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PSI Real Estate Exam: Contracts
Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What is the purpose of a "real estate contract"?✔✔ A real estate contract is a legally binding agreement between parties involved in a real estate transaction, outlining the terms and conditions of the sale or lease.
What is an "option contract" in real estate?✔✔ An option contract gives a buyer the right, but not the obligation, to purchase a property within a specified time frame, for a set price.
What does "consideration" mean in the context of a real estate contract?✔✔ Consideration refers to something of value, such as money or services, that is exchanged between the parties to a contract, making it legally enforceable.
What is a "counteroffer" in real estate?✔✔ A counteroffer is a response to an offer made in a contract negotiation, where the original offer is rejected, and new terms are proposed.
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What is a "listing agreement" in real estate?✔✔ A listing agreement is a contract between a property owner and a real estate broker that authorizes the broker to find a buyer for the property.
What is the difference between "bilateral" and "unilateral" contracts?✔✔ A bilateral contract involves a mutual exchange of promises between two parties, while a unilateral contract involves one party making a promise that the other party can accept by performing an act.
What is the "statute of limitations" in real estate contracts?✔✔ The statute of limitations sets the maximum time period within which a party can file a lawsuit to enforce a contract or resolve a legal dispute.
What is a "sales contract" in real estate?✔✔ A sales contract is an agreement between a buyer and seller that outlines the terms of the property sale, including price, contingencies, and closing details.
What is "mutual assent" in a contract?
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