Contracts, Financing and Settlement
Area IX is 15% of the exam — the second largest. It runs from contract formation through the sales contract, financing, lender requirements, settlement calculations and foreclosure.
Contract Formation and Written Agreements
A valid contract needs competent parties, mutual assent, consideration, a lawful object, and for an interest in land a writing signed by the party to be charged. A sales contract is bilateral; an option is unilateral, binding only the optionor. Regulation 10.10(a) makes the licensee responsible for seeing that the exact agreement of the parties is in writing and that clients and other parties receive copies signed by all parties, and strongly recommends a written acknowledgment of receipt. Regulation 10.10(c) requires attorney-approved forms. Sections 17-42-317(c) and 17-42-318(c) both bar a licensee from performing any act that constitutes the practice of law.
Offers, Earnest Money and Disputes
Regulation 10.12(a) requires all offers on a property to be presented promptly to the seller by the listing firm or its designee. Where the listing is exclusive, Regulation 10.13(a) requires a selling licensee to deliver an offer to the listing firm not later than the close of the next business day and to forward earnest money to the listing firm's trust account. Earnest money is trust funds under Regulation 10.8(a) and may not be disbursed contrary to the contract. When buyer and seller both claim it, Regulation 10.9(c) offers the ways out — a written agreement signed by all parties with an interest, an interpleader action, or a court order — and Regulation 10.9(d) requires immediate written notice to all parties of any disbursement they did not expressly agree to in writing.
Financing
The promissory note is the borrower's promise to repay; the mortgage or deed of trust is the security instrument that pledges the property. In full amortization the payment stays level while the interest share falls and the principal share grows. A due-on-sale clause lets the lender call the balance on transfer; a prepayment penalty charges for early payoff; a partial release clause frees parcels from a blanket mortgage. Private mortgage insurance protects the lender on a conventional loan above eighty percent loan-to-value; hazard insurance covers physical loss; flood insurance is required when the improved structure sits in a special flood hazard area on FEMA's map.
Settlement and Foreclosure
Commission suits are constrained by Ark. Code Ann. § 17-42-107: an affiliated licensee may sue only the principal broker with whom he or she is or was licensed, and no action for compensation lies at all unless the plaintiff was an active principal broker or property management broker, or the owner of the firm that acted through one. Prorating divides a recurring expense by ownership period: where the seller has prepaid the year's tax, the buyer reimburses the seller for the post-closing portion, shown as a buyer debit and a seller credit. In a judicial foreclosure the lender obtains a decree and the property is sold at a public sale, with proceeds applied to costs and the secured debt, any surplus to junior lienholders and then the borrower.
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State-specific details
State exam facts
- State regulator
- Arkansas Real Estate Commission (AREC)
- Exam vendor
- Pearson VUE
- Prelicensing education
- 60 classroom hours within the prior 36 months, 45 of them the Commission-developed Broker Pre-License Course
- Passing score
- 70 (scaled)
- Scored questions
- 120
Who regulates real estate brokers in Arkansas?
The Arkansas Real Estate Commission (AREC) licenses principal brokers, executive brokers, associate brokers, and salespersons under the Arkansas Real Estate License Law, Ark. Code Ann. § 17-42-101 et seq., and the Commission Regulations. AREC contracts with Pearson VUE to deliver the licensing exams at test centers across Arkansas and at select military installations.
What education and experience do I need before the Arkansas broker exam?
AREC Regulation 4.1(a)(2) requires not less than 60 classroom hours completed within the 36 months immediately preceding the application, of which at least 45 must be in a course developed by the Commission — the Broker Pre-License Course, not merely a Commission-approved course. Ark. Code Ann. § 17-42-303(b)(1) adds the experience: an active, bona fide apprenticeship holding a valid salesperson license from AREC, or a salesperson or broker license from another state, for not less than 24 months within the previous 48-month period. Section 17-42-303(b)(2) allows the Commission to waive that experience for an applicant who has held an active broker license for at least 18 months or has 24 months of acceptable real-estate-related experience.
How is the Arkansas broker exam structured?
Unlike most states, Arkansas gives brokers a single UNIFIED examination rather than a national portion plus a state portion. Pearson VUE handbook #090400 (rev. June 2026): "The Arkansas Unified Real Estate Broker examination covers both general knowledge concepts, as well as Arkansas-specific content. The examination consists of 120 scored items and ten pretest (unscored) items." Because it is one-part comprehensive it cannot be divided into portions for reexamination — fail it and you retake the whole thing. The content outline effective December 1, 2025 publishes ten areas as percentages: Commission duties 4%, licensure 10%, other Arkansas statutes 6%, federal law 10%, broker operations 18%, agency 12%, property characteristics 10%, valuation 5%, contracts and financing 15%, property management 10%.
What score do I need, and how long do I get?
The Commission set a passing SCALED score of 70. That is not 70% correct: the handbook states the scaled score reported "is neither the number of questions answered correctly nor the percentage of questions answered correctly." Numeric scores are reported only to candidates who fail. The handbook publishes no per-exam time limit — its Quick Reference says only that you will have "two to four hours" to complete your exam, a range covering all five Arkansas real estate and property management exams. The exam fee is $75, paid to Pearson VUE at reservation.
Sources: https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/090400.pdf, https://arec.arkansas.gov/wp-content/uploads/AR-Real-Estate-License-Law-April-2026.pdf, https://arec.arkansas.gov/wp-content/uploads/2024-Commission-Regulations-04092025-LKA.pdf, https://arec.arkansas.gov/licensing/exam-information/
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