KENTUCKY REAL ESTATE MOCK TEST 1 PREP ACTUAL EXAM SOLUTION GUIDE

pdf

School

University of Alabama *

*We aren’t endorsed by this school

Course

TAXATION

Subject

Accounting

Date

Nov 24, 2024

Type

pdf

Pages

Uploaded by juliusmuchiri

KENTUCKY REAL ESTATE MOCK TEST 1 PREP ACTUAL EXAM SOLUTION GUIDE If a broker's branch office is 75 miles from his main office, the person managing this branch office must: - ANS Have been licensed for 2 years averaging 20 hours per week in the business. Which of the following is NOT true regarding a sale-leaseback? - ANS The ownership of the property never transfers. Dino owns property rights located on Lake Michigan where he docks his yacht. His water rights are called: - ANS Littoral rights Which of the following is NOT a duty of the real estate agent: - ANS To accept offer on behalf a client. After receiving recommendations from the KY Assoc of REALTOR, the governor appoints: - ANS 5 commissioners, four of whom have had an active license for the past 10 years. 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... - ANS Must present the buyer's offer to the seller. Which of the following would not be a disciplinary action of the KREC? - ANS A jail term - KREC cannot send a licensee to jail. Ann conveys a life estate to Paul based on the life of Troy. Paul has 2 children who live with him and help him care for Troy. What is the status of the life estate if Paul predeceases Troy? - ANS The property would revert to Paul's children, so long as Troy was alive. A life estate pur autre vie means tha the life estate is based on a 3rd party- in this instance, Paul or his heirs would have a life estate to the property o long as Troy was alive. Which of the following is NOT true regarding title insurance: - ANS 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. When a lender charges more interest than is legally allowed, it is known as - ANS Usury A buyer made an offer on a property which was accepted by the seller. Three days before the closing, the title was found to be defective and the buyer negated the contract. Under these

circumstances the - ANS brokerage has earned a commission because it found a ready, willing and able buyer A leasehold estate that automatically renews for the original term is a/an - ANS Periodic Tenancy The seller accepted a signed offer. The earnest money must - ANS be placed in the broker's escrow account within 3 business days A tenant leased a commercial space for a dance studio. The tenant purchased and installed mirrors on all the walls in the practice room. Which of the following statements is NOT true in this situation: - ANS The mirror are legally classified as fixtures; the mirror are legally classified as TRADE FIXTURES, or the personal property of a tenant that is installed for the use of business. Which of the following would relieve the lessee of any obligation to make the rental payments? - ANS Constructive eviction 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.) - ANS $17,248.20 Buyer Credits: $125,000 x 90% = $112,500 Loan Buyer 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 Rate June 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 = $129,748.20 Total credits: $112,500 $129,748.20 - 112,500 = $17,248.20

A veteran's offer of $65,000 was accepted. She made a $3,000 down payment on the property. The seller agreed to pay the 4 discount points and a 6% commission. If the seller owned the property free and clear, the seller will net - ANS $58,620 Step 1 $65,000 - $3,000 = $62,000 Step 2 $62,000 x 4% = $2,480 Step 3 $65,000 x 6% = $3,900 Step 4 $65,000 - 2,480 - 3,900 = $58,620 Which of the following is NOT an executory, bilateral contract? - ANS Open Listing An 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 terms is associated with a security that is being sold across state lines? - ANS Interstate The percentage lease agreement provides for the following terms: a monthly rent of $500 and 5% of the annual gross sales of the lease over $300,000. The total rent paid at the end of the year was $12,250. What was the gross volume of business for the year? - ANS $425,000 $500 x 12 = $6,000 $12,250 - 6,000 = $6,250 $6,260 ÷ 5% = $125,000 $300,000 + 125,000 = $425,000 A borrower purchased mortgagee's title insurance on a property. After the final payment was made on the mortgage, a title defect was found. The borrower would have recourse through the - ANS previous owner if a general warranty deed was transferred at the closing. Most lenders require the borrower to purchase the mortgagee's title insurance, which covers the lender. The mortgagee's title policy decreases as each payment is made and once the loan is paid in full the coverage stops. In this situation, the borrower would have recourse through the previous owner if a general warrant deed was transferred at closing. Which of the following mortgages would include both real and personal property? - ANS Package mortgage A package mortgage would include both real and personal property. This type of mortgage may be used in resort communities where the condo or house is furnished and the buyer can simply move in.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

