1
Real Estate Principles Final
Exam (2025/2026) – Verified
Licensing Questions with
Correct Broker Law Answers
| Graded A+
Real Estate Contracts (30 Questions)
1. A real estate contract that requires both parties to perform specific duties is called:
A. Unilateral contract
B. Bilateral contract
C. Void contract
D. Executory contract
B. Bilateral contract
Rationale: A bilateral contract involves mutual obligations, such as a buyer agreeing to
pay and a seller agreeing to transfer property, common in real estate transactions.
2. A listing agreement between a seller and a broker is an example of:
A. Buyer representation agreement
B. Bilateral contract
C. Unilateral contract
D. Voidable contract
B. Bilateral contract
Rationale: A listing agreement is a bilateral contract where the seller agrees to pay a
commission, and the broker agrees to market the property.
3. When does a real estate sales contract become fully performed?
A. Upon signing
B. At closing
C. During negotiations
D. After contingencies are met
, 2
B. At closing
Rationale: A sales contract is executory until closing, when all obligations (e.g., title
transfer, payment) are fulfilled, making it discharged.
4. A contract lacking a legal purpose is considered:
A. Valid
B. Void
C. Voidable
D. Enforceable
B. Void
Rationale: A contract without a legal purpose (e.g., for illegal activity) is void and
unenforceable under real estate law.
5. What is required for a real estate contract to be enforceable?
A. Verbal agreement
B. Written agreement
C. Handshake
D. Email confirmation
B. Written agreement
Rationale: The Statute of Frauds requires real estate contracts to be in writing to be
enforceable, except for leases of one year or less.
6. An earnest money deposit is:
A. A commission paid to the broker
B. A deposit showing the buyer’s good faith
C. A fee for property appraisal
D. A payment for closing costs
B. A deposit showing the buyer’s good faith
Rationale: Earnest money is a deposit made by the buyer to demonstrate commitment to
the sales contract.
7. A buyer includes an appraisal contingency in a contract. This allows the buyer to:
A. Cancel if the home’s value is lower than the offer
B. Increase the purchase price
C. Waive inspections
D. Avoid closing costs
A. Cancel if the home’s value is lower than the offer
Rationale: An appraisal contingency allows the buyer to terminate the contract if the
property’s appraised value is below the agreed price.
8. A contract where one party is not competent is considered:
A. Valid
, 3
B. Void
C. Voidable
D. Executory
C. Voidable
Rationale: A contract with an incompetent party (e.g., a minor) is voidable by that party,
meaning they can choose to enforce or cancel it.
9. The Uniform Electronic Transactions Act (UETA) states that:
A. Contracts must be handwritten
B. Electronic signatures are legally binding
C. Earnest money must be in escrow
D. Contracts require notarization
B. Electronic signatures are legally binding
Rationale: UETA establishes that electronic signatures on real estate contracts are as
valid as handwritten ones.
10. A seller’s agent must present which of the following to the seller?
A. Only offers above the listing price
B. All offers received
C. Only written offers
D. Offers from pre-approved buyers
B. All offers received
Rationale: A seller’s agent has a fiduciary duty to present all offers to the seller to ensure
informed decision-making.
11. A buyer representation agreement is between:
A. Buyer and seller
B. Buyer and broker
C. Seller and broker
D. Broker and lender
B. Buyer and broker
Rationale: A buyer representation agreement is a contract where a broker agrees to
represent the buyer’s interests in a transaction.
12. What happens to equitable title upon signing a real estate sales contract?
A. It transfers to the seller
B. It passes to the buyer
C. It remains with the broker
D. It is voided
Real Estate Principles Final
Exam (2025/2026) – Verified
Licensing Questions with
Correct Broker Law Answers
| Graded A+
Real Estate Contracts (30 Questions)
1. A real estate contract that requires both parties to perform specific duties is called:
A. Unilateral contract
B. Bilateral contract
C. Void contract
D. Executory contract
B. Bilateral contract
Rationale: A bilateral contract involves mutual obligations, such as a buyer agreeing to
pay and a seller agreeing to transfer property, common in real estate transactions.
2. A listing agreement between a seller and a broker is an example of:
A. Buyer representation agreement
B. Bilateral contract
C. Unilateral contract
D. Voidable contract
B. Bilateral contract
Rationale: A listing agreement is a bilateral contract where the seller agrees to pay a
commission, and the broker agrees to market the property.
3. When does a real estate sales contract become fully performed?
A. Upon signing
B. At closing
C. During negotiations
D. After contingencies are met
, 2
B. At closing
Rationale: A sales contract is executory until closing, when all obligations (e.g., title
transfer, payment) are fulfilled, making it discharged.
4. A contract lacking a legal purpose is considered:
A. Valid
B. Void
C. Voidable
D. Enforceable
B. Void
Rationale: A contract without a legal purpose (e.g., for illegal activity) is void and
unenforceable under real estate law.
5. What is required for a real estate contract to be enforceable?
A. Verbal agreement
B. Written agreement
C. Handshake
D. Email confirmation
B. Written agreement
Rationale: The Statute of Frauds requires real estate contracts to be in writing to be
enforceable, except for leases of one year or less.
6. An earnest money deposit is:
A. A commission paid to the broker
B. A deposit showing the buyer’s good faith
C. A fee for property appraisal
D. A payment for closing costs
B. A deposit showing the buyer’s good faith
Rationale: Earnest money is a deposit made by the buyer to demonstrate commitment to
the sales contract.
7. A buyer includes an appraisal contingency in a contract. This allows the buyer to:
A. Cancel if the home’s value is lower than the offer
B. Increase the purchase price
C. Waive inspections
D. Avoid closing costs
A. Cancel if the home’s value is lower than the offer
Rationale: An appraisal contingency allows the buyer to terminate the contract if the
property’s appraised value is below the agreed price.
8. A contract where one party is not competent is considered:
A. Valid
, 3
B. Void
C. Voidable
D. Executory
C. Voidable
Rationale: A contract with an incompetent party (e.g., a minor) is voidable by that party,
meaning they can choose to enforce or cancel it.
9. The Uniform Electronic Transactions Act (UETA) states that:
A. Contracts must be handwritten
B. Electronic signatures are legally binding
C. Earnest money must be in escrow
D. Contracts require notarization
B. Electronic signatures are legally binding
Rationale: UETA establishes that electronic signatures on real estate contracts are as
valid as handwritten ones.
10. A seller’s agent must present which of the following to the seller?
A. Only offers above the listing price
B. All offers received
C. Only written offers
D. Offers from pre-approved buyers
B. All offers received
Rationale: A seller’s agent has a fiduciary duty to present all offers to the seller to ensure
informed decision-making.
11. A buyer representation agreement is between:
A. Buyer and seller
B. Buyer and broker
C. Seller and broker
D. Broker and lender
B. Buyer and broker
Rationale: A buyer representation agreement is a contract where a broker agrees to
represent the buyer’s interests in a transaction.
12. What happens to equitable title upon signing a real estate sales contract?
A. It transfers to the seller
B. It passes to the buyer
C. It remains with the broker
D. It is voided
