Kentucky Real Estate Mock Test 1 Flashcards

Kentucky Real Estate Mock Test 1 Flashcards An Agency Disclosure Statement must be signed by the buyer before making the offer on the property.Agent Kenzie has terminated her relationship with her broker. The broker has returned her license to the KREC.Agent Kenzie has 30 days to place her license in escrow or find another broker.Dr. Wilder bought a home for $125,000. She obtained a 90% mortgage at an interest rate of 8% for 30 years. Other expenses included title insurance of $425, 2 discount points, 1% origination fee, and attorney fees of $250.Taxes of $955 for the year have been paid. If the closing takes place on June 23, how much money does Dr. Wilder need to bring to the closing? (Use 360 days in a year and the seller is responsible for the day of closing.)

$17,248.20Buyer Credits: $125,000 x 90% = $112,500

LoanBuyer Debits:$125,000 - Sale Price$112,500 Loan x

8% = $9,000 Annual Interest$9,000 ÷ 360 = $25 Daily Interest Rate$25 x 8 days = $200 (Buyer would owe interest from June 23 - June 30.)$425 - Title Insurance$112,500 x 2% = $2,250 Discount Points$112,500 x 1% = $1,125 Origination Fee$250 Attorney Fee$955 ÷ 360 = $2.65 Daily Tax RateJune 23 - December 30 = 188 days$2.65 x 188 days = $498.20 Debit

to buyer for taxes.Total debits: $125,000 + $200 + 425 +

2,250 + 1,125 + 250 + 498.20 = $129,748.20Total credits:

$112,500$129,748.20 - 112,500 = $17,248.20

After receiving recommendations from the KY Assoc of

REALTOR, the governor appoints:

• commissioners, four of whom have had an active license

for the past 10 years.Carrie's lease agreement states that the landlord is responsible for furnishing heat. The landlord failed to provide heat and Carrie had to vacate the unit. This is an example of constructive eviction.Constructive eviction occurs when the property becomes uninhabitable and the tenant must vacate the property.The optionee's attorney met with the optionor and presented the signed document wherein his client exercised her option. An option contract that has been exercised is a/an bilateral, executory contract.An option contract is a unilateral contract because only the seller is obligated to perform or sell if the buyer wants to buy. When the buyer says, "I'm going to exercise my option and purchase the property." the option contract becomes a bilateral, executory contract. Both buyer and sellers have duties to perform.A neighbor referred a buyer to an agent. After the closing the neighbor asked for a $1,000 referral fee. The agent may inform the neighbor that the law doesn't allow referral fees to be paid to anyone that does not have a real estate license Tiffany passed her real estate exam on August 6. She must apply for her real estate license within 60 days Which of the following is NOT a responsibility of the broker, and thus would NOT be found in a normal listing agreement?To inspect the property and complete a property disclosure statement.It is not the responsibility of the broker to complete the property disclosure form for the seller. State laws vary, and if a property disclosure form is required, the broker would be responsible for providing the form to the seller for completion, but not completing it for the seller.

A deed states that title is held by Carrie and David as co-owners. In most states, their ownership would be interpreted as tenancy in common.When two or more people own property, the law will interpret the ownership as tenants in common, unless the deed states otherwise. For joint tenancy or tenancy by the entireties to be created, the owners would need to give those instructions upon the creation of the deed.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 gap in the title.When an owner does not record a deed, it creates a gap in the title. It is sometimes called a break in the chain of title.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.Which of the following is not required to secure a sales associate Kentucky Real Estate License?Be at least twenty-one years of age Which of the following is NOT a duty of the real estate

agent:

To accept offer on behalf a client.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?$63,529.41Step 1 $450,000 x 12% = $54,000Step 2 100%

• 15% = 85%Step 3 $54,000 ÷ 85% = $63,529.41

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

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 has breached the fiduciary duty of confidentially.Unless an agent has permission from the sellers, an agent is not allowed to disclose the personal information of the sellers.How many acres are in a tract of land 400' by 800'?7.34619 acres400' x 800' = 320,000 square feet320,000 ÷ 43,560 = 7.34619 acres When making adjustments in the comparable properties, the appraiser would NOT consider which of the following?Racial demographics Which of the following is true regarding RESPA? RESPA requires the disclosure of settlement charges on a HUD-1 Settlement sheet Which of the following would terminate a sales contract?Contingencies that cannot be fulfilledContingencies that cannot be fulfilled would terminate a sales contract.Which of the following is NOT a duty of the KREC? Fine a licensee $1,200KRS 324.281(1) (c). The KREC can fine a licensee not to exceed $1,000.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 in writing that all advertisements must be approved by the

broker.324.117 (4) and 201 KAR 11:105. The agent must

inform the sellers in writing that all advertisements must be approved by the broker.

