Kansas Real Estate Salesperson Exam — All Questions

The principle of contribution states that the value of a component or improvement is measured by:

• a.The raw number of square feet of floor area or land area that the improvement happens to occupy
• b.The owner's personal emotional attachment to and sentimental feelings about that improvement
• c.Its original construction or installation cost in every case, dollar for dollar, with no exception
• d.How much it adds to the overall value of the property, not its cost✓

Under contribution, an improvement is worth the amount it adds to the whole property's market value, which may be more or less than its cost. This principle explains why some renovations do not fully return their expense, a key point in over-improvement analysis.

Under Internal Revenue Code Section 121, a qualifying homeowner may generally EXCLUDE from taxable capital gain:

• a.Up to $250,000 of gain if single, or $500,000 if married filing jointly✓
• b.Up to a full one million dollars of gain on any property at all, at any time and any frequency
• c.All gain on any and every investment or rental property the taxpayer happens to own and sell
• d.Absolutely nothing, because gain on the sale of a home is always fully and entirely taxable

Section 121 lets homeowners who owned and used the home as their principal residence for at least two of the prior five years exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). It applies to a primary residence, not to investment property.

Depreciation recapture on the sale of investment real estate means that:

• a.All of the depreciation deductions previously claimed are simply refunded to the investor in cash
• b.The investor is legally required to physically restore and rebuild the depreciated building itself
• c.Gain from prior depreciation may be taxed, often at a special rate✓
• d.No income tax is ever owed at all on the sale of a property that has previously been depreciated

When depreciated property is sold at a gain, the portion of gain due to depreciation deductions is 'recaptured' and taxed under special rules, reflecting the earlier tax benefit. It is a tax concept, not a requirement to rebuild, and it increases, not eliminates, tax on sale.

Which appraisal approach is generally MOST reliable for a special-purpose property, such as a church or public school, that rarely sells and earns no market income?

• a.The sales comparison approach, which depends on recent sales of similar comparable properties
• b.The income approach, which converts a property's market rental income into an indicated value
• c.The gross rent multiplier method, which relies on typical market rents that these lack entirely
• d.The cost approach✓

Special-purpose properties have few or no comparable sales and generate no market rent, so the cost approach (replacement cost new, less depreciation, plus land) is typically most reliable. Sales comparison lacks comparables and the income/GRM methods need market income these properties do not produce.

The four characteristics an item must have to possess value in the market, often remembered as DUST, are:

• a.Debt, Utility, Supply, and Taxes, a mix of unrelated financing and cost terms rather than value
• b.Demand, Utility, Scarcity, and Transferability✓
• c.Depreciation, Use, Sale, and Title, which describe stages of ownership rather than value itself
• d.Demand, Ownership, Scarcity, and Time, which swaps in two terms that are not part of the concept

For something to have market value it must have Demand (buyers who want it), Utility (usefulness), Scarcity (limited supply), and Transferability (the ability to convey it). The DUST acronym captures these four essentials of value.

Which agency licenses and regulates real estate salespersons and brokers in Kansas?

• a.The Kansas Association of Realtors
• b.The Kansas Department of Revenue
• c.The Kansas Real Estate Commission✓
• d.The Kansas Corporation Commission

Real estate licensing in Kansas is administered by the Kansas Real Estate Commission (KREC) under the Kansas real estate license law. The Commission issues, renews, and disciplines licenses and enforces the license law and the Brokerage Relationships in Real Estate Transactions Act. A trade association such as the Kansas Association of Realtors is a private group with no licensing authority.

The Kansas Real Estate Recovery Revolving Fund exists primarily to:

• a.Reimburse a consumer for an actual loss from certain fraudulent acts of a licensee when a court judgment cannot be collected✓
• b.Guarantee the resale value of listed properties
• c.Provide grants to real estate schools
• d.Pay the Commission's staff salaries

The Kansas Real Estate Recovery Revolving Fund (K.S.A. 58-3066 et seq.) may reimburse a member of the public who obtains a final judgment against a licensee for an actual loss caused by fraud, misrepresentation, deceit, or conversion of funds in a real estate transaction and who cannot otherwise collect, subject to statutory limits. When the fund pays a claim in satisfaction of a judgment, the licensee's license is revoked and is not reinstated until the fund is repaid. It is not an insurance, guaranty, or grant program.

