I85PREP
⌘ K
GES AD1 Promotion Exam study materials
GES AD1 Promotion Exam study resources

GES AD1 Promotion Exam practice questions

One question at a time. Build your GES AD1 Promotion Exam understanding.

First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Real Estate Brokerage and Transaction Practice

Under the Georgia license law, which party is responsible for depositing a buyer's earnest money into a designated trust account when the sales contract names the broker as the holder of the funds?

  1. The buyer's lender, because the funds secure the loan commitment
  2. The closing attorney, because earnest money is held in escrow until closing
  3. The listing broker, always, because the property is listed with that firm
  4. The broker designated in the contract as holding the funds, within the time required by the agreement or law Correct answer.

Explanation

Earnest money must be deposited by the broker who is designated in the contract to hold the funds, and that deposit must occur within the timeframe required by the agreement and by Georgia rules. The listing broker is not automatically the holder merely because the property is listed, and third parties such as attorneys or lenders do not control the deposit duty unless the contract says so.

Question 2Real Estate Brokerage and Transaction Practice

A brokerage firm wants to advertise a property it has listed. Which statement best describes the required disclosure in the advertisement?

  1. No firm name is required as long as the property address is accurate
  2. The firm's licensed name must appear in the ad so the public knows a brokerage is involved Correct answer.
  3. Only the salesperson's personal name is required, since the salesperson procured the listing
  4. The name of the supervising broker must be omitted to protect privacy

Explanation

Georgia advertising rules require that advertisements identify the brokerage firm by its licensed name so consumers know a licensed brokerage is behind the ad. A salesperson's individual name alone does not satisfy the requirement, and omitting the firm name is a common advertising violation.

Question 3Real Estate Brokerage and Transaction Practice

A buyer client tells her agent that she will pay up to $400,000 but wants to offer $360,000. The agent knows the seller has already rejected two offers below $375,000. What is the agent's best course of action?

  1. Advise the client using the known market information, then follow the client's lawful written direction Correct answer.
  2. Refuse to submit the offer because it is unlikely to be accepted
  3. Submit the $360,000 offer as instructed and say nothing further
  4. Submit $375,000 without telling the client, since it is more likely to succeed

Explanation

The agent owes the buyer client loyalty, disclosure of material information, and obedience to lawful instructions, so the agent should share the relevant market intelligence and then transmit whatever offer the client authorizes. Submitting a different price without authority breaches the duty of obedience and loyalty.

Question 4Real Estate Brokerage and Transaction Practice

An agent receives a commission check made payable to the brokerage after a closing. Which handling is consistent with Georgia license law?

  1. The agent may deposit it into a personal account and forward the firm's share later
  2. The agent must turn the check over to the broker, who disburses the agent's share under the firm's compensation agreement Correct answer.
  3. The agent may hold the check until the next tax year to defer income
  4. The agent may split the check directly with the cooperating agent at the other firm

Explanation

Commissions are earned by and payable to the brokerage, not the individual licensee, so the agent must deliver the check to the broker for deposit and later disbursement. Direct splitting with another firm's agent and personal deposit both bypass the broker's control of funds.

Question 5Real Estate Brokerage and Transaction Practice

A seller asks his listing agent to prepare a comparative market analysis and to recommend a list price. The agent has not performed a formal appraisal. What is the correct characterization of this service?

  1. It is prohibited because only attorneys may estimate value
  2. It is a brokerage opinion of value, permitted for licensees when not represented as an appraisal Correct answer.
  3. It is permitted only if the lender approves the estimate in writing
  4. It is an appraisal and requires a state appraiser certification

Explanation

Licensees may prepare a comparative market analysis and give pricing opinions as part of brokerage services, provided they do not hold it out as an appraisal, which requires appraiser certification. Attorneys and lenders have no general gatekeeping role over a listing agent's pricing advice.

Question 6Real Estate Brokerage and Transaction Practice

A buyer and seller sign a binding agreement, but the buyer later refuses to close without a lawful excuse. What remedy is generally available to the seller under the standard Georgia sales contract?

