Kansas Real Estate Practice Exam.
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Answer: A
References to sections, townships, and ranges are the hallmark of the government rectangular survey system, which divides land into a grid of townships and sections measured out from principal meridians and base lines. Metes and bounds instead traces boundaries using compass directions and distances from a point of beginning, none of which appears in this description, and lot and block platting would instead cite a recorded subdivision plat.

Answer: C
An encroachment occurs when a physical structure, like a fence, unlawfully extends onto a neighboring owner's land, which is precisely what the survey revealed. An easement, unlike an encroachment, is a legal right to use another's land that is typically granted or established by agreement or long use, not an unauthorized physical intrusion discovered during a survey.

Answer: B
Dual agency requires the informed, written consent of both parties because each side is giving up the undivided loyalty a single agent would otherwise owe them, and both must understand and agree to that tradeoff before the firm can act for both. Simply having both parties already at the same brokerage does not itself create valid dual agency, and only the seller consenting would leave the buyer's side of the arrangement improperly authorized.

Answer: D
Open, notorious, continuous, and hostile use of another's land for the statutory period, without the true owner's permission, is the classic fact pattern for a claim of adverse possession, which can result in the possessor obtaining actual title. A prescriptive easement is a related but distinct claim that only grants a right to use land for a specific purpose, not ownership of the land itself, so it understates what continuous farming of the strip could ultimately support.

Answer: B
Brokerage relationship disclosure is meant to happen at first substantive contact, before a party shares confidential or material information, so the party understands whose interests the licensee represents before revealing anything sensitive. Waiting until contract signing defeats the purpose of the disclosure, since by then the buyer may have already shared financial details and preferences that an agent representing the other side could use.

Answer: D
A transaction broker provides limited, non-agency services to both parties without representing either one's interests over the other, which is different from dual agency, where the licensee is still an agent to both sides after obtaining consent. Because the licensee here has no fiduciary agency relationship with either party at all, calling this dual agency mischaracterizes the arrangement.

Answer: A
Without a signed representation agreement, the buyer is generally treated as a customer rather than a client, meaning the licensee owes them basic duties like honesty and fair dealing but not the enhanced fiduciary duties reserved for represented parties. Labeling this buyer a client would overstate the protections in place, since fiduciary duties like loyalty and full disclosure typically attach only once a representation agreement is formed.

Answer: A
A listing agreement is a contract for a defined term, and once that term expires without a sale, the agency relationship it created simply ends unless the parties affirmatively renew it. Nothing about an expired listing automatically extends the broker's representation or creates any ongoing claim to future proceeds if the seller later sells through someone else.

Answer: A
A general warranty deed provides the broadest protection because the grantor warrants against title defects arising at any point in the property's history, even before the grantor's own ownership began. A special warranty deed only covers defects that arose during the grantor's own period of ownership, and a quitclaim deed offers no warranties at all, so neither would protect the new owner against defects predating the estate's title.

Answer: B
A quitclaim deed transfers whatever interest the grantor may have, if any, without making any warranties about the quality or validity of the title, which fits an heir simply releasing a possible claim. A deed of trust is not a conveyance of ownership at all but a financing instrument used to secure a loan, so it would not apply to an heir releasing an ownership claim.

Answer: B
A properly invoked financing contingency protects the buyer by allowing the earnest money to be returned when the buyer cannot obtain the required loan despite a good-faith effort, since failing to close under those circumstances is not a breach of the contract. Forfeiting the deposit to the seller would only be appropriate if the buyer breached outright, which is not the case when a contingency the seller agreed to simply goes unmet.

Answer: D
Escrow describes exactly this situation: a neutral third party holds funds and documents on behalf of both parties until specified conditions, like clearing a title issue, are satisfied. Novation refers to substituting a new party or obligation into an existing contract, which has nothing to do with a neutral party temporarily holding closing funds.

