Ky Realtors Flashcards
to pass the KY Realtor Exam
1
Q
The governor appoints five commissioners, four of whom have
A
had an active license for the past ten years.
2
Q
The following are duties of the KREC EXCEPT to
A
fine a licensee $1,200.
3
Q
The KREC requires brokers to keep records for
A
five years.
4
Q
The maximum amount that may be paid an aggrieved party from the Recovery fund is up to
A
$20,000 if the licensee is found guilty of fraud.
5
Q
The minimum amount that may be maintained in the Recovery Fund is
A
$400,000.
6
Q
Sanctions by the KREC after a formal hearing can include all of the following EXCEPT
A
placing a licensee on probation indefinitely.
7
Q
Dual agency may only be formed by
A
written informed consent of both the buyer and the seller.
8
Q
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
A
civil action to prohibit him from practicing real estate.
9
Q
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
A
20 days to answer after the complaint is sent to him.
10
Q
On December 15 the KREC issued Mary Jo’s broker her new license. Mary Jo will be required to renew her license by
A
March 31 of the following year.
11
Q
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,
A
“Thank you for the referral but the law doesn’t allow me to give you a referral fee because you are not licensed.”
12
Q
The Chairperson of the Kentucky Real Estate Commission is appointed by
A
the commissioners.
13
Q
Ron placed his license in escrow. While his license is in escrow he must
A
pay annual renewal fees.
14
Q
On December 15, Agnes passed her real estate exam. She has
A
60 days to apply for her real estate license.
15
Q
One doe NOT have to be at least 21 years of age as a requirement for securing a real estate license in Kentucky.
A
True
16
Q
The seller just accepted and signed an offer to purchase. The principal broker must place the earnest money check in her escrow account within
A
three business days.
17
Q
A sales associate owns rental property. The tenants’ security deposits must by Kentucky law be placed in
A
a separate security deposit account.
18
Q
In order to manage a branch office outside a 100-mile radius of the main office, the person must have
A
a brokers license.
19
Q
An unlicensed assistant may NOT
A
show the house with the seller’s permission.
20
Q
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
A
Cooperative agreement and notice of affiliation agreement.
21
Q
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
A
The principal brokers name with designation or the brokerage name.
22
Q
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
A
Designated agency.
23
Q
An agents license had been suspended for thirty days. The agent can receive compensation if it was earned
A
Prior to the suspension period.
24
Q
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
A
Give it to his or her principal broker.
25
Active real estate licensees are required to take the core course as his/her continuing education requirement every
Four years.
26
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.
27
Principal broker Fernando of ABC realty had his real estate license suspended. This means
The licenses of his agents are automatically inactive.
28
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.
29
Principal broker sue charged sandy $250 as an affiliation fee. This action by the principal broker is
Illegal because Kentucky law prohibits affiliation fees.
30
The statue of frauds requires that real estate contracts
Be in writing to be enforceable.
31
An ending date that automatically renews is a listing contract provision that would be
Illegal under Kentucky law.
32
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.
33
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.
34
The sellers disclosure of property condition must be delivered to the seller when the seller is
Listing his/her property.
35
A licensee from another state may obtain a Kentucky license through
License recognition.
36
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.
37
Under Kentucky law, the consumer guide to agency relationships must be delivered to prospects
Before the licensee receives confidential information.
38
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.
39
“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.
40
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.
41
The two forms of ownership characterized by the right of survivorship are
Joint tenancy and tenancy by the entirety.
42
Mr. owner just purchased a new garage door opener. When he garage door opener is installed, it will be classified as
A fixture.
43
“Point of beginning” is a term that would NOT be associated with
The government survey.
44
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.
45
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.
46
Zoning, taxation and police power are examples of
Public restriction.
47
A lie pendens means a lawsuit is pending and the notice will
Make the property unmarketable.
48
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
49
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
50
Zoning requires a lot to have 12,000 square feet. If a lot contains 11,990 square feet, the owner may
Request a variance.
51
Title to a property is transferred
When the deed is accepted by the grantee.
52
A property has been sold at foreclosure. This is an example of
Involuntary alienation
53
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
54
The term remainder interest or remainder estate refers to the
Remaindermans interest in a life estate.
55
The unified of time, title, interest and possession are associated with
Joint tenancy.
56
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.
57
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.
58
When determining the value of a property, it is the appraisers duty to
Estimate the market value.
