Download KY BOARD OF AUCTIONEER TEST QUESTIONS WITH 100% VERIFIED ANSWERS RATED A+ and more Quizzes Commercial Law in PDF only on Docsity!
KY BOARD OF AUCTIONEER TEST QUESTIONS WITH
100% VERIFIED ANSWERS RATED A+
“Absolute Auction - CORRECT ANSWER=> After the auctioneer calls for bids on an article or lot, that
article or lot cannot be withdrawn unless no bid is made within a reasonable time"
"Auction with reserve - CORRECT ANSWER=> when auctioneer may withdraw the property at any time
until he or she announces the completion of the sale. The potential bidders are the offerors"
"Auction with reserve and the sellers reserving the right to bid - CORRECT ANSWER=> The auctioneer
may withdraw the goods at any time until he announces completion of the sale - KRS 355.2-328. The goods may be put up subject to the seller's confirmation or subject to a certain reserve price - KRS 330.220(5). The seller, or someone acting on the seller's behalf, may bid, provided that full disclosure has been made that liberty for such bidding is retained. No licensee shall knowingly receive such a bid without this full disclosure - KRS 330.220(6)(c) and KRS 355.2-328(4)."
"Real Estate/Real Property - CORRECT ANSWER=> Means real estate in its ordinary meaning, including
but not limited to timeshares, options, leaseholds, and other interests less than leaseholds of any form or type which may be lawfully kept or offered for sale, exchange, or lease. Real estate usually includes all improvements to the land, such as buildings, fences and fixtures. Title for real estate sold at auction passes at closing with delivery and acceptance of the deed."
"Fee Simple - CORRECT ANSWER=> The highest type of real estate ownership recognized by law. It is
complete ownership for all time and is the most common type of ownership."
"Life Estate - CORRECT ANSWER=> A temporary ownership of real estate. Usually the life estate
ownership expires at the death of a designated person. This type of ownership is more often used in family situations where one family member retains ownership of the family property until his/her death, at which time ownership transfers to another family member. Interest in property held in a life estate may be sold, but rights to the property end at the death of the individual to whom the life estate was originally given."
"Eminent Domain - CORRECT ANSWER=> The federal, state and local government's right to take
property after adequate compensation for the purpose of using the land for the public good. Examples include land taken for highways, urban renewal projects, airport expansion, schools and parks, plus for the use of power companies, telephone companies, natural gas companies and railroads."
"Lease - CORRECT ANSWER=> An agreement that conveys the use and possession, but not ownership,
of property for a specified period. Unless a lease is released or expires, that lease remains with the property even if that property is sold. Leases for a year or more must be in writing."
"Encumbrances - CORRECT ANSWER=> Any binding adverse interest, claim, charge or liability on a
property which in some manner burdens or diminishes the value of the property. Common encumbrances include the following:"
"Lien - CORRECT ANSWER=> An adverse claim or charge against a property when that property is being
used as collateral for a debt or a legal interest created upon non-payment of a debt such as unpaid taxes or contractor's bills. Tax liens usually take priority over other liens and are paid off first when a property is sold. When property is sold, any unpaid liens are usually paid off at the time of transfer (closing). If the liens are not paid, transferred or released at the time of closing then they would remain on the property."
"Mortgage - CORRECT ANSWER=> A document which pledges property as security for a loan. A
mortgage is a type of lien that becomes void on payment or performance according to stipulated terms. An additional mortgage on a property is called a second or junior mortgage. Usually when a property is sold, the first mortgage is paid off before the second or junior mortgage."
"Restrictions - CORRECT ANSWER=> Private agreements placed in the public record that affect or limit
the use of real property. Restrictions include things such as building specifications on new homes in a subdivision or limitations as to the future use of a property."
"Easements - CORRECT ANSWER=> A right acquired by one party to the limited use of property owned
by another. Easements are often for accesses to landlocked properties and rights of way for special purposes such as power or telephone lines. Easements usually pass with the title to a property."
"Common Encumbrances - CORRECT ANSWER=> a. Lien B. mortgage c. restrictions d. easements"
"Grantor - CORRECT ANSWER=> The seller of real property, the grantor, conveys title of the property to
the grantee, the buyer. The grantor must be legally competent to convey title to the property and if the grantor has a spouse, she/he must also sign the listing contract and the deed."
"Grantee - CORRECT ANSWER=> The buyer of real property, the grantee, receives title of the property
from the grantor, the seller. The grantee must be correctly identified in the deed."