In Kansas, a salesperson may perform licensed real estate activity only when:

• a.Affiliated with and supervised by a licensed supervising broker✓
• b.Working independently once the license is issued
• c.Individually approved by KREC for each sale
• d.Registered with the local register of deeds

A Kansas salesperson's license is valid only while the salesperson is affiliated with and supervised by a licensed broker. All licensed activity is conducted for the broker, who is responsible for supervision and trust funds. A salesperson may not be paid a commission directly by a consumer; compensation is paid through the supervising broker.

Under the Kansas Brokerage Relationships in Real Estate Transactions Act (BRRETA), a licensee is presumed to be which of the following unless a written agreement establishes an agency relationship?

• a.A seller's agent
• b.A buyer's agent
• c.A dual agent
• d.A transaction broker✓

Under Kansas BRRETA, a licensee is presumed to be a transaction broker unless the licensee and the consumer enter a written agreement creating a single-agency or other agency relationship. A transaction broker assists the parties without being an advocate or agent for either and owes limited statutory duties such as honesty, reasonable skill, and disclosure of adverse material facts.

How does a Kansas transaction broker differ from a single agent?

• a.A transaction broker owes full fiduciary loyalty to the buyer
• b.A transaction broker assists the parties without advocating for or representing either as an agent✓
• c.A transaction broker may not accept any compensation
• d.A transaction broker can only work with commercial property

A single agent under BRRETA represents one party with full agency duties including loyalty and confidentiality. A transaction broker, by contrast, helps the parties complete a transaction without being an advocate for either and without owing a duty of loyalty, though the transaction broker must still be honest, exercise reasonable skill and care, and disclose known adverse material facts.

Under Kansas BRRETA, when must a licensee provide the required brokerage relationships disclosure to a consumer?

• a.At the first substantial contact, before confidential information is disclosed✓
• b.Only after the closing is scheduled
• c.Only if the consumer is buying commercial property
• d.Within 60 days after the transaction ends

BRRETA requires the licensee to provide the brokerage relationships disclosure at the first substantial contact with a consumer, before the consumer shares confidential information. Early disclosure lets the consumer understand whether the licensee is acting as a transaction broker or as an agent for a party before negotiating information is revealed.

When a Kansas salesperson receives an earnest-money deposit, the funds must be:

• a.Kept by the salesperson until closing
• b.Deposited into the salesperson's personal account
• c.Delivered to the supervising broker to be held in the broker's trust account✓
• d.Mailed to the Kansas Real Estate Commission

Earnest money and other client funds must be handled through the supervising broker's trust (escrow) account. A salesperson must deliver received funds promptly to the broker, who must keep trust money separate from personal and business funds. Commingling or converting trust money is a serious violation of Kansas license law.

Which best describes the education path for a new Kansas salesperson?

• a.A single continuing-education class with no exam
• b.Complete an approved principles/pre-license course and pass the exam, then complete additional required Kansas coursework to activate and maintain the license✓
• c.A four-year real estate degree only
• d.No coursework if sponsored by a broker

Kansas requires a candidate to complete an approved pre-license (principles) course and pass the licensing examination, and to complete additional required Kansas coursework as part of activating and maintaining the salesperson license. Applicants must also affiliate with a supervising broker and complete ongoing continuing education to renew.

A Kansas broker shows a listed house to a buyer but has signed no agency agreement with anyone. Under BRRETA, what is the broker's status in that transaction?

• a.A transaction broker✓
• b.A subagent of the listing broker
• c.An implied agent of the buyer
• d.A dual agent by operation of law

Kansas abolished presumed common-law agency for licensees. A broker is considered a transaction broker unless an agency relationship is established under the act or the broker works as a subagent by accepting an offer of subagency. Cite: K.S.A. 58-30,103(c).

