CE Shop - 96 Hour KY Final Exam
Which of the following is one of your duties as a listing agent?
Disclose material facts to the seller only
Hold confidential all facts from the buyer, even material facts
Promote your clients interests throughout the entire transaction
Secure a profit for your client
What are the two categories of comparison, when evaluating comparables to the subject property in the market comparison approach?
Broad and specific
Components and measures
Elements and units
General and detailed
As it relates to appraisals, _____ is a loss in value for any reason
Depreciation
Devaluation
Economic decline
Recession
Engaging in unlicensed brokerage by performing brokerage services, without a license, or with an exemption, may result in which of the
A civil injunction to stop engaging in an unlicensed brokerage
A fine of double the amount of any commission received or paid
Class A felony charges
Class B misdemeanor charges
Which type of loan provide short-term financing for the purpose of developing improvements on vacant land or on land that has improvements, but will soon have more
Commercial loan
Construction loan
Mortgage loan
Share loan
Kentucky licensee Carl, transferred to a new brokerage firm, owned by principal broker, Sandy Carl’s previous principal broker. Ken gave permission to assign Carl’s active listing agreement to Sandy’s firm the seller. Susan agreed to have her listing handled by a new by the new firm as long as Carl remained, her agent which parties were the assignor and assignee in the assignment of listing contract agreement.
Carl (assignor) and Sandy (assignee)
Carl (assignor) and Susan (assignee)
Ken (assignor) and Sandy (assignee)
Ken (assignor) and Susan (assignee)
Which of these heating system is composed of a furnace in ducts
Electric
Forced Air
Hot water
Steam
What happens if a mortgage contingency is in effect, and the buyer cannot meet the terms of the agreement due to the inability to obtain a loan?
The agreement is placed on hold until the buyer can find a lender that will lend the money
The agreement is terminated
The buyers broker loans, the client the money so that the deal can go through
The seller is forced to drop the price of the property so that the buyer can afford to purchase a home without obtaining a loan
Which fiduciary duty goes beyond closing
Confidentiality
Disclosure
Loyalty
Obedience
The four stages of the neighborhood lifecycle, our growth, equilibrium, decline and what?
Rapid
Rejuvenation
Slow
Stable
Jenny and her friend Kali went out to lunch afterward they pay the bill their agreement to pay for the food they were served as what type of contract?
An audible contract
And express contract
An implied contract
A written contract
Minimizing risk in part means avoiding public networks, unsecure sites, and _____ sites.
All
Encrypted
Secure
Suspicious
Based on the duty of reasonable, Skill and care, if clients ask agents for advice in areas outside of an agent, scope of expertise, what should agents do?
Give the clients the best advice they can based on personal experience
Refer their clients to a competent professional in that field
Tell the clients they need to do a little research and that they will get back to them shortly
Wing it and then check later to make sure the answers are accurate
Realtor Randy has a seller client who’s proving difficult to work with and Randy knows he won’t appreciate the advice. Randy needs to give him. The market has called and the listing price they agreed to should be lowered. He puts off contacting his client, hoping someone will make an offer in the meantime, is Randy acting according to the NAR code of ethics
No, Randy is violating the code of ethics by not immediately informing his client of a change in the market that indicates the listing price should be lowered
No, Randy is violating the code of ethics by planning to advise client to lower the listing price of the property which wouldn’t be in the clients interest
Yes, Randy is promoting his clients interest by marketing the property at the clients desire price
Yes, the code of ethics recognizes that a client has a responsibility to be proactive in the agency relationship, so Randy can wait for his client to contact him
Property managers in Kentucky use which of the following to keep track of all property management account information
Master escrow account log
Monthly reconciliation statements
Owner and tenant ledger’s
Owner journals
What is a short sale?
A property sale that occurs in less than one week
A sale that fails to receive a high enough beer at auction, and falls to the banks ownership
The for sale of a home due to the bar of defaulting on the mortgage loan
The sale of a property for an amount that’s less than what is old excluding closing cost
It is not a good idea to post photos of your clients expensive belongings. Why is that?
It can attract the attention of thieves
It will decrease the market value of the property
It will discouraged criminals
It will make the property less attractive to potential buyers
What does a chain of title document establish
A chain of past title liens
An abstract of title
The path of title ownership overtime
Whether the title is free of encumbrances
Why would a retail tenet be willing to sign a lease in which a percentage of sales proceeds are paid to the landlord?
