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NE Real Estate practice questions

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Question 1Real Property Ownership, Interests, and Land Use Controls

Married spouses in Nevada buy a home using wages each earned during the marriage. No written agreement addresses ownership. How is title presumed to be held?

  1. As the separate property of the spouse whose earnings paid the larger share
  2. As community property Correct answer.
  3. As a joint tenancy with right of survivorship
  4. As a tenancy in common with equal shares

Explanation

Nevada is a community property state, and property acquired during marriage with community funds is presumed to be community property no matter which spouse's earnings paid for it. The presumption can be overcome only by clear and convincing evidence of a contrary agreement or source of funds.

Question 2Real Property Ownership, Interests, and Land Use Controls

Zoning ordinances that regulate the use of privately owned land are adopted under which governmental power?

  1. Escheat
  2. Police power Correct answer.
  3. Taxation
  4. Eminent domain

Explanation

Zoning is an exercise of the police power, the state's authority to regulate private conduct and property to protect the public health, safety, morals, and general welfare. No compensation is paid because the regulation does not transfer title to the government.

Question 3Real Property Ownership, Interests, and Land Use Controls

In Nevada, a person claiming title to land by adverse possession must generally show continuous occupancy for at least what period?

  1. Twenty years
  2. Ten years
  3. Two years
  4. Five years Correct answer.

Explanation

Nevada's adverse possession statute sets a five-year period of possession, and shorter proof requirements apply where the claimant holds color of title and pays the taxes. Most states require longer periods, which is why the Nevada figure is often tested.

Question 4Real Property Ownership, Interests, and Land Use Controls

A utility company obtains a written right to string power lines across a farm. The right benefits the utility rather than any neighboring parcel of land. This interest is best described as:

  1. A license
  2. A profit a prendre
  3. An easement appurtenant
  4. An easement in gross Correct answer.

Explanation

An easement in gross benefits a particular person or entity rather than a dominant parcel, so it has no dominant tenement. Commercial easements in gross, such as utility easements, are generally transferable.

Question 5Real Property Ownership, Interests, and Land Use Controls

Most surface water rights in Nevada are administered under which doctrine?

  1. Prior appropriation Correct answer.
  2. Rule of capture
  3. Riparian rights
  4. Littoral rights

Explanation

Nevada follows the prior appropriation doctrine, under which water is allocated by permit according to the date of appropriation and the water must be put to beneficial use. Riparian rights, which are tied to ownership of land bordering a watercourse, are generally not the governing rule in Nevada.

Question 6Real Property Ownership, Interests, and Land Use Controls

A use of land that was lawful when it began but no longer complies with a subsequently adopted zoning ordinance is called:

  1. A legal nonconforming use Correct answer.
  2. Spot zoning
  3. A variance
  4. A special use permit

Explanation

A legal nonconforming use is an existing use protected from a later ordinance that would otherwise prohibit it, and it may generally continue although it cannot be expanded without limit. Amortization or abandonment rules can eventually terminate the protection.

Question 7Real Property Ownership, Interests, and Land Use Controls

In Nevada, a married couple may take title as community property with right of survivorship only if:

  1. They have resided in Nevada for at least five years
  2. The property is their primary residence
  3. The conveyance expressly states that form of ownership Correct answer.
  4. They record a declaration of homestead

Explanation

Nevada recognizes community property with right of survivorship, but the survivorship feature must be expressly declared in the deed or other conveyance. A deed simply naming the spouses creates community property without survivorship, so the decedent's half passes under a will or by intestacy.

Question 8Real Property Ownership, Interests, and Land Use Controls

An estate measured by the lifetime of someone other than the holder is known as:

  1. A fee tail
  2. A term of years
  3. A life estate pur autre vie Correct answer.
  4. A fee simple determinable

Explanation

A life estate pur autre vie lasts for the life of a person designated in the grant rather than the life of the grantee. If the measuring life ends, the estate ends even if the holder is still alive.

