Where this fits on the exam
| Official syllabus topic | Real Estate Practice in Georgia: Sales Contracts; Real Estate Practice |
|---|---|
| Official PSI group | Real Estate Practice in Georgia |
| Published group count | 21 of the 52 Georgia questions |
| Exam portion | Georgia salesperson supplement |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes 16, 21, and 15 items for the three Georgia groups. It does not publish a guaranteed subtopic count. The statute, current GREC rule, contract, or other cited primary authority controls each lesson.
The lesson
Receipt and deposit
Cash, checks, and other items of value move promptly into the broker-controlled process and designated trust account unless a valid written agreement directs otherwise.
Accounting
Records identify the parties, property, amount and date of deposit, and every payee, check amount, and disbursement date.
Seven disbursement grounds
Rule 520-1-.08 provides more than court order or mutual release. A reasonable contract interpretation is included, with immediate written notice when all parties do not agree.
Cleared funds
The broker needs reasonable assurance that the financial institution credited the funds before making a disbursement.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. A buyer withdraws an unaccepted offer and the earnest-money check has cleared the broker's trust account.
Reason it through. Withdrawal before acceptance is one of the express disbursement circumstances. The broker still documents the ledger and refund by check or closing credit as applicable.
Answer. The broker may return the funds under Rule 520-1-.08 rather than waiting for a court order.
Common exam traps
- Saying only a judge may authorize disbursement
- Disbursing uncleared funds
- Ignoring the contract
- Using the operating account
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or a live examination. Choose an answer before opening the explanation.
Question 1A buyer withdraws an offer before the seller accepts it. The $5,000 earnest-money check has cleared the broker's trust account. What may the broker do?
- A. Hold the money until both parties sign a mutual release.
- B. Hold the money until a court orders it to be released.
- C. Refund it to the buyer under the rule's listed grounds.
- D. Pay it to the seller, who lost time on the offer.
Show answer and explanation →
Answer: C. Refund it to the buyer under the rule's listed grounds.
GREC Rule 520-1-.08 lists the grounds on which a broker may disburse earnest money, and withdrawal of an offer before acceptance is one of them. The funds have cleared, so the broker may refund the buyer and record it. The court-order answer reflects the myth that only a judge can release earnest money.
- A. Incorrect. A mutual release is one permitted route, but it is not required for withdrawal before acceptance.
- B. Incorrect. A court order is not the only permissible disbursement ground.
- C. Correct. Withdrawal before acceptance is a listed ground, and the cleared funds may be refunded to the buyer.
- D. Incorrect. The seller's lost time does not create entitlement to earnest money on an unaccepted offer.
Question 2A seller rejects a buyer's offer the day after the broker deposits the earnest-money check. The buyer demands an immediate refund, but the bank has not yet credited the funds. What should the broker do?
- A. Refund it at once, because rejection is a listed ground.
- B. Wait for reasonable assurance the funds are credited.
- C. Refund it from the operating account to avoid a delay.
- D. Keep it until the buyer and seller sign a mutual release.
Show answer and explanation →
Answer: B. Wait for reasonable assurance the funds are credited.
Rejection is a valid ground for disbursement, but the broker needs reasonable assurance that the bank has credited the funds before paying them out. Otherwise the broker could disburse money the trust account never received. Refunding at once is plausible because the ground exists, but the timing rule still applies.
- A. Incorrect. Rejection supplies a disbursement ground, but the broker must also confirm the funds have been credited.
- B. Correct. The broker needs reasonable assurance of credited funds before making the refund.
- C. Incorrect. Using operating funds is not the required substitute for confirming the trust deposit.
- D. Incorrect. Rejection is a listed ground, so a mutual release is not the missing condition; cleared funds are.
Question 3A buyer terminates during due diligence and asks for the earnest money back. The seller objects. The broker reasonably reads the contract as entitling the buyer to the refund. Under GREC Rule 520-1-.08, what may the broker do?
- A. Disburse on that reasonable reading and give written notice.
- B. Hold the money until the buyer and seller sign a mutual release.
- C. Hold the money until a judge decides who is entitled to it.
- D. Split the money evenly between the buyer and the seller.
Show answer and explanation →
Answer: A. Disburse on that reasonable reading and give written notice.
Georgia's rule does not limit a broker to mutual release, court order, or interpleader. A broker may disburse on a reasonable interpretation of the contract, with written notice to the parties when they do not all agree. Waiting for a mutual release is wrong because it ignores a ground the rule expressly gives.
- A. Correct. The rule permits a reasonable contract-based disbursement, with the required written notice when the parties disagree.
- B. Incorrect. Mutual release is available, but the rule also permits the reasonable-interpretation route described here.
- C. Incorrect. A court order is not required for every disputed earnest-money disbursement under the rule.
- D. Incorrect. An even split is not justified by disagreement or by the contract interpretation given.
Question 4A buyer and seller have accepted and signed a purchase contract. The buyer later says the offer is withdrawn and demands the cleared earnest money back. The buyer identifies no contract termination right, and the parties have not agreed on a release. May the broker refund it solely under the withdrawal-before-acceptance ground?
- A. Yes, because any withdrawal requires a refund
- B. Yes, because the deposit has cleared the bank
- C. No, because acceptance already occurred; another authorized ground is needed
- D. No, because the broker must always pay the seller after acceptance
Show answer and explanation →
Answer: C. No, because acceptance already occurred; another authorized ground is needed
The rule's withdrawal ground concerns an offer withdrawn before acceptance. Here the parties already have a contract, so that ground does not authorize a refund. The broker must identify a different permitted basis, such as a reasonable contract interpretation, separate written agreement, interpleader, or court order. The buyer's demand alone does not decide entitlement.
- A. Incorrect. The specified withdrawal ground ends at acceptance; it is not an automatic refund right after contract formation.
- B. Incorrect. Cleared funds satisfy a banking condition but do not establish who is entitled to the deposit.
- C. Correct. Acceptance changes the applicable analysis, so the broker needs another lawful disbursement basis.
- D. Incorrect. Acceptance alone does not automatically award the deposit to the seller either.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Follow the receipt, deposit, ledger, and disbursement instructions for the transaction.
- Explain why a court order or mutual release is not the only possible disbursement ground.
- Identify the notice needed for a disputed contract-based disbursement and verify that funds have cleared.
- Answer the practice questions without looking back, then explain why the other choices fail.
- Explain the worked example in your own words and identify the fact that decides the answer.
- Retest this topic on another day in a mixed question set.
Recommended next lesson
Continue with Property Management in Georgia. The property management lesson applies the same trust-account discipline to rents and security deposits, where each owner's money must stay in its own ledger and bills are paid only from funds actually credited.
Return to the Real Estate Practice in Georgia hub for the complete official branch and the full lesson list for this Georgia group.