Promulgated Contract Forms UPDATED
Exam Questions and CORRECT Answers
The five essential elements that must exist for a real estate sales contract to be considered valid
and enforceable are legal purpose, competent parties, mutual assent, consideration, and _____. -
CORRECT ANSWER - In writing
If a contract has been entered into with a person who has been judged to be incompetent, that
contract is considered _____ because that person never had the capacity to enter into it. -
CORRECT ANSWER - Void
Tammy is interested in Jolene's property but wants to research the zoning laws before
purchasing. She has an agreement in which she paid a fee of $100 to keep the property available
for a preset price for 30 days, during which time Jolene cannot sell the property to another.
Tammy, however, can change her mind if she likes. What kind of agreement is this? - CORRECT
ANSWER - Option
Linda is the buyer's rep for Guy, who is inheriting some money and wants to buy a home. Guy's
offer of $190,000 has been accepted, and the parties have agreed to allow Guy plenty of time to
secure financing (20 days) since he has not yet received his inheritance money and his financing
pre-approval is based on a sizable down payment (80% of property value). The deadline has
passed and Guy has not yet secured financing. He claims he has not even tried yet because there
has been a delay in receiving his inheritance, which he claims will be received in about a week.
Guy states that he is not sure he still wants to buy the property.
1. Which of the following courses of action are not available to the seller?
2. If Guy quickly secures financing and learns he can buy a $180,000 property without the
inheritance, which of the following is TRUE about renegotiating the sales contract?
3. What could happen if - a couple of d - CORRECT ANSWER - 1. If Guy cannot obtain
financing and still wants to purchase the property, the seller has to accept the 80% down
payment.
, 2. The seller is under no obligation to renegotiate the sales price and may still seek remedy
against Guy if he does not complete the sale.
3. Guy could choose to void the contract.
Bertha, a law school dropout is a licensed real estate agent who wants to make sure that she is
providing her buyers with the best representation possible, so she drafts an iron-clad purchase
contract for them. Bertha's sponsoring broker is horrified because Bertha is guilty of _____. -
CORRECT ANSWER - Unauthorized Practice of Law
Which of the following correctly defines a counteroffer? - CORRECT ANSWER -A
rejection of the original offer coupled with a new offer
John and Bev made an offer on Fernando's 3-bed, 2-bath home. When does that offer become a
contract? - CORRECT ANSWER - When it is accepted and communicated
Property includes: - CORRECT ANSWER - Land, Accessories, Improvements
In order for a buyer to purchase a property using VA Guaranteed financing, the buyer must
receive a(n) _____, which establishes the value of the property. - CORRECT ANSWER -
Certificate of Reasonable Value
Raul is Moises's father and real estate agent. What must Raul do when filling out the sales
contract? - CORRECT ANSWER - Disclose this relationship in Paragraph 4
Which of the following is NOT considered an accessory? - CORRECT ANSWER -
Mailbox
Paragraph 7D(1) indicates that the buyer: - CORRECT ANSWER - Accepts the property
As-Is
Exam Questions and CORRECT Answers
The five essential elements that must exist for a real estate sales contract to be considered valid
and enforceable are legal purpose, competent parties, mutual assent, consideration, and _____. -
CORRECT ANSWER - In writing
If a contract has been entered into with a person who has been judged to be incompetent, that
contract is considered _____ because that person never had the capacity to enter into it. -
CORRECT ANSWER - Void
Tammy is interested in Jolene's property but wants to research the zoning laws before
purchasing. She has an agreement in which she paid a fee of $100 to keep the property available
for a preset price for 30 days, during which time Jolene cannot sell the property to another.
Tammy, however, can change her mind if she likes. What kind of agreement is this? - CORRECT
ANSWER - Option
Linda is the buyer's rep for Guy, who is inheriting some money and wants to buy a home. Guy's
offer of $190,000 has been accepted, and the parties have agreed to allow Guy plenty of time to
secure financing (20 days) since he has not yet received his inheritance money and his financing
pre-approval is based on a sizable down payment (80% of property value). The deadline has
passed and Guy has not yet secured financing. He claims he has not even tried yet because there
has been a delay in receiving his inheritance, which he claims will be received in about a week.
Guy states that he is not sure he still wants to buy the property.
1. Which of the following courses of action are not available to the seller?
2. If Guy quickly secures financing and learns he can buy a $180,000 property without the
inheritance, which of the following is TRUE about renegotiating the sales contract?
3. What could happen if - a couple of d - CORRECT ANSWER - 1. If Guy cannot obtain
financing and still wants to purchase the property, the seller has to accept the 80% down
payment.
, 2. The seller is under no obligation to renegotiate the sales price and may still seek remedy
against Guy if he does not complete the sale.
3. Guy could choose to void the contract.
Bertha, a law school dropout is a licensed real estate agent who wants to make sure that she is
providing her buyers with the best representation possible, so she drafts an iron-clad purchase
contract for them. Bertha's sponsoring broker is horrified because Bertha is guilty of _____. -
CORRECT ANSWER - Unauthorized Practice of Law
Which of the following correctly defines a counteroffer? - CORRECT ANSWER -A
rejection of the original offer coupled with a new offer
John and Bev made an offer on Fernando's 3-bed, 2-bath home. When does that offer become a
contract? - CORRECT ANSWER - When it is accepted and communicated
Property includes: - CORRECT ANSWER - Land, Accessories, Improvements
In order for a buyer to purchase a property using VA Guaranteed financing, the buyer must
receive a(n) _____, which establishes the value of the property. - CORRECT ANSWER -
Certificate of Reasonable Value
Raul is Moises's father and real estate agent. What must Raul do when filling out the sales
contract? - CORRECT ANSWER - Disclose this relationship in Paragraph 4
Which of the following is NOT considered an accessory? - CORRECT ANSWER -
Mailbox
Paragraph 7D(1) indicates that the buyer: - CORRECT ANSWER - Accepts the property
As-Is