59
The legal use that results in the greatest net value being attributed to the property BEST describes the
Highest and best use.
60
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.
61
The first and last steps of the appraisal process are
Define the problem and report the value.
62
All of the following types of depreciation are considered curable EXCEPT
A neighbor who does not maintain the property.
63
The terms dominant and serving estate are associated with
Appurtenant easement
64
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.
65
When estimating the value with the market data approach to appraising, the appraiser will make
Adjustments for the amenities in the comparable properties.
66
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.
67
Date does NOT represent an essential element of a contract.
| T/F
True
68
Upon the creation of listing agreements, sales contracts, and leases they are
Executors, bilateral, voidable contracts.
69
A contracted entered into under fraud, misrepresentation or with a minor are examples of
Voidable contracts.
70
"The death of the offeror or offeree will not affect the offer" is a T/F statement regarding offer and acceptance.
False
71
The difference between compensatory damages and punitive damages are
Compensatory are awarded for a loss and Punitive are awarded as punishment.
72
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.
73
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
74
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
75
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.
76
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.
77
Agent Linda listed the property of Mr. and Mrs. Homeowner. The listing agreement is an employment contract between
Linda's brokerage and the homeowners.
78
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
79
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
80
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.
81
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
82
Maintenance is a fiduciary duty that an agent has with a seller.
False. It is not a fiduciary duty.
83
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.
84
To give the seller or buyer advice on environmental issues would
create liability for a licensee.
85
The odorless, tasteless, radioactive gas produced by the natural decay of uranium is called
radon.
86
The term friable is associated with
asbestos.
87
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.
88
The Lead-based Paint Hazard Reduction Act requires that
landlords disclose lead information before leases take effect.
89
The EPA recommends mitigation if a radon level is
4 PicoCuries per liter of air.
90
A landlord owns two apartment buildings. The landlord may charge rent based on
the number of people living in the apartments.
91
"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.
92
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.
93
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
94
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.
95
The owner of a four-plex may legally refuse to rent to a potential tenant because
the person is a drug addict.
96
A three-party instrument whereby the trustor conveys title to the trustee for the benefit of the lender (beneficiary) is a
deed of trust.
97
Trust deed is NOT associated with a land contract. T/F
True
98
"A mortgage is evidence of debt and must be signed by the lender" is a T/F regarding a mortgage.
False
99
Commercial banks, savings and loans, mortgage bankers and mortgage brokers are examples of
businesses where loans are made directly to borrowers.
100
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.
101
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
102
In an adjustable rate mortgage, the margin will
adjust over the loan term.
103
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.
104
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.
105
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
106
A conventional loan may be insured or uninsured and is made without
a government guarantee or insurance.
107
A conforming loan meets the standards set by
Fannie Mae or Freddie Mac.
108
Truth-in-Lending does NOT require a three day right of rescission for a first mortgage on a property that is being purchased.
True
109
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.
110
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.
111
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.
112
In a sublease, a sub-lessor is
liable to the lessor.
113
A lease has definite beginning and ending dates. This lease does not automatically renew. This is an example of an
estate for years.
114
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
115
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.
116
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.
117
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.
118
To be classified as an independent contractor, the IRS does not require that
the agent be classified as a full time agent.
119
The broker deposited an earnest money check into his business account. This illegal process is called
Commingling.
120
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.
121
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.
122
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
123
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.
124
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.
125
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.
126
A driveway measures 12' x 25' x 6". If concrete cost $159 per cubic yard, it will cost
$883,32 to pour the driveway.
127
When an owner sold her property she made a ten percent profit of $40,000. She paid _____ for the house.
$400,000
128
The gross income of an investment property is $102,000. If the monthly expenses are $1,000 and the cap rate is seven percent, the value would be
$1,285,714.20
129
A broker wrote a check from the escrow account to pay for a vacation. This illegal act is called
conversion.
130
The buyer's offer was accepted by the seller. At this point, the buyer has
equitable title.
131
"Mother-in-Law Suite" for a single family home is considered
legal in an advertisement
132
The lessor's interest is BEST described as
leased fee estate plus a reversionary right.
133
If the tenant breaches the lease agreement the landlord may regain possession through a legal process called
actual eviction.
134
The tenant lease expired on June 30. On July 1 the landlord informed the tenant that he must vacate the property immediately. The landlord did not accept another month's rent from the tenant. This situation is BEST described as
estate at sufferance.
135
A non-disturbance clause would be found in a
mortgage for commercial property.
