Cheat sheet

Commission

C

total commission

S

sale price, never the list price

r

commission rate

The rate applies to the price the property actually sold for. Applying 6% to a $365,000 list price instead of the $350,000 sale price is the single most common error.

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Seller's net proceeds

N

cash to the seller

S

sale price

C

commission

Two items get dropped most often: the Georgia transfer tax and the seller's share of the unpaid ad valorem tax. Both are seller debits, and both come out of the net.

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Price to net a target

N

net the seller wants

r

commission rate

Divide by (1 − r); never multiply by (1 + r). At 6%, multiplying $353,000 by 1.06 gives $374,180 instead of the correct $375,531.91, and dividing by 1.06 gives $333,018.87.

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Buyer cash needed at closing

Earnest money and seller credits are subtracted because the buyer has already paid or is being given them. Adding the deposit instead of crediting it is the classic reversal.

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Low appraisal

The lender lends against the lower number, so the buyer covers the down payment plus the whole appraisal shortfall in cash.

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Nonresident and foreign seller withholding

W

amount the buyer withholds and remits

Georgia withholding is remitted by the buyer on Form G-2RP by the last day of the month after closing, with a $20,000 price threshold. FIRPTA goes on Forms 8288 and 8288-A within 20 days of transfer, and the reduced 10% rate needs both the residence use and the price band.

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Daily rate

Use the method the question names. A $3,650 tax bill is $10.00/day on 365 days but $10.14/day on the 360-day banker's method, and the two answers are both on the page.

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Counting the seller's days

January 1 to September 15 is 258 days, not 257. Dropping the closing day is the standard off-by-one; the seller owns the day of closing.

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Accrued and prepaid items

Georgia ad valorem taxes are billed late in the year, so at a mid-year closing they are accrued: the seller is charged and the buyer credited because the buyer pays the whole bill later. Association dues paid in advance run the other way, and the seller is reimbursed only for the buyer's days.

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Rent and security deposits

Rent collected in advance for days the buyer will own is credited to the buyer, and the security deposit transfers in full. Forgetting the deposit is the usual omission.

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Prepaid (interim) interest

L

loan amount

i

annual note rate

June 20 through June 30 is 11 days, not 10. Watch whether the question says 365 days or a 360-day banker's year.

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Real estate transfer tax, O.C.G.A. 48-6-1

It rides on the deed, is the seller's liability under 48-6-3, and works out to $1 per $1,000, or 0.1%. Applying the $1.50 per $500 intangible rate to a warranty deed is the classic swap.

Round the amount above $1,000 up to the next whole $100 before applying the dime: on $412,550 the excess is 4,115.5 hundreds, which becomes 4,116 units, so the tax is $412.60 and not the flat-0.1% figure of $412.55.

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Assumed lien comes off the base

Taxing the full price when the buyer assumes an existing loan is the trap. Subtract the assumed balance first, then round up and apply the rate.

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Intangible recording tax, O.C.G.A. 48-6-61

L

face amount of the note, not the sale price

Always round the unit count up: $265,250 is 530.5 units, so 531 × $1.50 = $796.50, not $795.75.

The tax is capped at $25,000 per note, reached at $8,333,333.34. A $9,000,000 note computes to $27,000, and running the arithmetic without applying the cap is exactly what the question tests.

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Long-term note test

A 24-month note owes nothing at all; there is no reduced short-term rate.

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PT-61 and recording fees

The flat $25 has applied since January 1, 2020 regardless of page count. Security deeds, releases and identified correction deeds need no PT-61.

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40% assessment ratio

Applying the millage to full market value is the error the question is built around. Preferential agricultural property is assessed at 75% of that level, so 0.75 × 40% = 30% of FMV.

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Millage and the tax bill

Subtract the exemption from the 40% assessed value, never from market value. Order: market value → 40% → minus exemptions → × millage.

Going backwards, divide the assessed value by 0.40 to reach market value. Multiplying by 0.40 a second time is the planted answer.

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Homestead exemption

Apply by April 1, when the tax return books close; a late filing waives it for that year. Once granted it renews automatically while the owner keeps occupying the home.

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Tax lien priority

First in time, first in right is the general rule, and statutory tax liens are the exception that jumps ahead of an earlier-recorded first security deed.

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Appeal and tax-sale redemption

The 45 days run from the date on the notice, not the date it was received. A second year of redemption adds a further 10% of the price.