An 80% loan was negotiated with an interest rate of 10%. The first month's interest payment was $833.33. What was the sale price of the property? - ANS $125,000 $833.33 x 12 = $9,999.96 $9,996.96 ÷ 10% = $99,999.60 $99,996.96 ÷ 80% = $124,999.50 or $125,000 Which of the following is not required to secure a sales associate Kentucky Real Estate License? - ANS Be at least twenty-one years of age 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 - ANS 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 person dies testate. The person named to settle the estate would MOST LIKELY be called - ANS an executor If it is determined that the complaint contains prima facie evidence, how many days does the licensee have to answer? - ANS 20 days Broker Nelson appointed Julia, as only agent representing the seller and Barron as the only agent representing the buyer. Broker Nelson's agency policy is that of - ANS designated agency When a real estate firm has an in-house dual agency, where an individual agent is designated to represent only the interests of the seller the same instance for the buyer. A person would be a special agent in which of the following transactions? - ANS When a person has been given the authority to sign closing documents for the seller. A special agent is also known as a limited agent. A special agent is given limited authority, such as signing closing documents for the seller The minimum amount that Kentucky law requires that may be maintained in the Recovery Fund is - ANS $400,000 In a percentage lease the tenant agreed to pay $650 fixed rent per month and 3% of the gross sales over $75,000. If the sales were $150,000 this year, what was the total rent paid for the year? - ANS $10,050

Step 1 $650 x 12 = $7,800 Step 2 $150,000 - $75,000 = $75,000 Step 3 $75,000 x 3% = $2,250 Step 3 $7,800 + 2,250 = $10,050 An agent changed her surname. The agent - ANS must 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 suit to quiet title would be filed under which of the following circumstances? - ANS When there is an adverse possession claim on the property. Mr. Singleton's primary residence cost $250,000. During his period of ownership he added a tennis court at a cost of $10,000 and made other improvements at a cost of $20,000. Two years later he sold the property for $350,000 and paid a 7% commission. If he buys another home for $350,000, how much capital gains can he defer? - ANS $0 because there is no deferment of capital gains on a principal place of residence. There is no deferment of capital gains when selling a principal place of residence. A capital gain is deferred on investment property if IRS guidelines are followed. What party is responsible for giving the Condominium Certificate to the Homeowner's Association for completion? - ANS Seller Which of the following would be an example of external obsolescence? - ANS A neighbor who doesn't maintain his property. External obsolescence or depreciation occurs because of issues outside the property's boundary lines. 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? - ANS $5,000 A builder secured a construction loan. He MOST LIKELY obtained a/an - ANS open-end term mortgage. The builder most likely negotiated an open-end mortgage. This means there is a set loan amount, but the money is received in a series of "draws" as each stage of construction is completed. (A credit card is another example of an open-end mortgage.) An open mortgage

