Free Arizona Contracts Practice Test — LicenseIQ

Question 1

After the buyer and seller sign a sales contract but before closing, the contract is:

Accepted Answer

A contract is executory while obligations remain to be performed; it becomes executed when fully performed (at closing).

Question 2

A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

Accepted Answer

LTV is applied to the LESSER of price or appraised value: $290,000 x 0.75 = $217,500. Using the $300,000 price ($225,000) is the common mistake.

Question 3

Under A.R.S. §32-2151.02, every Arizona real estate employment agreement (such as a listing) must:

Accepted Answer

A.R.S. §32-2151.02 requires clear language, all material terms including broker compensation, a definite duration showing inception and expiration dates, and signatures of all parties. Commissions are negotiable and agreements are not recorded.

Question 4

A seller delivers the SPDS on day 9 of a 10-day inspection period. By when must the buyer give notice of disapproval of SPDS items under the AAR contract?

Accepted Answer

The buyer may object within the Inspection Period or five days after receipt of the SPDS, whichever is later. Receiving it on day 9 gives the buyer until day 14, which is later than day 10.

Question 5

A financing contingency in a purchase agreement protects the:

Accepted Answer

A financing (mortgage) contingency lets the buyer cancel without penalty if unable to secure the specified loan by the deadline.

Question 6

A contract that is missing an essential element, such as consideration, is:

Accepted Answer

Missing an essential element makes a contract void from the start. A voidable contract appears valid but may be canceled by one party.

Question 7

When a seller changes a term of the buyer's offer and returns it, this creates a:

Accepted Answer

Altering any term rejects the original offer and creates a counteroffer, which the buyer may accept or reject.

Question 8

Under the AAR purchase contract, when must the seller deliver the insurance claims history for the property?

Accepted Answer

The AAR contract requires the seller's insurance claims history within five days after acceptance, with the buyer able to object within the Inspection Period or five days after receipt, whichever is later.

Question 9

A listing expires without a sale after the seller rejected two written offers. How long must the broker keep those rejected offers?

Accepted Answer

A.R.S. §32-2151.01(I) requires rejected offers to be kept at least one year. Only if the property later goes under a binding contract must earlier rejected offers be kept for five years.

Question 10

Under the AAR Residential Resale Real Estate Purchase Contract, the seller must deliver the completed SPDS within how many days after contract acceptance?

Accepted Answer

The current AAR purchase contract requires the seller to deliver a completed SPDS within three days after contract acceptance. Five days is the deadline for the insurance claims history.

Question 11

A buyer offers $300,000. The seller counters at $315,000. The buyer rejects the counter and then tries to accept the original $300,000 offer terms. Is there a contract?

Accepted Answer

A counteroffer is a rejection and a new offer; the original offer cannot be revived by the buyer.

Question 12

Before offering subdivided lands for sale, the subdivider must:

Accepted Answer

A.R.S. §32-2181(A) requires the subdivider to notify the Commissioner in writing (a notice of intent) before offering subdivided lands. The Commissioner then issues the public report.

Question 13

A buyer signs a contract on Monday, May 4 to buy an unimproved lot in an Arizona subdivision. Under A.R.S. §32-2185.01(D), the buyer may rescind for any reason until:

Accepted Answer

The buyer may rescind by midnight of the seventh calendar day following the day of signing. Seven calendar days after May 4 is May 11. Business days are not used here.

Question 14

A contract signed by a 17-year-old buyer is generally:

Accepted Answer

Contracts with minors are voidable at the minor's option; the adult party remains bound. A contract with someone adjudged insane is void.

Question 15

Under the AAR contract's appraisal contingency, if the home appraises below the purchase price, the buyer may cancel and recover the earnest money within:

Accepted Answer

The AAR contract gives the buyer five days after notice of the appraised value to cancel and receive the earnest money, unless the appraisal contingency was waived.

