Kentucky CE Shop Practice Exam

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• Which statement describes a sale-leaseback arrangement?
• The assumption that if an identical property were sold recently, its sales price should be a good indicator of the value of the subject property describes which value principle?
• You've accepted a new listing. Why would you view the details of past listings for this property?
• Which remedy would compel the seller to transfer the property when monetary damages are insufficient to make the buyer whole?
• What is a licensee's primary role when discussing the pros and cons of selling a property at a voluntary auction?
• How do duress and undue influence affect contract validity?
• Which statement best describes the Consumer Guide to Agency Relationships?
• What is the role of the broker-in-charge in a real estate firm?
• Which statement best describes title insurance?
• Where in the Uniform Residential Appraisal Report would you find the number of total rooms, bedrooms, and bathrooms?
• What is the purpose of a title search and how does title insurance protect buyers?
• What is the principle of substitution in appraisal?
• Why are industrial lofts and warehouses often converted for residential or commercial uses?
• A CLUE report provides information about which aspect of a property?
• Which statement best describes the purpose of a financing contingency?
• Which of the following is NOT one of the six fiduciary duties a licensee owes to a client?
• Why was the Civil Rights Act of 1866 monumental among fair housing and anti-discrimination laws?
• Why should radon be disclosed in real estate transactions?
• Which activity is NOT typically part of Kentucky property management?
• Which of the following is deducted from potential gross income to determine effective gross income when appraising income property?
• Which appraisal approach uses information from recent sales of comparable properties to estimate value?
• Which statement about earnest money is most accurate?
• Which statement about tenancy by the entireties is true?
• Gene wants to buy a property at auction. He has 15 minutes before the auction to walk the property. Which of the following items should Gene focus on?
• What's the primary difference between reproduction cost and replacement cost?
• Document handling in your brokerage firm includes proper creation, distribution, security, storage, and ______.
• What's the primary purpose of the Universal Appraisal Dataset?
• What is a settlement statement and what is its purpose at closing?
• Which describes the amount of income a property can produce if it's fully occupied at market rent?
• Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?
• What is the purpose of the Uniform Electronic Transaction Act (UETA)?
• Which industrial property type offers flexible-use buildings that are good for storing large quantities of goods?
• Which of the following is NOT a federally protected class under fair housing law?
• What is a fee simple estate and how does it differ from a life estate?
• In contract law, rescission is best described as what?
• Which term refers to the legal ability to enter into a contract?
• Which is NOT a right of appurtenant to the ownership of real property?
• Real property includes which of the following?
• Which statement correctly defines a fixture in real property?
• Which fiduciary duty requires honesty and full disclosure of material facts to the client?
• Failure to disclose known defects that affect value or safety can expose the seller and broker to liability for damages.
• Which description best defines Comparative Market Analysis?
• Which of the following is the presentation of the appraiser's solution to the appraisal problem for a commercial property?
• What are the primary duties of a property manager?
• Industrial lofts and warehouses are often converted because they are located in which type of area?
• How is advertising legality ensured in real estate, and what is puffery?
• What is eminent domain and when may it be exercised?
• In Kentucky, the fee for a new or renewed real estate license is set by ______.
• What constitutes prohibited misrepresentation in real estate advertising and how can it be avoided?
• Which value principle holds that the value of a property is determined by the price of a close substitute?
• Which of the following best describes the concept of appreciation?
• What must be included in a lead-based paint disclosure for homes built before 1978?
• How does timely disclosure affect seller liability and buyer risk?
• In an exclusive agency listing, who pays the broker if the seller finds a buyer without the broker's help?
• If there's an overall change in market value, what type of adjustment can an appraiser use to show the overall effect of the change?
• If you're in a caveat emptor state, which statement about property condition disclosures is true?
• In Kentucky practice, the cooperating broker is defined as which of the following?
• What is earnest money and how is it typically handled?
• Which statement best distinguishes an express contract from an implied contract?
• Which statement about the property condition disclosure statement is true?
• One square mile contains how many acres?
• Which of the following are common encumbrances affecting real property?
• What does PLE stand for in licensing requirements?
• Which valuation method used by real estate professionals is most similar to the sales comparison approach used by appraisers?
• Which statement best describes the Consumer Financial Protection Bureau?
• What is the minimum balance for the Kentucky Real Estate Education, Research, and Recovery Fund?
• Which statement about joint tenancy, tenancy in common, and tenancy by the entireties is true?
• What's the area of a rectangular building that's 40 feet by 20 feet?
• Which profile describes a buyer who tends to ask many questions and research options, signaling potential first-time homebuyer status?
• Which deed provides no warranties and transfers only the interest the grantor has?
• Why is continuing education important for Kentucky real estate licensees?
• Under a listing agreement, who is typically responsible for verifying the accuracy of property information?
• Which ownership type is associated with a timeshare estate?
• Which contingency applies if a buyer must sell their current home as a condition of purchasing?
• Which option best describes a short sale?
• Who would be the most likely target buyer for a new construction condo in the city?
• Which outcome can result from an unresolved title defect found during the closing process?
• Why should a listing agent include a seller net sheet with a comparative market analysis?
