Finance and closing is section III of the Georgia Supplement, 15 of the 52 state items. It is the most exact section: Georgia’s security deed, the real estate transfer tax on the deed, the intangible recording tax on the loan, and what happens in what order on closing day. Mortgage types and federal lending law belong to the national portion.
Updated Oct 24, 2026 · Not affiliated with any state commission or test provider.
15items on the exam
52Georgia Supplement items
2subtopics
15questions on this page
What the section covers
PSI’s outline for section III has two subtopics, finance and closing procedures. In practice that means:
The security deed, the lender’s title and the power of sale
Recording: who records what, and in which order
The real estate transfer tax and Form PT-61
The intangible recording tax on long-term notes
The salesperson’s role at closing, and where it stops
Two closing taxes
Real estate transfer tax. Paid before a deed can be recorded, at $1 for the first $1,000 of the sale price or fraction of it and 10 cents for each additional $100 or fraction. The seller is liable, though the contract often shifts it to the buyer. The Form PT-61 declaration is filed online before recording. Source: Georgia Department of Revenue.
Intangible recording tax. Due on a long-term note secured by Georgia real estate, at $1.50 for each $500 of the note’s face amount or fraction of it, capped at $25,000 per note. The lender records the security instrument within 90 days of its date and pays the tax at recording, and may pass the cost on to the borrower. Source: Georgia Department of Revenue.
Both taxes on one sale
A house sells for $285,500, and the buyer finances $228,400 with a long-term note. The fractions are where the rounding goes:
Calculation steps
1Transfer tax, first $1,000$1.00
2Next $284,500 = 2,845 units of $1002,845 × $0.10$284.50
3Transfer tax on the deed$1.00 + $284.50$285.50
4Note $228,400 ÷ $500 = 456.8, a fraction counts as a whole unit457 units457
5Intangible tax on the security deed457 × $1.50$685.50
=Closing taxes on this sale$285.50 + $685.50$971.00
Question 1 of 15 · Finance and closing in Georgia · 15 items
At a Georgia closing, the title examination reveals a previously undiscovered lien against the property. What is the salesperson's most appropriate action?
Answer and explanations
Incorrect: Negotiating a lien release for a party is outside the salesperson's role and can amount to giving legal advice.
Correct: Clearing a title defect is legal work; at a Georgia closing the closing attorney handles payoff or curative steps with the parties.
Incorrect: Whether and how the lien is paid is the parties' decision with the closing attorney, not a salesperson's directive.
Incorrect: Closing over an unresolved lien leaves the buyer with encumbered title.
Incorrect: A title commitment typically lists a known lien as an exception to be paid or cleared; the policy will not quietly cover it.
Question 2 of 15 · Finance and closing in Georgia · 15 items
A residential property sells for $350,000 in Georgia. Using the statutory real estate transfer tax rate of $1.00 for the first $1,000 and $0.10 for each additional $100 or fraction thereof, what is the total transfer tax?
Answer and explanations
Incorrect: This uses $1 per $100 instead of 10 cents per $100.
Correct: One dollar for the first $1,000 plus 10 cents on each of the remaining 3,490 hundreds gives $350, the same as $1 per $1,000 (O.C.G.A. 48-6-1).
Incorrect: This doubles the tax, as if the rate were 20 cents per $100.
Incorrect: This halves the correct figure, as if the rate were 5 cents per $100.
Incorrect: This applies $1.50 per $1,000, mixing in the intangible tax's $1.50 figure.
Calculation steps
1Transfer tax under O.C.G.A. 48-6-1. First $1,0001.00
2Remaining value350,000 - 1,000349,000
3$100 units349,000 / 1003,490
4Tax on the units3,490 x 0.10349.00
5Total1.00 + 349.00350.00
=Answer350
Question 3 of 15 · Finance and closing in Georgia · 15 items
A buyer gives a long-term note secured by Georgia real estate. The face amount of the note is $200,000. Applying the intangible recording tax of $1.50 per $500 or fraction thereof, what is the tax due?
Answer and explanations
Correct: $200,000 divided by $500 is 400 units, and 400 times $1.50 is $600 (O.C.G.A. 48-6-61).
Incorrect: This stops at the number of $500 units and never applies the $1.50 rate.
Incorrect: This uses a rate of about $1.875 per $500; the statute sets $1.50.
Incorrect: This applies $1.50 per $500 to $300,000, not to the $200,000 face amount.
Incorrect: This applies $1.50 per $1,000, half the statutory rate.
Calculation steps
1Intangible recording tax under O.C.G.A. 48-6-61. $500 units in the note200,000 / 500400
2Tax400 x 1.50600
=Answer600
Question 4 of 15 · Finance and closing in Georgia · 15 items
A Georgia purchase contract says nothing about the real estate transfer tax. Who customarily pays it at closing?
