KY 96-Hour Salesperson Pre-License Final Practice Exam

Gabe's home has an assessed value of $172,000, and his tax rate is .55%. What are the annual taxes?

$946

What does one hectare equal?

2.47 acres

How is timeshare ownership typically split?

52 weeks

Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them?

A VA loan, which requires no down payment.

Which of the following is most susceptible to a predatory lender?

A borrower with poor credit

Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?

A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.

What's an environmental impact statement?

A written statement that requires all levels of government to perform an environmental assessment

When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at?

Addendum

The buyer in a transaction has requested a particular closing agent in her offer. What kind of provision would this be considered?

Additional provision

When a subject property has a feature that a comparable property doesn't have, what should the licensee preparing a CMA do?

Adjust the comparable's price down

Your clients are considering purchasing a home built in 1998. They're excited that it comes with a warranty plan because the furnace, central air system, and all of the appliances are original. Since the EPA has banned the use of Freon® in cooling systems, you need to advise your clients on this situation. What advice should you give them?

Advise them the EPA banned the use of Freon® in cooling systems in 2010, and that home warranty companies may not cover repair of the older systems.

According to Kentucky license law, which statement most accurately describes a licensee's responsibility related to written offers on his or her listings?

All formal written offers the licensee receives must be presented to the owner, even after the seller accepts an offer.

Which of the following is a true statement about FHA financing?

An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.

Which of the following is more likely to act as a closing agent?

An attorney or title company representative

Which environmental issue facing property owners and managers is most commonly found in structures built before 1981?

Asbestos

Which type of framing involves a single system of wall studs run from the foundation through the first and second floors to the ceiling support?

Balloon

Why might an appraiser use only one approach to valuation in an appraisal?

Because the other two approaches aren't relevant to the subject property

Jennifer, an experienced salesperson, hires an unlicensed assistant, Suzanne. Jennifer's on vacation, and in her absence, Suzanne discussed some contract terms with one of Jennifer's clients. Who's responsible for Suzanne's behavior?

Both Jennifer and her broker are responsible for supervising Suzanne, and both could be disciplined.

What is the relationship between a policies and procedures manual and the broker's obligation to supervise agents?

Brokers who enforce policies and procedures outlined in an effective PPM have proof of efforts to properly train and supervise agents.

Shelly's real estate investment strategy is to look for smaller multi-family properties, fix them up, and rent them out. Her investment strategy most closely matches which of the following?

Buy and hold

How is the adjusted sales price calculated for a comparable property using the sales comparison approach?

By adding or subtracting the sum of the adjustments made on a comparable property

Quentin brought an application before city council to build a shopping mall on 17 acres south of town that currently don't have a zoning designation. The council referred him to the planning commission, which will review the application in light of the city's ________.

Comprehensive plan

Chadwick is a developer considering purchasing a large piece of unimproved land for a subdivision development. What should he do before committing to the project?

Conduct a feasibility study.

What's an antitrust violation's central element?

Conspiracy

What type of an eviction could tenants claim if they're forced to vacate an apartment after the landlord failed to repair the heat?

Constructive eviction

Luis had just finished remodeling his older downtown space into a family restaurant called the Spaghetti Warehouse. What kind of industrial property is this an example of?

Converted industrial property

An unrepresented ______ who's a party to a transaction is known as a principal.

Customer

Which fiduciary duty is missing: loyalty, reasonable skill and care, obedience, confidentiality, accounting, and ______?

Disclosure

Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?

Discount point

John and Tara have lived in their home for 23 years and are excited to move to Florida for retirement. As homeowners, what right allows them to sell their home?

Disposition

LaTonya's aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya's sister was even married there. That's why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?

Disposition

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal?

Document health and safety issues that may affect both the cost and enjoyment of the home.

Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?

Encroachment

Property owner Craig likes to sunbathe in the nude in his nice, private backyard. What part of the bundle of rights allows him to do this legally?

Enjoyment

Which agency enforces fair housing law?

FHEO

Mike's been friends with Tim since college. They often work together: Mike flips houses and Tim's an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they're engaging?