• What are typical protections or requirements for security deposits in residential rentals?
• Which task is often difficult to perform prior to purchasing a property at auction?
• A vacant parcel of land is six square miles. How many acres is this?
• What is a common remedy when a listing agreement has not progressed and both parties are frustrated, allowing for a fresh start?
• Which listing arrangement guarantees the broker a commission if the property is sold during the listing period, regardless of who procures the buyer?
• In which lease arrangement does the tenant typically pay taxes, insurance, and maintenance in addition to rent?
• An appraiser evaluating rent for a multiunit building will convert monthly rental income to which annual measure for comparison?
• How can a title search affect the closing timeline and risk to the buyer?
• Which statement about auctioning this property is true?
• In URAR, which section contains data about improvements such as the number of rooms?
• Which model is used to value raw, vacant land when the highest and best use development is planned as residential parcels?
• Which entity governs the handling of security deposits in residential rentals?
• A completion bond is primarily an assurance to which party that planned improvements will be completed?
• The ease with which a property can be conveyed to another describes which value-influencing factor?
• Which entity imposes penalties for license violations in real estate practice?
• Which deed provides full covenants against defects?
• Which agency duties survive termination of an agency agreement?
• What are common remedies for breach of contract in real estate?
• Which of the following could be a consequence of engaging in unlicensed brokerage?
• Industrial lofts and warehouses are often converted because they are located in which type of area?
• What is a completion bond?
• Which component contributes to potential gross income for a rental property?
• Which of the following conditions contributed to the 2007 financial crisis?
• Which statement best defines an easement?
• What is escrow and how is it used in real estate closings?
• What are the three traditional approaches to estimating property value in residential appraisal?
• Edgar is in the process of selling his home in a short sale. What's a short sale?
• Loans insured through USDA have which of the following characteristics?
• Before Chet buys a property at an auction, he reviews the ______ to make sure there's no tax liens or other encumbrances on the property.
• In Kentucky real estate practice, what does the signature on the Agency Disclosure Statement confirm?
• Who may serve as the escrow holder in a real estate closing?
• Sylvan is using the cost approach to estimate a specific property's value. What's he using to determine this property's value?
• Which fiduciary duty extends beyond closing?
• A Kentucky cooperating broker is a(n) ______.
• In Kentucky, exclusive listing agreements, which statement is true?
• Engaging in unlicensed brokerage by performing brokerage services without a license or with an exemption may result in which of the following?
• In commercial lease agreements, which type requires the tenant to pay some or all of the expenses in addition to rent?
• Why is it important for a buyer to know if an underground storage tank is present on a property?
• Which approach might an appraiser weigh more heavily while reconciling the appraisal value of a vacant lot?
• Which statement best describes the Federal Fair Housing Act and how state laws interact with it?
• Until the contract terms of a promotional land sale agreement are satisfied, who has legal ownership of the land?
• As it relates to appraisals, ______ is a loss in value.
• Which term describes the total income a property could generate if fully leased at market rent, before expenses?
• What document, signed by all parties to a sales contract, changes the original terms?
• Bart and Claire are under contract for Claire to buy Bart's house, but financing fell through and they cancel as if it never happened. Which termination method is this?
• On March 1, a seller signs a six-month listing. What is the best option for both parties if they are frustrated and wish to move forward?
• A week before a transaction closed, the seller changed her mind and decided to not go through with the sale, so the buyer filed a lawsuit to make the seller sell. What is this called?
• A $400,000 property depreciated in value by 2%. What's its new value?
• What type of agency exists because of the actions and behavior of the parties?
• How does the Kentucky Real Estate Commission address license violations?
• Which of the following is NOT an essential element of a legally enforceable real estate contract?
• Which term describes the appraisal document that presents the appraiser's solution to the problem for a commercial property?
• Which is the proper time to provide the Consumer Guide to Agency Relationships to a prospective client?
• When might a broker still earn a commission if a sale fails due to buyer or seller default?
• Which of these statements about Kentucky's Agency Disclosure Statement is true?
• A 15-unit apartment building has an estimated annual rental income of $130,000 based on market rent, spends $102,000 in operating expenses, and takes in about $4,000 from the machines in the building's laundry. What is this property's potential gross income?
• Which scenario best illustrates seeking specific performance?
• In the cost approach, which of the following best describes how value is determined?
• What do the principles of conformity and progression/regression mean in appraisal?
• Which concept describes estimating value by comparing recent sales of similar properties?
• The requirement that a portion of the purchase money mortgage be repaid when each lot is sold is called ____________.
• Which listing type gives the broker the sole right to earn a commission regardless of who sells the property?
• Per the KREC Exclusive Right to Sell Agency Contract, the broker/agent is obligated to do which of the following?
• Property ownership for an indeterminable length of time is an example of what form of estate?
• Why are legal descriptions required in real estate contracts?
• Which standards govern appraisal practice among the listed options?
• When listing a property, which type of defect must be disclosed to prospective buyers?
• Which data type is typically used by appraisers to analyze demographic trends?
• What are PCBs?
• What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?
• Which industrial property type is pre-planned to allow a variety of building types and industries to all be located close together with access to transportation options?