  1. The seller may keep the earnest money as liquidated damages, subject to the contract's terms Correct answer.
  2. The seller may file a criminal complaint for theft against the buyer
  3. The seller may collect the full purchase price without any legal action
  4. The seller has no remedy unless the broker waives commission

Explanation

Standard Georgia sales contracts commonly provide that if the buyer defaults, the seller may retain the earnest money as liquidated damages, subject to the contract's specific terms and any notice provisions. The seller cannot simply collect the price or pursue criminal charges, and the broker's commission does not control the seller's remedy.

Question 7Real Estate Brokerage and Transaction Practice

Which activity requires a Georgia real estate license when performed for another person for compensation?

  1. A property owner renting a single unit in a four-unit building he owns
  2. A homeowner negotiating the sale of her own residence
  3. An attorney drafting a deed as part of legal representation
  4. An unlicensed assistant hosting an open house and quoting prices to buyers Correct answer.

Explanation

Hosting an open house and quoting prices for another person's property in exchange for compensation is brokerage activity that requires a license. Owners acting on their own behalf and attorneys performing legal services are among the recognized exemptions.

Question 8Real Estate Brokerage and Transaction Practice

A licensee moves from one brokerage to another. What must happen for the licensee to lawfully continue engaging in brokerage activity under the new firm?

  1. The licensee must wait one year before affiliating with a new firm
  2. Nothing, because licenses are issued to individuals and are portable between firms
  3. The licensee must surrender the license and retake the state exam
  4. The licensee must notify the new broker, who files the appropriate transfer with the commission Correct answer.

Explanation

A license is affiliated with a specific broker, so a licensee changing firms must have the new broker file the required transfer or activation with the Georgia Real Estate Commission before practicing under the new firm. The license itself is not portable without that filing, and no waiting period or reexamination is required.

Question 9Real Estate Brokerage and Transaction Practice

An agent is showing a home and notices a strong gas odor near the water heater. The seller has not disclosed any gas issue. What should the agent do?

  1. Quietly turn off the utility and say nothing to avoid alarming the buyer
  2. Ignore it, because the agent is not a home inspector
  3. Remove the listing immediately without notifying the seller
  4. Advise the parties promptly and recommend the appropriate safety and inspection steps Correct answer.

Explanation

A licensee who observes a condition suggesting a safety hazard must disclose it to the parties and recommend appropriate action rather than staying silent. The agent's role is not to diagnose or repair, but silence about a potential gas hazard is inconsistent with the duty of disclosure.

Question 10Real Estate Brokerage and Transaction Practice

A buyer's agent wants to show a property listed by another firm. Under Georgia practice, how is compensation for the buyer's agent typically arranged?

  1. The buyer's agent is paid by the state commission from a transaction fund
  2. The buyer's agent must always collect the full commission directly from the buyer at closing
  3. The listing broker may offer compensation to a cooperating broker through the listing, subject to the parties' agreement Correct answer.
  4. The buyer's agent may not be compensated unless the buyer signs a dual agency consent

Explanation

In cooperative transactions, the listing broker commonly offers compensation to a cooperating broker as part of the listing arrangement, and that offer is subject to the agreement among the parties. There is no state fund paying buyer agents, and dual agency consent is not the trigger for compensation.

Question 11Real Estate Brokerage and Transaction Practice

A listing agent learns that the seller's home was previously used as a methamphetamine lab and has been remediated. The seller instructs the agent not to mention it. How should the agent respond?

  1. Resign the listing but tell no one the reason
  2. Explain that material facts affecting value or safety generally must be disclosed and decline to conceal the history Correct answer.
  3. Follow the instruction, because the seller decides what to disclose
  4. Disclose the history only if the buyer specifically asks about drug use

Explanation

Licensees owe a duty of honesty and disclosure of material facts, and a former drug lab that may affect value or safety is generally material, so the agent should not agree to conceal it. Concealment conditioned on the buyer's question or on the seller's preference does not satisfy the disclosure obligation.

Question 12Real Estate Brokerage and Transaction Practice

Which record-keeping practice best satisfies a Georgia broker's obligation for transaction documents?

  1. Keep copies only until the commission check clears
  2. Discard records once the buyer and seller receive their closing packets
  3. Store records only on the agent's personal device
  4. Retain transaction records for the period required by commission rule and make them available for inspection Correct answer.

Explanation

Brokers must retain transaction records for the retention period set by commission rule and produce them on request during an investigation or audit. Records kept only on a personal device or discarded after closing do not meet the broker's custody and availability obligations.

