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Kentucky State Real Estate Practice Exam #3:
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Under Kentucky law, which of the following would not be included in an offer to purchase? A. The purchase price, the amount of the contract deposit and who is to hold the deposit B. Date and time when the offer or counteroffer expires C. The agent who prepared the offer and the commission he/she will be paid D. The closing date and when possession will be given to the buyer - CORRECT ANS- - The agent who prepared the offer and the commission he/she will be paid If a person does not renew in the proper timeframe the person will be fined up to A. $100.00 B. $200.00 C. $500.00 D. $1,000.00 - CORRECT ANS- - $200. Under Kentucky law, which of the following would not be included in a listing contract? A. The commission and the expiration of the listing B. The listing price and the signatures of all owners C. The expiration of the offer and the buyers names D. Special directions of the owner - CORRECT ANS- - The expiration of the offer and buyers names. A seller has offered two round-trip tickets within the continental United States to anyone who buys his property. The agent A. cannot advertise the tickets because it is an inducement. B. cannot advertise the tickets until it is approved by the Board. C. can advertise the tickets with the permission of the KREC. D. can advertise the seller's inducement of the tickets. - CORRECT ANS- - can advertise the seller's inducement of the tickets Which of the following statements would trigger an agent having the buyer sign an Agency Disclosure Statement? A. "I would like to set an appointment to see the house at 229 Main Street." B. "How many bedrooms does the house at 119 Main Street have?" C. "You're one of three agents that I'm
interviewing, why should I work you and your company?" D. "I'm ready to write on offer on the property." - CORRECT ANS- - I'm ready to write an offer on the property A seller has told his listing agent that if sells the property within the first two weeks of listing, the seller will give the agent a $2,000 bonus. Under which of the following circumstances could the agent be paid the bonus? A. If the agent owns the real estate company. B. If he receives the bonus from his broker. C. If the KREC gives the agent consent to receive the bonus. D. If the agent has a broker's license, not a sales associate license. - CORRECT ANS- - If he receives the bonus from his broker Agent John has an appointment with a seller to list a property. The agent explained the office policies and told the seller that the advertising would consist of internet ads, the yard sign, and newspaper adverting twice a week. After two months on the market, the agent had not advertised in the newspaper. Based on this situation A. the agent appears to have made false promises. B. the license law does not regulate advertising. C. newspaper advertising is not required and the agent has no liability to the seller. D. the seller cannot specify how an agent advertises listed property. - CORRECT ANS- - the agent appears to have made false promises Effective January 1, 2020 which of the following statements is FALSE regarding continuing education? A. Unless exempt, all actively licensed agents shall complete twelve hours of continuing education every biennial license period. B. Six of the twelve hours shall be completed in the first year of the biennial license period or the license shall be automatically cancelled. C. All licensee may not attend more than six hours of continuing education classes in the first year of the biennial term. D. Six of the twelve hours of continuing education shall be in real estate law. - CORRECT ANS- - All licensee may not attend more than six hours of continuing education classes in the first year of the biennial term Which of the following properties would an agent be required to give the seller an agency disclosure statement?
