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:
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.
2. A seller delivers the Seller's Disclosure Notice 4 days after the contract's effective date. What right does the buyer have?
Answer & explanation
Answer: D. §5.008(f) allows a buyer who receives the notice after the effective date to terminate for any reason within 7 days after receipt.
3. Why does TREC promulgate standard contract forms for license holders?
Answer & explanation
Answer: D. Promulgated forms let license holders fill in factual blanks without drafting legal language, which would be the unauthorized practice of law. TREC does not set commissions.
4. Under the TREC resale contract, when must the seller furnish the title commitment?
Answer & explanation
Answer: D. Paragraph 6B requires the commitment within 20 days after the title company receives the contract.
5. A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?
Answer & explanation
Answer: A. At 95% LTV the down payment is 5% of price. Price = $18,000 / 0.05 = $360,000; loan = $342,000.
6. A contract signed by a 17-year-old buyer is generally:
Answer & explanation
Answer: B. Contracts with minors are voidable at the minor's option; the adult party remains bound. A contract with someone adjudged insane is void.
7. A seller fails to give the MUD notice before contract, then hands it to the buyer at closing, and the buyer closes. What is the effect?
Answer & explanation
Answer: A. If the notice is given at or before closing and the purchaser elects to close, the purchaser is presumed to have waived termination and damages under §49.452.
8. Which term is permitted in a non-representation, showing-only agreement?
Answer & explanation
Answer: C. A showing-only agreement must be non-exclusive and may not state a termination date more than 14 days after signing. The agent may not give opinions or advice.
9. Under the statute of frauds, a real estate sales contract must be:
Answer & explanation
Answer: C. The statute of frauds requires real estate sales contracts to be in writing and signed to be enforceable.
10. 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.
11. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):
Answer & explanation
Answer: B. 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.)
12. The seller refuses to close without legal excuse. Which remedies does the buyer have under the TREC resale contract?
Answer & explanation
Answer: A. Paragraph 15 gives the buyer the choice of enforcing specific performance or other relief, or terminating and receiving the earnest money.
13. To whom does the buyer deliver the earnest money under the TREC resale contract?
Answer & explanation
Answer: D. Earnest money and the option fee are made payable to and delivered to the escrow agent, usually a title company.
14. 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.
15. 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.
16. 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.
17. A listing agent calls a buyer's agent about an offer. When must the listing agent disclose that the listing agent represents the seller?
Answer & explanation
Answer: A. §1101.558(b) requires a representing license holder to disclose the representation, orally or in writing, at the first contact with another party or that party's license holder.
18. A broker sues a seller for a commission based on an oral listing agreement. What is the most likely result?
Answer & explanation
Answer: B. §1101.806(c) bars an action to recover a commission unless the promise is in writing and signed by the party against whom the action is brought, or that party's authorized signer.
19. 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.
20. Under the TREC resale contract, when must the buyer deliver the earnest money and option fee?
Answer & explanation
Answer: B. Paragraph 5A requires delivery to the escrow agent within 3 days after the Effective Date.
21. 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?
Answer & explanation
Answer: B. 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.
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?
Answer & explanation
Answer: B. A counteroffer is a rejection and a new offer; the original offer cannot be revived by the buyer.
23. 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.
24. Which is the most common and desirable way a real estate sales contract terminates?
Answer & explanation
Answer: C. Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.
25. An offer or counteroffer becomes a binding contract when:
Answer & explanation
Answer: A. Acceptance must be unconditional and communicated back to the offeror; any change creates a counteroffer instead.
Sources
Source verification pending. Confirm current requirements with your state regulator.