What is the exam-ready answer?
| Roadmap lesson | 100 of 500 |
|---|---|
| Official syllabus topic | Material Facts, Defects, Misrepresentation, and Fraud |
| Official PSI area | Property Disclosures |
| Published area weight | 7% of the 100-question national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Last verified | August 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.
Materiality and knowledge
Disclosure obligations depend on the fact, the speaker's actual or required knowledge, the relationship, and law. A licensee should verify statements within competence and identify their source.
Patent and latent
A patent condition is discoverable by reasonable observation; a latent condition is hidden. The label does not automatically resolve whether someone knew, disclosed, inspected, or relied.
Misrepresentation and concealment
False statements can be intentional, negligent, or innocent with different remedies. Active concealment, half-truths, and silence when a duty exists can create liability.
Puffing and as is
Puffing is subjective sales opinion, but specific factual claims are not protected by enthusiastic wording. As-is language does not erase required disclosure or excuse false facts.
Stigma and nonphysical facts
A death, crime, disease history, or other nonphysical association may be treated differently from a defect. State law can limit affirmative disclosure, protect privacy, or require a truthful response to a direct question, so never import another state's rule.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A seller paints over active water damage immediately before showings and says the basement has always been dry.
Reason it through. The conduct hides a material condition and the factual statement conflicts with known reality. An as-is clause would not authorize that deception.
Answer. The facts support concealment and misrepresentation concerns, requiring correction and legal guidance.
Common exam traps
- Calling specific facts puffing
- Assuming latent means unknown
- Treating as is as a fraud waiver
- Repeating unverified claims as fact
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 1What is a latent defect?
- A. A hidden defect not readily observable
- B. Any cosmetic flaw
- C. A disclosed easement
- D. A public tax rate
Show answer and explanation →
Answer: A. A hidden defect not readily observable
Latent describes a condition that is not reasonably apparent through ordinary observation.
Question 2Does an as-is clause permit intentional concealment?
- A. Yes
- B. No
- C. Only in cash sales
- D. Only for investors
Show answer and explanation →
Answer: B. No
As-is allocation does not authorize fraud or negate every mandatory disclosure duty.
Question 3Which statement is most likely puffing?
- A. The roof was replaced in 2025
- B. This is the most charming kitchen in town
- C. The parcel is exactly two acres
- D. The basement never flooded
Show answer and explanation →
Answer: B. This is the most charming kitchen in town
Charm is subjective opinion; the other statements assert verifiable facts.
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 Tenant Procurement, Screening, and Qualification. Continue to roadmap lesson 101 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.