Free Nevada real estate practice exam

Answer key and explanations

Every answer, with the reasoning. Work through the ones you missed — that list is your study plan.

1. Question 1 — answer D

   Which of the following is a physical characteristic of land?

   Soil quality is a physical characteristic of land, as it refers to the composition and properties of the soil itself.

2. Question 2 — answer D

   A property owner fails to pay property taxes and the government seizes the property. What is the process called?

   Tax foreclosure is the process by which the government seizes a property due to non-payment of property taxes.

3. Question 3 — answer A

   What is the term for a type of covenant that restricts the use of a property and is typically found in a subdivision's governing documents?

   A CC&R, or Covenants, Conditions, and Restrictions, is a type of covenant that restricts the use of a property and is typically found in a subdivision's governing documents.

4. Question 4 — answer D

   Which of the following is an example of a physical characteristic of land?

   Topography is a physical characteristic of land, referring to the natural features and shape of the land.

5. Question 5 — answer D

   A property owner installs a fence that encroaches on a neighboring property. What is this an example of?

   An encroachment occurs when a property owner's improvement, such as a fence, extends onto a neighboring property without permission.

6. Question 6 — answer D

   A property owner installs a fence that encroaches onto the neighboring property. What is this an example of?

   An encroachment occurs when a property owner's improvement, such as a fence, extends onto neighboring property without permission.

7. Question 7 — answer D

   A property description that uses reference points such as 'beginning at the northwest corner of the property' is an example of what type of legal description?

   This type of description uses measurements and reference points to define the boundaries of a property, which is characteristic of a metes and bounds description.

8. Question 8 — answer D

   What is the effect of a lien on a property's title?

   A lien provides a creditor with a claim against the property, which can affect the property's marketability and value.

9. Question 9 — answer D

   A built-in oven in a home is considered what type of property?

   A built-in oven is a fixture because it is attached to the real property, making it a part of the home.

10. Question 10 — answer D

    What is the effect of an easement on a property's value?

    An easement can either increase or decrease a property's value, depending on the specific terms and circumstances of the easement.

11. Question 11 — answer D

    A city passes a zoning ordinance that prohibits the construction of new billboards within city limits. What type of governmental power is being exercised?

    The city is exercising its police power to regulate land use for the health, safety, and welfare of its citizens.

12. Question 12 — answer D

    What is the purpose of a title search?

    A title search is conducted to identify any encumbrances or title defects that may affect the buyer's ownership of the property.

13. Question 13 — answer D

    What is the purpose of recording a deed?

    Recording a deed provides constructive notice to potential buyers and protects the grantee's priority against later buyers.

14. Question 14 — answer D

    A title search reveals a defect in the chain of title. What is the purpose of title insurance in this situation?

    Title insurance protects the buyer against losses due to defects in title, including errors or omissions in the chain of title.

15. Question 15 — answer D

    A freehold estate is characterized by what feature?

    A freehold estate is defined as an estate where the owner has the right to possess the property for an indefinite period, unlike a leasehold estate which has a fixed term.

16. Question 16 — answer A

    Which of the following types of deeds conveys the greatest warranty of title?

    A general warranty deed conveys the greatest warranty of title, as it guarantees the grantor's title against all claims, whereas a special warranty deed only guarantees against claims arising during the grantor's ownership.

17. Question 17 — answer D

    A property owner sells their property to a buyer, but the deed is not recorded. What is the effect on the buyer's title?

    The deed is valid between the parties, but recording is necessary to protect the buyer's title against later purchasers.

18. Question 18 — answer C

    A bundle of rights includes the right to:

    A bundle of rights includes the right to use, sell, gift, and lease the property, among other rights.

19. Question 19 — answer A

    What is the purpose of a chain of title?

    A chain of title is a record of the sequence of owners of a property, which helps to establish the property's ownership history and ensure that the title is clear and marketable.

20. Question 20 — answer D

    What type of estate is created when a landlord leases a property to a tenant for a specific period of time?

    A leasehold estate is created when a landlord leases a property to a tenant for a specific period of time, giving the tenant the right to use and occupy the property.

