The five traps
National instinct
The answer that is correct in most states is wrong in Georgia. These are the questions a national question bank actively trains you to fail.
ContractsIn a Georgia purchase agreement, the due diligence period primarily gives the buyer the right to:
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Answer: Terminate for any reason within the negotiated window
The Georgia due diligence period is a negotiated window in which the buyer may walk away for any reason at all. It does not obligate the seller to repair anything.
The Rule
Due diligence buys the right to leave, not the right to demand repairs.
AgencyAn agent shows homes to a buyer for a month. No agreement is signed. Under BRRETA, the buyer is:
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Answer: A customer owed honesty and material-fact disclosure
BRRETA ties the client relationship to a written brokerage engagement. Time and effort do not create one, however involved the agent has been.
The Rule
No written engagement, no client.
AgencyUnder BRRETA, the brokerage engagement is between the client and:
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Answer: The broker
The engagement runs to the broker. That is why designated agency works, and why an agent moving firms does not take the client relationship with them automatically.
The Rule
The engagement belongs to the broker, not the agent.
Real Estate Practice in GeorgiaUnder BRRETA, a customer is owed:
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Answer: Honesty and disclosure of material facts
A customer has no brokerage engagement, so they receive honesty and material-fact disclosure. Loyalty, confidentiality and obedience belong to clients.
The Rule
Customers get honesty and material facts. Clients get everything else.
Real Estate Practice in GeorgiaA Georgia licensee explains to a buyer what a contract clause legally means for their rights. This risks:
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Answer: The unauthorised practice of law
Georgia closings are conducted by attorneys, and interpreting legal effect is lawyering. Filling blanks on approved forms is permitted, advising on legal consequence is not.
The Rule
Fill in the blanks, do not explain the law.
Real Estate Practice in GeorgiaWhich Georgia forms are most commonly used in residential transactions?
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Answer: GAR forms, which the state does not promulgate
Georgia does not promulgate contract forms. GAR forms are the widely used industry standard, which differs from states where the regulator issues mandatory forms.
The Rule
Georgia does not promulgate forms. GAR forms are industry standard.
Finance and ClosingGeorgia secures real estate loans using a:
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Answer: Security deed
Georgia is a title theory state and uses a security deed, sometimes called a deed to secure debt. Legal title passes to the lender until the debt is repaid.
The Rule
Georgia uses a security deed, not a mortgage.
Finance and ClosingWho must conduct a real estate closing in Georgia?
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Answer: A licensed Georgia attorney
Georgia is an attorney-closing state. This also constrains what a licensee may say about legal effect without practising law.
The Rule
Georgia closings are conducted by attorneys.
Finance and ClosingAfter a non-judicial foreclosure sale in Georgia, the borrower's statutory right of redemption is:
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Answer: There is none
Georgia provides no statutory right of redemption after a non-judicial foreclosure sale. Candidates trained on states with redemption periods pick a number here.
The Rule
No statutory redemption after a Georgia foreclosure sale.
EXCEPT and NOT
The stem inverts the question. You know the material, you answer the question you expected, and you lose the mark.
ContractsAll of the following are required for a valid real estate contract EXCEPT:
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Answer: Recording at the courthouse
Recording protects an interest against third parties. It has nothing to do with whether the contract is valid between the two people who signed it.
The Rule
Recording gives notice to the world. It does not create validity.
Practice of Real EstateAll of the following are prohibited under the federal Fair Housing Act EXCEPT:
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Answer: Declining an applicant with a poor payment history
Creditworthiness is not a protected class. Declining someone for a documented payment history applied consistently to everyone is lawful.
The Rule
Fair housing protects classes of people, not every applicant from every refusal.
Property DisclosuresWhich is generally NOT considered a material fact requiring disclosure?
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Answer: A death that occurred in the home years ago
Material facts concern the physical condition and legal status of the property. Stigmatising events are treated differently and are generally not required disclosures.
The Rule
Material facts are about the property, not its history of events.
State Laws and RulesAll of the following are within GREC's authority EXCEPT:
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Answer: Setting the commission rate licensees may charge
Commission is always negotiable between a broker and a client. A regulator setting rates would be price fixing, which is exactly what antitrust law forbids.