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Special assessment by front foot

Special assessments are allocated by benefit and frontage, not by assessed value or lot area, and not equally per parcel.

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Loan-to-value

L

loan amount

On a purchase the denominator is the lower of the two numbers. Dividing by the higher appraisal is the most common error.

For CLTV every balance secured by the property goes in the numerator, including a second mortgage or equity line; counting only the first gives the LTV.

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Equity

Current balances, not the original purchase figures, and every lien including a home equity line. The original down payment is not the equity.

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Discount points and origination

Points are a percentage of the loan, never of the sale price. A 1% origination fee plus 2 discount points is 3% of the loan.

To buy yield, divide the gap by 0.125%: one point raises the lender's yield about 1/8%, and 8 points about 1%.

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PITI

Divide the annual escrow items by 12 before adding them. FHA adds monthly MIP on top of PITI.

When a per-thousand factor is given, P&I is the loan divided by 1,000 and multiplied by the factor: a $180,000 loan is 180 thousands, so 180 × $6.32 = $1,137.60.

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First payment split

Interest is charged first, so the principal portion is the small remainder. A $250,000 loan at 6.5% pays $1,354.17 interest and only $226.00 principal in month one.

On an interest-only loan the payment is exactly the monthly interest, the balance never declines, and the full principal balloons. Negative amortization is the reverse: the payment is less than the interest due and the shortfall is added to principal.

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ARM fully indexed rate

Add, never subtract. On a 5/1 ARM the first adjustment comes after five fixed years, then annually, subject to initial, periodic and lifetime caps.

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PMI termination, Homeowners Protection Act

Use the lower of price or appraisal as the base. FHA loans are not covered by the HPA: with LTV above 90% at origination, MIP runs for the life of the loan.

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Qualifying ratios: 28/36 and 31/43

Subtract the recurring debts from the back-end figure before comparing. The larger of the two numbers is never the answer.

Same mechanics, different percentages. Answering with the 28/36 result on an FHA question is the planted distractor.

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FHA down payment and MIP

UFMIP is 1.75% of the base loan after the down payment, not of the sale price, and is usually financed. Annual MIP is divided by 12 to reach the monthly figure.

The Limited 203(k) covers non-structural rehabilitation up to $75,000 with no consultant for case numbers assigned on or after November 4, 2024; 203(b) is the basic purchase program and finances no repairs.

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VA funding fee and entitlement

No loan limit with full entitlement since January 1, 2020, and VA guarantees 25% on loans over $144,000. VA guarantees rather than lends, and the fee may be financed.

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USDA guarantee fees

Divide the annual 0.35% by 12 for the monthly figure: $250,000 gives $875 a year, or $72.92 a month.

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Reverse mortgage (HECM)

The balance rises over time, not falls. It comes due on death, sale, a 12-month absence, or failure to pay taxes and insurance or maintain the home.

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Qualified Mortgage limits

A 30-year fully amortizing fixed loan is the safest structure, not a disqualifier. Ability-to-Repay counts eight factors; marital status is not one and is barred by ECOA.

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Cost approach

Best for new construction and special-purpose property such as schools and churches, where there are neither comparable sales nor income. Depreciation is subtracted, never added.

Age-life questions usually want the depreciated value, which is cost new minus accrued depreciation, not the depreciation figure itself. Sales comparison needs at least three closed sales, generally within 12 months, and reconciliation is judgment, never an average of the three approaches.

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Straight-line (age-life) depreciation

The question usually asks for the depreciated value, which is cost new minus accrued depreciation, not the depreciation figure itself.

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Three kinds of depreciation

An over-built pool is functional; a freeway next door is external. Reversing those two is the classic trap.

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Adjustment direction

The subject is the unknown being valued, so it is never adjusted. CBS and CIA: comp better, subtract; comp inferior, add.

In a rising market the time adjustment is added to the comparable, because it sold before prices rose. Subtracting it is the reversal the question plants.

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Net operating income

PGI

potential gross income at full occupancy

Debt service, depreciation and income taxes are never operating expenses. Property taxes, insurance and management fees are.

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IRV: cap rate and value

I

net operating income

R

capitalization rate

V

value

The lower the cap rate, the higher the value. Multiplying NOI by the rate instead of dividing is the standard wrong answer.