Question 9Real Property Ownership, Interests, and Land Use Controls

Al and Ben take title as joint tenants. Al conveys his interest to Cory. Ben later dies. What is Cory's position?

  1. Cory owns a one-quarter interest as a joint tenant with Ben's heirs
  2. Cory owns nothing, because the deed triggered Ben's right of survivorship
  3. Cory owns the whole parcel by survivorship
  4. Cory owns a one-half interest as a tenant in common with Ben's heirs Correct answer.

Explanation

Al's conveyance severed the joint tenancy as to his half, converting the co-ownership into a tenancy in common. Ben's death therefore passed his half to his heirs or devisees, leaving Cory as a tenant in common holding one-half.

Question 10Real Property Ownership, Interests, and Land Use Controls

For more than five years a neighbor has openly and continuously crossed a corner of an adjacent farm to reach a public road, without the owner's permission and without paying taxes on the strip. The neighbor most likely has acquired:

  1. Title to the strip by adverse possession
  2. A prescriptive easement Correct answer.
  3. A license
  4. An easement by necessity

Explanation

Open, notorious, hostile, and continuous use of another's land for the statutory period creates a prescriptive easement, a right of use rather than ownership. Because the claimant did not pay taxes or hold color of title, a claim to the fee itself would fail in Nevada.

Question 11Real Property Ownership, Interests, and Land Use Controls

A homeowner's lot is narrower than the current ordinance allows, and the owner seeks permission to build an addition that will intrude two feet into the required side setback. The appropriate remedy is:

  1. Rezoning of the parcel to a less restrictive zone
  2. A special use permit
  3. A variance from the board of adjustment Correct answer.
  4. An amendment to the comprehensive plan

Explanation

A variance is administrative relief from a dimensional standard such as a setback, granted where strict application would cause undue hardship and the relief will not harm neighboring property. It addresses the individual parcel rather than changing the ordinance.

Question 12Real Property Ownership, Interests, and Land Use Controls

Nevada's automatic homestead exemption protects equity in a homeowner's primary residence up to what amount?

  1. $50,000
  2. There is no dollar limit
  3. $605,000 Correct answer.
  4. $250,000

Explanation

Nevada's homestead statutes protect the equity in a debtor's primary residence up to $605,000 automatically, without the need to record a declaration. The protection applies in bankruptcy and execution sales but does not defeat liens that predate the homestead.

Question 13Real Property Ownership, Interests, and Land Use Controls

A buyer purchases a unit in a building and receives a deed to that unit together with an undivided interest in the common areas as a tenant in common with the other owners. The buyer has purchased:

  1. A cooperative apartment
  2. A planned unit development lot
  3. A timeshare estate
  4. A condominium unit Correct answer.

Explanation

In a condominium the owner holds a deed to a separate unit plus an undivided interest in the common elements, and pays a proportionate share of common expenses. The unit itself is taxed and financed separately.

Question 14Real Property Ownership, Interests, and Land Use Controls

Owen conveys Blackacre "to Paula for life, then to Rob." Paula mortgages her interest, and the lender forecloses. What does the foreclosure purchaser receive?

  1. Fee simple absolute title
  2. A remainder interest
  3. Nothing, because a life tenant cannot mortgage the estate
  4. An estate measured by Paula's remaining lifetime Correct answer.

Explanation

Paula owns a life estate and may encumber it, but the mortgage can reach only the interest she owns. Foreclosure therefore transfers a life estate that ends when Paula dies, at which point Rob's remainder becomes possessory.

Question 15Real Property Ownership, Interests, and Land Use Controls

A subdivision's recorded covenants prohibit fences over four feet tall. A lot owner builds a six-foot fence, and a neighbor wants it removed. The neighbor's most likely remedy is:

  1. Automatic forfeiture of the violator's title
  2. A civil action for an injunction or damages to enforce the covenant Correct answer.
  3. Criminal prosecution by the county
  4. No remedy, because private covenants are unenforceable

Explanation

Recorded restrictive covenants run with the land and may be enforced by other lot owners through an injunction or damages in a civil action. Enforcement is a private matter rather than a criminal one, and forfeiture is not a standard remedy.

