KENTUCKY REAL ESTATE COMPREHENSIVE
ANSWERS AND QUESTIONS SET A+
✔✔Bundle of Legal Rights - ✔✔"An illness due to air quality problems, typically toxic
substances or pathogens; a clinically diagnosed condition. Symptoms include asthma,
allergies, and hypersensitivity."
✔✔Buydown - ✔✔"The concept of land ownership that includes ownership of all legal
rights to the land - possession, control within the law, enjoyment, exclusion, and
disposition."
✔✔Buyer Agency Agreement - ✔✔"A financing technique used to reduce the monthly
payments for the first few years of a loan. Funds in the form of discount points are given
to the lender by the builder or seller to buy down or lower the effective interest rate paid
by the buyer, thus reducing the monthly payments for a set time."
✔✔Buyer's Agent - ✔✔"A principal-agent relationship in which the broker is the agent
for the buyer, with fiduciary responsibilities to the buyer. The broker represents the
buyer under the law of agency."
✔✔Buyer's Broker - ✔✔A residential real estate broker or salesperson who represents
the prospective purchaser in a transaction. The buyer's agent owes the buyer-principal
the common-law or statutory agency duties.
✔✔Capital Gain - ✔✔"A residential real estate broker who represents prospective buyer
exclusively. As the buyer's agent, the broker owes the buyer-principal the common-law
or statutory agency duties."
✔✔Capitalization - ✔✔Profit earned from the sale of an asset.
✔✔Capitalization Rate - ✔✔A mathematical process for estimating the value of a
property using a proper rate of return on the investment and the annual net operating
income expected to be produced by the property. The formula is expressed as follows:
Income / Rate = Value.
,✔✔Capping - ✔✔The rate of return a property will produce on the owner's investment.
✔✔Carbon Monoxide (CO) - ✔✔The process of laying two to four feet of soil over the
top of a landfill site and then planting grass on it to enhance the aesthetic value and
prevent erosion.
✔✔Cash Flow - ✔✔"A colorless, odorless gas that occurs as a by-product of fuel
combustion that may result in death in poorly ventilated areas."
✔✔Cash Flow Report - ✔✔"The net spendable income from an investment, determined
by deducting all operating and fixed expenses from the gross income. When expenses
exceed income, a negative cash flow results."
✔✔Caveat Emptor - ✔✔A monthly statement that details the financial status of the
property.
✔✔Certificate of Occupancy - ✔✔"A Latin phrase meaning, Let the buyer beware."
✔✔Certificate of Reasonable Value (CRV) - ✔✔Permission by the municipal inspector
to occupy a completed building structure after being inspected and having complied with
building codes.
✔✔Certificate of Sale - ✔✔A form indicating the appraised value of a property being
financed with a VA loan.
✔✔Chain of Title - ✔✔"The document generally given to the purchaser at a tax
foreclosure sale. A certificate of sale does not convey title; normally, it is an instrument
certifying that the holder received title to the property after the redemption period
passed and that the holder paid the property taxes for that interim period."
✔✔Change - ✔✔"The succession of conveyances, from some accepted starting point,
whereby the present holder of real property derives title."
✔✔Chlorofluorocarbons (CFCs) - ✔✔The appraisal principle that holds that no physical
or economical condition remains constant.
✔✔Civil Rights Act of 1866 - ✔✔"Nontoxic, nonflammable chemicals containing atoms
of carbon, chlorine, and fluorine, such as air conditioners and refrigerators. CFCs are
safe in application but cause ozone depletion."
✔✔Client - ✔✔An act that prohibits racial discrimination in the sale of rental or housing.
✔✔Closing - ✔✔The principal.
, ✔✔Closing Statement - ✔✔An event where promises made in a sales contract are
fulfilled and mortgage loan funds (if any) are distributed to the buyer.
✔✔Cloud on Title - ✔✔"A detailed cash accounting of a real estate transaction showing
all cash received, all charges and credits made, and all cash paid out in the
transaction."
✔✔Code of Ethics - ✔✔"Any document, claim, unreleased lien, or encumbrance that
may impair the title to real property or make the title doubtful; usually revealed by a title
search and removed by either a quitclaim deed or suit to quiet title."
✔✔Codicil - ✔✔A written system of standards for ethical conduct.
✔✔Coinsurance Clause - ✔✔"A supplement or an addition to a will, executed with the
same formalities as a will, which normally does not revoke the entire will."
✔✔Collateral - ✔✔A clause in insurance policies covering real property that requires the
policyholder to maintain fire insurance coverage generally equal to at least 80 percent of
the property's actual replacement cost.
✔✔Commingling - ✔✔Something having value that is given to secure repayment of a
debt.
✔✔Commission - ✔✔"The illegal act by a real estate broker of placing client or
customer funds with personal funds. By law, brokers are required to maintain a separate
trust or escrow account for other parties' funds held temporarily by the broker."
✔✔Common Elements - ✔✔"Payment to a broker for services rendered, such as in the
sale or purchase of real property; usually a percentage of the selling price of the
property."
✔✔Common Law - ✔✔"Parts of a property that are necessary or convenient to the
existence, maintenance, and safety of a condominium or are normally in common use
by all of the condominium residents. Each condominium owner has an undivided
ownership interest in the common elements."
✔✔Community Association Management - ✔✔"The body of law based on custom,
usage, and court decision."
✔✔Community Property - ✔✔"Provides a team of property managers, accounting staff,
office staff, and property consultants to manage property."
