REAL ESTATE CONTRACTS 2026/2027 TEST PAPER
QUESTIONS AND SOLUTIONS RATED A+
✔✔A contract which authorizes a real estate agent to sell a property during a specified
time and allows that person to collect a commission if the sale is made by anyone,
including the owner, is: - ✔✔An exclusive right to sell
✔✔Which of the following is necessary for a real property conditional installment sales
contract to be valid? - ✔✔Consideration, offer and acceptance, lawful object, competent
parties, legally sufficient writing.
✔✔A written agreement in which an owner allows an individual to use a property in
exchange for rent, and also gives that individual the right to buy the property for a
specified price within a specified period. This contract would most likely be a: -
✔✔Lease option
✔✔When one party is substituted for another party in a contract, the process is
appropriately called a - ✔✔Novation.
✔✔Under a lease for a commercial property, a tenant agrees to pay $4,000 per month
plus 3% of the gross monthly sales. This type of lease is called a: - ✔✔percentage
✔✔A salesperson who prepares a written listing agreement with a seller is helping to
create a contractual relationship between the: - ✔✔salesperson's broker and the seller
✔✔Under a sales contract, the legal remedy that may be used to force the seller to
consummate the sale is called: - ✔✔Specific performance
✔✔If a lessee pays a fixed amount of rent plus all expenses, the lease is known as a: -
✔✔net lease
✔✔When a contract states that "time is of the essence," the contract MUST be
delivered and presented: - ✔✔as soon as possible
✔✔If the owners of a shopping center want a major department store's lease to provide
rental payments that reflect the store's sales, they are MOST likely to use which of the
following types of leases? - ✔✔Percentage
✔✔With the exception of court-ordered sales, the amount of earnest money to be
deposited by a prospective buyer is determined by the: - ✔✔agreement between the
seller and the buyer
, ✔✔In the event that a buyer fails to perform on an agreement to purchase, the seller
may be allowed to keep the earnest money deposit as - ✔✔Liquidated damages
✔✔To be valid, a listing contract must contain all of the following except: - ✔✔Final
contract price
✔✔Jones, the seller, receives an offer to purchase and puts forth a counteroffer to
Brown, the buyer. Until Brown notifies Jones of his acceptance or rejection, Jones: -
✔✔may produce a new counteroffer
✔✔The earnest money accompanying a purchase offer: - ✔✔Is not necessary to
establish a valid contract
✔✔Jones goes into a restaurant and orders lunch. At the end of the meal, is he legally
obligated to pay the check? - ✔✔Yes, because by ordering, Jones entered into an
implied contract to pay for the meal.
✔✔What is a sum of money a buyer may submit with an offer to purchase known as? -
✔✔An earnest money deposit
✔✔The most important document in the sales process is the purchase contract because
- ✔✔It provides the road map for the closing.
✔✔One effect of a clause in a sales agreement that states that "time is of the essence"
might be that: - ✔✔All parties must attend to those details called for in the agreement in
a timely manner.
✔✔If during negotiations one party crosses out or alters any wording in a contract: -
✔✔Each party must initial the change in the margin for it to be valid
✔✔Jones' offer to buy Brown's house has been accepted, but the actual sale will not
take place for three months. Until then, their written sales contract is considered to be: -
✔✔Executory.
✔✔When is a contract said to be discharged? - ✔✔Once all of its terms and conditions
have been met
✔✔A buyer paid $2,800 for an option to purchase a property within 90 days for
$450,000. Within a month, the buyer made an offer to buy the property immediately for
$425,000. Which of the following is true in this situation? - ✔✔The owner may accept
the offer for $425,000
QUESTIONS AND SOLUTIONS RATED A+
✔✔A contract which authorizes a real estate agent to sell a property during a specified
time and allows that person to collect a commission if the sale is made by anyone,
including the owner, is: - ✔✔An exclusive right to sell
✔✔Which of the following is necessary for a real property conditional installment sales
contract to be valid? - ✔✔Consideration, offer and acceptance, lawful object, competent
parties, legally sufficient writing.
✔✔A written agreement in which an owner allows an individual to use a property in
exchange for rent, and also gives that individual the right to buy the property for a
specified price within a specified period. This contract would most likely be a: -
✔✔Lease option
✔✔When one party is substituted for another party in a contract, the process is
appropriately called a - ✔✔Novation.
✔✔Under a lease for a commercial property, a tenant agrees to pay $4,000 per month
plus 3% of the gross monthly sales. This type of lease is called a: - ✔✔percentage
✔✔A salesperson who prepares a written listing agreement with a seller is helping to
create a contractual relationship between the: - ✔✔salesperson's broker and the seller
✔✔Under a sales contract, the legal remedy that may be used to force the seller to
consummate the sale is called: - ✔✔Specific performance
✔✔If a lessee pays a fixed amount of rent plus all expenses, the lease is known as a: -
✔✔net lease
✔✔When a contract states that "time is of the essence," the contract MUST be
delivered and presented: - ✔✔as soon as possible
✔✔If the owners of a shopping center want a major department store's lease to provide
rental payments that reflect the store's sales, they are MOST likely to use which of the
following types of leases? - ✔✔Percentage
✔✔With the exception of court-ordered sales, the amount of earnest money to be
deposited by a prospective buyer is determined by the: - ✔✔agreement between the
seller and the buyer
, ✔✔In the event that a buyer fails to perform on an agreement to purchase, the seller
may be allowed to keep the earnest money deposit as - ✔✔Liquidated damages
✔✔To be valid, a listing contract must contain all of the following except: - ✔✔Final
contract price
✔✔Jones, the seller, receives an offer to purchase and puts forth a counteroffer to
Brown, the buyer. Until Brown notifies Jones of his acceptance or rejection, Jones: -
✔✔may produce a new counteroffer
✔✔The earnest money accompanying a purchase offer: - ✔✔Is not necessary to
establish a valid contract
✔✔Jones goes into a restaurant and orders lunch. At the end of the meal, is he legally
obligated to pay the check? - ✔✔Yes, because by ordering, Jones entered into an
implied contract to pay for the meal.
✔✔What is a sum of money a buyer may submit with an offer to purchase known as? -
✔✔An earnest money deposit
✔✔The most important document in the sales process is the purchase contract because
- ✔✔It provides the road map for the closing.
✔✔One effect of a clause in a sales agreement that states that "time is of the essence"
might be that: - ✔✔All parties must attend to those details called for in the agreement in
a timely manner.
✔✔If during negotiations one party crosses out or alters any wording in a contract: -
✔✔Each party must initial the change in the margin for it to be valid
✔✔Jones' offer to buy Brown's house has been accepted, but the actual sale will not
take place for three months. Until then, their written sales contract is considered to be: -
✔✔Executory.
✔✔When is a contract said to be discharged? - ✔✔Once all of its terms and conditions
have been met
✔✔A buyer paid $2,800 for an option to purchase a property within 90 days for
$450,000. Within a month, the buyer made an offer to buy the property immediately for
$425,000. Which of the following is true in this situation? - ✔✔The owner may accept
the offer for $425,000
