or the duty to account for money.
• C. A direct question does not override a client's confidence.
• D. Other licensees are not an exception. The information stays confidential.

Rule to remember: Confidential client information stays confidential after the engagement ends.

1. A.Twice the standard fee
2. B.The standard fee
3. C.The standard fee plus a late penalty
4. D.Refused until the exam is retaken

Why each choice works or fails

• A. Correct. After three months the application fee doubles.
• B. Misconception: any timing gets the base fee. The standard fee applies only within three months of the exam.
• C. Misconception: lateness adds a surcharge. The rule doubles the fee rather than adding a penalty.
• D. Misconception: a late application voids the score. A retake is required only after twelve months.

Rule to remember: Apply within three months for the standard fee; after that it doubles, and after twelve months you retest.

1. A.Provide the names of several attorneys and let the buyer choose
2. B.Tell the buyer no attorney is needed for a cash purchase
3. C.Prepare the deed and closing documents to save the buyer money
4. D.Require the firm's preferred attorney as a condition of the sale

Why each choice works or fails

• A. Correct. Offering options and letting the client choose is appropriate.
• B. The attorney-closing requirement is not limited to financed purchases.
• C. Preparing deeds and closing documents is the practice of law, which a licensee may not do.
• D. Conditioning the sale on a particular provider improperly removes the buyer's choice.

Rule to remember: Georgia closings are run by attorneys; an agent may suggest several and let the client choose, but may not draft closing documents.

1. A.$300,000
2. B.$180,000
3. C.$120,000
4. D.$12,000

Why each choice works or fails

• A. Misconception: assessed value equals market value. Full value skips the 40% ratio.
• B. Misconception: subtracting 40% instead of taking 40%. $300,000 - $120,000 = $180,000.
• C. Correct. $300,000 x 0.40 = $120,000.
• D. Misconception: a decimal slip, using 4% instead of 40%.

Work it through

1. $300,000 x 0.40 = $120,000 assessed value

Rule to remember: Georgia assesses at 40% of fair market value.

1. A.Permitted, because the sale has already closed
2. B.Permitted, if the salesperson reports it as taxable income
3. C.A violation, because the broker has not consented to it
4. D.A violation only if it exceeds the agreed commission split

Why each choice works or fails

• A. Misconception: closing ends the rules. Closing does not change who may pay a licensee.
• B. Misconception: tax compliance equals license compliance. Reporting income does not supply the broker's consent.
• C. Correct. A licensee may accept compensation from someone other than the broker only with that broker's consent.
• D. Misconception: only overpayment matters. Any payment outside the broker without consent is the violation, whatever the amount.

Rule to remember: A licensee may accept compensation only from the broker holding the license, unless that broker consents.

1. A.Transaction brokerage
2. B.Designated agency
3. C.Dual agency
4. D.Subagency

Why each choice works or fails

• A. Misconception: any two-sided firm deal is transaction brokerage. A transaction broker represents neither party; here each agent represents a client.
• B. Correct. Assigning separate agents to each client is designated agency.
• C. Misconception: one firm on both sides is always dual agency. A proper designation does not make the broker a dual agent.
• D. Misconception: in-house cooperation is subagency. Subagency involves another broker helping the listing broker.

Rule to remember: Designated agency lets one firm serve both sides through separate agents without becoming a dual agent.

1. A.Oral or written
2. B.In writing
3. C.Recorded with the county
4. D.Approved by GREC

Why each choice works or fails

• A. An oral agreement does not create a brokerage engagement.
• B. Correct. The engagement must be a written contract.
• C. Brokerage engagements are not recorded in the county records.
• D. GREC does not approve individual engagements.

Rule to remember: The brokerage engagement is written, or there is no client.