21. Question 21 — answer D

    A broker is asked to perform a BPO, or Broker Price Opinion. What is the primary purpose of a BPO?

    A BPO is an estimate of the likely sales price of a property, typically performed by a broker for a client, such as a lender or potential buyer.

22. Question 22 — answer D

    What is the purpose of the sales comparison approach in appraising a property?

    The sales comparison approach estimates the value of a property by comparing it to similar properties that have recently sold, taking into account factors such as location, size, and amenities.

23. Question 23 — answer D

    A real estate agent is asked to perform a Broker Price Opinion (BPO) for a client. What is the primary purpose of a BPO?

    A BPO is used to estimate the market value of a property for a lender or investor, typically in a non-traditional lending or investment scenario.

24. Question 24 — answer D

    A Broker Price Opinion (BPO) is typically used for which purpose?

    A BPO is a quick, informal estimate of a property's value, often used by real estate agents or brokers to help price a property for sale or to provide a rough estimate of value for marketing purposes.

25. Question 25 — answer D

    Which approach to value considers the cost to acquire or construct a property, including land and improvements?

    The Cost Approach estimates a property's value by calculating the cost to acquire the land and construct the improvements, then adjusting for depreciation.

26. Question 26 — answer D

    A Broker Price Opinion (BPO) is typically prepared by a

    A BPO is an estimate of a property's value prepared by a real estate broker or sales agent, often for use in lending decisions or other transactions.

27. Question 27 — answer D

    Which approach to value considers the potential gross income of a property?

    The Income Approach estimates the value of a property based on its potential to generate income, such as rental income from an apartment building.

28. Question 28 — answer D

    What type of depreciation occurs when a property's design or features become outdated or less desirable?

    Functional depreciation refers to the loss in value due to a property's outdated design, poor layout, or lack of desirable features.

29. Question 29 — answer A

    A property appraiser is using the sales comparison approach to estimate the value of a property. What principle is being applied?

    The sales comparison approach is based on the principle of substitution, which states that a buyer will pay no more for a property than the cost of acquiring a similar property with the same utility.

30. Question 30 — answer D

    Which approach to value would be most appropriate for a unique, custom-built property?

    The cost approach to value is most appropriate for unique, custom-built properties, as it estimates the value of the property based on the cost to replicate or replace it.

31. Question 31 — answer D

    Functional depreciation refers to a loss in value due to

    Functional depreciation refers to a loss in value due to inadequate design or layout, such as a house with a poorly designed floor plan.

32. Question 32 — answer D

    A buyer makes an offer on a property with a contingency for financing. The seller responds with a counteroffer that changes the price. What is the effect of the seller's counteroffer on the buyer's original offer?

    A counteroffer terminates the original offer, and the buyer must decide whether to accept, reject, or make another counteroffer.

33. Question 33 — answer D

    An agent's failure to disclose their agency relationship to a buyer or seller can result in

    An agent's failure to disclose their agency relationship can result in termination of the agency relationship, loss of the agent's license, and a lawsuit for damages.

34. Question 34 — answer D

    What is the OLD CAR acronym used for in real estate agency?

    The OLD CAR acronym represents the fiduciary duties of obedience, loyalty, disclosure, accountability, and reasonableness that an agent owes to their principal.

35. Question 35 — answer D

    A buyer and seller enter into a contract with a contingency for inspection. If the buyer discovers a major defect during the inspection, what can they do?

    The buyer can terminate the contract and receive a refund of earnest money, request the seller to repair the defect, or waive the contingency and proceed with the transaction.

36. Question 36 — answer D

    A buyer hires a real estate agent to represent them in a transaction. What is the agent's fiduciary duty of obedience?

    The agent's fiduciary duty of obedience requires them to follow the lawful instructions of the buyer, as long as they are within the scope of the agency agreement.

37. Question 37 — answer D

    A buyer makes an offer on a property with a $10,000 earnest money deposit. The seller countered with a higher price. What happens to the original offer?

    A counteroffer terminates the original offer, requiring the buyer to accept, reject, or make another counteroffer.

38. Question 38 — answer D

    What fiduciary duty requires an agent to act in the best interests of their principal, even if it means sacrificing their own interests?

