1. 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?
Answer & explanation
Answer: B. 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.
2. A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?
Answer & explanation
Answer: C. Total = $520,000 x 0.05 = $26,000. Buyer broker gets 2.5% = $13,000, leaving $13,000 for the listing side. Salesperson = $13,000 x 0.60 = $7,800.
3. One discount point equals what percentage of the loan amount?
Answer & explanation
Answer: B. One point = 1% of the loan amount (not the purchase price), paid to lower the interest rate.
4. When competing brokerages agree to charge the same commission rate, they commit:
Answer & explanation
Answer: D. Agreeing on commissions among competitors is illegal price fixing under the Sherman Antitrust Act; commissions must be set independently and are always negotiable.
5. A broker received a 4.2% commission totaling $12,600. What was the sale price?
Answer & explanation
Answer: C. Sale price = commission / rate = $12,600 / 0.042 = $300,000.
6. A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?
Answer & explanation
Answer: D. Commission = $389,000 x 0.05 = $19,450. Total costs = $19,450 + $212,600 + $1,200 + $1,950 + $600 = $235,800. Net = $389,000 - $235,800 = $153,200.
7. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):
Answer & explanation
Answer: B. 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.)
8. An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:
Answer & explanation
Answer: C. Only the building depreciates: $350,000 - $75,000 = $275,000; $275,000 / 27.5 = $10,000. Using the full price gives $12,727 (wrong).
9. A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?
Answer & explanation
Answer: A. Rate = commission / sale price = $15,750 / $450,000 = 0.035 = 3.5%.
10. An 8-unit building rents for $1,100 per unit per month with 5% vacancy. Annual operating expenses are $28,320 (excluding debt service). At an 8% capitalization rate, what is the value?
Answer & explanation
Answer: D. PGI = 8 x $1,100 x 12 = $105,600; less 5% vacancy = $100,320; NOI = $100,320 - $28,320 = $72,000; value = $72,000 / 0.08 = $900,000.
11. When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:
Answer & explanation
Answer: B. Designated agency assigns separate agents within one brokerage; the broker is still a dual agent and written consent is required.
12. A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?
Answer & explanation
Answer: A. Loan = $275,000 x 0.80 = $220,000; points = $220,000 x 0.025 = $5,500. ($6,875 wrongly applies points to the price.)
13. On a $250,000 loan, how much is 2 discount points?
Answer & explanation
Answer: A. 1 point = 1% of the loan. 2 points = 0.02 x $250,000 = $5,000.
14. On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?
Answer & explanation
Answer: D. $20,000 x 0.50 = $10,000 to the buyer's broker.
15. A new highway interchange built next to a residential subdivision lowers home values. This is:
Answer & explanation
Answer: D. Loss in value caused by factors outside the property boundaries is external obsolescence.
16. A house is L-shaped: one section is 40 ft by 30 ft and the other is 20 ft by 15 ft. At $185 per square foot, what is the estimated cost to build?
Answer & explanation
Answer: C. Area = (40 x 30) + (20 x 15) = 1,200 + 300 = 1,500 sq ft; 1,500 x $185 = $277,500.
17. An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?
Answer & explanation
Answer: C. Cap rate = NOI / value = $63,000 / $900,000 = 0.07 = 7%.
18. A person who was not licensed when a claim for compensation arose sues to collect a commission. What is the likely result?
Answer & explanation
Answer: B. NRS 645.270 bars an action to collect compensation without proof of licensure when the alleged cause of action arose. Later licensure or a written agreement does not cure it.
19. What is the maximum administrative fine the Nevada Real Estate Commission may impose?
Answer & explanation
Answer: B. NRS 645.630 authorizes a fine of not more than $10,000 for each violation, along with suspension, revocation, conditions or any combination.
20. Which function is performed by the Real Estate Commission rather than the Real Estate Division?
Answer & explanation
Answer: A. The Commission adopts the NAC 645 regulations and hears disciplinary cases. Issuing licenses, processing applications and maintaining records are the Division's administrative work.
21. Last year's tax on an owner-occupied Reno home was $2,800. Before abatement, this year's tax would be $3,150 with no new improvements. What will the owner pay?
Answer & explanation
Answer: C. The cap is 3%: $2,800 × 1.03 = $2,884. The abatement is $3,150 − $2,884 = $266. $3,024 applies an 8% cap, which is for other property.
22. How many members serve on the Nevada Real Estate Commission?
Answer & explanation
Answer: C. NRS 645.050 creates a five-member Commission. Seven is a common distractor from other states' commissions, but Nevada's is five.
23. A broker leaves an earned $9,000 commission in the trust account for three months to keep the balance high. This is:
Answer & explanation
Answer: B. NRS 645.310 prohibits commingling client money with the broker's own. The Division's trust manual treats leaving earned commissions in trust as commingling; only a small cushion for bank charges is permitted.
24. Who appoints members of the Nevada Real Estate Commission?
Answer & explanation
Answer: A. Commission members are appointed by the Governor. The Administrator runs the Division but does not appoint the Commission, and a trade association has no appointment power.
25. Which person meets the experience qualification for appointment to the Nevada Real Estate Commission?
Answer & explanation
Answer: B. NRS 645.090 requires 3 years as a Nevada broker or 5 years as a Nevada broker-salesperson immediately before appointment, plus 5 years' residency and U.S. citizenship. Salesperson experience, however long, does not qualify; 2 years as a broker is too short.
Sources
Source verification pending. Confirm current requirements with your state regulator.