1. 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:
Answer & explanation
Answer: A. Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.
2. Which statement about a consent agreement resolving a complaint against a Maine licensee is correct?
Answer & explanation
Answer: B. A consent agreement needs three parties (licensee, board and the AG's office), can include any lawful remedy up to permanent revocation, and is not subject to review or appeal. The appeal option is tempting because nonconsensual discipline is reviewable in Superior Court.
3. While an offer is pending, a second buyer's agent asks the listing agent the amount of the first offer. The listing agent:
Answer & explanation
Answer: A. Rule 410 §12 bars disclosing the terms of a pending offer, counteroffer or contract to anyone but the buyer and seller without both parties' prior written permission. Representing the seller does not override the rule.
4. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:
Answer & explanation
Answer: D. Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.
5. A licensee representing the seller who learns the buyer will pay more than the offer must:
Answer & explanation
Answer: C. Loyalty and disclosure require the seller's agent to share material information that benefits the client. The agent owes the buyer-customer no confidentiality.
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:
Answer & explanation
Answer: C. 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.
7. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:
Answer & explanation
Answer: D. 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.
8. For how long must a designated broker review and initial the contracts and disclosure forms prepared by a newly licensed sales agent?
Answer & explanation
Answer: B. Rule 400 §1(5) requires review and initialing of a new sales agent's documents during the first 90 days with the agency. The two-year option confuses this with the license term.
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:
Answer & explanation
Answer: D. Liquidated damages are a sum agreed in advance as compensation for breach - often the earnest money deposit.
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?
Answer & explanation
Answer: B. A counteroffer is a rejection and a new offer; the original offer cannot be revived by the buyer.
11. Which event terminates a listing agreement by operation (force) of law?
Answer & explanation
Answer: B. Agency ends by performance, expiration, mutual agreement, or situationally by force of law (bankruptcy, condemnation), death or incapacity, destruction of the property, or breach.
12. A buyer received a late disclosure statement but moved into the property before closing under an early occupancy agreement, then tried to terminate under the 72-hour rule. Is the termination valid?
Answer & explanation
Answer: A. Section 174 says the termination right is waived if not used before settlement or occupancy, whichever comes first. Late disclosure does create the right, but occupancy ended it.
13. Which is NOT an essential element of a valid contract?
Answer & explanation
Answer: C. 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.
14. A party making an offer to buy is the ____, and the party receiving it is the ____.
Answer & explanation
Answer: D. The offeror makes the offer; the offeree receives it. When a counteroffer is made, the roles swap.
15. A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:
Answer & explanation
Answer: C. The option binds only the optionor. The optionee may exercise or let it lapse (forfeiting the option money).
16. A purchase falls through. Neither party disputes the signed agreement's terms on the deposit. The designated broker wants to release funds based on the signed documents without a written release from both parties. The broker must:
Answer & explanation
Answer: D. Rule 400 §2 allows release based on signed documents no sooner than 5 business days after notifying both parties, unless the broker actually knows of a dispute. A court order is one option for disputed funds but not a precondition here.
17. 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) ____.
Answer & explanation
Answer: C. An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.
18. Under a land contract (contract for deed), during the payment period the buyer holds:
Answer & explanation
Answer: D. In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.
19. A contract that has all legal elements but where one party may cancel is:
Answer & explanation
Answer: D. 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.
20. A financing contingency in a purchase agreement protects the:
Answer & explanation
Answer: C. A financing (mortgage) contingency lets the buyer cancel without penalty if unable to secure the specified loan by the deadline.
21. Which item is NOT required in a Maine brokerage agreement under 32 M.R.S. §13177-A?
Answer & explanation
Answer: B. Section 13177-A requires the client's signature, terms of services, compensation, expiration date and the agency-client statement. A guaranteed price is not required and could mislead the client.
22. A sale closed on June 1, 2025, but the agency held a repair escrow and disbursed it on September 15, 2025. Until when must the purchase and sale contract be kept?
Answer & explanation
Answer: A. Rule 400 §3 measures three calendar years from the later of disbursement of all funds or conclusion of the transaction. The later date is September 15, 2025, so retention runs to September 15, 2028.
23. A buyer signs a contract for a condominium resale but never receives the resale certificate. What right does the buyer have?
Answer & explanation
Answer: C. Section 1604-108 gives the buyer that voidability right. The buyer is also not liable for unpaid assessments beyond the amount stated in a certificate.
24. A title company offers a licensee $100 for each client referred. The licensee may:
Answer & explanation
Answer: B. Rule 410 §19 prohibits compensation from title companies, lenders or closing companies for referrals. Written disclosure permits referral fees only for other services.
25. A seller agent prepares an offer for an unrepresented buyer and delivers it to the seller. What relationship does this create with the buyer?
Answer & explanation
Answer: C. Section 13273(2)(C) allows a seller agent to perform ministerial acts for a buyer without creating a brokerage agreement or transaction-broker role. Drafting is ministerial when done at the buyer's direction.
Sources
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