Question 16Real Property Ownership, Interests, and Land Use Controls

A developer plans to divide a 20-acre parcel into eight lots for sale in Nevada. The developer must obtain:

  1. Only a parcel map
  2. A subdivision map approved by the governing body Correct answer.
  3. Approval by the state legislature
  4. No map at all, because each lot exceeds one acre

Explanation

Nevada requires a subdivision map for the division of land into five or more lots, while a parcel map suffices for four or fewer. Because this project creates eight lots, the full subdivision map process applies.

Question 17Real Property Ownership, Interests, and Land Use Controls

Which statement about airspace and subsurface rights is correct?

  1. Air rights can never be severed from the surface estate
  2. Mineral rights pass with every deed regardless of any reservation
  3. A landowner owns airspace to unlimited height with no governmental restriction
  4. Airspace and mineral rights may be severed from the surface and conveyed separately Correct answer.

Explanation

Ownership of airspace and of minerals can be separated from the surface estate and conveyed or reserved independently, creating distinct estates in the same parcel. The surface owner's rights are also limited by aviation law and by public regulation.

Question 18Real Property Ownership, Interests, and Land Use Controls

A promise restricting the use of land that is enforceable in equity against later owners who take with notice is known as:

  1. A profit a prendre
  2. An equitable servitude Correct answer.
  3. A license
  4. An easement in gross

Explanation

An equitable servitude is a covenant about land use enforced by injunction against successors who take with notice, even where damages at law are unavailable. Notice and intent to bind successors are the critical elements.

Question 19Real Property Ownership, Interests, and Land Use Controls

A city rezones one lot in the middle of an established residential neighborhood to commercial use so that its owner can open a shop. This action is best described as:

  1. A conditional use permit
  2. Spot zoning Correct answer.
  3. A variance
  4. A legal nonconforming use

Explanation

Spot zoning is the singling out of one small parcel for treatment inconsistent with the surrounding area, usually for the benefit of its owner. Courts scrutinize such amendments for whether they bear a rational relationship to the public welfare.

Question 20Real Property Ownership, Interests, and Land Use Controls

Which asset remains the separate property of one spouse under Nevada law?

  1. Wages earned by that spouse during the marriage
  2. A vehicle purchased with community earnings
  3. Rent collected from a community-owned rental house
  4. A gift received by that spouse alone during the marriage Correct answer.

Explanation

Property acquired during marriage by gift, bequest, devise, or descent to one spouse is separate property, as is property owned before marriage. Earnings during marriage and income from community property are community.

Question 21Real Property Ownership, Interests, and Land Use Controls

Under Nevada law, the period used to measure the rule against perpetuities is:

  1. 21 years
  2. No period applies because the rule is abolished
  3. 365 years Correct answer.
  4. 90 years

Explanation

Nevada's statute replaces the common law measuring lives with a fixed 365-year period, which permits long-term trusts while still setting an outer limit on vesting. The common law's twenty-one years after lives in being does not govern in Nevada.

Question 22Real Property Ownership, Interests, and Land Use Controls

Kessler owns two adjoining parcels and sells the rear parcel, which has no access to a public road except across the land Kessler keeps. The buyer's strongest claim is:

  1. A revocable license
  2. An easement by necessity Correct answer.
  3. An easement in gross
  4. A prescriptive easement

Explanation

When a grantor severs land so that a parcel becomes landlocked, the law implies an easement by necessity over the retained land for access. The right arises from the severance itself and lasts while the necessity exists.

Question 23Real Property Ownership, Interests, and Land Use Controls

Which statement is correct under Nevada's prior appropriation system for water?