A Kansas brokerage wants one licensee to represent both the buyer and the seller in the same sale. Under BRRETA that arrangement is:

• a.allowed with the written consent of both clients
• b.allowed only for commercial property
• c.prohibited, because a licensee may not be a dual agent✓
• d.allowed if the supervising broker approves it

BRRETA replaced dual agency with designated agency and transaction brokerage. A licensee shall not act as a dual agent or in a dual capacity of agent and undisclosed principal in any transaction. Cite: K.S.A. 58-30,103(a).

By when must a Kansas broker have a signed written agency agreement with a buyer in order to represent that buyer as an agent?

• a.Before showing the buyer any property in person
• b.No later than the signing of an offer to purchase✓
• c.Within three business days after the offer is made
• d.Before the closing date set in the contract

For sellers and landlords the written agreement must come before licensed activity begins, but for a buyer or tenant the deadline is the signing of an offer to purchase or lease. Cite: K.S.A. 58-30,103(e).

BRRETA requires a written agency agreement with a seller before the broker does any licensed activity. Which seller is the recognized exception?

• a.A seller relocating out of state
• b.A seller who lists more than four units
• c.A bank selling foreclosed property
• d.An agency of the federal government✓

If the real estate offered for sale is owned by a federal agency, the broker may act after obtaining verbal authorization from that agency instead of a signed written agency agreement. Cite: K.S.A. 58-30,103(d)(2).

Which term must appear in every Kansas agency agreement and every written transaction brokerage agreement?

• a.A fixed date of expiration✓
• b.The seller's minimum acceptable price
• c.A cancellation penalty
• d.The name of the cooperating broker

The agreement must set out the terms of the relationship including a fixed date of expiration, any limit on the duty of confidentiality, and the terms of compensation. Cite: K.S.A. 58-30,103(f).

A Kansas seller wants the listing agreement to let the broker sign closing papers for her while she is overseas. What does BRRETA say?

• a.The clause is valid if it is notarized
• b.The clause is valid for sellers living outside Kansas
• c.The agreement may not contain such an authorization✓
• d.The clause is valid if the commission approves the form

An agency agreement or written transaction brokerage agreement shall not authorize the broker to sign or initial documents for the client or to act as the client's attorney-in-fact. Cite: K.S.A. 58-30,103(i).

A Kansas seller offers to let the broker keep everything above $200,000 as the fee. Under BRRETA this compensation term is:

• a.permitted if the seller initials it
• b.prohibited in any listing agreement✓
• c.permitted only on commercial property
• d.permitted if disclosed to the buyer

A Kansas agency or transaction brokerage agreement with a seller shall not provide that the broker's commission be based on the difference between the gross sales price and the net proceeds to the owner. Cite: K.S.A. 58-30,103(j).

In a Kansas in-house sale where the buyer and the seller each have a designated agent supervised by the same supervising broker, what role does that supervising broker take?

• a.Agent of the seller only
• b.Agent of whichever client signed first
• c.No role in the transaction
• d.Transaction broker✓

In any transaction involving designated agents the supervising broker acts as a transaction broker, and where both designated agents report to the same branch broker that branch broker takes the transaction broker role. Cite: K.S.A. 58-30,109(b)(4).

A Kansas firm with no designated agents will act as a transaction broker on an in-house deal. When must the transaction broker addendum be signed?

• a.Buyer before the offer, seller before the contract✓
• b.Both parties at the closing table
• c.Seller at listing and buyer at the time of closing
• d.Both parties within five days after the offer

The informed consent of both clients is evidenced by a transaction broker addendum to the agency agreements, signed by the buyer prior to writing the offer and by the seller prior to signing the contract. Cite: K.S.A. 58-30,109(a).

Which cooperation is a Kansas transaction broker forbidden to use?

• a.Paying compensation to a cooperating broker
• b.Listing properties that compete with each other
• c.Engaging subagents✓
• d.Showing other properties to the same buyer

A transaction broker may cooperate with other brokers and may pay them compensation, but shall not engage any subagents. Cite: K.S.A. 58-30,113(l).