contains a prepayment privilege clause which allows the borrower to pay off the loan at any time during the life of the loan. The brokerage fee on a $185,000 sale was computed as follows: 7% on the first 60,000, 6% on the next $50,000, plus a certain percentage of the remaining balance. If the total fee paid was $10,950, what was the third percentage? - ANS 5% Step 1 $60,000 x 7% = $4,200 Step 2 $50,000 x 6% = $3.000 Step 3 $4,200 + $3,000 = $7,200 Step 5 $10,950 - $7,200 = $3,750 Step 6 $185,000 - 60,000 - 50,000 = $75,000 Step 7 $3,750 ÷ $75,000 = 0.05 or 5% $4,200 + $3,000 = $7,200 $10,950 - $7,200 = $3,750 $185,000 - 60,000 - 50,000 = $75,000 $3,750 ÷ $75,000 = 0.05 or 5% A neighbor referred a buyer to an agent. After the closing the neighbor asked for a $1,000 referral fee. The agent may - ANS inform the neighbor that the law doesn't allow referral fees to be paid to anyone that does not have a real estate license An auctioneer has just been asked to auction a farm. The auctioneer - ANS may work jointly with a licensed broker who would list and advertise the property Keith owns a lot where zoning will allow her to build a residence that is 45 feet wide. If she builds a house 50 feet wide, she is allowed to do so because she was granted - ANS a variance. A variance is granted by zoning to give relief to a zoning ordinance. A seller agreed to list his house for $90,000, but the seller was not informed by the agent that the actual value of the property was $100,000. The agent purchased the property the day after it was listed. This is an example of a violation of which of the agent's responsibilities? - ANS Loyalty Loyalty means to place the client's interest first, above every other person. An agent who does not inform the seller of the comparable market analysis, and then purchases the property would be violating the fiduciary duty of loyalty. Which of the following is NOT true regarding a land contract? - ANS The seller is the vendee and the buyer is the vendor. This is the incorrect statement. In a land contract, the seller is the vendor and the buyer is the vendee.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

The purpose of the capitalization rate is to convert a - ANS net income into a value. The purpose of a capitalization rate is to convert the net income the property generates into an economic value. A deed states that title is held by Carrie and David as co-owners. In most states, their ownership would be interpreted as - ANS 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. Which of the following is NOT a statutory general lien? - ANS Ad valorem tax lien An 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. 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 - ANS constructive eviction. Constructive eviction occurs when the property becomes uninhabitable and the tenant must vacate the property. A licensee could be active in the real estate business if his/her license is - ANS on probation A defeasible fee estate means that title - ANS can be defeated upon the occurrence or nonoccurrence of a specified event. A defeasible fee estate means that title can be defeated upon the occurrence or nonoccurrence of a specified event. Fee Simple with a special limitation and fee simple conditional subsequent are the two types of defeasible fee estates. 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 - ANS 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. Which of the following is NOT a duty of the KREC? - ANS Fine a licensee $1,200

KRS 324.281(1) (c). The KREC can fine a licensee not to exceed $1,000. 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 - ANS executory. A borrower secured a loan in which he makes a fixed monthly payment and the balance will be zero at the end of the loan term. This BEST describes a/an - ANS fully amortized mortgage. A fully amortized mortgage means that if the borrower makes timely payments on the loan, the balance will be zero at the end of the loan term. A seller wants to net $25,000 after paying an 8% commission and after paying selling expenses of $531. If a buyer assumes the mortgage balance of $21,500, how much did he pay for the house? - ANS $51,121 100% - 8% = 92% $25,000 + 21,500 + 531 = $47,031 $47,031 ÷ 92% = $51,120.65 Which of the following listings could not be offered to a seller of real property located in Kentucky? - ANS Net 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 - ANS can recover actual damages from the fund if filed within two years of actual knowledge 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.) - ANS $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 days 191 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 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 - ANS 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. 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? - ANS $732.25 Step 1 $199,250 x 28% = $55,790 Step 2 $5.25 ÷ $100 = .0525 Step 3 $55,790 x .0525 = $2,928.98 ÷ 4 = $732.25 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 - ANS by March 31 of the following year. Tiffany passed her real estate exam on August 6. She must apply for her real estate license within - ANS 60 days 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 - ANS Steering All of the following are true regarding tenancy in common EXCEPT that - ANS ownership shares must be equal. The ownership shares do NOT have to be equal when property is owned as tenancy in common. Branham, a buyer, has made a written offer on a property. At what point should the agent give a copy of the offer to the buyer? - ANS When it is signed by the buyer 324.160 (4) (q) Failing or refusing on demand to furnish copies of a document pertaining to a transaction dealing with real estate to a person whose signature is affixed to the document. Anytime someone signs a copy of a document, he/she should receive a copy of it. 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? - ANS $63,529.41 Step 1 $450,000 x 12% = $54,000 Step 2 100% - 15% = 85% Step 3 $54,000 ÷ 85% = $63,529.41 Which of the following would be an example of a non-possessory property interest? - ANS Easement