  1. Beneficial use need not be shown to keep a water right alive
  2. A riparian owner's use always prevails over an earlier appropriator
  3. The earliest appropriator with a valid permit has priority over later users Correct answer.
  4. A water right passes automatically with the land whether or not it is transferred

Explanation

Prior appropriation ranks rights by the date of appropriation, so the senior appropriator is served first in times of shortage. The right is conditioned on diversion for a beneficial use and may be lost through nonuse.

Question 24Real Property Ownership, Interests, and Land Use Controls

A Nevada claimant seeking title by adverse possession must, among other requirements, show that the claimant:

  1. Posted a notice on the property for a full year
  2. Filed a lis pendens within thirty days of first entry
  3. Occupied the land openly for at least twenty-one years
  4. Paid all taxes levied on the land during the occupancy period Correct answer.

Explanation

Nevada conditions adverse possession on payment of the taxes levied against the property for the statutory period, and the five-year period applies where the claimant also holds color of title. Failure to pay the taxes defeats the claim regardless of how long the possession lasted.

Question 25Real Property Ownership, Interests, and Land Use Controls

A county adopts an ordinance that leaves an owner with no economically viable use of a parcel, and the owner sues the county. The owner's claim is for:

  1. A prescriptive easement over adjoining land
  2. A variance from the board of adjustment
  3. Inverse condemnation amounting to a regulatory taking Correct answer.
  4. Specific performance of the prior zoning

Explanation

A regulation that goes too far and deprives an owner of all economically beneficial use can be a taking requiring compensation, pursued through an inverse condemnation action. The owner does not sue to invalidate the ordinance but to recover the value taken.

Question 26Agency, Brokerage Relationships, and Fiduciary Duties

A real estate brokerage relationship is created when a broker is authorized to act on behalf of a client and is subject to the client's control. Which statement best describes how that agency relationship arises?

  1. The broker advertises the property to the public
  2. The broker and client sign a listing agreement that includes a commission
  3. The broker is authorized to act for the client and is subject to the client's control Correct answer.
  4. The broker receives compensation from the transaction

Explanation

Agency arises when one person consents that another act on the person's behalf and subject to the person's control. Compensation, advertising, and commission terms may be evidence of a relationship but do not by themselves create agency.

Question 27Agency, Brokerage Relationships, and Fiduciary Duties

A seller told her listing agent that she is selling because of a pending divorce and would accept $20,000 below list. After the listing expires, a prospective buyer asks the former agent about the seller's motivation. What is the agent's best response?

  1. Decline to discuss the seller's motivation because confidentiality survives termination Correct answer.
  2. Disclose only if the buyer signs a buyer agency agreement
  3. Disclose the motivation because the listing has expired
  4. Disclose if the seller has not relisted with another broker

Explanation

The fiduciary duty of confidentiality continues after the agency relationship ends, so the former agent may not reveal confidential information learned during the representation. The seller's motivation and bargaining position remain protected unless the seller authorizes disclosure or a court orders it.

Question 28Agency, Brokerage Relationships, and Fiduciary Duties

In Nebraska, a broker who represents both the buyer and the seller in the same transaction must take which step?

  1. Reduce the commission by half
  2. Obtain court approval before closing
  3. Refer the buyer to another brokerage firm
  4. Obtain written consent from both parties Correct answer.

Explanation

Dual agency requires the informed written consent of all parties to the transaction. With proper consent, the broker may act for both sides but must treat both parties fairly and may not disclose either party's confidential information.

Question 29Agency, Brokerage Relationships, and Fiduciary Duties

A seller's agent is showing a home to an unrepresented buyer. The agent notices a basement wall crack that the seller has not disclosed. What is the agent's obligation?

  1. Tell the buyer to hire an inspector without commenting on the crack
  2. Say nothing because the buyer is not the agent's client
  3. Recommend that the buyer make a full-price offer
  4. Disclose the material defect to the buyer Correct answer.

