KY Real Estate cheat sheet

The Kentucky Real Estate Commission (KREC) licenses sales associates, brokers, and principal brokers; every sales associate must be affiliated with and supervised by a principal broker.

A principal broker is the licensee responsible for the brokerage's real estate transactions, escrow account, and supervision of affiliated licensees.

Real estate commissions are negotiable; Kentucky law does not set a standard commission rate.

Brokerage escrow funds must be deposited in a designated escrow account and cannot be commingled with the broker's operating funds.

KREC rules require licensees to explain agency relationships to consumers using the prescribed agency guide, which describes seller agency, buyer agency, and dual agency.

Unlicensed office staff may perform clerical work but may not negotiate, show property, discuss contract terms, or perform activities requiring a real estate license.

Advertising by a licensee must identify the brokerage; a sales associate may not advertise as an independent brokerage.

Kentucky licensees renew through KREC and must satisfy continuing education requirements; inactive license status does not permit brokerage activity.

A licensee must disclose known material defects and may not make false statements about a property.

Fiduciary duties are commonly summarized as OLD CAR: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care.

Dual agency exists when one brokerage represents both buyer and seller in the same transaction; Kentucky requires informed written consent from both parties.

Designated agency assigns different licensees within one brokerage to represent the buyer and seller, reducing conflicts when state rules permit it.

Confidentiality continues after the agency relationship ends and covers client information that could harm the client if disclosed.

A licensee must disclose material facts about the property or transaction regardless of whether the client asks.

Under the statute of frauds, a contract for the sale of real property must be in writing and signed by the party to be charged.

A valid contract requires offer, acceptance, consideration, capacity, and legal purpose.

Earnest money is a deposit showing buyer commitment; it is applied to the purchase price or refunded according to the contract terms.

Contingencies are conditions that must be satisfied for the contract to proceed, such as financing, inspection, or appraisal.

Fee simple absolute is the most complete ownership estate and has no fixed duration.

A life estate lasts for the life of a named person; the remainderman receives the property when the life estate ends.

An easement appurtenant benefits a neighboring parcel; an easement in gross benefits a person or entity, not a parcel.

Kentucky follows lien theory: a mortgage creates a lien, and the borrower retains title while the lender holds a security interest.

Kentucky property descriptions commonly use metes and bounds, lot and block, and tax parcel numbers; the PLSS is not the primary system in Kentucky.

A deed must identify the grantor and grantee, describe the land, contain words of conveyance, be signed by the grantor, and be delivered.

Tenants in common hold separate shares without survivorship; joint tenants hold equal shares with right of survivorship.

Recorded deeds give constructive notice; unrecorded interests may be cut off by later purchasers under recording statutes.

Title transfers by deed during life and by will or intestacy at death.

Loan-to-value (LTV) = loan amount divided by property value or purchase price, whichever is lower.

One discount point equals 1% of the loan amount and is paid upfront to lower the interest rate.

PITI = principal + interest + property taxes + hazard insurance.

The APR discloses the cost of credit as a yearly rate and includes certain finance charges; the note rate is the stated interest rate.

Sales comparison approach estimates value by comparing similar recent sales; it is most reliable for owner-occupied homes.

Cost approach value = replacement cost new minus depreciation plus land value.

Income approach value = net operating income divided by the capitalization rate.

Gross rent multiplier = sale price divided by gross monthly rent.

Depreciation types are physical deterioration, functional obsolescence, and external obsolescence.

Exclusive right to sell pays the broker regardless of who procures the buyer; exclusive agency pays the broker unless the owner procures the buyer.

An open listing allows the owner to list with multiple brokers and pays only the broker who procures the buyer.

A net listing sets the seller's minimum net and lets the broker keep the excess; it creates a conflict and is restricted in many jurisdictions.

The Closing Disclosure for covered residential loans must be delivered at least three business days before consummation.

RESPA prohibits kickbacks and unearned fees for settlement services.

Federal fair housing protected classes are race, color, religion, sex, national origin, familial status, and disability.

Blockbusting, steering, and redlining are fair housing violations.

A comparative market analysis is a broker's opinion of value, not a licensed appraisal.

Advertising must be truthful, identify the brokerage, and not indicate a preference based on a protected class.