Download Perry Real Estate College Final Exam Prep 2026-2028 | 100 Q&A Practice Test | Kentucky and more Exams Real Estate Management in PDF only on Docsity!
Perry Real Estate College Final Exam Prep 2026- 2028 | 100
Q&A Practice Test | Kentucky License Law & National
Principles | KREC Regulations, Finance & Contracts |
Comprehensive Real Estate Salesperson Exam Study Guide
with Explanations | INSTANT PDF DOWNLOAD
Pass the Perry Real Estate College Final Exam on your first attempt! This comprehensive 100-question practice exam is meticulously designed to mirror the actual Perry Real Estate College final assessment. It covers both the Kentucky-specific state laws and the national general principles required to move forward to the KREC state licensing exam. What’s Included in this 2-Section Guide: Section 1: Kentucky License Law & KREC Regulations (50 Qs): Deep dive into the Recovery Fund, escrow account management, Kentucky advertising rules, fiduciary duties, and disciplinary actions. Section 2: General Principles & Finance (50 Qs): Mastery of appraisal methods, federal Fair Housing laws (RESPA, TILA, TRID), types of ownership (Fee Simple, Life Estates), and contract law.
Section 1: Kentucky License Law & Commission Regulations (Q1–50)
- What is the maximum fine the Kentucky Real Estate Commission (KREC) can impose per individual violation? A) $ B) $1, C) $2, D) $5, KREC has the statutory authority to levy fines up to $1,000 for each violation of license law or administrative regulation.
- A licensee must notify the Commission of a change in their residence address within: A) 3 days B) 5 days C) 10 days D) 30 days Licensees are required to keep their contact information current with the Commission to ensure they receive all official notices.
- What is the maximum payout from the Kentucky Real Estate Education, Research, and Recovery Fund for a single claimant? A) $10, B) $20, C) $50, D) $100, The fund compensates aggrieved parties for financial loss due to a licensee's fraud or deceit, capped at $20,000 per transaction.
- In Kentucky, an unlicensed assistant is permitted to: A) Discuss terms of a listing with a client B) Show a property to a prospective buyer C) Transmit a message from a client to a broker D) Negotiate a counteroffer Unlicensed assistants may only perform administrative or "ministerial" tasks that do not involve the exercise of discretion or real estate expertise.
C) 10 days D) 30 days Serious criminal convictions must be reported to the Commission promptly as they reflect on the licensee's professional fitness.
- The "Agency Disclosure Statement" must be signed by the consumer: A) At the closing table B) Before the first phone call C) Prior to entering into a written agreement for representation D) Only if they are buying a commercial property This ensures that the consumer understands the nature of the relationship (Dual, Single, or Transactional) before they share confidential info.
- An out-of-state broker wanting to practice real estate in Kentucky must: A) Take the entire pre-license course again B) Enter into a co-brokerage agreement with a Kentucky broker C) Pay a $5,000 fee to the Governor D) Practice only for 24 hours at a time Kentucky allows "Co-operation Agreements" between local and out-of-state brokers for specific transactions.
- To be eligible for a Kentucky Broker's license, an applicant must have: A) Two years of experience working at least 20 hours per week as a salesperson B) Five years of experience as a salesperson C) A college degree in any field D) No experience, just a higher test score The "two-year rule" is a prerequisite for advancing from a salesperson to a broker license in Kentucky.
- "Commingling" occurs when a broker: A) Represents both buyer and seller with consent B) Mixes escrow funds with the broker's personal or business funds C) Forgets to sign a listing agreement D) Sells their own home through their firm Escrow money must be kept in a separate, dedicated account to protect the public's funds.
- What is the maximum number of Commission members on the KREC? A) 3 B) 5 C) 7 D) 9 KREC consists of seven members appointed by the Governor, including at least one "citizen-at-large" who does not hold a license.
- A salesperson wants to move their license to a new firm. The current broker must: A) Hold the license until all desk fees are paid B) Return the license to KREC immediately C) Give the license to the salesperson to hand-carry D) Shred the license Brokers cannot withhold a license during a dispute. If the salesperson leaves, the license goes back to the Commission.
