Ky Realtors Flashcards
to pass the KY Realtor Exam
The governor appoints five commissioners, four of whom have
had an active license for the past ten years.
The following are duties of the KREC EXCEPT to
fine a licensee $1,200.
The KREC requires brokers to keep records for
five years.
The maximum amount that may be paid an aggrieved party from the Recovery fund is up to
$20,000 if the licensee is found guilty of fraud.
The minimum amount that may be maintained in the Recovery Fund is
$400,000.
Sanctions by the KREC after a formal hearing can include all of the following EXCEPT
placing a licensee on probation indefinitely.
Dual agency may only be formed by
written informed consent of both the buyer and the seller.
John Doe, who does not have a real estate license, is advertising that buyers have not seen all properties for sale until they have seen his listed properties. The KREC may file a
civil action to prohibit him from practicing real estate.
A complaint has been filed with the KREC. If it is determined that the complaint contains prima facie evidence against the licensee, the licensee has
20 days to answer after the complaint is sent to him.
On December 15 the KREC issued Mary Jo’s broker her new license. Mary Jo will be required to renew her license by
March 31 of the following year.
A neighbor referred you to a buyer who purchased a million dollar home from you. After the closing the neighbor asked for a referral fee of $1,000. You may graciously say,
“Thank you for the referral but the law doesn’t allow me to give you a referral fee because you are not licensed.”
The Chairperson of the Kentucky Real Estate Commission is appointed by
the commissioners.
Ron placed his license in escrow. While his license is in escrow he must
pay annual renewal fees.
On December 15, Agnes passed her real estate exam. She has
60 days to apply for her real estate license.
One doe NOT have to be at least 21 years of age as a requirement for securing a real estate license in Kentucky.
True
The seller just accepted and signed an offer to purchase. The principal broker must place the earnest money check in her escrow account within
three business days.
A sales associate owns rental property. The tenants’ security deposits must by Kentucky law be placed in
a separate security deposit account.
In order to manage a branch office outside a 100-mile radius of the main office, the person must have
a brokers license.
An unlicensed assistant may NOT
show the house with the seller’s permission.
For a Kentucky principal broker to work with an out of state principal broker in a commercial transaction, the two documents which must be signed by the brokers are
Cooperative agreement and notice of affiliation agreement.
Mr and mrs Moore listed their property with XYZ Realty and they also have the right to sell the property without the services of the brokerage. Their agent should inform them that if they advertise the property to include
The principal brokers name with designation or the brokerage name.
Broker Redford appointed Jose, the listing agent, as the agent of the seller. He appointed Nadine as the agent of the buyer. This is BEST described as
Designated agency.
An agents license had been suspended for thirty days. The agent can receive compensation if it was earned
Prior to the suspension period.
An agent listed a property and three days later, the seller accepted an offer. When the transaction closed the seller gave the agent a $1,000 bonus check. The agent must
Give it to his or her principal broker.
Active real estate licensees are required to take the core course as his/her continuing education requirement every
Four years.
An affiliate is transferring to another brokerage firm. The principal broker should return the agents license to the KREC
Immediately, but no later than 5 days to be in compliance with the law.
Principal broker Fernando of ABC realty had his real estate license suspended. This means
The licenses of his agents are automatically inactive.
A commissioner will be automatically removed from the KREC under all of the following circumstances EXCEPT
if the chairman, who is also a broker, lists a property.
Principal broker sue charged sandy $250 as an affiliation fee. This action by the principal broker is
Illegal because Kentucky law prohibits affiliation fees.
The statue of frauds requires that real estate contracts
Be in writing to be enforceable.
An ending date that automatically renews is a listing contract provision that would be
Illegal under Kentucky law.
The seller of a listed property refused to pay the commission to the broker. In order to collect, the broker must file the lien within ____ months after the service of the broker ceases and it must be filed __________.
6; in the county where the real estate is located.
Under Kentucky’s no call laws, an agent would NOT be allowed to
Call, fax or leave a voicemail for potential buyers who signed a guest book at a open house.
