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GA Real Estate practice questions

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Question 1Property Ownership, Land Use Controls, and Environmental Issues

Which estate gives its owner the broadest bundle of rights, an indefinite duration, and no conditions attached to ownership?

  1. Fee simple determinable
  2. Easement in gross
  3. Fee simple absolute Correct answer.
  4. Life estate measured by the grantee's own life

Explanation

A fee simple absolute is the largest estate recognized in Georgia: it lasts indefinitely, is freely inheritable and transferable, and carries no conditions or limitations. Lesser freehold estates end on a stated event or on the death of a measuring life.

Question 2Property Ownership, Land Use Controls, and Environmental Issues

A grantor conveys a parcel 'to Bailey for the life of Chen.' What estate does Bailey hold?

  1. A life estate for Bailey's own life
  2. A fee simple absolute
  3. A life estate pur autre vie Correct answer.
  4. A fee tail

Explanation

A life estate measured by someone other than the holder's own life is a life estate pur autre vie. Bailey's estate ends when Chen dies, at which point the property passes to the holder of the future interest.

Question 3Property Ownership, Land Use Controls, and Environmental Issues

What distinguishes a joint tenancy from a tenancy in common?

  1. It arises only by operation of law
  2. Owners must hold equal, undivided shares
  3. The co-owners hold a right of survivorship Correct answer.
  4. Each owner's interest passes by will rather than by survivorship

Explanation

Joint tenants share the four unities and, most importantly, a right of survivorship: when one joint tenant dies, that interest passes to the surviving joint tenants rather than through probate. Tenants in common hold no such right.

Question 4Property Ownership, Land Use Controls, and Environmental Issues

A local government's authority to adopt and enforce zoning regulations comes from which power?

  1. Taxation
  2. Escheat
  3. Police power Correct answer.
  4. Eminent domain

Explanation

Zoning rests on the police power, the state's authority to regulate for the public health, safety, and general welfare, which local governments exercise under delegated enabling legislation.

Question 5Property Ownership, Land Use Controls, and Environmental Issues

The federal lead-based paint disclosure rule applies to which residential housing?

  1. Housing built before 1978 Correct answer.
  2. Housing built before 1950
  3. All residential housing, regardless of age
  4. Only housing constructed before 1900

Explanation

The federal rule covers sales and leases of most residential housing constructed before 1978, the year lead-based paint was restricted for residential use. Sellers and landlords must disclose known hazards and provide the EPA pamphlet.

Question 6Property Ownership, Land Use Controls, and Environmental Issues

In Georgia, a prescriptive easement generally requires adverse use of another's land for a continuous period of at least:

  1. 10 years
  2. 7 years
  3. 30 years
  4. 20 years Correct answer.

Explanation

A prescriptive easement arises from use that is open, notorious, adverse, and continuous for the statutory period, which in Georgia is 20 years. The use must be of the type that puts the servient owner on notice.

Question 7Property Ownership, Land Use Controls, and Environmental Issues

An easement appurtenant is one that:

  1. Ends automatically when either party dies
  2. Benefits the holder as owner of a particular parcel Correct answer.
  3. Benefits its holder personally, with no dominant parcel
  4. May be transferred only to the original grantee's heirs

Explanation

An easement appurtenant attaches to and benefits a dominant parcel, so it passes automatically with that land when it is conveyed. An easement in gross, by contrast, benefits a person or entity rather than a parcel.

Question 8Property Ownership, Land Use Controls, and Environmental Issues

Because of an unusually narrow lot, an owner wants to build a garage that would encroach two feet into the required side setback. What relief should the owner seek?

  1. A special use permit
  2. A variance Correct answer.
  3. A rezoning to a less restrictive district
  4. Nonconforming use status

Explanation

A variance authorizes a deviation from a dimensional requirement such as a setback when strict application would cause unnecessary hardship arising from conditions peculiar to the property. It does not change the permitted use of the land.