Question 13Real Estate Brokerage and Transaction Practice

An unlicensed assistant at a brokerage answers the phone, schedules appointments, and provides published listing information to callers. Which additional task would require a license?

  1. Scheduling a showing at a time the seller has approved
  2. Confirming that a listed property is still available using the firm's listing sheet
  3. Forwarding a caller's message to the listing agent
  4. Discussing and negotiating the terms of an offer with a prospective buyer Correct answer.

Explanation

Negotiating or discussing the terms of a transaction with a prospective buyer is brokerage activity reserved for licensees, while clerical and informational tasks may be performed by unlicensed assistants. Reading published availability, scheduling approved showings, and taking messages are administrative functions.

Question 14Real Estate Brokerage and Transaction Practice

A broker holds earnest money in a trust account. Which practice is required for that account?

  1. Maintaining a separate trust account and accurate records identifying each transaction's funds Correct answer.
  2. Holding funds in the broker's personal account when the bank charges fees
  3. Using trust funds temporarily to cover firm payroll until closings occur
  4. Commingling trust funds with the firm's operating funds to simplify bookkeeping

Explanation

Trust funds must be kept in a designated trust account with records that identify the funds belonging to each transaction, and they may not be commingled with the firm's operating money. Using trust funds for firm expenses or holding them in a personal account is a serious violation.

Question 15Real Estate Brokerage and Transaction Practice

A buyer submits an offer with a $5,000 earnest money check made payable to the brokerage. Before the offer is accepted, the buyer changes his mind and asks for the check back. What should the broker do?

  1. Hold the check and follow the contract terms and applicable rules on disposition before any refund Correct answer.
  2. Cash the check and split the funds with the cooperating broker
  3. Return the check immediately, since no contract exists
  4. Deposit the check and keep the funds as a penalty

Explanation

Before acceptance, the disposition of an earnest money check is governed by the offer's terms and applicable rules, so the broker should not simply hand it back or treat it as a penalty. Cashing the check and splitting it with another broker would be improper handling of funds that are not yet earned.

Question 16Real Estate Brokerage and Transaction Practice

A seller wants to limit the agency relationship so that the licensee represents only the seller while still allowing the licensee to assist the buyer with paperwork. Which Georgia agency option fits this arrangement?

  1. Transaction brokerage with no written agreement of any kind
  2. A disclosed limited-consent arrangement in which the licensee provides services to the buyer without representing the buyer Correct answer.
  3. Designated agency, where the firm represents both parties fully
  4. Dual agency with undisclosed consent from both parties

Explanation

Georgia allows limited consent or similar arrangements in which a licensee assists a buyer with ministerial tasks while representing only the seller, provided the arrangement is disclosed and documented. Full dual agency requires informed written consent from both parties, and undisclosed dual agency is prohibited.

Question 17Real Estate Brokerage and Transaction Practice

A licensee is convicted of a felony involving fraud. What is the most likely consequence regarding the license?

  1. The licensee may continue practicing if the broker writes a letter of support
  2. The license is automatically renewed because the conviction is unrelated to listings
  3. The commission may suspend or revoke the license or impose other discipline after notice and hearing Correct answer.
  4. No effect, because criminal matters are separate from licensing

Explanation

A felony conviction involving fraud is grounds for disciplinary action, and the commission may suspend, revoke, or otherwise discipline the license after proper notice and a hearing. A broker's letter of support does not insulate the licensee from the commission's authority.

Question 18Real Estate Brokerage and Transaction Practice

A buyer's agent receives a text from the listing agent stating that the seller will accept $10,000 below list if the buyer closes in 20 days. The buyer's agent has no written confirmation. What is the soundest practice?

  1. Ignore the text because it is not a formal offer
  2. Tell the buyer the seller has agreed and prepare a contract at that price
  3. Advise the buyer of the information while confirming the terms in writing before relying on them Correct answer.
  4. Share the text with other buyers to create competition

Explanation

Material terms communicated informally should be confirmed in writing before the buyer relies on them, and the agent should keep the client informed without overstating what has been agreed. Treating a text as a binding acceptance or ignoring it entirely both misstate the situation.

Question 19Real Estate Brokerage and Transaction Practice

A licensee wants to earn extra income by referring prospective buyers to a mortgage lender in exchange for a fee. Under Georgia rules, what is the key concern?