136
A triple net lease means the tenant
pays for all operating expenses in addition to the periodic rent.
137
Title theory states, lien theory states, and intermediate theory states are terms which refer to the
lender's interest in a mortgage property.
138
A borrower made their final payment to the lender. Deed in trust is a document that can not be used by the lender to _________________.
release their interest in the property.
139
The market in which loans are bought and sold after they have been funded is the
secondary mortgage market.
140
An investor has purchased and assembled three lots so she can develop a subdivision. Her loan contains a partial release clause. She MOST LIKELY negotiated a
blanket loan.
141
Jason negotiated a loan to purchase a single family residential property. The law which requires the disclosure of loan fees, finder's fees, service charges, points and interest is
Regulation Z.
142
The defaulted borrower's right to redeem the property before the date of the foreclosure sale is called the
equitable right of redemption.
143
A lender in a first lien position agreed to move to a second lien position. The written document that both lenders would sign to fulfill this action is
a subordination agreement.
144
A qualified veteran applied for a loan. The document which places a ceiling on the amount of a loan allowed for the property is
a certificate of reasonable value.
145
Vicki applied for a loan to purchase her first home. The law which requires the lender to provide a good faith estimate within three days of the application is the
Real Estate Settlement Procedures Act (RESPA).
146
When a disinterested third party acts on behalf of the buyer and seller to conduct all closing activities it is called a
closing in escrow.
147
The law does allow a prepayment penalty in a FHA insured and VA guaranteed loan. T/F
False, it does not allow a prepayment penalty.
148
Payment of principal would NOT be a way for a lender to generate income from _______ a loan.
originating
149
Lowering wall-mounted public telephones, reversing the direction in which doors open, and installing auditory signals in elevators are examples of
readily achievable modifications required by the ADA.
150
A person found guilty of violating the Sherman Antitrust laws can be penalized up to
$100,000, three years in jail and the plaintiff may recover triple the damages.
151
A real estate licensee who owns an eight-plex would
NOT be exempt from Federal Fair Housing laws.
152
Under Federal Fair Housing laws, marital status and age are
NOT included in the protected classes.
153
The 1968 Supreme Court case which upheld the Civil Rights Act of 1866 was
Jones v. Mayer.
154
One of the biggest threats to the contamination of groundwater is the 3 to 5 million underground storage tanks where approximately _____ percent are leaking.
40
155
Under Superfund guidelines, retroactive liability means
current and past owners may be liable for the cleanup of hazardous materials.
156
While the owners were on vacation the hose on the washing machine burst and water spewed into the basement for days before it was discovered. An agent hearing the story should be concerned about
mold.
157
The Lead-Based Paint Hazard Reduction Act requires that borrowers of property built before 1978 are given ___ days to conduct an inspection and __________.
10; they may waive this right.
158
An agent can be found liable for failure to disclose material facts that they should have known. T/F
True
159
Abandoned commercial and industrial sites are known as
brownfields.
160
A contract that is created by a person's acts and conduct is called an
implied contract.
161
Kimberly offered to buy Ted's property for $150,000. Ted counter offered at $155,000. In the counteroffer Ted is the
offeror/seller.
162
A new contract has been substituted in place of the original contract. The intent of this action was to discharge the old obligation and to release the liability of the parties in the original contract. This is best described as
novation.
163
A new contract transferred the rights and duties under a contract to a new party. The original party is primarily liable under the terms of the original contract. The word that defines this action is called
assignment.
164
A contract that has been entered into by legally competent parties, contains an offer and acceptance, consideration, consent and has been entered into for a legal purpose is
valid.
165
Paula's property was listed by XYZ realty. John, an agent from ABC realty, called Paula with a full list price offer. On the phone Paula accepted the offer. At this point, the status of the contract is
unenforceable.
166
The term "valid as between the parties" BEST describes
an unenforceable contract.
167
Erin made an offer on Glenn's property contingent upon securing financing within 14 days of the acceptance of the offer. If Glenn accepts her offer, the contingency will create
a voidable contract.
168
On April 30, 2006 an investor knocked on the door of a farmhouse. The investor and the owners negotiated and agreed to the following terms: in return for the consideration of $50,000 the owners would sell the property for $500,000 and the buyer had until April 30, 2007 to decide if he wanted to buy. If the buyer did not purchase the property, the owners would retain the $50,000 for taking the property off the market. The investor called his attorney, who faxed a contract to his computer. The contract was printed and signed by both parties. With these actions the contract that has been created is an
option contract which is unilateral and voidable.
