Georgia real estate practice test, every option explained

Incorrect: The statute requires the disclosure in writing; telling clients orally does not satisfy it.

Correct: O.C.G.A. 43-40-25(b)(6)(C) requires written disclosure to the principal of anything of value received for referring a service or product in a real estate transaction.

Incorrect: The duty applies to anything of value, with no dollar or percentage threshold.

Incorrect: No exemption exists for licensed providers; the mover's licensing is irrelevant.

Incorrect: Custom is never a defense to a listed unfair practice.

Incorrect: The statute reaches the qualifying broker precisely because the judgment is against the firm.

Correct: O.C.G.A. 43-40-22(d)(6): when the Fund pays on a firm's account, the qualifying broker's license is also automatically revoked on the court's payment order.

Incorrect: No monitoring alternative exists; revocation is automatic.

Incorrect: Revocation under the Fund statute is automatic on the court order, with no separate hearing.

Incorrect: The statute revokes rather than suspends; repayment with interest only restores eligibility for a new license.

Incorrect: Holding an inactive license is not the same as being licensed to act; activity requires an active license with a broker.

Incorrect: No price threshold allows brokerage on an inactive license; the figure is invented.

Correct: An inactive license does not authorize brokerage, and O.C.G.A. 43-40-25(b)(8) also bars accepting a commission from anyone but the broker holding the license.

Incorrect: A successful closing does not legalize unlicensed activity or a commission paid outside the broker.

Incorrect: Whether the friend had an agreement elsewhere has no bearing on this licensee's lack of an active license.

Incorrect: Social media is expressly covered as advertising media; it is not banned.

Correct: Rule 520-1-.09(7) requires the firm name as registered and its phone number in every ad, at least as prominent as any agent or team name.

Incorrect: A disclaimer does not replace the required firm name and phone number.

Incorrect: The rule requires the firm's name and phone number, not the salesperson's license number.

Incorrect: Teams can advertise; the firm name simply has to be equal or greater in size and prominence.

Incorrect: Five years is more than the Commission rule requires; a firm can keep files longer by choice, but the minimum is three.

Incorrect: Two years is short of the three-year retention period.

Incorrect: Tax-record guidance is a different rule; the Commission period is three years.

Incorrect: One year is far short of the three-year retention period.

Correct: O.C.G.A. 43-40-25(b)(27) and Rule 520-1-.10(4) require keeping transaction records, including trust records, for three years.

Correct: Rule 520-1-.06(4)(a): a licensee may not buy property listed with her firm unless she clearly discloses her position as a buyer to the seller and puts a clause to that effect in the contract.

Incorrect: The duty to disclose does not depend on being paid; she was the buyer.

Incorrect: O.C.G.A. 43-40-25(d) lets the Commission sanction a licensee who acts as a principal, and the rule speaks to exactly that case.

Incorrect: The rule binds any licensee buying a listing of her own firm, not only the listing agent.

Incorrect: The seller's reliance is not an element; the disclosure itself is required.

Incorrect: Judicial review is available once administrative remedies are exhausted.

Incorrect: Review starts in superior court, not in the Court of Appeals.

Incorrect: Reconsideration is not a prerequisite to review, and the 15-day period is invented.

Correct: O.C.G.A. 43-40-26(c) sends initial judicial review of a Commission final decision to the superior court of its county of domicile, and the Georgia APA allows 30 days from service of the decision to petition.

Incorrect: A license sanction is reviewed in state superior court under the APA.

Incorrect: The statute guarantees the opportunity for a contested-case hearing, not just an informal meeting.

Correct: O.C.G.A. 43-40-26(a): before revoking or suspending a license the Commission must provide an opportunity for a hearing under the Georgia APA.

Incorrect: A complaint is an allegation; revocation follows a hearing or the licensee's waiver of one.

Incorrect: Discipline does not wait for, or depend on, a private settlement.

Incorrect: Summary suspension needs a finding that public safety or welfare imperatively requires it, not mere probable cause.

Incorrect: The client's civil remedy does not stop the Commission from disciplining the license.

Incorrect: Automatic revocation follows a court order paying from the Fund, not mere notice of a judgment; other discipline needs a hearing opportunity.

