Free Delaware 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 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 3

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 4

A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

Accepted Answer

At 95% LTV the down payment is 5% of price. Price = $18,000 / 0.05 = $360,000; loan = $342,000.

Question 5

A lender asks a listing agent for a CMA on a property already under a signed agreement of sale. The agent should:

Accepted Answer

§2931.

Question 6

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 7

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 8

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.

Question 9

A buyer offers a postdated personal check as the earnest money deposit. The licensee should:

Accepted Answer

Rule 6.2.

Question 10

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 11

A purchaser of a new unit from a declarant who did not receive the public offering statement more than 5 days before signing may cancel:

Accepted Answer

§81-408: no penalty, full refund.

Question 12

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 13

A buyer signs a contract before receiving the resale certificate. The buyer may cancel within:

Accepted Answer

§81-409.

Question 14

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 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

Unless the agreement says otherwise, interest earned on escrowed funds belongs to:

Accepted Answer

Rule 6.6.

Question 17

After a report of suspected impairment, within how many days must the chairperson notify the licensee in writing and offer the Voluntary Treatment Option?

Accepted Answer

Rule 15.0: written notice within 7 days of the report; the licensee then has 30 days to obtain the evaluation.

Question 18

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 19

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 20

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 21

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 22

A defect arises after the offer and the seller discloses it before settlement, complying with the agreement. The buyer:

Accepted Answer

6 Del. C. §2575(2).

Question 23

An agreement of sale is fully signed Thursday at 4 p.m. There are no holidays. By when must the earnest money be deposited?

Accepted Answer

72 hours excluding the weekend: Thu 4 p.m.–Fri midnight (32 h) + Monday (24 h) + Tuesday to 4 p.m. (16 h) = 72 h. Sunday counts weekend hours, which §2923 excludes.

Question 24

A property under contract is still being marketed for backup offers. The listing broker must disclose this:

Accepted Answer

Rule 10.6.

Question 25

Before the buyer signs an agreement of sale, the licensee provides the seller's Radon Disclosure along with:

Accepted Answer

Rule 10.8.

Delaware real estate contracts practice test

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

2. 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:

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

4. A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

5. A lender asks a listing agent for a CMA on a property already under a signed agreement of sale. The agent should:

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

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

8. 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) .

9. A buyer offers a postdated personal check as the earnest money deposit. The licensee should:

10. 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?

11. A purchaser of a new unit from a declarant who did not receive the public offering statement more than 5 days before signing may cancel:

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

13. A buyer signs a contract before receiving the resale certificate. The buyer may cancel within:

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

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

16. Unless the agreement says otherwise, interest earned on escrowed funds belongs to:

17. After a report of suspected impairment, within how many days must the chairperson notify the licensee in writing and offer the Voluntary Treatment Option?

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

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

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

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

22. A defect arises after the offer and the seller discloses it before settlement, complying with the agreement. The buyer:

23. An agreement of sale is fully signed Thursday at 4 p.m. There are no holidays. By when must the earnest money be deposited?

24. A property under contract is still being marketed for backup offers. The listing broker must disclose this:

25. Before the buyer signs an agreement of sale, the licensee provides the seller's Radon Disclosure along with:

Sources