169
A seller knew he had a problem with the foundation. Before he listed the property, he finished the basement to hide the problem. When the buyer's offer was accepted, the buyer hired a property inspector to inspect the property. No defects were found. The problem with the foundation is a
latent defect, and a licensee is not liable for the nondisclosure of the defect.
170
The party in a real estate transaction to whom the agent owes the duties of reasonable care and skill, honest and fair dealing, and disclosure of known facts about the property is a
customer.
171
The intentional misrepresentation of a material fact to harm or take advantage of another person is
fraud.
172
The fiduciary relationship between the brokerage and the client is governed by
common-law law of agency.
173
Answering phone calls in a timely manner is NOT a require to
be entitled to the payment of a sales commission.
174
Loretta and Carrie are new agents for Broker Rusty. At lunch they decide that Loretta will market to Sterling Properties and Carrie will market to Helm Properties. This is a
legal action because the allocation of markets is legal since they work for the same broker.
175
When a seller listed his property with JFK Realty, the seller retained the right to sell the property himself and not pay the broker a commission. JFK Realty was paid a flat fee to place the listing in the multiple listing service. This is an example of a
exclusive agency listing.
176
In the listing contract the broker and the seller agreed to hold each other harmless for any incorrect information supplied by one to the other. This clause in the contract would be called an
indemnification clause.
177
Michael has been given the authority to act on behalf of a person and perform anything the principal could personally do. Michael is a
universal agent.
178
To have monetary worth in the market, a property must have
demand, scarcity and transferability.
179
Sales comparison approach is the method of appraising that would be used to determine the value of
a single family home.
180
The index method, quantity-survey method, unit-in-place method and square-foot method may be used by an appraiser to determine
the reproduction or replacement cost.
181
To compute the capitalization rate,
The annual net operating income is divided by the sales price.
182
The principle of appraising that is considered the foundation for the market data approach is
The principle of substitution
183
Lot 1 is valued at $25,000; Lot 2 is valued at $28,000 and Lot 3 is valued at $30,000. Ben purchased the price of the three lots to develop the Daniels shopping plaza. The appraiser has determined that the value of the three consolidated lots is $100,000. The principle of appraising that would BEST describe the increased value is
Plottage
184
3 ways to hold title to property are
Tenancy in entirety, tenants in common and joint tenancy.
185
Stewart has leased space to open a new French restaurant. The restaurant equipment that he installs is classified as a trade fixture and are considered his property if
Removed before the lease expires.
186
A claim, charge, or liability that attaches to real estate and affects the title or the use of the land is an
Encumbrance.
187
The only form of co-ownership where fractional shares can be unequal is
Tenants in common.
188
The highest form of ownership recognized by law is a
Few simple absolute.
189
Three examples of legal life estate:
Dower, curtesy and homestead.
190
A section is a measurement in the government survey that is
5,280x5,280
191
Property taxes, mechanics liens, mortgage liens and special assessments are examples of
Specific liens.
192
Scott went to the Lexington court house and determined who owned a parcel of land and how many liens were on it. Scott is said to have
Actual notice.
193
The HUD-1 indicates that Shawn paid for a title policy. The policy will decrease as each principal and interest payment is made on the loan. Shawn paid for a
Mortgagee’s title policy.
194
When designing a community, the developers created a park between a residential area and a commercial area. The park is classified as
A buffer zone.
195
Amanda sold a farm to Dwayne with the condition that the land must always be utilized as a farm, it could never be sold and developed into a subdivision. This control of land use is classified as
A private restriction.
196
At last nights zoning meeting a residential street was rezoned to a commercial use. The owners may live in the property and use it for residential purposes for as long as they own it. When the property is sold, it must be developed into commercial property. The owners have a
Nonconforming use.
197
The deed which provides the greatest protection to the buyer is a
General warranty deed.
198
The following covenant warrants that the grantors own the property and have the right to convey title to it are:
Covenants against encumbrances, covenant of quiet enjoyment, and covenants of further assurance.
199
A person died testate. The gift of real property to an heir is known as
Devise.
200
Under Kentucky law, an owner who wants to sell her own property would NOT be required to have a real estate license. T/F
True.
201
A licensee is interested in making an offer on a property listed by his brokerage firm. The licensee MUST
Disclose his dual status as a licensee and a buyer on the sales contract.
