Free Colorado Contracts Practice Test — LicenseIQ

Question 1

If a seller defaults under the Colorado Contract to Buy and Sell, the buyer may:

Accepted Answer

Section 20.2 gives the non-defaulting buyer a choice of cancellation with return of earnest money and damages, or specific performance.

Question 2

Under the 2026 Colorado Contract to Buy and Sell, unless an Alternative Earnest Money Deadline is set, the buyer must tender earnest money:

Accepted Answer

Section 4.3 requires earnest money to be tendered with the contract unless an Alternative Earnest Money Deadline is specified.

Question 3

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 4

Under the Colorado Contract to Buy and Sell, a 'day' ends at:

Accepted Answer

Section 3.3.1 of CBS1 defines a day as the entire day ending at 11:59 p.m. United States Mountain Time.

Question 5

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 6

A brokerage receives an earnest money check on Monday, May 11. The contract is mutually executed on Wednesday, May 13. Assuming no holidays, the latest deposit date is:

Accepted Answer

Count from the later event, mutual execution on Wednesday. Business day 1 is Thursday, day 2 is Friday, and day 3 is Monday, May 18. Counting from receipt on Monday gives Thursday, the tempting wrong answer.

Question 7

A new property management firm takes over an owner's rentals. Within how many days of signing the management agreement must it disclose the status of security deposits to the owner and tenants?

Accepted Answer

Rule 5.8.B, discussed in Commission Position 7, requires the new firm to disclose security deposit status to the owner and tenant within 30 days.

Question 8

The Colorado Contract to Buy and Sell provides that, for all dates and deadlines:

Accepted Answer

Section 20 states that time is of the essence for all dates and deadlines, so a late notice is ineffective.

Question 9

A title company prepares the settlement statement in a broker-assisted Colorado sale. Responsibility for confirming that the statement is accurate and consistent with the contract rests with:

Accepted Answer

Failing to furnish accurate closing statements is a ground for discipline under 12-10-217(1)(j); the broker must review the statement against the contract even when a title company drafts it.

Question 10

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 11

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 12

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 13

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 14

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 15

A deadline in the Colorado Contract to Buy and Sell falls on a Saturday. The parties left both the 'Will' and 'Will Not' extension boxes in Section 3.3.3 blank. The deadline:

Accepted Answer

Section 3.3.3 extends weekend and holiday deadlines only if 'Will' is checked; if neither box is checked, the deadline is not extended.

Question 16

When counting days to a deadline under the Colorado Contract to Buy and Sell, the parties:

Accepted Answer

Section 3.3.2 excludes the first day and includes the last day.

Question 17

In an option to purchase, the seller who grants the option is the ____ and the option holder is the ____.

Accepted Answer

The seller (optionor) gives the option; the buyer (optionee) holds it. Only the optionor is bound during the option period, making it unilateral.

Question 18

Which is NOT an essential element of a valid contract?

Accepted Answer

The essential elements are offer and acceptance (mutual consent), consideration, competent parties and legal purpose. Notarization is not required for a contract to be valid.

Question 19

Unless the parties choose otherwise, the 2026 Colorado residential contract calls for the seller to convey title by:

Accepted Answer

Section 13 of CBS1 defaults to a special warranty deed unless another deed type is selected.

Question 20

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 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

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 23

Under an open listing, the seller owes a commission to:

Accepted Answer

Open listings are non-exclusive; only the procuring broker is paid, and the owner owes nothing for a self-sale.

Question 24

A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

Accepted Answer

RESPA prohibits kickbacks and unearned referral fees between settlement service providers and real estate licensees, even if disclosed.

Question 25

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.

Colorado real estate contracts practice test

1. If a seller defaults under the Colorado Contract to Buy and Sell, the buyer may:

2. Under the 2026 Colorado Contract to Buy and Sell, unless an Alternative Earnest Money Deadline is set, the buyer must tender earnest money:

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

4. Under the Colorado Contract to Buy and Sell, a 'day' ends at:

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

6. A brokerage receives an earnest money check on Monday, May 11. The contract is mutually executed on Wednesday, May 13. Assuming no holidays, the latest deposit date is:

7. A new property management firm takes over an owner's rentals. Within how many days of signing the management agreement must it disclose the status of security deposits to the owner and tenants?

8. The Colorado Contract to Buy and Sell provides that, for all dates and deadlines:

9. A title company prepares the settlement statement in a broker-assisted Colorado sale. Responsibility for confirming that the statement is accurate and consistent with the contract rests with:

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

11. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

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

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

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

15. A deadline in the Colorado Contract to Buy and Sell falls on a Saturday. The parties left both the 'Will' and 'Will Not' extension boxes in Section 3.3.3 blank. The deadline:

16. When counting days to a deadline under the Colorado Contract to Buy and Sell, the parties:

17. In an option to purchase, the seller who grants the option is the and the option holder is the .

18. Which is NOT an essential element of a valid contract?

19. Unless the parties choose otherwise, the 2026 Colorado residential contract calls for the seller to convey title by:

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

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

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

23. Under an open listing, the seller owes a commission to:

24. A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

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

Sources