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Real Estate Test > Ky Real Estate Test Ch 2 part 3 > Flashcards

Ky Real Estate Test Ch 2 part 3 Flashcards

1
Q

Once property is listed

A. the sales associate, by law, has to approve all advertisements because he/she has talked to the seller and not the principal broker

B. the sellers may advertise with permission of the principal broker

C. if the sellers advertise they must follow the same rules as the principal broker

D. all advertising must be placed by the principal broker

A

C. if the sellers advertise they must follow the same rules as the principal broker

Sellers may advertise, and if they do advertise, they must use the principal broker’s name with designation or fully company name. The listing broker must inform the seller of the rule. in writing.

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2
Q

All brokerage ads must contain

A. principal broker’s name, sales associate’s name, and company name

B. principal broker’s name, address, and phone number

C. company name as generally known and principal broker’s name

D. principal broker’s name with designation or full company name

A

D. principal broker’s name with designation or full company name

Although there may be different rules for internet advertisements, the one constant with all brokerage ads is that the advertisement must contain the principal broker’s name with designation or the full company name. The principal broker’s designation is “principal broker”. The full company name is the name registered with the KREC.

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3
Q

The license law requires written permission to

A. advertise an open house

B. offer owner financing

C. place a for sale sign on the property

D. advertise on the internet

A

C. place a for sale sign on the property

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4
Q

In order to advertise property, the principal broker must have

A. written permission of the multiple listing service

B. written permission of the current owner

C. permission of the listing affiliate

D. permission of the current owner

A

B. written permission of the current owner

Written permission of the current owner is needed to advertise property.

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5
Q

True or False & Why

Sally has been hired as an employee to make phone calls scheduling appointments for the principal broker of a large real estate broker. She does not have a real estate license and must get one within 30 days under the license law.

A

False

Making cold calls is one of the exceptions to licensing.

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6
Q

True or False & Why

If a license sends the KREC a check that is returned for insufficient funds, the licensee’s license is canceled.

A

True

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7
Q

True or False & Why

On an ad the Name of the Team or Group can be 1% larger than the broker name or company name.

A

False

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8
Q

True or False & Why

A property owner has asked his/her regular salaried housekeeper to show his/her real estate to a prospective buyer. The housekeeper may show the property without a real estate license.

A

True

As long as she is a salaried employee of the owner she can show the property.

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9
Q

True or False & Why

The bankruptcy trustee must have a real estate license to sell real property in the bankruptcy.

A

False

The Trustee is operating under a Court Order which is an exception to the licensing requirement.

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10
Q

True or False & Why

Licenses expire annually on April 1st.

A

False

They expire on March 31st.

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11
Q

True or False & Why

Licensees must carry the group policy.

A

False

Licensees may arrange for private insurance that meets the statutory requirements.

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12
Q

True or False & Why

Licensees can never advertise properties listed with other brokerages.

A

False

In order to advertise another principal broker’s listings, you must have permission of the listing principal broker.

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13
Q

True or False & Why

All brokerage advertising must contain the full company name or the broker’s name with designation.

A

Ture

A seller must also follow this rule if he/she advertises his/her property.

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14
Q

True or False & Why

All active licensees in Kentucky must have E&O insurance

A

True

Licensees who are in escrow do not have to have professional liability insurance.

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15
Q

True or False & Why

If the applicant has been convicted of a felony within ten (10 years), he/she cannot have a real estate license in the state of Kentucky.

A

False

The KREC will conduct an investigation of the facts surrounding the crime and will hold a hearing to determine if the applicant would pose a threat to the consuming public.

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16
Q

True or False & Why

The criminal background check is performed by the Kentucky Administrative Offices of the Court.

A

False

It is performed by the FBI.

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17
Q

True or False & Why

Licensees must have written permission of the owner before placing a sign on the property.

A

True

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18
Q

True or False & Why

An attorney can market real estate without a real estate license as long as he/she charges the standard fee charged by real estate agents.

A

False

The attorney must have a license and THERE IS NO STANDARD FEE. That statement would be a violation of the anti-trust laws.

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19
Q

True or False & Why

Al has been hired to manage a small apartment building and a large part of his compensation is the use of the manager’s apartment. He does not have a real estate license and does not need one.

A

True

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20
Q

True or False & Why

The fine for failing to renew on time is $500.

A

False

The fine is $1,000.

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21
Q

True or False & Why

Licensees are required to notify the Commission of a change of residence address within fifteen (15) days.