1. A.Negotiate contract terms with a cooperating agent
2. B.Explain the terms of a listing agreement to a seller
3. C.Schedule appointments and prepare marketing materials
4. D.Show listed homes to buyers and answer their questions

Why each choice works or fails

• A. Misconception: relaying terms is clerical. Negotiating is brokerage activity that requires a license.
• B. Misconception: explaining a signed form is paperwork. Interpreting an agreement calls for the judgment a license represents.
• C. Correct. Scheduling and preparing marketing materials are ministerial support tasks.
• D. Misconception: showing is just opening doors. Showing homes to buyers and answering their questions is licensed sales activity.

Rule to remember: Unlicensed assistants may do only ministerial, no-judgment tasks. Showing, negotiating, and explaining terms need a license.

1. A.30 days
2. B.60 days
3. C.90 days
4. D.7 days

Why each choice works or fails

• A. 30 days is the notice the tenant gives, not the landlord.
• B. Correct. The landlord gives 60 days' notice.
• C. Georgia sets the landlord's notice at 60 days, not 90.
• D. Seven days is far shorter than the statute allows.

Rule to remember: Tenancy at will: the landlord gives 60 days' notice, the tenant gives 30.

1. A.A 25-hour post-license course within one year of licensure
2. B.A 25-hour post-license course before the first license renewal
3. C.36 hours of continuing education within one year of licensure
4. D.A 3-hour license law course within one year of licensure

Why each choice works or fails

• A. Correct. The 25-hour post-license course is due within one year of the original license.
• B. Misconception: tying post-license to renewal. The course has its own one-year deadline, well before the first renewal.
• C. Misconception: mixing up the hour counts. 36 hours is the continuing education total for each renewal period, not the first-year course.
• D. Misconception: treating license law CE as the first obligation. The 3 license law hours are part of the 36 CE hours due by renewal.

Rule to remember: Georgia salespersons: 25-hour post-license course within year one; 36 CE hours each renewal period.

1. A.Apply by reciprocity with no Georgia exam
2. B.Take and pass the Georgia Supplement Exam
3. C.Wait one year after moving to Georgia, then apply
4. D.Complete the 75-hour prelicense course again

Why each choice works or fails

• A. That route is open to many out-of-state licensees, but the bulletin excludes Florida residents from it.
• B. Correct. Florida residents must take and pass the Georgia Supplement Exam.
• C. No waiting period appears in the bulletin's reciprocity rules.
• D. The bulletin's Florida rule is the supplement exam, not repeating the prelicense course.

Rule to remember: Reciprocity skips the exam, except for Florida residents, who take the Georgia Supplement Exam.

1. A.$4,680
2. B.$5,040
3. C.$12,240
4. D.$12,600

Why each choice works or fails

• A. Correct. ($168,000 - $12,000) x 0.030 = $4,680.
• B. Wrong. Skips the exemption.
• C. Wrong. Skips the 40% ratio before subtracting the exemption.
• D. Wrong. Applies millage to full market value.

Work it through

1. $420,000 x 0.40 = $168,000 assessed value
2. $168,000 - $12,000 = $156,000 taxable value
3. $156,000 x 0.030 = $4,680

Rule to remember: Georgia's ordinary sequence is fair market value, 40% assessment, stated exemptions, then millage.

1. A.Deposited in the broker's operating account
2. B.Deposited in a designated trust account
3. C.Given directly to the seller
4. D.Kept by the licensee who received it until closing

Why each choice works or fails

• A. Putting trust funds in the operating account is commingling.
• B. Correct. A broker holds earnest money in a designated trust account.
• C. The deposit is held for both parties, not handed to the seller.
• D. Affiliated licensees must turn trust funds over to the broker promptly.

Rule to remember: Unless the interested parties agree otherwise in writing, the broker promptly deposits earnest money in a designated, federally insured trust account registered with GREC.