Question 9Property Ownership, Land Use Controls, and Environmental Issues

A use that was lawful when established but that a later zoning ordinance prohibits or restricts is called:

  1. A conditional use
  2. A nonconforming use Correct answer.
  3. A variance
  4. Spot zoning

Explanation

A nonconforming use is a use that lawfully existed before the ordinance made it prohibited. Most ordinances allow it to continue, often with limits on expansion or after a period of discontinuance.

Question 10Property Ownership, Land Use Controls, and Environmental Issues

Three investors take title as tenants in common, with one contributing 50 percent of the price and the other two contributing 25 percent each. Which statement is correct?

  1. Each may sell or devise their own share without the consent of the others Correct answer.
  2. The property may not be partitioned under any circumstance
  3. Each owns a one-third interest, because co-tenants must hold equal shares
  4. The last surviving owner takes the entire property

Explanation

Tenants in common may hold unequal shares, have no right of survivorship, and may freely transfer or devise their interests; the property remains subject to partition. Their contributions may affect rights of contribution, but each has an undivided right to possess the whole.

Question 11Property Ownership, Land Use Controls, and Environmental Issues

Restrictive covenants in a subdivision declaration are enforced primarily by:

  1. Private legal action among the parties bound Correct answer.
  2. The state real estate commission
  3. The local zoning administrator
  4. Recording alone, with no enforcement mechanism

Explanation

Restrictive covenants are private land use controls enforced by the parties bound, including successors, through injunctions or damages. Recording provides constructive notice and helps restrictions run with the land, but it does not itself enforce anything.

Question 12Property Ownership, Land Use Controls, and Environmental Issues

A developer plans to place fill material into wetlands on a Georgia site. Which agency issues the required permit?

  1. The Federal Emergency Management Agency
  2. The local board of zoning appeals
  3. The U.S. Army Corps of Engineers Correct answer.
  4. The Georgia Real Estate Commission

Explanation

Section 404 of the Clean Water Act requires a permit from the U.S. Army Corps of Engineers before dredged or fill material is discharged into waters of the United States, including most wetlands. State requirements may apply in addition.

Question 13Property Ownership, Land Use Controls, and Environmental Issues

A buyer purchasing a site with a history of industrial use wants the strongest protection against federal environmental cleanup liability. The buyer should:

  1. Obtain a quitclaim deed from the prior owner and record it
  2. Notify the EPA within 24 hours after taking title
  3. Buy a title insurance policy that covers environmental claims
  4. Perform all appropriate inquiries before purchase Correct answer.

Explanation

CERCLA recognizes defenses such as the bona fide prospective purchaser and innocent landowner defenses, and each requires all appropriate inquiries into prior uses before acquisition. The purchaser must also take reasonable steps against continuing releases and comply with land use restrictions.

Question 14Property Ownership, Land Use Controls, and Environmental Issues

Under the riparian doctrine followed in Georgia, water rights in a stream belong to:

  1. The state, which leases withdrawal rights to users
  2. The first person to put the water to beneficial use
  3. Only holders of a federal water permit
  4. Owners of land that borders the watercourse Correct answer.

Explanation

Riparian rights belong to owners of land bordering the water, who must use it reasonably so as not to injure other riparians. Prior appropriation, which awards water to the first beneficial user, is a different doctrine used in much of the West.

Question 15Property Ownership, Land Use Controls, and Environmental Issues

A grantor conveys a parcel 'to the City, so long as the parcel is used as a public park.' What estate does the City hold?

  1. A fee simple subject to condition subsequent
  2. A fee simple determinable Correct answer.
  3. A life estate
  4. A fee simple absolute

Explanation

Language such as 'so long as' creates a fee simple determinable, which ends automatically when the stated event occurs; the grantor keeps a possibility of reverter. A fee simple subject to a condition subsequent requires words like 'but if' or 'upon condition that' and gives the grantor a right of entry.