The Rule
GREC regulates licensees. It never sets commission rates.
Wrong setup
The arithmetic is easy. The question is testing whether you pick the right formula before you touch the calculator.
Property OwnershipA parcel measures 660 feet by 660 feet. How many acres is it?
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Answer: 10 acres
Multiply to get square footage, then divide by 43,560 square feet per acre.
The Rule
An acre is 43,560 square feet. Commit that number to memory.
FinancingA buyer purchases at $250,000 with $50,000 down. What is the loan-to-value ratio?
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Answer: 80%
LTV is the loan divided by the value, not the down payment divided by the price.
The Rule
LTV is loan divided by value. The down payment is what is left over.
FinancingOne discount point on a $180,000 loan costs the borrower:
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Answer: $1,800
A point is one percent of the loan amount, paid up front to reduce the rate.
The Rule
A point is 1% of the loan, never 1% of the price.
Valuation and Market AnalysisA property generates $48,000 net operating income and sells for $600,000. What is the capitalisation rate?
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Answer: 8%
Cap rate is net operating income divided by value. Use NOI, never gross rent.
The Rule
Cap rate is NOI divided by value.
Valuation and Market AnalysisA comparable sold for $310,000 and has an extra bathroom worth $8,000 that the subject lacks. The adjusted value of the comparable is:
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Answer: $302,000
Adjust the comparable, never the subject. The comparable is superior, so subtract the value of the superiority.
The Rule
Adjust the comparable. Better comparable means subtract.
Real Estate CalculationsA seller wants $280,000 net after paying a 6% commission. What must the property sell for, to the nearest dollar?
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Answer: $297,872
Adding 6% to the net is the classic error. The commission is a percentage of the sale price, so divide the net by the percentage the seller keeps.
The Rule
Net to seller means divide by what the seller keeps, never multiply the net.
Real Estate CalculationsAnnual property taxes are $3,600, paid in arrears. Closing is on 31 March. Using a 360-day year, what does the seller owe the buyer?
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Answer: $900
The seller owned the property for three months of the tax year and has not paid, so the seller credits the buyer for that period.
The Rule
Taxes in arrears means the seller credits the buyer for time already owned.
Finance and ClosingA Georgia home sells for $285,000. At $1.00 per $1,000 of consideration, the state transfer tax is:
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Answer: $285.00
Divide the price by 1,000 and multiply by one dollar. Do not confuse this with the intangible recording tax, which applies to the loan amount.
The Rule
Transfer tax follows the price. Intangible tax follows the loan.
Finance and ClosingA Georgia property has a fair market value of $300,000. What is its assessed value for property tax?
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Answer: $120,000
Georgia assesses at 40% of fair market value before the millage rate is applied. Miss the ratio and every downstream figure is wrong.
The Rule
Georgia assesses at 40% of fair market value.
Close distractor
Two options are defensible until you read the stem properly. One word decides it.
ContractsA seller accepts a buyer's offer but changes the closing date before signing and returns it. What has the seller created?
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Answer: A counteroffer
Any change to the terms of an offer rejects the original and creates a counteroffer. The buyer is now free to accept, reject or counter again, and the original offer is dead.
The Rule
Change any term and you have rejected the offer and made a new one.
ContractsA contract is signed by a person who has been legally declared mentally incompetent. The contract is:
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Answer: Void
A person adjudicated incompetent has no legal capacity, so the agreement never became a contract. This differs from a contract with a minor, which is voidable by the minor rather than void from the start.
The Rule
Adjudicated incompetent means void. A minor means voidable.
ContractsA buyer assigns their purchase contract to a third party. Absent a clause forbidding it, the assignment:
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Answer: Is generally permitted, and the original buyer stays liable unless released
Contracts are generally assignable unless they say otherwise. Assignment moves the benefit, but the original party stays on the hook unless the seller releases them by novation.
The Rule
Assignment moves the benefit. Only novation moves the liability.
AgencyA broker represents both buyer and seller in one transaction. In Georgia this is lawful only when:
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Answer: All clients give written informed consent
Georgia permits dual agency, but the consent must be both written and informed. Oral agreement does not satisfy the requirement.
The Rule
Dual agency needs written informed consent from every client.