• Under the Kentucky Property Management Agreement, how many days' notice does an owner have to give an agent or broker regarding the contract's early termination?
• Which document is listed for borrowers to receive at least three days before closing, detailing costs?
• Dana, a Kentucky property manager, has been notified by a tenant about a leak in the bathroom. What does this mean for Dana?
• What type of industrial property is used for the production of raw goods and products?
• In Kentucky, property management activities include ______.
• Which term describes the appraisal principle that means a close substitute can cap the price of a property?
• Which task is often difficult to perform prior to purchasing a property at auction?
• What are the typical renewal requirements for a Kentucky real estate license?
• What is the difference between a material defect and a latent defect in a property disclosure?
• Which practices are commonly considered real estate antitrust concerns and prohibited activities?
• When comparing rents for similar properties, appraisers often convert monthly rent to annual dollars per room.
• If a buyer is concerned about hidden issues with a property's condition, what can they do to obtain more information related to the property's insurance history?
• What real estate investment strategy involves purchasing many properties and reselling them immediately for a small profit?
• The Kentucky Real Estate Education, Research, and Recovery Fund must carry a minimum balance of ______.
• Under the Uniform Electronic Transactions Act, electronic signatures are...
• In dual agency, which form of consent is required to legally establish the arrangement?
• What is dual agency and what is required to lawfully practice it in Kentucky?
• Robert is looking for a great deal on income property that will begin producing income as soon as he purchases it. He's reviewing an auction catalog. Which property type most likely meets his needs?
• The ability to deduct the costs of maintaining and operating an income property describes a/an _____.
• Which statement best describes appreciation as a real estate concept?
• Of all the preventive risk measures a broker takes, which is the most important?
• What's the purpose of a short sale?
• What is the primary purpose of an operating budget in real estate management?
• What is the maximum fee licensees are required to pay into the Kentucky Real Estate Education, Research, and Recovery Fund?
• Which option is not a typical use of an operating budget?
• How are commissions typically determined in real estate transactions?
• In a real estate transaction, who does a licensee represent?
• For risk management, which measure is essential for compliance?
• Which appraisal approach is based on replacement cost?
• The US Census Bureau is a good source of what type of data needed by appraisers?
• A seller is unlikely to cooperate with an auction that's...
• In a life estate, all of the following apply during the term except ______.
• Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
• What is an encumbrance?
• What does the Lead-Based Paint Disclosure Rule require?
• How can agency be created in real estate?
• How do the cost approach and the sales comparison approach differ in valuing property?
• A seller is preparing a property condition disclosure statement. Which statement is true?
• Why isn't the cost approach usually not used to determine the value of older properties?
• What is the purpose of zoning and how do police powers regulate land use?
• How should earnest money or other deposits be handled in a broker's trust account?
• Which statement best describes continuing education requirements for Kentucky licensees?
• What is the difference between a sale-leaseback and a lease with option to buy?
• In a short sale, the property is sold for less than the amount owed on the loan.
• Which protected classes exist under federal fair housing law?
• Which are three common estates in land?
• The Appraiser Independence Requirements (AIR) are designed to protect which groups?
• What's the purpose of the Consumer Guide to Agency Relationships?
• A timeshare estate involves what type of property ownership?
• Aside from price, which of the following is a major reason to counter an offer?
• What is the primary purpose of disclosures in real estate transactions?
• Who is responsible for completing the Condominium Seller's Certificate in a Kentucky Transaction?
• Which of the following is NOT a common contingency in real estate contracts?
• How can an agent offer dual agency legally?
• In a real estate sale, the price that would be agreed upon between a willing buyer and seller under normal market conditions is called what?
• Which statement best describes the difference between a bilateral contract and a unilateral contract in real estate?
• What is escrow/trust accounting and what records must a broker maintain?
• Which statement is true about USDA insured loans?
• The Richardsons' property auction is likely scheduled?
• What type of fee is paid to offset the increased burden on area infrastructure, such as schools and roadways?
• Which factor aside from price is commonly addressed in a counteroffer?
• Who typically holds earnest money in escrow?
• Suppose a licensee must complete 48 hours of post-licensing education (PLE) during the stipulated time period. If the period is two years, how many hours of PLE would be required per year?
• Which statement is true about a construction mortgage?
• The Appraiser Independence Requirements protect which parties?
• How do homeowners association CC&Rs differ from an easement?
• Ross thinks he knows which neighborhoods his new clients belong in, so he tries to guide them away from the neighborhood they like. What prohibited practice is Ross engaging in?
• Which statement best explains why the cost approach is rarely used for older properties?
• A property manager is authorized to perform all duties related to the property on whose behalf?
• Which statement about using real estate assistants is true?
• Which buyer is likely a first-time homebuyer?
• Which of the following describes the primary purpose of a settlement statement at closing?
• Which party is typically responsible for arranging and paying for necessary repairs once a leak is reported in a rental unit?
• When listing a property, what defects must be disclosed to potential buyers?
• What guidelines must appraisers follow when completing the sales comparison section of the URAR?
• A licensee represents the client. Which of the following best describes that relationship?