- In Kentucky, "Dual Agency" is: A) Illegal B) Only allowed for family members C) Legal with the written, informed consent of both parties D) Mandatory for all transactions Dual agency is permitted but requires strict disclosure since the agent cannot provide full advocacy to either side.
- Which of the following is an example of an "Inducement"? A) Paying a referral fee to another broker B) Offering a $500 gift card to a buyer if they purchase a home by Friday C) Giving a client a closing gift worth $ D) Charging a lower commission rate Inducements are incentives offered to enter a contract. They must be disclosed in the contract and are subject to specific KREC rules.
- If a licensee receives an earnest money check, they must: A) Immediately deliver it to their principal broker B) Hold it until the offer is accepted
B) Not use a sign C) Give the buyer a 50% discount D) Hire a different broker to do the paperwork To prevent unfair advantage, licensees must always reveal their professional status when buying or selling for themselves.
- Who appoints the members of the Kentucky Real Estate Commission? A) The President B) The Governor C) The State Senate D) The Realtors Association The Governor selects members from a list provided by the Kentucky REALTORS association (except for the citizen-at-large).
- A licensee's "Principal Place of Business" is: A) Their home office B) The office where the broker maintains their license C) Any coffee shop where they meet clients D) The local Board of Realtors A license must be prominently displayed at the broker's registered office.
- Which of the following would be a violation of the "Guaranteed Sales" regulation? A) Failing to provide the terms of the purchase in writing before the seller signs the listing B) Selling the home in under 10 days C) Charging a 6% commission D) Advertising on social media If a broker promises to buy a home if it doesn't sell, all terms and conditions must be transparent and in writing upfront.
- A salesperson can receive a commission check from: A) The buyer B) The seller C) Only their principal broker D) The closing attorney
It is illegal for a salesperson to accept money for real estate acts from anyone other than the broker they are affiliated with.
- When must a broker provide a "Seller's Disclosure of Property Condition" form? A) On all single-family residential transactions B) Only on commercial buildings C) Only if the buyer asks for it D) Only on bank-owned foreclosures Kentucky law requires this form for residential sales (1-4 units) to inform the buyer of known defects.
- If a complaint is filed against a licensee, they have how many days to respond to KREC? A) 5 days B) 10 days C) 20 days D) 30 days The licensee must provide a written, sworn answer to the allegations within 20 days of receiving the complaint.
- An "Exclusive Right to Sell" listing must contain: A) A definite termination date B) An automatic renewal clause C) The buyer's name D) The broker's social security number Kentucky listings cannot be "indefinite." They must have a clear end date and no automatic extensions.
- If a broker's office is in their home, it must: A) Have a separate entrance and be identified by a sign B) Be in the basement only C) Not have a phone D) Be open 24 hours a day Home offices must meet specific KREC accessibility and signage standards to be considered a legal place of business.
KREC has the right to inspect escrow accounts at any time to ensure the public's money is safe.
- If a salesperson leaves a firm, the broker must return the license to KREC within: A) Immediately / 5 business days B) 10 days C) 30 days D) Never The law requires a swift return of the license to the Commission upon termination of the affiliation.
- Which of the following is NOT a KREC disciplinary action? A) Reprimand B) Fine C) Revocation D) Prison sentence KREC is a civil administrative body. They can take your license and money, but only a court can send you to jail.
- A "Designated Agency" occurs when: A) The broker assigns one agent to the buyer and one to the seller in the same firm B) The buyer and seller are the same person C) The agent is also a lawyer D) The property is in another state This allows for separate advocacy for both parties within the same brokerage firm.
- An unlicensed person who performs real estate acts for a fee is: A) A transactional broker B) Guilty of a Class A Misdemeanor C) Allowed to do so once a year D) Smart Practicing without a license is a criminal offense in Kentucky.
