Nevada Real Estate Practice Exam.
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Answer: A
Joint tenancy relies on the four unities of time, title, interest, and possession among co-owners; when one joint tenant conveys her interest to an outsider, that unity is broken, converting the buyer into a tenant in common. The sale itself is valid — joint tenancy interests are freely transferable during life — and survivorship rights only apply to interests that remain unbroken at death, not to a lifetime sale.

Answer: D
An easement appurtenant is tied to the benefited parcel itself, so it transfers automatically to future owners of the ranch whenever the property is sold, rather than existing as a personal right of one individual. A license would be revocable at the landowner's discretion and would not guarantee decades of continued access, an easement in gross benefits a person rather than a parcel, and an encroachment describes an unauthorized intrusion, not a recorded, permitted right of way.

Answer: A
An encroachment is a physical intrusion of an improvement — here, paving — onto an adjoining owner's land without permission or legal right, which is exactly what the walkthrough uncovered. It is not an easement, since no right of use was ever granted; it is not a deed restriction issue, since that involves violating recorded covenants rather than a boundary intrusion; and it cannot be a matured adverse possession claim without a further showing of open, continuous, hostile use for the full statutory period.

Answer: A
Zoning ordinances set the minimum public-law floor for permitted uses, but private covenants such as CC&Rs can impose additional, stricter limits, and a property owner must comply with both sets of rules simultaneously. Satisfying the zoning code alone does not override a valid recorded restriction, and recording CC&Rs never suspends a municipality's zoning authority, so the homeowner cannot rely on either document alone to justify the bakery.

Answer: C
Dual agency creates an inherent conflict because the agent owes full fiduciary loyalty to two parties with opposing interests, so both the buyer and seller must be informed of the arrangement and give consent, generally in writing, before the agent can proceed. An agent cannot lawfully favor one party once representing both, silence or one-sided consent is not sufficient, and the requirement applies to both parties precisely because both have interests at stake in the transaction.

Answer: C
An agency relationship created by a listing agreement ends when its stated term expires, and with it ends the broker's basis for claiming a commission on a later, independent sale, unless the agreement contains a valid holdover or protection clause covering that specific buyer. Listings do not renew automatically, a blanket one-year commission entitlement regardless of holdover terms is not how listing agreements work, and the buyer's identity as a neighbor is irrelevant to whether the agency itself had already terminated.

Answer: C
Because the salesperson represents the buyer as a fiduciary, the duty of confidentiality protects the buyer's financial position from being shared with the other side of the transaction, even though the seller is unrepresented and asking directly. A seller's status as a customer rather than a client does not entitle them to confidential client information, offering a partial or misleading figure would itself violate honesty obligations, and commission arrangements have no bearing on what confidential information may be disclosed.

Answer: C
Procuring cause analyzes the chain of events to determine which agent's efforts were the predominant, uninterrupted cause of bringing about the completed sale, and it is the standard commonly used to resolve commission disputes between competing agents. Steering and blockbusting are fair-housing violations unrelated to commission disputes, and novation is a contract concept involving substituting one party for another in an agreement, not a commission-entitlement standard.

Answer: D
Agency by ratification arises when a principal, after learning of an unauthorized act taken on their behalf, accepts and acts consistently with that act, effectively adopting it as though it had been authorized from the start. The agreement is not void, since the broker's later conduct cured the lack of original authority; an easement by prescription concerns acquiring land-use rights through open, continuous use, which is unrelated; and describing this as a one-sided unilateral contract mischaracterizes an agency relationship between broker and seller.

Answer: B
A counteroffer operates as a rejection of the original offer while simultaneously proposing new terms, which terminates the original offer entirely — it cannot later be revived and accepted by the buyer as though the counteroffer had never happened. There is no rule that keeps an already-rejected offer open regardless of a writing or an arbitrary time window, and the reasoning has nothing to do with offers being generally irrevocable, since offers ordinarily can be revoked before acceptance in any case.

