Free Nevada Contracts Practice Test — LicenseIQ

Question 1

A seller discloses a defect after the purchase agreement is signed, and the agreement does not limit repair costs. To rescind, the buyer must act in writing, notarized, within:

Accepted Answer

NRS 113.150 requires a written, notarized rescission served within 4 working days after the buyer learns of the defect. Five calendar days applies to CIC resale packages and timeshares.

Question 2

A contract that has all legal elements but where one party may cancel is:

Accepted Answer

A voidable contract is valid but one party may rescind it (e.g., a minor, or a party induced by misrepresentation or duress). A void contract lacks an essential element and has no legal effect.

Question 3

A sales contract provides that if the buyer defaults, the seller keeps the earnest money as the full measure of damages. This is a:

Accepted Answer

Liquidated damages are a sum agreed in advance as compensation for breach - often the earnest money deposit.

Question 4

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 5

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 6

Buyers sign a timeshare contract on Friday, July 10. What is the last day they may cancel?

Accepted Answer

Calendar days count, starting the day after signing. July 11 is day 1, so day 5 is Wednesday, July 15. Skipping the weekend would wrongly produce Friday, July 17.

Question 7

A listing agreement states it continues 'until the property is sold.' Under Nevada law, this is:

Accepted Answer

NRS 645.633(1)(f) makes it a disciplinary ground to fail to include a fixed date of expiration in a written brokerage agreement, and NRS 645.320 requires a definite termination.

Question 8

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 9

A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

Accepted Answer

LTV is applied to the LESSER of price or appraised value: $290,000 x 0.75 = $217,500. Using the $300,000 price ($225,000) is the common mistake.

Question 10

In an option to purchase, the seller who grants the option is the ____ and the option holder is the ____.

Accepted Answer

The seller (optionor) gives the option; the buyer (optionee) holds it. Only the optionor is bound during the option period, making it unilateral.

Question 11

Which is the most common and desirable way a real estate sales contract terminates?

Accepted Answer

Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.

Question 12

A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

Accepted Answer

USDA Rural Development loans serve eligible rural buyers who meet income limits, often with no down payment.

Question 13

The seller accepts an offer in writing Monday morning. A second written offer reaches the listing broker Monday afternoon, before the broker learns of the acceptance. The listing broker must:

Accepted Answer

NRS 645.635(8) requires submitting all written bona fide offers received before the seller accepts in writing, until the broker has knowledge of that acceptance. The broker did not yet know.

Question 14

A party making an offer to buy is the ____, and the party receiving it is the ____.

Accepted Answer

The offeror makes the offer; the offeree receives it. When a counteroffer is made, the roles swap.

Question 15

After the buyer and seller sign a sales contract but before closing, the contract is:

Accepted Answer

A contract is executory while obligations remain to be performed; it becomes executed when fully performed (at closing).

Question 16

Which is NOT an essential element of a valid contract?

Accepted Answer

The essential elements are offer and acceptance (mutual consent), consideration, competent parties and legal purpose. Notarization is not required for a contract to be valid.

Question 17

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 18

A seller signs the Division's waiver of the duty to present offers, but the broker never signs it. What is the waiver's status?

Accepted Answer

The Division's waiver form states it is not valid until signed by the broker. It also applies to one specific property and can be revoked in writing by mutual agreement of client and broker.

Question 19

A buyer's offer was rejected and the file never went further. What must the broker do with the file?

Accepted Answer

NAC 645.650 expressly includes unaccepted offers and transactions that did not close in the 5-year retention rule.

Question 20

Which provision would make an exclusive brokerage agreement unenforceable or improper under NRS 645.320?

Accepted Answer

NRS 645.320 requires a written agreement with a definite, specified and complete termination, signed by both, and prohibits requiring the client to notify the broker of intent to cancel after termination.

Question 21

The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

Accepted Answer

The Sherman Antitrust Act of 1890 prohibits conspiracies in restraint of trade, including these practices.

Question 22

Which event terminates a listing agreement by operation (force) of law?

Accepted Answer

Agency ends by performance, expiration, mutual agreement, or situationally by force of law (bankruptcy, condemnation), death or incapacity, destruction of the property, or breach.

Question 23

How many of the 36 continuing education hours must be in Contracts for a Nevada salesperson's subsequent renewal?

Accepted Answer

The Division's breakdown is 3 agency, 6 contracts, 3 ethics, 3 law and legislation, 3 risk reduction and 18 general. Contracts is the only core topic at 6 hours; the others are 3.

Question 24

A timeshare developer offers a discount if the buyer waives the 5-day cancellation right, and the buyer signs the waiver. The effect is:

Accepted Answer

NRS 119A.410 makes the right non-waivable, and a developer's attempt to obtain a waiver makes the contract voidable by the purchaser.

Question 25

A licensee persuades a buyer to cancel an existing purchase contract so the buyer can buy one of the licensee's own listings. This is grounds for discipline because:

Accepted Answer

NRS 645.630(1)(l) prohibits inducing a party to break an agreement to substitute a new agreement where done for the licensee's personal gain.

Nevada real estate contracts practice test

1. A seller discloses a defect after the purchase agreement is signed, and the agreement does not limit repair costs. To rescind, the buyer must act in writing, notarized, within:

2. A contract that has all legal elements but where one party may cancel is:

3. A sales contract provides that if the buyer defaults, the seller keeps the earnest money as the full measure of damages. This is a:

4. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

5. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

6. Buyers sign a timeshare contract on Friday, July 10. What is the last day they may cancel?

7. A listing agreement states it continues 'until the property is sold.' Under Nevada law, this is:

8. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

9. A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

10. In an option to purchase, the seller who grants the option is the and the option holder is the .

11. Which is the most common and desirable way a real estate sales contract terminates?

12. A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

13. The seller accepts an offer in writing Monday morning. A second written offer reaches the listing broker Monday afternoon, before the broker learns of the acceptance. The listing broker must:

14. A party making an offer to buy is the , and the party receiving it is the .

15. After the buyer and seller sign a sales contract but before closing, the contract is:

16. Which is NOT an essential element of a valid contract?

17. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

18. A seller signs the Division's waiver of the duty to present offers, but the broker never signs it. What is the waiver's status?

19. A buyer's offer was rejected and the file never went further. What must the broker do with the file?

20. Which provision would make an exclusive brokerage agreement unenforceable or improper under NRS 645.320?

21. The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

22. Which event terminates a listing agreement by operation (force) of law?

23. How many of the 36 continuing education hours must be in Contracts for a Nevada salesperson's subsequent renewal?

24. A timeshare developer offers a discount if the buyer waives the 5-day cancellation right, and the buyer signs the waiver. The effect is:

25. A licensee persuades a buyer to cancel an existing purchase contract so the buyer can buy one of the licensee's own listings. This is grounds for discipline because:

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