ON Real Estate Sim 1 common mistakes
ON Real Estate Sim 1 · Understand the traps and how to avoid them.
Answering questions about disclosure duties by reciting the general duty of fairness and honesty, without identifying which specific disclosure obligation (latent defect, stigmatized property, material fact, or written disclosure of representation) the fact pattern actually triggers.
Candidates memorize the broad ethical duty once and reuse it as a catch-all, because the specific disclosure rules are scattered across the Act, the Code of Ethics, and case law, and the exam deliberately blends them.
What to do instead
Build a one-page disclosure matrix with columns for the trigger fact, the obligated party, the timing, and the required form (oral vs. written). For each practice scenario, force yourself to name the exact obligation before choosing an answer, and reject any option that only restates generic honesty.
Treating a buyer-client representation as automatically extending to every property the buyer asks about, including properties listed by the brokerage itself, and missing the conflict-of-interest and designated-representation analysis.
Candidates conflate 'I have a buyer client' with 'I owe that buyer full fiduciary duty on every transaction,' forgetting that in-brokerage representation and multiple representation require specific consent and procedural steps.
What to do instead
Practice drawing the representation diagram for each scenario: who represents whom, at what brokerage, and whether the same brokerage represents both sides. Memorize the consent and disclosure requirements for multiple representation and apply them explicitly in your answer rationale.
Calculating commission, deposit, or closing adjustments using the wrong base or forgetting that the deposit forms part of the purchase price, then selecting the answer that matches the flawed arithmetic.
Under time pressure, candidates compute the obvious percentage and stop, skipping the reconciliation step where the deposit is credited and adjustments for taxes, utilities, and rent are prorated.
What to do instead
Adopt a fixed three-line worksheet: gross price, less deposit already paid, plus or minus prorated adjustments to the closing date. Do the arithmetic twice with different rounding and check that the buyer's total cash equals price minus deposit plus adjustments.
Confusing the different mortgage prepayment and discharge penalties, and assuming the penalty is always three months' interest regardless of whether the mortgage is closed or open and whether the rate is fixed or variable.
Candidates learn one penalty formula and apply it universally, ignoring that lenders calculate penalties differently for fixed versus variable rate mortgages and that open mortgages may have no penalty at all.
What to do instead
Memorize the distinction between interest rate differential and three months' interest, and note which product type triggers which. For any penalty question, first identify the product type, then the formula, and only then calculate.
Answering title and ownership questions by choosing the option that sounds most protective of the buyer, without distinguishing between joint tenancy and tenancy in common, or between registered and unregistered interests.
The concepts feel intuitive, so candidates answer from a lay sense of fairness rather than from the legal consequences of survivorship, severance, and registration.
What to do instead
Write out the consequences of each tenancy form side by side, including what happens on death, on severance, and on transfer. For every title question, identify the form of ownership first and then test each answer option against that form's legal consequences.
Skipping the conditions and warranties clause in an Agreement of Purchase and Sale question and answering based on the parties' apparent intentions rather than on whether the condition was fulfilled, waived, or expired.
Fact patterns are written to make one party sympathetic, and candidates let narrative sympathy override the contractual mechanics of conditions precedent and time-is-of-the-essence clauses.
What to do instead
For every contract question, list the conditions with their deadlines and status before reading the answer options. Then determine which party bore the risk at the moment the dispute arose, and choose the option consistent with that allocation.
Mixing up zoning by-law permissions with official plan designations, and assuming a permitted use under one instrument automatically authorizes the use under the other.
Both documents govern land use, so candidates treat them as interchangeable and miss that the official plan sets policy direction while the zoning by-law sets enforceable permissions.
What to do instead
Create a two-column comparison of official plan versus zoning by-law: purpose, legal effect, amendment process, and who appeals. When a scenario involves a proposed use, check both instruments separately and note any non-conforming or legal non-conforming status.
Calculating capitalization rate, gross rent multiplier, or net operating income using gross income instead of effective gross income, or omitting vacancy and operating expenses from the analysis.
Candidates shortcut to the simplest formula they remember and forget that investment valuation requires effective gross income after vacancy and collection loss, and that debt service is excluded from net operating income.
What to do instead
Build a standard income statement template: potential gross income, less vacancy and collection loss, equals effective gross income, less operating expenses, equals net operating income. Practice until you can produce it from memory, then apply cap rate and GRM only to the correct line.
Describing a building system defect using a general label such as 'structural problem' or 'moisture issue' instead of identifying the specific component, the mechanism of failure, and the observable evidence.
Candidates lack hands-on familiarity with building systems, so they default to vague categories and pick answers that sound technical but do not match the described symptoms.
What to do instead
Study a labelled diagram of each major system (foundation, envelope, roofing, HVAC, electrical, plumbing) and write one sentence per component describing its typical failure mode and visible signs. Practice matching symptom descriptions to components rather than to categories.
Handling ethics scenarios by choosing the answer that best protects the brokerage's commission or the client's immediate wish, rather than the answer that satisfies the duty owed to the public and to the profession.
Candidates import commercial instincts into ethics questions and treat client loyalty as outweighing obligations of honesty, disclosure, and avoiding misrepresentation to third parties.
What to do instead
For every ethics question, rank the duties in order: honesty and avoidance of misrepresentation to all parties, then confidentiality and loyalty to the client, then the brokerage's commercial interest. Choose the answer that satisfies the highest-ranked duty and can be defended in writing.