The sellers disclosure of property condition must be delivered to the seller when the seller is
Listing his/her property.
A licensee from another state may obtain a Kentucky license through
License recognition.
An agent entered into a listing agreement with mr and mrs seller who are settling an estate. The agent is NOT required to disclose the owner
Died of HIV/AIDS.
Under Kentucky law, the consumer guide to agency relationships must be delivered to prospects
Before the licensee receives confidential information.
There is an overdraft in the principal brokers escrow account. The broker has to correct the overdraft within
72 hours or they will need to report it to the KREC.
“The escrow account bank and account number do not have to be given to the tenants” is
False regarding the property management laws in Kentucky.
The last month rent was paid by the tenant and there was no damage when the tenant moved. He left no forwarding address and the landlord sent the proper notice to the last known address of the tenant. If the tenant does not request it, the landlord may
Retain the security deposit after 60 days.
The two forms of ownership characterized by the right of survivorship are
Joint tenancy and tenancy by the entirety.
Mr. owner just purchased a new garage door opener. When he garage door opener is installed, it will be classified as
A fixture.
“Point of beginning” is a term that would NOT be associated with
The government survey.
A couple had three children and one of them as disabled. The parents died. In their will, the parents gave one sibling the legal right to live in the property for the life of the disabled child. This situation is BEST described as
A life estate pur autre.
Two brothers purchased a property on the lake. If they did not tell the title company how they wanted to acquire title, the brothers will probably hold title as
Tenants in common.
Zoning, taxation and police power are examples of
Public restriction.
A lie pendens means a lawsuit is pending and the notice will
Make the property unmarketable.
A title search revealed the following lines on the property: HOA lien, mortgage, ad valorem taxes and a home equity line of credit. Which will be paid first at closing?
Ad valorem
When the seller sold the property her interest was conveyed using a quitclaim deed. This means the ____ transfers whatever ______ they have in the real estate.
Grantor; interest
Zoning requires a lot to have 12,000 square feet. If a lot contains 11,990 square feet, the owner may
Request a variance.
Title to a property is transferred
When the deed is accepted by the grantee.
A property has been sold at foreclosure. This is an example of
Involuntary alienation
Changes in land use brought about by zoning ordinances is a title defect that would be covered by a standard or extended title insurance policy. T/F
False
The term remainder interest or remainder estate refers to the
Remaindermans interest in a life estate.
The unified of time, title, interest and possession are associated with
Joint tenancy.
Jackie has a proprietary lease to an apartment in NYC. Her monthly payment includes her portion of the mortgage payment, insurance and maintenance. Jack owns a
Cooperative.
In preparation for a listing presentation on a residential home an agent completed a comparative market analysis. This process is similar to
Market data approach.
When determining the value of a property, it is the appraisers duty to
Estimate the market value.
The legal use that results in the greatest net value being attributed to the property BEST describes the
Highest and best use.
A ten unit apartment building creates the following income: 5 apartments rent for $500; 5 apartments rent for $600; vacancy rate - 5%; expenses - $600 per month. If the potential buyer wants an 8% return, he can pay
$693,750 for the building.
The first and last steps of the appraisal process are
Define the problem and report the value.
All of the following types of depreciation are considered curable EXCEPT
A neighbor who does not maintain the property.
The terms dominant and serving estate are associated with
Appurtenant easement
Under the cost approach an appraiser determined the following: replacement cost-$600,000; depreciation-2% per year for 10 years; land value-$195,000. The appraiser will depreciate
The $600,000 replacement cost.
When estimating the value with the market data approach to appraising, the appraiser will make
Adjustments for the amenities in the comparable properties.
Last year an owner determined that her expenses on her investment property were $12,000. This year the expenses are $10,000. If the effective gross income remained the same, and the cap rate was 7% each year,
The value would increase.
Date does NOT represent an essential element of a contract.
T/F
True
Upon the creation of listing agreements, sales contracts, and leases they are
Executors, bilateral, voidable contracts.
A contracted entered into under fraud, misrepresentation or with a minor are examples of
Voidable contracts.