  1. Referral fees to unlicensed third parties for settlement services raise RESPA and licensing concerns and should be avoided Correct answer.
  2. Referral fees are always permitted because they are paid outside closing
  3. The fee is permitted only if the buyer pays it directly
  4. The fee is permitted if the lender discloses it after closing

Explanation

Paying or receiving fees for the referral of settlement service business implicates federal RESPA restrictions and Georgia licensing rules, so a licensee should not accept such a fee. Disclosure after closing or shifting the payment to the buyer does not cure the underlying prohibition.

Question 20Real Estate Brokerage and Transaction Practice

A seller asks the listing agent to represent him in the purchase of his next home as well. What should the agent clarify before proceeding?

  1. That the agent may act without any written agreement because the parties already know each other
  2. The scope of the agency relationship and obtain the required written agreement for the new representation Correct answer.
  3. Nothing, because one client relationship covers all transactions
  4. That the seller must use the same lender for both transactions

Explanation

Agency relationships in Georgia must be documented in writing, and a new transaction calls for clarifying the scope and obtaining the appropriate agreement. Prior dealings do not substitute for the required written engagement, and lender or familiarity considerations are irrelevant.

Question 21Real Estate Brokerage and Transaction Practice

An agent lists a property and, without the seller's permission, advertises it on a social media page that also promotes the agent's side business selling furniture. Which issue is most significant?

  1. The agent must obtain the seller's consent and keep advertising consistent with the firm's advertising rules Correct answer.
  2. The agent may advertise freely because social media is not regulated
  3. There is no issue as long as the property information is accurate
  4. The agent must remove the firm name to avoid confusion

Explanation

Advertising another person's property requires the seller's consent, and the ad must comply with the firm's and the commission's advertising rules, including proper identification of the brokerage. Accuracy of the property information alone does not address consent or the mixing of unrelated business.

Question 22Real Estate Brokerage and Transaction Practice

A buyer wants to submit an offer on a home the agent has listed. The agent represents the seller. What must occur before the agent can act as a dual agent?

  1. The agent must obtain informed written consent from both parties and disclose the conflict Correct answer.
  2. The agent must refer the buyer to another firm or resign the listing before any discussion
  3. The agent may act as a dual agent automatically once an offer is received
  4. The agent must reduce the commission by half to offset the conflict

Explanation

Dual agency requires disclosure of the conflict and informed written consent from both the buyer and the seller before the licensee may act for both. Automatic dual agency and commission adjustments do not satisfy the consent requirement, and referral or resignation is one option but not the only mandated step.

Question 23Real Estate Brokerage and Transaction Practice

A broker discovers that an affiliated licensee has been submitting offers on behalf of a buyer client without the buyer's signature. What is the broker's most appropriate response?

  1. Investigate promptly and take corrective action, including reporting if warranted, because the practice is unauthorized Correct answer.
  2. Ask the cooperating broker to keep the matter confidential from the commission
  3. Approve the practice as long as the offers are eventually accepted
  4. Ignore the practice because the buyer orally approved the offers

Explanation

Submitting offers without the buyer's authorization is a serious violation, and the broker has a supervisory duty to investigate and correct the conduct, including reporting when required. Oral approval does not cure the lack of written authorization, and concealing the matter from the commission compounds the problem.

Question 24Real Estate Brokerage and Transaction Practice

Which statement accurately describes the Georgia Real Estate Commission's role?

  1. It sets interest rates for mortgage loans in the state
  2. It guarantees buyers clear title at closing
  3. It negotiates commission splits between competing brokerages
  4. It regulates real estate licensees and enforces license law through investigation and discipline Correct answer.

Explanation

The Georgia Real Estate Commission licenses and regulates real estate practitioners and enforces the license law through investigations, hearings, and discipline. It does not set mortgage rates, mediate commission splits, or provide title guarantees.

Question 25Real Estate Brokerage and Transaction Practice

A licensee is working with a buyer who is relocating and wants to see homes in several counties. The buyer asks whether the agent can also manage the buyer's rental property for a fee. What should the agent confirm first?

  1. That property management for another person for compensation is licensed activity within the scope of the agent's license Correct answer.
  2. That the agent's broker cannot be involved in management arrangements
  3. That rental management is unregulated and needs no license
  4. That the buyer must buy a home before management services can begin

Explanation

Managing rental property for another person for compensation is licensed real estate activity, so the agent must confirm the license covers it and that the broker authorizes and supervises the arrangement. Rental management is not unregulated, and no purchase is a prerequisite.

