National portion

Free Real Estate Contracts & Agency practice questions

10 original questions with full explanations. 16 of the 80 scored national-portion questions (about 20%) come from this area.

This is national-portion content — identical whichever state you're licensing in, and scored separately from your state-law portion.

1. 1

   A buyer's offer states it is open for acceptance until Friday. On Wednesday the seller responds with a higher price. The buyer's original offer is now:

   • A. Still open until Friday
   • B. Terminated by the counteroffer
   • C. Automatically accepted
   • D. Voidable by the seller
   Show answer & explanation

   Answer: B

   A counteroffer is a rejection of the original offer and terminates it — the seller cannot later 'accept' the original offer without the buyer reviving it.

2. 2

   A buyer makes an offer on a property with a contingency for financing. The seller responds with a counteroffer that changes the price. What happens to the original offer?

   • A. It is accepted
   • B. It is rejected
   • C. It remains open for acceptance
   • D. It is terminated
   Show answer & explanation

   Answer: D

   A counteroffer terminates the original offer, allowing the seller to propose new terms.

3. 3

   A buyer's agent has a fiduciary duty to disclose all known facts about a property to their client. What does this duty require the agent to do?

   • A. Disclose only the facts that are favorable to the buyer
   • B. Disclose all known facts, whether favorable or unfavorable
   • C. Keep all known facts confidential
   • D. Disclose only the facts that are required by law
   Show answer & explanation

   Answer: B

   The duty of disclosure requires the agent to disclose all known facts about the property, whether favorable or unfavorable, to their client.

4. 4

   A seller's agent is working with a buyer who is interested in purchasing a property. What is the agent's duty to the buyer in this situation?

   • A. To represent the buyer's interests
   • B. To disclose the seller's confidential information
   • C. To treat the buyer honestly and fairly
   • D. To persuade the buyer to purchase the property
   Show answer & explanation

   Answer: C

   Although the agent represents the seller, they still have a duty to treat the buyer honestly and fairly.

5. 5

   What type of agent is authorized to bind the principal to a contract?

   • A. Special agent
   • B. General agent
   • C. Universal agent
   • D. Limited agent
   Show answer & explanation

   Answer: B

   A general agent has the authority to bind the principal to a contract, whereas a special agent has limited authority.

6. 6

   A buyer and seller enter into a contract with an earnest money provision. If the buyer breaches the contract, what can the seller do with the earnest money?

   • A. Return it to the buyer
   • B. Keep it as liquidated damages
   • C. Use it to pay the commissions
   • D. Apply it to the purchase price
   Show answer & explanation

   Answer: B

   If the buyer breaches the contract, the seller can keep the earnest money as liquidated damages, but this is not always the case and depends on the contract terms.

7. 7

   What is the primary purpose of the earnest money deposit in a real estate contract?

   • A. To secure the buyer's financing
   • B. To demonstrate the buyer's good faith
   • C. To pay the seller's commissions
   • D. To cover the seller's closing costs
   Show answer & explanation

   Answer: B

   The earnest money deposit demonstrates the buyer's good faith and commitment to the purchase.

8. 8

   A buyer makes an offer to purchase a house, and the seller responds with a counteroffer. What happens to the original offer?

   • A. It remains open for acceptance
   • B. It is rejected and a new offer is made
   • C. It is terminated and replaced by the counteroffer
   • D. It becomes a contract
   Show answer & explanation

   Answer: C

   A counteroffer terminates the original offer, replacing it with a new proposal.

9. 9

   A seller lists their property with a broker, granting the broker the authority to market and show the property. What type of agent is the broker in this scenario?

   • A. Special agent
   • B. General agent
   • C. Universal agent
   • D. No agency relationship exists
   Show answer & explanation

   Answer: A

   The broker is a special agent, authorized to perform specific tasks on behalf of the seller, such as marketing and showing the property.

10. 10

    A buyer and seller enter into a contract, but the buyer fails to perform. What is the seller's remedy?

    • A. Specific performance
    • B. Rescission
    • C. Damages
    • D. All of the above
    Show answer & explanation

    Answer: D

    The seller may pursue specific performance, requiring the buyer to complete the purchase, or rescission, canceling the contract, or seek damages for the buyer's breach.