A Kansas transaction broker on a single-family home learns the buyer would pay more than the offered price. Without consent of all parties, the transaction broker may:

• a.tell the seller, since the seller is the client
• b.not disclose it to anyone✓
• c.tell the seller if the offer is below list price
• d.tell the seller after the contract is signed

On residential property of four units or fewer, a transaction broker may not reveal without consent of all parties that a buyer would pay more, that a seller would take less, either party's motivation, or willingness to change financing terms. Cite: K.S.A. 58-30,113(f).

How does Kansas treat that same price information when a transaction broker is handling a 40-unit apartment building?

• a.It must still be kept confidential
• b.It may be disclosed only to the seller client
• c.It may be disclosed only after closing
• d.It may be disclosed unless the parties object✓

For commercial property or residential property of more than four units the statute flips the default: the transaction broker may disclose those items unless the parties prohibit it, though personal confidences that would disadvantage a party stay protected. Cite: K.S.A. 58-30,113(g).

In which Kansas transaction is a licensee NOT required to hand a prospect the "real estate brokerage relationships" brochure?

• a.Sale of a 12-unit apartment building✓
• b.Sale of a three-bedroom house
• c.Sale of a duplex to an investor
• d.Sale of a vacant residential lot

The brochure is not required when the licensee acts solely as a principal, when the contact is a business solicitation, on commercial property or residential property of more than four units, at a public auction, for ministerial acts only, or when the firm already delivered it. Cite: K.S.A. 58-30,110(a)(3).

Under BRRETA, where must the buyer's and seller's acknowledgment that they received the brokerage relationships brochure appear?

• a.In the brokerage firm's office file
• b.On a form filed with the commission
• c.In the contract for sale✓
• d.In the multiple listing service record

Acknowledgment of receipt of the brochure by the seller and buyer shall be included in any contract for sale, and the brokerage relationship of every licensee involved must be disclosed in that contract and in any lot reservation agreement. Cite: K.S.A. 58-30,110(a)(4) and (c).

A Kansas seller pays the fee earned by the broker who worked with the buyer. Under BRRETA, what does that payment establish?

• a.That the broker represented the seller
• b.Nothing about who the broker acts for✓
• c.That the broker was a transaction broker
• d.That the broker was a subagent of the seller

Compensation is presumed to come from the transaction, and payment of compensation by itself does not establish an agency between the payer and the broker or any affiliated licensee. Cite: K.S.A. 58-30,105(a) and (b).

A Kansas listing expires without a sale. Absent a written agreement to the contrary, which duties survive?

• a.Continuing to market the property
• b.Presenting late offers to the seller
• c.Advising the seller about future pricing
• d.Accounting for money and keeping confidences✓

After termination, expiration or closing the broker owes no further duties except to account for all money and property relating to the engagement and to keep confidential information confidential. Cite: K.S.A. 58-30,104(a)(2).

Two buyers were defrauded in the same Kansas closing and both won judgments against the licensee. What is the total the Kansas Real Estate Recovery Revolving Fund can pay on that one transaction?

• a.$15,000✓
• b.$30,000, the annual cap per licensee
• c.$50,000, the lifetime cap per licensee
• d.$25,000

Payments for claims arising out of the same transaction are limited in the aggregate to $15,000 regardless of how many claimants or parcels are involved, and a single claimant's recovery is capped at the same figure. Cite: K.S.A. 58-3067(b) and 58-3069(c) (limits set by L. 2008, ch. 155).

Kansas caps what the Recovery Revolving Fund will pay out on judgments against any one licensee. Those caps are:

• a.$15,000 each year and $30,000 in total
• b.$25,000 each year and $75,000 in total
• c.$30,000 a year and $50,000 in total✓
• d.$50,000 a year with no lifetime limit

Payments on judgments against any one broker or salesperson may not exceed $30,000 in any calendar year, and may never exceed $50,000 in the aggregate. Cite: K.S.A. 58-3067(c) (amounts set by L. 2008, ch. 155).

What happens when the balance in the Kansas Real Estate Recovery Revolving Fund drops below $100,000?

• a.Payments from the fund stop for that year
• b.Every broker is assessed $10 and every salesperson $5✓
• c.The legislature must appropriate the shortfall
• d.License renewal fees double until it is restored

The commission must assess each licensed broker $10 and each licensed salesperson $5 without delay, and a licensee who does not pay within 30 days of the mailed notice may have the license suspended until it is paid. Cite: K.S.A. 58-3066(b).

