Georgia Real Estate Salesperson Exam Prep: Practice Questions and Answers, Exams of Real Estate Management

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Practice of Real Estate - GA Salesperson Exam Prep

Edge: National & State Portions 2024-2025.

Questions and 5-Star Rated Correct Answers.

Graded A

1. Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true? – ANS Jane will need to fill out a W-9 for IRS reporting purposes
2. Corinne is 68 years old and employed full time. She's of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, Katherine. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination? – ANS National origin, sex, disability, and familial status -Age, employment status, and sexual identity aren't covered under federal fair housing laws. Corinne would be protected if she experienced housing discrimination based on her national origin, sex, disability, or familial status.
3. Jean is a licensee for At Home Realty. She chooses her own schedule, sets her own sales goals, and is compensated based on commission. She must complete three training courses each quarter and the required number of CE hours to

maintain her license. She must belong to the local REALTORS® association. The firm doesn't pay for employment taxes for Jean. She receives no insurance or other benefits. Which of these factors might cause the IRS to classify Jean as an employee instead of an IC? – ANS She must take 3 training classes through the firm. -Brokerage firms should avoid requiring attendance at specific training courses, though they should require that licensees take the steps necessary to maintain their license.

1. Jeung gave her agent an earnest money check. What will happen to it now? - ANSAn escrow agent will hold the funds in a trust account until the agreement's terms are satisfied. -The earnest money will be delivered either to the seller's broker or to some other escrow officer who will hold it in a trust account until all terms of the agreement have been met. If there's a dispute, the money will be held until the dispute is settled.
2. Krening Realty has been found guilty of running deceptive ads. Which of these statements about the potential penalty is NOT true? – ANS Kerning's broker may face jail time. -Violations of a cease-and-desist order may result in penalties of more than $15,000 for each day a deceptive ad runs; civil penalties may be in the millions,

depending on the violation. Violators may be required to run corrective or informational ads.

1. Prior to a certain act's existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What's this act called? – ANS Housing and Community Development Act of 1974 -The Housing and Community Development Act of 1974 included gender or a person's sex in the list of protected classes.
2. Shakira is attending an association meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that charges a flat $500 to list properties, then lets the sellers fend for themselves. Why should Shakira leave the discussion? – ANS This conversation sounds like it might become an antitrust violation. -This conversation sounds like it could lead to group boycotting, an antitrust violation.
3. Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer brokers who show her listings to not do business with this company, either. What is this an example of? - ANSGroup boycotting

1. Which act created an agency to investigate antitrust practices? - ANSFederal Trade Commission Act
2. Which of the following would make the "Choose Your Neighbor" flyer an allowable strategy for finding prospective buyers? - ANSAs part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers. -The "Choose Your Neighbor" flyer would be allowed only in conjunction with other marketing strategies that make the property available to all types of buyers.
3. Which of these statements most accurately represents existing federal antitrust legislation? - ANSThe Clayton Act supports the Sherman Act's purpose of preventing monopolies by prohibiting mergers or acquisitions that would create a monopoly. -The Clayton Act of 1914 supports the Sherman Act of 1890 by prohibiting mergers or acquisitions that would result in an unreasonable reduction in competition or the creation of monopolies.
4. Debra's listing agent, Raj, just called to tell her that he'd received an offer on her house and an earnest money check for $4,500. "I'm on my way over to go through the offer with you. I think you'll like it!" Debra's excited, and she knows exactly what she wants to spend that $4,500 on. What's wrong with Debra's

thought process? - ANSThe earnest money doesn't belong to Debra. It will be held in an escrow account. -Earnest money doesn't belong to the seller. The funds will be held in an escrow account until closing or until the transaction otherwise terminates.

