Section 3 Practice Exam – Ontario Real Estate - Real Estate

Prepare for your Section 3 Ontario real estate license with this free comprehensive practice exam. This exam covers key topics from section three of the Ontario Real Estate License Program.

#1. When can a notice of fulfillment be used?

When an amendment is made

When a condition is waived

When the agreement is terminated

When a condition is fulfilled exactly as in the agreement

#2. What should be done if a deposit cheque bounces?

Inform the seller immediately

Delay the sale until the funds are available

Ignore the issue

Replace the cheque with personal funds

#3. What should a salesperson do if a buyer is interested in a property that is in foreclosure?

Advise the buyer to offer a low price

Ignore the foreclosure status

Provide information about the foreclosure process

Advise the buyer to avoid it

#4. What does 'under contract' mean in real estate?

The property is listed for sale

The property has no interested buyers

The property is available for showings

The property is in the process of being sold

#5. What is a lien?

A legal claim against a property

A property tax

A type of insurance

A zoning regulation

#6. How should a salesperson handle offers during a multiple offer situation?

Accept the first offer

Keep offers confidential

Disclose all offers to each buyer

Reject all offers

#7. Who must sign the offer for it to be legally binding?

Both the buyer and the seller

The real estate agent

Only the seller

Only the buyer

#8. What should a salesperson do if a buyer wants to make an offer below market value?

Refuse to submit the offer

Provide market data to support their decision

Encourage them

Advise against it

#9. What is the role of the real estate agent during the offer process?

To provide legal advice

To determine the property's market value

To represent the buyer's interests and draft the offer

To approve the mortgage

#10. How should a salesperson handle a buyer's request for a property history?

Ignore the request

Provide accurate and detailed history

Redirect the buyer to the seller

Make up a history

#11. What is the purpose of a listing agreement?

To provide a legal description of a property

To outline the terms under which a brokerage will represent a seller

To finalize the sale of a property

To list all the properties a buyer is interested in

#12. What is a real estate disclosure?

A type of loan

A financing option

A marketing strategy

Information provided by the seller about the property's condition

#13. What is a contingency in real estate?

A home improvement loan

A condition that must be met for the sale to proceed

A property tax

A type of insurance

#14. Rachel is a first-time homebuyer. What should her brokerage provide?

All of the above

A list of potential properties

A detailed explanation of the buying process

Advice on securing financing

#15. What is the benefit of a home warranty?

Protects the buyer from title issues

Covers major home repairs and replacements for a specified period

Reduces property taxes

#16. What is the importance of a comparative market analysis (CMA)?

To finalize the sale price

To determine the competitive market value

To confuse the buyer

To set unrealistic expectations

#17. How can a buyer ensure they are working with a licensed brokerage?

Check online reviews

Verify the brokerage's license through the regulatory authority

Visit the brokerage's office

Ask for the brokerage's business card

#18. What is the role of a home appraiser?

To determine the value of a property

To negotiate prices

To provide legal advice

To inspect for code violations

#19. Which form is used to identify the fulfillment of a condition in an agreement?

OREA Form 110

OREA Form 100

OREA Form 140

OREA Form 124

#20. What is the benefit of a pre-approval letter for a buyer?

Guarantees a low interest rate

Shows the buyer is serious

Removes the need for a down payment

Locks in the purchase price

#21. What is a buyer representation agreement?

A lease agreement for renting a property

An agreement that outlines the buyer's financial status

A contract that allows a brokerage to represent a buyer's interests

A document that details the buyer's property preferences

#22. What does 'contingent' mean in a real estate listing?

The property is sold

The property is not for sale

The property sale depends on certain conditions

The property is overpriced

#23. What is the primary purpose of an open house?

To entertain neighbors

To showcase the property to potential buyers

To appraise the property

To finalize the sale

#24. What should a salesperson do if a property is overpriced?

Encourage the seller to wait for the right buyer

Advise the seller to reduce the price based on market data

Increase the marketing efforts

Ignore it

#25. What is the purpose of a home inspection?