An agent has just been hired as a property manager. The person that will pay the agent is A. outlined in the management agreement. B. her broker. C. the owner. D. the tenants. - CORRECT ANS- - her broker What are the maximum fines that an agent could pay for calling someone on the Do-Not- Call list? A. $1,000 - Kentucky Law; $1,000 Federal Law B. $1,000 - Kentucky Law; $10,000 Federal Law C. $5,000 - Kentucky Law; $11,000 Federal Law D. $5,000 - Kentucky Law; $16, Federal Law - CORRECT ANS- - $5,000 - Kentucky Law; $16,000 Federal Law The KREC issued a person her sales license on 10/20/2020. The person must complete her 48 hours of post license education by what date? A. 10/20/2021 B. 10/20/2022 C. 12/31/2020 D. 12/31/2021 - CORRECT ANS- - 10/20/ An agent collected a $1,000 good faith deposit which was deposited into the broker's escrow account. The broker A. must place the money in a non-interest bearing trust account. B. must place the money in an interest bearing trust account. C. must give the money to the seller upon performance. D. may withdraw the money upon performance, court order, written agreement or through the release process. - CORRECT ANS- - may withdraw the money upon performance, court order, written agreement or through the release process The Consumer's Guide to Agency Relationships must be given to the buyer under all of the following circumstances EXCEPT A. Before receiving confidential information from a prospective party relative to a mutually- contemplated real estate transaction. B. Before entering a representation agreement OR submitting an offer to, or on behalf of, a prospective party. C. The conclusion of the second contact between the licensee and a prospective party. D. A buyer looking at a property at an open house. - CORRECT ANS- - A buyer looking at a property at an open house
Which of the following statements is FALSE regarding the Kentucky Real Estate Commission? A. All commissioners are appointed by the Governor. B. There are seven commissioners. C. No more than four commissioners can belong to the same political party. D. All commissioners must reside in the same county. - CORRECT ANS- - All commissioners must reside in the same county A potential buyer was shown a property by listing agent Betty. The buyer asked Betty if the basement leaked. Betty said the basement did not leak. After purchasing the property, the buyer discovered that the basement did in fact leak every time it rained and she filed a complaint with the Kentucky Real Estate Commission. Which of the following would be CORRECT? A. The Commission is legally required to investigate the complaint. B. The buyer can only file a complaint if the agent represented her. C. The law requires answers to valid complaints to be notarized. D. Betty has 10 days to answer the complaint. - CORRECT ANS-
- The law requires answers to valid complaints to be notorized Which of the following statements is false regarding the Consumers Guide to Agency Relationships? A. The form may be delivered by mail, e-mail, fax, messenger, or hand. B. A discussion with a potential buyer where confidential information may be disclosed would trigger giving the Consumers Guide. C. Commercial agents are not required to use either of these forms. D. The Consumer's Guide to Agency Relationships is only given when the transaction involves a one unit residential property. - CORRECT ANS- - The Consumer's Guide to Agency Relationships is only given when the transaction involves a one unit residential property. Agent David owns, and is the property manager of a commercial shopping center. His broker requires him to place all the rents he collects in the broker's rental management account. Is the broker's requirement legal? A. No, because the agent is acting as his own property manager. B. No, because it is not necessary under Kentucky law. C. Yes, if the broker requires it. D. Yes, but only if David wanted the money kept in the broker's account. - CORRECT ANS- - Yes, if the broker requires it.
A. can show the property with the permission of her broker. B. can show the property as long as the seller doesn't find out. C. can show the property on June 1. D. can show the property on May 18. - CORRECT ANS- - can show the property on June 1 No aggrieved party shall be entitled to recover compensation from the real estate education, research, and recovery fund unless the action against the licensee is commenced within what timeframe from actual knowledge of the cause of action or from the time when circumstances should reasonably have put the aggrieved party on notice of the cause of action? A. One year B. Two years C. Three years D. Five years - CORRECT ANS- - One year Which of the following statements is false regarding errors and omissions insurance? A. The limit of liability shall be no less than $100,000 for any one claim nor less than $1,000,000 annual aggregate limit of liability. B. Licensees have the option of purchasing his/her own policy if it meets the approval of the KREC. C. All real estate licensees must carry errors and omissions insurance. D. If a company