Free Utah Contracts Practice Test — LicenseIQ

Question 1

A mortgage broker offers a Utah agent $500 for each client referred. The agent may:

Accepted Answer

R162-2f-401b(1)(m) prohibits accepting a referral fee from a lender or mortgage broker, regardless of disclosure. The $250 figure applies to gifts to unlicensed referrers.

Question 2

A buyer asks the agent to prepare one REPC at a higher price for the lender and a second at the true price. This is:

Accepted Answer

R162-2f-401b(1)(f) prohibits using or proposing a double contract, and 401b(1)(d) bars documents that do not reflect true terms. Party consent does not make it lawful.

Question 3

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 4

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 5

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 6

Which offers must a Utah principal broker keep in a separate file?

Accepted Answer

R162-2f-401c(1)(j) requires separate files for each offer with trust funds, including rejected ones. Rejected offers without deposits may share a file.

Question 7

As a limited agent, a licensee learns the buyer would pay $15,000 more than offered. Without the buyer's permission, the licensee may:

Accepted Answer

R162-2f-401b(1)(t) forbids a limited agent from disclosing information that would likely weaken a party's bargaining position unless permitted. Representing both parties does not create a duty to share it.

Question 8

A Utah licensee offering a guaranteed sales plan must give the seller a written contract that includes, among other things:

Accepted Answer

R162-2f-401a(23) requires the conditions, charges, price, and approximate net proceeds. A license number is not part of that list.

Question 9

After the buyer and seller sign a sales contract but before closing, the contract is:

Accepted Answer

A contract is executory while obligations remain to be performed; it becomes executed when fully performed (at closing).

Question 10

A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

Accepted Answer

RESPA prohibits kickbacks and unearned referral fees between settlement service providers and real estate licensees, even if disclosed.

Question 11

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 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

A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

Accepted Answer

Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.

Question 14

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 15

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 16

A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

Accepted Answer

USDA Rural Development loans serve eligible rural buyers who meet income limits, often with no down payment.

Question 17

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 18

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 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

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 21

Buyer and seller make written competing claims to earnest money, the agreements don't resolve it, no suit has been filed, and the contract requires mediation. The principal broker may:

Accepted Answer

R162-2f-403a(8) allows interpleader or, within 15 days, referral to mediation if no suit is filed and the contract requires mediation. Unilateral disbursement is prohibited.

Question 22

After a property management agreement ends, the principal broker must deliver trust money to the owner within:

Accepted Answer

R162-2f-401j requires delivery within 30 days. Sixty days is the deadline for sweeping earnings to operating.

Question 23

A Utah exclusive brokerage agreement gives the sole right to act for the client to:

Accepted Answer

61-2f-308 states that an exclusive brokerage agreement gives the principal broker the sole right to act for the client. Agreements belong to the principal broker, not the individual agent.

Question 24

An unlicensed person is offered a fee to find a buyer for a neighbor's home and negotiate one sale. Under Utah law, this person:

Accepted Answer

61-2f-201 requires a license for performing even one act of buying, selling, or exchanging real estate for another for compensation. The isolated-transaction exemption applies only to someone acting under an unsolicited, duly executed power of attorney, not a person hired for a fee to broker the deal.

Question 25

To counter a buyer's REPC, a Utah agent should:

Accepted Answer

R162-2f-401a(18) requires an approved addendum for counteroffers, and 401b(1)(p) prohibits altering the boilerplate or filled-in blanks. Striking and initialing is the common but prohibited practice.

Utah real estate contracts practice test

1. A mortgage broker offers a Utah agent $500 for each client referred. The agent may:

2. A buyer asks the agent to prepare one REPC at a higher price for the lender and a second at the true price. This is:

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

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

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

6. Which offers must a Utah principal broker keep in a separate file?

7. As a limited agent, a licensee learns the buyer would pay $15,000 more than offered. Without the buyer's permission, the licensee may:

8. A Utah licensee offering a guaranteed sales plan must give the seller a written contract that includes, among other things:

9. After the buyer and seller sign a sales contract but before closing, the contract is:

10. A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

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

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. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

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

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

16. A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

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

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

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

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

21. Buyer and seller make written competing claims to earnest money, the agreements don't resolve it, no suit has been filed, and the contract requires mediation. The principal broker may:

22. After a property management agreement ends, the principal broker must deliver trust money to the owner within:

23. A Utah exclusive brokerage agreement gives the sole right to act for the client to:

24. An unlicensed person is offered a fee to find a buyer for a neighbor's home and negotiate one sale. Under Utah law, this person:

25. To counter a buyer's REPC, a Utah agent should:

Sources