Download Ohio Real Estate Exam Practice Questions And Answers 2024-2025 and more Exams Business Economics in PDF only on Docsity!
Ohio Real Estate Exam Practice Questions And Answers 2024- 2025
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? - ANS- ✔✔CORRECT ANSWER: No, the consumer must file a lawsuit, get a final judgment, and attempt to collect
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 - ANS-✔✔CORRECT ANSWER: agency
According to the Statute of Frauds, what does NOT have to be in writing? - ANS-✔✔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a website for a licensee, places information on the website on behalf of the licensee, and that information becomes outdated or expired, how soon must it be updated or removed?
- ANS-✔✔CORRECT ANSWER: Outdated and expired information must be updated or removed within two weeks
After issuing a bad check, the Division requires the licensee to send certified funds for all subsequent payments for a period of - ANS-✔✔CORRECT ANSWER: 5 years
How much will a licensee be fined for paying fees to the state with a bad check? - ANS-✔✔CORRECT ANSWER: $
Once a salesperson is affiliated with a broker, what are the steps to be taken to associate with another broker? - ANS-✔✔CORRECT ANSWER: the salesperson must submit an application to the Superintendent
What statement regarding condominium ownership is correct? - ANS-✔✔CORRECT ANSWER: A unit owner may devise the property
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? - ANS-✔✔CORRECT ANSWER: No, anything that covers subflooring becomes real property
How would a developer/builder typically finance a development? - ANS-✔✔CORRECT ANSWER: blanket
For a conventional loan, how much of a borrower's income can be used to service debt? - ANS-✔✔ CORRECT ANSWER: 36%
What document uses legal title to real property to secure debt? - ANS-✔✔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? - ANS-✔✔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 - ANS-✔✔CORRECT ANSWER: mitigate damages
What would be considered evidence of the agency relationship between broker and buyer? - ANS-✔✔ 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? - ANS-✔✔CORRECT ANSWER: net lease
What is the fee to transfer a real estate salesperson's license from one brokerage to another? - ANS-✔ ✔CORRECT ANSWER: $
The fee to apply for a real estate broker license is - ANS-✔✔CORRECT ANSWER: $
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? - ANS- ✔✔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? - ANS-✔✔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?
- ANS-✔✔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 - ANS-✔✔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? - ANS-✔✔CORRECT ANSWER: ask the client to specify areas of interest
A property management account: - ANS-✔✔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 - ANS-✔✔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 - ANS-✔✔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 - ANS-✔✔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? - ANS-✔✔CORRECT ANSWER: $990,
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 - ANS-✔✔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 - ANS-✔✔ CORRECT ANSWER: equitable right of redemption
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? - ANS-✔✔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? - ANS-✔✔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 - ANS-✔✔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? - ANS-✔✔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? - ANS-✔✔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 - ANS-✔✔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? - ANS-✔✔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? - ANS-✔✔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. - ANS-✔✔CORRECT ANSWER: $2,
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 - ANS-✔✔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 - ANS-✔✔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.
investigation and disciplinary hearing, all of the following could happen EXCEPT - ANS-✔✔CORRECT ANSWER: six months probation
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? - ANS-✔✔ CORRECT ANSWER: agent arthur may get punished
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)
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? - ANS-✔✔ 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 - ANS-✔✔CORRECT ANSWER: tenants at will
Tenancy at will is a leasehold estate.
What best describes personal property transformed into real property? - ANS-✔✔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 - ANS-✔✔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? - ANS-✔✔CORRECT ANSWER: $
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? - ANS-✔✔CORRECT ANSWER: $
RATIONALE
280,000 x 3.5% = 9800 total commission on the sale 9800 - 2% Transaction fee = 9604.00 9604. divided by 2 or 50% split = 4802.
What is the body of law that governs negotiable instruments? - ANS-✔✔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 - ANS-✔✔CORRECT ANSWER: good faith and fair dealing
RATIONALE
The federal district court is the only court with jurisdiction over the Civil Rights Act of 1866.
Who uses the term REALTIST? - ANS-✔✔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? - ANS- ✔✔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). - ANS-✔✔CORRECT ANSWER: $914,
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? - ANS-✔✔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: - ANS-✔✔CORRECT ANSWER: $
What is the cost to reserve a business name with the Division of Real Estate & Professional Licensing? - ANS-✔✔CORRECT ANSWER: $
Who gets the interest generated in a property management trust account? - ANS-✔✔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? - ANS-✔✔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? - ANS-✔✔ 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.
$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 - ANS-✔✔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.
The phrase "right of survivorship" is closely associated with which type of co-ownership? - ANS-✔✔ 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.
Which can the operation of law NOT create? - ANS-✔✔CORRECT ANSWER: joint tenancy
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? - ANS-✔✔ 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? - ANS-✔✔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 - ANS-✔✔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? - ANS-✔✔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? - ANS-✔ ✔CORRECT ANSWER: when the licensee appeals the decision
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? - ANS-✔✔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? - ANS-✔✔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 - ANS-✔✔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? - ANS-✔ ✔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 - ANS-✔✔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? - ANS- ✔✔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? - ANS-✔✔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 - ANS-✔✔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.