will not provide coverage to all licensees, then agents would not be required to have errors and omissions insurance. - CORRECT ANS- - All real estate licensees must carry errors and omissions insurance A tenant has moved from her/his apartment and all rent is paid in full. The tenant's security deposit may be returned if A. there was an initial and final damage list and there was no damage to the apartment. B. the security deposit was placed in the landlord's business account. C. the tenant asked for the return of the deposit within thirty days. D. there were initial and final damage lists signed by the owner and the tenant and there was no damage. - CORRECT ANS- - there were initial and final damage lists signed by the owner and the tenant and there was no damage Which of the following is false regarding designated agency? A. A designated agent would be representing the buyer and seller in the transaction. B. If designated agents represent different clients in a transaction, an employee could only assist one of the designated agents. C. Confidential files must be maintained by the
designated agent and the broker. D. All documents containing confidential information relating to a client must be kept in an individual file - CORRECT ANS- - A designated agent would be representing the buyer and seller in the transaction. Which of the following statements is not true regarding the complaint process? A. If the complaint does not contain prima facie evidence the complainant will have ten days to revise the complaint. B. If the complaint does contain prima facie evidence the agent will receive a copy of it at his/her last known business address. C. If the complaint does contain prima facie evidence the agent will have twenty days to answer. D. If damages cannot be accurately determined, then the amount of damages will be determined by a Circuit Court in the county where the violation took place. - CORRECT ANS- - If the complaint does contain prima facie evidence the agent will receive a copy of it at his/her last known business address. If the KREC is holding the real estate license it is classified as A. suspended. B. cancelled. C. expired. D. inactive. - CORRECT ANS- - inactive Under Kentucky's Condominium Act, a real estate agent is required to A. give the Condo Certificate to the seller. B. fill out the Condo Certificate for the seller. C. give the Condo Certificate to the Homeowner's Association. D. give the Condo Certificate to the buyer before the offer is written. - CORRECT ANS- - give the condo certificate to the seller Which of the following disclosure is not required to be in writing? A. The property disclosure in the sale of a single-family home B. Permission from the buyer and seller to be a dual agent C. The fact that the agent is a part time agent D. The lead- based paint disclosure - CORRECT ANS- - the fact that the agent is a part time agent If a person has not renewed in the appropriate timeframe, the status of the license is classified as A. inactive. B. expired. C. cancelled. D. on probation. - CORRECT ANS- - expired
Bob and Jane both work for Quarter Realty. Jane has listed a property and Bob is working with a buyer who decides to purchase the property Jane has listed. At what point in the transaction would the broker be acting as a dual agent? A. When the seller has listed more than one property with the same licensee. B. When a buyer client writes an offer on a property his broker has listed. C. When Bob and Jane agree to be dual agents. D. When a buyer client purchases two or more properties from a broker. - CORRECT ANS- - When a buyer client writes an offer on a property his broker has listed. Which of the following is false regarding property management agreements? A. The lease must contain the name and address of the bank, and the account number where the security deposit will be held. B. An agent must send a monthly accounting to the owner. C. The agreement must contain an automatic renewal clause. D. Within sixty days of the termination of the management agreement, an agent shall send the owner a final accounting. - CORRECT ANS- - The agreement must contain an automatic renewal clause. Effective January 1, 2020 all licensees must renew their license A. every quarter. B. annually. C. biennially. D. every monthly. - CORRECT ANS- - biennially The following clause was written in an offer: "This offer is submitted as a back-up offer, which means the property is subject to a previously-accepted offer which has priority over this offer." This clause would be used when the agent is A. in a multiple offer situation. B. writing a land contract. C. writing a back-up offer. D. writing a cash offer. - CORRECT ANS- - writing a back up offer Which of the following actions is NOT required to reactivate a real estate license that is being held by the KREC? A. Submit an acceptable criminal record check B. Complete all continuing education requirements C. Pay the applicable reactivation fees D. Pass the Kentucky section of the real estate exam. - CORRECT ANS- - Pass the Kentucky section of the real estate exam.