Question 16Property Ownership, Land Use Controls, and Environmental Issues

The owner of a dominant estate acquires title to the servient estate. The easement is terminated by:

  1. Prescription
  2. Abandonment
  3. Merger Correct answer.
  4. Estoppel

Explanation

When one person owns both the dominant and servient estates, the easement is extinguished by merger, because an owner cannot hold an easement over their own land. This is a distinct ground of termination from abandonment or prescription.

Question 17Property Ownership, Land Use Controls, and Environmental Issues

A city rezones one residential lot to commercial use at its owner's request while every surrounding lot remains residential, and the record shows no changed conditions and no public benefit. This action is best characterized as:

  1. A conditional use
  2. A regulatory taking
  3. Spot zoning Correct answer.
  4. Downzoning

Explanation

Singling out one parcel for a classification inconsistent with its surroundings, without evidence of changed conditions or public welfare, is spot zoning and is generally invalid. A valid rezoning must bear a rational relationship to the public health, safety, and general welfare.

Question 18Property Ownership, Land Use Controls, and Environmental Issues

Under federal stormwater rules, a construction general permit is required for site work that disturbs at least:

  1. Twenty-five acres
  2. Five acres
  3. One acre Correct answer.
  4. One-half acre

Explanation

NPDES permit coverage is required for construction activity disturbing one acre or more, or that is part of a common plan of development exceeding that threshold. Georgia implements this through its construction stormwater general permit and required erosion controls.

Question 19Laws of Agency and Fiduciary Duties

An agency relationship between a broker and a seller is created when:

  1. The agent receives a commission at closing
  2. The principal and agent consent to the relationship Correct answer.
  3. The licensing authority issues the agent a real estate license
  4. The listing appears in the multiple listing service

Explanation

Agency is a consensual relationship: it arises when the principal manifests assent that the agent act on the principal's behalf and the agent consents to do so. A license, a commission payment, or an MLS entry may accompany the relationship but does not create it.

Question 20Laws of Agency and Fiduciary Duties

The fiduciary duty that requires a licensee to place the principal's interests ahead of the licensee's own is:

  1. Disclosure
  2. Obedience
  3. Accounting
  4. Loyalty Correct answer.

Explanation

Loyalty obligates the agent to act solely for the principal's benefit, avoiding self-dealing, secret profits, and conflicts of interest. The other duties address recordkeeping, following lawful directions, and sharing information.

Question 21Laws of Agency and Fiduciary Duties

A licensee agrees, as a favor and with no written agreement and no compensation, to help a friend find a tenant. Once the licensee begins acting for the friend, the licensee:

  1. Owes no duties at all, because there is no consideration paid
  2. Is treated as a customer rather than an agent
  3. Owes the same fiduciary duties as a paid agent Correct answer.
  4. Owes only the duties spelled out in a written contract

Explanation

Consideration is not required to create an agency; a gratuitous agent is an agent. Once the licensee undertakes to act on the friend's behalf, the fiduciary duties attach exactly as they would for a paid engagement.

Question 22Laws of Agency and Fiduciary Duties

Which event terminates a brokerage engagement by operation of law rather than by the act of a party?

  1. The agent renounces the engagement
  2. The parties mutually agree to cancel it
  3. The property is destroyed by fire Correct answer.
  4. The principal revokes the engagement

Explanation

Destruction of the subject property makes performance impossible and ends the agency automatically by operation of law. Revocation, renunciation, and mutual cancellation are all voluntary acts of the parties.

Question 23Laws of Agency and Fiduciary Duties

A broker deposits a buyer's earnest money check into the brokerage's general operating account. This is best described as:

  1. Conversion
  2. A trust fund deposit
  3. An escrow disbursement
  4. Commingling Correct answer.

Explanation

Funds held for others must be kept in a separate, properly designated escrow or trust account. Mixing client money with the brokerage's own operating funds is commingling, even if the money is later replaced.