10. Frances collected an earnest money check from her client, but didn't have an opportunity to deliver it to the escrow agent before close of business on Friday. For safekeeping, she deposited it into her personal checking account over the weekend and wrote the escrow agent a new check on Monday morning. Which of these statements is true? - ANSFrances is guilty of commingling.
11. Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay? - ANSYes, licensees can use standard forms provided by the brokerage or approved by an attorney.
12. What is the purpose of earnest money? - ANSTo show the seller that the buyer is serious and intends to go through with the sale. -Earnest money is the buyer's indication to the seller that they are serious and intend to go through with the sale.

10. What should brokerages do with regard to using social networking sites to market real estate? - ANSCreate policies and procedures that address proper social networking use.
11. Which of the following statements about escrow accounts is correct? - ANSEscrow accounts are managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits. -Escrow accounts are most widely used in real estate to hold earnest money deposits. These accounts may be opened and managed by the brokerage firm, a title insurance representative who's serving as a closing officer, or an attorney.
12. According to Article 7 of the NAR Code of Ethics, which of these statements is most accurate when accepting compensation from parties to a transaction? - ANSA licensee shall not accept compensation from more than one party to a transaction without the full knowledge and consent of all parties.
13. Greta is working with agent Brandon to sell some property. Nelson represents the buyer, Rigby. Of these four parties, who will pay the earnest money? - ANSRigby
14. Kiley Ann is thrilled to have her real estate license and to be hired on at New Beginnings Brokerage. She's not positive about Luis, her employing broker,

though. He seems a little sketchy. For example, when she looks at her independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do? - ANSReview the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance. -Independent contractors aren't given the same benefits as individuals who are actual employees of a firm. Luis isn't required to pay unemployment insurance or withhold taxes. In fact, if he does this, he might be putting Kiley Ann's independent contractor status at risk.

2. Leo's client is looking for a property with at least 2,500 finished square feet. He finds a 2,200-square-foot property with all the other features the client is looking for. He intentionally fails to mention the square footage. His client agrees to look at the property, falls in love with it, and wants to make an offer. Which of these statements accurately represents Leo's level of misrepresentation in this situation? - ANSLeo obviously knew about the square footage and intentionally didn't mention it. He's guilty of negligent misrepresentation. -Leo knew the square footage was short, and he intentionally didn't mention it to the buyer. He's guilty of intentional misrepresentation.
3. Morrison lives in a predominantly Latino neighborhood. He applied for a mortgage loan to purchase a house in this neighborhood, and later discovered that the lender charged him a higher interest rate than similarly qualified

borrowers buying homes in non-Latino neighborhoods were charged. This might be the practice of ______. - ANSReverse redlining -Reverse redlining is the practice of charging higher interest rates or fees to nonwhite borrowers.

2. Which of the following factors helps the iRS determine whether a licensee is classified as an employee or an independent contractor? - ANSWhether the licensee receives benefits from the brokerage firm. -The IRS considers a number of factors when determining whether a licensee should be classified as an employee or an independent contractor, including whether the licensee receives benefits from the firm.
3. Which of the following is an example of market allocation? - ANSAcme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half. -An agreement between competing firms to segment the market would be market allocation. Segmenting a market in this way limits consumer choice and thus is an illegal violation of federal antitrust laws.
4. Which of these situations represents an illegal tie-in arrangement? - ANSGrayson tells his seller client, Geneva, that he'll only represent her if Geneva uses MBS Title Services to close her transaction.

-A tie-in arrangement includes making use of one service dependent on the client obtaining another specific service; or agreeing to provide some service only if the client refrains from doing business with another third-party vendor.

2. Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission? - ANSMisleading ads
3. Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200. When he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue? - ANSXavier is guilty of commingling and conversion. -Because Xavier's balance fell below the amount required to cover the earnest money check, he's guilty of both commingling and conversion, even though he replaced the funds.
4. Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under what federal law? - ANSFair Housing Amendments Act of 1988

3. A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true? - ANSAjit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts. -Licensees must follow state laws regarding disclosure of all material facts, but typically there's no distinction between disclosure of material facts or adverse material facts. Ajit may be liable even if the seller didn't disclose the fact, depending on state law.
4. A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there's an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What's this an example of? - ANSMarket allocation
5. An agent is trying to build up business for a friend's mortgage company. She requires all clients to use her friend's mortgage company for their financing. What's this an example of? - ANSTie-in arrangement
6. Annie and George have been saving and are finally ready to purchase their first home for their family (including their two toddlers). They want to make an offer on a sweet little bungalow in a quiet neighborhood. If the sellers are represented

by a real estate licensee, which situation would be a violation of fair housing laws?