    The fiduciary duty of loyalty requires an agent to act in the best interests of their principal, even if it means sacrificing their own interests, and to avoid conflicts of interest.

39. Question 39 — answer D

    What type of agent is authorized to perform a specific task on behalf of the principal, such as purchasing a property?

    A special agent is authorized to perform a specific task on behalf of the principal, such as purchasing a property.

40. Question 40 — answer D

    A buyer and seller enter into a contract, but the buyer fails to perform. What is the seller's remedy in this situation?

    The seller may seek rescission to cancel the contract, specific performance to force the buyer to perform, or damages to compensate for the buyer's breach.

41. Question 41 — answer A

    What is the effect of a breach of contract by the buyer on the earnest money deposit?

    If the buyer breaches the contract, the buyer may forfeit the earnest money deposit to the seller, depending on the contract terms.

42. Question 42 — answer D

    A buyer's agent is working with a client to purchase a property. What type of agent is the buyer's agent in this scenario?

    A special agent is authorized to represent the client in a specific transaction or matter, such as purchasing a property.

43. Question 43 — answer D

    A buyer's agent has a duty of loyalty to their client. What does this mean in practice?

    The duty of loyalty requires an agent to act in the best interests of their client, and put their needs above all else, including the agent's own interests.

44. Question 44 — answer D

    A buyer's agent is working with a buyer to purchase a property. What is the agent's fiduciary duty of confidentiality?

    The agent's fiduciary duty of confidentiality requires them to keep all information about the buyer confidential, unless authorized to disclose it.

45. Question 45 — answer A

    A seller's agent breaches their fiduciary duty to the seller by failing to disclose a known defect in the property. What is the seller's remedy?

    If an agent breaches their fiduciary duty, the principal can sue the agent for damages.

46. Question 46 — answer D

    A seller breaches a contract to sell their property, and the buyer sues for specific performance. What is the likely outcome?

    Specific performance is a remedy that requires the breaching party to perform their obligations under the contract, in this case, to sell the property to the buyer.

47. Question 47 — answer D

    A buyer signs a contract to purchase a property, but later discovers a material defect. What remedy is available to the buyer if the seller refuses to repair or credit the defect?

    The buyer may seek various remedies, including specific performance, rescission, or damages, depending on the circumstances and the terms of the contract.

48. Question 48 — answer D

    A real estate agent is handling a transaction and is required to provide the buyer with certain disclosures. Which of the following is a disclosure that the agent is required to provide under RESPA?

    RESPA requires the agent to provide the buyer with a Good Faith Estimate of settlement costs, which includes an estimate of the costs associated with the transaction.

49. Question 49 — answer A

    A sales agent is working with a seller who wants to sell their property 'as-is'. The sales agent

    The sales agent must disclose all known defects in the property to potential buyers, regardless of whether the seller is selling 'as-is', to comply with the requirements for disclosure.

50. Question 50 — answer D

    A group of real estate agents agrees to fix their commission rates at a certain percentage. This practice may be a violation of

    Antitrust laws prohibit price-fixing and other anti-competitive practices. Agreeing to fix commission rates may be considered a violation of these laws.

51. Question 51 — answer D

    Which of the following is a requirement for a real estate agent's trust account?

    A real estate agent's trust account must be non-interest-bearing, as interest-bearing accounts can create a conflict of interest.

52. Question 52 — answer D

    A real estate agent is contacted by a potential client who is on the national Do-Not-Call registry. The agent has never done business with the client before. What should the agent do?

    The agent should add the client's number to their internal do-not-call list, as the client has opted out of receiving unsolicited calls.

53. Question 53 — answer D

    A real estate agent is handling client funds in a trust account. What is the agent's primary responsibility regarding these funds?

    When handling client funds in a trust account, the agent has a fiduciary duty to keep the funds separate from the agent's own money and use them only for the client's benefit.

54. Question 54 — answer A

    A real estate agent is helping a client find a home in a specific neighborhood. The client mentions that they don't want to live near people of a certain racial group. What should the agent do?