Question 24Laws of Agency and Fiduciary Duties

A buyer signs no brokerage engagement and simply tours a listing with the listing agent. In Georgia, that buyer is best described as:

  1. The broker's customer Correct answer.
  2. The broker's client
  3. A dual client
  4. A subagent of the buyer

Explanation

Under Georgia brokerage relationships law, only the party who has a brokerage engagement with the broker is a client. An unrepresented party to the transaction is a customer, and the listing agent represents the seller.

Question 25Laws of Agency and Fiduciary Duties

A licensee wants to represent both the seller and the buyer in the same transaction. Under Georgia law, the licensee must:

  1. Obtain the informed written consent of both parties Correct answer.
  2. Obtain the commission split approval from the other broker
  3. Only inform both parties verbally before closing
  4. Refer the matter to the Georgia Real Estate Commission for approval

Explanation

Georgia recognizes dual agency when the broker acts for both parties to the same transaction, but only after full disclosure and the informed written consent of both. Verbal notice or a commission arrangement does not satisfy the requirement.

Question 26Laws of Agency and Fiduciary Duties

After a listing engagement expires, a former seller's agent is asked by a buyer's agent why the seller is moving. The former agent:

  1. Must disclose it because the property is no longer listed
  2. Must keep it confidential after termination Correct answer.
  3. May disclose it if the seller did not specifically forbid it
  4. May disclose the reason because the engagement has ended

Explanation

The duty of confidentiality continues after the agency terminates, so information acquired during the engagement remains protected indefinitely. The end of the listing does not convert the former client's private information into public information.

Question 27Laws of Agency and Fiduciary Duties

An agent holding a listing wants to buy the listed property personally. The agent should:

  1. Disclose the conflict and obtain the seller's consent Correct answer.
  2. Have a colleague present the offer without revealing the buyer's identity
  3. Buy through an unlicensed relative and stay silent
  4. Wait until the listing expires, then buy without mentioning it

Explanation

Purchasing the client's property puts the agent's interest directly against the client's, so the agent must make full written disclosure and obtain informed consent, or step aside. Acting through a relative or concealed identity is a breach of loyalty regardless of timing.

Question 28Laws of Agency and Fiduciary Duties

Which conduct best satisfies the agent's fiduciary duty of accounting?

  1. Depositing a client's funds in the broker's operating account and replacing them at closing
  2. Holding a deposit in the agent's personal account until the offer is accepted
  3. Deducting the commission from escrow before closing
  4. Keeping a separate ledger for each client's funds and delivering them on request Correct answer.

Explanation

The accounting duty requires accurate, separate records of all money and property belonging to the client and prompt delivery of those funds to the proper party. Trust funds must never be placed in the broker's business or the agent's personal account.

Question 29Laws of Agency and Fiduciary Duties

A listing agent knows the basement floods every spring and also knows the seller is eager to close quickly for personal financial reasons. An unrepresented buyer asks about the property. The agent should disclose:

  1. Neither fact, because the buyer is only a customer
  2. The flooding problem, but not the seller's motivation Correct answer.
  3. Both facts, because the agent owes equal duties to both parties
  4. The seller's motivation, but not the flooding

Explanation

A licensee must disclose adverse material facts actually known about the property to the parties in the transaction, including customers. The seller's urgency and willingness to negotiate is confidential client information protected by the duty of loyalty.

Question 30Laws of Agency and Fiduciary Duties

An affiliated licensee negligently fails to disclose a known defect while showing a listing within the scope of the brokerage engagement. Who may be held responsible?

  1. Only the individual licensee
  2. Only the buyer, because the buyer chose the property
  3. No one, because agency duties do not create liability
  4. Both the individual licensee and the broker Correct answer.

