RESIDENTIAL BUILDER'S SALESPERSON
PRACTICE EXAM QUESTIONS COMPLETE WITH
100% VERIFIED ANSWERS
Section 1: Real Estate & Sales Basics (Questions 1–35)
1. A residential builder’s salesperson must be registered under which Act?
A. Real Estate and Business Brokers Act, 2002
B. New Home Construction Licensing Act, 2017
C. Ontario Building Code Act
D. Consumer Protection Act
Correct Answer: A
2. Which of the following best defines “market value”?
A. Original cost of the home plus improvements
B. The price a willing buyer pays a willing seller in an arm’s length transaction
C. Replacement cost minus depreciation
D. Assessed value determined by MPAC
Correct Answer: B
3. A salesperson’s fiduciary duty to a buyer includes:
A. Selling the home at the highest possible price
B. Disclosing latent defects known to the salesperson
C. Recommending a specific home inspector for a fee
D. Guaranteeing future property appreciation
Correct Answer: B
4. Which of the following is an example of “puffery” in home sales?
A. “This home has a new roof installed in 2022”
B. “This is the most charming house on the street”
C. “Square footage is 2,500 according to builder plans”
,D. “The furnace is less than 5 years old”
Correct Answer: B
5. A salesperson represents both the builder and the buyer. This is called:
A. Dual agency
B. Multiple representation
C. Sub-agency
D. Designated representation
Correct Answer: A
6. Under REBBA 2002, a salesperson must provide a written consumer relationship
guide to a buyer:
A. Only if the buyer requests it
B. Before any offer is signed
C. At the closing of the sale
D. Only for resale homes, not new builds
Correct Answer: B
7. The primary purpose of the Tarion warranty program is to:
A. Guarantee home prices remain stable
B. Protect consumers from builder insolvency and construction defects
C. Provide low-interest loans for new home buyers
D. Replace municipal building inspections
Correct Answer: B
8. A “builder’s lien” under the Construction Act can be registered by:
A. The homeowner
B. A subcontractor who has not been paid
C. The real estate salesperson
D. The municipality
Correct Answer: B
9. Which is a prohibited practice under the Consumer Protection Act?
A. Including an amortization schedule in an agreement
B. Charging a deposit greater than 10% of purchase price
,C. Requiring a cooling-off period
D. Providing a Statement of Critical Dates after offer acceptance
Correct Answer: B
10. An Agreement of Purchase and Sale for a new home must include all EXCEPT:
A. Legal description of the property
B. Builder’s Tarion registration number
C. Mortgage pre-approval letter from buyer
D. Closing date
Correct Answer: C
11. What does “HST new housing rebate” apply to?
A. Only the land portion of a new home
B. Part of the federal/provincial HST paid on a new or substantially renovated
home
C. Only first-time home buyers
D. Only homes under $200,000
Correct Answer: B
12. Which of the following is considered a “material latent defect”?
A. Peeling paint in a bedroom
B. A history of flooding in the basement not visible during viewing
C. An outdated kitchen faucet
D. Cracked driveway pavement
Correct Answer: B
13. A “cooling-off period” for a new home purchase in Ontario:
A. Does not exist for any home purchase
B. Is 10 days for condominiums only
C. Is 10 days for freehold homes if no waiver is signed
D. Is 5 days for all new homes
Correct Answer: C (Note: For new freehold homes, 10-day cooling-off period per
CPA if builder gave no disclosure.)
, 14. The maximum deposit protection under Tarion for a new home is:
A. 20,000𝐵.40,000
C. 60,000𝐷.100,000
Correct Answer: C
15. A salesperson tells a buyer “you can always flip this home for a profit before
closing.” This may be considered:
A. Professional advice
B. Unprofessional conduct and misleading representation
C. Standard industry practice
D. Permitted under Ontario securities law
Correct Answer: B
16. “Comparative market analysis” (CMA) is used to:
A. Determine exact appraisal value for lender
B. Estimate a home’s likely selling price based on recent sales
C. Calculate property taxes
D. Measure square footage
Correct Answer: B
17. Which of the following is NOT a protected ground under the Ontario Human
Rights Code affecting home sales?