The purpose of the capitalization rate is to convert anet income into a value.The purpose of a capitalization rate is to convert the net income the property generates into an economic value.Five years ago an agent committed fraud in a real estate transaction. The buyers just discovered the fraudulent act.If the buyers want to receive compensation from the recovery fund, they can recover actual damages from the fund if filed within two years of actual knowledge A lease in which the tenant pays rent only and the landlord is responsible for all ownership expenses would BEST describe a gross lease.A gross lease means that the tenant pays the rent only and the landlord is responsible for all ownership expenses 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?$732.25Step 1 $199,250 x 28% = $55,790Step 2 $5.25 ÷ $100 = .0525Step 3 $55,790 x .0525 = $2,928.98 ÷ 4 =

$732.25

When property taxes and special assessments are due and they are NOT paid, they become specific liens against the property.A specific lien is against an identified piece of property. Property taxes and special assessments are example of specific liens.Which of the following is NOT true regarding title insurance:The mortgagee's policy is for the value of the property - it's for the loan balance and decreases as each payment is made on the loan.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.Which of the following listings could not be offered to a seller of real property located in Kentucky?Net 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 file a civil action in the Jefferson Circuit Court.324.020 (6).The Kentucky Real Estate Commission may seek and obtain injunctive relief against any unlicensed individual acting in violation of this chapter by filing a civil action in the Circuit Court where the commission is located or where the unlawful activity took place.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.) $479.41$9.50 ÷ $1,000 = .0095 tax rate$95,000 x .0095= $902.50 annual property taxes$902.50 ÷ 360= $2.51 daily tax rate (rounded up)January 1 thru July 11 = 191 days191 x 2.51 = $479.41 Debit the seller, Credit the buyer(The assessed value of $95,000 is already given in the question so the 35% assessment rate is unnecessary information.) A seller listed her property for $100,000 and told her agent not to present her with any offer les than $99,000. 3 days later a buyer wanted to make a written offer of $95,000.The agent...Must present the buyer's offer to the seller.Which of the following is not true regarding property management?Property management agreements are personal service contracts that are binding upon the death of either party.Property management contracts are personal service contracts and they are NOT binding upon the death of either party.

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 agent changed her surname. The agentmust give written notification to the KREC of the change.324.330 requires written notification to the KREC of a change of surname. There is no time frame, but it should take place in a timely manner. Please note.Licensees shall annually file their telephone numbers and email addresses with the Commission.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 executory.Which of the following is NOT true regarding a sale-leaseback?The ownership of the property never transfers.Which of the following is NOT an executory, bilateral contract?Open ListingAn open listing is an executory contract, meaning there are duties and obligations to perform, but it is a unilateral contract because only one party is obligated to perform. (The seller is obligated to pay if the brokerage brings a ready willing and able buyer. The brokerage has no duties to perform.) Which of the following is NOT a statutory general lien?Ad valorem tax lienAn ad valorem or property tax lien is a specific lien, not a general lien. A general lien is against both real and personal property. A specific lien is against one identified property. A statutory lien means it is placed by statute, or law.Under Kentucky law, a broker is required to keep copies of records for

• years

Jayne's birthday is March 19th. She passed her exam and her sales associate license was issued on November 15th.Her license will be renewed by March 31 of the following year.What party is responsible for giving the Condominium Certificate to the Homeowner's Association for completion?Seller Which of the following would be an example of a non-possessory property interest?EasementAn easement grants the right to use another person's property, but it does not grant the right of possession.A suit to quiet title would be filed under which of the following circumstances?When there is an adverse possession claim on the property.If it is determined that the complaint contains prima facie evidence, how many days does the licensee have to answer?20 days A tenancy in common interest which grants the right to interval ownership of the property would BEST describe a/an time share.A time share is described as interval ownership of a property. An estate from year to year or an estate for years, are examples of leases. A cooperative is a way of owning property wherein the company holds the deed and tenants within the building purchase stock in the company