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National curriculum lesson 97 · Disclosures

Inspection and Survey Red Flags

Inspection red flags include movement or cracking, water intrusion, roof failure, unsafe wiring, plumbing or HVAC defects, pests, mold indicators, failed drainage, and unpermitted work. Survey red flags include boundary conflicts, encroachments, easements, access gaps, setback problems, and improvements inconsistent with the legal description. Licensees recognize and disclose, but specialists diagnose.

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Last reviewed August 2, 2026. Editorial standards.

What is the exam-ready answer?

Inspection red flags include movement or cracking, water intrusion, roof failure, unsafe wiring, plumbing or HVAC defects, pests, mold indicators, failed drainage, and unpermitted work. Survey red flags include boundary conflicts, encroachments, easements, access gaps, setback problems, and improvements inconsistent with the legal description. Licensees recognize and disclose, but specialists diagnose.
Official syllabus mapping for Inspection and Survey Red Flags
Roadmap lesson97 of 500
Official syllabus topicInspection and Survey Red Flags
Official PSI areaProperty Disclosures
Published area weight7% of the 100-question national portion
Exam portionNational salesperson portion
Source editionPSI Georgia Candidate Information Bulletin dated July 1, 2026
Last verifiedAugust 2, 2026

The Rule

PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.

Complete lesson

Read each concept as part of one decision system. The exam often gives one accurate statement and three statements that belong to a nearby concept.

Building and site clues

Stains, odors, fresh localized paint, sloped floors, foundation cracks, ponding, damaged shingles, or improvised wiring can justify further evaluation without proving the cause.

Systems and pests

Age, unsafe operation, visible leaks, damaged components, wood-destroying-organism evidence, and missing permits can affect safety, cost, insurance, or lending.

Survey and access

Fences are not conclusive boundaries. Driveways, garages, walls, docks, and utility lines may cross lines or depend on recorded access rights.

Scope of competence

A licensee records observable facts, shares known reports accurately, recommends qualified experts, and avoids diagnosing engineering, environmental, or legal issues.

Decision rule

Describe the observation without diagnosing it, disclose as required, and refer the issue to the correct expert.

Georgia-specific distinction

Georgia licensees must exercise reasonable care and disclose required material facts, but they are not made inspectors, surveyors, engineers, or attorneys by their real estate license. Georgia caveat-buyer concepts do not protect affirmative misrepresentation or concealment.

Worked example

Scenario. A detached garage appears to cross a fence line, but no current survey is available.

Reason it through. A fence may not mark the legal boundary, so the licensee cannot declare an encroachment or dismiss the concern.

Answer. Disclose the observation and recommend survey and title review before the buyer's deadline.

Common exam traps

  • Diagnosing from a stain
  • Treating fences as surveyed lines
  • Assuming inspection covers title
  • Waiting until after due diligence to refer

Original practice questions with detailed explanations

These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.

Question 1

Who should determine a disputed boundary?

  1. A. Licensed surveyor and appropriate title or legal professionals
  2. B. Listing photographer
  3. C. Any licensee
  4. D. Home stager
Show answer and explanation →

Answer: A. Licensed surveyor and appropriate title or legal professionals

Boundary location and title consequences require qualified survey and legal or title analysis.

Question 2

What is the safest response to a visible water stain?

  1. A. Guarantee mold
  2. B. Describe it and recommend qualified evaluation
  3. C. Hide it
  4. D. Promise it is old
Show answer and explanation →

Answer: B. Describe it and recommend qualified evaluation

The observation is material, but causation and condition require appropriate expertise.

Question 3

Does a home inspection establish legal access?

  1. A. Yes
  2. B. No
  3. C. Only for rural homes
  4. D. Only if lender ordered
Show answer and explanation →

Answer: B. No

Access and easement rights are title and survey matters, not ordinary building inspection conclusions.

Mastery tracking

Mark this lesson mastered only when every statement is true.

  • State the direct answer and decision rule without notes.
  • Explain every core concept in plain English.
  • Solve the worked example after changing one important fact.
  • Identify the Georgia distinction before reading answer choices.
  • Answer all three questions correctly and reject every distractor.
  • Repeat the topic in mixed practice on a later day.

Recommended next lesson

Continue with Land-Use and Development Red Flags. Continue to roadmap lesson 98 and build on this decision rule.

Return to the Property Disclosures hub to see every official branch and the complete lesson sequence for this content area.

Inspection and Survey Red Flags questions

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Last reviewed August 2, 2026. Editorial standards.

Is Inspection and Survey Red Flags on the Georgia real estate exam?

Yes. It belongs to PSI's Property Disclosures content area, which is 7% of the 100-question national portion. PSI publishes content-area weights, not a guaranteed question count for this individual lesson.

What is the main rule for Inspection and Survey Red Flags?

Describe the observation without diagnosing it, disclose as required, and refer the issue to the correct expert.

What Georgia-specific distinction should I remember?

Georgia licensees must exercise reasonable care and disclose required material facts, but they are not made inspectors, surveyors, engineers, or attorneys by their real estate license. Georgia caveat-buyer concepts do not protect affirmative misrepresentation or concealment.

How do I know I have mastered this lesson?

Explain the rule without notes, solve the worked example again with changed facts, answer all original questions correctly, explain every distractor, and repeat mixed practice on a later day.