ANSWERS AND QUESTIONS SET A+
✔✔Bundle of Legal Rights - ✔✔"An illness due to air quality problems, typically toxic
substances or pathogens; a clinically diagnosed condition. Symptoms include asthma,
allergies, and hypersensitivity."
✔✔Buydown - ✔✔"The concept of land ownership that includes ownership of all legal
rights to the land - possession, control within the law, enjoyment, exclusion, and
disposition."
✔✔Buyer Agency Agreement - ✔✔"A financing technique used to reduce the monthly
payments for the first few years of a loan. Funds in the form of discount points are given
to the lender by the builder or seller to buy down or lower the effective interest rate paid
by the buyer, thus reducing the monthly payments for a set time."
✔✔Buyer's Agent - ✔✔"A principal-agent relationship in which the broker is the agent
for the buyer, with fiduciary responsibilities to the buyer. The broker represents the
buyer under the law of agency."
✔✔Buyer's Broker - ✔✔A residential real estate broker or salesperson who represents
the prospective purchaser in a transaction. The buyer's agent owes the buyer-principal
the common-law or statutory agency duties.
✔✔Capital Gain - ✔✔"A residential real estate broker who represents prospective buyer
exclusively. As the buyer's agent, the broker owes the buyer-principal the common-law
or statutory agency duties."
✔✔Capitalization - ✔✔Profit earned from the sale of an asset.
✔✔Capitalization Rate - ✔✔A mathematical process for estimating the value of a
property using a proper rate of return on the investment and the annual net operating
income expected to be produced by the property. The formula is expressed as follows:
Income / Rate = Value.
,✔✔Capping - ✔✔The rate of return a property will produce on the owner's investment.
✔✔Carbon Monoxide (CO) - ✔✔The process of laying two to four feet of soil over the
top of a landfill site and then planting grass on it to enhance the aesthetic value and
prevent erosion.
✔✔Cash Flow - ✔✔"A colorless, odorless gas that occurs as a by-product of fuel
combustion that may result in death in poorly ventilated areas."
✔✔Cash Flow Report - ✔✔"The net spendable income from an investment, determined
by deducting all operating and fixed expenses from the gross income. When expenses
exceed income, a negative cash flow results."
✔✔Caveat Emptor - ✔✔A monthly statement that details the financial status of the
property.
✔✔Certificate of Occupancy - ✔✔"A Latin phrase meaning, Let the buyer beware."
✔✔Certificate of Reasonable Value (CRV) - ✔✔Permission by the municipal inspector
to occupy a completed building structure after being inspected and having complied with
building codes.
✔✔Certificate of Sale - ✔✔A form indicating the appraised value of a property being
financed with a VA loan.
✔✔Chain of Title - ✔✔"The document generally given to the purchaser at a tax
foreclosure sale. A certificate of sale does not convey title; normally, it is an instrument
certifying that the holder received title to the property after the redemption period
passed and that the holder paid the property taxes for that interim period."
✔✔Change - ✔✔"The succession of conveyances, from some accepted starting point,
whereby the present holder of real property derives title."
✔✔Chlorofluorocarbons (CFCs) - ✔✔The appraisal principle that holds that no physical
or economical condition remains constant.
✔✔Civil Rights Act of 1866 - ✔✔"Nontoxic, nonflammable chemicals containing atoms
of carbon, chlorine, and fluorine, such as air conditioners and refrigerators. CFCs are
safe in application but cause ozone depletion."
✔✔Client - ✔✔An act that prohibits racial discrimination in the sale of rental or housing.
✔✔Closing - ✔✔The principal.
, ✔✔Closing Statement - ✔✔An event where promises made in a sales contract are
fulfilled and mortgage loan funds (if any) are distributed to the buyer.
✔✔Cloud on Title - ✔✔"A detailed cash accounting of a real estate transaction showing
all cash received, all charges and credits made, and all cash paid out in the
transaction."
✔✔Code of Ethics - ✔✔"Any document, claim, unreleased lien, or encumbrance that
may impair the title to real property or make the title doubtful; usually revealed by a title
search and removed by either a quitclaim deed or suit to quiet title."
✔✔Codicil - ✔✔A written system of standards for ethical conduct.
✔✔Coinsurance Clause - ✔✔"A supplement or an addition to a will, executed with the
same formalities as a will, which normally does not revoke the entire will."
✔✔Collateral - ✔✔A clause in insurance policies covering real property that requires the
policyholder to maintain fire insurance coverage generally equal to at least 80 percent of
the property's actual replacement cost.
✔✔Commingling - ✔✔Something having value that is given to secure repayment of a
debt.
✔✔Commission - ✔✔"The illegal act by a real estate broker of placing client or
customer funds with personal funds. By law, brokers are required to maintain a separate
trust or escrow account for other parties' funds held temporarily by the broker."
✔✔Common Elements - ✔✔"Payment to a broker for services rendered, such as in the
sale or purchase of real property; usually a percentage of the selling price of the
property."
✔✔Common Law - ✔✔"Parts of a property that are necessary or convenient to the
existence, maintenance, and safety of a condominium or are normally in common use
by all of the condominium residents. Each condominium owner has an undivided
ownership interest in the common elements."
✔✔Community Association Management - ✔✔"The body of law based on custom,
usage, and court decision."
✔✔Community Property - ✔✔"Provides a team of property managers, accounting staff,
office staff, and property consultants to manage property."
