Free North Dakota 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

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 3

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 4

An Arizona developer's advertising for lots offered in North Dakota states 'Approved by the North Dakota Real Estate Commission.' This statement is:

Accepted Answer

NDCC 43-23.1 provides that advertising may not claim Commission approval or endorsement, even after registration. The $25,000 bond is a separate registration requirement.

Question 5

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 6

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 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:

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 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

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 10

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 11

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 12

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 13

For residential property of one to four units, a licensee must have a signed written listing agreement:

Accepted Answer

N.D. Admin. Code 70-02-03-04 requires a signed written listing before the property is advertised or offered.

Question 14

A buyer offers a personal promissory note as the earnest money deposit. The licensee may accept it:

Accepted Answer

N.D. Admin. Code 70-02-03-14 bars accepting notes or nonnegotiable or hard-to-liquidate items as deposits without the principal's knowledge and permission.

Question 15

Unless the purchase contract provides otherwise, earnest money received by a North Dakota broker must be deposited within:

Accepted Answer

N.D. Admin. Code 70-02-01-15 and NDCC 43-23-11.1 require deposit within 24 hours of receipt, extended to the next business day when the depository is closed.

Question 16

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 17

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 18

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 19

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 20

A wholesaler assigns his equitable interest in a purchase contract without giving the required written disclosure. Under NDCC 43-23-24, the end buyer may:

Accepted Answer

NDCC 43-23-24 lets the buyer cancel before closing without penalty with a full earnest money refund, and lets the seller cancel and keep the earnest money. Treble damages relate to bad-faith deposit retention under the landlord-tenant law.

Question 21

After an offer is accepted, executed copies must be delivered to:

Accepted Answer

N.D. Admin. Code 70-02-03-06 requires executed copies to go to both the seller and the buyer.

Question 22

A licensed agent from a state that has no reciprocity agreement with North Dakota passed her home state's exam. To get a North Dakota salesperson license she must:

Accepted Answer

N.D. Admin. Code 70-02-01-06 lets an applicant licensed in a nonreciprocal state who passed another state's exam take only the North Dakota state portion, without a prelicense course. The Commission's application page says the same.

Question 23

Before acting as a buyer's representative for a one-to-four-unit home, a licensee must have a signed buyer's broker agreement that includes all of the following EXCEPT:

Accepted Answer

N.D. Admin. Code 70-02-03-05.1 requires an expiration date, the compensation, the services and compensation triggers, and a dual agency disclosure if applicable. A maximum purchase price is not a required term, and revealing it would be confidential information anyway.

Question 24

A seller wants to change several material terms in a buyer's offer. Under the Commission's rule, the best practice is to:

Accepted Answer

N.D. Admin. Code 70-02-03-06 says changes must be initiated and agreed to by the offeror, and material or extensive changes call for rewriting the entire offer.

Question 25

A listing agent receives three written offers on the same afternoon. The agent must:

Accepted Answer

N.D. Admin. Code 70-02-03-06 requires prompt presentation of every written offer. Screening offers violates the rule and NDCC 43-23-11.1.

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

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

4. An Arizona developer's advertising for lots offered in North Dakota states 'Approved by the North Dakota Real Estate Commission.' This statement is:

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

6. 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:

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:

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. An offer or counteroffer becomes a binding contract when:

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

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

12. 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:

13. For residential property of one to four units, a licensee must have a signed written listing agreement:

14. A buyer offers a personal promissory note as the earnest money deposit. The licensee may accept it:

15. Unless the purchase contract provides otherwise, earnest money received by a North Dakota broker must be deposited within:

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

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

18. 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?

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

20. A wholesaler assigns his equitable interest in a purchase contract without giving the required written disclosure. Under NDCC 43-23-24, the end buyer may:

21. After an offer is accepted, executed copies must be delivered to:

22. A licensed agent from a state that has no reciprocity agreement with North Dakota passed her home state's exam. To get a North Dakota salesperson license she must:

23. Before acting as a buyer's representative for a one-to-four-unit home, a licensee must have a signed buyer's broker agreement that includes all of the following EXCEPT:

24. A seller wants to change several material terms in a buyer's offer. Under the Commission's rule, the best practice is to:

25. A listing agent receives three written offers on the same afternoon. The agent must:

Sources