Free Kentucky Real Estate Practice Exam

Q1.After passing the Kentucky broker examination, an applicant must activate their broker license by affiliating with or establishing a brokerage. Under KRS 324.045 and KREC rules, within how many years of passing the broker examination must the applicant activate their license before the examination results expire?

• A.One year
• B.Two years
• C.Three years
• D.Five years

Q2.Under KRS 324.160 and 201 KAR 11:121, a principal broker's supervisory responsibilities over affiliated sales associates include which of the following?

• A.Personally attending all property showings conducted by sales associates
• B.Reviewing and maintaining copies of all contracts and documents related to real estate transactions handled by affiliated associates
• C.Co-signing every purchase contract negotiated by a sales associate
• D.Requiring sales associates to submit weekly written activity reports to KREC

Q3.According to EPA guidelines, which action regarding underground storage tanks (USTs) is required for real estate professionals when representing clients in commercial property transactions?

• A.Advising clients to investigate potential environmental liabilities associated with USTs
• B.Conducting soil contamination testing on all properties with current or former USTs
• C.Obtaining EPA permits for any existing USTs on the property
• D.Removing all USTs before completing the transaction

Q4.Under the Kentucky Seller Disclosure of Property Condition Act, which of the following sellers is generally EXEMPT from providing a residential property disclosure form?

• A.A seller who has lived in the home for less than one year
• B.A seller transferring property to a co-owner or family member
• C.A seller whose property is listed at below market value
• D.A seller who has not made any recent repairs to the property

Q5.Under RESPA (Real Estate Settlement Procedures Act), which practice is specifically prohibited regarding escrow accounts?

• A.Requiring borrowers to deposit two months of property taxes at closing
• B.Conducting an annual escrow analysis to adjust monthly payments
• C.Maintaining a cushion of more than two months of escrow payments
• D.Requiring flood insurance premiums to be escrowed

Q6.Which of the following duties does a Kentucky licensee owe exclusively to a CLIENT, but NOT to a mere customer in a transaction?

• A.Disclosing material facts about the property
• B.Providing honest and fair dealing
• C.Maintaining confidentiality of the client's negotiating position
• D.Accounting for all funds received in the transaction

Q7.A Kentucky sales associate advertises a listing on social media using only the associate's personal name and contact information, without mentioning the employing brokerage. Under Kentucky law, this advertisement is:

• A.Permissible, provided the sales associate discloses their license status in the ad.
• B.Permissible, because social media is not considered a regulated advertising medium in Kentucky.
• C.A violation, because all advertising by a sales associate must clearly identify the principal broker or brokerage by name.
• D.A violation only if the listing is priced above a threshold set by the Kentucky Real Estate Commission.

Q8.A Kentucky sales associate receives an earnest money deposit from a buyer on a Friday afternoon. Under Kentucky law, what is the latest the associate must deliver these funds to the principal broker or a designated depository?

• A.By the end of business on the same day received
• B.Within one banking day of receipt
• C.Within three banking days of receipt
• D.By the close of the next business day after receipt

Q9.Under KRS 324.160, a Kentucky sales associate is working with a buyer and discovers that the seller of the property is not disclosing a known material defect. What is the sales associate's MOST appropriate course of action under Kentucky's standards of conduct?

• A.Keep the information confidential to protect the seller's interests since the associate represents the brokerage
• B.Disclose the known material defect to the buyer and report the situation to the principal broker
• C.Withdraw from the transaction immediately without informing anyone
• D.Complete the transaction and disclose the defect only if the buyer specifically asks about it

Q10.A fee simple estate differs from a life estate primarily in which characteristic?

• A.The duration and inheritability of the ownership interest
• B.The right to possess and use the property during the holder's lifetime
• C.The ability to lease the property to tenants
• D.The requirement to maintain the property in good condition

Q11.A real estate licensee discovers that a property previously housed a methamphetamine laboratory. Under federal environmental law, which statute would be most relevant for determining potential liability and cleanup requirements?

• A.Resource Conservation and Recovery Act (RCRA)
• B.Clean Air Act
• C.Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
• D.Safe Drinking Water Act

Q12.A Kentucky sales associate candidate passes the PSI licensing examination. Under KRS Chapter 324 and 201 KAR Chapter 11, within what period must the candidate submit a complete license application to KREC in order to avoid retaking the examination?

• A.60 days from the date of passing the examination
• B.90 days from the date of passing the examination
• C.One year from the date of passing the examination
• D.Six months from the date of passing the examination

Q13.Which federal agency is responsible for enforcing lead-based paint disclosure requirements in residential real estate transactions?

• A.Department of Housing and Urban Development (HUD)
• B.Federal Trade Commission (FTC)
• C.Consumer Financial Protection Bureau (CFPB)
• D.Environmental Protection Agency (EPA)

Q14.A Kentucky sales associate applicant has completed the required pre-licensing education and passed the state examination. Under KRS Chapter 324, which of the following conditions must ALSO be met before the Kentucky Real Estate Commission (KREC) will issue an active sales associate license?

• A.The applicant must have at least six months of documented real estate experience in another state
• B.The applicant must be sponsored by and affiliated with a licensed Kentucky principal broker
• C.The applicant must complete an additional 12-hour post-licensing course before submitting the application
• D.The applicant must obtain a surety bond in an amount set by KREC before activation

Q15.Elena's buyer is making an all-cash offer. The seller asks for proof of funds. What is an acceptable form of proof of funds?

• A.A letter from the buyer's employer confirming their annual salary
• B.A current bank or investment account statement showing liquid assets sufficient to close
• C.A pre-qualification letter from a mortgage lender
• D.An earnest money check made payable to the escrow company