• ANSTheir offer is rejected because the seller knows the neighbors don't like children.

3. Marcus, who primarily represents sellers, hired multiple groups of actors to portray large, poor families who attend an open house in a neighborhood of mostly retired, wealthy families. He then mailed postcards to residents, offering to purchase their properties quickly for a discounted price before the neighborhood make-up changes. What is this an example of? - ANSBlockbusting -Marcus is trying to induce homeowners to sell by implying that a different type of family is moving into the neighborhood.
4. Nathan is placing a listing ad for a soon-to-be-built expensive home in a gated community. He includes the words "exclusive" and "ultra-conservative community" in his ad. Does this violate fair housing law? - ANSYes, because it implies that the listing is suitable only for a particular type of buyer.
5. The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______. - ANSLetters of apology to all affected consumers. -The Federal Trade Commission may require the Perfect Home to run corrective ads, notify consumers of deceptive claims it made, include specific disclosures in future ads, or provide consumers with other information.

3. Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service? - ANSTie-in arrangement -Tie-in arrangements are antitrust violations that involve predicating one service on the consumer purchasing another from a recommended company. These arrangements severely limit choices for consumers.
4. Krening Realty has been found guilty of running deceptive ads. Which of these statements about the potential penalty is NOT true? - ANSKrening's broker may face jail time. -Violations of a cease-and-desist order may result in penalties of more than $50,000 per violation; civil penalties may be in the millions, depending on the violation. Violators may be required to run corrective or informational ads.
5. Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this? - ANSGroup boycotting
6. Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing? - ANSCivil Rights Act of 1968

4. Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally? - ANSFederal Trade Commission
5. Which of the following is true about the security of your clients' information? - ANSClient data can be compromised if the brokerage's computer system is compromised. -Brokerage and licensees are responsible for the safety and proper use of client information. Your clients' data can be compromised if the brokerage's computer system is compromised.
6. Which of these is an example of illegal market allocation? - ANSBased on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes. -Illegal market allocation involves an implied, oral, or written agreement between competing firms to allocate markets or customers.
7. Which of these scenarios is a violation of federal fair housing laws? - ANSMiguel follows his client's request to only show him properties where the neighborhood is mainly Hispanic.

4. Which of these scenarios is considered steering and is therefore a violation of federal fair housing laws? - ANSAt his client's request, Miguel shows his client only properties where the neighborhood is mainly Hispanic. -Buyers are free to select properties based on demographics as long as licensees don't use demographics as a basis for showing properties. Landlords may refuse to rent to individuals on the basis of creditworthiness.
5. A brokerage firm that hires licensees as employees instead of as independent contractors must ______. - ANSPay licensees a regular salary regardless of the revenue they generate.
6. Cambridge Apartments provides an open parking lot for their residents. There is adequate parking and all spaces are available on a "first-come, first-served" basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests? - ANSCambridge must allow an exception to the first-come, first-served policy for Alton. -Reasonable accommodation requirements preserve Alton's right to reserved parking space that fits his needs.
7. It's fine for Clarissa to phone Gerry, who's on the National Do Not Call Registry, even for solicitation purposes, because ______. - ANSShe has an established business relationship with Gerry.

-If you've helped a client purchase a home, you may follow up with that client who's on the registry for a period of 18 months after your working relationship ends. After 18 months, unless the consumer agrees to continued contact or a new business relationship is established between you, no further calls should be made.