The landlord and tenant are in business together
The tenant is hoping the landlord will sell the building to the tenant
The tenant wants to reduce the base rent
The tenant wants to show the landlord have viable the business is
Frank took out a mortgage from first national bank in order to purchase a new home in a lien theory, state who, or what retains the title to the property
Fanny Mae, which buys the loan from First National Bank
First national bank, the lender
Frank. The borrower.
The trustee to this transaction
In real estate contracts, which are required, legal descriptions, or street addresses
Legal descriptions are required because they provide less ambiguous and more complete descriptions of properties then street addresses provide
Legal descriptions are required because they are more ambiguous than street addresses
Treat addresses are required, because they provide clear more unambiguous information than legal descriptions provide
Street addresses are required because they are easier to find on the map and can be easily identified by anyone
Which of the following is true about condominium ownership?
A condo is a multi family dwelling
A condo is a single family dwelling
It involves proprietary leases
There is a large yard to maintain
Which formula calculate net, to seller
(Net amount + mortgage or other expenses) / (100% - commission rate)
Sales price ➗(100% - commission rate)
Sales price - (100% - commission rate)
Sales price x (100% - commission rate)
Careful handling of all funds is crucial to the success of a brokerage firm of special importance, however, is handling of ______
Capital expenditure funds
Escrow funds
Operating funds
Payroll funds
Investors can stay on top of trends in the market by maintaining a relationship with local appraisers as well as with ______
Apartment in commercial real estate lenders
Commercial tenants
Elected officials
Stockbrokers
A gift or bonus from a buyer client to a sales associate ______
Is illegal
Is illegal unless it’s disclosed to the seller
Maybe Presented directly to the sales associate, as long as it’s not cash or cash equivalent
Must be presented through the associates broker
When a lender charges a borrower more than the highest allowable interest rate, it is called _____
A discount point
A note
Interest
Usury
Dominique purchased a timeshare that conveys the right to occupy the property for two weeks each year continuing for 20 years however the time sure does not convey ownership. This is an example of a _____ timeshare
Estate for life
Fee simple ownership
Renewable
Right to use
With which approach to value does the appraiser, Annaliza properties ability to earn future income?
Cost approach
Income approach
Sales comparison approach
Taxable revenue approach
Tony is a real estate licensee who has an ownership interest in Killian title company he represents a client who needs to have a title search performed. What’s Tonys best course of action
Offer three different title companies for the buyer to choose from if Kylian Title is included, Tony should disclose his ownership interest in the company
Recommend Killian Title, but disclose his interest with the company to the client
Recommend Killian title since he has interest in the company
Schedule Killian Title to perform a title search
Greg is considering the purchase of a residential auction property. He’s most likely to be interested in the interior finishes of neighboring properties if he’s going to ______
Live in the property
Rehab, the property and resell it
Rent the property after he buys it
Scrape the property and sell it as a lot to build on
Uh-oh, you fail to present an offer on behalf of your client in a timely manner as a result, the seller excepted a lower offer from another buyer for which of the following could your buyer sue you
Fraud
Misrepresentation
Negligence
Puffing
The Jeffersons would like to sell their home however, they had their home painted last year and never paid. The contractor contractor has placed what type of lien on the property
He cannot place a lien on the home
Mechanics lien
Mortgage lien
Tax lien
What real estate investment strategy involves an investor purchasing many properties, and reselling them immediately for a small profit
Fix and flip
Joint venture
Retail
Wholesale
In most transaction involving a buyer or seller real estate agents have limited authority to act on behalf of their clients therefore which type of agency relationship are they in
Designated
General
Special
Universal
What’s a feasible study?
An approach appraisers used to determine the value of a home
An evaluation performed by environmental agency is considering the cost of clean up
A process that answers the question about whether a development as possible, and whether there is a market
Attest that home inspectors conduct to determine whether a certificate of occupancy should be issued
What’s a covenant between a lesser and a lessee?
An addendum to the contract added after it’s signed
An agreement or promise made between the parties
A provision, for which neither party to a contract is willing to compromise
A Rent escalation
How does an appraiser begin an appraisal?
Buy estimate the value of the land
Buy gathering and analyzing data
By identifying the data needed
By stating the problem
Which of these is an example of a rectangular survey system description
123 Raonoake Street Any Town, ST 98765
� beginning at the iron pin 30 pieces from the center of the brook that runs across the road Southwesterly from the dwelling…”
Lot 6 of block three of the East subdivision plat as recorded in map book 18, page 11 at the recorder of deeds
S 1/2 SE 1/4 NW 1/4 Section 2, Township Clarkson
Which of the following would most likely be the best investment in terms of short-term resale potential?
