Free Missouri Contracts Practice Test — LicenseIQ

Question 1

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 2

A buyer offers a promissory note as earnest money. The broker may accept it only with:

Accepted Answer

20 CSR 2250-8.130 bars accepting notes or items not readily negotiable as earnest money without the owner's signed written consent.

Question 3

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 4

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 5

After a Missouri listing agreement expires, which duties continue?

Accepted Answer

RSMo 339.790.2 states the broker owes no further duties except timely accounting and preserving confidential information that could reasonably harm the client.

Question 6

A cooperating broker becomes a subagent under a unilateral offer of subagency by:

Accepted Answer

RSMo 339.780.5 provides that under a unilateral offer, another broker becomes a subagent by disclosing that status to the customer. The seller must have agreed in writing that subagents may be used.

Question 7

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 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 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 10

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 11

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 12

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 13

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 14

Every Missouri listing agreement must include:

Accepted Answer

20 CSR 2250-8.090 requires a beginning date and expiration date and prohibits clauses requiring the owner to give notice to cancel after expiration. Net listings are prohibited.

Question 15

Unless the contract says otherwise, earnest money must be deposited no later than:

Accepted Answer

20 CSR 2250-8.120 sets the deadline at 10 banking days following the last signature or initial, unless the contract provides otherwise.

Question 16

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 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) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 18

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 19

Before providing brokerage services other than ministerial acts to a buyer as the buyer's agent, the designated broker must have:

Accepted Answer

RSMo 339.780.3 requires a written buyer's agency agreement that states the RSMo 339.740 duties and compensation terms before activities other than ministerial acts.

Question 20

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 21

A broker fills in the blanks on a counsel-approved purchase contract for a client. The broker may:

Accepted Answer

20 CSR 2250-8.140 allows brokers to complete standardized forms but bars a separate charge for doing so.

Question 22

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?

Accepted Answer

A counteroffer is a rejection and a new offer; the original offer cannot be revived by the buyer.

Question 23

A property manager collects $1,250 rent from each of 16 units. The management fee is 7% of collected rent. What is the fee, and how often must fees at least be withdrawn absent another written agreement?

Accepted Answer

16 x $1,250 = $20,000 collected. 0.07 x $20,000 = $1,400. 20 CSR 2250-8.220 requires fees to be withdrawn at least once a month unless otherwise agreed in writing.

Question 24

Every written offer prepared by a Missouri licensee must include:

Accepted Answer

20 CSR 2250-8.100 requires the terms authorized by the principal and the legal description or address and city.

Question 25

After designated agents are appointed for a buyer client, another licensee at the firm helps a seller who has no written agreement. That licensee is presumed to be:

Accepted Answer

RSMo 339.820.1 presumes an affiliated licensee assisting a party without a written agreement is a transaction broker unless another status was disclosed or established.

Missouri real estate contracts practice test

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

2. A buyer offers a promissory note as earnest money. The broker may accept it only with:

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

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

5. After a Missouri listing agreement expires, which duties continue?

6. A cooperating broker becomes a subagent under a unilateral offer of subagency by:

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

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

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

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

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

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

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

14. Every Missouri listing agreement must include:

15. Unless the contract says otherwise, earnest money must be deposited no later than:

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

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) .

18. 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:

19. Before providing brokerage services other than ministerial acts to a buyer as the buyer's agent, the designated broker must have:

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

21. A broker fills in the blanks on a counsel-approved purchase contract for a client. The broker may:

22. 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?

23. A property manager collects $1,250 rent from each of 16 units. The management fee is 7% of collected rent. What is the fee, and how often must fees at least be withdrawn absent another written agreement?

24. Every written offer prepared by a Missouri licensee must include:

25. After designated agents are appointed for a buyer client, another licensee at the firm helps a seller who has no written agreement. That licensee is presumed to be:

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