Explanation

A broker is responsible for the licensed activities of affiliated licensees performed within the scope of the brokerage relationship, in addition to the individual licensee's own accountability. Both the supervising broker and the licensee can face consequences.

Question 31Laws of Agency and Fiduciary Duties

A Georgia broker has two affiliated licensees, one working with the seller and one working with the buyer in the same transaction. The broker may handle this as:

  1. Subagency, because the buyer's licensee automatically represents the seller
  2. Designated agency, with written consent from both parties Correct answer.
  3. An illegal conflict that the broker must decline
  4. Dual agency only, because one broker cannot represent both sides

Explanation

Georgia law permits designated agency, in which the broker appoints different affiliated licensees to represent the seller and the buyer, so long as the required disclosures are made and both parties consent in writing. The individual licensees then owe their duties to their own designated clients.

Question 32Laws of Agency and Fiduciary Duties

A seller engages a broker to sell the home but says nothing about marketing. The broker may:

  1. Accept a purchase price well below the listed price without asking
  2. Advertise the listing, as that authority is implied Correct answer.
  3. Sign a binding deed on the seller's behalf
  4. Sell the seller's furniture to stage the sale

Explanation

Implied authority covers the acts reasonably necessary to accomplish the purpose of the agency, and marketing a listing is a customary part of selling a home. Authority to sell personal property, to accept a materially lower price, or to convey title must be separately granted.

Question 33Laws of Agency and Fiduciary Duties

A seller tells the listing agent not to show the home to buyers with young children. The agent should:

  1. Follow the instruction because obedience is a fiduciary duty
  2. Follow it but note the instruction in the MLS remarks
  3. Follow it only if the seller's reason is in writing
  4. Refuse, because obedience extends only to lawful orders Correct answer.

Explanation

The duty of obedience obligates an agent to follow the principal's lawful directions within the scope of authority, not directions that would violate fair housing law. Screening buyers by familial status is unlawful, so the agent must decline and explain why.

Question 34Laws of Agency and Fiduciary Duties

Without authority, a licensee signs a listing agreement on behalf of a broker. The broker later learns of it, begins marketing the property, and collects the commission. The broker has:

  1. Committed conversion
  2. Ratified the unauthorized act and is bound by the engagement Correct answer.
  3. No relationship with the seller, because the signature was unauthorized
  4. Created a dual agency

Explanation

Ratification occurs when a principal, with knowledge of an unauthorized act, accepts its benefits or otherwise affirms it. By accepting the listing and the commission, the broker adopted the unauthorized signature and became bound by the engagement.

Question 35Laws of Agency and Fiduciary Duties

A broker lends the seller money secured by the property and, as part of the same arrangement, receives an exclusive right to sell with an interest in the sale proceeds. Two months later the seller tries to revoke. The revocation is:

  1. Ineffective, because the agency is coupled with an interest Correct answer.
  2. Effective after 30 days' written notice
  3. Ineffective unless the broker has earned a commission
  4. Effective, because a principal may revoke an agency at any time

Explanation

An agency coupled with an interest arises when the agent is given a stake in the subject matter of the agency, as through a loan secured by the property. Because revocation would destroy that interest, the agency is irrevocable without the agent's consent.

Question 36Laws of Agency and Fiduciary Duties

A broker's licensed assistant has no actual authority to quote prices, but the broker has allowed her to quote prices to the public for months. A buyer relies on her quote and signs an offer. The broker is:

  1. Bound, because apparent authority was created by the broker's conduct Correct answer.
  2. Bound only if the buyer can prove the assistant intended to bind the broker
  3. Not bound unless the buyer paid earnest money
  4. Not bound, because the assistant lacked actual authority

Explanation

A principal who permits an agent to appear to have authority, and thereby induces a third party to rely on it, is bound under the doctrine of apparent authority. The broker's acquiescence over time created that appearance even without actual authority.

