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. What is a zoning ordinance?

A home insurance policy

A regulation that defines how property in specific areas can be used

A loan agreement

A property tax law

#2. What is a real estate disclosure?

A financing option

A type of loan

Information provided by the seller about the property's condition

A marketing strategy

#3. What is a short sale?

Selling a property quickly

Selling a property below market value

Selling a property without listing it

Selling a property for less than the outstanding mortgage balance

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

As a condition in the offer

In the property description

In the closing date

In the purchase price

#5. What is the best strategy for pricing a home to sell quickly?

Price it above market value

Ignore market trends

Price it below market value

Set the highest possible price

#6. Liam is including a condition for a water quality test in his offer. Where should this be specified?

In the closing date

In the purchase price

In the property description

In the schedule of the offer

#7. What is a common contingency included in offers?

Seller's moving date

Buyer's vacation plans

Financing approval

Neighbor's consent

#8. What is the primary benefit of a fixed-rate mortgage?

The interest rate changes with the market

Higher long-term savings

Lower initial payments

The interest rate remains constant

#9. What should a salesperson do if a property appraisal comes in lower than the offer price?

Negotiate with the seller to lower the price

Increase the offer

Advise the buyer to walk away

Ignore the appraisal

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

Advise the seller to quickly sell the property

Keep the information private to not hinder the sale

Disclose the information to the seller and potential buyers

Deny any knowledge of the landfill when asked by buyers

#12. What is a buyer representation agreement?

A document that details the buyer's property preferences

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

An agreement that outlines the buyer's financial status

A lease agreement for renting a property

#13. What should a buyer do if their offer is rejected?

Withdraw from the market

Make a higher offer or look for another property

Wait for the seller to change their mind

File a complaint

#14. What is the best way to market a property in a competitive market?

Ignore market trends

Limit advertising

Highlight unique features

Set a high price

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

Clean it themselves

Disclose it to the buyer immediately

Ignore it

Cover it up

#16. Rachel's offer was accepted but she needs more time to arrange financing. What should she do?

Shorten the closing date

Increase the deposit amount

Include a longer financing condition

Remove all conditions

#17. How can a salesperson assist a client in determining a competitive offer price?

By guessing

By using online calculators

By asking the seller

By providing a Comparative Market Analysis (CMA)

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

To showcase the property to potential buyers

To finalize the sale

To entertain neighbors

To appraise the property

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

To terminate the agreement

To amend the agreement of purchase and sale

To confirm the fulfillment of a condition

To remove a condition from the agreement

#20. What is a home equity loan?

A loan to cover closing costs

A loan to purchase a new home

A loan against the value of the home

A loan for home improvements

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

OREA Form 140

OREA Form 124

OREA Form 100

OREA Form 110

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

Ignore the foreclosure status

Advise the buyer to avoid it

Provide information about the foreclosure process

Advise the buyer to offer a low price

#23. Sophia is selling her home and received an offer with a very low deposit. What can she do to protect her interests?

Ask for a quick closing date

Counter the offer with a higher deposit

Reject the offer

Accept the offer

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

Accept the original offer

Amend the original offer

Reject the offer

Draft a new offer

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

That the offer is accepted

That the terms reflect his instructions

That the buyer agrees immediately

That the offer is rejected

#26. What should a salesperson do if a seller wants to hide a defect?

Ignore the defect

Cover up the defect

Disclose all known defects to potential buyers

Agree with the seller

#27. What is the role of curb appeal in selling a property?

Minor role

Major role in attracting buyers

No role

Only important for luxury homes

#28. Why is it important to include a financing condition in an offer?

To increase the property's value

To delay the closing date

To ensure the buyer can secure a mortgage

To allow the buyer to change their mind

#29. Who is responsible for providing accurate information about a property?

The brokerage representing the seller

The seller

The brokerage representing the buyer

The buyer

#30. 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

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

A detailed explanation of the buying process

Advice on securing financing

All of the above

A list of potential properties

#32. What is a common reason for an offer to be conditional?

Buyer's preference for paint color

Real estate agent's recommendation

Pending sale of the buyer's current home

Seller's request for a higher price

#33. What is a dual agency?

When two agents represent one seller

When an agent represents neither party

When two agents represent one buyer

When one agent represents both buyer and seller

#34. What should a salesperson do if a buyer wants to include an escalation clause in an offer?

Include the clause and discuss it with the seller

Ignore the clause

Automatically accept the highest possible offer

Reject the offer outright

#35. Matthew's offer includes a condition for the sale of his current home within 30 days. What happens if this condition is not met?

The offer stands

The seller can cancel the offer

The offer is void

The buyer must proceed without selling

#36. What is a balloon mortgage?

A mortgage with decreasing payments

A mortgage with no interest

A mortgage for commercial properties

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

#37. What is the purpose of an irrevocable period in an offer?

To determine the closing date

To outline the terms of payment

To list contingencies

To specify how long the offer is valid and cannot be revoked

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

Only the seller

Only the buyer

The real estate agent

Both the buyer and the seller

#39. What obligations does a salesperson have when handling a property sale with known environmental issues?

Advise the seller to fix the issues before selling

Only disclose if the buyer asks about environmental concerns

Disclose all known issues to all parties

Minimize the issues to facilitate the sale

#40. What is an adjustable-rate mortgage (ARM)?

A mortgage that does not require a down payment

A mortgage with an interest rate that changes periodically

A mortgage with a fixed interest rate

A mortgage that is interest-free

#41. How can a buyer withdraw an offer before it is accepted?

By sending an email to the mortgage lender

By notifying the seller in writing before the irrevocable period ends

By calling the seller

By informing the real estate agent

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

To determine the value of a property

To provide legal advice

To negotiate prices

To inspect for code violations

#43. Henry's brokerage is handling both the sale and the purchase of properties for him. What should Henry ensure?

Clear communication of his needs

Understanding of the brokerage's role

Awareness of any potential conflicts of interest

All of the above

#44. What is the main purpose of a title search?

To establish property boundaries

To plan for future development

To determine ownership and any encumbrances

To assess property value

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

The property is available for showings

The property is in the process of being sold

The property has no interested buyers

The property is listed for sale

#46. What is a condition precedent?

A condition that must be fulfilled after closing

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

#47. What is required when an amendment to an agreement is not accepted?

A new agreement must be drafted

The buyer must make a new offer

The agreement becomes null and void

The original terms remain in effect

#48. What is a common reason for a real estate deal to fall through?

High appraisal

Long closing date

Low appraisal

Quick closing date

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

At the time of closing

Within 5 business days

Within 24 hours

Within 48 hours

#50. How can staging affect the sale of a property?

Increase appeal and potential sale price

Have no effect

Make the property less desirable

Decrease interest

Finish

Results

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