"Deed - CORRECT ANSWER=> A written document by which the grantor conveys to the grantee an
interest, usually ownership, in real property. A deed must recognize that the grantor received valuable consideration for the property and describe the property such that a competent surveyor could locate the plot of the property. The deed should specify any exceptions or reservations to the deed, including encumbrances, liens, mortgages, taxes, restrictions, easements or limitations of the title. To be valid, a deed must be properly signed and delivered. While it is recommended that a deed also be recorded, it is not required."
"Auction Listing Contract - CORRECT ANSWER=> The agreement between the auction house operator
or the auctioneer and the seller (or his/her agent) where the parties agree to the offering of certain goods at auction as set forth in the contract. All auction listing contracts are required by law to be written."
"Auction Sales Contract - CORRECT ANSWER=> The agreement to sell and buy certain goods between
the seller and the buyer, with the auctioneer acting as the seller's agent. The majority of auction sales contracts for personal property are oral. All auction sales and purchase contracts for real property are required to be in writing."
"Valid Contract - CORRECT ANSWER=> An agreement that meets all legal requirements for a contract
and as such has legal force and binding effect."
"Void Contract - CORRECT ANSWER=> A contract that is null, having no legal force or binding effect and
as such is unenforceable."
"Voidable Contract - CORRECT ANSWER=> A contract which may be avoided or declared void by one or
more parties of that contract."
"Enforceable Contract - CORRECT ANSWER=> A contract which meets all of the legal requirements for a
contract and as such would be enforced by the courts. Contracts in certain situations may be enforceable on one party but not another, such as a contract with a minor (see Legal Capacity)."
"Real Property/Real Estate - CORRECT ANSWER=> Means real estate in its ordinary meaning, including
but not limited to timeshares, options, leaseholds, and other interests less than leaseholds of any form or type which may be lawfully kept or offered for sale, exchange, or lease. Real estate usually includes all improvements to the land, such as buildings, fences and fixtures. Title for real estate sold at auction passes at closing with delivery and acceptance of the deed."
"Personal Property - CORRECT ANSWER=> Means any tangible or intangible property, goods, services,
chattels, merchandise, commodities, or any item of value in any form or type, other than real property, which may be lawfully kept or offered for sale, exchange, or lease. Title for personal property sold at auction usually passes when the auctioneer accepts the final bid and announces the item sold (at the "fall of the hammer")."
"Chattels - CORRECT ANSWER=> Moveable personal property, such as furniture, automobiles and
livestock."
"Commodities - CORRECT ANSWER=> Interest in agricultural products, silver, gold and other products
customarily sold or traded in commercial markets, may or may not be chattels."
"... - CORRECT ANSWER=> The person or authorized agent or entity that consigns goods to an
auctioneer. The consignor is usually the seller."
"Consignee - CORRECT ANSWER=> The auctioneer to whom goods are entrusted by another (the
consignor) for sale at auction"
"spouse - CORRECT ANSWER=> A husband or wife."
"Encumbrance - CORRECT ANSWER=> Any binding adverse interest, claim, charge, or liability on an
item which in some manner burdens or diminishes the value of that item. The most common encumbrance is a lien."
"lein - CORRECT ANSWER=> An adverse claim or charge against an item when that item is being use as
collateral for a debt. The auction house operator has a responsibility to act in good faith to determine that any and all goods consigned and sold at his/her auction house are free and clear from any and all leins and/or any other encumbrances."
"Six Basic Requirements for All Contracts to be Valid and Enforceable - CORRECT ANSWER=> a.Legal
Capacity/Contractual Authority b.Legal Purpose c. Offer and Acceptance d. Consideration e.Reality of Consent f.Legal Form"
"Legal Capacity/Contractual Authority - CORRECT ANSWER=> All parties to a contract must be of legal
age (18), mentally competent, and/or not intoxicated. If a bidder lacks legal capacity (such as a minor) then the "sales contract" could be void able and unenforceable against that bidder. As the seller's agent the auctioneer must act in the seller's best interest and at her/his discretion decide whether to accept the bid. If acting on behalf of another individual, for a corporation, partnership, entity or an estate that person must be duly authorized."
"Legal Purpose - CORRECT ANSWER=> The purpose, consideration and goods involved in the contract
must be legal."
"Offer and Acceptance - CORRECT ANSWER=> In the auction listing contract the auctioneer offers to
sell the goods at auction and the seller accepts. During bidding the auctioneer "offers" the item or goods and solicits bids. The bids are a series of offers and counter offers. When the auctioneer declares the item sold the auctioneer thereby "accepts", as the seller's agent, the last bid."