Correct: The judgment compensates the client, and the Fund claim runs through the court under O.C.G.A. 43-40-22(d); discipline is a separate license proceeding under 43-40-25 with its own hearing.

Incorrect: A money award is not a license sanction; the Commission chooses sanctions from the list in 43-40-25(a).

Incorrect: A Fund claim needs a final judgment and collection efforts, not a finished disciplinary case.

Incorrect: A count of complaints is not the test; the agency must find an imperative public-welfare need.

Incorrect: An allegation alone cannot support summary suspension without the emergency finding.

Incorrect: Emergency suspension is the exception; the normal path is notice and a hearing.

Correct: Under the Georgia APA (O.C.G.A. 50-13-18), a license may be summarily suspended only when the agency finds that public health, safety or welfare imperatively requires emergency action.

Incorrect: A past judgment does not mandate emergency action; nothing makes it automatic.

Incorrect: A withdrawal does not end the Commission's power to pursue a violation it has evidence of.

Incorrect: The license law has no mandatory mediation step in disciplinary cases.

Correct: A consent order settles a contested case on agreed terms, so the licensee resolves it without a formal hearing.

Incorrect: Asking for a formal hearing is the opposite of avoiding one.

Incorrect: Fines come through a citation the licensee can contest or through a sanction order; none is automatic.

Incorrect: Collecting assessments for others is brokerage, but the association's own full-time employee is exempt.

Correct: O.C.G.A. 43-40-29(a)(8.1) exempts a person employed full time by a community association to provide its management services.

Incorrect: Supervision is not the test; the exemption rests on full-time employment by the association.

Incorrect: No unit-count threshold exists; the figure is invented.

Incorrect: Nonprofit status is not the basis of the exemption; an outside paid manager of a nonprofit association still needs a license.

Incorrect: A bill sent afterward cannot add a term the signed agreement lacks.

Incorrect: Market custom cannot supply the written compensation term.

Correct: O.C.G.A. 10-6A-3(4) defines a brokerage engagement as a written contract in which the client promises compensation or agrees the broker may be paid by another; an agreement silent on pay is not one.

Incorrect: A writing creates a client relationship only if it is a brokerage engagement, and this one lacks the compensation term.

Incorrect: A brokerage engagement is a written contract; an oral side promise does not complete it.

Incorrect: The disclosure must be a written statement to the buyer of whom the firm represents and who pays it; a sign is not that.

Correct: Rule 520-1-.06(4)(b) requires the written disclosure in a timely manner and in any event no later than when any party first makes an offer; giving it after the offer is late.

Incorrect: The rule caps the timing at the first offer, well before closing.

Incorrect: The listing agreement is between the firm and the seller; the buyer is owed a separate written disclosure.

Incorrect: Showing a property does not by itself trigger the deadline; the rule ties it to the first offer.

Incorrect: This applies $1 per $100, ten times the statutory rate.

Correct: One dollar for the first $1,000 plus 10 cents on 4,749 hundreds (the extra $1 counts as a full $100) gives $475.90.

Incorrect: This rounds the price up to the next whole $1,000 instead of the next $100.

Incorrect: This applies $1 per $1,000 to $475,000 and ignores the remaining $801.

Incorrect: This treats 474,801 as exactly 4,748 hundreds and drops the fractional $100 the statute taxes.

Incorrect: This applies $1.50 per $100 (2,751 units) instead of per $500.

Incorrect: This drops the fractional $500 unit that the extra dollar creates.

Incorrect: This applies $1.50 per $1,000 and drops the fractional unit.

Correct: $275,001 is 550 full $500 units plus a fraction, which counts as a 551st unit; 551 times $1.50 is $826.50.

Incorrect: This applies $3 per $500, double the rate.

Incorrect: The deadline moves only to the next Monday, not a day past it.

Correct: Day 90 after September 1 is Sunday, November 30, 2025; O.C.G.A. 1-3-1(d)(3) gives the party through the following Monday, December 1.

Incorrect: That is the 90th day, but it is a Sunday, so the deadline moves to Monday.

Incorrect: That is about 120 days, well past the deadline.

Incorrect: That is about 60 days, short of the 90-day period.

Correct: Unless the parties sign a separate occupancy or possession agreement, the standard Georgia purchase agreement transfers possession at closing.

Incorrect: Recording protects the buyer's title against third parties; it is not the possession trigger.