Answer: A
Specific performance is an equitable remedy that can compel a breaching seller, or here an executor acting for the estate, to actually complete the sale, which is often available in real estate cases because each parcel of land is considered legally unique and money damages alone may not make the buyer whole. Liquidated damages and rescission both address the situation with money or contract cancellation rather than forcing the sale through, so neither achieves what the buyer is seeking.

Answer: B
Each point equals one percent of the loan amount, so 2.75 points on a $214,800 loan is calculated as $214,800 multiplied by 0.0275, which equals $5,907.00. A common wrong step is rounding up to an even 3 percent instead of using the full 2.75 percent, which inflates the result, while misplacing the decimal point produces a wildly oversized figure and understating to 2.5 percent produces a number that's too small.

Answer: B
The loan amount is the purchase price minus the down payment, or $134,300, and dividing that loan amount by the $158,000 purchase price gives an LTV of 85%. A common mistake is confusing the down payment percentage itself, which is 15% of the price, with the LTV ratio, when in fact LTV and the down payment percentage are complementary figures that together total 100%.

Answer: C
Lenders typically require private mortgage insurance when a conventional loan's down payment falls below 20%, since PMI protects the lender against the greater risk of loss if a borrower with less equity defaults. A prepayment penalty addresses an entirely different risk, discouraging early payoff, and would not be imposed simply because of a smaller down payment.

Answer: D
Some loans include a prepayment penalty that charges the borrower a fee for paying off the balance earlier than scheduled, so checking the loan documents for this clause before making a large payoff is essential to avoid an unexpected cost. Loan assumability and 1031 exchange eligibility are unrelated concerns tied to a future sale or investment property exchange, not to an early payoff of an existing loan by the current borrower.

Answer: B
A settlement or closing disclosure statement exists to itemize every charge and credit affecting each party, such as prorated taxes and loan fees, so both the buyer and seller can see exactly how the final numbers were reached. Establishing a legal description and setting the assessed value for taxation are handled through entirely separate documents and processes, not through the closing statement itself.

Answer: A
The income approach estimates value by dividing net operating income by the capitalization rate, so $44,100 divided by 0.0675 yields $653,333.33. A frequent wrong step is substituting a rounder-looking cap rate such as 7% or 6.5% instead of the precise 6.75% figure, or multiplying NOI by the cap rate instead of dividing, which produces a figure far too small to represent a commercial building's value.

Answer: A
Highest and best use analysis requires identifying the use that is legally permissible, physically possible, financially feasible, and maximally productive, meaning it produces the greatest net return to the land among the realistic alternatives. Owner preference and simple construction cost minimization are not part of this standard, since a cheaper use that generates far less income would not qualify as the highest and best use.

Answer: C
Estimating the current cost to reproduce or replace a structure and then subtracting depreciation is the defining method of the cost approach, which is especially useful for newer or unique custom homes with few comparable sales. The sales comparison approach instead relies on analyzing recent sales of similar properties, which is a different data source entirely from a cost-to-build calculation.

Answer: A
The principle of substitution holds that a rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute, so between two nearly identical duplexes, the lower-priced one represents the better value. The principle of contribution instead addresses how much a specific improvement adds to overall value, which is not the issue when comparing two already-equivalent properties at different prices.

Answer: C
Functional obsolescence refers to a loss in value caused by an outdated or inadequate design feature within the property itself, such as too few bathrooms for the home's size, even when the structure is otherwise well maintained. External obsolescence instead stems from negative factors outside the property's boundaries, like nearby industrial noise, so it would not explain a value loss rooted in the home's own internal layout.

Answer: D
Facts about a property's history unrelated to its physical condition or value, such as a natural death occurring inside it, are generally treated as non-material and are not required to be proactively disclosed, though a licensee should still answer honestly rather than deny knowledge outright if directly asked. Requiring this to be volunteered in every listing, or treating a sale as automatically voidable without it, overstates the disclosure obligation for facts that do not affect the property's physical condition.