"Consideration - CORRECT ANSWER=> Something of "good and valuable consideration" that is
exchanged. In the auction listing contract, this is usually a commission or a fee paid by the seller to the auctioneer."
"Reality of Consent - CORRECT ANSWER=> All parties must enter into the contract voluntarily and
without misrepresentation, fraud, duress, menace, undue influence, or mistake. All parties to a contract must have a mutual understanding of the contract contents."
- By court order."
"Basic components for a general purpose opening statement - CORRECT ANSWER=> 1. Obtain the
attention of the audience.
- Welcome the audience to the auction.
- Introduce yourself as a Kentucky licensed auctioneer and introduce your staff.
- Introduction of the sellers, if appropriate.
- Explain the reason for the auction, such as to settle an estate, seller retiring, etc.
- Describe what will be selling, in general terms, such as a fine group of antiques and collectibles, a well- maintained group of farm equipment, etc.
- Explain bidder registration.
- Explain in detail the complete terms and conditions, include how (cash, check, etc.) and when payment is to be made, warranty disclaimers (such as "as is" and "where is"), when does the item become the property and responsibility of the buyer, and what are the removal times and procedures.
- Explain appropriate bidding procedures, such as bidding increments, auctioneer reserving the right to bid, etc.
- Explain in detail sales tax. State the tax rate and explain how everything is subject to sales tax unless either the item or purchaser is exempt. These exemptions should be explained (see the Study Guide section on sales tax).
- Explain the basic auction order, such as which type of items sell first, second, third and last or that items will be sold in numerical order.
- Ask if anyone in the audience has any questions before the selling begins."
"Chant and Voice - CORRECT ANSWER=> Based on the smoothness and rhythm of your chant and the
quality of your voice. Your chant should be one that can be maintained throughout a long auction, and does not strain your voice unnecessarily but remains strong and distinctive. Use vocal variety for emphasis, breathe deeply, and relax your throat so that you can project your voice rather than shout."
"Description of Merchandise - CORRECT ANSWER=> You must give a description of the item. Identify
any special features and describe the item's condition."
"Control - CORRECT ANSWER=> Control represents your general management of the auction situation.
It includes your poise and self-confidence as well as your ability to keep the auction properly paced neither too fast nor too slow for the audience to follow. It also reflects your ability to keep track of the bidding and the bidders, the pace of the bidding, control of bidding increments and other general management tasks."
""Advertisement" means any written, oral, or electronic communication that: - CORRECT ANSWER=>
(a) Offers real or personal property or any combination thereof by or at auction; or (b) Promotes, solicits, induces, or offers to conduct an auction or to provide auction services;"
"Apprentice auctioneer - CORRECT ANSWER=> means any person who is employed or supervised,
directly or indirectly, by an auctioneer to deal or engage in any activity in subsection (6) of this section,
excluding the authority to enter into an auction listing contract or to independently maintain an auction escrow account;"
"Auction - CORRECT ANSWER=> means any method of sale, lease, or exchange of real property,
personal property, or any combinationthereof,bymeansofcompetitivelyincreasingordecreasingbids.Anysale, lease,orexchange of real property, personal property, or any combination thereof, advertised or presented in any way by or at auction, is an auction for the purposes of this chapter"
"Auction house - CORRECT ANSWER=> means any commercial establishment at which personal
property is regularly or customarily offered at auction, or at which personal property is customarily or regularly deposited and accepted, on consignment or otherwise, for sale at auction at a fixed location;"
""Auction house" does not mean: - CORRECT ANSWER=> 1. Those establishments which limit personal
property sold in regard to thoroughbred horses or other horses or any interests therein, including but not limited to horse shares and seasons;
- Tobacco and fixed-base livestock markets regulated by the United States Department of Agriculture; or
- Fixed-base motor vehicle markets regulated by the Kentucky Motor Vehicle Commission pursuant to KRS Chapter 190;"
""Auctioneer" or "principal auctioneer" - CORRECT ANSWER=> any person who offers, solicits,
negotiates, or attempts to offer, solicit, or negotiate an auction listing contract, sale, lease, or exchange of real property, personal property, or any other item of value, or any combination thereof, which may lawfully be kept or offered for sale, lease, or exchange, or any combination thereof, by or at auction, or who offers the same at auction and who is allowed to supervise and accepts the responsibility of sponsoring one (1) or more apprentice auctioneers;"
""Board" - CORRECT ANSWER=> the Board of Auctioneers;"
