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KENTUCKY REAL ESTATE FINAL EXAM ACTUAL
EXAM | ALL QUESTIONS AND ANSWERS | GRADED
A+ | VERIFIED ANSWERS | LATEST VERSION (JUST
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How many acres are in a tract of land 400' by 800'? ------CORRECT ANSWER---------------7.34619 acres 400 feet x 800 feet = 320,000 square feet 320,000 divided by 43,560 = 7.34619 acres A borrower secured a loan in which he makes a fixed monthly payment and the balance will be zero at the end of the loan term. This BEST describes a/an ------CORRECT ANSWER---------------fully amortized mortgage The semi-annual interest payments totaled $4,600. The borrower negotiated a 75% loan at an interest rate of 10.5%. How much did the borrower pay for the property? ------CORRECT ANSWER--------------- $116, 4,600 x 2 = $9, $9,200 ÷ 10.5% = $87,619. $87,619.05 ÷ 75% = $116, After a hearing an agent's license was suspended for ten days. This means the agent ------CORRECT ANSWER---------------can receive compensation if it was earned prior to the suspension period. A builder secured a construction loan. He MOST LIKELY obtained a/an -----
- CORRECT ANSWER---------------open-end term mortgage
In a circuit court an unlicensed may be penalized ------CORRECT ANSWER---------------the return of the commission, a fine of not less than $100 nor more than $1,000 and up to six months imprisonment, or both 324.990. In the circuit court a fine an unlicensed individual not less than $100 nor more than $1,000, imprison them for up to six month, or both; and require them to return the commission. Which of the following is NOT true regarding title insurance? ------ CORRECT ANSWER---------------The mortgagee's policy is for the sale price of the property. Agent "J" was showing one of his listing to a potential buyer when he disclosed, without the seller's consent, that the sellers were in the process of a divorce. The buyer then commented that he thought the list price was too high and questioned how much the sellers would really take. Agent "J" said he was sure he could get the sellers to take less than the list price for the property. It would appear that the agent ------CORRECT ANSWER------- --------has breached the fiduciary duty of confidentially. A person dies testate. The person named to settle the estate would MOST LIKELY be called ------CORRECT ANSWER---------------an executor. The purpose of the capitalization rate is to convert a ------CORRECT ANSWER---------------net income into a value. The seller accepted a signed offer. The earnest money must ------ CORRECT ANSWER---------------be placed in the broker's escrow account within three business days.
of $21,500, how much did he pay for the house? ------CORRECT ANSWER---------------$51, $531 plus $21,500 plus $25,000 = $47, 100% - 8% = 92% $47,031 divided by 92% = $51, A veteran's offer of $65,000 was accepted. She made a $3,000 down payment on the property. The seller agreed to pay the 4 discount points and a 6% commission. If the seller owned the property free and clear, the seller will net ------CORRECT ANSWER--------------- 5 8, Step 1 $65,000 - $3,000 = $62, Step 2 $62,000 x 4% = $2, Step 3 $65,000 x 6% = $3, Step 4 $65,000 - 2,480 - 3,900 = $58, Broker Bonnie moved into her new home on March 15. The BREP should receive notice of her move ------CORRECT ANSWER---------------no later than March 26. In a percentage lease the tenant agreed to pay $650 fixed rent per month and 3% of the gross sales over $75,000. If the sales were $150,000 this year, what was the total rent paid for the year? ------CORRECT ANSWER-- -------------$10, Step 1 $650 x 12 = $7, Step 2 $150,000 - $75,000 = $75, Step 3 $75,000 x 3% = $2, Step 3 $7,800 2,250 = $10, An assessed value of a property is $95,000. The assessment rate is 35% and the tax rate is $9.50 per $1,000. The taxes have not been paid and the seller is responsible for the day of closing which is July 11. How much is