Explanation

A licensee owes honesty and fair dealing to all parties and must disclose known material facts about the property, even to an unrepresented buyer. The agent may also recommend an inspection, but that does not replace the duty to disclose the known defect.

Question 30Agency, Brokerage Relationships, and Fiduciary Duties

A buyer's agent learns that the buyer will pay up to $400,000 for a home listed at $375,000. When speaking with the listing agent, the buyer's agent should take which action?

  1. Reveal the maximum only if the listing agent promises confidentiality
  2. Keep the buyer's maximum price confidential Correct answer.
  3. Reveal the maximum to help the buyer win the home
  4. Reveal the maximum after the offer is submitted

Explanation

The duty of loyalty and confidentiality requires the buyer's agent to protect the client's bargaining position. Disclosing the buyer's maximum price would weaken the buyer's negotiating position and breach that duty.

Question 31Agency, Brokerage Relationships, and Fiduciary Duties

A Nebraska listing broker offers a commission split in the MLS to any broker who brings a buyer. A broker who brings a buyer under that offer, without any written buyer agency agreement, generally does which of the following?

  1. Does not automatically represent either party Correct answer.
  2. Is barred from receiving any compensation
  3. Becomes the seller's subagent automatically
  4. Becomes the buyer's agent automatically

Explanation

Agency is created by consent and control, not by a commission offer alone. Accepting a cooperating commission may establish a right to payment, but it does not automatically make the broker an agent of the seller or the buyer.

Question 32Agency, Brokerage Relationships, and Fiduciary Duties

Under Nebraska rules, a licensee must disclose the nature of the brokerage relationship to a prospective client at what point?

  1. Only at the closing
  2. Within 30 days after the closing
  3. Only after an offer is accepted
  4. At first substantive contact Correct answer.

Explanation

Agency disclosure must occur early enough that the consumer understands whom the licensee represents before sharing confidential information. Nebraska requires disclosure at the first substantive contact rather than waiting until closing or an accepted offer.

Question 33Agency, Brokerage Relationships, and Fiduciary Duties

In a Nebraska real estate office, the designated broker is responsible for which activity?

  1. Personally representing every client of the office
  2. Supervising only licensed salespersons, not associate brokers
  3. Supervising brokerage activities and ensuring license law compliance Correct answer.
  4. Setting commission rates for the entire local market

Explanation

The designated broker is the licensed broker responsible for the brokerage's operations and for supervising licensees affiliated with the office. That supervision includes ensuring compliance with Nebraska license law and Commission rules.

Question 34Agency, Brokerage Relationships, and Fiduciary Duties

A broker receives a $5,000 earnest money deposit. The broker may take which action?

  1. Deposit it into the broker's personal checking account
  2. Deposit it into a separate trust account Correct answer.
  3. Use it for office expenses until closing
  4. Keep it as a commission before closing

Explanation

Funds entrusted to a broker must be handled in accordance with the agreement and kept in a proper trust or escrow account. The broker may not commingle client funds with personal or operating funds or convert them for the broker's own use.

Question 35Agency, Brokerage Relationships, and Fiduciary Duties

A seller instructs the listing agent to advertise the home as "handicap accessible" even though the agent knows there is no ramp and the seller refuses to add one. The agent should take which action?

  1. Ask the buyer to verify accessibility
  2. Refuse to make the false statement Correct answer.
  3. Advertise it but add a small disclaimer
  4. Follow the instruction because the seller is the client

Explanation

The duty of obedience does not require a licensee to make false or misleading statements. The agent should refuse the unlawful instruction and explain the legal risk to the seller.

Question 36Agency, Brokerage Relationships, and Fiduciary Duties

Which of the following is generally a material fact that a seller's agent must disclose to a buyer?

  1. The seller's religious preference
  2. The seller's reason for moving
  3. A hidden known foundation defect Correct answer.
  4. The seller's financial hardship

Explanation

Known latent defects that affect the property's value or use are material facts that must be disclosed to prospective buyers. Personal information about the seller, such as motivation, finances, or religion, is generally not a property defect requiring disclosure.