Question 26Real Estate Brokerage and Transaction Practice

A licensee is preparing a comparative market analysis for a seller. Which statement best describes the purpose of a CMA in Georgia brokerage practice?

  1. It is a state-certified appraisal that can be used to obtain mortgage financing.
  2. It replaces the seller's property disclosure obligations under Georgia law.
  3. It guarantees the property will sell within the stated price range.
  4. It estimates a probable listing or sale price range using comparable properties and market data. Correct answer.

Explanation

A CMA is a broker's opinion of value built from comparable sales, active listings, and market conditions, used to help a seller set price. It is not a certified appraisal and carries no guarantee of sale price. It also does not affect the seller's separate disclosure duties.

Question 27Real Estate Brokerage and Transaction Practice

A seller tells the listing agent she wants to sell quickly and will consider any offer above $250,000, but instructs the agent not to reveal that figure. A buyer's agent asks the listing agent directly what the seller will take. What is the listing agent's best course of action?

  1. Suggest the buyer submit a low offer to test the seller's resolve.
  2. State that the seller is motivated but decline to reveal the confidential figure. Correct answer.
  3. Disclose the $250,000 figure because agents must answer questions truthfully.
  4. Refer the buyer's agent to the seller's lender for pricing guidance.

Explanation

Information the seller designates as confidential must be protected by the listing agent, even when another agent asks directly. The agent can convey general motivation without disclosing the specific floor price. Truthfulness does not require revealing confidential client information.

Question 28Real Estate Brokerage and Transaction Practice

A buyer client asks her agent to recommend a home inspector. Which practice best protects the agent and the buyer?

  1. Decline to discuss inspections because that is legal advice.
  2. Provide a list of several qualified inspectors and let the buyer choose. Correct answer.
  3. Require the buyer to use the inspector the agent selects.
  4. Select one inspector and accept a referral fee from that company.

Explanation

Offering a list of qualified inspectors preserves the buyer's independent choice and reduces the agent's exposure to liability. Requiring one inspector or accepting undisclosed referral fees creates conflicts and possible license law problems. Declining to discuss inspections leaves the client without expected brokerage assistance.

Question 29Real Estate Brokerage and Transaction Practice

During a listing appointment, the seller mentions that the basement flooded twice and was repaired. The seller asks the agent not to mention it. How should the licensee handle this?

  1. Explain that the seller must disclose known material defects and document the conversation. Correct answer.
  2. Include the flooding history only if a buyer specifically asks about water.
  3. Omit it from the listing but tell buyers orally at the showing.
  4. Honor the request because the seller decides what appears in the listing.

Explanation

Sellers have a legal duty to disclose known material defects, and a licensee should not participate in concealing them. The agent should explain that obligation and keep a record of the conversation. Selective or oral-only disclosure does not satisfy the duty.

Question 30Real Estate Brokerage and Transaction Practice

A buyer and seller have signed a purchase agreement, and the buyer has deposited earnest money with the broker. A dispute later arises over who is entitled to the funds. What is the broker's most appropriate action?

  1. Hold the funds and follow the dispute-resolution procedure in the contract or seek legal guidance. Correct answer.
  2. Apply the funds to the brokerage's commission.
  3. Release the funds to the buyer because the buyer deposited them.
  4. Release the funds to the seller because the seller holds title.

Explanation

When entitlement to earnest money is disputed, the broker should not unilaterally choose a side. The broker holds the funds and follows the contract's dispute provisions or obtains legal direction. Using the money for commission before entitlement is settled is improper.

Question 31Real Estate Brokerage and Transaction Practice

A licensee is drafting an advertisement for a listing. Which element is required in the ad under Georgia advertising rules?

  1. The licensee's home address.
  2. The brokerage firm's name as registered with the Commission. Correct answer.
  3. The seller's original purchase price.
  4. The name of the title company that will close the sale.

Explanation

Advertisements must identify the brokerage firm so the public knows which company stands behind the licensee. Personal addresses, prior purchase prices, and closing vendors are not required advertising elements. Omission of the firm name is a common advertising violation.

