Ohio Real Estate Exam| Latest 2026/2027 Edition |Correct Questions with Correct Answers | A+ Graded and Fully Updated

Ohio Real Estate Exam| Latest 2026/2027 Edition |Correct Questions with Correct Answers | A+ Graded and Fully Updated 2026 / 2027 Academic Year Q: A buyer asks a real estate agent to prepare a land installment contract. The agent obtains the contract and proceeds to fill out the preprinted form for the buyer. What is this a case of? Answer This is a case of an unauthorized practice of law and a violation of Ohio real estate law. An agent found guilty of violating Ohio real estate advertising laws, may be subject to both a $200 fine per violation by the Superintendent, and a fine of $2,500 per violation by the Ohio Real Estate Commission. Q: The entity or person in charge of determining whether or not the agent is guilty in the case of violating Ohio real estate code Answer Superintendent A real estate agent is found guilty of a fair housing law violation, the agent's broker is liable only if the broker knew of the actions of the agent, and did nothing to correct it. Q: If the listing agent represents both buyer and seller in the same transaction, this is known as dual agency. Is dual agency legal in Ohio? Answer Yes, representing both parties in a transaction is legal under Ohio law, as long as both parties agree in writing. Q: Dual agency is forbidden in which case: Answer A real estate agent wants to sell his own house and act as the buyer and the sellers agent. Q: Any interest earned on a property management trust account belongs to who? Answer The Property Owner Q: Whenever you pay your agency fees a portion of those fees go towards the recovery fund, how much specifically? Answer $10.00 Q: The Ohio Real Estate Commission notes in its quarterly newsletter if an agent has had his or her license suspended and has been fined. This is known as a Answer public reprimand Q: Which event will NOT trigger the licensee's obligation to provide the "Guide to Agency Relationships?" Answer Discussing the property to someone during an open house Answer They have a 3 day right of rescission from the day they receive the form. Q: The entity or person who holds hearings to determine the punishment for a real estate agent who has violated the Ohio real estate codes is the Answer Ohio Real Estate Commission Q: The Williams family entered into a purchase agreement with the seller of a single family residence. Ten days into the transaction the family is given a copy of the Ohio Residential Property disclosure statement. On the disclosure the seller notes that the loft has a leak. What rights if any does The Williams family have? Q: In Ohio, what is the most important aspect of a real estate agency advertisement? Answer Broker Q: If an auditor visits a real estate broker's office and demands to see its records, how many years of records are required to be shown? Answer Three Q: Susie was approached by a real estate agent who offered to put her house on the MLS for a flat fee of $595. In addition to the Listing Agreement, the Lead Disclosure, and the Consumer Guide to Agency, what other form does Susie need to sign? Answer The waiver of duties statement Q: Which of the following is not under the jurisdiction of the Division of Real Estate? Answer Reprimands Q: Jason receives a Cease and Desist order from the Ohio Real Estate Commission. If ignored, how much per day can Jason be fined by the Commission? Answer $1,000.00 Q: What part of an Agency Disclosure Statement would a transaction involving two brokers fill out? Answer Section-I Q: If any Real Estate Commission judgements are appealed which court are they first sent to? Answer Court of Common Pleas Q: Real Estate Agent Vanessa Hamilton advertised a property being in the Boardman school district, while it was actually in the Brookfield school district, and she posted the information on the MLS. What is this a violation of ? Answer License Law Q: A person selling detachable mobile homes in Ohio is required to be licensed as what? Answer No real estate license is required Q: Real Estate Agent Jimmy John took out a large page ad in the local newspaper. In the ad, Jimmy's name was the same size as his broker's. What punishment will Jimmy receive if any? Answer Nothing will happen to Jimmy; he is actually following Ohio Law. Q: A "Consumer Guide to Agency Relationships" form must be provided for all of the following except Answer A commercial property Q: In Ohio net leases are leases typically that consist of which factors: Answer All expenses related to the property Q: Property management activity, such as rent, must be deposited in Answer Property management accounts Q: After a 2nd Fair Housing violation offense the commission may suspend or revoke a license for any broker or sales agent (found guilty) for a minimum of Answer 2 months Q: What part of an Agency Disclosure Statement would an in-company transaction fill out? Answer Section-II Q: What will happen if a real estate applicant is charged with applicant misconduct after the examination but before they officially receive their license? Answer The real estate application will be denied. Q: Jessica Smalls is a real estate agent working under Hannah Biggs. Hannah has had her brokers license suspended and it will be unsuspended next week. Jessica took a listing on Hannah and put the listing up on her website. Which of the following best describes the situation? Answer Hannah will be punished and suspended again. Q: A real estate agent is selling Ohio property that is owned by a resident of New Mexico. The buyer is a resident of Michigan. In order to perform this transaction the real estate agent must be licensed in Answer Ohio Q: In Ohio if a license of an agent is suspended or revoked, what real estate activities can the