Answer and explanations
Incorrect: The buyer pays it only if the contract says so; the contract here is silent.
Incorrect: Splitting the transfer tax is a local custom in some states, not the Georgia practice.
Correct: By long Georgia custom, and in the standard Georgia purchase forms, the seller as grantor pays the transfer tax on the deed unless the contract shifts it.
Incorrect: The closing attorney collects and remits the tax at recording but pays it out of a party's funds, not personally.
Incorrect: The lender's charge is the intangible tax on its security deed, not the transfer tax on the deed.
Question 5 of 15 · Finance and closing in Georgia · 15 items
A Georgia salesperson is preparing for a closing. Which sequence is correct regarding the real estate transfer tax and recording of the deed?
Answer and explanations
Incorrect: Filing the form does not replace payment; both are required before recording.
Incorrect: Payment must come before recording, not after.
Correct: O.C.G.A. 48-6-4: the deed may not be recorded until the tax is paid and the consideration has been shown on the Department of Revenue's form (the PT-61).
Incorrect: The form is a prerequisite to recording, including when an exemption is claimed.
Incorrect: This reverses the statutory order; the clerk will not record before the tax and form.
Question 6 of 15 · Finance and closing in Georgia · 15 items
An uncle conveys a property to his nephew as a gift, with no consideration paid. Which statement is correct about Georgia real estate transfer tax in this transaction?
Answer and explanations
Incorrect: No party owes the tax, because the gift deed is exempt.
Correct: O.C.G.A. 48-6-2(a)(2) exempts any deed of gift from the transfer tax.
Incorrect: Assessed value is not the base, and the exemption makes the question of a base moot.
Incorrect: O.C.G.A. 48-6-2(b) still requires the form to claim the exemption.
Incorrect: Value matters only for a taxable conveyance; a gift deed is exempt outright.
Question 7 of 15 · Finance and closing in Georgia · 15 items
Under a Georgia security deed, which party holds legal title to the property during the term of the loan?
Answer and explanations
Incorrect: Nothing is held in escrow; the security deed conveys title to the lender.
Correct: O.C.G.A. 44-14-60: a deed to secure debt passes title to the grantee (the lender) until the debt is paid; the borrower keeps possession and the right to reconveyance.
Incorrect: Georgia does not use a trustee under a deed of trust; the security deed runs directly to the lender.
Incorrect: That is the lien-theory model; Georgia security deeds pass legal title to the lender.
Incorrect: Legal title is in the lender; the borrower holds equitable rights, not shared legal title.
Question 8 of 15 · Finance and closing in Georgia · 15 items
Lender A extended a loan and obtained a security deed but failed to record it. The owner later sold the property to Buyer B, a bona fide purchaser for value, who recorded the deed without knowledge of Lender A’s interest. Under Georgia recording laws, which party’s interest has priority?
Answer and explanations
Correct: Under O.C.G.A. 44-2-2(b), an unrecorded instrument takes effect against a good-faith purchaser without notice only from its filing, so Buyer B, who recorded first, wins.
Incorrect: Priority is not shared; one interest ranks ahead of the other.
Incorrect: Being first in time loses to a later good-faith purchaser who records first.
Incorrect: The deed stays valid between the parties; it simply loses priority to Buyer B.
Incorrect: The recording statute does not excuse an unintentional failure to record against a buyer without notice.
Question 9 of 15 · Finance and closing in Georgia · 15 items
Which statement best describes the responsibility of the closing attorney in a Georgia residential real estate transaction?
Answer and explanations
Incorrect: Notarizing is a small part of the job; the attorney also handles title, documents, recording and disbursement.
Correct: In Georgia a closing is conducted by an attorney, who runs the closing and prepares or supervises the deed, security deed and closing statement.
Incorrect: Georgia closings are run by an attorney, who often also acts as the title insurer's agent; a title agent does not run the closing on its own.
Incorrect: The attorney does not act as every party's adviser; parties wanting legal advice get their own counsel.
Incorrect: Preparing a deed for others is the practice of law; brokers do not draft it.
Question 10 of 15 · Finance and closing in Georgia · 15 items
In a typical Georgia purchase financed with a new long-term loan, who ends up bearing the cost of the intangible recording tax?
Answer and explanations
Incorrect: The seller has no loan in the buyer's financing; the seller's tax is the transfer tax.
Incorrect: The attorney collects and remits the tax from closing funds; it is not the attorney's own cost.
Incorrect: The lender is the party the clerk collects from, but it passes the amount on to the borrower as the statute allows.