1. A.Only if the tenant agrees to amend the lease
2. B.After giving the tenant 60 days' written notice
3. C.Immediately, to pass through the tax increase
4. D.Once the tenant has paid rent late

Why each choice works or fails

• A. Correct. The lease fixes the rent for its term, so a mid-term change needs the tenant's agreement.
• B. Misconception: borrowing the 60-day notice that ends a tenancy at will. Notice cannot rewrite a fixed-term lease.
• C. Misconception: higher costs pass through automatically. Only an escalation clause allows that, and this lease has none.
• D. Misconception: a late payment frees the landlord. Late rent triggers default remedies, not a right to raise rent.

Rule to remember: Rent in a fixed-term lease stays as written for the term unless the lease allows a change or the tenant agrees.

1. A.May redeem within 12 months by paying the sale price
2. B.May redeem within 30 days by paying the full debt
3. C.Has no statutory right to redeem the property
4. D.May reinstate the loan by paying the arrears

Why each choice works or fails

• A. Misconception: 12-month redemption applies in some other states and to Georgia tax sales, not foreclosure sales.
• B. Misconception: 30 days is the pre-sale notice period to the debtor, not a redemption right.
• C. Correct. Georgia has no statutory redemption after a foreclosure sale.
• D. Paying arrears after a completed valid sale does not create a statutory right to reinstate the loan.

Rule to remember: No statutory redemption after a valid Georgia power-of-sale foreclosure. Tax sales follow different rules.

1. A.Show and negotiate the former broker's listings
2. B.Manage rental property for other owners for a fee
3. C.Sell a house that the licensee owns alone
4. D.List a neighbor's home and collect a commission

Why each choice works or fails

• A. Showing and negotiating for a broker is brokerage activity, which an inactive license does not allow.
• B. Managing property for others for a fee is brokerage activity.
• C. Correct. Selling real estate the licensee solely owns is the exception to the inactive-status bar.
• D. Listing someone else's property for a commission is brokerage activity.

Rule to remember: Inactive means no brokerage, except on property the licensee owns alone.

1. A.Guarantee the commissions owed to affiliated licensees
2. B.Supervise the affiliated licensees and their activities
3. C.Hold the firm's trust funds in an account in her own name
4. D.Personally handle every transaction the firm lists or sells

Why each choice works or fails

• A. Misconception: the broker is a guarantor of splits. Compensation is set by written agreement and depends on the deal closing.
• B. Correct. The qualifying broker answers for supervising the firm's affiliated licensees.
• C. Misconception: trust money belongs to the broker. Trust funds go in a designated firm trust account, never a personal one.
• D. Misconception: supervision means doing every deal. Affiliated licensees handle transactions under the broker's supervision.

Rule to remember: The qualifying broker qualifies the firm's license and is responsible for supervising its affiliated licensees.

1. A.No, every sale must use a Commission-issued form
2. B.Yes, licensees may complete contract forms prepared by legal counsel
3. C.Only if GREC approves the form for that transaction
4. D.Only if the salesperson also holds a law license

Why each choice works or fails

• A. The statute does not require a Commission-issued sales contract.
• B. Correct. A form prepared by the firm's attorney meets the counsel-prepared requirement.
• C. GREC approval of each transaction's form is not required by this provision.
• D. The statute permits real estate licensees to complete counsel-prepared forms without becoming attorneys.

Rule to remember: Use contract forms prepared by legal counsel; the permission is not limited to GAR forms.

1. A.The unauthorized practice of law by the licensee
2. B.Proper client service, if the explanation is accurate
3. C.Acceptable, since licensees may fill in contract forms
4. D.A problem only if the buyer later suffers a loss

Why each choice works or fails

• A. Correct. Explaining the legal effect of a clause is the practice of law.
• B. Misconception: accuracy makes it acceptable. The problem is giving legal advice at all, not whether it is right.
• C. Misconception: form authority covers interpretation. Licensees may complete forms prepared by counsel but may not explain their legal effect.
• D. Misconception: no harm means no violation. The conduct itself is the problem, whatever the outcome.