Incorrect: Moving out before closing does not give the buyer a right to occupy.

Incorrect: No midnight cut-off applies; possession passes at closing itself.

Incorrect: Funding is part of closing mechanics; possession follows the contract's closing term.

Incorrect: The buyer's reliance cannot supply the seller's signature the law requires.

Incorrect: Silence is not acceptance, and real estate sales need a signed writing in any case.

Incorrect: The missing signature is the seller's; a note from the buyer adds nothing.

Incorrect: Conduct can accept some kinds of offers, but a contract to buy land needs a signed writing from the seller.

Correct: A contract to sell land must be in writing and signed by the party to be charged (O.C.G.A. 13-5-30), so repairs alone cannot form one; the seller has to sign an acceptance and communicate it.

Incorrect: Letting the owner read it is still disclosing privileged content.

Incorrect: Calling it an association record ignores the privilege exception in the policy.

Incorrect: With the advice removed nothing privileged is left to share, and producing it still treats the letter as an inspectable record.

Correct: The association's own policy excludes privileged attorney-client records, and a legal opinion about pending litigation is exactly that.

Incorrect: Privilege belongs to the association, but an ad hoc board vote to release it is not what the records policy calls for, and it risks waiving the privilege.

Incorrect: A board vote cannot override how the reserves were funded and designated.

Correct: Reserves funded for a roof replacement are earmarked for that capital item; paying a routine operating bill from them diverts them.

Incorrect: Calling it a loan does not change the purpose of the funds, absent authority in the governing documents.

Incorrect: A cash shortfall calls for an operating fix (budget, assessment), not raiding reserves.

Incorrect: A landscaping bill is not a reserve expenditure in the first place.

Incorrect: The governing documents expressly allow no withholding over disputes.

Incorrect: Assessments are due on schedule; a suit comes only after nonpayment.

Correct: Assessments are a covenant obligation; disagreeing with a board decision does not suspend it when the documents allow no withholding.

Incorrect: Winning a fence dispute would not cancel the owner's assessment obligation.

Incorrect: Any suspension of voting rights for delinquency is the association's power under its documents and the law, not the manager's.

Incorrect: Waiting quietly leaves the seller uninformed about a failed deposit.

Incorrect: There is no money to return; the check never cleared.

Incorrect: The broker is not a party and cannot terminate; whether to terminate is the seller's call.

Correct: The contract stays binding; the broker tells the parties the check failed and asks the buyer to replace it, leaving any remedy to the seller under the contract.

Incorrect: Suing for breach is the seller's remedy, not the broker's.

Incorrect: The buyer's consent does not lift the statutory bar on dealing around the other broker.

Incorrect: The statute's only exception is an exclusive agreement providing that the buyer's broker will not negotiate; an informal waiver is not it.

Correct: O.C.G.A. 43-40-25(b)(14) bars negotiating directly with a buyer the licensee knows has an outstanding exclusive brokerage agreement with another broker (unless that agreement says the broker will not negotiate), and Rule 520-1-.10(1) routes the offer through the other licensee.

Incorrect: The listing agent does not represent the buyer, so no dual agency arose; the problem is bypassing the buyer's broker.

Incorrect: Who started the conversation does not matter; the bar applies once the agent knows of the exclusive agreement.

Incorrect: A loose railing is a real safety issue to fix soon, but an active electrical hazard is more urgent.

Incorrect: A drip causes slow, minor damage and can wait for routine scheduling.

Correct: A sparking outlet is a fire and shock hazard to life and property, so it comes ahead of every comfort or minor repair.

Incorrect: A failed fixture is an inconvenience, not a hazard.

Correct: A third failure in six months signals an underlying problem; inspecting the repair and keeping the history lets the manager decide on a lasting fix and protects the owner.

Incorrect: Selling is an extreme reaction to a repair the manager has not even diagnosed.

Incorrect: Closing it ignores the pattern that suggests the repair is not holding.

Incorrect: A repeated plumbing repair is maintenance, and nothing says insured damage has occurred.

Incorrect: The landlord stays responsible for repairs; refusing them would breach the lease and the law.

Correct: Comparable rents are adjusted for each difference: the pool supports a higher rent, while the pooled comp's high vacancy suggests its $1,400 is above what the market absorbs.