""Limited livestock auctioneer" - CORRECT ANSWER=> means any auctioneer whose professional
activities are limited to the calling of bids at the sale of livestock at fixed-based livestock yards operating under the control and guidance of the United States Department of Agriculture;"
""Personal property - CORRECT ANSWER=> means any tangible or intangible property, goods, services,
chattels, merchandise, commodities, or any item of value in any form or type, other than real property, which may be lawfully kept or offered for sale, exchange, or lease;"
""Person" - CORRECT ANSWER=> any individual, association, partnership, corporation, limited liability
company, or other business entity, including any officer, director, or employee thereof;"
""Real property" - CORRECT ANSWER=> real estate in its ordinary meaning, including but not limited to
timeshares, options, leaseholds, and other interests less than leaseholds of any form or type which may be lawfully kept or offered for sale, exchange, or lease; and"
""Limited livestock auctioneer" - CORRECT ANSWER=> means any auctioneer whose professional
activities are limited to the calling of bids at the sale of livestock at fixed-based livestock yards operating under the control and guidance of the United States Department of Agriculture;"
""Personal property" - CORRECT ANSWER=> means any tangible or intangible property, goods,
services, chattels, merchandise, commodities, or any item of value in any form or type, other than real property, which may be lawfully kept or offered for sale, exchange, or lease;"
""Person" - CORRECT ANSWER=> means any individual, association, partnership, corporation, limited
liability company, or other business entity, including any officer, director, or employee thereof;"
""Real property" - CORRECT ANSWER=> means real estate in its ordinary meaning, including but not
limited to timeshares, options,leaseholds, and other interests less than leaseholds of any form or type which may be lawfully kept or offered for sale, exchange, or lease; and"
""Sealed bid auction" - CORRECT ANSWER=> means a sealed bidding procedure which incorporates or
allows for any competitive increasing or decreasing of bids a"
"Auctioneer's license required. - CORRECT ANSWER=> It is unlawful for any person to advertise or act
as an auctioneer or apprentice auctioneer within the Commonwealth, or advertise or act as an auctioneer or apprentice auctioneer of real or personal property located within the Commonwealth, without a license issued by the board."
"Auctioneer's license required. - CORRECT ANSWER=> It is unlawful for any person to advertise or act
as a limited livestock auctioneer within the Commonwealth without a license issued by the board."
"Auctioneer's license required. - CORRECT ANSWER=> It is unlawful for any person to advertise or act
as an auction house operator within the Commonwealth without a license issued by the board. (a) An auction house operator shall be a licensed auctioneer or apprentice auctioneer if he or she acts as an auctioneer or apprentice auctioneer. If licensed as an auctioneer, an auction house operator license shall not be required. (b) If an auction house operator conducts and operates more than one (1) auction house, a license shall be issued for each location, and the initial and renewal fees shall be applicable."
"Exceptions to KRS 330.030...required by... - CORRECT ANSWER=> An auction conducted by or under
the direction of any public authority or pursuant to any judicial order or decree, or to any sale required by law to be at auction;"
"Exceptions to KRS 330.030...property for - CORRECT ANSWER=> (b) An auction of any real or personal
property conducted exclusively by an individual who personally owns such real or personal property and who did not acquire such real or personal property for resale."
"Exceptions to KRS 330.030 - CORRECT ANSWER=> This paragraph is applicable only to individuals. It
does not apply to any other "person" as defined in KRS 330.020, nor does it apply to any officer, director, or employee thereof when engaged in any duties associated with those capacities."
"Exceptions to KRS 330.030...sale of - CORRECT ANSWER=> (c) Any person who calls bids at the sale of
livestock owned and offered at auction by 4-H Clubs or FFA Clubs or club members, or by any university operated by the Commonwealth of Kentucky;"
"Exceptions to KRS 330.030...behalf of... - CORRECT ANSWER=> (d) An auction conducted by or on
behalf of any political party, church, or charitable organization,corporation, or association if:"
"Exceptions to KRS 330.030...individual - CORRECT ANSWER=> 1. The individual conducting the sale
receives no compensation and does not, by advertising or otherwise, present himself or herself as a licensed auctioneer;"
"Exceptions to KRS 330.030...consign - CORRECT ANSWER=> 2. All real or personal property is donated
and not consigned; and 3. One hundred percent (100%) of the net proceeds of the auction are donated to the political"
"Exceptions to KRS 330.030...donation - CORRECT ANSWER=> 3. One hundred percent (100%) of the
net proceeds of the auction are donated to the political party, church, or charitable organization, corporation, or association; or"