Question 16

Under the statute of frauds, a real estate sales contract must be:

Accepted Answer

The statute of frauds requires real estate sales contracts to be in writing and signed to be enforceable.

Question 17

A licensee representing the seller who learns the buyer will pay more than the offer must:

Accepted Answer

Loyalty and disclosure require the seller's agent to share material information that benefits the client. The agent owes the buyer-customer no confidentiality.

Question 18

A purchase contract for rural land in unincorporated Mohave County includes a clause in which the buyer waives any claims for errors in the seller's Affidavit of Disclosure. That clause is:

Accepted Answer

A.R.S. §33-422 provides that any release or waiver of the seller's liability arising out of omissions or misrepresentations in the affidavit is not valid or binding on the buyer.

Question 19

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Question 20

The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

Accepted Answer

The Sherman Antitrust Act of 1890 prohibits conspiracies in restraint of trade, including these practices.

Question 21

Which is the most common and desirable way a real estate sales contract terminates?

Accepted Answer

Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.

Question 22

After the public report is issued and the reservation holder receives it with a proposed contract, how long do the parties have to sign a purchase contract before the reservation automatically terminates?

Accepted Answer

The seller must provide the report and a proposed contract within 15 calendar days after the report issues. The parties then have seven business days after the buyer receives them to sign, or the reservation terminates.

Question 23

A party making an offer to buy is the ____, and the party receiving it is the ____.

Accepted Answer

The offeror makes the offer; the offeree receives it. When a counteroffer is made, the roles swap.

Question 24

Which event terminates a listing agreement by operation (force) of law?

Accepted Answer

Agency ends by performance, expiration, mutual agreement, or situationally by force of law (bankruptcy, condemnation), death or incapacity, destruction of the property, or breach.

Question 25

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Arizona real estate contracts practice test

1. After the buyer and seller sign a sales contract but before closing, the contract is:

2. A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

3. Under A.R.S. §32-2151.02, every Arizona real estate employment agreement (such as a listing) must:

4. A seller delivers the SPDS on day 9 of a 10-day inspection period. By when must the buyer give notice of disapproval of SPDS items under the AAR contract?

5. A financing contingency in a purchase agreement protects the:

6. A contract that is missing an essential element, such as consideration, is:

7. When a seller changes a term of the buyer's offer and returns it, this creates a:

8. Under the AAR purchase contract, when must the seller deliver the insurance claims history for the property?

9. A listing expires without a sale after the seller rejected two written offers. How long must the broker keep those rejected offers?

10. Under the AAR Residential Resale Real Estate Purchase Contract, the seller must deliver the completed SPDS within how many days after contract acceptance?

11. A buyer offers $300,000. The seller counters at $315,000. The buyer rejects the counter and then tries to accept the original $300,000 offer terms. Is there a contract?

12. Before offering subdivided lands for sale, the subdivider must:

13. A buyer signs a contract on Monday, May 4 to buy an unimproved lot in an Arizona subdivision. Under A.R.S. §32-2185.01(D), the buyer may rescind for any reason until:

14. A contract signed by a 17-year-old buyer is generally:

15. Under the AAR contract's appraisal contingency, if the home appraises below the purchase price, the buyer may cancel and recover the earnest money within:

16. Under the statute of frauds, a real estate sales contract must be:

17. A licensee representing the seller who learns the buyer will pay more than the offer must:

18. A purchase contract for rural land in unincorporated Mohave County includes a clause in which the buyer waives any claims for errors in the seller's Affidavit of Disclosure. That clause is:

19. Under a land contract (contract for deed), during the payment period the buyer holds:

20. The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

21. Which is the most common and desirable way a real estate sales contract terminates?

22. After the public report is issued and the reservation holder receives it with a proposed contract, how long do the parties have to sign a purchase contract before the reservation automatically terminates?

23. A party making an offer to buy is the , and the party receiving it is the .

24. Which event terminates a listing agreement by operation (force) of law?

25. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

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