“The death of the offeror or offeree will not affect the offer” is a T/F statement regarding offer and acceptance.
False
The difference between compensatory damages and punitive damages are
Compensatory are awarded for a loss and Punitive are awarded as punishment.
Three days before closing the seller informed his agent that circumstances had changed and he would not sell the property. The buyer can
Sue for specific performance.
The parties to a contract decided to cancel the contract. Legally, they were returned to the same legal positions they were in before they entered the contract. This action is known as
Recission
An owner entered into a 3-year lease with a company. Six months later the company was sold and the landlord allowed the owner to substitute a new lease agreement with the new owner of the company. This action describes
Assignment
Agent Sam of Moore Realty listed a property. Agent Pam of Trapp Realty found the buyer for the property. Pam may
Be paid by the principal broker of Trapp Realty.
An owner entered into a six month listing agreement with JFK realty. Three days later the agent presented the seller with an offer which was accepted. The offer did not contain any contingencies. Later that week a tornado totally destroyed the property. The sales contract is
Binding but may be voided by the buyer.
Agent Linda listed the property of Mr. and Mrs. Homeowner. The listing agreement is an employment contract between
Linda’s brokerage and the homeowners.
Agent Roger was paid $13,650 or 60% of his broker’s share. If the seller agreed to pay a commission of 6.5%, the sales price is
$350,000
Agent Sharon lives in Chicago. She referred a buyer to Agent Carrie in Lexington, Kentucky. When the transaction closed Sharon received $1,800 or thirty percent of Carrie’s commission. Carrie was paid 50% of her broker’s commission. If the broker charged a 6% commission, the sale price was
$200,000
After the seller listed his property, a neighbor down the street saw the For Sale sign of the brokerage firm in the yard. The neighbor rang the door bell and asked to see the property. Three days later, a contract was presented by the buyer’s attorney that the seller accepted. At the closing, the listing brokerage firm was paid a commission.The seller signed a
Exclusive right to sell listing.
A buyer entered into agency agreements with three different brokers. The buyer agreed to pay the broker who located the property that the buyer would purchase. The buyer signed an
Open agency agreement
Maintenance is a fiduciary duty that an agent has with a seller.
False. It is not a fiduciary duty.
In 1980 a $9 billion fund known as the Superfund, was created to clean up uncontrolled hazardous waste sites and to respond to environmental spills. Liability under CERCLA includes
Strict, joint, and retroactive liability.
To give the seller or buyer advice on environmental issues would
create liability for a licensee.
The odorless, tasteless, radioactive gas produced by the natural decay of uranium is called
radon.
The term friable is associated with
asbestos.
Real estate licensees must be aware of possible environmental hazards and know where to go to seek professional help is the WORST policy an agent could have in regards to environmental hazards. T/F
False, it is the BEST policy.
The Lead-based Paint Hazard Reduction Act requires that
landlords disclose lead information before leases take effect.
The EPA recommends mitigation if a radon level is
4 PicoCuries per liter of air.
A landlord owns two apartment buildings. The landlord may charge rent based on
the number of people living in the apartments.
“The owner of a single family home may secure the services of a broker and advertise that the house is for sale only to a disabled person” is
NOT a legal exemption under the Fair Housing guidelines.
A person filed a complaint for discrimination with the HUD. The penalty that an administrative law judge (ALJ) may impose for the first offense is up to
$11,000.
Broker Bob will only agree to list an owner’s property if the owner will buy a new house in Bob’s development. This is an example of a violation of
Tie-in agreements
Broker Rob installed ramps, put up Braille signs on the elevators, and widened the doorways to all offices. These actions would mean he is
In compliance with the Americans with Disabilities Act.
The owner of a four-plex may legally refuse to rent to a potential tenant because
the person is a drug addict.
A three-party instrument whereby the trustor conveys title to the trustee for the benefit of the lender (beneficiary) is a
deed of trust.
Trust deed is NOT associated with a land contract. T/F
True
“A mortgage is evidence of debt and must be signed by the lender” is a T/F regarding a mortgage.
False
Commercial banks, savings and loans, mortgage bankers and mortgage brokers are examples of
businesses where loans are made directly to borrowers.