    The agent should inform the client that they cannot discriminate based on race, as it is a protected class under the Federal Fair Housing Act.

55. Question 55 — answer D

    A real estate agent is handling a transaction where the buyer is paying $500,000 for a property. The agent's broker requires the agent to deposit the buyer's earnest money into a trust account. Why is this required?

    Real estate agents are required to deposit client funds into a trust account to protect those funds from being commingled with the agent's personal funds and to ensure that the funds are used for their intended purpose.

56. Question 56 — answer D

    A real estate agent is handling a transaction and is required to deposit the buyer's earnest money into a trust account. What is the primary reason for this requirement?

    The primary reason for depositing earnest money into a trust account is to ensure that the buyer's funds are properly accounted for and protected until the transaction is complete.

57. Question 57 — answer D

    A real estate agent is handling a transaction and holds earnest money in a trust account. What is the agent's responsibility regarding the trust account?

    The agent is responsible for maintaining accurate records and accounting for all transactions in the trust account.

58. Question 58 — answer D

    A property is considered stigmatized if it has a history of:

    A stigmatized property is one that has a psychological or emotional impact on potential buyers, such as a history of a murder or other violent crime, which can affect the property's value or marketability.

59. Question 59 — answer A

    A seller of a single-family residence built in 1965 must provide which of the following disclosures to the buyer?

    The seller must provide both the Seller's Disclosure Notice and a lead-based paint disclosure for a pre-1978 property.

60. Question 60 — answer D

    A seller fails to disclose a material defect in the property's foundation. What is the buyer's recourse?

    A buyer can pursue a claim for damages if a seller fails to disclose a material defect, as this is a breach of the seller's disclosure obligations.

61. Question 61 — answer A

    What is the primary difference between a material defect and a stigmatized property?

    A material defect refers to a physical problem with the property, such as a structural issue or needed repair, while a stigmatized property has a psychological impact, such as a history of murder or other traumatic event, that may affect its desirability but not its physical condition.

62. Question 62 — answer D

    Radon is detected in a property during an inspection. What is the seller's responsibility regarding this environmental hazard?

    The seller must disclose the presence of radon to the buyer, as it is an environmental hazard that can affect the property's value and the buyer's health.

63. Question 63 — answer A

    A seller of a property built in 1950 must provide which federal disclosure to the buyer?

    The federal lead-based paint disclosure is required for properties built before 1978.

64. Question 64 — answer D

    A seller of a single-family home built before 1978 must provide a specific federal disclosure to the buyer regarding what potential hazard?

    The federal disclosure requirement specifically targets lead-based paint in homes built before 1978 to protect buyers from its health risks.

65. Question 65 — answer A

    A property is located in a flood zone, but the seller does not disclose this information to the buyer. What can the buyer do?

    The buyer can sue the seller for damages if the seller fails to disclose known information about the property, including flood zone information.

66. Question 66 — answer D

    Which of the following is NOT a type of environmental hazard that may be present in a residential property?

    While termites can cause significant damage to a residential property, they are not typically considered an environmental hazard in the same category as asbestos, radon, and mold, which can pose health risks to occupants.

67. Question 67 — answer D

    A buyer is obtaining a mortgage with a loan-to-value ratio of 82%. What is the likely result regarding private mortgage insurance?

    The buyer will be required to pay private mortgage insurance because the loan-to-value ratio exceeds 80%.

68. Question 68 — answer D

    What is the main difference between a conventional loan and an FHA loan?

    FHA loans are insured by the Federal Housing Administration, which provides a guarantee to the lender in case of default, while conventional loans are not insured by the government.

69. Question 69 — answer D

    A borrower is closing on a home purchase and is presented with a Closing Disclosure form. What is the primary purpose of this form?

    The Closing Disclosure form is required to summarize the final terms and costs of the loan, including the loan amount, interest rate, and closing costs, so the borrower can review and understand the loan terms before closing.

70. Question 70 — answer D

    A borrower obtains a conventional loan with a loan-to-value ratio of 85%. What is the likely consequence of this high LTV ratio?

    With a loan-to-value ratio above 80%, the borrower is likely to be required to pay private mortgage insurance to protect the lender against default.