To identify any issues with the property

To increase the sale price

To appraise the property's value

To negotiate closing costs

#26. What should a salesperson do if they notice mold during a property showing?

Cover it up

Disclose it to the buyer immediately

Clean it themselves

Ignore it

#27. Olivia wants to include a condition for a structural engineer's report before purchase. What is this condition called?

Insurance condition

Sale of buyer's property condition

Inspection condition

Financing condition

#28. Who typically holds the deposit once an offer is accepted?

The buyer

The mortgage lender

The real estate brokerage

The seller

#29. James's brokerage is preparing a counteroffer on his behalf. What should James ensure?

That the offer is accepted

That the buyer agrees immediately

That the terms reflect his instructions

That the offer is rejected

#30. What is a balloon mortgage?

A mortgage with small initial payments that increase significantly at the end

A mortgage for commercial properties

A mortgage with no interest

A mortgage with decreasing payments

#31. What is a condition precedent?

A condition that must be fulfilled before the agreement becomes binding

A condition that can be waived anytime

A condition that has no specific time frame

A condition that must be fulfilled after closing

#32. When is a real estate transaction considered closed?

When the buyer makes an offer

When the property is appraised

When the seller accepts the offer

When all funds are transferred and the deed is recorded

#33. What is the purpose of a waiver in a real estate transaction?

To remove a condition from the agreement

To terminate the agreement

To amend the agreement of purchase and sale

To confirm the fulfillment of a condition

#34. Henry is buying a property and wants assurance that the included appliances are in working order. How should this be included?

In the closing date

In the purchase price

As a condition in the offer

In the property description

#35. What is the impact of interest rates on the real estate market?

Can influence buyer affordability and demand

Only affects sellers

Only affects commercial properties

No impact

#36. What does a financing condition protect the buyer from?

Inability to secure a mortgage

Higher property taxes

Changes in interest rates

Increase in property value

#37. Ben's offer was accepted but he needs more time for a title search. What should he do?

Reject the offer

Draft a new offer

Accept the original offer

Amend the original offer

#38. When must a buyer provide the deposit after an offer is accepted?

Within 48 hours

Within 24 hours

Within 5 business days

At the time of closing

#39. What should a seller do if they receive multiple offers?

Consult with the mortgage lender

Review all offers and consider the terms and conditions of each

Reject all offers and wait for a higher one

Accept the first offer received

#40. What is a property deed?

A document listing property improvements

A tax record

A loan document

A legal document transferring ownership of property

#41. Sophia wants to rent her property instead of selling it. What should she discuss with her brokerage?

Rental market analysis

All of the above

Tenant screening process

Lease agreement terms

#42. What is an earnest money deposit?

A fee for the real estate agent

A payment to cover home inspection costs

A payment for property taxes

#43. What is an escrow account used for?

To hold funds related to a real estate transaction

To store real estate contracts

To record property taxes

To manage rental properties

#44. Who typically pays the commission to the brokerage in a real estate transaction?

The government

The buyer

Both the buyer and the seller

The seller

#45. What is the role of a real estate appraiser?

To inspect for structural issues

To assess the value of a property

To draft legal documents

To negotiate prices

#46. What must be included in a valid real estate offer?

Neighbor's consent

Buyer's employment history

Seller's personal information

Offer price, terms, and conditions

#47. What should a salesperson do if they learn that a new landfill is planned near a property they are selling?

Deny any knowledge of the landfill when asked by buyers

Keep the information private to not hinder the sale

Advise the seller to quickly sell the property

Disclose the information to the seller and potential buyers

#48. What obligation does a brokerage have when representing a buyer?

To act in the best interest of the buyer

To get the highest price for the property

To negotiate the lowest price possible for the buyer

To share the buyer's confidential information with the seller

#49. How can a salesperson help a seller set the right asking price?

By setting a price based on seller's debt

By suggesting a high price to leave room for negotiation

By asking the buyer's agent

By using a Comparative Market Analysis (CMA)

#50. How can a salesperson help a buyer during a bidding war?

Encourage emotional decision-making

Suggest making an extremely high offer

Advise to drop out

Recommend setting a budget and sticking to it

Finish

Results

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