Question 37Agency, Brokerage Relationships, and Fiduciary Duties

A listing broker receives a low offer before the seller has seen any offer. Under the duty of disclosure, the broker must take which action?

  1. Wait until a better offer arrives
  2. Present the offer promptly and accurately to the seller Correct answer.
  3. Reject the offer without telling the seller
  4. Tell the seller only if the offer is at least 90% of list

Explanation

The fiduciary duty of disclosure requires the broker to present all offers promptly and accurately so the client can decide how to respond. The broker may not withhold, reject, or screen offers based on the broker's opinion of price.

Question 38Agency, Brokerage Relationships, and Fiduciary Duties

A licensee who begins giving a buyer advice and negotiating on the buyer's behalf without discussing agency may create which situation?

  1. A subagency with the listing broker
  2. An implied agency relationship created by conduct Correct answer.
  3. A dual agency automatically
  4. No relationship because agency requires a formal written contract in every case

Explanation

Agency may be implied from the parties' conduct when a licensee acts on another person's behalf and the person accepts that representation. Once an implied agency exists, fiduciary duties attach even if the parties never used a formal agency label.

Question 39Agency, Brokerage Relationships, and Fiduciary Duties

When a broker acts as a dual agent with proper consent, the broker must take which approach?

  1. Avoid disclosing either party's confidential information Correct answer.
  2. Advocate aggressively for whichever party pays more
  3. Owe undivided loyalty to the buyer only
  4. Owe undivided loyalty to the seller only

Explanation

A dual agent must treat both parties fairly and may not disclose either party's confidential information. The broker's advocacy is limited because the broker cannot provide undivided loyalty to one side over the other.

Question 40Agency, Brokerage Relationships, and Fiduciary Duties

A customer, as distinguished from a client, is best described as which of the following?

  1. A person who has signed a buyer agency agreement
  2. A person not represented but entitled to honest dealing Correct answer.
  3. A person who is owed fiduciary duties
  4. A person who owns the property being sold

Explanation

A customer is a party to a transaction whom the licensee does not represent. The licensee still owes the customer honesty and fair dealing but does not owe the customer the full set of fiduciary duties owed to a client.

Question 41Agency, Brokerage Relationships, and Fiduciary Duties

Which action best demonstrates the fiduciary duty of care?

  1. Sharing the seller's confidential motivation with buyers
  2. Keeping earnest money in the broker's operating account
  3. Recommending appropriate inspections and professionals Correct answer.
  4. Obeying an instruction to misrepresent the property

Explanation

The duty of care requires the licensee to use reasonable skill and diligence, including recommending inspections and qualified professionals when issues arise. Fiduciary care does not authorize disclosure of confidential information, misrepresentation, or improper handling of funds.

Question 42Agency, Brokerage Relationships, and Fiduciary Duties

A buyer's agent learns that the buyer wants to make an offer on a home the agent personally owns. What should the agent do?

  1. Represent both buyer and seller automatically
  2. Make the offer without mentioning ownership
  3. Refer the buyer to another agent without disclosure
  4. Disclose ownership and obtain informed consent Correct answer.

Explanation

A personal interest in the property creates a conflict that must be disclosed in writing so the buyer can make an informed decision. Silence or automatic dual representation would violate the duties of loyalty and disclosure.

Question 43Agency, Brokerage Relationships, and Fiduciary Duties

An agency relationship between a broker and a seller generally terminates automatically when which event occurs?

  1. The broker takes a vacation
  2. The listing price is reduced
  3. The seller dies or is adjudicated incapacitated Correct answer.
  4. The seller leaves town for a month

Explanation

Agency terminates by operation of law when the principal dies or is adjudicated incapacitated, because the principal can no longer consent to or control the agent's acts. Temporary travel, vacations, and price changes do not automatically terminate the relationship.

