Free Wisconsin Contracts Practice Test — LicenseIQ

Question 1

Who may prepare a property management agreement between a firm and a landlord that qualifies as an approved form under REEB 16.03?

Accepted Answer

REEB 16.03(1)(e) approves property management agreements prepared by the broker, an attorney, or the landlord.

Question 2

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 3

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 4

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 5

When a party objects to a disbursement the firm plans to make under the contract, what notice is required before the firm disburses?

Accepted Answer

REEB 18.09(2) requires certified-mail notice and a 30-day waiting period.

Question 6

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

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.)

Question 7

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 8

A seller responds to a buyer's WB-11 with a WB-44 Counter-Offer. The buyer rejects the counter. Can the seller now accept the buyer's original offer?

Accepted Answer

A counter-offer operates as a rejection of the original offer and a new offer. Once countered, the original offer cannot be revived by the seller's later acceptance.

Question 9

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 10

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 11

For an agency agreement involving residential property of one to four dwelling units, what additional step is required if the Disclosure to Clients is NOT incorporated into the agreement?

Accepted Answer

When the client disclosure is not built into a 1-4 unit residential agency agreement, the firm must ask the client to sign an acknowledgment of receipt.

Question 12

Which form is used for an offer on a residential condominium unit?

Accepted Answer

WB-14 is the Residential Condominium Offer to Purchase. WB-4 is the condominium listing, not the offer.

Question 13

A contract that has all legal elements but where one party may cancel is:

Accepted Answer

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.

Question 14

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 15

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 16

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 17

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 18

Which form is used for an offer on an unimproved building lot?

Accepted Answer

WB-13 is the Vacant Land Offer to Purchase.

Question 19

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 20

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 21

A seller has three competing offers and wants to respond to two buyers at the same time. Which form is designed for this?

Accepted Answer

The WB-46 is the form for responding to multiple buyers simultaneously. The WB-44 is an ordinary counter-offer to a single offer.

Question 22

A married man owns his family's homestead in his name alone. To sell it, who must sign the contract or join by separate conveyance?

Accepted Answer

Section 706.02(1)(f) requires each spouse to sign, or join by separate conveyance, any conveyance alienating a married person's homestead interest, regardless of title.

Question 23

A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 24

Buyer and seller want a title company to hold earnest money as a neutral escrow agent. Which is correct?

Accepted Answer

REEB 18.06 bars licensees from drafting escrow agreements and bars the firm from holding the funds in its trust account or acting as custodian when a neutral escrow agent is used.

Question 25

The WB-36 Buyer Agency/Tenant Representation Agreement may be altered to create:

Accepted Answer

REEB 16.06(9) allows the buyer agency form to be altered into these three types of agreements.

Wisconsin real estate contracts practice test

1. Who may prepare a property management agreement between a firm and a landlord that qualifies as an approved form under REEB 16.03?

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

3. 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:

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

5. When a party objects to a disbursement the firm plans to make under the contract, what notice is required before the firm disburses?

6. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

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

8. A seller responds to a buyer's WB-11 with a WB-44 Counter-Offer. The buyer rejects the counter. Can the seller now accept the buyer's original offer?

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

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

11. For an agency agreement involving residential property of one to four dwelling units, what additional step is required if the Disclosure to Clients is NOT incorporated into the agreement?

12. Which form is used for an offer on a residential condominium unit?

13. A contract that has all legal elements but where one party may cancel is:

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

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

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

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

18. Which form is used for an offer on an unimproved building lot?

19. 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) .

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

21. A seller has three competing offers and wants to respond to two buyers at the same time. Which form is designed for this?

22. A married man owns his family's homestead in his name alone. To sell it, who must sign the contract or join by separate conveyance?

23. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

24. Buyer and seller want a title company to hold earnest money as a neutral escrow agent. Which is correct?

25. The WB-36 Buyer Agency/Tenant Representation Agreement may be altered to create:

Sources