Question 37Laws of Agency and Fiduciary Duties

A licensee is a disclosed dual agent. The seller privately tells the licensee that the seller would accept substantially less than the list price. The licensee may:

  1. Tell the buyer only if the buyer makes a written request
  2. Tell the buyer, because a dual agent must share all information with both clients
  3. Use it to encourage the buyer to offer low, without telling the buyer why
  4. Not reveal it to the buyer without the seller's permission Correct answer.

Explanation

A dual agent must not disclose one client's confidential information to the other client without permission, even while sharing material facts about the property itself. The agent also may not use confidential information to advantage one side over the other.

Question 38Laws of Agency and Fiduciary Duties

A buyer's agent accepts a $2,000 payment from a home inspector for the referral, without telling the buyer. The agent has:

  1. Acted properly, because the buyer paid nothing extra
  2. Acted properly, if the bonus is customary in the local market
  3. Breached only the duty of accounting
  4. Breached the duty of loyalty by taking a secret profit Correct answer.

Explanation

An agent may not accept undisclosed compensation from a third party in connection with the client's transaction. Doing so creates a secret profit and a conflict of interest that violates the duty of loyalty, regardless of local custom.

Question 39Property Valuation and Market Analysis

In appraisal practice, market value is best described as which of the following?

  1. The original cost of the improvements less all depreciation
  2. The price agreed upon in the most recent sale of the property
  3. The most probable price in a competitive and open market Correct answer.
  4. The highest price any motivated buyer would pay under any circumstances

Explanation

Market value is the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, with both parties acting prudently and knowledgeably. It assumes a reasonable exposure period and no undue stimulus on either side. A single prior sale or a buyer's maximum willingness is not a market value conclusion.

Question 40Property Valuation and Market Analysis

Which statement expresses the principle of substitution?

  1. Value is fixed by the original construction cost of a property.
  2. Value is set by the cost of an equally desirable substitute. Correct answer.
  3. Value rises when a property is the most expensive in its neighborhood.
  4. Value grows in direct proportion to the number of similar homes nearby.

Explanation

The principle of substitution holds that a prudent buyer will pay no more for a property than the cost of acquiring an equally desirable substitute with similar utility. It underlies all three approaches to value, especially the sales comparison and cost approaches. Cost of the subject itself is irrelevant if a comparable substitute is cheaper.

Question 41Property Valuation and Market Analysis

A use of a site that satisfies the legally permissible, physically possible, and financially feasible tests and that produces the greatest net return is described as which of the following?

  1. The maximally productive use Correct answer.
  2. The interim use
  3. The highest grossing use
  4. The most conforming use

Explanation

Highest and best use applies four tests in sequence: legally permissible, physically possible, financially feasible, and maximally productive. The last test selects among feasible uses the one yielding the highest net return to the land. Interim uses are temporary and do not satisfy the final test.

Question 42Property Valuation and Market Analysis

A duplex sells for $300,000 and rents for $2,500 per month. Using monthly rent, what is the gross rent multiplier?

  1. 83.3
  2. 12
  3. 0.0083
  4. 120 Correct answer.

Explanation

The gross rent multiplier equals sale price divided by gross monthly rent: $300,000 divided by $2,500 equals 120. The multiplier can then be applied to the subject's monthly rent to indicate value. It is a gross-income tool and does not adjust for vacancy or expenses.

Question 43Property Valuation and Market Analysis

In the sales comparison approach, the subject has a two-car garage while the comparable has a one-car garage. The appraiser should do which of the following?

  1. Add value to the subject's indicated value.
  2. Subtract value from the comparable's price.
  3. Add value to the comparable's price. Correct answer.
  4. Make no adjustment, because garages are not entered on the grid.

Explanation

Adjustments are always made to the comparable, never to the subject, because the subject is the standard of comparison. When the subject is superior to the comparable, value is added to the comparable so it reflects the subject's features. If the subject were inferior, the appraiser would subtract from the comparable.