A consumer holds a final Kansas judgment against a licensee and wants to claim from the Recovery Revolving Fund. How long does she have?

• a.Six months after the judgment
• b.One year after the judgment
• c.Three years after the judgment
• d.Two years after the judgment✓

The claim must be made within two years after the date final judgment is entered, and the claimant must also have executed on the judgment and searched for assets without being made whole. Cite: K.S.A. 58-3068(b)(2).

Kansas lets the commission spend the Recovery Revolving Fund on consumer education and an agency newsletter only above a stated balance. What is that balance?

• a.$250,000✓
• b.$100,000
• c.$500,000
• d.$1,000,000

Any amount over $250,000 may be used for the agency newsletter, monitoring education courses, expanded consumer materials, and education grants to schools for money-management and home-ownership course materials. Cite: K.S.A. 58-3068(d).

How long may a Kansas real estate license run before it expires?

• a.One year from issuance or renewal
• b.Three years from issuance or renewal
• c.Not more than two years from issuance✓
• d.Until the licensee deactivates it

Each license expires on a date set by commission schedule, which may be no more than two years from the date of issuance or renewal. Cite: K.S.A. 58-3045(a).

A Kansas salesperson forgot to renew and the license expired. What does the statute allow?

• a.Late renewal within 30 days with a $25 late fee
• b.Late renewal within six months with a $100 late fee✓
• c.Late renewal within one year with a $50 late fee
• d.Late renewal within two years with no late fee

The commission may reinstate and renew an expired license if the licensee applies within six months of the expiration date and pays the renewal fee plus a $100 late fee. Cite: K.S.A. 58-3045(c).

A Kansas license has sat on deactivated status for four straight years. What extra education is required to reinstate it?

• a.None beyond the current renewal period
• b.A repeat of the 30-hour principles course
• c.Twelve added hours for each full year deactivated
• d.Six added hours for each full year deactivated✓

A license deactivated more than two but not more than five years is reinstated on proof of six additional approved hours for each full year on deactivated status, plus the reinstatement fee and application. Cite: K.S.A. 58-3047(f).

What changes once a Kansas license has been deactivated for a continuous period of more than five years?

• a.The licensing examination must be retaken✓
• b.The license can no longer be reinstated at all
• c.The licensee must apprentice under a broker for a year
• d.The licensee must pay a double reinstatement fee

Beyond five years of continuous deactivation the licensee must pass the examination required of an original applicant and show six additional approved hours for each full year of deactivation. Cite: K.S.A. 58-3047(g).

What licensed experience does Kansas normally require of an applicant for an original broker's license?

• a.One year of active licensure immediately before applying
• b.Three continuous years as a Kansas salesperson
• c.Two years of activity within the preceding three years✓
• d.Four years of activity within the preceding six years

The applicant must have been licensed as a salesperson in Kansas or as a salesperson or broker elsewhere and actively engaged in licensed activity at least two years during the three years immediately preceding application, although the commission may accept equivalent experience or education. Cite: K.S.A. 58-3039(d) and (e).

A Kansas candidate passed both portions of the license examination but has not yet filed the application. How long do those results stay usable?

• a.Three months
• b.Six months✓
• c.One year
• d.Two years

No license may be issued on an examination if either portion was administered more than six months before the commission receives the application. Cite: K.S.A. 58-3039(f)(3).

What are the basic personal qualifications for any Kansas real estate license?

• a.At least 21 years old and a Kansas resident
• b.At least 18 years old and a Kansas resident
• c.At least 21 years old with a college degree
• d.At least 18 years old with a high school diploma✓

A broker's or salesperson's license may be granted only to a person 18 or more years of age who holds a high school diploma or its equivalent; residency is not a condition. Cite: K.S.A. 58-3039(c).

Four Kansas licensees form an LLC to run their brokerage. How does the Kansas license act treat the LLC itself?

