Free Nevada Real Estate Practice Exam

Q1.At closing, a buyer's real estate taxes have already been paid by the seller for the full year. Using a 365-day proration method and closing on September 30th, which of the following best describes the correct proration entry on the settlement statement?

• A.Debit seller, credit buyer for the portion of taxes covering October 1 through December 31
• B.Credit seller, debit buyer for the portion of taxes covering October 1 through December 31
• C.Debit buyer, credit seller for the portion of taxes covering January 1 through September 30
• D.No proration is needed because the seller has already paid the full year

Q2.Under Nevada law, a listing agreement for the sale of residential real property must include which of the following disclosures regarding compensation?

• A.A statement that the commission rate is fixed by state law.
• B.A disclosure that commission rates are negotiable and not fixed by law.
• C.A disclosure that the seller must pay a minimum commission of 6%.
• D.A statement that the listing broker must share the commission equally with the buyer's broker.

Q3.The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) creates potential liability for property owners when:

• A.They fail to obtain proper building permits
• B.They violate local zoning ordinances
• C.They fail to pay property taxes
• D.Hazardous substances are released on their property, regardless of fault

Q4.A broker represents a seller whose property was remediated for underground storage tank contamination 10 years ago. The buyer submits an offer with no environmental contingency, and the seller instructs the broker to disclose the remediation history only if the buyer asks directly. The broker has documentation showing the remediation was completed but also has an internal environmental report suggesting residual soil contamination may remain. Under CERCLA's joint-and-several liability framework and general broker duty principles, what is the broker's most defensible course of action?

• A.Proactively disclose the residual contamination report to the buyer regardless of the seller's instruction, because a broker who possesses material adverse facts has an independent duty to disclose them and CERCLA imposes potential liability on parties who knowingly transfer contaminated property without disclosure.
• B.Follow the seller's instruction and remain silent unless the buyer asks, because the broker's fiduciary duty runs exclusively to the seller and the buyer can conduct their own environmental due diligence.
• C.Withdraw the listing entirely, because representing a seller who possesses undisclosed environmental contamination automatically exposes the broker to criminal liability under CERCLA.
• D.Disclose only the completed remediation and withhold the residual contamination report, because completed government-approved remediation satisfies all disclosure obligations under federal environmental law.

Q5.In property management, what does the term 'effective gross income' represent?

• A.Total potential rental income minus operating expenses
• B.Total potential rental income minus vacancy and collection losses
• C.Net operating income minus debt service
• D.Gross rental income plus miscellaneous income

Q6.A listing broker represents a seller of a 40-unit apartment complex. During due diligence, a prospective buyer—who has been pre-qualified—asks the listing broker whether the property has ever been subject to environmental remediation. The broker knows from the seller's disclosures that a dry-cleaning solvent spill was remediated ten years ago under a state-approved plan. The seller instructs the broker to say nothing about the remediation because it is 'ancient history.' The broker remains silent. Which of the following BEST describes the broker's obligations and potential liability under federal common law and agency principles?

• A.The broker must disclose the remediation history to the prospective buyer because a broker owes a duty of honesty to all parties and silence on a known material fact constitutes fraudulent concealment; the seller's instruction does not relieve the broker of this duty, and compliance with the seller's instruction exposes the broker to liability for misrepresentation by omission.
• B.The broker has no duty to disclose because CERCLA's innocent landowner defense protects agents who rely on seller representations, and the remediation was completed under an approved plan.
• C.The broker must disclose only if the buyer asks a direct question about environmental issues; absent a specific inquiry, the broker's fiduciary duty of loyalty to the seller supersedes any duty to the buyer.
• D.The broker is protected from liability because the seller's written instruction to remain silent transfers all disclosure liability to the seller under the doctrine of imputed knowledge.

Q7.A broker managing a residential sales team discovers that one of her affiliated salespersons failed to provide a Lead-Based Paint Disclosure and EPA pamphlet to a buyer purchasing a pre-1978 home. The purchase contract has already been signed. Which statement BEST describes the broker's liability exposure under the Residential Lead-Based Paint Hazard Reduction Act?

• A.The broker faces potential civil liability because brokers have an independent duty to ensure the required disclosure is provided and can be held liable for their agents' failures to comply.
• B.Only the salesperson is liable because the statutory obligation to disclose belongs exclusively to the licensee who presented the offer.
• C.Only the seller is liable because the disclosure obligation under federal law rests solely with the property owner, not the brokerage.
• D.The broker is shielded from liability as long as the brokerage's policy manual requires salespersons to provide the disclosure.

Q8.Under federal fair housing law, which statement about reasonable accommodations for disabled tenants is correct?

• A.Landlords must make all requested modifications at their own expense
• B.Landlords must allow reasonable modifications to be made at the tenant's expense
• C.Landlords can charge additional rent for disabled tenants
• D.Landlords are not required to make any accommodations

Q9.A mortgage lender denies a loan application from a qualified minority borrower for a property in a predominantly minority neighborhood, while approving similar applications for properties in predominantly white neighborhoods. This practice is an example of:

• A.Blockbusting
• B.Steering
• C.Redlining
• D.Panic peddling

Q10.Under Nevada Administrative Code (NAC) 645 and NRS 645.190, the Nevada Real Estate Commission has the power to adopt regulations that govern licensees. Which of the following best describes the scope of this rulemaking authority?

• A.The Commission may only adopt regulations that are first approved by the Nevada Legislature on a case-by-case basis
• B.The Commission may adopt regulations related to licensing standards, ethical conduct, and education requirements for licensees
• C.The Commission may adopt regulations, but these apply only to brokers, not to salespersons
• D.The Commission's rulemaking authority is limited to setting examination fees and nothing else

Q11.Under the Truth-in-Lending Act (TILA), which of the following must be disclosed to a borrower within three business days of receiving a loan application?

• A.Good Faith Estimate of closing costs
• B.HUD-1 Settlement Statement
• C.Mortgage Insurance Premium disclosure
• D.Loan Estimate form

Q12.A complainant has TWO paths to enforce the FHA. What are the time limits?

• A.HUD administrative complaint: 6 months; federal lawsuit: 1 year
• B.Both paths have a 90-day deadline
• C.HUD administrative complaint: 1 year from the discriminatory act; federal civil lawsuit: 2 years from the discriminatory act
• D.Both paths have a 5-year statute of limitations

Q13.Under NRS 645.252, what is the maximum period for which a Nevada real estate license may be placed on inactive status before it is subject to expiration?

• A.1 year
• B.2 years
• C.5 years
• D.Indefinitely, as long as renewal fees are paid

Q14.RESPA (Real Estate Settlement Procedures Act) primarily protects consumers by requiring disclosure of what information?

• A.Property inspection results
• B.Property tax assessments
• C.Settlement costs and loan servicing details
• D.Homeowners insurance requirements

Q15.Under the Truth in Lending Act (TILA) and Regulation Z, for how long must creditors retain evidence of compliance with the disclosure requirements for a mortgage transaction?

• A.1 year
• B.2 years
• C.3 years
• D.5 years