A. Family status
B. Credit score
C. Disability
D. Sexual orientation
Correct Answer: B
18. A buyer’s deposit on a new home is typically held:
A. By the salesperson personally
B. In the builder’s operating account
C. In trust pending closing or terms of agreement
D. By the municipality
Correct Answer: C
PRACTICE EXAM QUESTIONS COMPLETE WITH
100% VERIFIED ANSWERS
Section 1: Real Estate & Sales Basics (Questions 1–35)
1. A residential builder’s salesperson must be registered under which Act?
A. Real Estate and Business Brokers Act, 2002
B. New Home Construction Licensing Act, 2017
C. Ontario Building Code Act
D. Consumer Protection Act
Correct Answer: A
2. Which of the following best defines “market value”?
A. Original cost of the home plus improvements
B. The price a willing buyer pays a willing seller in an arm’s length transaction
C. Replacement cost minus depreciation
D. Assessed value determined by MPAC
Correct Answer: B
3. A salesperson’s fiduciary duty to a buyer includes:
A. Selling the home at the highest possible price
B. Disclosing latent defects known to the salesperson
C. Recommending a specific home inspector for a fee
D. Guaranteeing future property appreciation
Correct Answer: B
4. Which of the following is an example of “puffery” in home sales?
A. “This home has a new roof installed in 2022”
B. “This is the most charming house on the street”
C. “Square footage is 2,500 according to builder plans”
,D. “The furnace is less than 5 years old”
Correct Answer: B
5. A salesperson represents both the builder and the buyer. This is called:
A. Dual agency
B. Multiple representation
C. Sub-agency
D. Designated representation
Correct Answer: A
6. Under REBBA 2002, a salesperson must provide a written consumer relationship
guide to a buyer:
A. Only if the buyer requests it
B. Before any offer is signed
C. At the closing of the sale
D. Only for resale homes, not new builds
Correct Answer: B
7. The primary purpose of the Tarion warranty program is to:
A. Guarantee home prices remain stable
B. Protect consumers from builder insolvency and construction defects
C. Provide low-interest loans for new home buyers
D. Replace municipal building inspections
Correct Answer: B
8. A “builder’s lien” under the Construction Act can be registered by:
A. The homeowner
B. A subcontractor who has not been paid
C. The real estate salesperson
D. The municipality
Correct Answer: B
9. Which is a prohibited practice under the Consumer Protection Act?
A. Including an amortization schedule in an agreement
B. Charging a deposit greater than 10% of purchase price
,C. Requiring a cooling-off period
D. Providing a Statement of Critical Dates after offer acceptance
Correct Answer: B
10. An Agreement of Purchase and Sale for a new home must include all EXCEPT:
A. Legal description of the property
B. Builder’s Tarion registration number
C. Mortgage pre-approval letter from buyer
D. Closing date
Correct Answer: C
11. What does “HST new housing rebate” apply to?
A. Only the land portion of a new home
B. Part of the federal/provincial HST paid on a new or substantially renovated
home
C. Only first-time home buyers
D. Only homes under $200,000
Correct Answer: B
12. Which of the following is considered a “material latent defect”?
A. Peeling paint in a bedroom
B. A history of flooding in the basement not visible during viewing
C. An outdated kitchen faucet
D. Cracked driveway pavement
Correct Answer: B
13. A “cooling-off period” for a new home purchase in Ontario:
A. Does not exist for any home purchase
B. Is 10 days for condominiums only
C. Is 10 days for freehold homes if no waiver is signed
D. Is 5 days for all new homes
Correct Answer: C (Note: For new freehold homes, 10-day cooling-off period per
CPA if builder gave no disclosure.)
, 14. The maximum deposit protection under Tarion for a new home is:
A. 20,000𝐵.40,000
C. 60,000𝐷.100,000
Correct Answer: C
15. A salesperson tells a buyer “you can always flip this home for a profit before
closing.” This may be considered:
A. Professional advice
B. Unprofessional conduct and misleading representation
C. Standard industry practice
D. Permitted under Ontario securities law
Correct Answer: B
16. “Comparative market analysis” (CMA) is used to:
A. Determine exact appraisal value for lender
B. Estimate a home’s likely selling price based on recent sales
C. Calculate property taxes
D. Measure square footage
Correct Answer: B
17. Which of the following is NOT a protected ground under the Ontario Human
Rights Code affecting home sales?
A. Family status
B. Credit score
C. Disability
D. Sexual orientation
Correct Answer: B
18. A buyer’s deposit on a new home is typically held:
A. By the salesperson personally
B. In the builder’s operating account
C. In trust pending closing or terms of agreement
D. By the municipality
Correct Answer: C