202
The sales contract between the buyer and seller was not fulfilled. Broker Lauren sent a certified letter to both parties stating what she would do with the earnest money if they did not enter into a written release or initiate litigation. The parties have ____ days to respond.
60
203
An unlicensed personal assistant may unlock the property for the appraiser. T/F
True
204
After a hearing, an agents license was revoked. The first time the person can ask to be considered for another license is ___ years from the date of revocation.
5
205
After a formal hearing, the KREC can impose all of the following penalties:
Revocation of the license, formal reprimand, additional continuing education classes.
206
The KREC is to be notified of a change of residence address within
10 days.
207
$10,000 was taken from the real education, research and recovery fund to pay an aggrieved party that the licensee refused to pay after and hearing an Order by the Commissioners. Until it is repaid in full, the agent will be
Charged 10% interest per annum.
208
In order to put a For Sale sign in the yard an agent must have
A written listing agreement as well as written consent from the owner.
209
“You May cancel this contract without any penalty or obligation within three (3) business days from the above date. If you cancel, any payments made by you under the contract and any negotiable executed by you will be returned within ten (10) business days following receipt by the seller if your cancellation notice, and any security interest arising out of the transaction will be cancelled. If you decide to cancel this contract, you must notify the seller in writing.” Under Kentucky law,
This cancellation notice must be in Sales contracts for a timeshare.
210
Each active licensee is required to complete ___ hours of continuing education by _____ of every year.
6; December 31st
211
An active licensee did not complete his continuing education by the deadline. In order to keep his license the licensee must
Pay a $500 fine and complete the delinquency plan by February 15.
212
A property management agreement expired and was not extended. The property manager has ___ days to___________.
60; give the owner a final accounting statement.
213
A tenant moved and did not pay his last month’s rent nor does he ask for the return of his security deposit. The landlord may keep the security deposit after
30 days.
214
If the seller has an executory contract and another buyer wants to make an offer, the contract that will be created if the seller accepts the offer is known as
A backup contract.
215
An unlicensed personal assistant of a real estate agent may disclose if the real estate is
Under contract with the company.
216
A real estate agent decided to create her own website. All of the following must be included on her site:
Name of the principal broker or brokerage, address of the business location and her name.
217
Agent Joyce is helping her daughter Carrie buy a single family residential home. Familial relationship must be disclosed if
Joyce is a dual agent.
218
A sellers disclosure of property condition firm must be given to the buyer when a buyer is purchasing
A listed single family home.
219
Errors and omissions insurance is only required if coverage is available for all licensees who choose to participate and the annual premium does not exceed
$200.
220
Licensees have the option of obtaining errors and omissions insurance independently, if the coverage and financial condition of the insurance company complied with the
Minimum requirements established by the commission.
221
The maximum deductibles, which may be separate deductibles, shall not exceed _____ for judgment and settlement and ____ for the cost of investigation and defense.
2,500; 1,000
222
An agent may call someone on the "no-call" list under the following circumstances:
the call is requested, there is a prior business relationship, or the parties are involved in a sales contract.
223
When selling a single family residential dwelling the agent provided an Agency Disclosure statement to _______
the buyers and sellers.
224
Agent Bob is licensed with XYZ Realty which is a flat fee service company. Last week he listed a property where the seller paid him a flat fee to place the property in the MLS. Agent Bob just got off the phone with an Agent Agnes from ABC Realty who has a buyer that has made an offer on the property. Agent Bob is responsible for
submitting the offer to the seller, assisting the seller in developing a counteroffer, and answering the seller's questions regarding the offer.
225
A license status is cancelled when a licensee
fails to renew a license, writes the commission a check for fees that is not honored, fails to re-affiliate with a principal broker, or fails to complete requirements for continuing education.
226
Under the license law, the KREC is required to investigate a complaint that is written on the complaint form furnished by the KREC and that contains ____ _____ evidence of a violation of law.
prima facie
227
Agent Ken wants to purchase an investment property that is listed by his broker. He must
disclose in writing that he has a real estate license on the offer to purchase.
228
Prospective commissioners are recommended by the _______ and appointed by _____.
Kentucky Association of REALTORS; the governor.
229
Agent Lois has decided to transfer to another broker. The principal broker currently holding her license must return it to the KREC _______
immediately upon request.
