Free Arkansas Contracts Practice Test — LicenseIQ

Question 1

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 2

A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 3

A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

Accepted Answer

The option binds only the optionor. The optionee may exercise or let it lapse (forfeiting the option money).

Question 4

Clients who consent to dual agency may contractually waive the duty of absolute fidelity

Accepted Answer

17 CAR 220-803 permits this limited contractual waiver, unless disclosure is required by law or authorized by the client in writing.

Question 5

A buyer offers a dual agent a $1,000 bonus paid directly at closing. The dual agent

Accepted Answer

17 CAR 220-803(b) and §17-42-311(a)(8) bar accepting compensation from anyone other than the principal broker.

Question 6

A seller agrees with a broker that the seller will receive $200,000 and the broker keeps anything above that. The home sells for $240,000. This arrangement is a:

Accepted Answer

In a net listing the broker's fee is the excess over a set net ($40,000 here). It encourages the broker to underprice and is illegal in many states, including NJ.

Question 7

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 8

A sales contract provides that if the buyer defaults, the seller keeps the earnest money as the full measure of damages. This is a:

Accepted Answer

Liquidated damages are a sum agreed in advance as compensation for breach - often the earnest money deposit.

Question 9

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 10

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 11

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 12

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 13

An offer or counteroffer becomes a binding contract when:

Accepted Answer

Acceptance must be unconditional and communicated back to the offeror; any change creates a counteroffer instead.

Question 14

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 15

A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

Accepted Answer

Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.

Question 16

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 17

Before managing residential rental property, a licensee must have

Accepted Answer

17 CAR 220-1017 requires a written, current agreement listing duties, authority, fees, accounting, duration and termination, with a copy promptly given to the owner.

Question 18

Under AREC rules, who must sign an offer that a buyer's agent receives from a buyer?

Accepted Answer

17 CAR 220-1011 requires offers to be signed by the receiving licensee and supervising broker. Acceptances are signed by the listing licensee and that licensee's supervising broker. The supervising broker must sign before closing.

Question 19

A contract clause stating that 'time is of the essence' means:

Accepted Answer

'Time is of the essence' makes performance by the stated dates essential; missing a deadline can be a breach.

Question 20

A broker disburses disputed earnest money based on a reasonable interpretation of the contract, without a written release from all parties. The broker must

Accepted Answer

17 CAR 220-1008 requires immediate written notice to all parties when disbursement occurs without written agreement of all parties.

Question 21

Trust funds must be deposited, delivered to an escrow agent, or handled under a written agreement no later than

Accepted Answer

17 CAR 220-1007 sets three days after execution by all parties, rolling to the next business day if the third day is a weekend or legal holiday.

Question 22

A buyer's agent's client wants to make an offer on a home already under contract. The buyer's agent must

Accepted Answer

Section 17-42-318 requires the buyer's agent to present the buyer's offers to the seller or seller's agent even when the property is under contract.

Question 23

Licensees in Arkansas may use preprinted contract forms only if the forms

Accepted Answer

17 CAR 220-1009, citing Pope County Bar Ass'n v. Suggs, requires forms to be approved by a licensed Arkansas attorney, with proof of approval on request.

Question 24

A seller's home is under contract when the listing agent receives a second offer. The listing agent must

Accepted Answer

Section 17-42-317 requires the seller's agent to promptly accept and present every offer, whether or not the property is under contract.

Question 25

Which listing agreement violates AREC rules?

Accepted Answer

17 CAR 220-1002 requires every written agency agreement and extension to have a specific determinable duration or expiration date. Until sold has neither.

Arkansas real estate contracts practice test

1. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

2. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

3. A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

4. Clients who consent to dual agency may contractually waive the duty of absolute fidelity

5. A buyer offers a dual agent a $1,000 bonus paid directly at closing. The dual agent

6. A seller agrees with a broker that the seller will receive $200,000 and the broker keeps anything above that. The home sells for $240,000. This arrangement is a:

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

8. A sales contract provides that if the buyer defaults, the seller keeps the earnest money as the full measure of damages. This is a:

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

10. 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?

11. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

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

13. An offer or counteroffer becomes a binding contract when:

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

15. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

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

17. Before managing residential rental property, a licensee must have

18. Under AREC rules, who must sign an offer that a buyer's agent receives from a buyer?

19. A contract clause stating that 'time is of the essence' means:

20. A broker disburses disputed earnest money based on a reasonable interpretation of the contract, without a written release from all parties. The broker must

21. Trust funds must be deposited, delivered to an escrow agent, or handled under a written agreement no later than

22. A buyer's agent's client wants to make an offer on a home already under contract. The buyer's agent must

23. Licensees in Arkansas may use preprinted contract forms only if the forms

24. A seller's home is under contract when the listing agent receives a second offer. The listing agent must

25. Which listing agreement violates AREC rules?

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