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

An easement grants the right to use another person's property, but it does not grant the right of possession. A tenancy in common interest which grants the right to interval ownership of the property would BEST describe a/an - ANS 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 and have a property lease to the property. How many acres are in a tract of land 400' by 800'? - ANS 7.34619 acres 400' x 800' = 320,000 square feet 320,000 ÷ 43,560 = 7.34619 acres The buyer executed a written offer to a seller. The seller's agent called the seller and presented the offer by phone. The seller accepted the offer by phone. At this point, what is the status of this offer? - ANS Unenforceable In real estate, offers must be accepted in writing before a contract is created. At this point, the oral acceptance is unenforceable. The appraiser is to determine the most probable price that a buyer will pay for a property. This is known as - ANS objective value. The appraiser's opinion of value is to be an objective value meaning it is based on evidence from surrounding sales Which of the following is NOT a future interest in an estate in land? - ANS Pur autre vie The term pur autre vie is used to describe the life estate created by the life of a third party. Example: A gives a life estate to B based on the life of C. B only has a life estate so long as C is alive. (C is the third party.) So, B's life estate interest is current, it is not a future interest. Kentucky's Statute of Frauds requires that - ANS to be compensated, there must be a written agreement between the party and the brokerage. Disciplinary actions that can be taken by the KREC include all of the following EXCEPT - ANS placing a licensee on probation for twenty four months. 324.160 (1) (d). Placing of any licensee on probation for a period of up to twelve (12) months.

When property taxes and special assessments are due and they are NOT paid, they become - ANS 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. Under the income approach to appraising which of the following would be deducted from effective gross income to derive the net operating income? - ANS Property taxes and insurance Potential Gross Income - Vacancy Rates & Credit Losses __________________________ Effective Gross Income - Fixed expenses (property taxes and insurance) - Operating expenses (day to day operating expenses) - Reserves funds (major improvements in the future) __________________________________________ Annual net operating income Annual net operating income ÷ Cap rate = Value Jayce listed a property for Sterling Realty which sold for $82,500. Jason, who works for Gold Realty, produced the purchasers. The brokers have agreed to divide the 7% commission equally, and Jason is to receive 55% of his brokers' share. How much was Jason paid? - ANS $1,588.12 Step 1 7% ÷ 2= 3.5% Step 2 $82,500 x 3.5% = $2,887.50 x 55% = $1,588.12 In a circuit court an unlicensed may be penalized - ANS the return of the commission, a fine of not less than $100 nor more than $1,000 and up to six months imprisonment, or both. 324.990. In the circuit court a fine an unlicensed individual not less than $100 nor more than $1,000, imprison them for up to six month, or both; and require them to return the commission. The semi-annual interest payments totaled $4,600. The borrower negotiated a 75% loan at an interest rate of 10.5%. How much did the borrower pay for the property? - ANS $116,825 $4,600 x 2 = $9,200 $9,200 ÷ 10.5% = $87,619.05 $87,619.05 ÷ 75% = $116,825 If a buyer or seller refuses to perform on a contract, the aggrieved party may ask the court to compel performance. This is called a/an - ANS suit for specific performance.