agent perform? Answer None, they cannot perform any real estate license related activities. Q: The fee for transferring a license from one broker to another: Answer $25.00 Q: Who appoints the members of the Ohio Real Estate Commission? Answer The Ohio state elected governor Q: The purpose of the Recovery Fund is to enable Answer people to get recourse of uncollected judgement against licensees. Q: If a buyer requests a property disclosure form and the seller refuses to provide it, while the buyer already signed an agreement to purchase a home. What rights are available to the buyer? Answer The buyer can rescind the contract. Q: While discussing a future listing, you are asked by the seller to not disclose a minor leak in the seller's penthouse. Knowing this, you should Answer Explain to the seller your obligation under law that the defect must be disclosed to potential buyers. Q: The commission may ask for additional funds for the recovery fund if it is below Answer $250,000.00 Q: Which would cause a real estate agent to lose their Ohio state real estate license? Answer A violation of the Canons of Ethics Q: Ohio real estate law promotes Answer transparency Q: If a seller is aware of a termite infestation from twenty years ago and informs the agent, what must an agent do? Answer Disclose the information to the buyer. Q: May a consumer who has been harmed by a licensee acting under her license as a real estate salesperson or broker immediately file a claim for payment from the Real Estate Recovery Fund? Answer CORRECT ANSWER: No, the consumer must file a lawsuit, get a final judgment, and attempt to collect Q: A listing agreement in which the agent may possibly be in competition with the client to see who can sell the house first is an exclusive Answer CORRECT ANSWER: agency Q: According to the Statute of Frauds, what does NOT have to be in writing? Answer CORRECT ANSWER: listing agreement Q: If a third party maintains a website for a licensee, places information on the website on behalf of the licensee, and that information becomes outdated or expired, how soon must it be updated or removed? Answer CORRECT ANSWER: Outdated and expired information must be updated or removed within two weeks Q: After issuing a bad check, the Division requires the licensee to send certified funds for all subsequent payments for a period of Answer CORRECT ANSWER: 5 years Q: How much will a licensee be fined for paying fees to the state with a bad check? Answer CORRECT ANSWER: $100 Q: Once a salesperson is affiliated with a broker, what are the steps to be taken to associate with another broker? Answer CORRECT ANSWER: the salesperson must submit an application to the Superintendent Q: What statement regarding condominium ownership is correct? Answer CORRECT ANSWER: A unit owner may devise the property Q: Julie is the new owner of a house and decides to remove the carpet. After doing so, she discovers there is significant pet damage to the hardwood floor beneath the carpet. Julie cuts most of the center of the floor out and replaces it with subfloor. Julie then places a Persian rug over the subfloor. When Julie sells, can she remove the Persian rug? Answer CORRECT ANSWER: No, anything that covers subflooring becomes real property Q: How would a developer/builder typically finance a development? CORRECT ANSWER: blanket Q: For a conventional loan, how much of a borrower's income can be used to service debt? CORRECT ANSWER: 36% What document uses legal title to real property to secure debt? CORRECT ANSWER: mortgage According to the Lead-Based Paint Hazard Reduction Act, what can happen to a licensee if she fails to give a buyer the lead-based paint pamphlet and disclosures? CORRECT ANSWER: - $10,000 fine - 3 times compensatory damages in lawsuit - punishment The non-breaching party to a contract has a duty by law to CORRECT ANSWER: mitigate damages What would be considered evidence of the agency relationship between broker and buyer? CORRECT ANSWER: buyer-broker contract Harvey enters into a lease where he must pay 30 percent of the landlord's expenses. Which type of lease did Harvey sign? CORRECT ANSWER: net lease Which statement regarding RESPA is TRUE? RESPA eliminates kickbacks and other referral fees, prohibits lenders from requiring excessive escrow account deposits, and provides accurate and timely information about the actual cost of buying or selling a home. A wealthy business man whishes to change his last will and testament to exclude a relative who recently died. Which document will the testator use to make the change? CORRECT ANSWER: codicil RATIONALE An addendum would signify a change in the terms of a contract. A certificate of transfer is the instrument used to convey title to a devise. A transfer on death deed transfers title of a decedent's property upon death. A codicil is used to change a last will and testament. When a broker received an unexpected bill, he deposited a client's earnest money check into his personal account to cover the expense. This best describes CORRECT ANSWER: conversion A real estate agent has written an offer in which Luke, the buyer, asked the sellers to pay his half of the escrow fee and his three points. The sellers accepted $135,000 for the home and Luke is going to put $40,000 down. How much will the Luke pay for his points? CORRECT ANSWER: $0 RATIONALE Read carefully: The sellers, not the buyer, are paying the points. For the math practice, the formula is: Loan Amount ($95,000) x number of points ($95,000 x 0.03) = Total Amount paid for points ($2,850). Remember, one point equals 1% or 0.01. The buyer asks for information about the property. Their agent telephones you for that information, but submits an offer before you have time to respond to the call. What do you do with the offer and the information