Correct: O.C.G.A. 48-6-61 collects the tax from the note holder but lets the holder pass it on to the borrower, which lenders routinely do, so the buyer bears it at closing.
Incorrect: There is no custom of splitting this tax; it follows the loan, which is the buyer's.
Question 11 of 15 · Finance and closing in Georgia · 15 items
A security deed was executed on May 10. To meet the 90-day requirement for intangible recording tax collection, by what date must it be recorded?
Answer and explanations
Correct: O.C.G.A. 48-6-61 gives 90 days from the date of the instrument; not counting May 10, day 90 is August 8.
Incorrect: This treats 90 days as three calendar months, which overcounts by two days.
Incorrect: That is 30 days, a third of the period.
Incorrect: Two months is about 61 days, short of the 90 the statute allows.
Incorrect: That is about 120 days, past the deadline.
Calculation steps
190 days from May 10 (O.C.G.A. 1-3-1(d)(3): the first day is not counted). May 11-3121 days
2June21 + 3051 days
3July51 + 3182 days
4August 1-882 + 890 days
=AnswerAugust 8
Question 12 of 15 · Finance and closing in Georgia · 15 items
The intangible recording tax on a long-term note secured by Georgia real estate is based on:
Answer and explanations
Incorrect: Ad valorem taxes are a separate tax; they are not the base of the recording tax.
Incorrect: LTV is an underwriting ratio; the statute measures the note's face amount.
Correct: O.C.G.A. 48-6-61 sets the tax at $1.50 for each $500 or fraction of the face amount of the note secured.
Incorrect: The sale price is the base of the transfer tax; the intangible tax uses the note.
Incorrect: The property's value matters for the transfer tax on the deed, not for the tax on the note.
Question 13 of 15 · Finance and closing in Georgia · 15 items
During a Georgia residential closing, which of the following is primarily the lender's responsibility?
Answer and explanations
Incorrect: Title examination and the commitment come from the closing attorney or title agent.
Incorrect: Explaining a legal instrument is legal work done by an attorney, not the lender's role.
Incorrect: Recording is handled by the closing attorney after closing.
Correct: The lender's job at closing is to deliver its loan package and closing instructions and to fund the loan.
Incorrect: In Georgia the closing attorney prepares the settlement statement.
Question 14 of 15 · Finance and closing in Georgia · 15 items
A Georgia purchase contract states that the buyer will pay the real estate transfer tax, a cost the seller customarily pays. At closing, how should the transfer tax be shown on the settlement statement?
Answer and explanations
Incorrect: A credit reduces what the buyer brings; paying a cost increases it.
Incorrect: The contract makes it the buyer's cost, and the tax is paid at recording through closing.
Correct: A charge the contract assigns to the buyer is a debit to the buyer, whatever the custom would otherwise be.
Incorrect: A seller credit would give the seller money for a tax nobody charged the seller.
Incorrect: That is the entry when the seller pays, which the contract changed.
Question 15 of 15 · Finance and closing in Georgia · 15 items
A lender records a security deed for a long-term note but never pays the Georgia intangible recording tax. Years later the borrower defaults. Which statement is correct?
Answer and explanations
Incorrect: The tax has to be paid before collection; foreclosing first is exactly what the bar prevents.
Incorrect: The statute says failure to pay does not discharge the debt; the deed still secures it.
Incorrect: Once the tax, interest and penalty are paid, the instrument continues to secure the debt with its place intact.
Correct: O.C.G.A. 48-6-77(a): unpaid intangible tax bars collection, foreclosure and any power of sale until the holder pays the tax plus interest and a 50 percent penalty; then collection proceeds as if no bar existed.
Incorrect: The bar is lifted by the holder's payment; the statute does not shift the unpaid tax to the borrower at this stage.
Answer every question to see your score
Explain it, or send it to the attorney?
Expect questions on what a salesperson should do when a buyer wants a legal document interpreted or a title problem turns up. The licensee’s job is to get the question to the person who can answer it, not to give legal advice; the option where the agent explains the security deed’s clauses is the trap.
Where the national material takes over
Loan types, points, PMI, RESPA, TILA and the TRID timeline are tested in the national portion: financing. Deeds, recording and title insurance in general: transfer of title.
$1 for the first $1,000 of the sale price and 10 cents for each additional $100, with any fraction rounded up to a full unit. On a $285,500 sale that is $285.50.
Who pays the intangible recording tax in Georgia?
The lender, as holder of the note, pays it when the security instrument is recorded, and may pass the amount on to the borrower. The Department of Revenue says it cannot be treated as a finance charge.
How many Georgia exam questions are on finance and closing?