Incorrect: Vacancy is evidence of whether a rent level holds; ignoring it risks overpricing.

Incorrect: Averaging skips the adjustment for the features that differ.

Incorrect: Copying the pooled comp's rent ignores that it sits at 12 percent vacancy, well above the 7 percent market.

Incorrect: Ignoring the amenity undervalues the subject unit.

Incorrect: Oral permission plus an informal note is not a duly executed power of attorney.

Correct: Signing a deed for someone else takes written authority: an attorney in fact acts under a duly executed power of attorney to convey real estate (O.C.G.A. 43-40-29(a)(2)), and a land conveyance must be in writing.

Incorrect: A witness to the agent's note does not turn it into a power of attorney from the seller.

Incorrect: The listing broker has no more authority to sign for the seller than the agent does.

Incorrect: Only the seller can grant authority to sign for the seller; the buyer cannot supply it.

Incorrect: A financed offer is still an offer; its terms are for the seller to weigh.

Incorrect: Presenting every offer is a statutory duty, not something that waits for instructions.

Incorrect: Fear of confusion is no reason to keep an offer from the seller.

Incorrect: Choosing the 'best' offer is the seller's decision, not the broker's.

Correct: O.C.G.A. 10-6A-5(a)(2)(B) requires a seller's broker to timely present all offers to and from the seller.

Incorrect: Silence is not an affirmative statement; the second act is a failure to disclose.

Incorrect: Neither act concerns agency relationships; one is a false statement and the other an omission.

Incorrect: Commingling means mixing client money with the licensee's own; it has nothing to do with statements.

Correct: A known false statement is a substantial misrepresentation (O.C.G.A. 43-40-25(b)(21)); keeping quiet about a known latent defect breaches the disclosure duty in BRRETA 10-6A-5(b)(1).

Incorrect: The violations are complete when the false statement is made and the known defect is withheld.

Incorrect: An inspection contingency lets the buyer ask or terminate under its terms; it does not let the buyer impose a new price.

Correct: Once a contract is binding, changing its price takes a written amendment signed by both parties; a counteroffer answers an offer that has not yet been accepted.

Incorrect: There is no live offer to counter; the binding contract can only be changed by amendment.

Incorrect: Terminating is unnecessary to renegotiate; the parties can amend the existing contract.

Incorrect: A credit is another kind of change that also needs a signed amendment; it is not a way around one.

Incorrect: Inspections are meant to occur after contract; that is what the contingency period is for.

Incorrect: Financing is still pending, not denied, so the financing contingency gives no ground to terminate yet.

Correct: On Day 18 the inspection contingency is still open and the defects support terminating under it with timely notice.

Incorrect: Each contingency works on its own; the buyer need not wait for financing.

Incorrect: The contingency as described gives the buyer a right to terminate, not just a right to demand repairs.

Incorrect: This is 10 days at 5 percent; the loan rate is 6 percent and the seller owes 9 days.

Incorrect: This is 10 days at 5.5 percent, neither the loan's rate nor the seller's day count.

Incorrect: This is 9 days at 6.5 percent instead of the loan's 6 percent.

Correct: Interest runs from July 1 through July 9, the last day the seller owns, which is 9 days at 120,000 x 6% / 365 = $19.726 a day, so $177.53.

Incorrect: This counts 10 days, giving the seller the closing day that belongs to the buyer.

Incorrect: Interest-only payments repay no principal, so the full $300,000 is still owed.

Correct: From year 6 the payment must cover interest plus all of the principal over the remaining 25 years, so it rises well above the interest-only payment.

Incorrect: Negative amortization happens when payments fall short of interest; interest-only payments cover the interest exactly.

Incorrect: This loan amortizes over the remaining term, so no balloon comes due.

Incorrect: An unchanged payment would never repay the principal.

Correct: A month's interest is $1,250; the $1,000 payment leaves $250 unpaid, which is added to the balance (negative amortization).

Incorrect: This adds the payment to the balance instead of subtracting it from the interest.

Incorrect: This adds the whole month's interest and ignores the $1,000 payment.

Incorrect: This applies the whole payment to principal, as if no interest were due.

Incorrect: The balance cannot stay level when part of the interest goes unpaid.