request? CORRECT ANSWER: Respond to the offer and the information request in writing as soon as possible The fee to amend a license to practice real estate is CORRECT ANSWER: $34 What is the fee to transfer a real estate salesperson's license from one brokerage to another? CORRECT ANSWER: $34 The fee to apply for a real estate broker license is CORRECT ANSWER: $135 May a consumer who has been harmed by a licensee acting under her license as a real estate salesperson or broker immediately file a claim for payment from the Real Estate Recovery Fund? CORRECT ANSWER: No, the consumer must file a lawsuit, get a final judgment, and attempt to collect According to the Statute of Frauds, what does NOT have to be in writing? CORRECT ANSWER: listing agreement If a third party maintains a website for a licensee, places information on the website on behalf of the licensee, and that information becomes outdated or expired, how soon must it be updated or removed? CORRECT ANSWER: Outdated and expired information must be updated or removed within two weeks The terms "agency" and "agency relationship" are defined by Ohio law as the relationship between a real estate licensee and the CORRECT ANSWER: person the licensee represents What should a salesperson do if a buyer-client, who happens to be an Hispanic American, instructs the agent to show him homes in areas where "other Hispanics" live? CORRECT ANSWER: ask the client to specify areas of interest A property management account: CORRECT ANSWER: Can earn interest A couple is engaged to be married. Any real estate they own at the time the marriage takes place remains that spouse's property in severalty, and property acquired after the marriage belongs equally to both of them. This type of ownership is referred to as CORRECT ANSWER: community property Community property consists of all property, real and personal, acquired by either spouse during the marriage. Land movement due to an earthquake is called CORRECT ANSWER: avulsion Avulsion is a sudden, violent event (such as an earthquake) that tears and moves land. Property accumulated by husband and wife by the efforts of either, which is equally divisible at time of divorce or dissolution, is called CORRECT ANSWER: community property A property has been renting for $750 per month. Based on comparables, the GRM is 110. What is the indicated value of the property? CORRECT ANSWER: $990,000 The indicated value using a GRM (Gross Rent Multiplier) is the (monthly rent x 12 (months)) x GRM. In this case, ($750 X 12) x 110 = $990,000. While determining the net operating income of an investment property, an appraiser will not take into account CORRECT ANSWER: interest expense Although tax deductible, the amount of interest an owner pays is not used to calculate the net operating income. Remember, anything related to debt service is an owner's expense. Just one day prior to a foreclosure sale, the homeowner pays the bank all past-due payments, late charges, attorney fees, etc. The homeowner saves the property under the right called CORRECT ANSWER: equitable right of redemption Statutory redemption occurs after the sale has been finalized, and is recognized only in those states that have extended the right of redemption to include the period after the sale. Equitable redemption occurs prior to the sale, when the homeowner avoids foreclosure by paying all past-due payments and other monetary obligations. An owner of a property enters into a purchase money mortgage with a buyer whereby the buyer will make payments to the seller and the seller will continue making payments to the mortgagee. Which clause does the lender enforce when sending a notice to the seller that the loan is due and payable? CORRECT ANSWER: alienation The mortgage clause that allows the lender to declare the loan due and payable in the event of a transfer is the alienation clause. Acceleration is the result of borrower default. John is a successful bidder at a sheriff's foreclosure sale. At the sale, he receives a certificate of sale, but does not know what it means. John's lawyer explains that CORRECT ANSWER: he is entitled to a deed upon confirmation of sale by the court, if the land is not redeemed by the original owner during the redemption period An agency agreement that allows the sellers to procure the buyer and forgo paying the broker a commission best describes a(n) CORRECT ANSWER: exclusive agency When the seller has the ability to bring the buyer, yet hires one broker to market the property, the listing agreement is an exclusive agency agreement. During a phone call, a salesperson discusses showing a property to a prospect. Three days later, the agent shows the property; at that time the customer reveals her financial abilities and motivation. Three days after that, the agent prepares her offer and asks the buyer to sign an agency disclosure statement stating the agent represents the seller. When should the agent have disclosed this fact? CORRECT ANSWER: before showing the house An agent is showing a house to a customer. The agent tells the buyer that the seller is desperate for an offer. Which duty has the agent breached? CORRECT ANSWER: loyalty An agent must have the client's permission to reveal such a motivation to a customer. A lead-based paint disclosure form is required for all residential dwellings built before January 1, 1978. When applicable, who must sign the form? CORRECT ANSWER: buyer, seller, and both agents Chelsea is a listing agent working for the listing broker and encounters a customer at the open house. The customer asks Chelsea if she could recommend an offering price. Chelsea should recommend that the customer CORRECT ANSWER: offer list price A listing agent dealing with a customer has a duty only to the seller. It would not be in the seller's best