Colorado Practice Test → Contracts

Colorado Contracts
Practice Questions & Answers (2026)

Contract law questions on the Colorado real estate exam test both general contract principles and Colorado-specific transaction requirements. Colorado requires licensees to use state-mandated contract forms — you cannot substitute your own — and questions specifically test the provisions in those CO forms. Pay close attention to offer and acceptance mechanics, how counteroffers extinguish prior offers, and the specific timelines under Colorado law for earnest money handling and contingency resolution. These are areas where candidates who studied nationally often apply the right concept but the wrong CO-specific timeframe or rule.

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Colorado Contracts — Practice Questions & Answers

136 questions on Contracts from the Colorado real estate question bank. First 10 are free — sign up to unlock all 136.

Q1. The Colorado Real Estate Commission-approved contract for the purchase and sale of residential property is called the:

A.Uniform Purchase Agreement
B.Contract to Buy and Sell Real Estate
C.Residential Sales Contract
D.Colorado Purchase and Sale Agreement

Explanation

The Colorado Real Estate Commission approves and requires the use of the 'Contract to Buy and Sell Real Estate' for residential property transactions when a broker is involved.

Q2. Under a Colorado Contract to Buy and Sell, when does the inspection objection deadline typically apply?

A.The day after contract acceptance
B.A negotiated date allowing the buyer time to complete inspections and object to findings
C.30 days after closing
D.Only after the appraisal is received

Explanation

The inspection objection deadline in a Colorado Contract to Buy and Sell is a negotiated date by which the buyer must submit any written objections based on inspection findings. If no objection is submitted by the deadline, the buyer waives the inspection contingency.

Q3. In Colorado, an earnest money deposit in a real estate contract is best described as:

A.The full down payment paid at contract signing
B.A good-faith deposit demonstrating the buyer's intent to purchase
C.The broker's commission held in trust
D.A non-refundable fee paid to the seller

Explanation

Earnest money is a good-faith deposit made by the buyer to demonstrate serious intent to purchase. It is held in a trust or escrow account and applied to the purchase price at closing or returned/forfeited per contract terms if the deal falls through.

Q4. Under Colorado's Contract to Buy and Sell, if a seller accepts an offer and the buyer's loan is denied, the buyer may:

A.Always receive a full refund of earnest money regardless of circumstances
B.Receive a refund only if a loan contingency was included and properly exercised
C.Never receive a refund of earnest money
D.Sue the seller for specific performance

Explanation

If a valid loan contingency is included in the contract and the buyer's loan is denied, the buyer may terminate the contract and receive the earnest money refund. Without such a contingency, the earnest money may be forfeited.

Q5. A Colorado listing contract gives the broker the exclusive right to sell. The sellers find their own buyer independently. Under an exclusive right-to-sell listing:

A.The broker earns no commission since the sellers found the buyer
B.The broker earns the full commission regardless of who procures the buyer
C.The commission is split equally between the broker and the sellers
D.The sellers must list the property with another broker

Explanation

An exclusive right-to-sell listing entitles the broker to a commission regardless of who procures the buyer — including the sellers themselves. This is the most protective listing for the broker.

Q6. Under Colorado contract law, a counteroffer by the seller:

A.Accepts the buyer's original offer with minor modifications
B.Rejects the buyer's offer and creates a new offer that the buyer may accept or reject
C.Extends the deadline for the buyer to accept
D.Requires both parties to proceed to closing

Explanation

A counteroffer rejects the original offer in its entirety and creates a new offer. The original buyer then becomes the offeree and may accept, reject, or counter the seller's counteroffer.

Q7. The Colorado Contract to Buy and Sell Real Estate is promulgated by which body?

A.Colorado Association of REALTORS
B.Colorado Real Estate Commission
C.Colorado Bar Association
D.Colorado Division of Housing

Explanation

The Colorado Real Estate Commission promulgates (creates and approves) the standard Contract to Buy and Sell Real Estate and other standard forms that brokers are required to use.

Q8. In the Colorado Contract to Buy and Sell, the 'closing date' refers to:

A.The date the offer is accepted
B.The date by which all contingencies must be resolved
C.The date on which the transaction is to be completed and title transferred
D.The date the earnest money is deposited

Explanation

The closing date in the Colorado Contract to Buy and Sell is the agreed date on which the transaction closes — all funds are disbursed, documents are signed, and title transfers from seller to buyer.

Q9. Under the Colorado Contract to Buy and Sell, which party typically pays the closing costs associated with the buyer's new loan?

A.The seller always pays all closing costs
B.Closing costs are split equally regardless of their nature
C.The buyer pays loan-related costs unless the contract specifies otherwise
D.Closing costs are always paid from earnest money

Explanation

In the Colorado Contract to Buy and Sell, each party is generally responsible for their own costs. Loan-related costs (origination fees, points, lender fees) are the buyer's responsibility unless the contract negotiates otherwise.

Q10. The 'appraisal objection deadline' in a Colorado Contract to Buy and Sell allows the buyer to:

A.Waive the right to have the property appraised
B.Object to and potentially terminate the contract if the appraised value is less than the purchase price
C.Request the seller reduce the price to any amount the buyer chooses
D.Order a second appraisal at the seller's expense

Explanation

The appraisal objection deadline gives the buyer the right to object to (and potentially terminate) the contract if the property appraises for less than the purchase price. The buyer has until this deadline to exercise this right.

Q11. A Colorado buyer submits an offer with an earnest money deposit of $10,000. Where is this money typically held?

A.In the listing broker's personal account
B.In the employing broker's trust account or an escrow account at the title company
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Colorado License LawAgencyFinanceProperty OwnershipProperty ValuationFair HousingEscrow & TitleReal Estate MathEnvironmentalLand Use & ZoningProperty Management
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