- To renew a license "Active," a licensee must complete how many hours of CE? A) 6 hours annually B) 12 hours annually
C) 3 hours every two years D) 48 hours Kentucky requires 6 hours of Continuing Education, 3 of which must be in Core Law every few years.
- The "KREC Core Course" must be taken: A) Every year B) Once every 4 years C) Only once in a lifetime D) Only if you get in trouble The Core Course provides mandatory updates on essential laws and regulations.
- Which of the following is a "Fiduciary Duty"? A) Punctuality B) Loyalty C) Generosity D) Friendliness Fiduciary duties include Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable Care (OLD CAR).
- A licensee may NOT: A) Accept a kickback from a home inspector B) Give a client a ride in their car C) Work on weekends D) Use a digital camera Accepting undisclosed fees from service providers (kickbacks) is a violation of RESPA and KREC rules.
- An offer is considered "Accepted" when: A) The seller says "Yes" over the phone B) The buyer signs the check C) The acceptance is communicated back to the person who made the offer D) The broker puts it in their pocket Communication of acceptance is vital for a binding contract to exist.
- A "Limited Service" listing broker must still: A) Disclose all known material defects in the property
Section 2: General Real Estate Principles & Finance (Q51–100)
- What is the highest form of property ownership recognized by law? A) Life Estate B) Determinable Fee C) Fee Simple Absolute D) Leasehold Estate Fee Simple Absolute represents the full "bundle of rights" with no conditions or time limits on the owner's interest.
- The "Principle of Substitution" is the basis for which appraisal approach? A) Income Approach B) Cost Approach C) Sales Comparison Approach D) Depreciation Approach This principle states that a buyer will not pay more for a property than the cost of an equally desirable substitute.
- Which federal law requires the disclosure of "Closing Costs" via the Loan Estimate and Closing Disclosure? A) Regulation Z B) Fair Housing Act C) TRID (TILA-RESPA Integrated Disclosure) D) Sherman Antitrust Act TRID ensures consumers have time to review the final costs of their loan before signing at the closing table.
- An "Appurtenant Easement" does which of the following? A) Benefits the dominant tenement and runs with the land B) Benefits a specific person (easement in gross) C) Is a temporary right that can be revoked (license) D) Terminates automatically when the owner dies Appurtenant easements are attached to the land itself and transfer to the new owner when the property is sold.
- "Steering" is a violation of the Fair Housing Act and is defined as: A) Leading buyers toward or away from certain areas based on a protected class
B) Refusing to make a loan in a high-risk neighborhood (redlining) C) Encouraging owners to sell because a minority group is moving in (blockbusting) D) Charging higher rent to a tenant with children Steering limits a consumer’s choice and is a form of discriminatory behavior by the licensee.
- Which of the following is considered "Real Property"? A) A free-standing microwave B) Window curtains C) A built-in dishwasher D) A potted plant A built-in dishwasher is considered a "fixture" because it is permanently attached to the real estate.
- What is the primary purpose of a "Quitclaim Deed"? A) To provide the buyer with a general warranty B) To clear a cloud on a title or transfer interest quickly C) To guarantee the seller owns the property D) To record a new mortgage lien A quitclaim deed provides the least protection; it only transfers whatever interest the grantor may have at that time.
- A "Mortgage" is best described as: A) The debt itself B) A security instrument that creates a lien on the property C) The monthly payment D) A contract to buy a house The "Note" is the promise to pay (the debt), while the "Mortgage" is the document that makes the house collateral for that debt.
- "Eminent Domain" is the government's right to: A) Take private property for public use with just compensation B) Revert property to the state when an owner dies without heirs (escheat) C) Control the use of land through zoning D) Collect property taxes The actual legal process of taking the land under eminent domain is called "condemnation."
If you wait too long to complain about a neighbor's fence violation, the court may rule you lost your right to sue via laches.
- A "Point" in mortgage lending is equal to: A) 1% of the loan amount B) 1% of the sales price C) $1, D) 1/8th of a percent interest Discount points are paid upfront to lower the interest rate over the life of the loan.