interest to suggest less than list price, or that the seller should pay closing costs. The customer has to request market information from the listing agent; she cannot just volunteer that information. If seller Adam simply decides not to go through with the closing on a sale to buyer William, what can William do about it? CORRECT ANSWER: Sue for specific performance and for damages A successful lawsuit for specific performance may compel Adam to perform his responsibilities under the contract, including transferring title to William. In addition, if William can prove other damages due to Adam's refusal to perform, William may also sue to recover those damages. If the contract was executed (completed), William would have obtained equitable title, and it would not matter that closing had not occurred. When must a buyer inspect the Closing Statement? CORRECT ANSWER: one business day before closing In a suit brought under the Federal Fair Housing law as amended, punitive damages may be as much as CORRECT ANSWER: there is no limit on punitive damages While an individual may be fined $11,000 by HUD for a violation of the Fair Housing Act and $55,000 for a third offense within the past seven years, there is no limit on compensatory or punitive damages awarded by a court of law. Mary has been working with her buyer client for several months when the buyer finally finds a property of interest. Mary shows the property and writes the offer, then calls the listing agent and leaves a message to be called back. Several hours later Mary still has not heard from the listing agent. Finally, Mary calls the seller directly to present the offer. The seller accepts the offer. What is the problem, if any? CORRECT ANSWER: Mary cannot negotiate directly with the owner If the loan value is 80%, and the property is appraised at $86,500 and sold for $88,000, how much would the purchaser be permitted to borrow? The loan value is based on the appraised value, not the sale price. The appraised value is $86,500 and 80% of that amount is $69,200. This would be the maximum the purchaser would be permitted to borrow. A property is appraised at $150,000 and assessed for tax purposes at 35% of value. Calculate the semi-annual tax bill if the mills total is 80. CORRECT ANSWER: $2,100 Don't forget to divide the answer by two as a final step At your listing appointment, your seller asks you if you will always represent her. She mentions she has heard about this "dual thing" regarding real estate agents. Your response is CORRECT ANSWER: "Yes Dual agency is nothing to be afraid of, but you should be aware of its downsides" The power to set continuing education standards is vested with CORRECT ANSWER: the Ohio Real Estate Commission The Ohio Real Estate Commission is vested with the power to set licensing exam standards and continuing education standards. The Superintendent reports to the Commission, and is charged with administering license laws. Agent Brenda took out a quarter page ad in the local newspaper. In the ad, Agent Brenda's name was the same size as the broker's logo. What will be the likely outcome for Brenda? CORRECT ANSWER: agent Brenda will have no consequences The law states that the broker's name must be equal or greater in prominence. Broker Dan decides to save the costs of overhead by increasing the share of commissions his salespersons receive. He also decides to close down the office and have his agents work from home. Which of the following best describes the situation? CORRECT ANSWER: Broker Dan has violated license law O.R.C. 4735.55(A) requires a broker to maintain a definite place of business with a sign indicating it as such outside of the building. An association applying for a real estate license has three members, one of whom is licensed as a real estate broker. The association must submit what document concerning the unlicensed members in order to be issued a real estate license in the association's name? CORRECT ANSWER: an affidavit stating the members will not Act as real estate brokers for the association In anticipation of a property selling at sheriff's sale to the loan servicing company, Eric, a salesperson from Happy Days Realty, planted his sign in the yard and held an open house for a few hours one Sunday. The following Monday, Eric showed the property to another buyer. What other ways can Eric market the property? CORRECT ANSWER: Eric cannot market the property without the consent of the owner Until the sale is confirmed, the loan servicing company cannot list with any broker and Eric does not have a valid listing. Agent Andy was so excited to be writing and presenting his first offer to the seller and listing agent that he forgot to make the offer contingent on the sale of the buyer's current residence. After an investigation and disciplinary hearing, all of the following could happen EXCEPT CORRECT ANSWER: six months probation Since a salesperson can only transact real estate business on behalf of a broker, Agent Arthur may be punished for withholding the broker's client from him. ORC 4735.18 (18) There are a number of disciplinary actions that can be taken against a licensee ranging from a simple reprimand to permanent revocation of license. Criminal actions would only take place after indictment and prosecution. Agent Arthur showed a property to a buyer who wanted to make an offer. Before Agent Arthur set up the appointment to meet the buyer to execute documents, he got into a heated argument with his broker and decided to leave the brokerage to go to a new one. The day after he signs on with a different broker, Agent Arthur writes the offer with the buyer and presents the offer on behalf of his new broker. The seller accepts the offer. Which of the following choices best describes the situation? CORRECT ANSWER: agent