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Nevada Real Estate 160 Exam Prep
Questions
Which option best describes an exclusive-right-to sell listing? - ✔ ✔ The listing agent will be paid the commission no matter who procures the buyer.
Explanation: When a principal signs an exclusive-right-sell listing with a broker, the principal will pay the broker a commission even if the principal or another agent procures the buyer.
Sandy, a 16 year old, enters into a contract to buy a condo from Sue, an adult. Which statement is TRUE? - ✔ ✔ Sandy can void the entire contract any time before the transaction is closed.
Explanation: It is true that Sandy, a 16-year old minor, can void the entire contract any time before the transaction is closed. Minors are permitted to enter into a contract; however, the law provides certain protections to minors that are not granted to adults.
A listing agreement between a principal and a broker is a(n): - ✔ ✔ express contract
Explanation: A listing agreement is an express contract between the principal and broker that names the broker as fiduciary representative (agent) of the principal.
Which statement regarding a Veteran's Affairs (VA) mortgage is FALSE?
- ✔ ✔ It does not have minimum property requirements.
Explanation: A VA mortgage does have minimum property requirements in order to ensure the veteran-buyer the property is safe, sanitary and sound.
A Department of Veteran Affairs (VA) mortgage is: - ✔ ✔ Guaranteed.
Explanation: The VA guarantees mortgage loans for eligible veterans.
Garrett sold his primary residence for $595,00, which was a capitol gain of $315,000. How much may Garrett exclude on his income tax as a single individual? - ✔ ✔ $250,
Explanation: Garrett may exclude $250,000 of the capital gain on the sale of his primary residence on his income tax. The most a single individual may exclude on the capital gain of a sale of a primary residence is $250,000.
A parcel of land is 140 feet by 75 feet and the seller is asking $130 per square foot. What is the asking price? - ✔ ✔ $1,365,
Explanation: To calculate the asking price, multiply the lot dimensions to derive the total square footage: 140 feet × 75 feet = 10,500. Finally,
Explanation: Title is said to pass when a deed is delivered and accepted
The Federal Housing Administration (FHA) Section 8 program helps low and moderate income people by - ✔ ✔ paying part of their rent
Explanation: FHA's Section 8 program helps low- and moderate-income people by paying part of their rent.
What percentage of a buildings replacement value must be covered by fire insurance according to typical coinsurance clauses? - ✔ ✔ 80 percent
Explanation: Insurance policies usually carry coinsurance clauses that require coverage up to 80 percent of the building's replacement value.
The metes and bounds, and monuments of a property can be found in what clause in a deed? - ✔ ✔ Description
Explanation: The metes and bounds and monuments of a property provides a legal description of real estate that will be accepted in a court of law and can be found in the Description clause of a deed.
The gross income of an office building is $122,000. Operating expenses are $70,000. The capitalization rate is 10%. What is the value estimate?
Explanation: To calculate the value, determine the net income: $122,000 - $70,000 = 52,000. Finally, divide the net income by the capitalization rate: 52,000 / .10 = $520,000 value estimate.
Zoning or deed restrictions on physical development fall under which category of forces affecting real estate value? - ✔ ✔ Physical and environmental
Explanation: Physical and environmental forces include dimensions, shape, area, topography, drainage and soil conditions. They also include utilities, streets, curbs, gutters, sidewalks, landscaping and zoning or deed restrictions on physical development.
Edwin sold Barry a parcel of land; title has passed, but to date Barry has not paid the purchase price in full as originally agreed. If Edwin does not receive payment, which could he use to enforce the payment? - ✔ ✔ Vendor's lien
Explanation: A vendor's lien is a seller's claim in cases where the seller does not receive the full agreed-on purchase amount.
A property manager is responsible for maintaining the value of a property while - ✔ ✔ maximizing income
Explanation: A property manager is responsible for maintaining the value of the property while maximizing income.
Curb appeal refers to - ✔ ✔ the exterior appearance of a property.
Samantha, a licensed agent, who is associated with the cooperating firm of Tommy Lang, effects the sale on April 1. - ✔ ✔ Tommy.
Explanation: Samantha, like any salesperson, may only accept a commission from her supervising broker.
Maria, a licensed broker, does not think the seller will seriously consider an offer she received for 15% less than the listing price. Maria should - ✔ ✔ submit the offer to the seller
Explanation: All offers should be immediately submitted to the principal.
In order to successfully sue a broker for misrepresentation, a buyer must be able to prove that - ✔ ✔ the buyer was damaged from relying on the truth of the statement.
Explanation: To sue a real estate broker for misrepresentation, the buyer must provide proof that he or she was damaged as a result of relying on the misinformation.
According to HUD standards, which of the following would be an acceptable neighborhood advertisement? - ✔ ✔ "Senior Housing"
Explanation: Words indicative of race, religion, color, familial status, sex, handicap, or national origin are not acceptable, nor are words that could be considered discriminatory, such as "exclusive," "restrictive," "traditional," or "board-approved." Housing intended to serve those 55 and older is acceptable according to HUD standards.