• a.No license is granted to the entity✓
• b.The entity holds the firm license
• c.The entity is licensed as an associate broker
• d.The entity is licensed once every member is licensed

Kansas licenses only individuals. No license is granted to an association, corporation, limited liability company, limited liability partnership, partnership or professional corporation, and each owner, officer, member or employee doing licensed acts must personally hold a license. Cite: K.S.A. 58-3042(b).

How much of a Kansas broker's own money may sit in the firm's trust account?

• a.Nothing at all
• b.Up to $500
• c.Up to $100 for account upkeep✓
• d.Up to one month of expected commissions

Commingling is a prohibited act, except that a broker may keep an amount not exceeding $100 in the trust account to pay expenses for the use and maintenance of the account. Cite: K.S.A. 58-3062(a)(2).

Absent a written agreement of all parties setting another date, when must a Kansas licensee deposit earnest money?

• a.By the end of the next banking day
• b.Within five business days after all parties sign✓
• c.Within three calendar days after all parties sign
• d.Within ten business days after all parties sign

It is a prohibited act to fail to deposit a check or cash taken as earnest money or as a lot deposit within five business days after the purchase or lot reservation agreement is signed by all parties, unless a written agreement of all parties sets a different date. Cite: K.S.A. 58-3062(a)(19).

A Kansas sale collapses and the buyer demands the earnest money back. From the broker's trust account, that deposit may be released only:

• a.On the buyer's written demand alone
• b.After the broker decides who defaulted on the contract
• c.Thirty days after the contract is formally cancelled
• d.By both parties in writing, court order, or closing✓

Once an accepted offer's earnest money is in the trust account, it may be disbursed only under written authorization of buyer and seller, under a court order, or when the transaction closes according to the parties' agreement. Cite: K.S.A. 58-3061(g).

Kansas law sets out optional contract language that treats silence as consent to distribute earnest money. What deadlines does that language use?

• a.Seven days to answer the letter, 30 days to demand✓
• b.Three days to answer the letter, 15 days to demand it
• c.Ten days to answer, 45 days to demand
• d.Fourteen days to answer the letter, 60 days to demand

The statute lets the parties agree in the sales contract that failing to answer the broker's certified letter within seven days of receipt, or failing to make written demand within 30 days of notice of cancellation, is consent to the distribution proposed. Cite: K.S.A. 58-3061(h).

A Kansas salesperson has a signed counteroffer that belongs in the transaction file. How soon must it reach the supervising or branch broker?

• a.The same business day
• b.Within five business days
• c.Within ten business days✓
• d.Before the transaction closes

A salesperson or associate broker commits a prohibited act by failing to submit to the supervising or branch broker, within 10 business days, any document that must be kept in the broker's transaction records; the clock starts when the client signs or when the document is presented. Cite: K.S.A. 58-3062(b)(6).

A Kansas broker collects an advance listing fee. What reporting does the license act require?

• a.A single accounting when the listing ends
• b.An itemized written report every 30 days and at the end✓
• c.A quarterly report filed with the commission
• d.A written report only if the principal requests one

A broker may not fail to give the principal a written report every 30 days, along with a final report, itemizing the disbursements made from advance listing fees. Cite: K.S.A. 58-3062(c)(5).

Kansas requires specific language in every contract for the sale of residential real estate. What does it tell the buyer?

• a.That radon testing is recommended before closing
• b.That the buyer should obtain an independent appraisal
• c.That the seller has completed a condition report
• d.That offender registration information is available✓

Each residential sales contract must state that Kansas law requires people convicted of certain crimes, including certain sexually violent crimes, to register with the sheriff of the county where they live, and that the buyer may get that information from the KBI homepage or the local sheriff. Cite: K.S.A. 58-3078(a).

A Kansas salesperson is selling her own house, which is not listed with any broker. What must her yard sign and online ad do?

• a.Say that a real estate licensee owns the property✓
• b.Carry the supervising broker's trade name only
• c.Carry the trade name and the ownership notice
• d.Carry neither; an unlisted owner sale is exempt

Advertising need not carry the supervising broker's trade name when the property is personally owned by the licensee and is not listed with a broker, but all advertising the licensee causes must clearly inform the public that a real estate licensee owns or has an interest in the property. Cite: K.S.A. 58-3086(c) and (e).