real estate

Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say?

"Without a written representation agreement, I don't represent you."

What's the approximate price per square foot of a home that's 1,492 square feet, and was purchased for $150,000?

$100

An agent acting for both the buyer and the seller sells a home for $799,995 at a commission rate of 4%. If the agent has a 60/40 split with the broker, how much does he net from this sale?

$19,199.88

Stephanie is calculating the total reproduction cost for a small industrial property. She has cost estimates for the foundation ($20,000), the floor ($40,000), and the exterior walls ($60,000). She's measured the roof (15,000 square feet) with a cost of $5 per square foot. If Stephanie were to determine the total reproduction cost at this point, what would it be?

$195,000

Carol and Leonard Shultz bought their new home for $330,795, and it appraised at $416,300. The assessment ratio for their area is 22%, and the tax rate is 2.8%. What is the assessed value of their new home?

$91,586

An 800-square-foot rectangular building sells for $75,000. What's the cost per square foot?

$93.75

If a complaint for a license law violation in Kentucky does not constitute a prima facie case, the complainant has ______ days to revise and supplement the case.

10

In addition to fines, individuals who violate antitrust laws may face imprisonment for up to what length of time?

10 years

In calculating PITI for a mortgage payment, the annual taxes and insurance are divided by ______ and are added to the monthly principal and interest payment to make up the total monthly payment.

12

What's the average length of a community shopping center lease for a major tenant?

15 to 20 years

A house sells for $135,000 and the seller pays Entity Brokerage $8,000 in commission. What is the commission rate?

5.9%

Which of the following properties is a REO?

A duplex that a lender has tried to sell by foreclosure and failed

You're performing a market analysis. Which of the following features, if present in the subject property and lacking in the comparable property, warrants an addition to the sales price of the comparable?

A new roof

Which of these is something that is NOT requested in the initial fair housing complaint form?

A notarized copy of the complaint description

Which of the following describes a subdivision plat?

A record in the county clerk's office that can serve as the legal description on a deed

Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?

A trustee will hold title until the loan is paid.

Your client, Cassandra, asks you at what stage in her property ownership life cycle she'll be impacted by income tax issues. You tell her that it's likely that she'll be affected at ______.

Acquisition, ownership, and reversion

Which of the following is a description of occupancy fraud?

An investor obtains an FHA loan but never occupies the property

When must lenders deliver the Closing Disclosure form to buyers?

At least three days before closing

Which of the following statements about the unit-in-place and square-foot methods is true?

Both methods rely on information provided by cost manuals.

Which of the following is a true statement about comparables?

Both real estate professionals and appraisers compare the subject property to the comparables and adjust the value of the comparables accordingly.

Specifically, what does the fiduciary duty of disclosure relate to?

Conflicts of interest, material facts, and adverse material facts

In states that don't make distinctions between licensee roles, Kentucky recognizes multiple roles as out-of-state principal brokers. Which would not be considered an out-of-state principal broker?

Cooperating broker

Your seller client learned of a material defect after completing the property condition disclosure statement. The property is now under contract. What can she do to rectify the situation?

Draft an addendum or amendment

What entities make up the secondary mortgage market?

Fannie Mae, Ginnie Mae, Freddie Mac, Farmer Mac, and lending institutions that buy loans from other lenders

The house that Rhema is considering purchasing is on a perfectly level lot, which is what attracted her to the home after years of living on a hill. It also has a lovely creek at the back of the 60-foot yard. What might Rhema have to purchase if she buys this home?

Flood insurance

Your cousin asks you to explain one difference between vacant and improved land, beyond the fact that there are no buildings on it. You answer, "Vacant land is ______."

Harder to finance

The MLS is a good source for data when researching a subject property. What information will you find there?

How long it took to sell last time

Which of the following is a risk most associated with wholesaling as a real estate investment strategy?

Inability to immediately resell the property for a profit

Which of the following statements about the fiduciary duty of confidentiality is true?

It doesn't extend to material facts relating to the property.

When a website has an S in the "http" portion of the URL, such as: "https://www.google.com," what does it mean?

It is a secure website.

Which of the following is generally true of flood insurance?

It is usually purchased separately or bundled with a homeowners policy, but it's not standard.

Andrea and Jim were planning to list their home with Cheryl, but just let her know they no longer wish to work with her. When Cheryl mentioned that listing agreements are legally binding, Andrea and Jim reminded her that their agreement is not legally binding. What would be the reason for this?

Jim didn't sign it

Jim represents Joel in the sale of Joel's country acreage and house. Jim's business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?

Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.

Which of the following statements about the licensee's role in an auction listing transaction is true?

Licensees will perform most of the same marketing tasks they would perform in a traditional sale.

Which of the following is a true statement about building codes?

Local codes address situations not addressed at the federal or state level.

Which industrial property type is most often converted for residential or commercial use?

Lofts/warehouses

A title officer will perform a title search in order to ______.

Make sure there are no clouds on the title

In which of these situations did the licensee breach the fiduciary duty of loyalty?

Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale.

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?

Not necessarily. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values.

Rohit bought 31 acres of undeveloped and mostly forested land. He is planning a weekend with friends where they'll camp on the property while scouting good locations to place a cabin. Which right in the bundle of rights allows Rohit to do the camping weekend on undeveloped land?

Possession

Which of the following statements related to the power of taxation is true?

Property tax liens take priority over any and all other liens on the property in most states.

Which type of commercial property offers parking surrounding the outside of the property, but also indoor parking beneath the building?

Regional shopping center

Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?