Land located between neighboring towns
Land located in a highly wooded area, near a lake, and far from the nearest town
Land located in a lush, remote valley
Land located on wide open spaces, away from civilization
Which one of the following terms is defined as the transfer of property given to another without consideration?
Adverse possession
Dedication
Deed of gift
Foreclosure
Jillian has a loan-to-value ratio of 90/10. This means _____
Her loan is 10% of the value of the real estate used as collateral and she's obtaining a second mortgage for 90%.
Her loan is 90% of the value of the real estate used as collateral and she's putting 10% down.
She's putting 10% down and pulling 90% from her IRA.
The property is only worth 90% of the amount loaned.
James is obtaining an 80/20 loan. What does 80/20 signify?
Amount financed/Down payment
ARM
Debt-to-income ratio
Fixed-rate mortgage
Which statement best describes the method used to reconcile the value found for a property from the three appraisal approaches?
The appraiser may weigh one or two approaches more heavily than the others, as appropriate for the property type.
The appraiser will weigh the cost approach more heavily than the other two approaches.
The appraiser will weigh the sales comparison approach more heavily than the other two approaches.
The appraiser will weigh the value produced from each approach equally.
Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?
Cost approach
Income approach
Market value approach
Sales comparison approach
Gina's top-floor condo is one of the few in the complex with a 360-degree view, three bedrooms, a gourmet kitchen, and an express elevator. The general market is a little sluggish, and there are several units available for sale in Gina's area. Which of the following factors suggests that Gina's condo might quickly sell at auction?
A rapidly changing market
High demand, low inventory
High inventory, low buyer interest due to high mortgage interest rates
Low inventory of a specific property type
A Kentucky cooperating broker is a(n) _____
Kentucky principal broker who's entered into a written cooperation agreement with an out-of-state principal broker
NAR member who's entered into a written cooperation agreement with a Kentucky principal broker
NAR member who's entered into a written cooperation agreement with an out-of-state principal broker
Out-of-state principal broker who's entered into a written cooperation agreement with Kentucky principal broker
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?
$1,145.83
$2,042.71
$896.88
$916.67
Chance and Lucky have an option agreement between them in which no consideration is provided. Is this enforceable?
No
Only for option periods of less than six months in length
Only if the sales price is clearly stated
Yes, as long as the option is executed by the required deadline
Janine wants to meet with her potential buyer clients face-to-face in her office. What's her reason for doing this?
She wants the buyers to meet her office mate.
She wants to make sure the buyers are serious about purchasing.
She wants to run a credit check on the buyers.
She wants to sell the buyers on a local neighborhood that she likes.
Mel is estimating the value of a depreciated item using comparable properties' sales prices. Which method is Mel using to measure depreciation?
Age-life
Capitalized value
Market extraction
Observed condition
Charles is selling his home to Sheila. Charles has an existing loan that he will continue to make payments on. Charles is also extending credit to Sheila for the balance of the purchase price. Sheila will make monthly payments to Charles. What type of financing is used in this transaction?
Home equity loan
Loan amalgamation
Refinance
Wrap-around loan
Which of the following formulas captures the basics of the quantity survey method?
Direct costs - Indirect costs - Entrepreneurial profit = Total reproduction cost new
Direct costs + Indirect costs - Entrepreneurial profit = Total reproduction cost new
Direct costs + Indirect costs + Entrepreneurial profit = Total reproduction cost new
Direct costs x Indirect costs ÷ Entrepreneurial profit = Total reproduction cost new
When is a transfer tax payable?
During the title search
When passing property from parent to child or between siblings
When the deed is recorded
When there is an equitable distribution between divorced spouses
Besides building seller rapport, what's a key purpose of touring a subject property?
Determining the seller's financial status
Making a note of decorating ideas for use with other clients
Posting a for-sale sign
Verifying data gathered elsewhere
A duplex produces a monthly gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125x. What's the property's estimated value?
$125,000
$180,000
$225,000
$270,000
What method of land valuation converts the amount of yearly income a site will produce into a value using a capitalization rate?
Abstraction
Allocation
Ground rent capitalization
Sales comparison
Which type of property is used for residential or commercial uses?
