Free Washington Contracts Practice Test — LicenseIQ

Question 1

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 2

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 3

Since January 1, 2024, when must a firm enter into a written services agreement with a buyer?

Accepted Answer

RCW 18.86.020, as amended by Laws of 2023, ch. 318 (effective January 1, 2024), requires the services agreement before or as soon as reasonably practical after services begin.

Question 4

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 5

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 6

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 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 buyer services agreement does not state a term. Under RCW 18.86.020, it has a default term of:

Accepted Answer

RCW 18.86.020 provides a default term of 60 days for buyer services agreements, which may be extended by the parties.

Question 9

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 10

A written property management agreement in Washington must be signed by:

Accepted Answer

WAC 308-124D-215 requires a written management agreement signed by the owner and the designated broker, kept on file.

Question 11

Mutual acceptance occurs Monday, June 1, 2026. The seller delivers the disclosure statement Thursday, June 4. Absent other agreement and holidays, the buyer's last day to deliver a written rescission is:

Accepted Answer

The buyer has three business days after delivery (RCW 64.06.030). Counting business days after June 4: Friday June 5 (1), Monday June 8 (2), Tuesday June 9 (3). Weekend days do not count, so Sunday June 7 is wrong.

Question 12

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 13

A contract that is missing an essential element, such as consideration, is:

Accepted Answer

Missing an essential element makes a contract void from the start. A voidable contract appears valid but may be canceled by one party.

Question 14

After a seller signs a listing agreement, the broker must give the seller a copy:

Accepted Answer

RCW 18.85.285(3) and RCW 18.85.361(18) require licensees to give copies of signed agreements to all signers within a reasonable time.

Question 15

According to DOL guidance, a broker may offer a buyer a rebate of part of the commission if:

Accepted Answer

DOL's advertising guidelines state rebates are lawful when the firm approves the reduction, and that buyers using financing may need lender approval. No dollar cap or seller consent applies.

Question 16

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 17

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 18

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 19

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 20

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 21

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 22

After receiving the seller disclosure statement, a buyer may rescind the purchase agreement within:

Accepted Answer

RCW 64.06.030 gives the buyer three business days after delivery (or an agreed period) to approve or rescind by written notice, in the buyer's sole discretion.

Question 23

A broker represents a buyer looking for a warehouse. Which is correct?

Accepted Answer

RCW 18.86.020 does not require a services agreement for a buyer's agent working solely on commercial real estate, and RCW 18.86.080 allows a Compensation Disclosure for commercial buyers.

Question 24

Which item is NOT a required term of a Washington buyer services agreement?

Accepted Answer

RCW 18.86.020 and 18.86.080 require the term, appointed broker, exclusive/nonexclusive status, dual agency consent, compensation, and whether the broker will show properties without offered compensation. A maximum price is confidential information, not a required term.

Question 25

A married buyer signs a purchase agreement for a home without her spouse's participation, intending it as community property. Under RCW 26.16.030:

Accepted Answer

RCW 26.16.030(4) states that neither spouse or domestic partner may purchase or contract to purchase community real property without the other joining in the transaction.

Washington real estate contracts practice test

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

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

3. Since January 1, 2024, when must a firm enter into a written services agreement with a buyer?

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

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

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

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 buyer services agreement does not state a term. Under RCW 18.86.020, it has a default term of:

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

10. A written property management agreement in Washington must be signed by:

11. Mutual acceptance occurs Monday, June 1, 2026. The seller delivers the disclosure statement Thursday, June 4. Absent other agreement and holidays, the buyer's last day to deliver a written rescission is:

12. 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?

13. A contract that is missing an essential element, such as consideration, is:

14. After a seller signs a listing agreement, the broker must give the seller a copy:

15. According to DOL guidance, a broker may offer a buyer a rebate of part of the commission if:

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

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

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

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

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

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

22. After receiving the seller disclosure statement, a buyer may rescind the purchase agreement within:

23. A broker represents a buyer looking for a warehouse. Which is correct?

24. Which item is NOT a required term of a Washington buyer services agreement?

25. A married buyer signs a purchase agreement for a home without her spouse's participation, intending it as community property. Under RCW 26.16.030:

Sources