Which of the following would not be a required disclosure under the guaranteed sales plan? A. The qualifications of the real estate that would be guaranteed. B. The fee that would be charged for participation. C. The name of the appraiser who would be determining the purchase price of the property. D. If the owner must purchase other real estate listed by the licensee. - CORRECT ANS- - The name of the appraiser who would be determine in the purchase price of the property When the KREC is holding a license, the person must A. meet continuing education requirements for each year that the license is held by the KREC. B. obtain extended reporting period coverage insurance for one year when it is placed with the KREC. C. login to the online services portal monthly to confirm that the KREC is still holding the license. D. pay for errors and omissions insurance for each year that the license is held by the KREC. - CORRECT ANS- - Obtain extended reporting period coverage insurance for one year when it is placed with the KREC Continuing education is to be completed by A. January 15 of each calendar year. B. February 15 of each calendar year. C. June 15 of each calendar year. D. December 31 of each calendar year. - CORRECT ANS- - December 31 of each calendar year A buyer made an offer on a condominium but had not yet received the Condo Certificate and other documents required by law. If the buyer's offer is accepted, what is the status of the offer? A. The offer will be a valid contract if it is accepted. B. The offer will be void until the Condo Certificate is received. C. The offer will be voidable by the buyer until the Condo Certificate is received and the buyer has five days to review the documents. D. The offer will be voidable by the buyer until the Condo Certificate is received and the buyer has ten days to review the documents. - CORRECT ANS- - The offer will be voidable by the buyer until the Condo Certificate is received and the buyer has five days to review the documents. Which of the following would be covered under errors and omissions?
Wrap around loan - CORRECT ANS- - the seller holds a mortgage that wraps the new buyer's mortgage around the seller's existing mortgage. The seller continues to make payments on the first mortgage, and buyer makes payments to the seller on the wrap-around mortgage. Amount financed/ down payment - CORRECT ANS- - James is obtaining an 80/20 loan. What does 80/20 signify? Familial status discrimination - CORRECT ANS- - A landlord discovers that his married tenants are expecting their first child. He wouldn't have rented to the couple had he known they were going to have children, so he serves them with an eviction notice and tells them they must be out in 30 days. The landlord is guilty of ______. Comparative Market Analysis (CMA) - CORRECT ANS- - ______ may only be used to help determine an appropriate list price for a property or to help a buyer determine fair market value. be sold or passed down to heirs - CORRECT ANS- - Rhonda is interested in putting money toward a timeshare estate, to use a condominium for two years. Timeshare estates can...... A real estate license - CORRECT ANS- - If you work for a property management company that manages property for more than one owner, what must you have in order to collect rent and perform other real estate functions? a single licensee - CORRECT ANS- - When a buyer signs a designated buyer representation agreement, the agency relationship is between the buyer and ________. the right to use timeshare - CORRECT ANS- - Marvin purchased the right to use a resort unit for two weeks every year, although he doesn't own the property itself. What kind of timeshare is this?
The building department - CORRECT ANS- - Which entity ensures that contractors perform their work according to code by inspecting their job sites? restricted appraisal report the appraisal report - CORRECT ANS- - What are the two report types permitted by the Uniform Standards of Professional Appraisal Practice? She has been engaged as a broker, in a full-time capacity, for the past five years. - CORRECT ANS- - Aileen has her broker's license and has been appointed by the governor to serve as a TREC member. Which of the following criteria made her eligible to be a member of the commission?
- She has been a part-time broker consultant for 20 years.
- She has been engaged as a broker, in a full-time capacity, for the past five years.
- She has been retired for two years after selling seven successful brokerage firms she built from the ground up.
- She has taught pre-licensing courses at the University of Tennessee as her full-time occupation for 17 years. Benchmark - CORRECT ANS- - A permanent reference point for marking datums Up to $100 million for corporations and $1 million for individuals - CORRECT ANS- - Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable? Stan and Vince need to sign an agency agreement. - CORRECT ANS- - Stan wants Vince to list his house. What does Stan need to do to have Vince represent him in all marketing and negotiation tasks?
