Real Estate Practice
This domain tests the day-to-day sequence of a transaction: agency agreements, disclosures, property information, offers, deposits, conditions and closing. The exam rewards precise process and punishes assumptions about financing, title or property condition.
Practice sequence and duties
- Use written agency agreements for seller and buyer representation, with term, duties, commission and consent to agency. Disclose agency relationships early.
- Gather and verify property information. Sellers must disclose known material latent defects; salespersons must not conceal or guess. Measurement, zoning, title and permitted use should be verified with the appropriate source.
- Present all offers promptly and objectively. An offer is a written promise subject to acceptance; counteroffers, conditions, deposit and irrevocability matter. Keep competing offers confidential unless the seller authorizes disclosure.
- A deposit is trust money. It must be delivered to the broker and deposited to the trust account, not held personally.
- Conditions such as financing, inspection and title search have deadlines. Diarize them; a condition is not a formality.
Financing, closing and scope
- A pre-approval is not a mortgage commitment. Refer financing questions to a mortgage broker or lender; do not advise on rates or qualification.
- Closing is coordinated with lawyers. Do not interpret title, prepare conveyances or give legal advice.
- Document client instructions, disclosures and referrals. If a client insists on a risky step, record the instruction in writing.
Worked example
A buyer has a pre-approval letter and asks the salesperson to remove the financing condition before the deadline. The salesperson explains that pre-approval does not guarantee the lender will approve this property and that removing the condition makes the offer firm. The salesperson asks the buyer to confirm in writing. If the buyer instructs removal, the salesperson documents the instruction and notifies the seller’s side. The salesperson does not remove the condition on a phone call or because the buyer ‘seems sure.’
Traps
- Misstating square footage or permitted use instead of directing the buyer to verify.
- Revealing one buyer’s offer price to another without authority.
- Treating a deposit as the brokerage’s money before entitlement is established.
- Pressuring a buyer to waive inspection or financing to ‘win’ a multiple-offer situation.
Trust Accounts and Professional Conduct
This domain tests the trust-account rules and the professional-conduct standards that protect the public. Expect questions on commingling, deposits, withdrawals, records, reconciliation, audits, secret commissions and the duty to cooperate with the Commission.
Trust account fundamentals
- A broker must maintain a designated trust account at a Saskatchewan financial institution for money held on behalf of clients. Trust money includes deposits, rents and other funds received in the course of trading.
- Do not commingle trust money with operating funds. Never deposit trust money into a personal or general business account.
- Deposits must be made promptly as the Act and bylaws require. The salesperson who receives a cheque must deliver it to the broker; the salesperson does not control the trust account.
- Withdrawals are permitted only when authorized: the transaction closes, conditions are waived or the parties give a proper written release, or a court order directs payment. Commission is not taken from trust until it is earned and accounted for.
- Keep a ledger for each transaction and client, receipts, disbursements, bank statements and monthly reconciliations. The broker must arrange the audit or report required by the Commission and report shortages.
Professional conduct
- Be honest in advertising, disclose conflicts and referral compensation, and never take a secret commission from a lender, contractor or other party.
- Cooperate with Commission investigations and produce records. Misleading the Commission is itself misconduct.
Worked example
A salesperson receives a $10,000 deposit cheque made payable to the brokerage. The salesperson must deliver it to the broker the same day for deposit to the trust account. The salesperson cannot cash it, hold it in a personal account or use it to pay a referral fee. If the buyer later defaults, the brokerage does not automatically keep the deposit; entitlement depends on the contract and law. The broker holds the funds until the parties sign a release or a court orders otherwise.
Traps
- Using trust funds for office expenses, advertising or commissions before entitlement.
- Releasing a deposit on a verbal instruction or after a conditional deal collapses without a signed release.
- Failing to reconcile monthly or to keep individual ledger records.
- Accepting a ‘thank-you’ payment from a mortgage or inspection contact without disclosure.