Determine your answer, then click the arrow to see the correct response.
What Is a "Promissory Note" in Real Estate Transactions?
A) A legal document transferring ownership of property
B) A written promise to repay a specified amount of money, typically with interest
C) A lease agreement between a tenant and landlord
D) A document outlining property boundaries
Correct Answer: B) A written promise to repay a specified amount of money, typically with interest
Explanation: A promissory note is a financial instrument where the borrower promises to repay a loan under specified terms.
What Is "Encroachment" in Real Estate Terms?
A) A formal agreement to allow utility companies to use land
B) Unauthorized intrusion of a building or other improvement onto another person's land
C) A government right to acquire private property for public use
D) A right to use another person's property for a specific purpose
Correct Answer: B) Unauthorized intrusion of a building or other improvement onto another person’s land
Explanation: Encroachment occurs when a structure or improvement illegally extends onto another person’s property.
What Is the Term for the Process by Which a Property Owner’s Right to the Property Is Involuntarily Transferred Due To Continuous and Open Use by Another Party?
A) Adverse possession
B) Easement by necessity
C) Eminent domain
D) Prescription
Correct Answer: A) Adverse possession
Explanation: Adverse possession is a legal doctrine that allows a person to claim ownership of land under certain conditions, including continuous and open use.
What Is a "Lis Pendens"?
A) A type of deed restriction
B) A pending legal action involving the property
C) A form of mortgage insurance
D) A type of property appraisal
Correct Answer: B) A pending legal action involving the property
Explanation: Lis pendens is a notice indicating that there is a pending lawsuit involving the property, which can affect its title
In Real Estate, "Liquidity" Refers To:
A) The ease with which an asset can be converted into cash without affecting its market price
B) The interest rate on a mortgage loan
C) The physical condition of a property
D) The level of demand for a property in the market
Correct Answer: A) The ease with which an asset can be converted into cash without affecting its market price
Explanation: Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its market price.
A Property Is Sold for $250,000. The Real Estate Commission is 6%. How Much Is the Commission?
A) $10,000
B) $12,000
C) $15,000
D) $18,000
Correct Answer: B) $15,000
Explanation: The commission is calculated by multiplying the sale price by the commission rate: $250,000 x 0.06 = $15,000.
A Buyer Obtains a Loan for $180,000 at an Annual Interest Rate of 4%. What Is the Monthly Interest Payment on the Loan?
A) $600
B) $720
C) $1,200
D) $7,200
Correct Answer: A) $600
Explanation: The monthly interest payment is calculated by dividing the annual interest by 12: ($180,000 x 0.04) / 12 = $600.
A Tenant in Nevada Has a One-Year Lease That Includes a Clause Allowing the Landlord To Enter the Property With 24-Hour Notice for Repairs. The Landlord Repeatedly Enters the Property Without Notice. What Actions Can the Tenant Take Under Nevada Law?
A) Ignore the landlord's actions
B) File a complaint with the Nevada Real Estate Division
C) Terminate the lease and move out
D) Both B and C
Correct Answer: D) Both B and C
Explanation: The tenant can file a complaint with the Nevada Real Estate Division and may also have the right to terminate the lease and move out due to the landlord’s repeated violations of the lease agreement.
A Tenant in Nevada Has a One-Year Lease and Requests Repairs for a Broken Air Conditioning Unit in the Middle of Summer. The Landlord Fails To Make the Repairs in a Timely Manner. What Legal Actions Can the Tenant Take?
A) Withhold rent until the repairs are made
B) Hire a contractor to make the repairs and deduct the cost from the rent
C) Terminate the lease and move out
D) All of the above
Correct Answer: D) All of the above
Explanation: The tenant has several options, including withholding rent, hiring a contractor to make the repairs and deducting the cost from the rent, or terminating the lease and moving out if the landlord fails to make necessary repairs in a timely manner.
If a Seller in Nevada Fails To Provide the Property Condition Disclosure Form as Required by NRS 113, What Recourse Does the Buyer Have?
A) The buyer can cancel the contract without penalty
B) The buyer can demand a reduction in the purchase price
C) The buyer can file a lawsuit for damages
D) The buyer must proceed with the purchase but can negotiate repairs
Correct Answer: A) The buyer can cancel the contract without penalty
Explanation: If the seller fails to provide the required disclosure form, the buyer has the right to cancel the contract without penalty.