Answer: A
A quitclaim deed transfers whatever interest, if any, the grantor currently holds without making any promises or warranties about the validity of that title, exactly the low-commitment tool needed to clear a boundary cloud where the neighbor may have no real claim at all. A warranty deed of either type would obligate the signer to guarantee title against defects, which the neighbor has no reason to do for a claim he may not even actually hold, and a deed of trust is a financing instrument securing a loan, not a title-clearing tool.

Answer: A
The statute of frauds requires contracts for the sale of an interest in real property to be in writing and signed to be enforceable, precisely to prevent disputes like this one where only a verbal understanding exists. Witness testimony does not substitute for the required writing, verbal real estate agreements are not treated the same as written ones, and the requirement applies to land sales generally, not only to improved property.

Answer: B
A financing contingency protects the buyer by making the contract conditional on obtaining loan approval within a specified window; if the buyer makes a genuine effort and is still denied within that period, the contingency allows cancellation with the earnest money returned rather than being forfeited. The contract does not automatically convert to seller financing, the seller cannot compel the sale to close when a valid financing contingency has failed, and forfeiture only becomes a risk if the buyer breaches or fails to act in good faith, not simply because a lender denies the loan.

Answer: A
Recording statutes generally protect a subsequent purchaser who records first and had no notice of an earlier, unrecorded competing claim, which is why timely recording is so important in real estate transactions — it puts the world on notice and establishes priority. Purchase price and the order of signing do not control priority under recording statutes, and the seller has no ongoing authority to choose between two buyers once conflicting deeds have already been delivered.

Answer: D
An assignment transfers a party's rights and obligations under an existing contract to a new party, and it is generally permitted unless the contract specifically prohibits it, which fits a buyer stepping aside for another investor before closing. This differs from a novation, which specifically requires the other original party's consent to fully release the assignor from liability rather than merely transferring the position; escrow substitution and deed in lieu of foreclosure describe unrelated closing and default concepts.

Answer: A
A deed of trust is a three-party financing arrangement in which the borrower conveys legal title to a neutral trustee, who holds it as security for the lender until the debt is paid, distinguishing it from a traditional two-party mortgage between only borrower and lender. A land contract is a seller-financing arrangement where the seller, not a trustee, retains title, and a deed in lieu of foreclosure is a voluntary post-default transfer to the lender, not the financing instrument used at origination.

Answer: B
Discount points are an upfront fee paid to the lender in exchange for a reduced interest rate over the life of the loan, letting a borrower effectively buy down the rate if they plan to keep the loan long enough to recoup the upfront cost through lower payments. Points do not raise the rate, are not refundable simply for paying off the loan early, and do not reduce the principal balance owed — they affect the interest rate, not the amount financed.

Answer: B
The income capitalization method finds the price that produces a target return by dividing net operating income by the desired capitalization rate: $87,400 divided by 0.092 equals $950,000. The $95,000 answer results from mistakenly treating 9.2% as 92% in the division, $874,000 comes from mistakenly applying a flat 10% cap rate instead of 9.2%, and $900,000 is simply a rounded estimate rather than the actual calculated value.

Answer: A
Highest and best use is the reasonably probable and legally permissible use of a property that produces the greatest value, and an appraiser values vacant land based on that potential use, here condominiums, rather than its current, lower-value use as a gravel lot. Functional obsolescence describes a design or feature that reduces a building's value, plottage refers to the value increase from combining adjacent lots, and assemblage describes the act of combining those lots, none of which describe evaluating a single parcel's most valuable legally permitted use.

Answer: D
A comparative market analysis is an agent's informal estimate of a likely sale price based on comparable listings and sales, useful for pricing strategy, while an appraisal is a more rigorous, standardized, and independent opinion of value performed by a licensed or certified appraiser, which lenders typically require to underwrite a loan. The two documents do not carry equal legal or lending weight, neither is restricted to only commercial or only residential property, and there is no rule that an appraisal's value is always higher than a CMA's estimate.