Falsely inflating appraisals

Which structural component is described as "the concrete base that supports the foundation of a building"?

Footing

Seller Garrett has a closing date of October 11. He's already paid his annual taxes of $1,825. Assuming the buyer owns the day of closing and assuming a calendar year proration, which of the following statements is true regarding the property tax proration?

Garrett will be credited $410 at closing.

Which of the following is NOT a purpose of touring a subject property?

Gather data for the MLS listing.

Angel's credit card company sued him in civil court for nonpayment. There was a judgment against him, and so now Angel has to sell his classic car and his primary residence to pay the credit card company. What type of lien did the company have?

General

What does the income approach to value rely on when valuing properties that are five or more units?

Gross income multiplier

Business is booming for Johnstone Realty, a new brokerage firm in town. The other firms in the area are unhappy about the cooperating split Johnstone offers, and they all agree to not show Johnstone's listings to their buyer clients. What is this an example of?

Group boycotting

Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?

Group boycotting

Jim is a listing agent. What offers must he present to his client, and when?

He must present all offers as soon as is practical.

Which statement best describes the criteria that would permit Tristan to legally engage in dual agency?

His firm and the state permit it and he obtains the proper consent.

Leslie, a property manager, always asks that her property management agreements contain a(n) ______ clause that states that she is not responsible for the negligent acts of the people she hires.

Hold harmless

Jan is an appraiser analyzing a site that's in an earthquake zone. This is considered a(n) ______ of the site.

Important feature

In the months before the financial crisis beginning in 2007, what made collateralized debt obligations (CDOs) such an attractive investment?

Increasing home prices gave them the perception of a safe, high-yield investment.

Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret's agent?

Inform Margaret about required property condition disclosures.

Ashish is purchasing a bank-owned property. His real estate agent tells him the bank is offering insurable, not marketable, title. What does this mean to Ashish?

Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy.

In the movies, a shady salesperson might say "I have some great farmland to sell you in the Midwest; just take a look at this brochure and let me know if you'd like to buy!" The federal government passed a law to prevent such fraudulent sales of property sight unseen. What is that law?

Interstate Land Sales Full Disclosure Act

Why are un-rehabbed properties priced below market value such popular auction properties?

Investors and developers look for below-market properties that will turn a profit for them.

What role does the Brownfields Law play in the assessment and cleanup of unused commercial/industrial sites that may contain hazardous waste?

It provides funds.

Appraiser Kali determines that the value of a piece of land with an endangered species present is less than it would be without the presence of that species. What's the likely explanation for that?

It will reduce the amount of land that can be used or developed.

Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?

Joint tenancy

Which of these is an example of puffery?

Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay."

After a Kentucky seller client has completed and signed the Seller's Disclosure of Property Conditions form, who keeps the original?

Listing agent's broker

Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non-discriminatory in its effect?

Listing the property on the MLS

In order to set an interest rate prior to closing, a borrower must _______ the interest rate.

Lock

Of the following examples, what is the tenant's duty under the URLTA?

Maintain the property in a good, clean, and safe condition.

When it comes to environmental concerns with a site, which of the following describes the appraiser's responsibility?

Make note of conditions which require further investigation or testing on the appraisal report

The main difference between puffery and misrepresentation is that _______.

Misrepresentation falsely represents material facts that a reasonable person would rely upon

You're expecting an appraisal report on a commercial property your client is interested in purchasing. What style of appraisal report would you expect to see?

Narrative report

What are the main benefits to veterans of the VA-guaranteed loan program?

No down payment, no mortgage insurance, and no prepayment penalty

Five competing brokerage firms in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?

No intent needs to be proven

The Kentucky Real Estate Commission and the accused licensee are required to ______ any additional statements regarding a complaint for license law violations.

Notarize

James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______.

Open

Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

Pending

What type of lease is used to secure a bonus from tenants who want a spot in the center of a neighborhood shopping center?

Percentage

Assuming adequate supervision is in place, which of the following statements about Kentucky principal brokers is false?