Cash-on-cash is a different measure: NOI less annual debt service, divided by the cash invested rather than by the price.

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GRM and GIM

Keep the periods consistent: a multiplier derived from monthly rent is applied to monthly rent, and one derived from annual rent to annual rent.

Percentage rent is base rent plus the rate times sales above the breakpoint only, and the natural breakpoint is annual base rent divided by that rate.

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CMA, BPO and AVM in Georgia

A BPO may not be the primary basis of value for originating a purchase loan on a principal dwelling, and an AVM output is not an appraisal even if an appraiser signs it.

Federal thresholds: residential at or under $400,000 needs an evaluation rather than an appraiser, and a certified appraiser is required at $1,000,000 or more, over $500,000 commercial, or over $400,000 complex residential.

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The acre

43,650 and 45,360 are digit transpositions planted in the answers. 5,280 is feet in a mile, a linear measure.

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Rectangular area to acreage

300 × 726 = 217,800 ft², which is exactly 5 acres. Halving or doubling the result means the wrong divisor went in.

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Sections and townships

Sections number 1 in the northeast corner and snake to 36 in the southeast. Georgia is not in the PLSS at all: it uses land lots and districts from the state land lotteries.

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Aliquot parts

The N 1/2 of the SE 1/4 of the NW 1/4 is 640 ÷ (2 × 4 × 4) = 20 acres. Read the description from the smallest division backwards to the largest.

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Heated living area

Garages, open porches and unheated space are excluded. Adding the garage is the standard wrong answer.

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Legal descriptions

A street address is never a legal description. Acreage is a result of the calls, not a required element of them.

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Prelicense hours and age

High school graduation or the equivalent is also required of a salesperson applicant.

A broker applicant also needs active status at least 3 of the 5 years immediately preceding application; inactive time inside that window does not count, and total years licensed is not the test.

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Applying after the exam

The $175 PSI examination fee is a separate charge and is not the license fee.

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Post-license and continuing education

The statutory floor is 6 hours a year, but the rule requires 36 to renew. No examination may be required for continuing education.

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Reinstating a lapsed license

The $25 penalty fee belongs to failing to notify the Commission of a change of address, trust account, transfer or inactive status.

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Disciplinary fines

Nine violations still cap at $5,000. Cost assessments reimbursing the Commission are not fines and are outside the cap.

Against unlicensed activity a cease and desist order becomes final in 10 days and carries up to $1,000 per transaction; a citation becomes final in 30 days, and a letter of findings is not a sanction and never appears on the license history.

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Real Estate Education, Research and Recovery Fund

Claims are paid in the order filed, so the shortfall falls on the last claimant. Payment automatically revokes the license, and bankruptcy does not erase the duty to repay with interest.

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Opening the trust account

A broker who accepts no trust funds need not keep an account at all. The 3-business-day figure is the citation benchmark for a late deposit, not for opening the account.

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Depositing earnest money

Banking days, not calendar days. The salesperson must deliver the check to the broker as soon as practicable; a licensee may never hold trust funds personally.

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Monthly reconciliation

Written, at least monthly, and kept three years. Comparing the checkbook to the bank statement without trust liability misses the point of the exercise.

Only a bank-required minimum balance and a service-charge reserve, clearly identified as the broker's, may sit in the account. The broker takes no part of the earnest money as commission until the transaction is consummated or terminated.

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Community association fidelity coverage

Reserves are added to the three months of assessments; taking one and omitting the other is the planted error. A board cannot waive the requirement.

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Records and closing statements

The closing attorney's settlement statement does not discharge the broker's own delivery duty, and nothing is filed with the Commission.

On termination of a property management contract the broker has 30 days, or the period stated in the contract, to deliver a full accounting, all records and all funds.

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Advertising rules

Outdated website content must be corrected within 30 days; a sign comes down within 10 days of expiration and goes up only with the owner's written consent.

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Security deed, O.C.G.A. 44-14-60

Georgia is a title-theory state. A true Georgia mortgage under 44-14-30 passes no title and must be foreclosed judicially, which is why lenders use the security deed.

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Cancelling a paid security deed

Plus actual loss and attorney's fees. Substantive reconveyance does not excuse the record cancellation.

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Notice before a power-of-sale foreclosure

Notice is deemed given on the official postmark day, must name the person with full authority to modify the loan, and any waiver of it in the security instrument is void.