Incorrect: This applies $1.50 per $1,000, half the rate.

Incorrect: This applies $1 per $1,000, the transfer-tax style rate.

Incorrect: This misplaces a decimal; even before the cap the tax is twelve times larger.

Correct: The formula gives $30,000, but O.C.G.A. 48-6-61 caps the tax on any single note at $25,000.

Incorrect: That is the uncapped figure; the statute limits the tax to $25,000 per note.

Incorrect: The note proves the debt and the promise to pay but gives no power to sell the land.

Incorrect: The note is the debt being collected, but the right to sell comes from the security deed alone.

Correct: The power of sale that lets a Georgia lender sell the property on default is a term of the security deed, which also holds the lender's title.

Incorrect: The warranty deed gave the borrower title; it gives the lender nothing to enforce.

Incorrect: No separate power of attorney is needed; the security deed already grants the power of sale.

Incorrect: Court confirmation belongs to foreclosure sales and deficiency claims, not to a payoff.

Incorrect: Payment itself triggers the right to reconveyance; no lawsuit is needed.

Incorrect: No escrow holder takes title; it returns from the lender to the borrower.

Incorrect: Equitable rights were the borrower's all along; payment brings back legal title.

Correct: O.C.G.A. 44-14-60: the security deed passes title to the lender only until the debt is paid, and the borrower holds the right to have the property reconveyed on payment.

Incorrect: $1,200 is over the $1,000 limit for one violation, although a course of study can be ordered as well.

Incorrect: Revocation is a sanction after a hearing, not something a citation can impose.

Incorrect: $5,000 is the cap for multiple violations in one citation; a single violation is capped at $1,000.

Correct: O.C.G.A. 43-40-25.2(b)(2): a citation may order a fine of up to $1,000 per violation and must tell the licensee of the right to request a contested-case hearing within 30 days.

Incorrect: A citation is issued first; the hearing happens only if the licensee requests one.

Incorrect: The rule gives the broker other ways out, including interpleader and a reasonable interpretation of the contract with written notice.

Correct: Rule 520-1-.08(3)(b)5 lists filing an interpleader action among the disbursals that fulfill the broker's duty to account for trust funds.

Incorrect: Who deposited the money does not decide who is entitled to it under the contract.

Incorrect: The Commission does not decide earnest money disputes; the broker files the interpleader directly with the court.

Incorrect: Taking disputed trust money for the broker is conversion; the rule lists no such option.

Incorrect: Thirty days is three times the statutory window for removing the sign.

Incorrect: Removal is the firm's duty when the listing ends; it does not wait for a request.

Incorrect: The law gives a ten-day window rather than a same-day deadline.

Incorrect: The statute allows ten days, not two.

Correct: O.C.G.A. 43-40-25(b)(11) makes it an unfair trade practice to fail to remove a sign within ten days after the listing expires.

Incorrect: A personal account is not a designated trust account, however carefully the deposit is tracked.

Incorrect: Opening her own trust account needs her broker's approval, and it is the broker who reports the account to the Commission (43-40-20(h)).

Incorrect: Rule 520-1-.08(9) counts a sole-member entity's property as owned by the licensee, so the broker-approved own account is available too.

Correct: Rule 520-1-.08(9) treats property titled only to an entity the licensee solely owns as owned by her, so under O.C.G.A. 43-40-20(h) she may hold the funds in her own designated trust account if her broker approves it; the broker then notifies the Commission of the account.

Incorrect: Earnest money is trust money; an operating account would commingle it with the LLC's own funds.

Correct: O.C.G.A. 43-40-25(b)(15) makes it an unfair trade practice to indicate that a price opinion is an appraisal unless the licensee holds an appraiser classification.

Incorrect: No filing requirement exists for price opinions.

Incorrect: A broker's signature does not turn a price opinion into an appraisal or supply an appraiser classification.

Incorrect: The opinion is for the seller; the buyer's consent is not a condition.

Incorrect: The statute does not forbid charging for a price opinion; it forbids calling it an appraisal.

Incorrect: The time limit applies to both own-motion and requested investigations.

Incorrect: A sworn request normally obliges an investigation, but only for acts within the three-year window this ad is outside of.

Incorrect: A licensee's consent does not lift the three-year limit; O.C.G.A. 43-40-27(a) excepts only applicants, fraud, mishandled trust funds and matters litigated in or arising from court cases.