Answer: C
Disclosure obligations generally attach to actual knowledge of a material defect, not to whether the seller personally resided in the home, so an estate representative who learned of the leak through other means, such as family reports or maintenance records, still must disclose it. Probate status does not create a blanket disclosure exemption, and the duty to disclose known material facts does not depend on the buyer first asking the right question.

Answer: B
Rules about disclosing deaths on a property vary by circumstance, but the underlying ethical principle is consistent: an agent should respond truthfully to a direct question rather than lying or engaging in deceptive evasion, since misrepresentation by omission or false statement can expose the agent to liability. Categorically refusing to answer or reflexively deflecting every such question to the seller does not fulfill the honesty obligation when a buyer has asked directly, and lying outright is a clear misrepresentation regardless of any disclosure exemption that might otherwise apply.

Answer: C
Blind advertising occurs when a licensee advertises a property without disclosing that they are acting as a licensed real estate professional and identifying their brokerage affiliation, which misleads the public into thinking they are dealing with an unrepresented private seller. This is not a dual agency issue, since dual agency concerns representing both parties in one transaction, and it has nothing to do with the statute of frauds, which governs the enforceability of contracts rather than advertising disclosures.

Answer: A
A latent defect is a hidden flaw that would not be discovered through a reasonable visual inspection, such as wiring concealed behind walls, which is why sellers with actual knowledge of such defects generally carry a heightened disclosure duty regarding them. A visibly cracked driveway is a patent defect, obvious to any observer, so it does not fit the latent category, and latent defects are not limited to foundation issues nor is the term simply a synonym for any defect whatsoever.

Answer: A
Client trust funds, such as a tenant's security deposit, must be kept separate from a broker's own operating funds precisely to prevent commingling, which risks the misuse or loss of money that does not belong to the brokerage. This scenario has nothing to do with contract enforceability under the statute of frauds, nor does it involve representing two parties in one transaction as dual agency would, and it is unrelated to determining which agent caused a sale as procuring cause addresses.

Answer: A
Fair housing law requires housing providers to make reasonable accommodations to policies, such as waiving a no-pets rule, when a tenant with a disability needs an assistance or service animal, since such an animal is treated as a disability accommodation rather than an ordinary pet. A blanket refusal to ever exempt anyone from the policy ignores this legal obligation, providers generally cannot charge a pet deposit or fee for a legitimate service animal, and the accommodation requirement is not limited by building size.

Answer: B
RESPA specifically prohibits giving or accepting a fee, kickback, or thing of value in exchange for referrals of real estate settlement service business, precisely the arrangement described between the title company and the agent. The Truth in Lending Act governs disclosure of credit and loan terms, the Fair Housing Act addresses discrimination in housing, and the Equal Credit Opportunity Act prohibits credit discrimination based on protected characteristics, none of which specifically target unearned settlement-service referral payments.

Answer: C
Fair housing advertising rules prohibit statements that express a preference, limitation, or discrimination based on a protected class, and phrasing that excludes children or favors a particular type of occupant based on familial status violates this rule regardless of whether an actual applicant is ever rejected. The violation occurs the moment the discriminatory statement is published, not conditioned on a later rejected application, and this is a fair housing advertising issue rather than a credit-discrimination issue under the Equal Credit Opportunity Act.

Answer: C
Nevada requires a completed license application to be submitted by someone at least 18 years old, so finishing the education requirement early does not allow an applicant to submit before reaching that minimum age. There is no parental co-signature exception that lowers the age threshold, and there is no requirement to first work as an unlicensed assistant for a year — the applicant simply must wait until she turns 18 to submit her application.

Answer: C
Nevada's salesperson prelicensing education requirement totals 120 hours across the required subject areas, combining the individual course-hour requirements for principles, law, contracts, and agency into that overall minimum. The 45-hour figure reflects only a single course such as principles or law alone rather than the combined total, and 90 and 150 hours do not match the actual sum of the required course components.

Answer: C
The Real Estate Principles course requires 45 hours, or the equivalent college credit, as one of the four required prelicensing subject areas in Nevada. The 15-hour figure instead matches the shorter contracts or agency course requirements, and 90 and 120 hours do not correspond to any single course — 120 hours is instead the combined total of all required courses together.

