Kentucky Real Estate Sales Associate
Licensing Exam Practice Questions And
Correct Answer
1. A Kentucky sales associate represents a buyer under a written buyer's agency
agreement. The buyer later asks the associate to show a property listed by the
associate's own brokerage. Under Kentucky agency law, what is the most appropriate
course of action?
A. The associate may act as a dual agent without written consent because the brokerage
already represents the seller.
B. The associate must disclose the limited dual agency and obtain written consent from
both parties before proceeding.
C. The associate may show the property as a seller's agent only, since the buyer's agency
agreement is subordinate to the listing.
D. The associate must terminate the buyer's agency agreement immediately and refer the
buyer to another brokerage.
Answer: B. The associate must disclose the limited dual agency and obtain written
consent from both parties before proceeding.
Rationale: Kentucky law permits limited dual agency only with the informed written
consent of both parties. The associate must disclose the conflict and obtain consent;
unilateral action or termination is not required.
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,2. A Kentucky broker is reviewing a sales contract that includes a financing
contingency. The buyer's loan is denied due to a low appraisal. Which contract
provision most directly determines whether the buyer can recover earnest money?
A. The liquidated damages clause
B. The financing contingency clause
C. The property condition disclosure
D. The time is of the essence clause
Answer: B. The financing contingency clause
Rationale: The financing contingency typically allows the buyer to cancel and recover
earnest money if loan approval fails. Liquidated damages apply to breach, not to a
contingency failure.
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,3. In Kentucky, which of the following property descriptions would be legally
sufficient to convey title in a deed?
A. A metes and bounds description referencing a monument that no longer exists
B. A lot and block description referencing a recorded plat
C. A general description such as 'my farm on Highway 60'
D. A description by street address only
Answer: B. A lot and block description referencing a recorded plat
Rationale: A lot and block description referencing a recorded plat is legally sufficient.
Metes and bounds referencing a non-existent monument may fail; general descriptions and
street addresses are insufficient.
4. A Kentucky sales associate is preparing a comparative market analysis (CMA) for a
seller. Which approach to value is primarily used in a CMA?
A. Income capitalization approach
B. Cost depreciation approach
C. Sales comparison approach
D. Gross rent multiplier approach
Answer: C. Sales comparison approach
Rationale: A CMA relies on the sales comparison approach, adjusting recent comparable
sales. Income and cost approaches are used in appraisals, not typically in a CMA.
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, 5. Under the Kentucky Fair Housing Act, which of the following actions by a real
estate licensee is prohibited?
A. Refusing to show a property to a buyer because of the buyer's race.
B. Requiring a buyer to provide proof of funds before showing a property.
C. Steering a buyer to a neighborhood based on the buyer's stated preferences for school
districts.
D. Advertising a property as 'adult community' in compliance with housing for older
persons exemptions.
Answer: A. Refusing to show a property to a buyer because of the buyer's race.
Rationale: Refusing to show a property based on race is a direct violation of fair housing
laws. Steering based on preferences is not necessarily illegal unless based on protected
class; adult community advertising may be exempt.
6. A Kentucky broker is calculating a commission split. The listing brokerage has a
6% commission, with 50% to the listing broker and 50% to the selling broker. The
sales associate who sells the property has a 40% split with her broker. If the property
sells for $250,000, what is the sales associate's commission?
A. $3,000
B. $6,000
C. $7,500
D. $15,000
Answer: A. $3,000
Rationale: Total commission = 6% of $250,000 = $15,000. Selling broker's share = 50% =
$7,500. Sales associate's split = 40% of $7,500 = $3,000.
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Licensing Exam Practice Questions And
Correct Answer
1. A Kentucky sales associate represents a buyer under a written buyer's agency
agreement. The buyer later asks the associate to show a property listed by the
associate's own brokerage. Under Kentucky agency law, what is the most appropriate
course of action?
A. The associate may act as a dual agent without written consent because the brokerage
already represents the seller.
B. The associate must disclose the limited dual agency and obtain written consent from
both parties before proceeding.
C. The associate may show the property as a seller's agent only, since the buyer's agency
agreement is subordinate to the listing.
D. The associate must terminate the buyer's agency agreement immediately and refer the
buyer to another brokerage.
Answer: B. The associate must disclose the limited dual agency and obtain written
consent from both parties before proceeding.
Rationale: Kentucky law permits limited dual agency only with the informed written
consent of both parties. The associate must disclose the conflict and obtain consent;
unilateral action or termination is not required.
Page 1 of 84
,2. A Kentucky broker is reviewing a sales contract that includes a financing
contingency. The buyer's loan is denied due to a low appraisal. Which contract
provision most directly determines whether the buyer can recover earnest money?
A. The liquidated damages clause
B. The financing contingency clause
C. The property condition disclosure
D. The time is of the essence clause
Answer: B. The financing contingency clause
Rationale: The financing contingency typically allows the buyer to cancel and recover
earnest money if loan approval fails. Liquidated damages apply to breach, not to a
contingency failure.
Page 2 of 84
,3. In Kentucky, which of the following property descriptions would be legally
sufficient to convey title in a deed?
A. A metes and bounds description referencing a monument that no longer exists
B. A lot and block description referencing a recorded plat
C. A general description such as 'my farm on Highway 60'
D. A description by street address only
Answer: B. A lot and block description referencing a recorded plat
Rationale: A lot and block description referencing a recorded plat is legally sufficient.
Metes and bounds referencing a non-existent monument may fail; general descriptions and
street addresses are insufficient.
4. A Kentucky sales associate is preparing a comparative market analysis (CMA) for a
seller. Which approach to value is primarily used in a CMA?
A. Income capitalization approach
B. Cost depreciation approach
C. Sales comparison approach
D. Gross rent multiplier approach
Answer: C. Sales comparison approach
Rationale: A CMA relies on the sales comparison approach, adjusting recent comparable
sales. Income and cost approaches are used in appraisals, not typically in a CMA.
Page 3 of 84
, 5. Under the Kentucky Fair Housing Act, which of the following actions by a real
estate licensee is prohibited?
A. Refusing to show a property to a buyer because of the buyer's race.
B. Requiring a buyer to provide proof of funds before showing a property.
C. Steering a buyer to a neighborhood based on the buyer's stated preferences for school
districts.
D. Advertising a property as 'adult community' in compliance with housing for older
persons exemptions.
Answer: A. Refusing to show a property to a buyer because of the buyer's race.
Rationale: Refusing to show a property based on race is a direct violation of fair housing
laws. Steering based on preferences is not necessarily illegal unless based on protected
class; adult community advertising may be exempt.
6. A Kentucky broker is calculating a commission split. The listing brokerage has a
6% commission, with 50% to the listing broker and 50% to the selling broker. The
sales associate who sells the property has a 40% split with her broker. If the property
sells for $250,000, what is the sales associate's commission?
A. $3,000
B. $6,000
C. $7,500
D. $15,000
Answer: A. $3,000
Rationale: Total commission = 6% of $250,000 = $15,000. Selling broker's share = 50% =
$7,500. Sales associate's split = 40% of $7,500 = $3,000.
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