5. Ken, a licensee, has published an ad claiming that he can sell homes for 25% more than any of his competitors. The Federal Trade Commission determined this to be a deceptive ad. What might the FTC require Ken to do as a penalty for his deception? - ANSTake out new ads correcting the misinformation in his original ad.
6. Millie is a buyer who has given her agent an earnest money check for $10, with an offer to purchase. When will the check be deposited? - ANSAfter the seller accepts the purchase offer.
7. Which of the following statements about independent contractors and taxes is true? - ANSBrokers don't withhold income or Social Security taxes for independent contractors. -Brokers don't withhold income or Social Security taxes from commissions paid to independent contractors. Independent contractors are responsible for paying these.

5. Which of these statements accurately describes finance- and housing-related legislation? - ANSThe Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.
6. Which one of these situations represents the illegal practice of redlining? - ANSBased on the neighborhood's demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods. -Redlining is the practice of selecting geographical areas in which no mortgage loans will be written (based on demographics instead of creditworthiness).
7. A family of four, with children ages six and nine, is denied the opportunity to view an available unit at a community that caters to seniors. Which of the following statements is true? - ANSThe federal Fair Housing Act allows an exemption for communities that are designated for senior use. -Senior communities that meet HUD's requirements are exempt from some portions of the federal Fair Housing Act.
8. Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property? - ANSWhen conditions are met at closing

6. Marcy is found guilty of price fixing. It's safe to assume that she must have done what? - ANSAgreed with a competitor to charge a specific amount. -Agreement between competitors is required for price fixing to occur.
7. What's the penalty for violating federal do not call rules? - ANSA fine of more than $40,000 for each violation. -Anyone who violates do not call rules can be fined for each violation. The maximum fine more than $40,000.
8. What's the purpose of a firewall? - ANSIt prevents hackers from infecting your system with viruses, worms, and malware.
9. When questions arise that are outside of your scope of expertise, what should you do? - ANSRefer clients and customers to a competent professional in that field
10. Which of these is an example of puffery? - ANSKevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay."
11. Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip's never listed an agricultural property before. How should

Chip handle this listing so he can still work for his friend but also not work outside his area of expertise? - ANSDisclose to his friend that he's not an agricultural expert and ask his friend's permission to work with an agricultural expert in his firm. -Chip could turn down the listing or refer the listing to a more experienced agent. If he wants to work the listing for his friend, he should disclose his lack of experience to the client and ask permission to partner with an ag expert at his firm.

7. The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on _______. - ANSReligion
8. This act added familial status and disability (both physical and mental) to the existing federally protected classes. - ANSThe Fair Housing Amendment Act
9. What does the Federal Trade Commission consider to be an unfair ad? - ANSAny ad or business practice that causes or is likely to cause injury.

7. What is the name of the federal law that sets forth guidelines regarding telephone solicitation? - ANSTelephone Consumer Protection Act of 2003
8. Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals? - ANSDevelopment of Housing and Urban Development
9. Belinda's client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______. - ANSAvoid unauthorized practice of law
10. Dave's company just did some renovation work on a free-standing hobby store in order to ensure that it's ADA compliant. As Dave is doing the final walk-through, he notes that the aisles are now wider, the restrooms each have an accessible stall, and the water fountain near the restrooms is lower and has more clearance. But he notices that one critical renovation hasn't been made. Which of these is key for ADA compliance? - ANSThere should be a ramp in addition to steps for wheelchair accessibility.
11. Patricia is meeting with James and Cindy, potential buyers of a listing. They are in the office to make an offer when James says, "The only thing that bothers me are those black spots on the ceiling in the bathroom. Do you think that could be

the bad kind of mold? It's not dangerous, is it?" What should Patricia do? - ANSRefer James and Cindy to a qualified mold professional.

8. Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems? - ANSClient data can be exposed when a brokerage's computer system is compromised.
9. Which of these has examples of antitrust violations common to real estate? - ANSTie-in arrangements, market allocation agreements, and group boycotting
10. Which of these professional activities is NOT covered by the Fair Housing Act? - ANSVickie's staging company works with investor clients to stage vacant properties
11. Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now? - ANSAn escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.
12. Kiley Ann is thrilled to have her real estate license and to be hired on at New Beginnings Brokerage. She's not positive about Luis, her employing broker, though. He seems a little sketchy. For example, when she looks at her

independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do? - ANSReview the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance.