71. Question 71 — answer D

    Which type of loan is guaranteed by the Department of Veterans Affairs and offers favorable terms to eligible veterans?

    A VA loan is guaranteed by the Department of Veterans Affairs and offers favorable terms to eligible veterans, including lower interest rates and lower or no down payment requirements.

72. Question 72 — answer D

    A borrower is purchasing a home with a 10% down payment. What type of insurance will they be required to pay?

    Since the borrower is putting down less than 20%, they will be required to pay private mortgage insurance (PMI).

73. Question 73 — answer D

    What is the purpose of Private Mortgage Insurance (PMI) in a home loan?

    PMI protects the lender against default when the loan-to-value ratio exceeds 80%, not the borrower.

74. Question 74 — answer D

    A lender charges 3 discount points on a $240,000 loan. One point equals 1% of the loan amount. What is the cost of the points?

    3 points = 3% of $240,000 = $7,200.

75. Question 75 — answer A

    Annual property taxes are $8,300. Using a 365-day year, the seller is responsible for 109 days. What is the seller's prorated share?

    Daily tax = $8,300 ÷ 365 = $22.74. Seller's share = $22.74 × 109 = $2,478.63.

76. Question 76 — answer D

    A home sells for $180,000 with a 5% commission and no other closing costs. What does the seller net?

    Commission = $180,000 × 5% = $9,000. Net = $180,000 − $9,000 = $171,000.

77. Question 77 — answer D

    A lender charges 1 discount point on a $290,000 loan. One point equals 1% of the loan amount. What is the cost of the points?

    1 point = 1% of $290,000 = $2,900.

78. Question 78 — answer D

    A commercial property has a net operating income of $52,000 and the market cap rate is 8%. Using the income approach, what is its estimated value?

    Value = NOI ÷ cap rate = $52,000 ÷ 8% = $650,000.

79. Question 79 — answer A

    A home sells for $350,000 with a 7% commission and no other closing costs. What does the seller net?

    Commission = $350,000 × 7% = $24,500. Net = $350,000 − $24,500 = $325,500.

80. Question 80 — answer D

    A tenant paid $2,400 rent for the full month. The sale closes on day 16 of a 30-day month. How much unearned rent must the seller credit the buyer at closing?

    Daily rent = $2,400 ÷ 30 = $80.00. The buyer owns the property for the 14 remaining days, so the credit = $80.00 × 14 = $1,120.00.

81. Question 81 — answer D

    The Nevada Real Estate Commission has the power to impose which of the following sanctions on a licensee found guilty of misconduct?

    The Nevada Real Estate Commission has the authority to impose various sanctions, including suspension or revocation of a license and fines, on a licensee found guilty of misconduct.

82. Question 82 — answer A

    A Nevada real estate salesperson wishes to change their broker association. What must they do?

    Nevada licensees must give the Division timely notice of certain events, including a change of broker association.

83. Question 83 — answer D

    A Nevada licensee represents a buyer in a transaction and wants to also represent the seller. What must the licensee obtain from both parties?

    The licensee must obtain a CONSENT TO ACT from both parties to represent more than one party in the transaction.

84. Question 84 — answer A

    A Nevada real estate salesperson must provide which document to the client at the earliest reasonable opportunity to explain the duties owed by the licensee?

    The 'Duties Owed by a Nevada Licensee' is the mandatory agency-relationship disclosure in Nevada.

85. Question 85 — answer D

    A Nevada real estate salesperson is working with a buyer who has already received the 'DUTIES OWED BY A NEVADA LICENSEE' disclosure. What is the salesperson's responsibility regarding this disclosure?

    If a buyer has already received the 'DUTIES OWED BY A NEVADA LICENSEE' disclosure, the salesperson is not required to provide it again, but should confirm that the buyer has already received it.

86. Question 86 — answer D

    What is the purpose of the confirmation of the agency relationship in a Nevada real estate transaction?

    The confirmation of the agency relationship is used to confirm the client's understanding of the agency relationship.

87. Question 87 — answer D

    A Nevada licensee represents a seller in a transaction. The buyer wants to negotiate directly with the seller. What is required?

