1.2 Kentucky License Requirements

Becoming a Kentucky Sales Associate

Kentucky calls the entry-level license a sales associate license (commonly "salesperson"). The path has four pillars: eligibility, education, examination, and background screening.

1. Eligibility Requirements

• Be at least 18 years of age
• Hold a high school diploma or GED
• Be of good moral character (felonies involving fraud or dishonesty can disqualify)
• Be a U.S. citizen or lawfully present

2. Pre-License Education — 96 Hours

Applicants must complete 96 classroom/clock hours from a KREC-approved school and pass the school's final exam before sitting for the state exam. Ninety-six hours is well above the 60-75 hours most states require, so do not assume a number from another state.

3. The Licensing Examination

Kentucky contracts with PSI to deliver the exam. The structure is two separately scored portions:

Do the math the exam expects: 75% of the 80-question national portion is 60 correct; 75% of the 50-question state portion is 38 correct (37.5 rounded up). You must clear both bars. Passing one and failing the other means you re-test only the failed portion, but only within KREC's eligibility window.

In addition to the scored items, PSI seeds a handful of unscored pretest questions into the exam to evaluate them for future use. You cannot tell which questions are unscored, so answer every item as if it counts. The exam is computer-based and you receive a pass/fail result for each portion at the test center, along with a diagnostic breakdown by topic on a fail so you know where to focus before retesting.

Scheduling and retakes: After KREC approves your eligibility, you schedule through PSI online or by phone and bring valid government photo identification. If you fail a portion, you re-register and pay the fee again to retake only the failed portion, provided you do so within KREC's eligibility window. Let the window lapse and you may have to re-establish eligibility from the start.

Trap alert: The scored structure is 80 national + 50 state = 130 total, 75% on each portion. You get 2.5 hours for the national portion and 1.5 hours for the state portion (4 hours total). Remember the per-portion math: 60 of 80 national and 38 of 50 state.

Background Check and Character Review

All applicants submit fingerprints through KREC's approved vendor for an FBI and Kentucky state criminal-history check. KREC reviews results for suitability rather than applying an automatic ban. Factors that draw scrutiny:

• Felonies involving fraud, theft, forgery, or dishonesty (most serious for real estate)
• Crimes directly related to handling money or property
• Recent or repeated criminal activity

An applicant with a disqualifying history may request a determination from KREC before paying for education. Disclosure is mandatory; failing to disclose a conviction is itself grounds for denial.

Becoming a Kentucky Broker

The principal broker is the licensee legally responsible for a brokerage, its escrow account, and the supervision of affiliated associates. Requirements climb sharply above the associate level.

A principal broker must maintain a definite place of business in Kentucky and supervise every associate sponsored under the firm.

Application and Activation Workflow

1. Complete 96 hours of pre-license education and pass the school final.
2. Apply through the KREC online portal and pay the application fee.
3. Submit fingerprints for the background check.
4. Receive exam eligibility from KREC/PSI.
5. Schedule and pass the PSI exam (75% on each portion).
6. Obtain Errors & Omissions (E&O) insurance (required for active status).
7. Affiliate with a sponsoring principal broker — a sales associate cannot practice unaffiliated.
8. The principal broker activates the license; only then may the associate work for compensation.

The sponsoring-broker relationship. Under Kentucky law a sales associate may work only for and be paid only by their sponsoring principal broker. A buyer or seller cannot pay an associate directly; commissions flow from the transaction to the broker, who then compensates the associate per their agreement. If an associate changes firms, the license is transferred to the new broker through KREC, and the associate cannot continue working in the gap between leaving the old broker and being activated by the new one.

Associate broker vs. principal broker. Kentucky also recognizes an associate broker — someone who has earned a broker license but still works under a principal broker rather than running their own firm. The principal broker is the one legally accountable for the escrow account, advertising compliance, and supervision; an associate broker has the broker credential but not that firm-level responsibility. The exam likes to contrast these roles, so keep them straight: a principal broker supervises; an associate broker is supervised despite holding a broker license.

Exam tip: A common state-portion question asks what makes a license active. The answer is affiliation with a principal broker plus current E&O coverage — holding the license alone is not enough. Another favorite asks who may pay a sales associate: only the sponsoring principal broker, never the customer directly.