Answer: A
Real estate commission rates are negotiable and set by agreement between the broker and the client, not fixed by statute, regulation, or any real estate board, so an agent must be careful not to imply otherwise. Suggesting the rate must match competitors' pricing would also raise antitrust concerns, since brokers are expected to set their own rates independently rather than coordinate with other firms.

Answer: B
General sales enthusiasm, often called puffery, is typically permitted in real estate advertising as long as it stays subjective and does not misstate objective, material facts about the property. Calling ordinary enthusiastic language fraud overstates the standard, since fraud requires a false statement of material fact, not simply an opinion-based sales phrase.

Answer: C
Refusing to rent to a household because it includes children violates the familial status protection under the federal Fair Housing Act, which covers households with children under 18, pregnant individuals, and those in the process of obtaining custody of a minor. National origin, disability, and religion each protect against entirely different grounds of discrimination and do not relate to a denial based on the presence of children.

Answer: D
Steering occurs when a licensee limits the neighborhoods shown to a buyer based on a protected characteristic rather than the buyer's own stated preferences and budget, funneling them toward or away from certain areas. Blockbusting is a different practice entirely, involving inducing panic selling by suggesting a neighborhood's demographics are changing, which is not what is happening in this showing scenario.

Answer: C
The Equal Credit Opportunity Act (ECOA) specifically prohibits creditors from denying credit based on marital status, along with race, color, religion, national origin, sex, age, and receipt of public assistance income. The federal Fair Housing Act's protected classes, race, color, national origin, religion, sex, familial status, and disability, notably do not include marital status, so a marital-status-based lending denial falls under ECOA rather than the Fair Housing Act, while the Truth in Lending Act and RESPA both address disclosure obligations rather than discriminatory denial decisions.

Answer: D
As the licensing authority for Kansas real estate salespersons and brokers, KREC has the power to investigate complaints and, when a violation is substantiated, impose discipline ranging from a reprimand up to suspension or revocation of the individual's license. This regulatory authority exists independently of any separate civil lawsuit the harmed client might choose to pursue, so KREC is not limited to waiting on outside litigation before acting.

Answer: A
Kansas requires salesperson license applicants to be at least 18 years of age, which is a basic eligibility requirement the 17-year-old has not yet met regardless of how much coursework is completed early. Setting the threshold at 21 overstates the actual requirement, and claiming no minimum age applies ignores this baseline eligibility rule entirely.

Answer: A
Kansas requires a complete license application to be filed within a defined window of time after passing the exam, and candidates who let that window lapse risk having to retake the exam before they can apply again. Believing there is no deadline at all, or that it applies only to broker candidates, would leave a salesperson candidate at risk of losing the benefit of their passing score without realizing it.

Answer: C
BRRETA is built around requiring licensees to disclose the nature of their brokerage relationship, such as whether they represent the seller, the buyer, or are acting as a transaction broker, so that parties understand whose interests are being represented before sharing sensitive information. Treating disclosure as confidential or purely discretionary would undermine the transparency BRRETA is specifically designed to create in Kansas real estate transactions.

Answer: A
Kansas licensing structure requires a salesperson to work under the active supervision of a licensed broker, since the salesperson's authority to practice real estate derives from that broker relationship rather than from an independent license. Neither time in practice, carrying insurance, nor a transaction's dollar amount changes this fundamental structural requirement that salespersons operate under broker supervision.

Answer: A
Licensee activity requirements generally direct a salesperson to promptly deliver any client trust funds they receive, such as earnest money, to their supervising broker for proper deposit into the broker's trust or escrow account, since the salesperson has no independent trust account of their own. Allowing the salesperson to deposit the money personally, hold it uncashed, or send it directly to a title company bypasses the broker's required oversight of client funds.

Answer: A
Commingling refers to improperly mixing a client's trust funds with a broker's own operating funds, which is exactly what occurred here and is treated as a prohibited act because it puts client money at risk and obscures proper accounting. Net listing and blockbusting describe entirely different problems, involving listing compensation structure and discriminatory sales pressure, respectively, neither of which involves mishandling of trust account funds.