A suit for specific performance can be filed when a party refuses to perform the terms of the contract. An Agency Disclosure Statement must be signed by the buyer - ANS before making the offer on the property. 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 - ANS 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. Which of the following is NOT associated with personal property? - ANS Fructus naturales Fructus naturales are fruits of nature such as trees, grasses and perennials. Fructus naturales are considered real property. Fructus industriales are fruits of nature. Examples: annual crops, such as potatoes, tomatoes, tobacco and corn. Fructus industriales are considered personal property. A lease in which the tenant pays rent only and the landlord is responsible for all ownership expenses would BEST describe a - ANS gross lease. A gross lease means that the tenant pays the rent only and the landlord is responsible for all ownership expenses Agent Kenzie has terminated her relationship with her broker. The broker has returned her license to the KREC. Agent Kenzie has - ANS 30 days to place her license in escrow or find another broker. Which of the following would terminate a sales contract? - ANS Contingencies that cannot be fulfilled Contingencies that cannot be fulfilled would terminate a sales contract. Which of the following is NOT a responsibility of the broker, and thus would NOT be found in a normal listing agreement? - ANS 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.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Active real estate licenses are required to take the core course every - ANS 4 years Severalty ownership of air rights combined with an undivided interest in the common areas of real estate would MOST LIKELY describe a - ANS condominium. The owner of a condominium owns the air rights within the unit in severalty, meaning separate from the other property owners in the condominium. Severalty ownership in this situation does not mean that the ownership is only by one person. It means the owner/owners of the unit have the right to use the air space within the unit. The owner of a condominium will own the buildings and other areas of the community as a tenant in common with the other owners. When listing a property or showing a property, which of the following duties is an agent NOT required to do? - ANS Discover latent defects in the property. A latent defect is a hidden defect. Agents are not required to discover latent defects. When leasing the following properties, which contract would LEAST LIKELY be a percentage lease? - ANS Apartment A percentage lease means the tenant is paying a fixed monthly rental plus a percentage of the gross or net sales. An apartment lease would NOT be a percentage lease. Which of the following is not true regarding property management? - ANS 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. Which of the following is true regarding RESPA? - ANS RESPA requires the disclosure of settlement charges on a HUD-1 Settlement sheet 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 - ANS 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.

When a sales associate owns rental property, Kentucky law requires that the tenant's security deposits be placed in - ANS an escrow account After a hearing an agent's license was suspended for ten days. This means the agent - ANS can receive compensation if it was earned prior to the suspension period. After the closing the seller gave the agent a $100 bonus check. The agent must - ANS give it to his/her broker. 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 - ANS refuse the listing. When making adjustments in the comparable properties, the appraiser would NOT consider which of the following? - ANS Racial demographics Under Kentucky law, a broker is required to keep copies of records for - ANS 5 years Broker Bonnie moved into her new home on March 15. The KREC should receive notice of her move - ANS no later than March 26 The commission shall be notified in writing of a change of residence address within ten (10) days Which of the following statements is true regarding the seller's disclosure form? - ANS Upon the request of a seller, an agent may complete the form because the seller is incapable of filling out the form. 324.360 (9). Even though the law allows the agent to fill out the form for the seller, it is NOT recommended. "It shall be a violation of this chapter for a licensee to complete any portion of the form unless the licensee is the owner of the property or has been requested by the owner to complete the form. The request shall be acknowledged in writing on the form and the licensee shall be held harmless for any representation that appears on the form." Anne's Art Gallery leased space on the following terms: $1,200 per month fixed rent, plus 4.25% commission on all sales over $800,000. This year sales were $1,259,355. What was the total rent paid this year? - ANS $33,922.59 Step 1 $1,200 x 12 = $14,400 Step 2 $1,259,355 - 800,000 = $459,355 Step 3 $459,355 x 4.25% = $19,522.59 Step 4 $19,522.59 + $14,400 = $33,922.59 Which of the following parties would have the legal right to transfer the title to property? - ANS The party with the legal authority to perform.

