Free Idaho Contracts Practice Test — LicenseIQ

Question 1

Which must be included in a written offer to purchase in Idaho?

Accepted Answer

54-2051 requires terms, earnest money form and amount, the responsible broker's name, the representation confirmation, a forfeiture division provision, signatures and dates, and a legal description.

Question 2

Which agreements must the designated broker review and approve?

Accepted Answer

54-2038 requires the designated broker to review and approve all real estate agreements, including listing, selling, purchasing, and representation agreements.

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

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 5

How must changes to an offer or purchase agreement be handled?

Accepted Answer

54-2051 requires changes to be initialed and dated by the parties.

Question 6

After representation ends, which duties does the brokerage still owe the former client, absent a written agreement for more?

Accepted Answer

54-2092 leaves only accounting and confidentiality. Presenting offers and disclosing adverse facts end with the representation.

Question 7

After reviewing the signed purchase agreement, a broker reasonably decides the buyer is entitled to disputed earnest money and refunds it. Which statement is accurate?

Accepted Answer

54-2047 says a discretionary disbursement based on a reasonable review is not a license violation but may expose the broker to civil liability. It does not create total immunity.

Question 8

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 9

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 10

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 11

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 12

No later than when must the brokerage relationship be determined and any needed representation agreements signed?

Accepted Answer

54-2085 requires the relationship to be determined and agreements signed no later than preparation of the purchase and sale agreement.

Question 13

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 14

A contract that has all legal elements but where one party may cancel is:

Accepted Answer

A voidable contract is valid but one party may rescind it (e.g., a minor, or a party induced by misrepresentation or duress). A void contract lacks an essential element and has no legal effect.

Question 15

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 16

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 17

Income earned during marriage from a rental house one spouse owned before marriage is, absent a written agreement or a provision in the deed:

Accepted Answer

32-906 makes income from separate property community unless the conveyance or a written agreement signed by both spouses provides otherwise.

Question 18

A listing brokerage offers to pay part of its commission to the buyer's brokerage. Does that payment make the buyer's brokerage the seller's agent?

Accepted Answer

54-2089 states that payment of compensation, or an agreement only for payment, does not create agency.

Question 19

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 20

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 21

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 22

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 23

Until when must a licensee continue to present written offers to the seller?

Accepted Answer

54-2051 requires prompt presentation of all written offers until closing.

Question 24

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 25

A buyer and seller sign one contract at the real price and a second, higher-priced contract given only to the lender. This is:

Accepted Answer

54-2004 defines a double contract as one not disclosed in writing to the lender to obtain a larger loan, and 54-2054 and 54-2060 make it flagrant misconduct.

Idaho real estate contracts practice test

1. Which must be included in a written offer to purchase in Idaho?

2. Which agreements must the designated broker review and approve?

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

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

5. How must changes to an offer or purchase agreement be handled?

6. After representation ends, which duties does the brokerage still owe the former client, absent a written agreement for more?

7. After reviewing the signed purchase agreement, a broker reasonably decides the buyer is entitled to disputed earnest money and refunds it. Which statement is accurate?

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

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

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

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

12. No later than when must the brokerage relationship be determined and any needed representation agreements signed?

13. 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) .

14. A contract that has all legal elements but where one party may cancel is:

15. 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:

16. 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?

17. Income earned during marriage from a rental house one spouse owned before marriage is, absent a written agreement or a provision in the deed:

18. A listing brokerage offers to pay part of its commission to the buyer's brokerage. Does that payment make the buyer's brokerage the seller's agent?

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

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

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

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

23. Until when must a licensee continue to present written offers to the seller?

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

25. A buyer and seller sign one contract at the real price and a second, higher-priced contract given only to the lender. This is:

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