Answer: B
A net listing sets a minimum price the seller must receive and lets the broker keep everything above that amount as compensation, which creates an incentive conflict because the broker profits more by pushing the sale price as high as possible rather than serving the seller's own pricing interests. Exclusive right-to-sell and exclusive agency listings instead define compensation through a set commission percentage or fee and differ mainly in whether the seller retains the right to sell independently without owing a commission.

Answer: C
Negotiating a real estate sale for compensation generally requires a license regardless of whether the parties happen to be friends, so accepting a fee to negotiate the sale without a license constitutes the unlicensed practice of real estate, a prohibited act. There is no general friends-and-family exemption from licensing law simply because of a personal relationship, and the absence of a written contract does not change whether licensed activity occurred.

Answer: A
Kansas licensing requirements include submitting to a criminal history background check as part of the application process before a salesperson license can be issued, since character and fitness are part of the eligibility review. A minimum credit score, a commission interview panel, or a county bond are not part of this eligibility framework and would misstate what applicants must actually complete.

Answer: C
Making an unsupported guarantee about future property appreciation goes beyond acceptable sales enthusiasm and crosses into misrepresentation, which is a prohibited act because licensees are not permitted to promise specific future value outcomes they cannot substantiate. Whether the buyer later relies on the statement in writing or whether the property eventually loses value does not determine whether the statement was improper when it was made.

Answer: B
KREC's regulatory role continues well past initial licensure, encompassing license renewal oversight, complaint investigation, and enforcement of discipline for violations of licensing law across both salespersons and brokers. Individual brokerage firms do not hold this disciplinary authority themselves; it remains centralized with the commission rather than being delegated away to private firms.

Answer: C
The defining feature of joint tenancy is the right of survivorship: a deceased owner's interest passes automatically to the surviving joint tenants outside of probate. The tempting wrong choice describes how a tenancy in common interest would pass, through the decedent's estate to their own heirs, which is the opposite of what a survivorship deed accomplishes.

Answer: D
An easement appurtenant, including one created by necessity for a landlocked parcel, attaches to and benefits the dominant land itself and transfers automatically with ownership. A license, by contrast, is a personal and revocable permission that does not run with the land, making it an unreliable basis for permanent access to a landlocked tract.

Answer: B
A conditional use permit, sometimes called a special use permit, allows a use that the zoning ordinance recognizes as acceptable in that district only if specific conditions are met, which is exactly the situation described. A variance is a different remedy entirely, granted for hardship relief from a dimensional requirement like setbacks, not for adding a use the ordinance already contemplates under conditions.

Answer: C
A life estate automatically terminates at the life tenant's death, and the remainder interest the daughter already holds simply ripens into full ownership without needing to pass through probate. Because the daughter's future interest was created and vested at the time of the original deed, the property is not treated as part of the father's probate estate the way an ordinary asset would be.

Answer: C
The fiduciary duty of loyalty obligates a listing agent to act in the seller's best interest, which includes presenting every offer received so the seller, not the agent, decides whether to accept, reject, or counter it. Confidentiality and accounting are separate fiduciary duties concerned with protecting sensitive information and properly handling client funds, neither of which governs whether an offer must be forwarded.

Answer: D
A subagent extends the listing broker's fiduciary obligations, meaning the subagent owes loyalty and other fiduciary duties to the seller even while personally working with the buyer day-to-day. This differs sharply from a buyer's agent relationship, which is why the buyer in this scenario, absent a signed buyer representation agreement, is not owed the same fiduciary protections as the seller.

Answer: C
Because a licensee operates under a supervising broker's license and authority, the broker can be held vicariously responsible for that licensee's conduct in the course of representing a client, even without being physically present for the conversation. Attributing responsibility only to the individual leasing agent ignores the supervisory relationship that licensing law establishes between broker and licensee, and neither the tenant's representative nor the owner bears responsibility for the agent's own misstatement.

