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Georgia Real Estate Vocabulary Test Preview

Vocabulary matters only when you can use it inside a fact pattern. This set alternates term recognition with scenario-to-term decisions and explains the rule each term changes. Answer this 5-question public preview here, then continue the complete experience in Pass Georgia.

Facts checked against the current PSI Candidate Information Bulletin and GREC sources.

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1 / 5Study mode: Real Estate Calculations

A property bought for $280,000 is now worth $238,000 with a $260,000 balance. The owner has:

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34% of the real exam is Georgia law. 52 of 152 questions.

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All 5 questions and explanations

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For a useful score, finish the test above before opening these answers. These are original practice questions based on published topics and sources.

1. A property bought for $280,000 is now worth $238,000 with a $260,000 balance. The owner has:Real Estate Calculations. Open choices and explanation.
  1. A.Negative equity of $42,000
  2. B.Negative equity of $22,000
  3. C.Positive equity of $20,000
  4. D.Positive equity of $22,000

Answer B: Negative equity of $22,000

Equity is current value minus debt: $238,000 - $260,000 = -$22,000. The purchase price is extra information. Owing more than the property is worth is called being underwater.

Why each choice works or fails

  • A. $42,000 is the drop in value since purchase, not equity.
  • B. Correct. Debt exceeds current value by $22,000.
  • C. $20,000 uses the purchase price instead of current value.
  • D. The sign is reversed; the owner is underwater.

Work it through

  1. $238,000 - $260,000 = -$22,000

Rule to remember: Equity equals current market value minus current debt; purchase price does not enter the formula.

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2. A purchase agreement contains no earnest money provision and none is paid. The contract is:Contracts. Open choices and explanation.
  1. A.Void, because consideration is missing entirely
  2. B.Valid only if the buyer pays a deposit later
  3. C.Valid, because mutual promises supply consideration
  4. D.Voidable at the option of the seller

Answer C: Valid, because mutual promises supply consideration

Earnest money is a deposit showing good faith and a fund for damages, not the consideration that makes the contract binding. The buyer promised to buy and the seller promised to sell, and those mutual promises are consideration on their own.

Why each choice works or fails

  • A. Consideration is present in the promises the parties exchanged.
  • B. The contract is binding when formed, not when a deposit arrives.
  • C. Exchanged promises are themselves consideration.
  • D. Nothing about the formation gives the seller a right to disaffirm.

Rule to remember: Earnest money is not required for a valid contract; exchanged promises are consideration.

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3. Which of the following is NOT real property?Property Ownership. Open choices and explanation.
  1. A.A well drilled on the parcel
  2. B.Oak trees growing on the lot
  3. C.A detached garage on a slab
  4. D.A tractor parked in the barn

Answer D: A tractor parked in the barn

The tractor is movable equipment and stays personal property no matter how long it sits on the land. A drilled well and a garage are permanent improvements, and trees growing naturally are part of the land, so all three pass with it.

Why each choice works or fails

  • A. A drilled well is a permanent improvement to the land.
  • B. Candidates think anything alive is personal property, but naturally growing trees are part of the real estate.
  • C. A garage built on a slab is a permanent improvement, even though it is detached.
  • D. Correct. Movable equipment remains personal property.

Rule to remember: Land, what grows naturally on it, and what is permanently attached are real property. Movable equipment is not.

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4. Using a 365-day year, prorate a $5,475 annual amount for 73 days. Round to the cent.Real Estate Calculations. Open choices and explanation.
  1. A.$1,080.00
  2. B.$1,095.00
  3. C.$1,110.21
  4. D.$4,380.00

Answer B: $1,095.00

Divide the annual amount by the stated year to get the daily rate: $5,475 / 365 = $15. Multiply by the days in the period: $15 x 73 = $1,095.00.

Why each choice works or fails

  • A. Wrong. Counts 72 days instead of 73.
  • B. Correct. $15 x 73 = $1,095.00.
  • C. Wrong. Uses a 360-day year ($5,475 / 360 x 73).
  • D. Wrong. Prorates the other 292 days of the year.

Work it through

  1. $5,475 / 365 = $15 per day
  2. $15 x 73 = $1,095

Rule to remember: Use the year basis stated in the question.

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5. A Georgia salesperson asks a seller to pay the salesperson's share of the commission directly, without telling the salesperson's broker. Accepting that payment is:Real Estate Practice in Georgia. Open choices and explanation.
  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

Answer C: A violation, because the broker has not consented to it

Georgia license law makes it an unfair practice for a licensee to accept a commission or other valuable consideration from anyone other than the broker holding the license, without that broker's consent. Closing, the split amount, and tax reporting do not change who may pay the licensee.

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.

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What does this assessment cover?

Terms come from all 14 published exam areas. The set favors words that change legal status, formula choice, title effect, agency duty, or the correct next action.
Question coverage in this assessment
Official content areaPublished weightQuestions hereComplete lesson
Real Estate Calculations7% of the national portion2Study Calculations
Contracts19% of the national portion1Study Contracts
Property Ownership10% of the national portion1Study Property Ownership
Real Estate Practice in Georgia21 of the 52 Georgia questions1Study Real Estate Practice in Georgia

The Georgia-specific distinction

Learn Georgia terms as operating rules. Security deed, brokerage engagement, designated agent, community association manager, transfer tax, and intangible recording tax each change the answer to a scenario.

Worked result example

Do not stop at 'novation means substitution.' In a contract scenario, novation is the device that can replace a party and release the original party when all required parties agree.

Common exam traps

  • Memorizing a synonym without the legal effect.
  • Confusing two terms that share a word.
  • Recognizing the definition but missing the scenario.
  • Using a national term where Georgia uses a different instrument or relationship.

Ready to move on?

  1. Score the set before opening notes.
  2. Explain the winning rule without repeating the answer choice.
  3. Classify every miss as knowledge, distinction, wording, math setup, or timing.
  4. Repair the weakest official area, then answer a fresh set on another day.
  5. Move on only when the result is stable and guesses are being marked as gaps.

Recommended next lesson

Build spaced recall with Georgia flashcards. Use the result above to choose the first lesson or drill rather than following a generic order.

Assessment integrity

The questions are original and mapped to the current PSI outline. This preview introduces the assessment; the complete version is in Pass Georgia. PSI says practice exams help candidates become familiar with general question types, but they do not replace education and a good practice score does not guarantee an examination outcome. This page reports evidence, not a pass probability.

About this practice set

Facts checked against the current PSI Candidate Information Bulletin and GREC sources.

Are these actual PSI exam questions?

No. Every item is original, written from the current published outline and primary sources. No question is copied, recalled, reconstructed, or represented as a live PSI item.

Does this score predict whether I will pass?

No. One practice result is evidence about this question sample. Use the area breakdown, review guesses as well as misses, and confirm improvement with fresh questions on another day.

What should I do after the result?

Open the explanation for every miss and guess, restate the rule, use the linked repair lesson, then continue with the next lesson: Build spaced recall with Georgia flashcards.

Is the assessment free?

Yes. This 5-question preview has no email gate, account requirement, or card. The complete assessment, saved mastery, spaced review, and adaptive recommendations are in Pass Georgia.