Rule to remember: Fill in the blanks, do not explain the law.

1. A.Permitted if each fee is under $500
2. B.A kickback that violates RESPA
3. C.Permitted with written disclosure to the buyer
4. D.Permitted because both parties are licensed

Why each choice works or fails

• A. Misconception: small fees are excused. RESPA sets no dollar threshold for referral fees.
• B. Correct. A payment for referring settlement service business violates RESPA.
• C. Misconception: disclosure cures it. Disclosure does not legalize a fee paid for a referral.
• D. Misconception: professional licenses create an exception. Holding a license does not permit referral fees.

Rule to remember: A mortgage referral fee prohibited by RESPA does not become lawful through disclosure.

1. A.Permitted under the Georgia license law
2. B.The unauthorized practice of law
3. C.Allowed only after a closing attorney approves each blank
4. D.Allowed only when the licensee represents the buyer

Why each choice works or fails

• A. Correct. Completing a counsel-prepared form is expressly allowed.
• B. Filling in a counsel-prepared form is not the practice of law. Giving legal opinions is.
• C. The statute does not require attorney approval of each blank.
• D. The permission applies to licensees generally, not only buyer's agents.

Rule to remember: Filling in a counsel-prepared form is allowed. Interpreting it as legal advice is not.

1. A.Investigating complaints against licensees
2. B.Suspending or revoking a license
3. C.Setting the commission rate licensees may charge
4. D.Approving prelicense schools and courses

Why each choice works or fails

• A. GREC investigates complaints against licensees.
• B. GREC may suspend or revoke licenses after due process.
• C. Correct. Commissions are negotiable; GREC does not set them.
• D. GREC approves prelicense schools, instructors, and courses.

Rule to remember: GREC regulates licensees and schools. It never sets commission rates, which are negotiable.

1. A.Hold the offer until the first contract fails
2. B.Return the offer without mentioning it to the seller
3. C.Present the offer to the seller in a timely way
4. D.Keep marketing the property to attract more offers

Why each choice works or fails

• A. Holding the offer breaks the duty to present offers in a timely way.
• B. The seller must see the offer. The broker cannot decide to return it unseen.
• C. Correct. All offers are presented in a timely way, including offers made after a contract is signed.
• D. Once under contract, the broker need not seek more offers unless the engagement requires it.

Rule to remember: Present every offer promptly, even under contract. No duty to seek more offers unless the engagement requires it.

1. A.$400,000
2. B.$80,000
3. C.$160,000
4. D.$320,000

Why each choice works or fails

• A. Misconception: the price is the base. The price is the transfer tax base.
• B. Misconception: taxing the equity. $80,000 is the down payment.
• C. Misconception: applying the 40% assessment ratio, which belongs to property tax, to the price.
• D. Correct. The tax follows the face amount of the secured note.

Work it through

1. Intangible tax follows the loan: $320,000
2. Transfer tax would follow the price: $400,000

Rule to remember: Intangible tax on the loan, transfer tax on the price.

1. A.Completion of the purpose of the engagement
2. B.Expiration of the term stated in the agreement
3. C.Mutual agreement of the client and the broker
4. D.The affiliated licensee moving to another firm

Why each choice works or fails

• A. This does end it. Closing the sale, for example, completes the purpose.
• B. This does end it. The engagement expires by its own terms.
• C. This does end it. Client and broker may agree to end it at any time.
• D. Correct. The engagement belongs to the broker's firm, so a licensee's move does not end it.

Rule to remember: A brokerage engagement is with the broker's firm, so it survives the individual licensee leaving.

1. A.Eliminates the need to notify the borrower
2. B.Prevents the borrower from curing the default at any point
3. C.Guarantees the lender will recover the full loan balance
4. D.Avoids filing suit, which shortens the timeline and reduces cost

Why each choice works or fails

• A. Misconception: non-judicial means no notice. Written notice to the debtor is mandatory, and skipping it can invalidate the sale.
• B. Misconception: power of sale shuts out the borrower. The borrower can still pay off, or reinstate if the loan documents allow, before the sale.
• C. Misconception: the sale always covers the debt. Recovery depends on the bid, and a deficiency claim needs court confirmation.
• D. Correct. Avoiding litigation is the point of the non-judicial process.