230
An agent listed a property, left the Seller's Disclosure of Property Condition form with the seller and returned to the office. She called a potential buyer for the property and showed it to the buyer two hours later. The buyer made an offer which was accepted by the seller that same day. The buyer must have a copy of the property disclosure statement within
72 hours.
231
If there is more than one claimant, the maximum amount that will be paid out of the Recovery Fund is
$50,000
232
A principal broker died. The KREC can appoint a sales associate to close the existing business of the broker for a period not to exceed
6 months.
233
When the KREC receives information about an alleged violation involving the principal broker's escrow account, the Commissioners
may hold an emergency hearing.
234
Agent Ron works for ABC Realty. He may advertise a listing of XYZ Realty if he
has the consent of the broker of XYZ Realty and includes XYZ Realty's name on the ad.
235
A potential buyer opened the newspaper and saw an ad which read, "Buy a property from me within the next 30 days and I will give you a new 42 inch HD TV." This ad is
legal as long as the inducement is disclosed in writing.
236
At the listing appointment a seller instructed Agent Amy that he did not want his property shown while he was on vacation from July 1-July 15. AMY SHOULD
Tell the seller to give her those instructions in writing.
237
Agent Sylvia has her license with Broker Rusty. Agent Sylvia is transferring her license to Broker Debbie's brokerage. Sylvia's listings will
stay with Broker Rusty, unless there is an agreement otherwise.
238
The fee to take the real estate exam cannot exceed
$100.
239
Upon the creation of an executory sales contract, the earnest money must be deposited into the escrow account
within three business days.
240
Escrow accounts must be located
within Kentucky.
241
KREC website is:
www.krec.ky.gov
242
KREC is located in
Louisville, KY.
243
____ commissioners are appointed by the governor.
5
244
___ commissioners have had licenses for at least ___ years immediately preceding appointment
4; 10
245
One commissioner is appointed as the ______ with no financial interest in the real estate business.
consumer member
246
Kentucky Association of REALTORS recommends names for commissioners to the governor; list must have at least
three names
247
Commissioners serve for __ year terms and may not serve more than __ consecutively.
4; two terms
248
Commissioners are paid ___ a year, plus actual and necessary expenses incurred in performing duties.
$15,000
249
Commissioners may be removed for _____ activity , including ___ and _______
criminal; fraud and moral turpitude.
250
Funds to operate the KREC come from the ____ fund of the ____________.
general; Kentucky state treasury.
251
KREC can hire staff, lease space, ____, and ______
buy furniture and run day-to-day operations.
252
KREC records are subject to
open records laws
253
Primary duty of the KREC is to
protect the consuming public
254
KREC duties include:
Licensing, education, investigation and discipline of licensees.
255
Licensees must cooperate with the KREC when information is requested, or they will be
in violation of licensing laws and regulations.
256
KREC has jurisdiction over not-for-profit associations. T/F
False, they do not have jurisdiction.
257
KREC does not regulate fees charged by brokers for their services or the fees paid brokers to their associates. T/F
True
258
Original license and renewal fees may not exceed
$30
259
Real estate education, research and recovery fees cannot exceed
$30 annually.
260
The real estate education, research and recovery fund protects consumers who have been
damaged by fraudulent activity of a licensee.
261
Maximum payment from the real estate education, research and recovery fund to any one consumer damaged by licensee fraudulent activity is
$20,000
262
Aggregate payment to consumers who have been damaged by fraudulent activity by any one licensee is
$50,000
263
To collect from the real estate education, research and recovery fund, a claim must be made within ___ years of activity or when the activity could have been reasonably discovered.
2 years
264
The statutory duty of the KREC is to
protect the public
265
The KREC is known as a ___, ____, and ____ agency in which the terms are interchangeable in the license law and in practice.
administrative, regulatory and licensing agency.
266
The constitutional protections that must be followed when a licensee is accused of violating the license law is called
due process.
267
Investigation may be initiated by the Commission, and they must be initiated when a verified written complaint is filed if the complaint states a
prima facie case.
268
A complaint that is in writing, signed, and notarized is called a
verified complaint.
269
The principal broker is the person with a broker's license who is resonsible for
adequately supervising the brokerage's affiliated licensees.
270
Principal brokers and affiliated licensees must cooperate with
the KREC investigators.
271
An emergency hearing may be held by the KREC if a violation relating to the Principal Broker's ____ is alleged.
escrow account
272
The person filing a complaint is the
Complainant, or the aggrieved party.
