Free Kentucky Real Estate Practice Test (2026) — LicenseIQ

Question 1

Which item must a Kentucky property management agreement include?

Accepted Answer

201 KAR 11:121 §10(2)(h) requires the escrow or management account's bank name, address, and account number, consistent with KRS 383.580(1). That information also goes in the lease.

Question 2

A salesperson wants to buy a FSBO home for his own investment. He must:

Accepted Answer

A licensee acting as a principal must disclose licensed status, because the licensee has superior knowledge and expertise.

Question 3

A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

Accepted Answer

The duty of confidentiality bars disclosing information, like the seller's lowest acceptable price, that would harm the client's bargaining position.

Question 4

The largest, most expensive home in a neighborhood of much smaller homes tends to lose value because of the principle of:

Accepted Answer

Regression: a higher-value property is pulled down by surrounding lower-value properties. Progression is the opposite.

Question 5

To qualify for the IRS Section 121 exclusion on the sale of a home, the seller generally must have owned and used it as a primary residence for at least:

Accepted Answer

The exclusion ($250,000 single / $500,000 married filing jointly) requires 2 years of ownership and use within the 5 years before sale, and can be used once every 2 years.

Question 6

The National Do-Not-Call Registry is maintained by the:

Accepted Answer

The FTC maintains the registry; real estate cold calls to registered numbers generally violate the rules.

Question 7

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 8

A principal broker's license is suspended. What happens to the licenses of the sales associates affiliated with that broker?

Accepted Answer

KRS 324.230 provides that suspension or revocation of a principal broker's license automatically makes affiliates' licenses inactive until they transfer to a new principal broker. The affiliates are not themselves disciplined.

Question 9

An agent advertises a home as having a 'new roof' without verifying it; the roof is actually 18 years old. This is:

Accepted Answer

Stating unverified facts that prove false is negligent misrepresentation; knowingly false statements are fraud. Puffing is opinion, not a verifiable fact.

Question 10

Who qualifies for Kentucky's homestead exemption?

Accepted Answer

KRS 132.810, as administered by the Department of Revenue, limits the exemption to owner-occupants 65 or older or totally disabled, based on the January 1 assessment date.

Question 11

In a deed, the party conveying title is the ____ and the party receiving title is the ____.

Accepted Answer

The seller (grantor) conveys to the buyer (grantee). A deed is the document; title is the ownership rights it transfers.

Question 12

A home sells for $315,000. What is the Kentucky deed transfer tax?

Accepted Answer

$315,000 / $500 = 630 units. 630 x $0.50 = $315.00 (KRS 142.050). $630 comes from using $1 per $500.

Question 13

When an owner dies with no will and no heirs, the property passes to the state through:

Accepted Answer

Escheat transfers ownerless property to the state when there is no will and no heirs.

Question 14

How soon must a principal broker register a new branch office with the Commission?

Accepted Answer

KRS 324.112 requires registration within 10 days of creating the branch.

Question 15

Directing buyers toward or away from neighborhoods based on protected class is:

Accepted Answer

Steering is illegally guiding people to or from areas based on a protected characteristic. Blockbusting induces panic selling; redlining is a lending practice.

Question 16

To manage a branch within 100 miles of the main office, a sales associate must have:

Accepted Answer

KRS 324.112(1) allows a qualified sales associate (two years, averaging 20 hours a week for 24 months) to manage a branch within 100 miles.

Question 17

A retail tenant pays $3,000 per month base rent plus 5% of annual gross sales over a $600,000 breakpoint. Annual gross sales are $750,000. What is the total annual rent?

Accepted Answer

Base: $3,000 x 12 = $36,000. Overage: ($750,000 - $600,000) x 0.05 = $7,500. Total = $43,500.

Question 18

On a closing statement, the purchase price is a:

Accepted Answer

The seller receives the price (credit); the buyer owes it (debit).

Question 19

After an Agency Consent Agreement ends at closing, a licensee's duty of confidentiality to the former client:

Accepted Answer

201 KAR 11:121 §1(2) provides that the duty of confidentiality survives termination of the Agency Consent Agreement.

Question 20

A contract clause stating that 'time is of the essence' means:

Accepted Answer

'Time is of the essence' makes performance by the stated dates essential; missing a deadline can be a breach.

Question 21

A conventional loan that exceeds the conforming loan limits set by the FHFA is called a:

Accepted Answer

Loans above the conforming limits cannot be sold to Fannie Mae/Freddie Mac and are non-conforming 'jumbo' loans, usually at higher rates.

Question 22

A broker's escrow account is overdrawn for reasons other than bank service charges. When must the Commission be notified?

Accepted Answer

KRS 324.111(1) requires written notice to the Commission of any overdraft not corrected within 72 hours of the broker receiving notice of it.

Question 23

An agency relationship can be terminated by all of the following EXCEPT:

Accepted Answer

Agency ends by performance, expiration, mutual agreement, operation of law, death or incapacity, or destruction of the property - not by the wish of an unrepresented customer.

Question 24

Whose name must appear on a Kentucky listing contract?

Accepted Answer

201 KAR 11:121 §3(1) requires the principal broker's first and last name and the full company name.

Question 25

Which circumstance authorizes emergency action, such as freezing a broker's escrow account, under the Commission's complaint rules?

Accepted Answer

201 KAR 11:190 authorizes emergency action for two or more escrow violations, one violation over $500, or a substantiated threat to public health, safety, or welfare. A single $100 violation alone does not meet the threshold.

Kentucky real estate practice test

1. Which item must a Kentucky property management agreement include?

2. A salesperson wants to buy a FSBO home for his own investment. He must:

3. A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

4. The largest, most expensive home in a neighborhood of much smaller homes tends to lose value because of the principle of:

5. To qualify for the IRS Section 121 exclusion on the sale of a home, the seller generally must have owned and used it as a primary residence for at least:

6. The National Do-Not-Call Registry is maintained by the:

7. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

8. A principal broker's license is suspended. What happens to the licenses of the sales associates affiliated with that broker?

9. An agent advertises a home as having a 'new roof' without verifying it; the roof is actually 18 years old. This is:

10. Who qualifies for Kentucky's homestead exemption?

11. In a deed, the party conveying title is the and the party receiving title is the .

12. A home sells for $315,000. What is the Kentucky deed transfer tax?

13. When an owner dies with no will and no heirs, the property passes to the state through:

14. How soon must a principal broker register a new branch office with the Commission?

15. Directing buyers toward or away from neighborhoods based on protected class is:

16. To manage a branch within 100 miles of the main office, a sales associate must have:

17. A retail tenant pays $3,000 per month base rent plus 5% of annual gross sales over a $600,000 breakpoint. Annual gross sales are $750,000. What is the total annual rent?

18. On a closing statement, the purchase price is a:

19. After an Agency Consent Agreement ends at closing, a licensee's duty of confidentiality to the former client:

20. A contract clause stating that 'time is of the essence' means:

21. A conventional loan that exceeds the conforming loan limits set by the FHFA is called a:

22. A broker's escrow account is overdrawn for reasons other than bank service charges. When must the Commission be notified?

23. An agency relationship can be terminated by all of the following EXCEPT:

24. Whose name must appear on a Kentucky listing contract?

25. Which circumstance authorizes emergency action, such as freezing a broker's escrow account, under the Commission's complaint rules?

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