Answer: A
Nevada's Real Estate Law course requires 45 total hours, of which at least 18 hours must specifically address Nevada law rather than general legal principles. Requiring 30 Nevada-specific hours overstates the carve-out within the same 45-hour course, 15 total hours mismatches this course with the shorter contracts requirement, and 120 hours confuses this single course with the combined total of all four required prelicensing courses.

Answer: D
Nevada requires 15 hours, or one college credit, of coursework specifically in contracts related to real estate transactions, distinct from the longer 45-hour principles and law courses. The 45-hour and 30-hour options do not match the contracts course specifically, and 3 hours understates the requirement, though it does match the foundation-specific carve-out within the separate agency course.

Answer: C
Nevada's required agency course totals 15 hours, or one college credit, of which at least 3 hours must specifically cover the foundational component of agency law. Pairing the correct 3-hour foundation carve-out with a 45-hour total confuses this course with the longer law or principles courses, requiring 10 foundation hours would consume most of the entire 15-hour course rather than a smaller carve-out, and a 30-hour total with a 5-hour foundation component does not match any of the actual required course structures.

Answer: B
Nevada generally requires applicants who have held a real estate license in any state within the past ten years to provide a certified license history documenting that licensure, and seven years falls well within that lookback window. There is no five-year cutoff that would excuse disclosure, fingerprints address a separate background-check requirement rather than substituting for license history documentation, and there is no requirement that a lapsed license be voluntarily surrendered in writing before applying elsewhere.

Answer: D
The certified license history document must be dated within 90 days of the application submission date, ensuring the Division reviews reasonably current information about the applicant's licensing status elsewhere. A 30-day window would be stricter than actually required, while 6 months and 12 months are both longer than the actual 90-day currency requirement for this specific document.

Answer: A
Nevada license law requires salespersons to practice under the active supervision of a licensed broker, meaning a salesperson cannot conduct real estate brokerage activities — including running auctions — entirely on her own regardless of experience level. There is no exception allowing independent practice for auctions only, and there is no rule under which independent practice becomes permitted after a set waiting period; the broker-affiliation requirement is an ongoing structural feature of the salesperson license itself, not a temporary condition tied to how many years someone has held it.

Answer: C
Nevada license law requires a real estate license to perform acts such as listing, negotiating, or arranging the sale of another's property for compensation, and disclosing one's unlicensed status does not create an exemption from this requirement. General neighborly assistance without compensation may fall outside the licensing requirement, but once compensation tied to a sale enters the picture, the activity crosses into licensed practice regardless of the dollar amount involved.

Answer: C
A life estate ends automatically when the life tenant dies, and any future interest created alongside it — here, a remainder — takes effect immediately without probate. The life tenant has no ownership interest to leave to heirs or a spouse, and because a specific remainderman was already named, the property does not revert to the original grantor as it would with a reversion.

Answer: A
Trade fixtures are items a commercial tenant attaches to a rented space specifically to carry on a business, and the law treats them as the tenant's personal property removable at lease end, provided the tenant repairs any resulting damage. The rule does not turn on written landlord approval or apply only to residential leases — the commercial trade-fixture exception exists precisely because ordinary fixtures would otherwise become part of the real estate simply by being attached.

Answer: A
Prior appropriation, the doctrine used throughout most arid Western states, awards priority based on who first put water to beneficial use under a valid permit — first in time, first in right — rather than dividing use equally among neighboring landowners as riparian law does in wetter regions. Littoral rights concern lake and ocean frontage rather than stream irrigation, and eminent domain is a government power to take property for public use with compensation, not a method for resolving private water-use priority.

Answer: B
The fiduciary duty of loyalty requires an agent to act solely in the principal's best interest rather than favor a personal connection, and the related duty of disclosure requires revealing any relationship or fact that could affect the seller's decision, such as a bid coming from the agent's relative. Duty of accounting concerns handling of money and documents, duty of obedience concerns following lawful instructions, and duty of confidentiality concerns protecting the principal's private information — none of which specifically compels revealing a personal conflict of interest between competing offers.