credited to the buyer? (Use 360 days in a year.) ------CORRECT ANSWER- --------------$479. $9.50 divided by $1,000 = .0095 tax rate $95,000 x .0095= $902.50 annual property taxes $902.50 divided by 360= $2.51 daily tax rate (rounded up) January 1 thru July 11 = 191 days 191 x 2.51 = $479.41 Debit the seller, Credit the buyer Tiffany passed her real estate exam on August 6. She must apply for her real estate license within ------CORRECT ANSWER---------------60 days. An Agency Disclosure Statement must be signed by the buyer ------ CORRECT ANSWER---------------before making the offer on the property. Edgar allowed an oil company to drill for oil on his farm. Edgar has given the oil company a/an ------CORRECT ANSWER---------------profit. After the closing the seller gave the agent a $100 bonus check. The agent must ------CORRECT ANSWER---------------give it to his/her broker. Broker Nelson appointed Julia, as only agent representing the seller and Barron as the only agent representing the buyer. Broker Nelson's agency policy is that of ------CORRECT ANSWER---------------designated agency
Mr. Brown, who does not have a Kentucky real estate license, is advertising that buyers have not seen all properties for sale until they have seen his "Real Estate Owned Listings" properties. The KREC may ------ CORRECT ANSWER---------------file a civil action in the Jefferson Circuit Court. Which of the following is NOT a duty of the real estate agent? ------ CORRECT ANSWER---------------To accept offers on behalf of a client A seller listed her property for $100,000 and told her agent not to present her with any offer less than $99,000. Three days later a buyer wanted to make a written offer of $95,000. The agent ------CORRECT ANSWER-------- -------must present the buyer's offer to the seller. Branham, a buyer, has made a written offer on a property. At what point should the agent give a copy of the offer to the buyer? ------CORRECT ANSWER---------------When it is signed by the buyer Active real estate licenses are required to take the core course every ------ CORRECT ANSWER---------------four years. Ann conveys a life estate to Paul based on the life of Troy. Paul has two children who live with him and help him care for Troy. What is the status of the life estate if Paul predeceases Troy? ------CORRECT ANSWER----------- ----The property would revert to Paul's children, so long as Troy was alive.
Which of the following would relieve the lessee of any obligation to make the rental payments? ------CORRECT ANSWER---------------Constructive eviction A grantee purchased a property and did not record the deed. Later the property was transferred to an heir, who sold the property. This would create a/an ------CORRECT ANSWER---------------gap in the title. Which of the following terms is associated with a security that is being sold across state lines? ------CORRECT ANSWER---------------Interstate A potential buyer is at an open house. At what point must the agent give the buyer a "Consumers Guide to Agency Relationships?" ------CORRECT ANSWER---------------The Guide must be given before the agent can ask questions where confidential information would be disclosed. A $450,000 sale price was obtained from a 12% capitalization rate. What was the gross income when the total expenses were 15% of the gross? ---- --CORRECT ANSWER---------------63,529. $450,000 x 12% = $54, 100% - 15%= 85% $54,000 divided by 85%= $63,529. Anne's Art Gallery leased space on the following terms: $1,200 per month fixed rent, plus 4.25% commission on all sales over $800,000. This year sales were $1,259,355. What was the total rent paid this year? ------ CORRECT ANSWER---------------$33,922. Step 1 $1,200 x 12 = $14, Step 2 $1,259,355 - 800,000 = $459, Step 3 $459,355 x 4.25% = $19,522.