arthur may get punished Identify the agency relationship formed when a listing salesperson receives a telephone call from a prospective purchaser, shows the listed property to the prospective customer, helps the prospective purchaser write an offer to purchase, and then delivers the offer to the seller/client? CORRECT ANSWER: With timely agency disclosure, assisting a customer does not form an agency relationship A wife and husband may not hold title to their home as CORRECT ANSWER: tenants at will Tenancy at will is a leasehold estate. What best describes personal property transformed into real property? CORRECT ANSWER: actual annexation Constructive annexation occurs when property is so closely related to real property that the law treats it as such, even though it is not physically attached. The fixture is the item that was transformed. Actual annexation is a physical attachment of personal property to land. Trade fixtures are equipment a tenant can remove and, thus, not real property. RESPA does NOT CORRECT ANSWER: allow lenders to charge undisclosed fees If a loan amount is $160,000 and the borrower is paying two points, and the rate of interest is 6%, and the loan will be amortized for 30 years, how much will the monthly payment be if the annual taxes are $6,400 and the insurance is $850 per year? CORRECT ANSWER: $1564 RATIONALE Using the amortization chart a factor of 6 is what you would take 160 x 6 = 960 + 1/12th of the taxes $533.33 = 1/12th of the insurance $70.83 = $1564. Chris agreed to pay 2% per transaction for broker fees out of each commission earned. What is the brokers share of a commission when Chris sells a property for $280,000 at a rate of 3.5% and Chris receives 50% of the commission? CORRECT ANSWER: $4802 RATIONALE 280,000 x 3.5% = 9800 total commission on the sale 9800 - 2% Transaction fee = 9604.00 9604.00 divided by 2 or 50% split = 4802.00 What is the body of law that governs negotiable instruments? CORRECT ANSWER: Uniform Commercial Code The Uniform Commercial Code sets out certain requirements for negotiable instruments in order to be transferrable to the secondary market, for example. An agent's duties to all customers include CORRECT ANSWER: good faith and fair dealing A prospective buyer who has previously always lived in the city is looking at a rural property with a real estate agent. The buyer admits that she doesn't know anything about rural properties. The buyer likes the back yard because it is very large but remarks that a small patch of the yard seems to grow more, and much healthier, grass than any other part of the yard. The agent should recommend a CORRECT ANSWER: well and septic inspection The lush grass just in one spot of the yard should be a red flag to the real estate agent. If the septic tank leaks or is overfull, it causes fertile spots on the lawn. The agent cannot determine why the grass is much greener, which is why he should recommend a well and septic inspection. Emily had signed a one-year lease, but after living in the apartment for three months, she transferred her right of possession for the remainder of the lease to her friend. Which type of arrangement does Emily have with her friend? CORRECT ANSWER: assignment A gross lease describes the arrangement between landlord and tenant. In a sublease the tenant will regain possession before the tenancy ends. A novation would require the consent of the landlord and the withdrawing tenant would be relieved of liability. In an assignment the tenant will not regain possession of the lease before it ends. A counteroffer constitutes a CORRECT ANSWER: change RATIONALE A counteroffer is a rejection of, and changes to, the original offer. An offer must be accepted in total without any changes. Any change constitutes a rejection and counteroffer. There is no contract at all; thus there is no voidable or void contract. "Void" means a contract never existed, while "voidable" means capable of becoming void at a later date. A person discriminated against under the Civil Rights Act of 1866 must file a lawsuit in what court? CORRECT ANSWER: federal district court RATIONALE The federal district court is the only court with jurisdiction over the Civil Rights Act of 1866. Who uses the term REALTIST? CORRECT ANSWER: members of the National Association of Real Estate Brokers RATIONALE A REALTIST is a member of the National Association of Real Estate Brokers, a group comprised primarily of minority brokers as a response to discrimination from membership to the NAR(R). The Women's council of REALTORS(R) was created as a response to discrimination against woman. At a listing appointment, Patty promises the sellers they will get four open houses a month. The seller signs the agreement. In the first month of marketing, Patty's husband becomes ill and Patty cancels the open house. The seller got only two open houses that month. Which best describes the situation? CORRECT ANSWER: Patty is breaching her broker's duty of accountability RATIONALE Agents are accountable to the client for their actions. If the seller was promised four open houses a month, that is what the seller should get. Bill was thinking of purchasing an apartment building. He wanted an 11% return on his investment and asked to see the books for this building. There are four apartments on each floor of the five-story building. The rent for an apartment on the first floor is $400 a month, and each floor's rent increases $50 per month, per apartment. Bill noticed a loss of rent through vacancy and collection losses of 9%, and when he figured the operating expenses, they averaged $720 a month. With all of this information, what is the most that Bill should pay for this building (round your answer to the nearest thousandth). CORRECT ANSWER: $914,000 When an applicant for a real estate