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The sale itself

The only shift allowed is to the following Wednesday when the first Tuesday is New Year's Day or Independence Day.

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After the sale

No confirmation, no deficiency judgment, and the court confirms only if the property brought its true market value. There is no post-sale redemption after a power-of-sale foreclosure; the 12 months and 20% belong to tax sales.

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Attorney-conducted closings

Witness-only closings are the unauthorized practice of law. Video conference is permitted under FAO 23-1, but the lawyer may not delegate the closing to a non-lawyer.

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Good funds law, O.C.G.A. 44-14-13

Cashier's checks of federally insured institutions, government checks and checks on Georgia attorney or broker escrow accounts are the other exceptions.

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Seven protected classes

Georgia's Fair Housing Act protects the same seven. Sexual orientation and gender identity are enforced within the sex class rather than added to the list, and age is not a class.

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Fair housing exemptions

No exemption ever covers advertising. A fourth house defeats the owner exemption before any other condition is examined.

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Housing for older persons

The 80% applies to occupied units, not to total units, and published policies showing the intent are also required.

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Fair housing complaint windows

Reversing the two is the classic trap: the administrative route has the shorter deadline. A court action may be brought whether or not a HUD complaint was ever filed. HUD's 100 days is its own investigation deadline.

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Antitrust

Say the firm's own rate and that commissions are negotiable. Implying an area-wide standard rate suggests an agreement among competitors, and an oral agreement is enough.

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RESPA

The $10,000 figure is the criminal fine, paid to the government. Surpluses of $50 or more are refunded within 30 days, and temporary construction or bridge financing is exempt.

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TILA and TRID clocks

For both clocks a business day is every day except Sundays and federal holidays, so Saturday counts. A mailed disclosure is deemed received three business days after mailing.

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Brokerage engagement under BRRETA

A Georgia broker owes only the duties BRRETA lists and is not a common-law fiduciary. Payment of compensation never determines the relationship.

Two duties survive termination: accounting for money and property, and confidentiality, which lasts indefinitely. Confidentiality never covers known material defects.

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Dual and designated agency

Oral consent is an unfair trade practice. A broker with no client performing ministerial acts is a transaction broker, not a subagent.

Agency and compensation must be disclosed in writing to both sides in a timely manner and in any event no later than the time any party first makes an offer.

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Binding Agreement Date

Signing is not acceptance and mailing is not delivery; the party giving notice carries the burden of proving it.

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Due Diligence Period

Counting the Binding Agreement Date as day one is the off-by-one. Banking days govern only the earnest money and cure clocks, and time is of the essence with no weekend rollover except closing.

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Seller's remedy on buyer default

It is the buyer who keeps specific performance. Special stipulations control over conflicting pre-printed paragraphs.

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Security deposit cap, Safe at Home Act

For leases entered or renewed on or after July 1, 2024, and the cap cannot be waived. Three months' rent was in the introduced bill and never became law.

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Returning the deposit

Treble the amount improperly withheld, not the whole deposit. A good-faith unintentional error with reasonable procedures reduces it to the single amount.

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Terminating a tenancy at will

The asymmetry is deliberate; reversing it is the classic error. A holdover the landlord accepts rent from becomes a tenant at will.

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Adverse possession

Color of title means written evidence such as a defective deed. The 5, 10 and 15-year figures come from other states.

An oral license acted on at expense stops being revocable and becomes an easement running with the land.

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Co-ownership defaults

A lifetime transfer severs only the transferring tenant's share; the remaining joint tenants keep survivorship between themselves.

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Intestate spouse's share

With three children an equal split would be 1/4, below the floor, so the spouse takes 1/3 and the children divide 2/3. Year's support is an additional protection, not a substitute.

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Mechanic's lien clock

The filed claim expires at 395 days if no notice of commencement of lien action is filed.

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Variance, special use, nonconforming use

Zoning notice runs at least 15 and not more than 45 days before the hearing, with the sign posted at least 15 days ahead.

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Lead-based paint

1977 is covered and 1978 is not. The seller never has to test or abate, and the 10-day period applies to sales only; it may be changed by mutual written agreement or waived in writing.

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Environmental figures

Zone AE is a Special Flood Hazard Area, so flood insurance is mandatory on a federally backed mortgage. EPA says material dried within 24 to 48 hours usually will not grow mold.

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