Rule to remember: Power-of-sale foreclosure skips a lawsuit, so it is faster and cheaper, but notice and advertising rules still apply.

1. A.$750.00
2. B.$1,125.00
3. C.$1,126.50
4. D.$1,500.00

Why each choice works or fails

• A. Wrong. Uses $1.50 per $1,000 of price.
• B. Wrong. Drops the fractional $500 unit (750 x $1.50).
• C. Correct. 751 x $1.50 = $1,126.50.
• D. Wrong. Uses the $500,000 price as the base.

Work it through

1. $375,250 / $500 = 750.5, rounded up to 751 units
2. 751 x $1.50 = $1,126.50

Rule to remember: Georgia intangible recording tax follows the qualifying secured note and rounds a fractional $500 unit up.

1. A.Must disclose the death in writing before the buyer signs
2. B.Has no liability for not volunteering it, but must answer truthfully if the buyer asks directly
3. C.Must disclose it only if the buyer is the broker's client
4. D.Must refuse to answer any question about it

Why each choice works or fails

• A. The statute does not require volunteering a natural death. Do not treat it as an undisclosed physical defect.
• B. Correct. No duty to volunteer it, but a direct question gets a truthful answer.
• C. Client status does not change this rule.
• D. A direct question requires a truthful answer to the best of the broker's knowledge, unless answering would violate fair housing or other law.

Rule to remember: Natural death: no duty to volunteer; answer direct questions truthfully unless disclosure would violate law.

1. A.A court order authorizing the sale before it may be advertised
2. B.Conducting the sale on the first Tuesday of the month during legal sale hours
3. C.Giving the debtor the prescribed notice at least 30 days before the sale date
4. D.Publication of the notice of sale in the county's legal organ once a week for four weeks before the sale

Why each choice works or fails

• A. No court order is needed; the power of sale supplies the authority.
• B. Sales follow sheriff's-sale timing: the first Tuesday of the month during legal sale hours.
• C. The creditor must give the prescribed notice at least 30 days before the proposed sale. Proper mailing completes notice on the official postmark date.
• D. The notice runs in the county legal organ once a week for the four weeks before the sale.

Rule to remember: Georgia power-of-sale foreclosure requires statutory notice, four weeks of publication, and a first-Tuesday sale, but no court order.

1. A.The seller, because the seller's money pays the commission
2. B.Both parties, as a dual agent
3. C.Neither party, as a transaction broker
4. D.The buyer, because payment does not decide the relationship

Why each choice works or fails

• A. Payment and representation are separate. Paying a broker does not by itself make the payer that broker's client.
• B. Dual agency requires the broker to represent both parties with written consent. Nothing here makes the seller a client.
• C. A transaction broker has no client, but this broker has a written engagement with the buyer.
• D. Correct. The engagement, not the source of payment, decides whom the broker represents.

Rule to remember: Who pays the broker does not decide whom the broker represents.

1. A.$410.00
2. B.$410.05
3. C.$410.10
4. D.$411.00

Why each choice works or fails

• A. Wrong. Drops the fractional $100 unit.
• B. Wrong. Applies $1 per $1,000 to the exact price.
• C. Correct. $1 + 4,091 x $0.10 = $410.10.
• D. Wrong. Rounds the price up to the next $1,000.

Work it through

1. $410,050 - $1,000 = $409,050
2. $409,050 / $100 = 4,090.5, rounded up to 4,091
3. $1 + 4,091 x $0.10 = $410.10

Rule to remember: Transfer tax uses taxable consideration and counts each fractional statutory unit.