A

False

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22
Q

True or False & Why

The minimum coverage for E&O is $50,000.

A

False

It is a $100,000.

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23
Q

True or False & Why

The KREC requires the FBI background report to ascertain if the applicant has been convicted of a felony within ten (10) years or misdemeanor within the past five (5) years.

A

True

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24
Q

True or False & Why

A broker must ascertain whether or not a referral has been sent by a licensed person before paying a referral fee.

A

True

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25
Q

True or False & Why

Fraud is one of the exclusions under the E&O policy.

A

True

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26
Q

True or False & Why

The term brokerage is only used when referring to a real estate company.

A

False

Brokerage is used to refer to a real estate company and the service performed by the company.

27
Q

True or False & Why

If a document is sent by fax the time of delivery is the time sent from the originator’s fax machine/computer.

A

True

28
Q

True or False & Why

Principal brokers must ensure buyers and sellers receive a debit and credit closing statement.

A

True

If the settlement agent does not prepare a debit and credit closing statement, the principal broker must either have one prepared or prepare one himself/herself.

29
Q

True or False & Why

Principal brokers and sales associates may advertise their fees.

A

True

30
Q

True or False & Why

If a licensee wants to be inactive until a later date he/she should ask the KREC to cancel his license.

A

False

If a licensee wants to become inactive, he/she may place his/her license in escrow.

31
Q

True or False & Why

In the license regulations, without unreasonable delay means five (5) years.

A

False

Without unreasonable delay means three (3) business days.

32
Q

True or False & Why

Copies of all written offers must be kept by the principal broker for a period of five (5) years.

A

True

The statute does not specify which principal broker but it is generally accepted that it is the buyer’s principal broker and not the seller’s principal broker.

33
Q

True or False & Why

Affiliated licensees are considered employees.

A

False

They are independent contractors not employees.

34
Q

True or False & Why

The time of delivery of an emailed document is the time that it is sent from the originator’s email system.

A

True

35
Q

True or False & Why

A sales associate may manage the branch office if the branch office is within a 100 mile radius of the firm and he meets certain experience standards.

A

True

36
Q

True or False & Why

Failing to give a person a copy of the contract he/she signed would be a license law violation.

A

True

A copy must be given to the signer immediately upon signing.

37
Q

True or False & Why

There can never be more than one principal broker in the brokerage.

A

False

There is one exception to the one principal broker per office rule.

38
Q

True or False & Why

Advertising must not be intentionally false, misleading, or deceptive.

A

True

39
Q

True or False & Why

If a broker receives the buyers good faith check on July 13th (a Friday), the earnest money deposit must be in the bank no later than Wednesday of the following week.

A

True

40
Q

True or False & Why

When a property is sold by absolute auction it must sell for at least 75% of the advertised amount.

A

False

A property sold at absolute auction must be sold to the highest bidder regardless of how low the sales price.

41
Q

True or False & Why

Escrow accounts cannot be interest-bearing accounts.

A

False

Escrow accounts can be interest bearing; however, the buyer and seller have to agree who receives the interest earned.

42
Q

True or False & Why

An agent with a sales associate’s license can never have his/her name in the firm name.

A

False

43
Q

If an agent fails to tell the KREC that he has changed principal brokers, his license will MOST LIKELY be

A. canceled.

B. placed on probation.

C. suspended.

D. revoked.

A

A. canceled.

44
Q

An applicant for a license must provide a

A. criminal background check.

B. credit report.

C. financial statement.

D. affidavit from principal broker.

A

A. criminal background check.

45
Q

The delinquency plan must be completed no later than

A. February 10th

B. January 1st

C. June 15th

D. July 1st

A

A. February 10th

46
Q

E&O insurance is LIKELY to pay claims on all the following EXCEPT when the licensee

A. thought the shingles on the roof were 3 years old and they were 10 years old.

B. believed the house was 2,000 square feet.

C. thought the city water was available to the property.

D. knew the basement had leaked but helped the seller cover it up.

A

D. knew the basement had leaked but helped the seller cover it up.

47
Q

A referral fee may be paid to the licensee’s Sunday School teacher if the teacher

A. is the principal broker of the licensee’s company

B. is an attorney-at-law.

C. has a power-of-attorney.

D. has a Kentucky real estate license.

A

A. is the principal broker of the licensee’s company

48
Q

The minimum education requirement for obtaining a license is

A

high school diploma or equivalent.