Question 44Agency, Brokerage Relationships, and Fiduciary Duties

Which situation creates an agency coupled with an interest that generally cannot be revoked by the principal alone?

  1. A listing agreement that expires in six months
  2. An oral buyer agency agreement
  3. A standard exclusive-right-to-sell listing
  4. A broker holding a security interest in the property Correct answer.

Explanation

An agency coupled with an interest arises when the agent has a proprietary interest in the subject matter of the agency, such as a security interest securing compensation. That interest makes the agency irrevocable without the agent's consent or a court order.

Question 45Agency, Brokerage Relationships, and Fiduciary Duties

A salesperson licensed under a Nebraska broker commits a license law violation. Under broker supervision rules, the broker may face which consequence?

  1. A duty to report the matter only if a consumer complains
  2. No responsibility because the salesperson is independently licensed
  3. Automatic immunity if the salesperson acted without written instructions
  4. Discipline for failing to supervise the salesperson Correct answer.

Explanation

The designated broker is responsible for supervising affiliated licensees and ensuring compliance with license law. A broker may be disciplined when a lack of reasonable supervision contributed to a salesperson's violation.

Question 46Agency, Brokerage Relationships, and Fiduciary Duties

A buyer's agent shows a buyer a for-sale-by-owner home, and the buyer later buys it directly from the owner. The agent's claim for compensation from the seller is generally what?

  1. Not enforceable against the seller without a written agreement Correct answer.
  2. Automatic under Nebraska license law
  3. Automatic because the agent showed the property
  4. Automatic if the buyer signed a buyer agency agreement

Explanation

A broker's right to compensation from a particular party generally depends on an agreement with that party or another legal basis for payment. A buyer agency agreement may create rights against the buyer, but it does not by itself obligate the for-sale-by-owner seller to pay the broker.

Question 47Agency, Brokerage Relationships, and Fiduciary Duties

An agent's fiduciary duty of disclosure requires the agent to reveal which of the following to the client?

  1. Material facts the agent knows or should know Correct answer.
  2. Only facts that reduce the client's tax liability
  3. Only facts the agent personally verifies
  4. Only facts the client specifically asks about

Explanation

The duty of disclosure requires the agent to tell the client material facts that affect the client's interests and that the agent knows or reasonably should know. The duty is not limited to facts the client asks about or facts that the agent personally verifies.

Question 48Agency, Brokerage Relationships, and Fiduciary Duties

Nebraska law requires a brokerage agreement between a broker and a client to meet which requirement?

  1. Include a fixed commission rate set by statute
  2. Last at least one year
  3. Be approved by the Real Estate Commission before use
  4. Be in writing and signed by the parties Correct answer.

Explanation

Nebraska requires brokerage agreements to be in writing and signed by the parties so the scope of the representation and compensation terms are clear. The Commission does not preapprove individual agreements, and commission rates are negotiated rather than set by statute.

Question 49Agency, Brokerage Relationships, and Fiduciary Duties

A broker's fiduciary duty of accounting requires the broker to take which action?

  1. Keep client funds in the broker's general account
  2. Pay client funds to any vendor the broker selects
  3. Provide a monthly market analysis to the client
  4. Account for and promptly remit entrusted funds Correct answer.

Explanation

The duty of accounting requires the broker to keep accurate records of funds entrusted to the broker and to remit or disburse those funds as directed. Client funds may not be commingled with the broker's own funds or paid out without authority.

Question 50Agency, Brokerage Relationships, and Fiduciary Duties

Which duty does a seller's agent owe to the seller but not to an unrepresented buyer?

  1. Disclosure of known material defects
  2. Honesty and fair dealing
  3. Reasonable care in presenting offers
  4. Loyalty and confidentiality Correct answer.

Explanation

Loyalty and confidentiality are fiduciary duties owed to the client, not to an unrepresented customer. The licensee still owes honesty, fair dealing, disclosure of known material facts, and reasonable care to the customer.