Answer: C
The statute of frauds requires contracts for the sale of real estate to be in writing and signed to be enforceable, so a purely oral handshake agreement generally cannot be enforced in court even if both parties genuinely intended to be bound. Paying earnest money does not cure the missing writing requirement on its own, though partial performance can sometimes raise separate equitable arguments that are distinct from simple oral enforceability.

Answer: D
A statutory redemption period gives the former owner, or in some cases junior lienholders, a window of time after a foreclosure sale to pay off the debt and reclaim the property, which is a protection for the party who lost the home, not for the winning bidder. It does not give the winning bidder any right to simply back out, since the bidder has made a binding commitment at the auction subject to court confirmation.

Answer: C
Recording a deed creates constructive notice to the world of the buyer's ownership interest, which helps protect that interest against later claims, such as a second buyer or lienholder who might otherwise assert priority. Title itself actually transfers upon delivery and acceptance of the deed between the parties, not upon recording, so treating delivery as sufficient misses the separate notice-and-priority function that recording serves.

Answer: D
Under a standard amortization schedule, early payments on a fixed-rate loan are weighted heavily toward interest because the outstanding balance, on which interest accrues, is still largest at that point, with the principal portion growing gradually as the balance shrinks. The payment split is never a flat 100% interest for an extended period, nor is it evenly split every month, since the ratio shifts gradually and continuously over the life of the loan.

Answer: C
The gross rent multiplier is found by dividing the sale price by the monthly rent, so $214,500 divided by $1,650 equals 130. A common error is dividing the sale price by an annualized rent figure instead of the monthly figure, which produces a much smaller multiplier that does not match how GRM is conventionally expressed for monthly-rent comparisons.

Answer: B
A significant flooding history is a material fact that a reasonable buyer would want to know when deciding whether to purchase and at what price, so a licensee who learns of it generally has a duty to disclose it rather than wait to be asked. Assuming buyers already anticipate regional risks does not excuse withholding a specific, known defect about the particular property being sold.

Answer: D
Federal law requires sellers of homes built before 1978 to provide buyers with a lead-based paint disclosure and an EPA-approved pamphlet before the buyer becomes contractually obligated, since homes from that era may contain lead-based paint. The disclosure obligation applies specifically to pre-1978 housing, the opposite of exempting older homes and instead exempting newer ones built after lead-based paint was banned for residential use.

Answer: B
When a licensee wants to purchase property they have a professional connection to, full and timely disclosure of their license status and personal financial interest is required so the seller can make an informed decision, since the licensee's insider knowledge and position create an inherent conflict of interest. Paying full price does not eliminate the need for disclosure, because the concern is transparency about the licensee's role, not simply whether the price seems fair.

Answer: C
Property condition disclosure obligations are generally based on what the seller actually knows about the property, not on whether the seller personally lived there, so heirs must still disclose material defects they are aware of from inspections, records, or family knowledge. Shifting responsibility entirely to the listing agent misunderstands the disclosure requirement, since it is fundamentally the seller's own knowledge that the disclosure form is meant to capture.

Answer: A
Blockbusting involves inducing panic selling by suggesting that a neighborhood's racial or ethnic composition is changing in a way that will harm property values, which is exactly the tactic used to pressure these homeowners. Steering instead involves directing buyers toward or away from neighborhoods, a distinct practice from pressuring existing owners into a quick, below-market sale, and redlining involves a lender's blanket denial of loans in an area rather than an agent's sales pitch.

Answer: B
Redlining occurs when a lender denies or limits loans within a specific geographic area based on the demographic makeup of that area rather than the creditworthiness of individual applicants, which is precisely the blanket policy described here. Ordinary underwriting, by contrast, is the legitimate evaluation of an individual applicant's creditworthiness and risk, the opposite of a blanket geographic denial, and blockbusting instead involves pressuring existing homeowners to sell.

Answer: C
Telling a prospective tenant that a unit 'isn't set up for kids' and preferring an applicant without children violates the familial status protections of fair housing law, regardless of whether that caller ever formally applies. Avoiding references to race or religion does not cure the violation, because familial status is its own independently protected class under the law.