Free West Virginia Contracts Practice Test — LicenseIQ

Question 1

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 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

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 4

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 5

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 6

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 7

A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

Accepted Answer

The option binds only the optionor. The optionee may exercise or let it lapse (forfeiting the option money).

Question 8

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 9

A broker receives an earnest money check on Tuesday, and the purchase agreement says nothing about deposit timing. By when must it be deposited in the trust account?

Accepted Answer

174CSR1 §15.3 requires deposit immediately or by the next business day unless the signed purchase agreement directs or allows otherwise.

Question 10

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 11

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 12

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 13

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 14

A buyer customer decides to sign a buyer agency agreement, making the earlier agency disclosure inaccurate. What must the licensee do?

Accepted Answer

174CSR1 §16 requires a corrected form whenever a change in agency status makes a prior disclosure inaccurate, incomplete or misleading, presented immediately and acknowledged in writing by all parties.

Question 15

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 16

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 17

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 18

How much written notice is required to end a year-to-year tenancy in West Virginia, absent a special agreement?

Accepted Answer

Section 37-6-5 requires written notice at least three months before the end of any year of a year-to-year tenancy.

Question 19

The seller backs out of a contract through no fault of the buyer, and the sale cannot be completed. Absent a court order or agreement of the parties, is the broker entitled to keep the buyer's earnest money as its commission?

Accepted Answer

174CSR1 §10.6 provides that when the seller fails to complete the transaction and the purchaser is not at fault, the broker has no right to the purchaser's earnest money unless the parties agree or a court orders otherwise.

Question 20

A listing agreement says the seller must send written cancellation by certified mail after the expiration date or the listing renews. Is this permitted?

Accepted Answer

Section 30-40-26(b) prohibits requiring the principal to give notice of cancellation after the definite expiration date.

Question 21

A listing expired March 31. In April the seller listed with a different broker and sold to a buyer who had seen the home during the first listing. Under §30-40-26, may the first contract require the seller to pay the first broker a fee?

Accepted Answer

Section 30-40-26(c) bars a representation contract from requiring a fee after expiration when the person has signed with another broker.

Question 22

A buyer's agent receives a verbal offer from her client. What must she do?

Accepted Answer

Failing to reduce a bona fide offer to writing is a ground for discipline (§30-40-19(a)(43)), and every written offer must be promptly delivered to the principal (§30-40-26(e)).

Question 23

How much notice is required to end a month-to-month tenancy under W. Va. Code §37-6-5, absent a special agreement?

Accepted Answer

For periodic tenancies of less than a year, §37-6-5 permits termination by written notice for one full period before the end of a period.

Question 24

Under W. Va. Code §30-40-26, every contract obligating a broker to represent a principal must include:

Accepted Answer

Section 30-40-26(b) requires a definite expiration date and forbids requiring notice of cancellation after that date. Commission rates are negotiable.

Question 25

May a West Virginia licensee offer a buyer a rebate of part of the commission?

Accepted Answer

174CSR1 §18 permits rebates and inducements with clear written disclosure of terms and fair market value, written broker permission and broker supervision.

West Virginia real estate contracts practice test

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

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

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

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

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

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

7. A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

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

9. A broker receives an earnest money check on Tuesday, and the purchase agreement says nothing about deposit timing. By when must it be deposited in the trust account?

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

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

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

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

14. A buyer customer decides to sign a buyer agency agreement, making the earlier agency disclosure inaccurate. What must the licensee do?

15. An offer or counteroffer becomes a binding contract when:

16. 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?

17. 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:

18. How much written notice is required to end a year-to-year tenancy in West Virginia, absent a special agreement?

19. The seller backs out of a contract through no fault of the buyer, and the sale cannot be completed. Absent a court order or agreement of the parties, is the broker entitled to keep the buyer's earnest money as its commission?

20. A listing agreement says the seller must send written cancellation by certified mail after the expiration date or the listing renews. Is this permitted?

21. A listing expired March 31. In April the seller listed with a different broker and sold to a buyer who had seen the home during the first listing. Under §30-40-26, may the first contract require the seller to pay the first broker a fee?

22. A buyer's agent receives a verbal offer from her client. What must she do?

23. How much notice is required to end a month-to-month tenancy under W. Va. Code §37-6-5, absent a special agreement?

24. Under W. Va. Code §30-40-26, every contract obligating a broker to represent a principal must include:

25. May a West Virginia licensee offer a buyer a rebate of part of the commission?

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