Question 32Real Estate Brokerage and Transaction Practice

A seller refuses to allow a buyer of a different race to view the home, telling the listing agent to steer such buyers elsewhere. What must the listing agent do?

  1. Refuse to participate in the discriminatory instruction and explain fair housing obligations. Correct answer.
  2. Show the home but warn the buyer that the seller is difficult.
  3. Quietly delay responses to buyers the seller disfavors.
  4. Follow the seller's instruction because the agent represents the seller.

Explanation

Fair housing law prohibits discriminatory steering and refusal to show based on protected characteristics, and a licensee cannot carry out such instructions even for a client. The agent should decline and explain the legal obligation. Quiet delay or warnings do not cure the discrimination.

Question 33Real Estate Brokerage and Transaction Practice

A buyer's agent is reviewing a purchase and sale agreement with clients. The buyers ask whether a particular contract clause will hold up in court. How should the agent respond?

  1. Tell them contract clauses are never enforced in Georgia.
  2. Advise them to consult an attorney for legal interpretation of the clause. Correct answer.
  3. Interpret the clause and assure them it is enforceable.
  4. Rewrite the clause to make it clearer before signing.

Explanation

Interpreting the legal effect of contract language is the practice of law, which licensees may not undertake. The agent should encourage the clients to obtain attorney review. Assuring enforceability or rewriting legal terms exceeds the licensee's role.

Question 34Real Estate Brokerage and Transaction Practice

A licensee represents a buyer under a written buyer brokerage agreement. The buyer wants to see a home listed by the licensee's own firm. What arrangement is proper?

  1. The licensee automatically represents the seller because the firm holds the listing.
  2. The listing agent represents the buyer without any disclosure.
  3. The buyer must waive all representation to view the home.
  4. The firm becomes a dual agent or designates separate licensees, with written consent as required. Correct answer.

Explanation

When the same firm represents both sides, the brokerage must handle the transaction as dual agency or through designated agency, with the disclosures and written consent Georgia requires. Representation does not shift automatically to the seller. The buyer is not required to give up representation.

Question 35Real Estate Brokerage and Transaction Practice

A licensee wants to hold an open house for a property listed by another brokerage. What is the proper first step?

  1. Collect names of attendees and solicit them as buyer clients on the spot.
  2. Obtain the listing broker's permission before holding the open house. Correct answer.
  3. Post the listing on the licensee's own website without approval.
  4. Advertise the open house and notify the listing agent afterward.

Explanation

A licensee from another firm should obtain permission from the listing broker before marketing or holding an open house on that listing. Unilateral advertising or solicitation at the property can interfere with the listing agreement. Permission protects both brokerages.

Question 36Real Estate Brokerage and Transaction Practice

A licensee has a signed agency agreement with a seller. The seller's neighbor asks the licensee to represent him in buying a different home. What should the licensee do first?

  1. Refuse all buyer representation while any listing agreement exists.
  2. Disclose the existing seller relationship and obtain informed consent to any new representation. Correct answer.
  3. Represent the neighbor without further discussion because buyers and sellers are separate matters.
  4. Represent the neighbor secretly to avoid upsetting the seller.

Explanation

Taking on a new client can create a conflict or dual agency situation, so the licensee must disclose existing relationships and obtain informed consent. Secret representation is never permissible. A blanket refusal is unnecessary if proper disclosure and consent occur.

Question 37Real Estate Brokerage and Transaction Practice

A broker is reviewing files and finds that a licensee accepted a $2,000 cash payment from a buyer as earnest money and kept it in the licensee's personal account. What is the primary problem?

  1. The amount was too small to require a receipt.
  2. Earnest money must be deposited into the broker's trust account, not a personal account. Correct answer.
  3. The licensee should have applied it directly to commission.
  4. Cash cannot lawfully be used as earnest money in Georgia.

Explanation

Earnest money is trust funds and must be handled through the broker's properly maintained trust account. Placing client funds in a personal account is commingling and a serious violation. The amount and form of payment do not excuse mishandling.

Question 38Real Estate Brokerage and Transaction Practice

A buyer wants to make an offer contingent on selling her current home. How should the buyer's agent explain this contingency?

  1. It guarantees the seller will wait indefinitely for the buyer's sale.
  2. It is prohibited in Georgia residential transactions.
  3. It protects the buyer if the current home does not sell but may make the offer less attractive to the seller. Correct answer.
  4. It eliminates the need for a financing contingency.