Converted loft
Manufacturing building
Strip mall
Warehouse
Identify the formula for determining the transfer tax amount.
Amount financed x transfer tax rate = transfer fax amount
Transfer tax rate x mortgage recording tax rate = transfer tax amount
Value of the property x amount financed = transfer tax amount
Value of the property x transfer tax rate = transfer tax amount
The Nguyens must get top dollar. Competitive properties are priced at $250,000 and $255,000. What's a good pricing strategy?
Price at or just below the highest competing property.
Price it high, then quickly lower the price to create a bargain frenzy.
Price it low to create a bidding war.
Price it under the lowest competing property.
In which type of commercial lease does the tenant pay some or all expenses separately?
Gross lease
Net lease
Percentage lease
Sublease
What happens when a married couple who owns a property as tenants by the entirety divorce?
Their ownership changes to tenants in common.
Their ownership rights terminate.
The one who records title first gets the property.
They become joint tenants with right of survivorship.
Nancy and Ned, your buyers, are purchasing a condo for $385,000. The transfer tax rate is $0.42 per $100 (.0042). To calculate the transfer tax, you multiply ____by .0042 and get a transfer tax amount of $1,617.
$225,000
$300,000
$385,000
$85,000
What is KREC's fee to take a license out of inactive status?
$10
$15
$20
$30
Mary is preparing a purchase offer for her buyer client. It's a fairly standard offer: a little less than list price, with the seller paying a little toward the buyer's closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?
No, Mary is not an attorney and shouldn't prepare contracts.
No, Mary should have her client prepare the offer.
No, Mary should hire an attorney to prepare the purchase offer.
Yes, Mary can use the standard forms that her brokerage uses (assuming these forms were originally created or approved by an attorney).
Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ____
Estate
Land
Personal Property
Real Property
When the sales comparison method of appraisal is used, which property's value is adjusted for difference?
Both the comparable property and the subject property's prices are adjusted.
The comparable property's value is adjusted.
The one with the highest sales price has its value adjusted.
The subject property's value is adjusted.
What's a licensee's primary role in discussing the pros and cons of selling a property at a voluntary auction?
Convincing the seller that a traditional listing is more cost-effective and efficient than an auction
Discussing how a buyer benefits from the seller's auction
Helping the seller understand and evaluate the process to make the best decision
Steering the seller toward the auction firm that pays the highest licensee referral fee
In addition to reimbursing the total recovery fund payout, how much annual interest does a licensee have to pay the Kentucky Real Estate Commission?
10%
15%
21%
5%
Under which type of buyer agency agreement does a buyer receive the most representation from a single agent?
Exclusive agency
Exclusive right to represent
Limited agency
Open agency
From a real estate professional's point of view, what's the purpose of qualifying buyers?
To determine the buyer's readiness to buy
To determine whether the buyer is has enough money to pay you a good commission
To learn if you have anything in common with the buyer
To see if the buyer can provide you with an appropriate advance fee
The income approach to appraisal is based on which value principle?
Anticipation
Capitalization
Competition
Substitution
Which of the following statements is prohibited under fair housing law?
Five bedrooms
Ideal location
Mother-in-law suite
Perfect for a couple without kids
James creates a trust to hold a piece of real estate he owns. He directs a corporate fiduciary to hold title to the real estate and provides instructions for the management, control, and disposition of the real estate upon his death. Given that the trust only holds real estate, James likely set up a(n)_____ trust
Assignable
Land
Tertiary
Testamentary
Which of the following is an example of a metes and bounds description?
123 Roanoke Street Any Town, ST 98765
"Beginning at the iron pin 30 paces from the center of the brook that runs across the road Southwesterly from the dwelling ..."
Lot 6 of Block 3 of the Meridian subdivision ...
� ½ SE ¼ NW ¼ Section 2 ...
Which of the following statements about net listings in Kentucky is true?
The listing agent is guaranteed at least some commission.
They don't include compensation for the buyer's agent.
They rarely, if ever, involve a conflict of interest.
They're illegal.
When it comes to investment risk, usually the greater the risk, the ____ the potential return.
Greater
Lower
More Liquid
Safer
Buyer Yun-Wah is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much will his loan origination fee be?
$2,400
$3,200
$3,600
$800
What's a foreclosure?
A property sale that occurs in less than one week
A sale that fails to receive a high enough bid at auction and then falls to the bank's ownership
The forced sale of a property due to the borrower defaulting on the mortgage loan
The sale of a property when the market value of the home is less than what is owed, plus closing costs
Which of the following describes a legal description?
