Free Kentucky Real Estate Practice Exam

Q1.Which of the following CORRECTLY describes the Kentucky pre-license education requirement for a sales associate applicant under 201 KAR Chapter 11?

• A.The applicant must complete 40 hours of KREC-approved pre-license education covering both national and Kentucky-specific content before sitting for the PSI examination
• B.The applicant must complete 96 hours of KREC-approved pre-license education before being eligible to sit for the PSI licensing examination
• C.The applicant may sit for the PSI examination before completing pre-license education, provided the education is finished within 30 days of passing
• D.The applicant must complete 60 hours of pre-license education and an additional 40-hour post-license course before the license is activated

Q2.Under Kentucky law, which of the following CORRECTLY describes the role of a 'seller's agent'?

• A.A licensee who represents the buyer in negotiating the best price from the seller
• B.A licensee employed by and owing full fiduciary-like duties to the seller, working to obtain the best terms for the seller
• C.A licensee who works for both the buyer and seller equally without favoring either party
• D.A licensee appointed by the Kentucky Real Estate Commission to supervise the transaction

Q3.A principal broker in Kentucky fails to provide adequate supervision to a sales associate, who subsequently makes material misrepresentations to a buyer. Under KRS Chapter 324, what is the likely consequence for the principal broker?

• A.The principal broker may face disciplinary action by the Kentucky Real Estate Commission for failing to supervise, even if the broker was unaware of the associate's misconduct.
• B.The principal broker has no liability because the sales associate is an independent contractor solely responsible for their own actions.
• C.The principal broker is only liable if the buyer files a civil lawsuit within one year of the transaction.
• D.The principal broker faces disciplinary action only if the Kentucky Attorney General's office files a formal complaint.

Q4.A buyer obtains an adjustable-rate mortgage (ARM) with a 2/2/6 cap structure at an initial rate of 4.5%. Under Regulation Z, what is the MAXIMUM interest rate the borrower could ever pay over the life of this loan?

• A.6.5%
• B.8.5%
• C.10.5%
• D.12.5%

Q5.Which of the following is generally TRUE about occupancy standards under the FHA?

• A.Two-per-bedroom is a fixed federal rule
• B.Occupancy limits cannot be applied to families with children at all
• C.HUD's Keating Memo treats two-per-bedroom as a presumptive starting point, evaluated against bedroom size, configuration, age of occupants, and local codes
• D.Landlords must accept any number of occupants requested by a tenant

Q6.Under the Fair Housing Act, which of the following is NOT considered a protected class in housing discrimination cases?

• A.Sexual orientation
• B.National origin
• C.Familial status
• D.Religion

Q7.Which of the following closing costs is typically paid by the BUYER rather than the seller in a standard residential real estate transaction?

• A.Real estate commission
• B.Loan origination fee
• C.Transfer taxes owed by the seller
• D.Cost to satisfy the seller's existing mortgage

Q8.A seller in Kentucky verbally agrees to pay a 6% commission to a listing broker. After the property sells, the seller refuses to pay, claiming no written agreement was signed. Under Kentucky law, which of the following best describes the enforceability of this commission agreement?

• A.The verbal agreement is fully enforceable because both parties acknowledged the terms.
• B.The commission is enforceable if two witnesses were present when the verbal agreement was made.
• C.The commission agreement is unenforceable because Kentucky law requires listing agreements and commission agreements to be in writing.
• D.The broker may collect a reduced commission of 3% based on quantum meruit principles recognized by KREC.

Q9.When screening potential tenants, which practice would violate the Equal Credit Opportunity Act (ECOA) as applied to rental housing decisions?

• A.Requesting employment verification from all applicants
• B.Requiring a co-signer for applicants with insufficient income
• C.Checking credit reports with written authorization
• D.Asking about an applicant's marital status to determine household composition

Q10.Under the Truth in Lending Act (TILA), which disclosure must a lender provide to a borrower taking out a mortgage loan so the borrower can compare the true cost of credit across lenders?

• A.Net operating income (NOI)
• B.Annual Percentage Rate (APR)
• C.Loan-to-value ratio (LTV)
• D.Debt-to-income ratio (DTI)

Q11.A principal broker in Kentucky wants to open a branch office to serve a new market area. Under 201 KAR 11:121, which of the following statements correctly describes Kentucky's branch office requirement?

• A.A branch office may operate under the supervision of any licensed sales associate designated by the principal broker.
• B.A branch office must be separately licensed and must be managed by a broker licensed in Kentucky.
• C.Branch offices are exempt from licensing requirements if they operate within 50 miles of the main office.
• D.A branch office license is optional but must be obtained within 90 days of opening the office to the public.

Q12.A complainant has TWO paths to enforce the FHA. What are the time limits?

• A.HUD administrative complaint: 6 months; federal lawsuit: 1 year
• B.Both paths have a 90-day deadline
• C.HUD administrative complaint: 1 year from the discriminatory act; federal civil lawsuit: 2 years from the discriminatory act
• D.Both paths have a 5-year statute of limitations

Q13.What is the legal term for a contract that has been fully performed by both parties?

• A.Executory contract
• B.Bilateral contract
• C.Executed contract
• D.Unilateral contract

Q14.The Equal Credit Opportunity Act (ECOA) prohibits discrimination in credit transactions based on all of the following EXCEPT:

• A.Race
• B.Marital status
• C.Income level
• D.Age

Q15.A buyer obtains a conventional mortgage with a loan-to-value (LTV) ratio of 90%. Under the Homeowners Protection Act (HPA), when must the lender automatically terminate private mortgage insurance (PMI)?

• A.When the LTV ratio reaches 80% based on the original purchase price
• B.When the LTV ratio reaches 78% based on the original amortization schedule
• C.When the borrower has made 60 consecutive on-time payments
• D.When the property is appraised at 20% above the original purchase price