Free Georgia Contracts Practice Test — LicenseIQ

Question 1

Under the statute of frauds, a real estate sales contract must be:

Accepted Answer

The statute of frauds requires real estate sales contracts to be in writing and signed to be enforceable.

Question 2

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 3

A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

Accepted Answer

USDA Rural Development loans serve eligible rural buyers who meet income limits, often with no down payment.

Question 4

When a seller changes a term of the buyer's offer and returns it, this creates a:

Accepted Answer

Altering any term rejects the original offer and creates a counteroffer, which the buyer may accept or reject.

Question 5

A buyer offers $300,000. The seller counters at $315,000. The buyer rejects the counter and then tries to accept the original $300,000 offer terms. Is there a contract?

Accepted Answer

A counteroffer is a rejection and a new offer; the original offer cannot be revived by the buyer.

Question 6

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 7

A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 8

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 9

Under an open listing, the seller owes a commission to:

Accepted Answer

Open listings are non-exclusive; only the procuring broker is paid, and the owner owes nothing for a self-sale.

Question 10

A broker disburses earnest money based on a reasonable interpretation of the contract, but the seller objects. The broker must:

Accepted Answer

When not all parties agree, Rule 520-1-.08(3)(c) requires immediate written notice to all parties of the disbursement.

Question 11

A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

Accepted Answer

LTV is applied to the LESSER of price or appraised value: $290,000 x 0.75 = $217,500. Using the $300,000 price ($225,000) is the common mistake.

Question 12

A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

Accepted Answer

The option binds only the optionor. The optionee may exercise or let it lapse (forfeiting the option money).

Question 13

A contract that is missing an essential element, such as consideration, is:

Accepted Answer

Missing an essential element makes a contract void from the start. A voidable contract appears valid but may be canceled by one party.

Question 14

Which event terminates a listing agreement by operation (force) of law?

Accepted Answer

Agency ends by performance, expiration, mutual agreement, or situationally by force of law (bankruptcy, condemnation), death or incapacity, destruction of the property, or breach.

Question 15

Which is NOT an essential element of a valid contract?

Accepted Answer

The essential elements are offer and acceptance (mutual consent), consideration, competent parties and legal purpose. Notarization is not required for a contract to be valid.

Question 16

A licensee representing the seller who learns the buyer will pay more than the offer must:

Accepted Answer

Loyalty and disclosure require the seller's agent to share material information that benefits the client. The agent owes the buyer-customer no confidentiality.

Question 17

A seller agrees with a broker that the seller will receive $200,000 and the broker keeps anything above that. The home sells for $240,000. This arrangement is a:

Accepted Answer

In a net listing the broker's fee is the excess over a set net ($40,000 here). It encourages the broker to underprice and is illegal in many states, including NJ.

Question 18

A buyer tours several homes with an agent but signs no agreement. Under BRRETA, the buyer is most likely the agent's:

Accepted Answer

A brokerage engagement is by definition a written contract. Without one, the buyer is a customer who may receive ministerial assistance.

Question 19

A buyer purchasing a newly built condominium unit from the declarant may void the contract until at least:

Accepted Answer

Section 44-3-111 gives a non-waivable right to void until at least seven days after receipt of all required items, for the first sale only.

Question 20

A financing contingency in a purchase agreement protects the:

Accepted Answer

A financing (mortgage) contingency lets the buyer cancel without penalty if unable to secure the specified loan by the deadline.

Question 21

An offer or counteroffer becomes a binding contract when:

Accepted Answer

Acceptance must be unconditional and communicated back to the offeror; any change creates a counteroffer instead.

Question 22

A contract that has all legal elements but where one party may cancel is:

Accepted Answer

A voidable contract is valid but one party may rescind it (e.g., a minor, or a party induced by misrepresentation or duress). A void contract lacks an essential element and has no legal effect.

Question 23

The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

Accepted Answer

The Sherman Antitrust Act of 1890 prohibits conspiracies in restraint of trade, including these practices.

Question 24

Unless the engagement provides otherwise, a seller's broker must present offers to the seller:

Accepted Answer

Section 10-6A-5(a) requires presenting all offers even when the property is subject to a contract, unless the engagement says otherwise.

Question 25

GREC finds a licensee committed seven violations in one disciplinary proceeding. Absent an agreement otherwise, the maximum total fine is:

Accepted Answer

Seven violations at $1,000 each would be $7,000, but the statute caps fines at $5,000 in one proceeding unless the parties agree otherwise.

Georgia real estate contracts practice test

1. Under the statute of frauds, a real estate sales contract must be:

2. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

3. A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

4. When a seller changes a term of the buyer's offer and returns it, this creates a:

5. A buyer offers $300,000. The seller counters at $315,000. The buyer rejects the counter and then tries to accept the original $300,000 offer terms. Is there a contract?

6. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

7. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

8. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

9. Under an open listing, the seller owes a commission to:

10. A broker disburses earnest money based on a reasonable interpretation of the contract, but the seller objects. The broker must:

11. A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

12. A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

13. A contract that is missing an essential element, such as consideration, is:

14. Which event terminates a listing agreement by operation (force) of law?

15. Which is NOT an essential element of a valid contract?

16. A licensee representing the seller who learns the buyer will pay more than the offer must:

17. A seller agrees with a broker that the seller will receive $200,000 and the broker keeps anything above that. The home sells for $240,000. This arrangement is a:

18. A buyer tours several homes with an agent but signs no agreement. Under BRRETA, the buyer is most likely the agent's:

19. A buyer purchasing a newly built condominium unit from the declarant may void the contract until at least:

20. A financing contingency in a purchase agreement protects the:

21. An offer or counteroffer becomes a binding contract when:

22. A contract that has all legal elements but where one party may cancel is:

23. The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

24. Unless the engagement provides otherwise, a seller's broker must present offers to the seller:

25. GREC finds a licensee committed seven violations in one disciplinary proceeding. Absent an agreement otherwise, the maximum total fine is:

Sources