Ontario RE Essentials Exam cheat sheet

A brokerage is the registered business that trades in real estate; individual brokers and salespersons must be registered with RECO and act through a brokerage.

Every brokerage must designate a broker of record, who oversees compliance and supervises registered staff.

A salesperson or broker cannot receive commission directly from a client; remuneration is paid to the brokerage and then split under the brokerage's agreement.

TRESA, 2020 replaced REBBA 2002 on December 1, 2023; RECO administers registration and the Code of Ethics.

Trust funds must be held in a designated trust account; brokerage operating funds and trust funds cannot be commingled.

Service agreements and commission arrangements are negotiable; no law or regulator sets a standard commission rate.

Registrants must keep records of trades, trust transactions, and written service agreements as required by TRESA regulations.

TRESA and its regulations set registration, conduct, trust, and disclosure duties; the Code of Ethics is enforced by RECO.

Fiduciary duties to a client include loyalty, obedience, disclosure, confidentiality, reasonable care and skill, and accounting.

Conflicts of interest must be disclosed in writing promptly; hidden referral fees or undisclosed benefits violate ethics rules.

The Ontario Human Rights Code prohibits discrimination in accommodation based on protected grounds, including race, sex, disability, family status, and receipt of public assistance.

PIPEDA requires consent and safeguards for personal information collected in commercial activity, including real estate files.

FINTRAC requires brokerages to identify clients, keep records, and report suspicious transactions and large cash transactions.

The Competition Act prohibits price fixing and misleading advertising; commissions are negotiable.

A registrant must not misrepresent a property's facts, services, or earnings; puffery does not excuse a false statement of fact.

Trust money must be accounted for and reconciled; shortages must be reported and corrected.

Agency is created by a written service agreement; the brokerage is the agent, and its registrants act for the brokerage.

The brokerage owes fiduciary duties to its client; the client's confidential information cannot be used against them.

Designated representation allows one brokerage to designate different registrants for different clients in the same trade, subject to consent and confidentiality controls.

Multiple representation occurs when the same brokerage represents more than one party; it requires written consent from all clients and fair, skilled representation.

A self-represented party is not a client; the registrant must disclose the limits of service and cannot give the party confidential advice.

Buyer representation agreements state term, services, commission, and holdover; a holdover can entitle the brokerage to commission after expiry.

Seller representation agreements authorize listing and marketing; the seller remains bound by the agreement's term and commission terms.

Confidential information received from a client cannot be disclosed without consent, even after the relationship ends, except as required by law.

Before substantive discussions, disclose whom you represent; if no agency exists, obtain written acknowledgment of self-representation.

Fee simple is the broadest estate; a life estate ends on death; a leasehold is a tenant's interest for a term.

Joint tenancy includes right of survivorship; tenancy in common does not, and shares need not be equal in tenancy in common.

Ontario's Land Titles system provides title assurance; parcel registers list ownership and encumbrances; title insurance covers certain defects.

Zoning by-laws regulate use, density, setbacks, height, and parking; official plans set municipal policy; the Provincial Policy Statement guides planning decisions.

Minor variances and consents (severances) are decided by the Committee of Adjustment; site plan control addresses site design.

Restrictive covenants and easements are encumbrances that can limit use or grant rights over land; they appear on title.

A condominium owner holds a unit and an interest in common elements; the corporation maintains common elements and a reserve fund.

The status certificate is requested from the condominium corporation; the buyer's solicitor reviews it during the condition period.

The matrimonial home has special treatment under the Family Law Act; a spouse may have possessory rights even if not on title.

An APS is formed by offer and acceptance, consideration, capacity, and legality; the offer must be communicated and accepted within the irrevocability period.

A counteroffer changes terms, rejects the prior offer, and creates a new offer; acceptance must mirror the counteroffer exactly.

Conditions precedent must be fulfilled or waived by the stated time; a failed condition can end the agreement and trigger deposit return under the contract.

Fixtures are included unless excluded; chattels are included only if listed; the APS lists excluded items and rental items.

The deposit is paid to the brokerage in trust and credited to the purchase price; forfeiture depends on the contract and default rules.

