KENTUCKY REAL ESTATE PRACTICE EXAM FINAL ONE |150 EXAM QUESTIONS AND ANSWERS WITH RATIONALE GRADED A

KENTUCKY REAL ESTATE PRACTICE EXAM FINAL ONE |150 EXAM QUESTIONS AND ANSWERS WITH RATIONALE GRADED condominium Severalty ownership of air rights combined with an undivided interest in the common areas of real estate would MOST LIKELY describe a on probation 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 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 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 $2,000 punitive. What amount could be paid from the recovery fund? $5,000 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? Unenforceable A suit to quiet title would be filed under which of the following circumstances? When there is an adverse possession claim on the property. Which of the following is NOT true regarding a land contract? 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? Discover latent defects in the property Mr. Singleton's primary residence cost $250,000. During his period of ownership he added a tennis court at a cost of $10,000 and made other improvements at a cost of $20,000. Two years later he sold the property for $350,000 and paid a 7% commission. If he buys another home for $350,000, how much capital gains can he defer? $0 because there is no deferment of capital gains on a principal place of residence. Kentucky's Statute of Frauds requires that to be compensated, there must be a written agreement between the party and the brokerage. A buyer made an offer on a property which was accepted by the seller. Three days before the closing the title was found to be defective and the buyer negated the contract. Under these circumstances the brokerage has earned a commission because it found a ready, willing and able buyer whose offer was accepted by the seller. Which of the following listings could not be offered to a seller of real property located in Kentucky? Net In a lease the right of reversion refers to the lessor's right to regain the property when the lease expires. An agent will only show prospective buyers properties where the agent thinks they should live, not the properties the buyers want to see. The agent is guilty of steering An auctioneer has just been asked to auction a farm. The auctioneer 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? $125,000 $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 $125,000 Sale Price Which of the following is not required to secure a sales associate Kentucky Real Estate License? Be at least twenty-one years of age After receiving recommendations from the Kentucky Association of REALTORS (R), the governor appoints 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? 5% $185,000 - $60,000 - $50,000 = $75,000 $60,000 x 7% $4,200 $50,000 x 6% = $3,000 $4,200 $3,000 = $7,200 $10,950 - $7,200 = $3,750 $3,750 divided by $75,000 = .05 or 5% Which of the following would be an example of external obsolescence? 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 littoral rights. Under Kentucky law, a broker is required to keep copies of records for five years. Which of the following parties would have the legal right to transfer the title to property? The party with the legal authority to perform. Which of the following mortgages would include both real and personal property? Package mortgage An agent's license has just been suspended. The agent 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? Seller A leasehold estate that automatically renews for the original term is a/an periodic tenancy Keith owns a lot where zoning will allow her to build a residence that is 45 feet wide. If she builds a house 50 feet wide, she is allowed to do so because she was granted a variance The sales comparison approach is based on the principle of adjustments. If an appraiser is using this approach, the adjustments would be made in the comparable property. While being interviewed as a potential listing agent for a property, the seller states that he does not want the property sold to a minority. The agent should refuse the listing. When a party purchases a cooperative, she/he will secure stock in the company and a lease to the unit. How many acres are in a tract of land 400' by 800'? 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 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? $116,825 4,600 x 2 = $9,200 $9,200 ÷ 10.5% = $87,619.05 $87,619.05 ÷ 75% = $116,825 After a hearing an agent's license was suspended for ten days. This means the agent can receive compensation if it was earned prior to the suspension period. A builder secured a construction loan. He MOST LIKELY obtained a/an open-end term mortgage In a circuit court an unlicensed may be penalized 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? The mortgagee's policy is for the sale price of the property. Agent