Hawaii Real Estate State Practice Exam

Which statement is true regarding both a listing contract and a Purchase Contract?

1. All terms, except those required by law, are negotiable

2. Buyers and sellers must mediate and arbitrate if problems arise

3. Either party can cancel at any time unilaterally

4. Supplementary verbal agreements are enforceable if noted by the agent

The correct answer is: All terms, except those required by law, are negotiable

The statement that all terms, except those required by law, are negotiable is true regarding both a listing contract and a purchase contract. In real estate transactions, both contracts are fundamentally agreements between parties in which terms such as price, length of the contract, closing dates, and contingencies can be negotiated to meet the specific needs and circumstances of the buyer and seller involved. This flexibility allows parties to tailor the agreements to their mutual satisfaction, fostering a more personalized and effective transaction process. In real estate, the law does mandate certain terms that must be included in contracts, such as required disclosures or the lawful duration of the contract, but beyond these statutory requirements, the parties involved have the freedom to negotiate and agree upon any other terms they deem necessary. This principle is critical in ensuring that all parties feel their interests are represented and taken into consideration during the agreement phase. The other statements do not accurately reflect the nature of listing and purchase contracts. Mediation and arbitration are methods that may be used to resolve disputes but are not mandatory in every situation. The notion that either party can unilaterally cancel the agreement at any time is incorrect; contracts bind the parties to the agreed terms unless specific conditions are met for cancellation. Finally, while verbal agreements can sometimes