AgencyA seller's agent learns their client will accept far less than the asking price. An unrepresented buyer asks about it. The agent must:
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Answer: Decline, because that is confidential client information
Honesty to a customer means not lying about material facts regarding the property. It never requires surrendering a client's negotiating position.
The Rule
Honesty to a customer never overrides confidentiality to a client.
AgencyAn agent's engagement with a seller expires. Months later, may the agent reveal what they learned about the seller's finances?
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Answer: No, confidentiality survives the engagement
Confidentiality does not expire when the engagement does. Information learned inside the relationship stays protected afterwards.
The Rule
Confidentiality outlives the engagement.
Practice of Real EstateA landlord tells an agent not to show a unit to families with children. The agent should:
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Answer: Refuse, because familial status is a protected class
Familial status is protected under the federal Fair Housing Act. A client instruction to discriminate is not a lawful instruction, so the duty of obedience does not reach it.
The Rule
Obedience covers lawful instructions only.
Property OwnershipAn owner holds property for life, and it passes to their child on death. The child holds:
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Answer: A remainder interest
A remainder goes to a third party named in the grant. A reversion returns the property to the original grantor instead.
The Rule
To a third party is a remainder. Back to the grantor is a reversion.
FinancingWhich loan type is insured by the federal government to protect the lender against borrower default?
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Answer: FHA
FHA insures the loan. VA guarantees a portion of it. The distinction between insured and guaranteed is tested directly.
The Rule
FHA insures, VA guarantees, conventional does neither.
Real Estate CalculationsA home sells for $340,000 with a 6% total commission split evenly between two brokerages. The listing brokerage receives:
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Answer: $10,200
Work out the total commission first, then apply the split. Answering with the total is the trap.
The Rule
Total commission first, then split. Read which party the question wants.
Property DisclosuresA radon test shows an elevated reading. The seller instructs the agent to say nothing. The agent should:
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Answer: Disclose the material fact
A known material defect must be disclosed. An instruction to conceal one is not lawful, so the duty of obedience does not apply to it.
The Rule
Known material defects get disclosed, whatever the client wants.
Land Use Controls and RegulationsA property use that was lawful before a zoning change and is allowed to continue is:
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Answer: A nonconforming use
A nonconforming use is grandfathered because it predates the ordinance. A variance is permission granted after the fact for a hardship.
The Rule
Grandfathered means nonconforming. Permission granted later is a variance.
State Laws and RulesA candidate passes the exam and applies for a licence four months later. The application fee will be:
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Answer: Twice the standard fee
Apply within three months of the examination date and you pay the standard fee. After three months the fee doubles, and after twelve months the result expires entirely.
The Rule
Three months for the standard fee, twelve months before the result dies.
State Laws and RulesThe Georgia Real Estate Education, Research and Recovery Fund primarily exists to:
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Answer: Compensate members of the public harmed by licensee misconduct
The fund reimburses members of the public who obtain a judgment against a licensee and cannot collect. It is not insurance for the licensee, who remains liable to the fund.
The Rule
The Recovery Fund protects the public, not the licensee.
Real Estate Practice in GeorgiaA licensee accepts a referral fee from a mortgage broker for sending clients their way. This is:
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Answer: A likely RESPA violation
RESPA prohibits kickbacks for referrals of settlement services. Disclosure does not cure a payment for a referral where no actual service was performed.
The Rule
No fee for a referral of settlement services. Disclosure does not save it.
Extra information
The stem hands you a number you do not need. Using it produces a wrong answer that appears in the options.
Finance and ClosingA buyer purchases at $400,000 with a $320,000 loan. The intangible recording tax is calculated on:
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Answer: $320,000
The intangible recording tax applies to the loan amount. The transfer tax applies to the sale price. A stem giving you both numbers is testing exactly this.
The Rule
Intangible tax on the loan, transfer tax on the price.
How to train against them
Slow down on the stem, not the options. Four of the five traps are set before you reach the answers: an inverted question, a number you do not need, or a scenario whose Georgia rule differs from the national one. Reading the stem twice costs ten seconds and prevents most of them.
Drill the underlying material at practice by topic, and read the Georgia versus national ledger for the national-instinct trap specifically.