    The seller must provide written authorization to the licensee to allow direct negotiation with the buyer.

88. Question 88 — answer D

    When must a Nevada real estate salesperson confirm the agency relationship with a client or customer?

    A Nevada real estate salesperson should confirm the agency relationship with a client or customer before preparing an offer to purchase, as this is a critical step in establishing the scope of the agency relationship.

89. Question 89 — answer A

    A Nevada salesperson is working with a buyer who wants to purchase a property. What must the salesperson do to confirm the agency relationship with the buyer?

    The 'DUTIES OWED BY A NEVADA LICENSEE' disclosure form is used to confirm the agency relationship and inform the client of the duties owed by the licensee.

90. Question 90 — answer A

    A Nevada licensee is working with a buyer and a seller in the same transaction. Can the licensee authorize the buyer to negotiate directly with the seller?

    In Nevada, a licensee can authorize the buyer to negotiate directly with the seller, but only with the seller's consent, which must be obtained in writing.

91. Question 91 — answer D

    A Nevada real estate salesperson receives a client's earnest money deposit. What must the salesperson do with these funds?

    Client monies, such as earnest money deposits, must be delivered to the broker for deposit into the broker's trust account to avoid commingling and conversion.

92. Question 92 — answer D

    A Nevada real estate salesperson receives a payment from a client for services rendered. What must the salesperson do with the payment?

    The salesperson must give the payment to the broker, as all compensation flows through the broker.

93. Question 93 — answer A

    What type of opinion requires a license to provide in Nevada, but does not require a full appraisal?

    A broker price opinion requires a license to provide in Nevada, but does not require a full appraisal.

94. Question 94 — answer A

    A Nevada real estate salesperson is preparing a broker price opinion (BPO) for a client. What is the primary purpose of a BPO?

    The primary purpose of a BPO is to determine the market value of a property, often for use in lending decisions.

95. Question 95 — answer D

    What must a Nevada real estate salesperson do with client monies, such as earnest money deposits, received in the course of a transaction?

    Nevada law requires that client monies be handled through the broker's trust account to prevent commingling and conversion.

96. Question 96 — answer D

    A Nevada real estate salesperson is asked to prepare a broker price opinion (BPO) for a client. What is the primary purpose of a BPO?

    A BPO is typically used to estimate a property's value for a lender or other third-party purposes.

97. Question 97 — answer D

    A Nevada real estate salesperson is subject to a disciplinary action for converting client funds. What may be the source of reimbursement for the client's loss?

    The Real Estate Education, Research and Recovery Fund may reimburse a client for losses due to a licensee's fraud or misrepresentation, including conversion of client funds.

98. Question 98 — answer D

    What must a Nevada real estate salesperson do when creating a broker price opinion (BPO) for a client?

    In Nevada, BPOs must be supervised by the broker to ensure accuracy and compliance with regulations.

99. Question 99 — answer D

    In Nevada, a real estate salesperson's compensation for services rendered must be paid through which of the following?

    Nevada salespersons are paid through their broker, as the broker is responsible for supervision and oversight.

100. Question 100 — answer D

     Which of the following is a requirement for a Nevada real estate salesperson's advertisement?

     Nevada requires that advertisements identify the broker, as compensation flows through the salesperson's broker.

101. Question 101 — answer D

     A Nevada real estate licensee is acting as a principal in a transaction, what must the licensee disclose to the other parties?

     When a Nevada real estate licensee is acting as a principal in a transaction, the licensee must disclose their role as a principal to the other parties.

102. Question 102 — answer D

     What is the consequence of a seller's failure to disclose known defects or conditions of the residential property in Nevada?

     The consequence of a seller's failure to disclose known defects or conditions of the residential property in Nevada can result in the buyer terminating the contract, the seller being liable for damages, or the transaction being voidable.

103. Question 103 — answer D

     In Nevada, which of the following is a required disclosure for sellers of residential property?

     Sellers of residential property in Nevada are required to disclose known defects or conditions, including environmental hazards, lawsuits, and other material facts.

