Free Hawaii Contracts Practice Test — LicenseIQ

Question 1

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 2

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 3

A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

Accepted Answer

USDA Rural Development loans serve eligible rural buyers who meet income limits, often with no down payment.

Question 4

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 5

A listing broker receives three written offers on the same day. The broker must:

Accepted Answer

HAR 16-99-3(j) requires immediate transmission, and when there are multiple offers all go to the owner for decision.

Question 6

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 7

A sales contract for a unit purchased from a condo developer becomes binding only after the buyer receives the public report, a notice of cancellation rights, and:

Accepted Answer

HRS 514B-86 conditions a binding contract on delivery plus waiver, actual or deemed.

Question 8

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 9

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 10

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 11

The agency disclosure must be confirmed in the purchase contract in a separate paragraph titled:

Accepted Answer

HAR 16-99-3.1(e) specifies a separate 'AGENCY DISCLOSURE' paragraph in no less than ten-point bold print. No exact wording is mandated.

Question 12

In a Hawaii agreement of sale, during the payment period:

Accepted Answer

An agreement of sale is an installment land contract. Such agreements and their assignments are named as taxable conveyance instruments in HRS 247-1.

Question 13

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 14

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 15

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 16

A deposit sits in an interest-bearing trust account, and there is no written agreement on who gets the interest. The interest belongs to:

Accepted Answer

HAR 16-99-4(c) awards interest to the fund owner absent a written agreement. The broker can never keep it without one.

Question 17

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 18

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 19

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 20

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 21

Under HRS 514E-8, who may cancel a time share contract within the 7-day period?

Accepted Answer

514E-8 is mutual: either party may cancel by mailing or delivering notice.

Question 22

A condo developer's buyer may cancel the contract until:

Accepted Answer

HRS 514B-86 sets the 30-day period running from the later of the two events.

Question 23

A Hawaii time share contract may be canceled without penalty within:

Accepted Answer

HRS 514E-8 provides a seven-day cancellation window.

Question 24

Under HRS 508D, the disclosure delivery and rescission periods may be changed:

Accepted Answer

HRS 508D-5 allows the parties to shorten or extend the periods in writing.

Question 25

An offer is accepted July 6. The seller delivers the 508D disclosure July 10. The buyer's last day to rescind (no agreed changes) is:

Accepted Answer

Fifteen calendar days from receipt (July 10) is July 25. July 21 counts from acceptance.

Hawaii real estate contracts practice test

1. 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:

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

3. A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

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

5. A listing broker receives three written offers on the same day. The broker must:

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

7. A sales contract for a unit purchased from a condo developer becomes binding only after the buyer receives the public report, a notice of cancellation rights, and:

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

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

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

11. The agency disclosure must be confirmed in the purchase contract in a separate paragraph titled:

12. In a Hawaii agreement of sale, during the payment period:

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

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

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

16. A deposit sits in an interest-bearing trust account, and there is no written agreement on who gets the interest. The interest belongs to:

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

18. 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:

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

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

21. Under HRS 514E-8, who may cancel a time share contract within the 7-day period?

22. A condo developer's buyer may cancel the contract until:

23. A Hawaii time share contract may be canceled without penalty within:

24. Under HRS 508D, the disclosure delivery and rescission periods may be changed:

25. An offer is accepted July 6. The seller delivers the 508D disclosure July 10. The buyer's last day to rescind (no agreed changes) is:

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