Question 44Property Valuation and Market Analysis

A property produces a net operating income of $48,000, and the market indicates a capitalization rate of 8 percent. What is the indicated value by the income approach?

  1. $60,000
  2. $600,000 Correct answer.
  3. $384,000
  4. $3,840,000

Explanation

Value by direct capitalization equals net operating income divided by the capitalization rate: $48,000 divided by 0.08 equals $600,000. The rate converts a single year's income into an estimate of value. Multiplying income by the rate is the wrong operation and produces a meaningless figure.

Question 45Property Valuation and Market Analysis

A loss in value caused by factors outside the property itself, such as a nearby industrial plant or a change in neighborhood demand, is called which of the following?

  1. Physical deterioration
  2. Deferred maintenance
  3. Functional obsolescence
  4. External obsolescence Correct answer.

Explanation

External obsolescence (economic obsolescence) is a loss in value from forces outside the property, such as adverse neighborhood trends, traffic patterns, or proximity to nuisance uses. It is generally considered incurable by the owner because the cause lies beyond the site. Physical deterioration and functional obsolescence arise from the property itself.

Question 46Property Valuation and Market Analysis

A local market has 480 homes listed for sale, and closings are averaging 60 homes per month. What is the months-of-supply figure?

  1. 6 months
  2. 8 months Correct answer.
  3. 4 months
  4. 0.125 months

Explanation

Months of supply equals the number of active listings divided by the average monthly sales rate: 480 divided by 60 equals 8 months. This absorption measure helps identify whether the market favors buyers or sellers. Roughly six months is often treated as a balanced market.

Question 47Property Valuation and Market Analysis

The principle of contribution holds which of the following?

  1. A component's value is what it adds to total property value. Correct answer.
  2. Each component contributes an equal share of the total value.
  3. The cost of an improvement determines its contribution to value.
  4. Only the land contributes to the value of a property.

Explanation

Contribution measures a component of a property by how much it adds to or subtracts from the value of the whole, regardless of its cost. An improvement that costs more than it adds may actually reduce value. This principle supports decisions about remodeling, additions, and curable versus incurable items.

Question 48Property Valuation and Market Analysis

Which statement best describes a comparative market analysis prepared by a Georgia real estate licensee who is not a licensed appraiser?

  1. It is an opinion of likely selling price used for listing purposes, not an appraisal. Correct answer.
  2. It is a valuation required by federal law for every mortgage loan.
  3. It is an appraisal and must comply with USPAP.
  4. It is identical to the assessed value issued by the county tax assessor.

Explanation

A comparative market analysis is a brokerage tool that estimates a probable selling price to help a client set a list price; it is not an appraisal and does not carry the certification and standards an appraisal requires. Georgia licensees who are not licensed or certified appraisers may not perform appraisals. Assessed values and lender-ordered appraisals serve entirely different purposes.

Question 49Property Valuation and Market Analysis

For county ad valorem taxation in Georgia, most taxable property is assessed at what percentage of its fair market value?

  1. 100 percent
  2. 40 percent Correct answer.
  3. 60 percent
  4. 25 percent

Explanation

Georgia law sets a 40 percent assessment ratio for most classes of taxable property, so the assessed value is 40 percent of fair market value. The millage rate is then applied to that assessed value to compute the tax bill. Certain property classes and exemptions may be treated differently.

Question 50Property Valuation and Market Analysis

In reconciliation, the appraiser's main task is which of the following?

  1. Choosing the highest value indicated by any approach
  2. Averaging the value indications from all three approaches
  3. Weighing which approach is most reliable for the subject Correct answer.
  4. Using only the cost approach for newly built properties

Explanation

Reconciliation is a reasoned judgment about the relative reliability of each approach given the nature of the property and the quality of the data. The appraiser does not simply average or select an extreme; the approaches are weighted and the final value is supported by the most credible evidence. The result is a single value conclusion, not a range of equal-weight figures.