Explanation

A sale-of-home contingency gives the buyer an exit if the existing home does not sell, but it weakens the offer from the seller's perspective. It does not guarantee the seller's acceptance or timing. Financing and other contingencies remain separate matters.

Question 39Real Estate Brokerage and Transaction Practice

A listing agent learns that the seller's property is subject to a pending foreclosure sale date. The agent is preparing marketing materials. What is the most appropriate action?

  1. Discuss the timeline with the seller and ensure marketing and contract terms reflect the realistic deadlines. Correct answer.
  2. Advertise the property as a normal sale and omit the foreclosure timeline.
  3. Cancel the listing immediately without consulting the seller.
  4. Promise buyers that the foreclosure will be postponed.

Explanation

A pending foreclosure sale creates real deadlines that affect whether a contract can close, so the agent must discuss the timeline with the seller and align marketing and contract terms accordingly. Concealing the timeline misleads buyers, and the agent cannot promise a postponement. Cancelling without consulting the seller ignores the client's interests.

Question 40Real Estate Brokerage and Transaction Practice

A licensee receives an offer on a listing. Before presenting it to the seller, the licensee notices the buyer's agent made an arithmetic error in the purchase price. What should the listing agent do?

  1. Present the offer as written and point out the discrepancy to the seller. Correct answer.
  2. Reject the offer without presenting it to the seller.
  3. Correct the price and present the corrected offer as if the buyer wrote it.
  4. Hold the offer until the buyer's agent discovers the error.

Explanation

The listing agent must present offers to the seller and can point out apparent errors, but cannot alter the buyer's document. Rejecting an offer without presenting it deprives the seller of a decision. Silently holding the offer delays the seller's response.

Question 41Real Estate Brokerage and Transaction Practice

A licensee is helping a buyer who is purchasing a newly constructed home directly from a builder. The builder's sales representative is not a licensee. What should the buyer's agent clarify?

  1. That no agency relationship exists for anyone in the transaction.
  2. That the buyer's agent represents the buyer and the builder's representative represents the builder. Correct answer.
  3. That the builder's representative automatically owes fiduciary duties to the buyer.
  4. That the buyer's agent also represents the builder because the home is new.

Explanation

Each party should understand who represents whom, and a builder's on-site representative typically works for the builder. The buyer's agent owes duties to the buyer only unless a lawful dual agency is created. Assuming no agency or automatic duties to the buyer misstates the relationships.

Question 42Real Estate Brokerage and Transaction Practice

A seller asks the listing agent to also manage the property as a rental after closing and to collect rent from tenants. What should the agent confirm before agreeing?

  1. That rent can be deposited into the agent's operating account.
  2. That tenant screening is prohibited for licensees.
  3. That no written agreement is needed for rental collection.
  4. That the broker's license and agreements cover property management activities and trust handling. Correct answer.

Explanation

Property management is licensed brokerage activity, so the agent must confirm the firm is authorized to perform it and that proper management agreements and trust procedures are in place. Rent is trust money that belongs in the trust account. Tenant screening is a normal management function.

Question 43Real Estate Brokerage and Transaction Practice

A buyer wants to submit an offer $30,000 below list price on a home that has been on the market for two days. What should the buyer's agent advise?

  1. Write the offer at list price without the buyer's approval.
  2. Refuse to write the offer because it is too low.
  3. Tell the buyer the seller will certainly accept the low offer.
  4. Discuss market conditions and let the buyer decide the offer price. Correct answer.

Explanation

The buyer, not the agent, decides the offer price, and the agent's role is to provide market information and guidance. Refusing to write a lawful offer or substituting the agent's preferred price overrides the client's decision. Predicting acceptance with certainty is unsupported.

Question 44Real Estate Brokerage and Transaction Practice

A broker is establishing written office policy on agency relationships. Which provision best supports compliance with Georgia license law?

  1. A policy that agency status is disclosed only at closing.
  2. A policy allowing oral agency agreements without documentation.
  3. A policy requiring written agency agreements and timely disclosure of the brokerage's role to consumers. Correct answer.
  4. A policy that all licensees represent only sellers in every transaction.

Explanation

Georgia law expects agency relationships to be established in writing and disclosed to consumers at the appropriate time, so office policy should require both. A blanket seller-only policy misstates actual practice, and delaying disclosure until closing defeats the purpose of informed consent.

