Kansas Real Estate Salesperson Licensing
Exam Practice Questions And Correct
Answers (Ver
1. A Kansas salesperson receives a $5,000 earnest money deposit on a residential sale.
The buyer terminates during the due diligence period per the contract. Under KREC
rules, which action is correct?
A. Deposit the funds into the salesperson's personal business account pending resolution.
B. Deliver the funds to the broker who must hold them in a trust account until written
release.
C. Return the funds immediately to the buyer without broker approval.
D. Forward the funds to the seller because the buyer terminated.
Answer: B. Deliver the funds to the broker who must hold them in a trust account
until written release.
Rationale: KREC requires earnest money to be held by the broker in a trust account;
salespersons cannot hold funds personally. The broker must retain the deposit until a
written release signed by all parties is obtained. Immediate return or delivery to seller
without release violates trust account rules.
2. A broker lists a property and later represents the buyer as a transaction broker
without written consent from the seller. Which statement is most accurate under
Kansas agency law?
A. The broker may act as a transaction broker only if both parties give written consent.
B. The broker automatically becomes a dual agent with fiduciary duties to both.
C. The broker may act as a transaction broker without consent because Kansas is a
non-agency state.
D. The broker must disclose the change in writing but does not need consent.
Answer: A. The broker may act as a transaction broker only if both parties give
written consent.
Rationale: Kansas law requires written consent from all parties before a broker can act as
a transaction broker. Without consent, the broker risks undisclosed dual agency and breach
of fiduciary duty. Kansas is not a non-agency state; transaction brokerage still requires
disclosure and consent.
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,3. A buyer obtains an FHA loan with a 3.5% down payment. The appraised value is
$200,000, but the sales price is $210,000. What is the maximum FHA-insured
mortgage amount based on the lower of sales price or appraised value?
A. $193,000
B. $196,500
C. $200,000
D. $210,000
Answer: A. $193,000
Rationale: FHA loans use the lower of sales price or appraised value for the mortgage
calculation. 96.5% of $200,000 = $193,000. Using the sales price or full appraised value
would overstate the insurable amount and violate FHA guidelines.
4. An appraiser uses the income approach for a 4-unit apartment building. Net
operating income is $48,000 and the capitalization rate is 8%. What is the indicated
value?
A. $384,000
B. $600,000
C. $480,000
D. $520,000
Answer: B. $600,000
Rationale: Value = NOI / cap rate = $48,.08 = $600,000. Multiplying NOI by cap
rate or using incorrect denominators yields the other options. The income approach is
standard for income-producing properties.
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, 5. A Kansas property manager signs a one-year management agreement. The owner
sells the property six months later. Which statement best describes the manager's legal
position?
A. The management agreement automatically transfers to the new owner.
B. The agreement terminates upon sale unless the new owner assumes it in writing.
C. The manager must continue managing until the agreement expires.
D. The manager is entitled to the full year's fees from the seller.
Answer: B. The agreement terminates upon sale unless the new owner assumes it in
writing.
Rationale: A property management agreement is generally a personal service contract that
does not automatically bind a new owner. Unless assigned or assumed in writing, the sale
terminates the agreement. The manager may have a claim against the original owner for
damages but cannot force the new owner to perform.
6. Which of the following best describes the Kansas Real Estate Commission's stance
on a salesperson advertising a property without the broker's name?
A. Permitted if the salesperson includes their license number.
B. Prohibited unless the broker's name appears in the advertisement.
C. Permitted if the salesperson is the listing agent.
D. Prohibited only for online advertisements.
Answer: B. Prohibited unless the broker's name appears in the advertisement.
Rationale: KREC requires all advertising by a salesperson to include the broker's name.
Omitting the broker's name violates advertising rules. License number alone is insufficient;
the broker's name is mandatory.
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Exam Practice Questions And Correct
Answers (Ver
1. A Kansas salesperson receives a $5,000 earnest money deposit on a residential sale.
The buyer terminates during the due diligence period per the contract. Under KREC
rules, which action is correct?
A. Deposit the funds into the salesperson's personal business account pending resolution.
B. Deliver the funds to the broker who must hold them in a trust account until written
release.
C. Return the funds immediately to the buyer without broker approval.
D. Forward the funds to the seller because the buyer terminated.
Answer: B. Deliver the funds to the broker who must hold them in a trust account
until written release.
Rationale: KREC requires earnest money to be held by the broker in a trust account;
salespersons cannot hold funds personally. The broker must retain the deposit until a
written release signed by all parties is obtained. Immediate return or delivery to seller
without release violates trust account rules.
2. A broker lists a property and later represents the buyer as a transaction broker
without written consent from the seller. Which statement is most accurate under
Kansas agency law?
A. The broker may act as a transaction broker only if both parties give written consent.
B. The broker automatically becomes a dual agent with fiduciary duties to both.
C. The broker may act as a transaction broker without consent because Kansas is a
non-agency state.
D. The broker must disclose the change in writing but does not need consent.
Answer: A. The broker may act as a transaction broker only if both parties give
written consent.
Rationale: Kansas law requires written consent from all parties before a broker can act as
a transaction broker. Without consent, the broker risks undisclosed dual agency and breach
of fiduciary duty. Kansas is not a non-agency state; transaction brokerage still requires
disclosure and consent.
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,3. A buyer obtains an FHA loan with a 3.5% down payment. The appraised value is
$200,000, but the sales price is $210,000. What is the maximum FHA-insured
mortgage amount based on the lower of sales price or appraised value?
A. $193,000
B. $196,500
C. $200,000
D. $210,000
Answer: A. $193,000
Rationale: FHA loans use the lower of sales price or appraised value for the mortgage
calculation. 96.5% of $200,000 = $193,000. Using the sales price or full appraised value
would overstate the insurable amount and violate FHA guidelines.
4. An appraiser uses the income approach for a 4-unit apartment building. Net
operating income is $48,000 and the capitalization rate is 8%. What is the indicated
value?
A. $384,000
B. $600,000
C. $480,000
D. $520,000
Answer: B. $600,000
Rationale: Value = NOI / cap rate = $48,.08 = $600,000. Multiplying NOI by cap
rate or using incorrect denominators yields the other options. The income approach is
standard for income-producing properties.
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, 5. A Kansas property manager signs a one-year management agreement. The owner
sells the property six months later. Which statement best describes the manager's legal
position?
A. The management agreement automatically transfers to the new owner.
B. The agreement terminates upon sale unless the new owner assumes it in writing.
C. The manager must continue managing until the agreement expires.
D. The manager is entitled to the full year's fees from the seller.
Answer: B. The agreement terminates upon sale unless the new owner assumes it in
writing.
Rationale: A property management agreement is generally a personal service contract that
does not automatically bind a new owner. Unless assigned or assumed in writing, the sale
terminates the agreement. The manager may have a claim against the original owner for
damages but cannot force the new owner to perform.
6. Which of the following best describes the Kansas Real Estate Commission's stance
on a salesperson advertising a property without the broker's name?
A. Permitted if the salesperson includes their license number.
B. Prohibited unless the broker's name appears in the advertisement.
C. Permitted if the salesperson is the listing agent.
D. Prohibited only for online advertisements.
Answer: B. Prohibited unless the broker's name appears in the advertisement.
Rationale: KREC requires all advertising by a salesperson to include the broker's name.
Omitting the broker's name violates advertising rules. License number alone is insufficient;
the broker's name is mandatory.
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