ON Residential Transactions Exam common mistakes
ON Residential Transactions Exam · Understand the traps and how to avoid them.
Treating the deposit as the brokerage's money once the buyer's cheque is handed over, and spending or transferring it against commission before the deal closes or before written direction from both parties is obtained.
Candidates confuse the brokerage's entitlement to commission with actual custody of funds, and they assume a deposit becomes 'earned' at acceptance rather than being held in trust until closing or a lawful release event. The exam leans on scenarios where the deal collapses and the deposit must be returned or interpleaded.
What to do instead
Memorize the trust-accounting sequence: deposit received, deposited into the brokerage trust account within the statutory time limit, recorded in the trust ledger per transaction, reconciled monthly, and released only on closing, a signed mutual release/direction, or a court order. Practise by writing out the ledger entries for a failed deal and for a deal that closes with the deposit credited to the purchase price.
Presenting an agreement of purchase and sale as binding while key terms are still open, or advising a client to sign a document with a condition that has no stated waiver mechanism, expiry, or consequences for non-fulfilment.
Candidates treat the APS as a form to complete rather than a contract, so they miss that an unfulfilled condition leaves the deal voidable rather than automatically void, and they overlook the difference between conditions precedent and conditions subsequent. They also forget that a counter-offer kills the original offer.
What to do instead
Build a checklist for every APS: parties, property description, price and deposit, chattels/fixtures, closing date, conditions with clear waiver language and deadlines, and remedies for default. For each condition, state who benefits, how it is waived, and what happens if the deadline passes. Rehearse counter-offer chains where each new offer revokes the prior one.
Acting for both sides, or for a buyer on a property listed by the same brokerage, without explaining in writing the nature of the relationship, the limits of the duties owed, and the client's option to be represented by another brokerage.
Candidates memorize the labels (client, customer, self-represented) but not the operational consequences, so they default to 'dual agency is fine if both agree' without recognizing the disclosure, consent, and confidentiality carve-outs that apply, and they miss that a customer is still owed honesty and fairness.
What to do instead
Draft a short script for the first meeting that identifies who you represent, what you must keep confidential, what you may disclose, and what the client gives up in a multiple-representation scenario. Then work through scenarios where a customer asks for advice and where a client's confidential information would help the other side, and state exactly what you may and may not say.
Marketing a listing with superlatives, guaranteed outcomes, or unverified claims about the property, neighbourhood, school catchment, or investment return, and posting it without the brokerage's name and the required identification on the advertising.
Candidates focus on getting attention for the listing and treat advertising rules as a formatting formality, so they miss that advertising is a representation that must be accurate, not misleading, and attributable to the brokerage. Social media and 'coming soon' posts feel informal and escape the review habit.
What to do instead
Before publishing, run every ad through three tests: is each factual claim verifiable from a source I can name, does it identify the brokerage as required, and would a reasonable buyer be misled if the claim were false. Keep a file copy of the substantiation for school, zoning, and rental-income claims, and route all social posts through the same review as print ads.
Quoting a price opinion or suggested list price without a documented comparative market analysis, or letting a seller's target price override the evidence without recording the client's decision in writing.
Candidates want to be agreeable and fear losing the listing, so they present a number rather than an analysis, and they skip the written record of overpricing advice. The exam tests whether the opinion is supportable and whether the client was informed, not whether the price was 'right'.
What to do instead
Prepare a written CMA with the comparables, adjustments, and date-of-sale basis, present a range rather than a single figure, and document the seller's instruction if they choose a price outside the range, including the marketing and carrying-cost consequences. Practise explaining a price reduction recommendation with evidence rather than opinion.
Failing to verify title, encumbrances, and the property's legal description before the buyer commits, and assuming the buyer's lawyer or lender will catch a registration problem such as an easement, restrictive covenant, or encroachment.
Candidates treat title search as someone else's step in the closing chain, so they do not flag issues early enough to make the offer conditional on them. They also confuse the land registry parcel with what is physically on the ground, missing survey and boundary discrepancies.
What to do instead
For every listing, pull the parcel register and any registered instruments, read the legal description against the survey or reference plan, and list every easement, right-of-way, covenant, and lien in the disclosure. Where something is unclear, make the offer conditional on a satisfactory title search and survey, and state the deadline.
Recommending or arranging a specific lender, mortgage product, or private financing without disclosing the referral relationship, or describing financing terms as assured when only a pre-qualification exists.
Candidates blur the line between general information and mortgage advice, and they assume a pre-approval equals a commitment. They also forget that compensation from a lender or broker must be disclosed and that the client must understand the difference between pre-qualification, pre-approval, and a firm commitment.
What to do instead
Separate the roles explicitly: the brokerage provides information and introductions, the licensed mortgage professional gives advice. Disclose any referral fee in writing, explain the three stages of financing approval and what each does not guarantee, and make the APS conditional on financing with a stated date and a defined lender/terms standard.
Skipping or downplaying a known material latent defect, or answering a buyer's direct question about the basement, roof, or prior water damage with a vague non-answer instead of the facts the seller disclosed.
Candidates fear losing the deal and misread confidentiality as permission to stay silent, forgetting that a client's disclosure to the brokerage about a latent defect must be handled honestly and that a direct question demands a truthful answer. They also conflate 'as is' with a licence to conceal.
What to do instead
Use a seller property information statement or a written disclosure checklist at the listing appointment, record what the seller knows, and treat any latent defect that makes the property dangerous or unfit as disclosable. When a buyer asks a direct question, give the known facts and document the answer in writing; never answer 'I don't know' when the file shows otherwise.
Treating a tenanted property or a condominium as an ordinary freehold transaction, ignoring notice requirements, existing leases, status certificates, reserve fund studies, and the rules on short-term rentals or special assessments.
Candidates apply a single residential template to every property type, so they miss that a tenanted purchase carries the lease and the tenants, and that a condo purchase requires reading the status certificate, budget, bylaws, and reserve fund rather than relying on the seller's summary.
What to do instead
Keep separate checklists by property type. For tenancies, confirm the lease terms, rent, notice obligations, and whether the buyer intends vacant possession, and make the offer conditional accordingly. For condos, make the offer conditional on review of the status certificate, current budget, reserve fund study, and rules, with a deadline for the review and a clear consequence if the documents are unsatisfactory.
Giving advice on legal, tax, or environmental matters beyond the licence, or failing to refer the client to a lawyer, accountant, or environmental consultant when an issue such as a designated substance, septic system, floodplain, or capital-gains question arises.
Candidates want to be helpful and appear knowledgeable, so they answer questions that belong to other professionals, and they do not recognize the point at which a general observation becomes unauthorized practice. The exam rewards knowing the boundary and documenting the referral.
What to do instead
Learn a short set of referral triggers: title and encumbrance questions, tax consequences, environmental contamination or designated substances, structural concerns, and tenancy disputes. When one appears, state what you can and cannot advise on, make the referral in writing, and record that the client was told to obtain professional advice before the condition deadline.