9. What's another name for an escrow account? - ANSTrust account -Escrow funds are also called trust funds, just like escrow agents can also be called trustees. Escrow/trust funds are kept in a trust account.
10. When it comes to earnest money, which one of the following statements is true? - ANSEarnest money must be placed in a trust account.
11. Which of the following is an example of commingling? - ANSMixing earnest money with personal funds. -Commingling occurs when escrow funds, such as earnest money, are mixed with personal funds.
12. Which of these is an example of conversion of funds? - ANSMonica used funds from the firm's trust account to pay her firm's rent

A fair housing specialist - ANSreviews the complaint, determines if a violation exists, and, if so, assists the victim in filing an official complaint. A per se antitrust violation - ANSis one in which the competing firms agreed to violate antitrust laws. A per se violation means that authorities don't need to make any additional inquiries about the violation to impose penalties. The fact that collusion existed is enough. Acting outside the scope of a license by offering legal advice is the _____ and may result in you losing your license. This includes drafting contract language. Licensees should use forms and language prepared by attorneys. Such forms are generally available from the broker, the local REALTOR® association, or the state. - ANSunauthorized practice of law Administered and enforced by HUD, Title II of the Americans with Disabilities Act of 1990 - ANSprohibits protected class-based discrimination in the delivery of commercial and public programs, services, and activities. Advertising practices may not limit or attempt to limit access to - ANSproperties or services on the basis of any protected class.

Aggrieved parties, including licensees, - ANScan file fair housing complaints through the FHEO for up to one year following the time the alleged discrimination occurred. Licensees may not file on behalf of any other aggrieved party. Antitrust involves - ANSbusinesses that conspire to restrict competition or trade, resulting in diminished choices or higher prices (or both) for the consumer. As a brokerage firm employee, - ANSlicensees are expected to adhere to the firm's rules regarding work hours, work processes, required training, etc. Avoid posting information, photos, or descriptions in online ads - ANSthat put you or your clients at risk. Criminals may use online information to target homes or individuals. Avoid real estate-targeted wire fraud by - ANSensuring that clients never wire funds to unverified recipients. Blockbusting - ANSis the act of inducing property sales by threatening that the changing demographics or the entry of a minority resident will decrease values.

Brokerage firm policies and procedures around the use of technology - ANScan help licensees avoid litigation. Brokerage firms found guilty of violations may be subjected to court-ordered supervision for up to 10 years. Brokerage firms and the managing or supervising broker - ANSare responsible for proper supervision of unlicensed employees and must be particularly careful to not allow unlicensed assistants to perform tasks that require a license. Brokerage firms found guilty of violations - ANSmay be subject to court-ordered supervision for up to 10 years. Buyers and tenants are free to select properties based on demographics - ANSas long as licensees don't use demographics as a basis for showing properties. Landlords may refuse to rent to individuals on the basis of creditworthiness. Buyers offer earnest money to - ANSshow they intend to follow through with a transaction. Commingling - ANSis when trust (escrow) funds are mixed with personal or brokerage firm funds.

Commingling and conversion - ANSare 2 primary ways licensees can go wrong when handling earnest money. Confidential information that brokerage firms collect and/or store - ANSmust be disposed of in a secure manner. Conversion - ANSis using trust funds for anything other than their intended purpose. Deceptive ads are - ANSthose that are likely to mislead a reasonable consumer. Disability/handicap - ANSis a physical or mental impairment that substantially limits one or more of a person's major life activities. Discrimination based on race - ANSis never permitted. Due diligence and the duty of reasonable skill and care also mean that - ANSlicensees shouldn't offer advice on real estate topics in which they have no expertise. Residential and commercial sales are separate areas of expertise. It also means that licensees should seek assistance when operating outside of their geographic area of expertise.