license submits an incomplete or incorrect application, and is notified of the error or incomplete status by the Division, how much time does the applicant have to resubmit the corrected/completed application? CORRECT ANSWER: 30 days The applicant who files an incomplete or incorrect application for a license has 30 days, from the date of last notice by the Division, to submit a corrected application or the requested additional information. The fee for renewing a broker's license is: CORRECT ANSWER: $243 What is the cost to reserve a business name with the Division of Real Estate & Professional Licensing? CORRECT ANSWER: $10 Who gets the interest generated in a property management trust account? CORRECT ANSWER: the property owner A salesperson went on a listing appointment and negotiated an Exclusive Agency agreement with the seller. What documents did the seller sign? CORRECT ANSWER: Listing agreement, Waiver Of Duties Statement, Consumer Guide, Lead Paint Disclosure, Residential Disclosure RATIONALE: In an Exclusive Agency agreement, the seller is doing most of the tasks a listing agent would in an Exclusive Right to Sell listing agreement. In the event of an Exclusive Agency agreement, the state needs the seller to execute a Waiver of Duties statement so there is evidence that the seller knew the broker would not be marketing the property. Joe, a salesperson from Happy Days Real Estate, sold a house listed by Better Days Real Estate. What part of the Agency Disclosure Statement would Joe and Better Days Real Estate fill out? CORRECT ANSWER: Section I A transaction involving two brokers is a Section I transaction. An in-company transaction is a Section II type. A transaction where one licensee is selling his own listing would require filling out Section III. There is no section IV. Listing agent Cindy received an offer from Greg, a buyer's agent in the same firm. What part of the Agency Disclosure Statement would Cindy and Greg fill out? CORRECT ANSWER: Section II A transaction involving two brokers is a section I transaction. An in-company transaction is a Section II type. A transaction where one licensee is selling his own listing would require filling out Section III. There is no section IV. A buyer is about to make a written offer on a listing. The sales agent says that, under Ohio law, $1,000 in earnest money must accompany the offer. The sales agent is guilty of CORRECT ANSWER: misrepresentation RATIONALE In all likelihood, the sales agent is guilty of misrepresentation. Even though many sales agents believe the law requires earnest money with all offers, this is not true. If the sales agent knew that such a law did not exist, then he would have been lying, and guilty of fraud. When can a property manager use a self-help eviction? CORRECT ANSWER: Only in non-residential tenancies RATIONALE A landlord may only use a utility shut-off or lockout against a non-residential tenancy. To calculate how much principal will cost with specific monthly payment Multiply interest rate by loan amount. This is ANNUAL interest. Divide by 12. That is monthly. Now you can subtract that from the monthly payment. Subtract this from the principal. Calculate next amount, etc. Mr. & Mrs. Boyd are approved for an $85,000 loan. Their monthly payments will be $9.75 per $1,000 for 30 years. How much interest will they pay over the life of the loan? First, determine the amount on which the interest rate will be applied by dividing by 1,000: $85,000 / $1,000 = $85. Then, multiply that amount by the interest per 1,000: $85 x $9.75 = $828.75. Multiply that number by the total number of months the loan is for to get the total payment amount: $828.75 x 360 months (30 years) = $298,350 P & I. Finally, subtract the loan amount to determine how much of the total payment is interest: $298,350 - $85,000 = $213,350 in interest. In some states the right of a husband to gain ownership of property when his wife dies can be described as CORRECT ANSWER: curtesy The wife's interest in a deceased husband's property is "dower," the husband's interest is called "curtesy." Entireties is a type of co-ownership for married people in some states. To devise is to give real property as a gift in a last will and testament. Which can the operation of law NOT create? CORRECT ANSWER: joint tenancy The phrase "right of survivorship" is closely associated with which type of co-ownership? CORRECT ANSWER: joint tenancy The right of survivorship is one of the distinguishing characteristics of joint tenancy. As each successive joint tenant dies, the surviving joint tenants acquire the interest of the deceased joint tenant. A trust is a device with which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party. A corporation is an artificial person or legal entity, created under the authority of the laws of the state from which it receives its charter. Tenancy in common refers to a parcel of real estate owned by two or more people--each of the owners holds an undivided fractional interest in the property without the right of survivorship. Given no other language in the deed, the law will presume tenancy in common. Tenancy by the entireties is presumed when the co-owners are married to each other. Tenancy at sufferance is a leasehold estate describing a holdover tenant. Joint tenants have a right of survivorship and must enter into that type of ownership deliberately. What approach to value would be most appropriate when appraising a vacant factory? CORRECT ANSWER: cost approach Unusual structures, where comparable properties are not readily available, are best appraised using the cost approach to value. If the structure was being rented, then the income approach would be best. Which best describes a layer of clay or other impermeable material installed over the top of a closed landfill