104. Question 104 — answer D

     What must be provided to a buyer in a common-interest community in Nevada?

     Nevada requires the resale package/certificate to be provided to a buyer in a common-interest community, which includes information about the community's governing documents and fees.

105. Question 105 — answer D

     A buyer of a condominium unit in Nevada should receive which of the following from the seller or the common-interest community?

     The resale package/certificate provides important information about the common-interest community, including fees, assessments, and governance documents.

106. Question 106 — answer D

     What type of disclosure is required for environmental hazards in Nevada?

     Nevada requires disclosure of environmental hazards, such as lead-based paint or methamphetamine contamination, through a specific environmental disclosure form.

107. Question 107 — answer A

     What type of disclosure is required for a property that was previously used as a methamphetamine lab?

     In Nevada, sellers of properties that were previously used for certain illegal activities, such as methamphetamine labs, must disclose this information to buyers as part of an environmental disclosure.

108. Question 108 — answer A

     What must a Nevada real estate licensee do when representing more than one party in a transaction?

     When representing more than one party in a transaction, a Nevada real estate licensee must obtain written consent from all parties, which is known as a Consent to Act.

109. Question 109 — answer D

     In Nevada, who is responsible for preparing the settlement statement in a real estate transaction?

     The title company is typically responsible for preparing the settlement statement, which outlines the terms of the transaction, including the purchase price, closing costs, and any credits or debits.

110. Question 110 — answer D

     A Nevada real estate transaction involves a cash sale with no financing contingency. What is the typical timeline for the buyer to deliver the earnest money deposit?

     In Nevada, the buyer typically has 3 days to deliver the earnest money deposit after the contract is executed.

111. Question 111 — answer D

     A Nevada real estate salesperson charges an advance fee to a client. What is the salesperson required to do?

     In Nevada, a salesperson who charges an advance fee must provide a written disclosure to the client, as advance fees are regulated in the state.

112. Question 112 — answer D

     A buyer and seller have signed a purchase agreement, and the buyer has deposited earnest money into the broker's trust account. What is the next step regarding the earnest money?

     The earnest money should be held in the broker's trust account until the transaction closes or is terminated.

113. Question 113 — answer D

     A Nevada broker enters into a buyer representation agreement with a client. What is the primary purpose of this document?

     The buyer representation agreement outlines the terms of the relationship between the broker and the buyer, including the services to be provided and the compensation to be paid.

114. Question 114 — answer D

     A Nevada salesperson represents a buyer in a transaction. What is the primary purpose of the buyer representation agreement?

     The buyer representation agreement outlines the terms of the brokerage relationship, including the scope of services, duration, and compensation.

115. Question 115 — answer D

     In Nevada, how long does a buyer typically have to review and approve the title report and inspection reports before closing?

     While the timeframe can be negotiated, 10 days is a common period for the buyer to review these reports.

116. Question 116 — answer D

     A Nevada real estate salesperson is preparing a settlement statement for a residential transaction. What information must be included on this statement?

     A settlement statement in Nevada must include the sales price of the property, the buyer's financing terms, the seller's net proceeds, and other relevant details to ensure an accurate accounting of the transaction.

117. Question 117 — answer D

     A Nevada real estate salesperson prepares a residential purchase agreement. What is the primary purpose of including a financing contingency in this contract?

     The primary purpose of a financing contingency is to provide the buyer with an opportunity to secure financing for the purchase, allowing them to back out of the contract if they are unable to obtain financing.

118. Question 118 — answer D

     A Nevada real estate salesperson is required to maintain records of all conversations and negotiations with clients and other parties in a transaction. What is the primary purpose of this requirement?

     The primary purpose of maintaining records of all conversations and negotiations with clients and other parties in a transaction is to provide evidence of the salesperson's activities in case of a dispute.

119. Question 119 — answer A

     What is a key factor in determining the value of a water right in Nevada?

     The amount of water allocated to a water right is a key factor in determining its value, as it directly affects the water's usefulness and scarcity.

120. Question 120 — answer D

     What is a Nevada salesperson's responsibility regarding a property's water rights?

     The salesperson must disclose the existence of water rights to the buyer.

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