All of the following are true regarding tenancy in common EXCEPT that -----
- CORRECT ANSWER---------------ownership shares must be equal. Which of the following would be an example of a non-possessory property interest? ------CORRECT ANSWER---------------Easement Which of the following would not be a disciplinary action of the BREP? ------ CORRECT ANSWER---------------A jail term of six months When making adjustments in the comparable properties, the appraiser would NOT consider which of the following? ------CORRECT ANSWER------ ---------Racial demographics condominium ------CORRECT ANSWER---------------Severalty ownership of air rights combined with an undivided interest in the common areas of real estate would MOST LIKELY describe a on probation ------CORRECT ANSWER---------------A licensee could be active in the real estate business if his/her license is Agent Kenzie has terminated her relationship with her broker. The broker has returned her license to the BREP. Agent Kenzie has ------CORRECT ANSWER---------------thirty days to place her license in escrow or find another broker
Disciplinary actions that can be taken by the BREP include all of the following EXCEPTplacing a licensee on probation for twenty four months --- ---CORRECT ANSWER---------------placing a licensee on probation for twenty four months. An agent has been found guilty of fraud in a real estate transaction. The court has determined the following damages: $5,000 actual and $2, punitive. What amount could be paid from the recovery fund? ------ CORRECT ANSWER---------------$5, The buyer executed a written offer to a seller. The seller's agent called the seller and presented the offer by phone. The seller accepted the offer by phone. At this point, what is the status of this offer? ------CORRECT ANSWER---------------Unenforceable A suit to quiet title would be filed under which of the following circumstances? ------CORRECT ANSWER---------------When there is an adverse possession claim on the property. Which of the following is NOT true regarding a land contract? ------ CORRECT ANSWER---------------The seller is the vendee and the buyer is the vendor. When listing a property or showing a property, which of the following duties is an agent NOT required to do? ------CORRECT ANSWER--------------- Discover latent defects in the property
An auctioneer has just been asked to auction a farm. The auctioneer ------ CORRECT ANSWER---------------may work jointly with a licensed broker who would list and advertise the property. An 80% loan was negotiated with an interest rate of 10%. The first month's interest payment was $833.33. What was the sale price of the property? ---- --CORRECT ANSWER---------------$125, $833.33 Monthly Interest x 12 = $9,999.96 Annual Interest $9,999.96 Annual Interest ÷ 10% Interest Rate = $99,999.60 Loan $99,999.60 Loan ÷ 80% Loan to Value Ratio = $124,999.50 or $125, Sale Price Which of the following is not required to secure a sales associate Kentucky Real Estate License? ------CORRECT ANSWER---------------Be at least twenty-one years of age After receiving recommendations from the Kentucky Association of REALTORS (R), the governor appoints ------CORRECT ANSWER------------ ---members of the BREP whose terms are for three years. The brokerage fee on a $185,000 sale was computed as follows: 7% on the first 60,000, 6% on the next $50,000, plus a certain percentage of the remaining balance. If the total fee paid was $10,950, what was the third percentage? ------CORRECT ANSWER---------------5% $185,000 - $60,000 - $50,000 = $75, $60,000 x 7% $4, $50,000 x 6% = $3, $4,200 $3,000 = $7, $10,950 - $7,200 = $3, $3,750 divided by $75,000 = .05 or 5%
Which of the following would be an example of external obsolescence? -----
- CORRECT ANSWER---------------A neighbor who doesn't maintain his property. Dino owns property located on Lake Michigan where he docks his yacht. His water rights are called ------CORRECT ANSWER---------------littoral rights. Under Kentucky law, a broker is required to keep copies of records for ------ CORRECT ANSWER---------------five years. Which of the following parties would have the legal right to transfer the title to property? ------CORRECT ANSWER---------------The party with the legal authority to perform. Which of the following mortgages would include both real and personal property? ------CORRECT ANSWER---------------Package mortgage An agent's license has just been suspended. The agent ------CORRECT ANSWER---------------may receive compensation that was earned prior to the suspension. What party is responsible for giving the Condominium Certificate to the Homeowner's Association for completion? ------CORRECT ANSWER-------- -------Seller