- What is "Redlining"? A) Pushing buyers to specific neighborhoods B) Lenders refusing to make loans in certain areas based on race C) Listing a property at a high price D) Refusing to show a house to a single mother Redlining is an illegal discriminatory practice by financial institutions.
- The "Statute of Frauds" requires: A) People to be honest B) Real estate contracts to be in writing to be enforceable C) Brokers to have an escrow account D) Buyers to have a home inspection Oral contracts for the sale of real estate are generally unenforceable in a court of law.
- "Accretion" is the process of: A) The gradual buildup of land by the action of water B) The sudden loss of land (avulsion) C) A government taking of land D) Adding a room to a house Land gained through accretion belongs to the property owner whose land was added to.
- A "Balloon Payment" is: A) The first payment of a loan B) A large final payment at the end of a partially amortized loan C) A payment made for a party D) An interest-only payment
In a balloon mortgage, the monthly payments don't fully pay off the debt, leaving a large balance due at the end.
- Which of the following would terminate an "Offer"? A) The buyer gets a cold B) A counteroffer by the seller C) The broker goes on vacation D) A neighbor says the house is haunted A counteroffer is a legal rejection of the original offer; the original offer no longer exists once a counter is made.
- What is "Ad Valorem" tax? A) A tax based on the value of the property B) A tax on personal income C) A tax on the number of people in the house D) A tax paid only by businesses Property taxes are "ad valorem" (Latin for "according to value").
- A "Fiduciary" relationship is one of: A) Trust and confidence B) Master and servant C) Buyer and seller D) Landlord and tenant Agents have a fiduciary duty to put their client's interests above their own.
- The "Cost Approach" is most useful for appraising: A) An old Victorian home B) An apartment complex C) A newly built library or church D) A vacant lot The cost approach is used for unique properties where there are no "comps" and no income generated.
- "Blockbusting" is also known as: A) Panic peddling B) Steering
C) People buy houses at auction D) The government sets interest rates Fannie Mae and Freddie Mac are major players in the secondary market.
- "Severalty" ownership means: A) Ownership by one person or entity B) Ownership by several people C) A property that has been cut in half D) A property with several liens Think of it as "severing" all other interests; only one person owns it.
- "Regulation Z" implements which federal act? A) Truth in Lending Act (TILA) B) RESPA C) Fair Housing Act D) Clean Air Act TILA requires lenders to disclose the true cost of credit, including the APR.
- A "Deed" must be __________ to transfer title. A) Recorded B) Notarized C) Delivered and accepted D) Written in blue ink Title is officially transferred when the grantor delivers the deed and the grantee accepts it. Recording is for public notice, not transfer.
- What is "Functional Obsolescence"? A) Loss of value due to outdated design or features (e.g., 5 bedrooms with 1 bath) B) Loss of value due to wear and tear C) Loss of value due to a nearby dump D) A house that is haunted Functional obsolescence is a flaw within the property lines that makes it less desirable by modern standards.
- A "Lien" is a: A) Financial claim against a property B) Right to walk across land
C) Type of deed D) Boundary line Liens like mortgages or tax liens use the property as security for a debt.
- "Joint Tenancy" includes the right of: A) Survivorship B) Inheritance C) Possession by only one person D) Free rent When one joint tenant dies, their interest passes automatically to the surviving joint tenants, not their heirs.
- A "Net Lease" requires the tenant to pay: A) Only the rent B) Rent plus some or all of the property expenses (taxes, insurance) C) A percentage of their sales D) For the landlord's vacation Common in commercial real estate; the "net" refers to the rent that is "net" to the landlord.
- "Caveat Emptor" means: A) Let the buyer beware B) The seller is always right C) No pets allowed D) Cash only In some states/situations, the buyer is responsible for discovering any defects before purchasing.
- What is "Amortization"? A) The systematic repayment of a loan over time through regular installments B) The interest rate on a loan C) Paying only the interest D) Getting a loan for a car Each payment covers the interest due and reduces the principal balance.
- A "General Warranty Deed" provides: A) The most protection for the buyer B) The most protection for the seller