Answer: D
Under agency law, a broker who supervises a salesperson can be held vicariously liable for misrepresentations the salesperson makes while acting within the scope of the brokerage relationship, since the salesperson operates under the broker's license and authority. Liability is not limited to the individual who spoke the false statement, the buyer's own agent has no responsibility for the other side's misstatement, and a title company's closing role has no connection to a misrepresentation made during marketing or negotiation.

Answer: D
Real estate salespersons are commonly classified as independent contractors for tax and compensation purposes, controlling their own schedules and work methods, yet the broker under whom they are licensed still retains supervisory and oversight responsibility for their licensed activities, since the salesperson practices under the broker's license. Independent contractor status affects employment classification, not the existence of the supervisory relationship, it does not let a salesperson dictate commission splits unilaterally, and it does not remove the broker's obligation to review transaction documents.

Answer: C
A valid contract requires consideration, something of value or a genuine mutual obligation exchanged between the parties, and a promise that is entirely optional at one party's whim, sometimes called an illusory promise, provides no real commitment and therefore no consideration. The scenario gives no indication of a missing legal description, a capacity problem, or a notarization issue; the defect described is specifically the absence of a binding, mutual exchange.

Answer: A
A liquidated damages clause sets, in advance, a specific and reasonable amount, typically the earnest money deposit, that a defaulting buyer forfeits to the seller, which avoids the need to prove actual damages in court after a breach. This is the opposite of the deposit going to the buyer, it does not force the seller into suing for the full price when a capped remedy was agreed upon, and it specifically eliminates the burden of proving an exact dollar loss, which is the whole purpose of agreeing to liquidated damages ahead of time.

Answer: B
One discount point equals one percent of the loan amount, so 2.25 points equals 2.25% of $268,000, which is $6,030. The $2,680 answer mistakenly applies only 1% instead of 2.25%, $603 results from misplacing the decimal and treating the rate as 0.225%, and $60,300 results from the opposite decimal error, treating the rate as 22.5%.

Answer: A
The new loan amount is the appraised value minus the equity carved out, $430,000 less $68,800 equals $361,200, and dividing that loan amount by the appraised value gives a loan-to-value ratio of 84%. The 16% answer mistakenly reports the equity percentage instead of the loan percentage, while 80% and 88% come from arithmetic slips in the subtraction or division steps.

Answer: B
Conventional lenders generally require private mortgage insurance when the loan-to-value ratio is high enough, typically above the 80% level associated with a 20% down payment, because a smaller down payment leaves the lender more exposed if the borrower defaults. Mortgage insurance is not universal on every conventional loan; a lender who receives a large enough down payment to bring the loan-to-value ratio below that threshold typically does not require it, property size is unrelated, and while credit factors can affect insurance pricing, the fundamental trigger is the loan-to-value ratio.

Answer: D
Proration divides shared expenses like already-paid property taxes between buyer and seller based on how much of the covered period each party will actually own the property, so a seller who prepaid taxes for the full year is credited at closing for the buyer's share of the remaining months. Taxes are not automatically the seller's sole burden once ownership changes hands, county tax refunds have nothing to do with reallocating a private prepayment between the parties, and a paid tax bill certainly does not become void simply because the property is sold.

Answer: B
In a land contract, also called a contract for deed, the seller finances the purchase directly and retains legal title as security while the buyer makes installment payments, with title transferring only once the full price is paid, exactly the structure described. A deed of trust involves a third-party trustee and an institutional lender rather than direct seller financing, a lease-option gives the tenant only the right to later purchase rather than an ongoing installment purchase already in progress, and an assumption involves the buyer taking over the seller's existing institutional loan rather than the seller acting as the financing source.