Principal brokers will be held primarily responsible for license law violations committed without their knowledge by sales associates.

Jess has permission to live on his father's property as long as Jess' grandmother is alive. This is an example of which type of life estate?

Pur autre vie

When working with a client, in order to fulfill your duty under Article 1 of NAR's Code of Ethics, you should ______.

Put the client's interests above all others, except your brokerage

Tabitha is finding the reproduction cost of a structure by adding the itemized costs—including direct and indirect expenses—of building or installing a new structure's component parts. What method is Tabitha using?

Quantity survey

The process appraisers use to find an appraised value for a property requires them to _______ the values found by the different valuation approaches.

Reconcile

Melisa's mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa's mother's name. What does Melisa have to do to clear this up?

Record the signed deed.

In a lease agreement, what consideration does the landlord give to the tenant?

Right to occupy the property

The right to access rivers, streams, and other flowing bodies of water adjacent to a property is called ______.

Riparian

What does Susanna do as an appraiser?

She determines what a buyer may pay for a property.

Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

Spot zoning

Marla is finding the reproduction cost of a structure by multiplying the cost per square foot of a recently built comparable structure by the number of square feet in the subject building. What method is she using?

Square-foot

When a large tract of land is purchased and prepared for development, and then split into parcels, the value of each lot as a residential building site must be determined. The method used to value each individual parcel is known as the ______ method.

Subdivision development

Marlon and Leah are interested in buying a home in a new homeowner opportunity area. The 100-year-old row house was renovated and is like new on the inside. The property taxes decreased by more than $5,000 last year. What's the likely reason for this?

Tax abatement

In reference to a real estate transaction, which of these terms does NOT refer to the process in which title is actually conveyed and proceeds disbursed?

Termination

Kentucky property managers are expected to provide receipts promptly and ensure moneys are deposited without delay. ______ needs to be entered into either the tenant and/or owner ledger for all moneys received.

The dollar amount and unit number

Your buyer Clint loves older homes and wants to make an offer on a beautiful Craftsman. He doesn't like the yellow brick and has plans to paint it a lovely Williamsburg blue. You tell him that he may not be able to change the color or, even if he can, he may have to get the color approved first. What did you see on the property disclosure form that hinted at this?

The house is in a historic preservation district.

Which of the following would NOT likely be a location issue of concern to buyers?

The house was built in 1985.

Marcy's offer on a home was accepted! Which party will be contacting her about arranging an appraisal?

The lender

Which of the following statements about supervising unlicensed assistants in Kentucky is correct?

The principal broker may assign supervision of an unlicensed assistant to another licensee.

Per the KREC Exclusive Right to Sell Agency Contract, which of the following statements about cooperating brokers and the showing of the property is true?

The seller can set limitations on showings and the broker's cooperation with other licensees.

Why would a seller reserve the right to revise the effective date of a KREC Exclusive Right to Sell Agency Contract?

The seller may be in negotiations with a potential buyer at the time the listing contract is signed.

Limited liability companies and limited liability partnerships are favorable forms of business because ______.

They don't require a general partner.

Why do land investors investigate the topography of a potential property?

To determine if the topography will pose an insurance risk

Why might a brokerage firm choose to create its own set of ethical guidelines?

To impose stricter guidelines than a national or state code

The benefits of a home warranty for buyers are clear. Why might sellers want to offer a home warranty to buyers?

To protect themselves from any claims after closing.

Eminent domain and condemnation occur when the ______ of land is involuntary.

Transfer

Which of the following can be defined as what a property is worth?

Value

As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this?

Voidable

Which of the following is a true statement about pricing strategy for a market analysis?

What the seller paid in the past has no bearing on today's pricing strategy.

Which of these would be a breach of a broker's fiduciary duty of confidentiality?

When asked by the buyer's agent if the seller client was firm on the price, the broker said, "Everything's negotiable".

Your seller client Clayton has found a house he'd like to purchase, but he needs to sell his current house before he can make an offer. Should his desire for another property impact pricing strategy?

Yes, if his desire for the other property outweighs his need to get top dollar for his house.