SARA -- Superfund Amendments and Reauthorization Act, created an innocent landowner defense. Often, the courts will review a SARA case and determine liability.

Monique is frustrated. The lender is requiring her to use the cost approach to determine her opinion of value, but the property is too old for her to estimate reproduction cost. What options does Monique have?

She can estimate construction cost-new using replacement cost instead.

Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?

Stacey is Rebecca's customer.

Which of the following involves street specifications, lot size, single- or multi-family dwellings, utilities provided and easements, how far houses must be set back from property lines, and drainage requirements?

Subdivision regulations

A "homes for sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true?

The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms.

In title theory states, which of the following is true?

The borrower doesn't hold the legal title to the property until the loan is paid in full.

Sheila's financing calls for the use of a promissory note. What's a promissory note?

The borrower's promise to repay a certain sum of money to another party (the lender or holder of the note) under specified terms

Which of the following statements about the number of contingencies in a sales contract is true?

The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted.

As a listing agent, when are you no longer obligated to present offers to your client?

The sale has closed.

Which of the following is one reason a lender might charge a prepayment penalty?

To recover the money lost in anticipated interest

What is the purpose of earnest money?

To show the seller that the buyer is serious and intends to go through with the sale

Regarding documentation, which of the following actions can help a licensee avoid being accused of unauthorized practice of law?

Using approved fill-in-the-blank forms

Martha is completing an addendum for her client. She should make sure that it's written ______.

Using standardized language

Which of these professional activities is NOT covered by the Fair Housing Act?

Vickie's staging company works with investor clients to stage vacant properties.

Where is aluminum wiring used in construction today?

Where the current is heaviest, such as at the service entrance

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______.

Willing to pay Scott's commission anyway

When Gillian looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "Beginning at the corner of State Route 61 and Hallowell Road" represent?

bounds

Which department typically decides which development projects require a permit or approval?

building department

What's the term for someone who has agency representation with the licensee?

client

What type of information would an appraiser gather from transit authorities?

general data

As a Kentucky seller, Barb will provide the buyer with a deed. Which type of deed meets the requirements of the KREC Exclusive Right to Sell Agency Contract?

general warranty

In order to protect your commission, which of the following must you do regarding a listing agreement?

get it in writing

On what do personal beliefs, such as religious ones, have the greatest effect?

morals

What type of asset is held in a land trust?

real estate

What's the final step in the appraisal process defined by the Uniform Standards of Professional Appraisal Practice?

report appraisal value

Which of these types of tenants most often uses a percentage lease?

retail

The Uniform Electronic Transaction Act (UETA) makes it legal and binding for contracts to be ______.

signed electronically

Which hot water system gives a constant supply of hot water on demand?

tankless

Your buyer is worried that after she closes on her property, she'll find out someone else has a claim to its ownership. What can reassure her?

title insurance

Unauthorized practice of law and acting outside the scope of one's expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law?

Writing contract addenda or additional provisions that cover unfamiliar circumstances

What must an appraiser provide about the data for each comparable sale so the information can be verified?

`Data Source

Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place?

a public record of tenancy

The Hendersons were hoping to list their home for $400,000; however, four other comparable homes in the neighborhood just went up for sale, and they now must list their property at $380,000 to sell quickly. Which economic principle is at work here?

competition

The Kentucky statutes regarding the use of electronic records and signatures are referred to as the _________________________.

electronic transaction act

Headhunters Anonymous rents office space in a large office building owned by CEO Properties. CEO Properties pays all expenses for the property, including taxes, insurance, and routine maintenance. What type of commercial lease does Headhunters Anonymous have?

gross lease

Which is true regarding the expected demand for self-storage options in many areas?

grow

You can't move land, and location plays a huge role in the value of real estate. To which characteristic does this refer?

immobility

As interest rates fall, what is the number of buyers in the market likely to do?

increase

Which kind of industrial property offers multiple lots for a variety of industry types in one location?

industrial park

Which of the following describes the amount a lender charges a borrower for using money?

interest

What's required for both assignments and subleasing in most cases?

landlord approval

A tenant's new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. He most likely has a _______ lease for the office space.

loft

Putting clients' interests ahead of all others describes which fiduciary duty?

loyalty

With which of the four methods used to measure depreciation does the appraiser estimate the property's loss in value for both curable and incurable items of depreciation?

observed condition

Which of the following factors would explain an adverse view rating?

powerlines

Which of the following is a legal term that can mean the right to take products out of the soil?

profit

Trudy loved her new neighbors. The investor couple bought every available house on Trudy's block and was working hard to renovate them and increase their value. Trudy decided that she'd sit back, relax, and let her property's value go up, too, thanks to ______.

progression

If a landlord removes the tenant's right of ______, the tenant can claim constructive eviction and vacate the property with no further financial responsibility to the landlord.

quiet enjoyment

Deducting the costs of maintaining and operating an income property provides a(n) _______ that's attractive to many real estate investors.

tax sheltor

Which provision of the KREC Exclusive Right to Sell Agency Contract explains under which conditions the agreement will be automatically canceled?

termination

What numbers does the appraiser reconcile to determine the indicated value by the sales comparison approach for the subject property in the URAR?

the adjusted sales prices of the comparable properties

Marge works for Morgan Realty as a transaction coordinator. Which of these factors may cause the IRS to classify Marge as an employee?

the firm pays marge a salary

XYZ Trust would like to sell its property. Which of the following is the legal title holder?

the trustee

Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______.

title insurance

All trusts have three parties: the trustor, the beneficiary, and the ______.

trustee

The Richards family farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards' property?

utility

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?

voidable