Free Oregon 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

After a licensee receives a written acceptance, within what time must copies of the signed agreement go to both buyer and seller?

Accepted Answer

OAR 863-015-0135(4) requires copies within three banking days. Seven banking days is the principal broker's review window.

Question 3

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 4

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 5

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 6

Which affirmative duty of a seller's agent may be waived or modified by written agreement?

Accepted Answer

ORS 696.805(5) makes the affirmative duties non-waivable except the continuous-marketing duty in (3)(g). The core fiduciary duties cannot be waived.

Question 7

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 8

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 9

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 10

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 11

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 12

When a management agreement ends, by when must the manager notify each tenant whose security deposit it holds about the transfer?

Accepted Answer

OAR 863-025-0070(3) requires notice no later than the next calendar day, naming the recipient of the deposits.

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

Which item must a disclosed limited agency agreement include under OAR 863-015-0210?

Accepted Answer

OAR 863-015-0210(2) requires the business name, existing agreements, licensee names including the principal broker, a description of ORS 696.815, disclosure of duties, and consent about future transactions. Confidentiality cannot be waived.

Question 15

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 16

Which item must an Oregon property management agreement include?

Accepted Answer

OAR 863-025-0020(2)(f) requires disclosure of all compensation and when it is earned and paid.

Question 17

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Question 18

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 19

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 20

When a seller changes a term of the buyer's offer and returns it, this creates a:

Accepted Answer

Altering any term rejects the original offer and creates a counteroffer, which the buyer may accept or reject.

Question 21

Within how many banking days must a principal broker review each agreement document generated in a transaction after it is accepted, rejected, or withdrawn?

Accepted Answer

OAR 863-015-0140(4) sets seven banking days for principal broker review. Three banking days is the deadline for a broker to deliver documents to the principal broker.

Question 22

If no agreement or proof of a legal claim arrives within the 20-day period, to whom may the principal broker disburse disputed trust funds?

Accepted Answer

OAR 863-015-0186(5) allows disbursal to the depositing party. The broker has no authority to decide the merits.

Question 23

Under HB 4058, an Oregon licensee may not enter into or be paid under a residential future right-to-list contract that:

Accepted Answer

HB 4058 bars licensee participation in such contracts that exceed 24 months, run with the land, can be assigned without the owner's notice and consent, or create a lien. A short, consent-based contract is not barred.

Question 24

An earnest money receipt in an Oregon offer must specifically state:

Accepted Answer

OAR 863-015-0135(6) requires the receipt to state the form of the earnest money.

Question 25

An offer says the earnest money check will be held undeposited until acceptance. After the seller accepts, when must the check be deposited into the trust account or with a licensed Oregon neutral escrow?

Accepted Answer

OAR 863-015-0255(5) requires deposit before the close of the third banking day after acceptance. Five banking days applies to other funds belonging to others.

Oregon real estate contracts practice test

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

2. After a licensee receives a written acceptance, within what time must copies of the signed agreement go to both buyer and seller?

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

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

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

6. Which affirmative duty of a seller's agent may be waived or modified by written agreement?

7. 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:

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

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

10. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

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

12. When a management agreement ends, by when must the manager notify each tenant whose security deposit it holds about the transfer?

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. Which item must a disclosed limited agency agreement include under OAR 863-015-0210?

15. 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?

16. Which item must an Oregon property management agreement include?

17. Under a land contract (contract for deed), during the payment period the buyer holds:

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

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

20. When a seller changes a term of the buyer's offer and returns it, this creates a:

21. Within how many banking days must a principal broker review each agreement document generated in a transaction after it is accepted, rejected, or withdrawn?

22. If no agreement or proof of a legal claim arrives within the 20-day period, to whom may the principal broker disburse disputed trust funds?

23. Under HB 4058, an Oregon licensee may not enter into or be paid under a residential future right-to-list contract that:

24. An earnest money receipt in an Oregon offer must specifically state:

25. An offer says the earnest money check will be held undeposited until acceptance. After the seller accepts, when must the check be deposited into the trust account or with a licensed Oregon neutral escrow?

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