- How much time is given to pass the NV salesperson exam? - ✔ ✔ 4 hours - 240 minutes or 4 hours total
- How many continuing education hours are required? - ✔ ✔ 24 hours - State of NV requires salesperson to complete 24-hours of continuing education every 2 years in each 4 year licensing term
- In order to obtain a NV real estate license you must have a HS diploma? - ✔ ✔ True - you must have a HS diploma or equivalent
- How often must you renew your sales agent license? - ✔ ✔ Every 2 years - NV salespeople and brokers must renew their license one year after their initial licensure. After the first renewal cycle realtors must renew every two years by the original date of issuance.
- How old do you have to be in NV to obtain a real estate license? - ✔ ✔ 18 years old
- Which of these is a fixture? Refrigerator, Microwave, Free Standing Work Bench, or Window Blinds - ✔ ✔ Window blinds - fixtures are articles of personal property that are attached (screwed in, etc.) and become real property. When window blinds are screwed into the home. They become part of the improvement that is part of the real property.
- A contract can become voidable if one of the parties was being victimized because ____. - ✔ ✔ all of these - They were a minor, misled, or did not agree voluntarily - all 3 provide legal cause for the contract to be voided.
- Which of the following is not a requirement for a deed to be valid? - ✔ ✔ recording in a county courthouse - although recording lets others know of the deed's existence and it is probably a great idea, it is not required for a deed to be a valid document. Many lenders require that it be recorded, but recording is not required to make the deed valid.
- An express contract is ____. - ✔ ✔ either written or oral - an express contract is created in words, either written or oral. The other answer choices are not true.
A good example of an implied contract is _____. - ✔ ✔ after a written lease expires, rent is paid and the check cashed. - the owner shows through his actions that the contract is still valid, even though now it's simply implied.
- Which of the following is not true regarding a contract of sale? - ✔ ✔ It must bo notarized - signatures on a contract of sale do not have to notarized.
- Deed restrictions and easements on a property are considered_____ when written into the deed. - ✔ ✔ exceptions and reservations - these are restrictions or limitations explicitly described in the deed.
- In a real estate transaction, the _____ is the current owner of the property and is conveying his or her property to someone else. - ✔ ✔ grantor - the grantor grants a piece of property to the grantee to complete a transfer of real estate.
- Substituting a new obligation for an existing one with the intent to cancel the later is called_______? - ✔ ✔ novation - novation is when a new contract is used to replace the initial contract.
- Why are net listings generally frowned upon in the real estate industry? - ✔ ✔ they can lead to brokers taking advantage of property owners - in a net listing, the seller names a price they want for their property, and any amount above that sale goes to the broker. Net listings are frowned upon in many states (illegal in others) because they can lead to brokers not acting in the best interest of the seller. For example, if a seller wanted $150,000 for their home, and there was an offer for $152,000, in a net listing the broker may be tempted to not accept the offer because their commission on the sale would be relatively small.
- A mortgage broker's primary role is to _______. - ✔ ✔ bring borrowers and lenders together - the mortgage broker is an intermediary and does not create, sell or underwrite loans (which is the job of the lender)
- Mortgage lenders make their money by ______. - ✔ ✔ All of these - Application fees, loan origination fees and annual loan servicing fees - all three of these are common processing and maintenance fees lenders charge.
- Gradual liquidation through periodic payments of principal interest is called ___. - ✔ ✔ an amortized loan - Amortized loans are the norm in most residential real estate and gradually lower the owed amount through monthly payments to principal and interest.
- How does an ARM mortgage differ from a fixed rate mortgage? - ✔ ✔ ARM stands for adjustable rate mortgage, whose rate may vary with changes in interest rates. - Fixed rate mortgages are locked in at the same rate for the life of the loan, while ARM mortgages have a rate that can "float" or "ride" market rates.
- A foreclosure sale is ______. - ✔ ✔ an auction sale to the highest bidder - A foreclosure sale occurs when the owner cannot sell the property via short sale. If it doesn't sell in a foreclosure auction, it becomes property of the lending institution.
- When the agent and the principal agree that the agent will represent the principal, it is called _______. - ✔ ✔ express agency - with express agency, both the agent and principal must come to a verbal or written agreement about representation.
- When the agent and the principal have not officially agreed that the agent will represent the buyer, but their actions imply this, it is called ______. - ✔ ✔ Implied agency - Legally, if both parties have taken action toward a sale, then the agent and principal have entered into an implied agency.
- When a principal doesn't stop an agent from going beyond his/her normal line of duties, this is called ________. - ✔ ✔ agency by estoppel - agency by estoppel is created when agents perform duties
outside of what they would normally do, though related to what their initial task was.
- When an agreement is formed between an agent and a principal after a sale is confirmed, this is called ________. - ✔ ✔ agency by ratification - if an agent sells a piece of property w/o any contract or permission from the principal, the principal may create an agency by ratification by approving the sale anyway.
- When an agent is invested in a project outside his or her agent status, this is called ________. - ✔ ✔ agency coupled with an interest. - agency coupled with an interest is when an agent invests time or money in a property and also agrees that before doing so, he or she will be the agent ( but one is not conditional on the other).