273
A complaint is filed against the licensee who is known as the
respondent.
274
Real Estate brokerage is a very broad term that includes
all types of real estate transactions; residential, commercial, industrial, farms, time shares and options.
275
Real estate brokerage includes assisting a client with
selling, purchasing, leasing, managing, and optioning property.
276
With few exceptions, a person brokering real estate that belongs to someone else must have
a real estate license.
277
Brokers may only split fees or pay _____ fees to someone who has a license.
referral
278
Fees are paid by one principal broker to another principal broker. T/F
True
279
Part of the _________ required that compensation agreements must be in writing to be enforceable.
statute of frauds
280
An owner may not market his/her property without a real estate license. T/F
False, they can
281
An owner's regular employees may market, including manage and lease, the owners property without a real estate license. T/F
True
282
Someone acting under a power-of-attorney may broker real estate for the owner without a real estate license. T/F
True
283
An attorney-at-law may broker real estate without a real estate license. T/F
False, an attorney-at-law must have a real estate license to broker real estate.
284
A person under court appointment may broker real estate without a real estate license. T/F
True
285
Real Estate Brokerage has two meanings:
Services performed and a real estate company are referred to as a real estate brokerage.
286
A real estate ___ is someone with a real estate broker's license.
broker
287
A real estate _____ is someone with a real estate sales associate license.
sales associate
288
An ____ is a person with either a brokers license or a sales associate license that works as an independent contractor for a brokerage.
affiliate
289
A ____________ is the person in charge of the real estate brokerage who is responsible for adequately supervising all affiliates in that brokerage.
principal broker
290
Affiliates owe their principal broker
Fiduciary duties.
291
Fiduciary duties are:
Duty of obedience, loyalty, reasonable care and skill, accounting, disclosure and confidentiality.
292
Principal brokers cannot charge affiliates _____
An affiliation fee.
293
Affiliates licenses must be kept in the office where they are
Actively engaged in the practice of real estate.
294
If a principal broker terminated an affiliation, they must immediately
Deliver or mail the affiliates license to the KREC with a statement of release that has also been sent to the affiliate.
295
Licensees may by disciplined by the KREC for
Improper conduct.
296
_____ fees cannot be paid to anyone who is not licensed to sell real estate.
Referral
297
The _____ is a federal law that prohibits kick-backs in the delivery of settlement services.
Real Estate Settlement Procedures Act (RESPA).
298
Real estate principal brokers and licensees may advertise their fees for service. T/F
True
299
Listing licensees must make their listings available to _______, but do not have to cooperate with ______.
Prospective buyers; other licensees.
300
Sellers may give listing agents written instructions not to show the property to certain individuals, but the listing agent must always examine the instruction for
Violation of the fair housing laws.
301
Principal brokers cooperate in many areas by the use of _______
Multiple listing services (MLS)
302
It is improper conduct for licensees to fail to follow ______ to their clients.
Fiduciary duties
303
Information that, if known by the client, would make a different to the client during the transaction is called
Material information.
304
Confidential information must be
Kept confidential forever.
305
Licensees must meet the ________ in the industry.
Standard of care
306
Standard of care is the degree of care which a reasonably prudent licensee should exercise under similar circumstances. T/F
True
307
It is improper conduct for licensees you advertise ________ without following the license law.
Guaranteed sales plans
308
A guaranteed sales plan assured the seller that
Their property will be sold even if the principal broker has to buy the property.
309
In a guaranteed sales plan the advertisement must state if:
There is a fee charged to the consumer, if the property must meet certain criteria for participation, how the purchase price will be determined and whether or not the seller must purchase other real estate through brokerage.
310
Advertising for guaranteed sales must be in print at least ____ of the size of the largest letters in the advertisement.
25%
311
A licensee who acts as this will do the following:
Inform the client, in writing, of dual roll and disclose additional compensation, must register with the department of financial institutions, performs at least 5-13 tasks listed in the regulation, insured compensation is commensurate with work, and may not receive compensation for work not actually performed. What is the other act the licensee is performing?
Loan originator
312
It is improper conduct to violate the
Fair housing laws.
313
It is improper conduct to use
Scare tactics, blockbusting, and panic peddling.
314
The fair housing protected classes include:
Race, color, religion, national origin, sex, familial status and handicap.
315
Some ares of Kentucky (Jefferson county, Fayetteville county, city of Covington) also have _____ as a protected class.
Sexual orientation.