The party/parties with the legal authority to perform would have the legal right to transfer the title to the property. In a lease the right of reversion refers to the - ANS lessor's right to regain the property when the lease expires. A right of reversion refers to the lessor's right to regain the property when the lease expires. Please note. The right of reversion also refers to right of the grantor of a life estate to regain the property when the life tenant dies. The sales comparison approach is based on the principle of adjustments. If an appraiser is using this approach, the adjustments would be made in the - ANS comparable property. An appraiser will make adjustments in comparable properties. The subject property cannot be changed. A potential buyer has made an offer on a property. The seller made a counteroffer. In the counteroffer the - ANS buyer is the offeree. In a counteroffer the legal positions of the parties are reversed. The seller making the counteroffer would be the offeror and the buyer receiving the counteroffer would be the offeree. A seller has called an agent to schedule an appointment to list her house. If the seller lists the house, this would be best described as a/an - ANS express agency. An express agency is created when created by written or verbal agreement. So, if the seller lists the house it would create an express agency. Dustin placed his license in escrow. To keep his license he must - ANS pay annual renewal fees. 324.310 (2). The person who places his/her license in escrow must pay the annual renewal fees. Which of the following parties would not be allowed to collect a commission in a real estate transaction? - ANS The neighbor who referred the seller. An unlicensed individual cannot collect a commission or part of a commission. Only licensed agents can receive referral fees A buyer's closing statement shows different items, including a purchase price of $58,325, an assumable mortgage of $55,000, a survey fee of $250, total debits of $59,925.25, title insurance of $395, 1% loan origination fee, total credits of $58,295, 2% for discount points, contract

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

deposit of $3,000 and rent prorations of $495. Based on this information, how much money does the buyer need to bring to the closing? - ANS $1,630.25 $59,925.25 - $58,295 = $1,630.25 (You got it! The total debits and total credits were given in the question. All you had to do was subtract the difference.) A developer entered into a long term fixed rental lease that did not contain an escalation clause. How would this lease affect the appraised value of the property? - ANS The value would decrease. If a developer entered into a long term fixed lease, the developer would not have the ability to raise the rent. This would cause the value of the property to decrease. Edgar allowed an oil company to drill for oil on his farm. Edgar has given the oil company a/an - ANS profit. The word profit has more than one meaning. Profit can mean that the revenue generated by a business exceeds the expenses. In real estate the word profit also means the right to take from the land, or anything that the land produces, such as minerals, oil, crops, trees, etc The NW 1/4 of the NW 1/4 - ANS is equivalent to ¼ mile by ¼ mile. A section of land is one mile by one mile. The NW 1/4 is one-half mile by one-half mile. (5,280 ÷ 2 = 2,640 feet) The NW ¼ of the NW ¼ is one-quarter mile by one-quarter mile. (2,640 ÷ 2 = 1,320 feet) 1,320 x 1,320 = 1,742,400 square feet 1,742,400 ÷ 43,560 = 40 acres A potential buyer is at an open house. At what point must the agent give the buyer a "Consumers Guide to Agency Relationships?" - ANS The Guide must be given before the agent can ask questions where confidential information would be disclosed. The broker's license was suspended. What is the status of the licensees of the real estate agents working for the broker? - ANS They are automatically inactive. A property manager's responsibilities include care and skill, obedience of legal instructions, and accountability of monies coming into his/her possession. This type of relationship can be BEST described as a - ANS fiduciary relationship. An agent's license has just been suspended. The agent - ANS may receive compensation that was earned prior to the suspension

A lease has been assigned. The new landlord tenant relationship would be between the - ANS lessor and the assignee. In the assignment of a lease, the new landlord tenant relationship would be between the lessor and the assignee. The landlord would expect the rent payment from the assignee. Please note. Unless novation was granted to the assignor, the landlord may look to the assignor for the rent payment, if the assignee does not pay the rent When a party purchases a cooperative, she/he will secure - ANS stock in the company and a lease to the unit. The owner of a cooperative will purchase stock in the company that owns the building. The owner will be given a proprietary lease to the co-op unit.

KENTUCKY REAL ESTATE MOCK TEST 1 PREP ACTUAL EXAM SOLUTION GUIDE

Related Documents