Where this fits on the exam
| Official syllabus topic | Seller Property Disclosure |
|---|---|
| Official PSI area | Property Disclosures |
| Published area weight | 7% of the national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 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.
The lesson
Known condition disclosure
The seller answers based on actual knowledge and the form's questions. A seller should not guess, omit a known material condition, or describe a repair more broadly than the evidence supports.
Licensee responsibilities
A licensee must disclose material adverse facts required by law, avoid false statements, present the seller's information accurately, and recommend qualified inspection where appropriate.
Form limits
A disclosure statement is not an engineering report, title search, survey, environmental assessment, or guarantee that no hidden defect exists.
Special disclosure regimes
Lead-based paint, flood, association, environmental, and other subjects can have separate federal, state, local, contract, or lender requirements.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A seller knows the basement floods after heavy rain but checks 'no water intrusion' on a voluntary disclosure form.
Reason it through. The form does not shield a knowingly false material representation.
Answer. The condition and false answer create serious disclosure and misrepresentation risk and must be corrected before buyer reliance.
Common exam traps
- Calling a disclosure a warranty
- Assuming no universal form means no duty
- Telling the seller to omit known defects
- Using disclosure instead of inspection
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 1A buyer reads the seller's completed disclosure statement and wants to skip the home inspection because the form lists no problems. What should the buyer's agent explain?
- A. The form is a warranty that no defects exist
- B. The form reports the seller's knowledge, not an inspection
- C. The form is reliable once the listing agent signs it
- D. The form covers defects the seller did not know about
Show answer and explanation →
Answer: B. The form reports the seller's knowledge, not an inspection
A disclosure statement reports what the seller knows; it is not an inspection, a warranty or a guarantee against hidden defects. Treating the form as a warranty is the common misreading that leads buyers to skip due diligence.
- A. Incorrect. The form does not warrant that every hidden or unknown defect is absent.
- B. Correct. It reports the seller's known information and cannot replace a qualified inspection.
- C. Incorrect. A listing agent's signature does not turn the seller's report into a verified condition guarantee.
- D. Incorrect. A knowledge-based disclosure does not establish facts the seller does not know.
Question 2A seller knows the septic system backed up twice last year and asks whether that must be mentioned, since Georgia has no single state-required disclosure form. What is correct?
- A. No form is required, so nothing must be disclosed
- B. It is up to the buyer's inspector to find it
- C. Known material defects cannot be concealed either way
- D. It must be disclosed only if a buyer asks directly
Show answer and explanation →
Answer: C. Known material defects cannot be concealed either way
Georgia has no universal state-mandated seller disclosure form, but fraud principles and brokerage duties still bar concealing known material adverse facts, and a seller's broker must disclose known adverse physical conditions a diligent inspection would not reveal. The direct-question option confuses this with Georgia's separate rule for deaths and crimes on a property.
- A. Incorrect. Absence of a required universal form does not authorize hiding known material defects.
- B. Incorrect. A buyer's inspection does not excuse concealment of a known recurring septic issue.
- C. Correct. The seller and broker cannot use the lack of a required form to conceal known material problems.
- D. Incorrect. The special direct-inquiry rule for stigma does not eliminate duties concerning material physical defects.
Question 3A house built in 1965 is being sold. Which subject has a specific federal disclosure process that must be completed before the buyer is obligated under the contract?
- A. Lead-based paint
- B. Radon
- C. Termite history
- D. Flood zone status
Show answer and explanation →
Answer: A. Lead-based paint
Federal law requires the lead pamphlet, disclosure of known lead information and records, and an evaluation opportunity for most pre-1978 housing before the buyer is bound. Radon is a common guess, but there is no parallel federal resale disclosure rule for it.
- A. Correct. Most pre-1978 housing sales have a required federal lead disclosure process before the buyer is bound.
- B. Incorrect. Radon can require investigation and disclosure of known issues, but it has no equivalent blanket federal resale process.
- C. Incorrect. Termite history may be material, but it is not the federal process triggered by a 1965 construction date.
- D. Incorrect. Flood information can be material, but the pre-1978 date specifically identifies the lead-paint requirement.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Seller Property Disclosure in one clear answer without notes.
- Separate Known condition disclosure from Licensee responsibilities using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Inspection and Survey Red Flags. Inspection and Survey Red Flags picks up where the disclosure form stops, showing how to describe a stain, crack or encroachment without diagnosing it and which expert should evaluate it.
Return to the Property Disclosures hub to see every official branch and the complete lesson sequence for this content area.