Correct: O.C.G.A. 43-40-27(a): apart from fraud, mishandled trust funds, litigated matters and applicants, the Commission may not investigate unless the act occurred within three years.

Incorrect: The statute sets three years for this kind of conduct; the ten-year figure is invented.

Incorrect: $75,000 is the aggregate cap for all transactions of one licensee, not the cap for one transaction.

Correct: O.C.G.A. 43-40-22(b): the Fund is not obligated for more than $25,000 per transaction, regardless of the number of persons aggrieved.

Incorrect: Paying each judgment in full would exceed the $25,000 per-transaction cap.

Incorrect: The figure matches no limit in the Georgia statute.

Incorrect: The cap is per transaction, not one judgment's worth.

Incorrect: The holder does not decide it; the maturity of the note does.

Incorrect: That is the rate for long-term notes; a note fully due within three years is not one.

Incorrect: No reduced rate exists for short-term notes under the recording tax.

Incorrect: $25,000 is the maximum tax on one note, not a threshold for owing it.

Correct: O.C.G.A. 48-6-60 defines a long-term note as one with principal due more than three years out; a note fully due in two years is short-term, and 48-6-61 taxes long-term notes.

Incorrect: The sale happens where the county's sheriff's sales are held (the courthouse in most counties), not on the property.

Correct: O.C.G.A. 44-14-162(a): a sale under a power of sale is valid only if advertised and conducted at the time and place, and in the usual manner, of the sheriff's sales in the county, with the required notice.

Incorrect: A power of sale works without a court order; that is what makes it nonjudicial.

Incorrect: The statute ties the sale to the county's sheriff's-sale time and place.

Incorrect: The place is set by statute, and notice follows the statutory notice rules, not an email.

Incorrect: The court also requires proof that the property brought its true market value (44-14-161(b)).

Incorrect: The Recovery Fund pays claims against licensees, not lenders' deficiencies.

Incorrect: The statute requires court confirmation, not the debtor's consent.

Incorrect: Without a confirmation order obtained after reporting the sale within 30 days, no deficiency action can be brought at all.

Correct: O.C.G.A. 44-14-161(a): no deficiency action may be taken unless the foreclosing party reports the sale to the superior court within 30 days for confirmation and obtains an order confirming it.

Incorrect: This applies $1.50 per $1,000, half the statutory rate.

Incorrect: Only the refinanced principal is excluded; the $50,000 of new money is taxed.

Incorrect: This taxes the full $200,000 and ignores the refinancing exclusion.

Incorrect: This taxes the $150,000 refinanced principal instead of the $50,000 of new money.

Correct: O.C.G.A. 48-6-65(b): when the original lender refinances unpaid principal on which the tax was paid and the new instrument states that amount, only the new money is taxed: $50,000 / 500 x $1.50 = $150.

Incorrect: This adds the loan to the price instead of subtracting it.

Incorrect: This applies $1.50 per $500, the intangible-tax rate, to $180,000.

Incorrect: This taxes the full price and ignores the assumed loan the statute excludes.

Incorrect: This taxes the assumed loan instead of the equity actually paid.

Correct: O.C.G.A. 48-6-1 taxes the consideration exclusive of any lien existing before the sale and not removed by it, so only $180,000 is taxed: $1 + 1,790 x $0.10 = $180.

Incorrect: Copies to the signers are required, not left to the firms.

Incorrect: The rule includes a copy for each brokerage firm in the transaction.

Incorrect: Every signer and every firm gets a copy, not just the seller.

Incorrect: Distribution is the licensee's duty once the contract is signed, not something that waits for closing.

Correct: Rule 520-1-.10(3): once an offer is accepted and signed by all parties, copies go one to each person signing it and one to each brokerage firm involved.

Incorrect: No consent is required; the statute permits it outright.

Incorrect: The statute sets no such timing condition.

Incorrect: BRRETA expressly says showing alternative properties is not a breach of the seller's engagement.

Incorrect: The buyer can stay a customer; showing other listings does not require a brokerage engagement.

Correct: O.C.G.A. 10-6A-5(d): a broker engaged by a seller does not breach any duty or obligation by showing alternative properties to prospective buyers.