OREA Ontario Real Estate Association

1 Copyright 2010 OREA Ontario real Estate Association February 2010 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, mechanical, electronic, photocopying, recording or otherwise, without the prior written consent of the Ontario real Estate Association (OREA). The OREA real Estate College has expanded the use of multiple choice examinations for all registration education courses. This testing format has a number of advantages for you our customer. The use of scantron technology allows the College to process examination results quickly. This provides students with added flexibility to plan their progress through the program.

2 Students who answer questions incorrectly will be provided with feedback highlighting both the chapter and topic related to these questions. This feedback is being provided to all students for all incorrectly answered questions whether or not a passing mark was achieved on the examination. It is important that students be made aware of all topics which require additional review. Changes in the real Estate marketplace occur frequently and are incorporated into course curriculum. The College is able to easily introduce new questions to ensure that students are examined on up to date course material. Knowledge of current practices is vital to a successful career as a real Estate sales professional. This publication has been developed as a guide to help you understand the types of multiple choice questions and the distribution of marks which you can expect to see on OREA real Estate College examinations.

3 The following information is provided for your benefit: There are four types of multiple choice questions asked on examinations. They are referred to as Levels 1 4. For each level you will find an explanation of the question type, sample questions, correct answers and an example of the feedback should the question not be answered correctly. A chart showing the types of questions, number of questions on each examination, marks per question and total marks. Table of Contents What is a Level 1 Question? .. 1 What is a Level 2 Question? .. 2-3 What is a Level 3 Question? .. 4-5 What is a Level 4 Question? .. 6-9 Exam Templates real Estate as a Professional Career .. 10 Land, Structures and real Estate Trading.

4 10 The real Estate Transaction General .. 10 The Residential real Estate Transaction .. 10 The Commercial real Estate Transaction .. 10 real Property .. 10 Principles of Appraisal .. 10 Principles of Mortgage Financing .. 10 Principles of Property Management .. 10 real Estate Investment Analysis .. 10 real Estate Broker Course .. 10 1 What is a Level 1 Question? Questions require students to recall and demonstrate their understanding of facts and concepts. Questions typically ask students to define, describe, identify, list, outline, recall, recognize, select, distinguish, estimate and summarize.

5 Sample Questions Correct Answer Feedback A principal's obligation to protect the agent from any action brought against the agent in the lawful fulfillment of the agent's duties is known as: a. remuneration b. duty of care c. indemnification d. delegation c Please Refer to Land, Structures and real Estate Trading Chapter 15: Trading and Agency Relationships, Topic: Agency Relationships Principal Indemnification Identify one of the essential elements that must be present in every contract for it to be enforceable. a. There must be past or future consideration. b. A seal must be present in the contract. c. The acceptance of the offer must be communicated to the offeror. d. The consideration must have reasonable value.

6 C Please Refer to The real Estate Transaction - General Chapter 1, Understanding Contract Law, Topic: Offer and Acceptance (Mutual Agreement) 2 What is a Level 2 Question? Questions require students to use their knowledge of facts and understanding of concepts to solve problems or complete a task. Questions typically ask students to apply, demonstrate, predict, prepare, solve, distinguish, identify, illustrate, outline, calculate and select. Sample Questions Correct Answer Feedback 1. Salesperson Lee of ABC Realty Inc. has listed a property at a rate of 6% commission. Salesperson Lee is compensated based on a 60/40 commission split with the brokerage (Note: brokerage retains the smaller portion). Salesperson Martin of XYZ real Estate Ltd.

7 Sells the property. All salespeople within XYZ real Estate Ltd. have a commission split of 55/45 with the brokerage. The commission distribution between listing and selling brokerages is 50/50. The property sells for $145,000. Calculate the amount of commission payable to each party. a. ABC Realty Inc.: $4,050; Salesperson Lee: $2,430; XYZ real Estate Ltd.: $1, ; Salesperson Martin: $2, b. ABC Realty Inc.: $1,740; Salesperson Lee: $2,610; XYZ real Estate Ltd.: $2, ; Salesperson Martin: $1, c. ABC Realty Inc.: $1,740; Salesperson Lee: $2,610; XYZ real Estate Ltd.: $1, ; Salesperson Martin: $2, d. ABC Realty Inc.: $2,610; Salesperson Lee: $1,740; XYZ real Estate Ltd.: $2,175; Salesperson Martin: $2,175.

8 C Please Refer to real Estate as a Professional Career Chapter 1 A Career in real Estate Topic: A Career in real Estate Salesperson Remuneration The Commission Sales Model 3 Sample Questions Correct Answer Feedback 2. Appraiser Leung is working on an appraisal for 44 Rabble Road. Leung is trying to determine the price trend in the neighbourhood in order to make the necessary time adjustments to comparable sold properties. He has come across a property in the area that sold seven months ago for $269,500 and resold one month ago for $291,200. Based on these two sales, what is the monthly percentage that Leung would use when calculating time adjustment (rounded to 2 decimal places)?

9 A. + b. c. + d. a Please Refer to Land, Structures and real Estate Trading Chapter 10 Direct Comparison Approach, Topic: Adjustment Calculations Time Resale Analysis 4 What is a Level 3 Question? Questions require students to review a series of questions in a case study and to use their knowledge of facts and understanding of concepts to critique, make judgments and/or build solutions to problems. Questions typically ask students to appraise, calculate, compare, conclude, contrast, criticize, critique, defend, describe, evaluate, explain, interpret, justify, summarize and support. Sample Questions Correct Answer Feedback Tom and Ellen O'Leary and their two young daughters have recently moved into town and have signed an offer to lease on a house at 147 Edgeware Road for one year, commencing February 1st.

10 When the offer is presented to the owners, they are satisfied with all of the terms but make a counter offer to the O'Learys in which they include a no pet clause because they are concerned about any possible damage being done to their property by a pet. The O'Learys have no pets and do not object to the clause being included. As a result, they accept the counter offer, sign a lease with the owners and move into 147 Edgeware Road on February 1st. Please answer the following three questions based on the information provided above and in the questions themselves. 1. It is now the 15th of June and the O Learys have just bought a dog for their daughters. The owners have found out and are furious. They remind the O'Learys of the no pet clause in the lease and demand that they get rid of the dog.