A description of the land that specifies the boundaries and location of a specific piece of real property
An object used as a boundary or starting point for a metes and bounds description
A professional, on-site measurement of the lot lines and dimensions of a property, including the location of any improvements (such as a house) on the lot, any encroachments that may exist, and any easements of public record
The street address of a property, including the city, state, and zip code (also known as a "mailing address")
Under what name must sole proprietors conduct business?
They must use a business name, which may not be their own name.
They must use their own name in combination with a nickname.
They must use their own name only.
They must use their own name or their own name in combination with a registered business name.
Kris made an offer on Lincoln's townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?
No, because Lincoln wouldn't have any liquidated damages if Kris defaulted.
No, because there's no consideration.
Yes, because earnest money isn't part of a binding contract.
Yes, because the offer to buy is the consideration.
If Rina wants to pay off her mortgage early, what might she consider before doing so?
Whether she can take out a second mortgage
Whether she'd rather rent
Whether she'll incur a pre-payment penalty
Whether she would save money in interest
What is the maximum fee licensees are required to pay into the Kentucky Real Estate Education, Research, and Recovery Fund?
$10
$20
$60
$90
Which one of the following statements regarding depreciation schedules is true?
Both commercial and residential income- producing properties are depreciated according to the same schedule.
Commercial income-producing properties are depreciated longer (39 years) than residential income-producing properties (27.5 years) are.
Residential income-producing properties are depreciated longer (39 years) than commercial income-producing properties (27.5 years) are.
You cannot depreciate income-producing properties.
You represent a buyer of a $1 million property. The seller's agent, through the seller, offers a 2.5% cooperative agent commission. Who's your client?
The buyer
The seller
The seller’s agent
The seller’s agent’s broker
A residential income property has 10 units. Each apartment rents for $1,000 per month and has two bedrooms, a bathroom, a living room, and a kitchen. What's the scheduled rent for this property on an annual per-room basis?
$12,000
$2,400
$3,000
$6,000
What is the instrument called that's generally used to convey property?
Deed
Lien
Mortgage
Title
How large is an acre?
10,000 square meters
43,560 feet
43,560 square feet
5,480 square feet
Jarvis is a builder. The building codes that apply to Jarvis's work were established at what level (or levels) of government?
Federal and state
Local
Local and state
Local, state, and federal
In Kentucky, out-of-state principal brokers must file a ____ with their Kentucky cooperating brokers) in accordance with KRS 324.237.
Brokerage license
Formal request
Notice of affiliation
Notice of cooperation
A property owner's right to access ponds, lakes, oceans, and other closed bodies of water bordering the owner's land is called ____ rights.
Alluvion
Littoral
Reliction
Riparian
George just applied for a conventional loan on a cottage he wants to buy. What percentage of the loan can he expect to submit as a down payment?
0%
20%
25%
5%
Carrie buys a tiny townhome in the city with only enough room for a computer and her shoes. The townhome is in which type of subdivision?
Commercial
Rural residential
Suburban residential
Urban residential
Which entity guarantees loans?
Federal Deposit Insurance Corporation
Federal Housing Administration
U.S. Department of the Interior
U.S. Department of Veterans Affairs
When it comes to a complaint filed with the Kentucky Real Estate Education, Research, and Recovery Fund, who is the aggrieved party?
KREC
The consumer against whom the licensee committed the fraud
The licensee
The licensee's principal broker
Loans available through the Farm Service Agency have which of the following characteristics?
Loan terms may be as long as 38 years.
They mirror the requirements for conventional loans.
They're for farm loans only.
They're for rural housing loans only.
What's the term for an addition to a sales agreement form that can be added before it is signed without changing any of the other terms that have already been agreed upon?
Addendum
Amendment
Annexation
Appurtenance
If you're in a caveat emptor state, which statement about property condition disclosures is true?
The seller isn't obligated to proactively disclose property defects.
The seller must conduct a home inspection in addition to providing disclosure forms.
The seller must proactively disclose any known defects.
The seller must proactively disclose any known defects and the seller must have a home inspection conducted.
Which type of events are generally on a title insurance policy's schedule of exceptions?
Claims from an owner with an unrecorded deed
Claims that were filed in the public record before a title insurance policy's effective date
Liens or claims that aren't on the public record
Mechanic's liens filed prior to a title insurance policy's effective date
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