Answer: B
Gross rent multiplier is calculated by dividing the sale price by the monthly rent, so $294,000 divided by $2,450 equals 120. The value 12 results from a decimal-placement error that drops a zero, 1,200 results from a decimal error in the opposite direction, and 10 results from mistakenly dividing the price by an annualized rent figure instead of the monthly rent the gross rent multiplier is meant to use.

Answer: D
Functional obsolescence is a loss in value caused by a design or feature deficiency within the property itself, such as an outdated, inadequate bathroom layout, while a loss in value caused by negative influences outside the property's boundaries, such as nearby noise, is called external obsolescence. The two are distinct causes of depreciation, so treating them as equivalent, attributing the internal design flaw to an external source, or dismissing both as unrelated to depreciation all mischaracterize how appraisers classify these forms of value loss.

Answer: C
The cost approach estimates value by calculating the cost to reproduce or replace the structure, subtracting accrued depreciation from all causes, and adding the estimated land value separately — a method well suited to insurance-loss and other situations where comparable sales are scarce or the structure is unusual. The sales comparison approach instead relies on adjusting prices of similar recently sold properties, the income approach relies on a property's income-generating potential, and the gross rent multiplier is a simplified income-based shortcut, none of which match the cost-based process described.

Answer: B
Antitrust law prohibits competitors from agreeing among themselves to set uniform prices, and commission rates must instead be independently negotiated between each broker and their own client, so an agreement among competing brokers to standardize a rate is illegal price fixing. This has nothing to do with discrimination against buyers, and the antitrust violation exists at the moment competitors agree to fix prices — it does not require that the agreed rate actually be charged on a completed transaction to be unlawful, nor is it a matter of contract-formality rules like the statute of frauds.

Answer: B
The duty of confidentiality generally survives the termination of an agency relationship, meaning an agent must continue protecting a former client's confidential information indefinitely, not just while actively representing them. The end of the agency relationship does not open the door to disclosure, and neither an additional fee from a new client nor an inability to reach the former client creates an exception to this ongoing obligation.

Answer: D
Steering occurs when an agent influences a housing seeker's choices based on a protected characteristic such as race or national origin, directing them toward or away from certain units or areas rather than presenting the full range of options that fit their stated preferences. Blockbusting involves persuading owners to sell by suggesting a protected group is moving into the area, redlining involves lenders or insurers denying services based on a neighborhood's demographics, and a reasonable accommodation violation concerns refusing disability-related requests, none of which describe an agent limiting the units offered to an applicant based on race.

Answer: D
Blockbusting is the practice of inducing property owners to sell, often at a discount, by suggesting that the entry of a particular protected group into the neighborhood will lower property values or change its character, which is precisely the tactic described. Redlining involves lenders or insurers denying services to entire neighborhoods based on demographics rather than an agent's direct persuasion tactics toward individual homeowners, a familial status violation concerns discrimination against families with children, and procuring cause manipulation is not a recognized fair housing concept at all.

Answer: A
The Fair Housing Act protects familial status, meaning a landlord generally cannot refuse to rent to a family simply because it includes children, absent a narrow, legitimate exception such as qualifying senior housing. Landlords do not have unlimited discretion to reject tenants for any reason once protected classes are involved, this scenario has nothing to do with a disability-related accommodation request, and the Equal Credit Opportunity Act addresses credit discrimination rather than rental refusals based on having children.

Answer: C
State real estate licensing authorities, including Nevada's, are granted regulatory and enforcement powers by statute, allowing them to adopt rules, investigate complaints, and discipline licensees who violate license law, a core governmental function separate from the courts. This authority is legally binding rather than merely advisory, it extends to salespersons as well as brokers since both are licensees subject to the same regulatory oversight, and while court appeals may follow, the initial disciplinary authority rests with the licensing agency itself.

Answer: B
Brokers are required to maintain organized transaction records so that the licensing authority can inspect them during audits or complaint investigations to confirm the brokerage is complying with license law, trust account rules, and disclosure obligations. This obligation exists independently of the broker's own convenience, it is not primarily a tax-reporting requirement, and it is not merely something title companies request for their own closing process — it is a regulatory obligation owed to the licensing authority.