49
Q

In order to obtain a real estate license, the KREC must determine you are

A. educated, experienced, and competent.

B. honest, truthful, trustworthy, and have a good reputation.

C. a citizen living in the Commonwealth of Kentucky.

D. a property owner with a good reputation.

A

B. honest, truthful, trustworthy, and have a good reputation.

50
Q

An out-of-state licensee may obtain a Kentucky license through

A. petition to the KREC.

B. license reciprocity

C. reciprocity.

D. testing.

A

B. license reciprocity

51
Q

Because of the statute of frauds, if a seller refuses to pay the agreed upon real estate commission after promising to do so, the broker

A. can file a lawsuit to collect the commission.

B. can ask the buyer to pay the commission.

C. can do nothing unless the promise was in writing.

D. should file a lien on the property.

A

C. can do nothing unless the promise was in writing.

52
Q

The Kentucky CORE class must be taken

A. every year if the license was issued after June 19, 1976.

B. every four years, unless licensee is grandfathered.

C. only when license is being taken out of escrow.

D. every year, except for the first year of licensing.

A

B. every four years, unless licensee is grandfathered.

53
Q

A principal broker must

A. adequately supervise all affiliates

B. have an ownership interest in the brokerage.

C. be principal broker for only one company at a time.

D. have had at least two (2) years experience as a broker.

A

A. adequately supervise all affiliates

54
Q

If the buyer’s agent discloses to the selling agent that the buyer wants to buy the house so her son can play basketball at the high school in the district, the agent has MOST LIKELY breached his fiduciary duty of

A. loyalty.

B. confidentiality.

C. reasonable care and skill.

D. accounting.

A

B. confidentiality.

55
Q

After receipt of the good faith check the earnest money must be deposited

A. according to the terms written in the contract.

B. without unreasonable delay.

C. immediately.

D. without undue delay.

A

B. without unreasonable delay.

56
Q

Barbara decided to close her general brokerage account and keep all her brokerage funds in the escrow account because the money would be safer. Her actions

A. are fine as long as she notifies the KREC.

B. will be acceptable as long as the buyer and seller agree.

C. make sense because her bank charges will be reduced.

D. are illegal because she is co-mingling funds.

A

D. are illegal because she is co-mingling funds.

57
Q

Money can be released from the escrow account in all the following situations EXCEPT

A. performance.

B. notification that the home inspection was not satisfactory.

C. court order.

D. mutual release signed by all parties.

A

B. notification that the home inspection was not satisfactory.

58
Q

The HUD-1 settlement statement is

A. a debit and credit type closing statement.

B. required for all closings.

C. prepared by the principal broker.

D. must be submitted to the lender one day before closing.

A

A. a debit and credit type closing statement.

59
Q

Eduardo decides he wants to be a principal broker for three brokerages that will market different types of property. Eduardo

A. may have all of his affiliates working for all three brokerages.

B. must have a separate escrow account for each company.

C. will need to have a broker manager for two of the three companies.

D. cannot be broker for more than one brokerage at a time.

A

B. must have a separate escrow account for each company.

60
Q

An affiliation fee

A. may be charged by the broker if the agent does not sell one property a month.

B. may not be charged by the broker for any reason.

C. may not be charged unless the agent has been licensed for five (5) years.

D. may be charged by the principal broker.

A

B. may not be charged by the broker for any reason.

61
Q

When an associate is paid his/her commission, the principal broker

A. gives the associate his/her share of commission earned with no tax deductions.

B. deducts for health insurance.

C. deducts federal and state income tax.

D. gives the associate the full commission after subtracting office expenses.

A

A. gives the associate his/her share of commission earned with no tax deductions.

62
Q

All of the following statements about advertising are true EXCEPT

A. licensee must have the written permission of the owner to place a sign on the property.

B. ads cannot be intentionally false, misleading, or deceptive.

C. ads must contain the name of the principal broker or the full company name.

D. after the closing, the licensee may place a sold insert in on the sign and leave it for 30 days.

A

D. after the closing, the licensee may place a sold insert in on the sign and leave it for 30 days.

63
Q

Principal Broker Sam has just received a notice that the buyers’ loan has not been approved. The sales contract had a financing contingency and the buyers want their earnest money returned, based on the rejection letter. Broker Sam may return the earnest money

A. immediately, as long as she keeps a copy of the disapproval letter from the lender.

B. unless the seller objects within 60 days.

C. because of the financing contingency.

D. with a release signed by the buyer and seller.

A

D. with a release signed by the buyer and seller.

Real Estate Test (30 decks)

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