Amendments and waivers must be in writing and signed by both parties; oral changes may not be enforceable.

The requisition date is the buyer's deadline to object to title; the closing date is when transfer and funds are exchanged.

Standard closing documents include the transfer/deed, statement of adjustments, title insurance policy, and mortgage instructions.

The APS addresses HST, adjustments, occupancy, and permitted inspections; new homes may have Tarion warranty protections.

Mortgage components include principal, interest rate, term, amortization, and payment frequency; term is the contract period, amortization is the repayment schedule.

Fixed-rate payments stay constant; variable-rate payments fluctuate with the lender's prime rate; open mortgages allow prepayment, closed mortgages limit it.

The stress test requires qualifying at the greater of the contract rate plus 2% or 5.25% for many federally regulated lenders.

GDS includes mortgage principal and interest, taxes, heat, and half of condo fees; TDS adds other debt payments; common limits are 39% GDS and 44% TDS.

Minimum down payment is 5% of the first $500,000 plus 10% of the portion from $500,000 to $1,000,000; 20% is required at $1,000,000 or more.

Ontario land transfer tax is graduated and based on purchase price; Toronto has an additional municipal land transfer tax; first-time buyer rebates may apply.

Closing costs include land transfer tax, legal fees, title insurance, adjustments, appraisal, status certificate, and HST where applicable.

HST generally does not apply to resale residential homes; new residential housing is taxable with rebates; commercial property may be subject to HST.

The statement of adjustments credits prepaid taxes and utilities to the seller and debits the buyer; the mortgage payout discharges an existing charge.

Market value is the most probable price in an arm's-length transaction after reasonable exposure, with knowledgeable parties and no undue pressure.

A CMA selects recent comparable sales and active listings similar in location, type, size, age, and condition, then adjusts for differences.

Adjustment rule: if the comparable is superior to the subject, subtract value; if inferior, add value; adjust the comparable toward the subject.

Price per square foot supports analysis but does not replace room count, lot, condition, and location adjustments.

Months of inventory equals active listings divided by average monthly sales; falling inventory and rising sale-to-list ratios indicate a seller's market.

Absorption rate equals sales in a period divided by active listings at period end; higher absorption indicates stronger demand.

An appraisal is a formal opinion by a licensed appraiser, often for lending; a CMA is a marketing and price opinion by a registrant.

Highest and best use considers legally permissible, physically possible, financially feasible, and maximally productive use.

Overpricing can lengthen days on market and lead to price reductions; track showing feedback and competing listings.

All advertising must be truthful, accurate, and not misleading; include the brokerage's registered name and the registrant's name as required.

Social media posts, websites, and flyers are advertising and must comply with TRESA, RECO, and human rights rules.

CASL requires consent for commercial electronic messages, sender identification, and an unsubscribe mechanism.

Do-not-call rules apply to telemarketing; consent and call-time restrictions must be respected.

Use client testimonials and photos only with informed consent; privacy laws apply to personal information.

Advertising another brokerage's listing requires authority or cooperation; listing content may be owned or licensed.

Avoid discriminatory advertising; describe the property and location, not preferred buyer characteristics.

REALTOR is a CREA trademark for members; non-members must not use it to describe themselves or their services.

Track cost per lead, conversion rate, and return on marketing spend to evaluate business development.

A seller's lawful written directions on offer presentation must be followed; the process must be explained to buyers accurately.

Present all written offers promptly and objectively unless the seller's lawful direction provides otherwise.

With multiple offers, do not disclose competing offer contents without authorization; disclosures must be accurate and consistent.

Counteroffers are made in writing with a clear expiry; verbal negotiations are confirmed in writing.

Negotiation preparation identifies the client's reservation price, BATNA, priorities, and walk-away point; confidential client information is not disclosed.

Offer review verifies buyer identity, financing, deposit, conditions, closing date, inclusions, and any seller's direction.

Waiver and condition fulfillment must be documented in writing before deadlines; missed deadlines can cause default.

Transaction checklist: deposit receipt, condition dates, requisition date, closing, adjustments, keys, and final reporting.

Commission and cooperating brokerage compensation must match the service agreement and be disclosed as required.