Section 3 Practice Exam – Ontario Real Estate - NOW Jimmo

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. Daniel’s offer was countered by the seller with a higher price and removal of some chattels. What should Daniel do if he disagrees?

Withdraw his offer

Accept the counter offer

Ignore the changes

Make another counter offer

#2. What should a salesperson do if a buyer wants to back out of a purchase contract?

Review the contract for any exit clauses

Ignore the buyer’s concerns

Advise the buyer to talk to the seller

Encourage the buyer to continue

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

OREA Form 124

OREA Form 110

OREA Form 100

OREA Form 140

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

Inspection condition

Insurance condition

Sale of buyer’s property condition

Financing condition

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

To remove a condition from the agreement

To confirm the fulfillment of a condition

To amend the agreement of purchase and sale

To terminate the agreement

#6. What is the significance of an earnest money deposit?

Reduces the down payment

Shows the buyer’s good faith in completing the transaction

Increases the property’s value

Guarantees a lower interest rate

#7. What happens if the conditions of an offer are not met?

The offer becomes void

The offer is automatically accepted

The closing date is extended

The offer price is reduced

#8. What must be included in an amendment to an agreement of purchase and sale?

Both old and new terms

Only new terms

Only old terms

Any terms that need revision

#9. Why is location important in real estate?

It dictates the property color

It determines the property size

It impacts property value and desirability

It sets the legal requirements

#10. What is a property deed?

A loan document

A tax record

A legal document transferring ownership of property

A document listing property improvements

#11. What is a real estate disclosure?

Information provided by the seller about the property’s condition

A financing option

A type of loan

A marketing strategy

#12. What is the role of a brokerage in a real estate transaction under REBBA?

To represent the interests of their clients

To offer legal services

To inspect properties

To provide financial advice

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

To establish property boundaries

To assess property value

To plan for future development

To determine ownership and any encumbrances

#14. What should a salesperson do if a property has an encroachment?

Disclose the encroachment to potential buyers

Lower the property price

Remove the encroachment

Ignore it

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

Ignore it

Advise the seller to reduce the price based on market data

Increase the marketing efforts

Encourage the seller to wait for the right buyer

#16. Isabella received an offer on her property but is unsure if it’s fair. What should she ask her brokerage?

For a market analysis

To reject the offer

To negotiate directly with the buyer

For a higher offer

#17. What is a dual agency?

When one agent represents both buyer and seller

When two agents represent one seller

When an agent represents neither party

When two agents represent one buyer

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

Highlight unique features

Limit advertising

Ignore market trends

Set a high price

#19. George received an offer with a very high deposit. What might this indicate about the buyer?

The buyer wants a lower purchase price

The buyer is not serious

The buyer is serious and has good faith

The buyer wants to delay the closing

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

Minimize the issues to facilitate the sale

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

#21. How should a salesperson respond if a buyer finds a significant issue during the home inspection?

Offer to fix the issue personally

Suggest canceling the transaction

Advise to ignore it

Recommend negotiating with the seller for repairs or a price reduction

#22. What is the purpose of a final walk-through?

To celebrate the purchase

To finalize the sale price

To measure the property size

To ensure the property is in agreed-upon condition before closing

#23. What is a lease option?

A property tax agreement

A home insurance policy

An agreement to lease with an option to buy

A type of mortgage

#24. How should a salesperson advise a buyer when interest rates are expected to rise?

Advise them to wait

Recommend only adjustable-rate mortgages

Suggest locking in a rate quickly

Ignore interest rates

#25. What should a seller disclose to their brokerage?

Any material facts that could affect the value of the property

Only positive aspects of the property

The lowest price they are willing to accept

Personal financial information

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

Guarantees a low interest rate

Removes the need for a down payment

Locks in the purchase price

Shows the buyer is serious

#27. What does ‘contingent’ mean in a real estate listing?

The property is overpriced

The property is sold

The property is not for sale

The property sale depends on certain conditions

#28. What document is used to amend an agreement of purchase and sale?

OREA Form 200

OREA Form 101

OREA Form 120

OREA Form 130

#29. David wants to terminate his buyer representation agreement. What should he do?

Sign a new agreement with another brokerage

Stop communicating with his brokerage

Notify his brokerage in writing

Wait until the agreement expires

#30. What is an escrow account used for?

To record property taxes

To hold funds related to a real estate transaction

To manage rental properties

To store real estate contracts

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

Encourage them

Provide market data to support their decision

Refuse to submit the offer

Advise against it

#32. How can a salesperson assist a first-time homebuyer?

By pushing them to buy quickly

By providing detailed guidance throughout the process

By limiting their choices

By ignoring their concerns

#33. What is a contingency in a real estate contract?

A bonus for the seller

A financing option

An optional clause

A condition that must be met for the contract to be binding

#34. Andrew received a counter offer with an adjusted purchase price. What must he ensure is correct before accepting?

Chattels included

Irrevocable date

New purchase price

Deposit amount

#35. Michael wants to ensure his property is marketed effectively. What should he discuss with his brokerage?

The buyer’s financial situation

The brokerage’s commission rate

The color of the property

Marketing strategy and advertising methods

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

The mortgage lender

The buyer

The seller

The real estate brokerage

#37. What is the role of a home inspection in a real estate transaction?

To speed up the sale

To increase the sale price

To lower the sale price

To identify any issues with the property

#38. What is the purpose of a home inspection condition in an offer?

To evaluate the property’s value

To assess the structural integrity and condition of the property

To determine property taxes

To negotiate the selling price

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

High appraisal

Quick closing date

Long closing date

Low appraisal

#40. Tyler’s brokerage is helping him buy a property. What should the brokerage avoid doing?

Providing accurate information about the property

Disclosing all material facts

Making decisions on Tyler’s behalf without his consent

Acting in Tyler’s best interest

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

To increase the property’s value

To delay the closing date

To allow the buyer to change their mind

To ensure the buyer can secure a mortgage

#42. What is a home equity loan?

A loan to cover closing costs

A loan to purchase a new home

A loan for home improvements

A loan against the value of the home

#43. How should a salesperson handle a buyer who is concerned about property taxes?

Ignore the concern

Advise the buyer to choose a different property

Suggest the buyer consult a tax advisor

Provide information on current and historical tax rates

#44. What is the role of a mortgage broker?

To represent buyers in transactions

To negotiate loan terms between the borrower and lender

To conduct home inspections

To appraise property

#45. What is an appraisal contingency?

A requirement for home insurance

A clause that requires the property to appraise at a certain value

A condition for home inspection

A type of loan

#46. What is the role of a mutual release in a real estate transaction?

To waive a condition

To amend the agreement

To confirm fulfillment of conditions

To release parties from the agreement and direct disbursement of deposit

#47. Emma is buying a house and wants her brokerage to keep her information confidential. What should she do?

Post a notice online

Discuss it with the seller

Sign a buyer representation agreement

Provide verbal instructions

#48. Jack’s offer includes a clause that the seller must repair the heating system. What type of clause is this?

Inspection clause

Warranty clause

Financing clause

Repair clause

#49. What is the correct course of action for a salesperson if a property has an unpermitted addition?

Advise the seller to disclose the addition to potential buyers

Ignore the issue as it does not affect the property’s usability

Recommend that the seller obtain retroactive permits

Encourage the seller to dismantle the addition

#50. What does ‘under contract’ mean in real estate?

The property is listed for sale

The property is available for showings

The property has no interested buyers

The property is in the process of being sold

Finish

Results

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Section 3 Practice Exam – Ontario Real Estate