to prevent entry of rainwater and minimize leachate? CORRECT ANSWER: cap The capillary fringe is the zone above the water table within which the porous medium is saturated by water under less than atmospheric pressure. A capillary action is the movement of water through very small spaces due to molecular forces called capillary forces. A carbon absorber is an add-on control device that uses activated carbon to absorb volatile organic compounds from a gas stream. A cap is a layer of clay or other impermeable material installed over the top of a closed landfill to prevent entry of rainwater and minimize leachate. Archie and Bert mutually agree to terminate a contract. The buyer, Bert, asks for the earnest money back and the seller, Archie, consents. This is an example of CORRECT ANSWER: rescission Cancellation occurs when both parties agree to terminate the contract. However, any consideration tendered would be kept by the seller. Rescission allows the buyer to receive the earnest money back. This would be a bilateral agreement to terminate a contract, not a unilateral one. Anticipatory repudiation is the breach of a contract before the contract even commences. What deed is most preferred from the seller's point of view? CORRECT ANSWER: quitclaim deed A seller wishes to give a deed that has absolutely no warranties in it (quitclaim deed), so the seller is subject to the least liability. The general warranty deed is the deed the buyer would most desire, as it contains the four basic warranties of ownership, no liens, quiet enjoyment, and warranties forever. The limited warranty deed and special warranty deed are the same in that they give very limited or "special" warranties to the buyer for the time period during which the seller owned the property. When could the subject of an investigation and the results become a matter of public record? CORRECT ANSWER: when the licensee appeals the decision If no appeal is filed, then the investigation, the results, and any documentation are kept confidential. When the licensee files the appeal, the appellate contest is filed in the courts, therefore becoming a matter of public record. If a broker or salesperson has knowledge of a fellow broker or salesperson who is convicted of a crime, felony, crime of moral turpitude, or violation of any federal, state, or municipal civil rights law, how long do they have to notify the Superintendent? CORRECT ANSWER: 15 days RATIONALE O.R.C. 4735.13 requires any broker or salesperson to notify the Superintendent of a conviction of a crime within 15 days of the conviction. If a licensee reduces his brokerage commission to facilitate agreement between a seller and buyer, what must happen? CORRECT ANSWER: the licensee must disclose the commission reduction in the purchase agreement One of the issues for disciplinary action by the real estate commission is "having offered anything of value" as an inducement to a person to enter into a contract for the purchase and sale of real estate. A reduction in commission constitutes an offer of value to induce the seller to sell, and must be disclosed in the purchase agreement. A salesperson succeeded in finding a buyer for a tract of land that is 250' x 350'. It sold at $300 per front foot, and the commission was 6%. If the listing broker gave the selling brokerage 45% and the selling broker gave the salesperson 50%, how much commission did the listing broker keep? CORRECT ANSWER: $2,475 250' x $300 = $75,000 x 6% (0.06) = $4,500.00 x 0.55 (100% - the 45% that the listing broker gave to the selling brokerage) = $2,475.00. Once consent to a dual agency arrangement has been established between a licensee, a seller, and a buyer, when can the parties revoke their consent? CORRECT ANSWER: when they learn there is a material change in previously disclosed information If, after consent of the purchaser and seller for dual agency is obtained, there is a material change in the information previously disclosed to the purchaser and seller, the licensee must disclose such change and give the parties an opportunity to revoke their consent. What is the duty of a licensee serving as the agent of a seller? CORRECT ANSWER: provide the seller with a copy of any agency disclosure statement signed by a purchaser Among other duties, an agent for the seller is required to provide the seller with a copy of any Agency Disclosure form signed by the purchaser prior to presenting the seller with an offer to purchase. The salesperson will have a buyer sign an Ohio State Agency Disclosure Form CORRECT ANSWER: prior to writing an offer The Agency Disclosure is transaction-specific and is filled out at the point of deciding to write an offer. Answers A, B, and D are triggers that mandate the presentation of the Consumer Guide to Agency Relationships. Ben has been given revocable permission to hunt on his neighbor's land. Which does Ben have? CORRECT ANSWER: license An encroachment is an object on someone else's land. A leasehold estate is how the law describes the landlord and tenant relationship. An easement is a right to use another's property. A license is revocable permission to use another's property. Building codes can be enforced by CORRECT ANSWER: the issuance of permits Building codes set construction standards; building plans must comply with the code for a permit to be issued. Failure to comply with the permit may result in a stop order, fines, and/or injunctions. Zoning laws set forth permitted uses. Licenses allow certain activities. Letters of approval are not a method of enforcement. Which term best describes a piece of land that is enhanced and ready for a building or structure? CORRECT ANSWER: site A site is a piece of land that has been enhanced and is ready for a structure. Situs is an area of preference, which can attribute