Specific Performance - CORRECT ANS- - _________ is when one party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract. When you are disclosing the information after your agency relationship with the client has ended. Even after a fiduciary relationship ends, you're obligated to preserve the former client's confidential information. - CORRECT ANS- - Under which of the following conditions is it unacceptable to disclose confidential information?
- When disclosure is necessary to defend yourself against an accusation of wrongful conduct
- When the information is made public from a source other than you
- When you are disclosing the information after your agency relationship with the client has ended
- When your client gives you written permission to disclose the information Joint Tenancy - CORRECT ANS- - Co-ownership without inheritance rights is what kind of real property ownership? Joint Tenancy may not be inherited - CORRECT ANS- - A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition. Value will be pushed downward - CORRECT ANS- - What effect will a property's utility have on the value if it's currently uninhabitable? Conflicts of interest,
material facts, and adverse material facts - CORRECT ANS- - What must you disclose to be in full compliance with an agent's fiduciary duty to disclose? Principal meridians, base lines, and sections - CORRECT ANS- - What does the rectangular government survey system use as the basis for legal descriptions? Designated agency - CORRECT ANS- - In Tennessee, one type of agency creates a relationship between a client and a single broker or affiliate broker. What's this type of agency called? Trustor - CORRECT ANS- - Carla creates a trust to convey her assets to her children. Her brother, Alvin, is placed in charge of making sure the terms of the trust are carried out. In this example, Carla is the ________. three - CORRECT ANS- - How many approaches to value do appraisers generally use? Buyers beware - CORRECT ANS- - Caveat Emptor means? Land - CORRECT ANS- - The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______. purpose of deed - CORRECT ANS- - used to transfer real property from one party to another. You must not share your client's confidential information. - CORRECT ANS- - Which one of the following best describes the fiduciary duty of confidentiality?
The Equal Credit Opportunity Act, the Community Reinvestment Act, and the Home Mortgage Disclosure Act - CORRECT ANS- - Which of these pieces of legislation work together to prevent discriminatory lending practices?
- The Equal Credit Opportunity Act, the Community Reinvestment Act, and the Home Mortgage Disclosure Act
- The Housing and Economic Recovery Act, the American Recovery and Reinvestment Act, and the Consumer Financial Protection Act
- The Housing and Urban Development Act, the Fair Housing and Employment Act, and the Community Development Act
- The Real Estate Settlement Procedures Act, the Truth in Lending Act, and the Consumer Credit Protection Act Tenancy in common - CORRECT ANS- - Co-ownership of property in which each party owns an undivided interest that passes to his or her heirs at death. illegal market allocation - CORRECT ANS- - Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes. this is an example of illegal what roof - CORRECT ANS- - Cracks, holes, or rotten areas on a soffit are common ______ issues. Confidentiality - CORRECT ANS- - Which fiduciary duty goes beyond closing? Brownfield - CORRECT ANS- - An abandoned or unused commercial or industrial site with suspected contaminants Active License - CORRECT ANS- - What type of license will you receive if you have a supervising broker at the time of application?
Trustee - CORRECT ANS- - Gerald creates a trust to convey his property to his heirs. His friend, Nancy, is placed in charge of making sure the terms of the trust are carried out. In this example, Nancy is the ________. An opinion regarding the listing price - CORRECT ANS- - Which of the following opinions can a real estate licensee provide?
- An opinion regarding the appraisal value of a property
- An opinion regarding the effect of breaking an existing agreement to accept a new offer
- An opinion regarding the listing price
- An opinion regarding whether a roof needs to be replaced Help the seller sell the property. - CORRECT ANS- - What's a listing agent's primary duty to a seller? It's an opinion of value. - CORRECT ANS- - Which of the following best describes what an appraisal is?
- It's a broker price opinion.
- It's a comparative market analysis.
- It's an assessment of market value.
- It's an opinion of value. Negotiable Instrument - CORRECT ANS- - A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The transferee then has the original payee's right to payment. Ownership Document - CORRECT ANS- - what is a deed?