the gross volume of business for the year? ------CORRECT ANSWER-------- -------$425, $500 x 12 = $6, $12,250 - $6,000 = $6, $6,250 divided by 5% = $125, $300,000 $125,000 = $425, A defeasible fee estate means that title ------CORRECT ANSWER------------ ---can be defeated upon the occurrence or nonoccurrence of a specified event. Mr. and Mrs. Puckett's listing allowed them to retain the right to sell the property without the services of the ABC Realty. The listing agent should inform Mr. and Mrs. Puckett ------CORRECT ANSWER---------------in writing that all advertisements must be approved by the broker. A buyer's closing statement shows different items, including a purchase price of $58,325, an assumable mortgage of $55,000, a survey fee of $250, total debits of $59,925.25, title insurance of $395, 1% loan origination fee, total credits of $58,295, 2% for discount points, contract deposit of $3, and rent prorations of $495. Based on this information, how much money does the buyer need to bring to the closing? ------CORRECT ANSWER------ ---------$1,630. $59,925.25 - $58,295 = $1,630. Which of the following is NOT an executory, bilateral contract? ------ CORRECT ANSWER---------------Open listing
A tenancy in common interest which grants the right to interval ownership of the property would BEST describe a/an ------CORRECT ANSWER--------- ------time share. The broker's license was suspended. What is the status of the licensees of the real estate agents working for the broker? ------CORRECT ANSWER---- -----------They are automatically inactive. Which of the following is true regarding RESPA? ------CORRECT ANSWER---------------RESPA requires the disclosure of settlement charges on a HUD-1 Settlement sheet. If a buyer or seller refuses to perform on a contract, the aggrieved party may ask the court to compel performance. This is called a/an ------ CORRECT ANSWER---------------suit for specific performance Which of the following is NOT a statutory general lien? ------CORRECT ANSWER---------------Ad valorem tax lien Which of the following is not true regarding property management? ------ CORRECT ANSWER---------------Property management agreements are personal service contracts that are binding upon the death of either party. Jayce listed a property for Sterling Realty which sold for $82,500. Jason, who works for Gold Realty, produced the purchasers. The brokers have agreed to divide the 7% commission equally, and Jason is to receive 55% of his brokers' share. How much was Jason paid? ------CORRECT ANSWER---------------$1,588.
A person would be a special agent in which of the following transactions? -- ----CORRECT ANSWER---------------When a person has been given the authority to sign closing documents for the seller. When a lender charges more interest than is legally allowed, it is known as ------CORRECT ANSWER---------------usury A seller has called an agent to schedule an appointment to list her house. If the seller lists the house, this would be best described as a/an ------ CORRECT ANSWER---------------express agency. If a broker's branch office is 75 miles from his main office, the person must managing this branch office must ------CORRECT ANSWER--------------- have been licensed for 2 years averaging 20 hours per week in the business. A developer entered into a long term fixed rental lease that did not contain an escalation clause. How would this lease affect the appraised value of the property? ------CORRECT ANSWER---------------The value would decrease Under the income approach to appraising which of the following would be deducted from effective gross income to derive the net operating income? - -----CORRECT ANSWER---------------Property taxes and insurance Potential Gross Income
- Vacancy Rates & Credit Losses
Effective Gross Income
- Fixed expenses (property taxes and insurance)
- Operating expenses (day to day operating expenses)
- Reserves funds (major improvements in the future)
Annual net operating income Annual net operating income ÷ Cap rate = Value Which of the following would terminate a sales contract? ------CORRECT ANSWER---------------Contingencies that cannot be fulfilled A sales contract has been signed by both the buyer and the seller. The closing is to take place in 30 days. The status of the contract is ------ CORRECT ANSWER---------------executory Which of the following is NOT a duty of the BREP? ------CORRECT ANSWER---------------Fine a licensee $1, Which of the following is NOT a future interest in an estate in land? ------ CORRECT ANSWER---------------Pur autre vie Which of the following is NOT a responsibility of the broker, and thus would NOT be found in a normal listing agreement? ------CORRECT ANSWER---- -----------To inspect the property and complete a property disclosure statement. A tax assessor has determined that the appraised value of a property is $199,250. If the assessment rate is 28% and the tax rate is $5.25 per $100, what is the quarterly tax bill? ------CORRECT ANSWER---------------$732. $199,250 x 28% = $55,