Question 45Real Estate Brokerage and Transaction Practice

A licensee is contacted by a prospective seller who wants to list a property the licensee knows has a defective septic system that the seller has not mentioned. What is the licensee's obligation?

  1. Encourage the seller to disclose the defect and refuse to assist in concealing it. Correct answer.
  2. Tell buyers only if they ask about septic systems.
  3. Ignore the issue because the seller is the one with disclosure duties.
  4. Advertise the property as having a fully functioning septic system.

Explanation

Although the seller bears the disclosure duty, a licensee cannot knowingly help conceal a material defect and should urge disclosure. Affirmatively advertising a defective system as functioning is misrepresentation. Waiting for buyers to ask does not satisfy the obligation.

Question 46Real Estate Brokerage and Transaction Practice

A buyer's agent is preparing a purchase offer and the buyer asks to include a clause requiring the seller to leave all appliances. The listing shows the refrigerator is excluded. What should the agent do?

  1. Remove the refrigerator from the buyer's request without telling the buyer.
  2. Tell the buyer the listing controls and no negotiation is possible.
  3. Insert the clause after the buyer signs the offer.
  4. Include the clause and inform the listing agent of the conflict. Correct answer.

Explanation

The buyer may request different terms, and the agent should document the request and flag the conflict with the listing so the parties can negotiate. Unilaterally deleting the buyer's request or altering a signed document exceeds the agent's authority. Negotiation of terms is always possible.

Question 47Real Estate Brokerage and Transaction Practice

A licensee is asked by a friend to give an opinion about a property's value for a divorce proceeding. The licensee has not inspected the property and is not an appraiser. What is the best response?

  1. Explain the limits of a licensee's opinion and recommend a licensed appraiser for litigation purposes. Correct answer.
  2. Testify as an expert appraiser in the proceeding.
  3. Provide a firm valuation because licensees can value property for any purpose.
  4. Prepare a CMA and label it a certified appraisal.

Explanation

A licensee may prepare a CMA for brokerage purposes but should not hold out as an appraiser or offer litigation-grade valuations without the proper inspection and credentials. Certified appraisals require a licensed appraiser. The licensee should clarify these limits and refer appropriately.

Question 48Real Estate Brokerage and Transaction Practice

A seller instructs the listing agent to accept only offers that come through the listing agent's own buyer clients. How should the agent respond?

  1. Refuse to list the property at all.
  2. Comply because the seller controls the listing.
  3. Explain that this could interfere with the broker's cooperation duties and fair dealing with other brokers. Correct answer.
  4. Comply but keep the instruction secret from other brokers.

Explanation

Steering all offers to the listing agent's own buyers raises conflicts and can interfere with cooperation and fair dealing obligations owed to other brokers. The agent should explain the problem and seek a lawful listing arrangement. Secret compliance or blanket refusal are not appropriate resolutions.

Question 49Real Estate Brokerage and Transaction Practice

A licensee is showing a home when the buyer says she plans to rent it out and asks about local rental registration requirements. The licensee is unsure of the rules. What is the best response?

  1. Promise to handle all registration paperwork for the buyer.
  2. Guess the requirements based on general knowledge.
  3. Tell the buyer that rental rules never apply to single-family homes.
  4. Advise the buyer to verify requirements with the local government or a qualified professional. Correct answer.

Explanation

Local rental registration and ordinance requirements vary by jurisdiction, and a licensee should not guess at legal requirements. Referring the buyer to the local government or a qualified professional is the responsible step. Promising to handle regulatory paperwork may exceed the licensee's role.

Question 50Real Estate Brokerage and Transaction Practice

A broker's trust account records show a shortage that cannot be explained by outstanding checks. What is the broker's most appropriate immediate action?

  1. Investigate and correct the shortage promptly, documenting the findings and corrective steps. Correct answer.
  2. Wait until the end of the month to see if the shortage resolves.
  3. Transfer funds from a client's file to cover the shortage temporarily.
  4. Close the trust account and reopen a new one without records.

Explanation

An unexplained trust account shortage signals a serious problem that requires prompt investigation, correction, and documentation. Waiting allows the deficiency to grow, and using one client's funds to cover another is a prohibited use of trust money. Closing the account without records conceals the issue.