- When a broker is given the right to collect the commission , no matter who sells a property, this is a(n) _______. - ✔ ✔ exclusive right to sell listing - an exclusive right to sell listing is very straightforward - the broker is given the exclusive right to sell a property and will collect the commission if someone else sells it.
- When a homeowner reserves the right to sell his or her own property, but offers the exclusive right for only one agent, this is a(n) _______. - ✔ ✔ exclusive agency listing - an exclusive agency listing is almost identical to an exclusive right to sell listing, except the homeowner can sell the property themselves and not have to pay a fee to the agent.
- When a property owner wishes to use multiple agents to sell a property, this is a(n) _______. - ✔ ✔ open listing - an open listing is also called a non-exclusive or general listing, and is not exclusive.
property. - ✔ ✔ escheat - when a property owner dies w/o a will or survivors, the state assumes title through escheat.
- Upon sale, the instrument that conveys ownership rights to personal property is a ______ and that dealing with real property is a _________. - ✔ ✔ bill of sale, deed - a bill of sale transfers title to personal property and a deed transfers title to real property.
- As is the case with most homes, what is the term for pledging something as security for a loan w/o necessity of giving it up? - ✔ ✔ hypothecation - hypothecation allows a property owner to use the property as security for the loan while still being able to occupy it.
- What is a right to use another's land called? - ✔ ✔ easement - easements such as party walls connecting adjoining dwellings allow others the right to use another's land.
- _________ are annual crops planted on real property but are considered personal property. - ✔ ✔ emblements - usually for agricultural easements, emblements are crops that are considered personal property while still being attached to the land.
- What is the most desirable deed that provides the greatest amount of protection grantee? - ✔ ✔ warranty deed - when a warranty deed is given, the grantee is protected from any person who claims it and any liens against the property by the grantor.
- An estate that is of indefinite duration is called a ________ estate. - ✔ ✔ freehold - the only type of estate without constraint on duration is a freehold estate.
- Most appraisers work ________. - ✔ ✔ independently, on a fee- for service basis - to avoid conflicts of interest, most appraisers work independently on a fee-for-service basis.
- The property being appraised is called_______. - ✔ ✔ the subject property - the subject property refers to the property being appraised.
- An appraisal will bot help you with ________. - ✔ ✔ Fair market interest - an appraisal is usually performed on a price of property to help with buying, selling, eminent domain, estate valuation, exchanges do ownership, mortgage approval, property and other taxes, and various court proceedings.
- Location is _________. - ✔ ✔ important in determining property value - location is one of many factors in determining property value and may be the most important.
- The location of a piece of property _______. - ✔ ✔ A. can both increase and decrease its value - the location of a piece of property can both increase and decrease its perceived value as the many factors surrounding that location fluctuate, including: school districts, crime rates, traffic, access to employment, and many more.
- Heavy vehicle traffic will _______. - ✔ ✔ affect the value of the property based on whether it is residential or commercial - vehicle traffic can affect the value of property, as generally less traffic is desired around residential property, while more of certain types of traffic is desired around commercial property. Generally, businesses prefer high traffic if it is the type to bring additional customers to them, types of traffic that would not be appreciated by businesses would
Explanation: The law requires a broker maintain a separate non- interest-bearing trust bank account to receive client funds tendered to the broker in trust but does not require interest earned be distributed in a particular way. The broker is an agent and should carry out the client's instructions completely, so long as they are legal.
If a buyers earnest money check is returned for insufficient funds after being deposited into the brokers trust account, the broker should: - ✔ ✔ Tell the seller or cooperating broker that the check bounced.
Explanation: Although the broker's client may be able to replace the funds quickly, the broker should inform the cooperating broker/seller immediately. An unfunded bank check is material fact (and possibly fraud). Licensees should avoid the appearance of impropriety, protect the public and disclose material facts concerning a transaction.
A deed is valid on when it is: - ✔ ✔ delivered and accepted
Explanation: Actual delivery of the deed by the grantor and acceptance by the grantee must take place before a transfer of title by deed can take place.
Malcom just received his salespersons license and has joined a firm, he will most likely be hired for tax purposes as a(n) - ✔ ✔ independent contractor
Explanation: A survey by the National Association of REALTORS® found that nine out of ten real estate firms treated their sales associates as independent contractors, which allows them to avoid the bookkeeping of withholding taxes, Social Security payments, unemployment insurance, etc.
Real Estate license laws are designed to: - ✔ ✔ protect the public and maintain high standards.
Explanation: Real estate license laws were instituted to protect the public from incompetent or dishonest brokers and salespersons and to maintain high standards in the real estate industry.
When a broker is retained by the buyer, the broker owes the prospective seller: - ✔ ✔ honest, straightforward treatment. was correct.
Explanation: When retained by the buyer, the broker owes a prospective seller honest, straightforward treatment.
A seller's broker must disclose to a prospective buyer that the - ✔ ✔ heating system doesn't work.
Explanation: The seller's broker must disclose latent defects but is not responsible for disclosing facts that might stigmatize the property or that the person who lives in the home has AIDS.