value. Assemblage is the joining of several parcels of land. Plottage is when the property is joined to increase value. What is the legal process by which potentially responsible parties who contributed to contamination at a Superfund site can be required to reimburse the trust fund for money spent during any clean up actions by the federal government? CORRECT ANSWER: cost recovery The Core Program Cooperative Agreement is an assistance agreement whereby the EPA transfers money, property, services, or anything of value to a state for the accomplishment of authorized activities. Corrective action is the EPA's requirement for treatment, storage, and disposal facilities handling hazardous waste. A cost/benefit analysis is a quantitative evaluation of the costs which would be incurred by implementing an environmental regulation versus the overall benefits to society of the proposed action. Cost recover is the legal process by which potentially responsible parties who contributed to contamination at a Superfund site can be required to reimburse the government for any money spent during clean up. A legatee is a person who receives CORRECT ANSWER: money as a gift through a will RATIONALE A person who receives title to real property is a devisee. A person who receives personal property (including jewelry) has received a bequest. A legacy is money left to a legatee in a last will and testament. Local ordinance requires a 20-foot rear and front setback. The ordinance also requires a 10- foot side set back. If the lot measures 100' x 200' and a developer wants to build a three- story office building, which is the maximum allowable square footage of the office building? CORRECT ANSWER: 38,400 square feet From the 100' frontage, subtract the 10' per side setback (100' - 20' = 80'). From the 200' depth, subtract the 20' rear and front setback (200' - 40' = 160'). 80 feet of frontage x 160 feed of depth = 12,800 square feet allowed by local ordinance. Remember, the developer wants to build a three-story building on the lot, so multiply that figure by three floors: 12,800 square feet x 3 stories = 38,400 square feet allowed by local ordinance. A buyer has obtained a mortgage in which the LTV is 95% of the first $40,000 of the sale price and 90% of the remainder of the sale price. What are the buyer's costs on a $185,000 sale if the lender charges a 2% loan origination fee and 2 points? There are several steps in calculating the answer to this question. First, determine the amount by which the first $40,000 is reduced; $40,000 x 0.05 = $2,000 (100% - 95% = 5% not covered). Next, determine the remainder of the loan; $185,000 - $40,000 = $145,000. Now, calculate the amount by which the remaining $145,000 is reduced; $145,000 x 0.10 = $14,500 (100% - 90% = 10% not covered). Next, determine the amount to apply toward the loan origination fee and discount points; $185,000 - $2,000 - $14,500 = $168,500. Now, calculate the origination fee; $168,500 x 0.02 = $3,370. Next, calculate the points charged; $168,500 x 0.02 = $3,370. Finally, add the origination fee and points together to calculate the buyer's total cost; $3,370 + $3,370 = $6,740. The Superintendent of the Ohio Division of Real Estate is appointed by the CORRECT ANSWER: Director of the Department of Commerce While the Ohio Real Estate Commissioners are appointed by the Governor, the Superintendent is appointed by the Director of the Department of Commerce. After being issued a real estate broker's license, the licensee must obtain 10 hours of post- licensure training in what topic? CORRECT ANSWER: real estate brokerage New brokers must complete 10 hours of classroom instruction in real estate brokerage-such instruction must include, but not be limited to, current issues in managing a real estate company or office. The post-licensure must be completed within 12 months of issuance of the broker's license. As part of marketing their business expertise and seeking future listings and buyers, many licensees, upon listing a home or closing a sale, send out postcards or flyers notifying residents on their mailing list of an event. When they do this, what request should be included on the postcard or flyer? CORRECT ANSWER: request that the notice be disregarded if the prospect has a licensed real estate agent Article 17 of the Canons of Ethics prohibits interference with the agency relationship of another licensee unless the other agent's client, without solicitation, contacts the licensee. Not all real estate licensees are REALTORS(r) and the Canons of Ethics apply to all licensees. In Ohio agency, the term "buyer" may also mean Purchaser, lessee, tenant An "in-company transaction" is one in which CORRECT ANSWER: different agents in the same brokerage represent the buyer and seller An "in-company transaction" is one in which the seller and buyer are each represented by two separate real estate agents who work for the same brokerage. When Agent Judy decided to go to another broker after two years in the business, she packed up her belongings and left her broker. When she arrived at her new brokerage, she put all of her old files in one box and put the box in her attic at home. How long must she keep her old files? CORRECT ANSWER: three years Brokers and salespersons are required to keep records for a period of three years. What duty must a licensee fulfill in representing a buyer client? CORRECT ANSWER: seek a property at a price and with terms acceptable to the purchaser A licensee representing the purchaser has a duty to seek a property at a price and with purchase or lease terms acceptable to the purchaser. Once the purchaser is a party to a contract or has extended a letter of intent to purchase or lease, the licensee/agent is not required to seek additional purchase or lease possibilities.