Due on sale clause would not allow a current property owner to sell a property subject to
the mortgage being assumable by a new buyer.
The buyer’s offer of $145,500 was accepted by the seller. The seller agreed to pay a 6 percent commission and 1 discount. Annual taxes of $2,945 were paid on January 1. If the buyer has a twenty percent down payment and the closing takes place on June 23, how much money will the buyer need to bring to the closing?
$30,630
In an adjustable rate mortgage, the margin will
adjust over the loan term.
The interest portion of the buyer’s first monthly payment was $1,482.30. She negotiated a loan with a 6 percent interest rate for 30 years and had a ten percent down payment. The sale price was
$329,400.
A homeowner’s monthly tax bill is $116.67. If the tax rate in her jurisdiction is 10 mills and the property assessed for 100 percent of the value, the assessed value is
$140,000.
The closing statement indicated the following: seller’s existing mortgage-$100,000, cash due to seller- $50,000; deed preparation fee- $250; attorney fee-$250; and the real estate commission of 6%. The sale price of the property is
$160,106
A conventional loan may be insured or uninsured and is made without
a government guarantee or insurance.
A conforming loan meets the standards set by
Fannie Mae or Freddie Mac.
Truth-in-Lending does NOT require a three day right of rescission for a first mortgage on a property that is being purchased.
True
The loan that allows a person 62 years of age or older to negotiate a loan on their property without making a monthly payment, or without income or credit qualifications is a
reverse mortgage.
A borrower has made monthly PI payments of $729.34 on his loan for 5 years. The final payment of $60,243.29 is due within the next 60 days of the end of the 5-year term. The borrower MOST LIKELY has a
balloon mortgage.
Mr. and Mrs. Baby boomer have purchased a furnished condo in a resort community. Their loan includes the condo, furniture and a new car. They secured a
package loan.
In a sublease, a sub-lessor is
liable to the lessor.
A lease has definite beginning and ending dates. This lease does not automatically renew. This is an example of an
estate for years.
The buyer will be able to deduct the lease payments as a business expense is a term that would be part of a sale-leaseback.
False. It is not a term
On September 1, an owner collected $2,000 in rent. The property closed on September 15. The HUD-1 would receive
$1,000 credit to the buyer and he can raise the rent when the lease expires after closing.
The landlord did not fulfill his responsibility of paying the water bill. Under these circumstances, _________. This act would be _________.
the tenant may vacate the premises; constructive eviction.
The purpose of the security deposit is to
ensure that the property is returned to the owner in good repair at the end of the lease.
To be classified as an independent contractor, the IRS does not require that
the agent be classified as a full time agent.
The broker deposited an earnest money check into his business account. This illegal process is called
Commingling.
Agent Lisa in Chicago referred a buyer to Agent Susie in Lexington, KY. The six percent commission paid by the seller was
split equally between the listing broker and the buyer’s broker.
Agent Susie was paid two percent of her broker’s fee and she paid $1,875 which represented a 25% referral fee to Agent Lisa. The sale price of the property was
$375,000.
The HUD-1 statement indicated that the cash to the seller was $125,550 and that a five percent commission was paid. The sale price of the property was
$132,157.89
A borrower negotiated a thirty year fixed mortgage with a six percent interest rate. She had a ten percent down payment. If the interest portion of her first monthly payment was $562.50, she paid
$125,000 for the property.
The seller listed a property for $135,000 but accepted the buyer’s offer of $133,000. The buyer secured a 95% loan and the property appraised for $132,000. If the seller agreed to pay three discount points, the HUD-1 would show
$3,762 due to the seller.
An offer was accepted by the seller on June 15. The closing took place on July 11 and the property taxes of $2,345 were paid in advance. Using a banker’s year to compute the entries for the property taxes on the HUD-1 if the buyer is responsible for the day of closing he is responsible for
$1,107.36 due to the buyer.
A driveway measures 12’ x 25’ x 6”. If concrete cost $159 per cubic yard, it will cost
$883,32 to pour the driveway.
