OH RE Broker cheat sheet

Ohio brokerage is a top-down structure: every salesperson and broker associate must be licensed under one responsible broker; a licensee may not receive compensation for brokerage services except through that broker.

Ohio requires a written agency policy for each brokerage, and the responsible broker must retain copies of agency disclosure/acknowledgment forms for three years from the date of the transaction.

Transaction records (listing and selling contracts, closing statements) must be kept by the broker for three years; trust/escrow records must be kept for three years after disbursement.

Trust account rules: commingling is prohibited; deposits of earnest money must be placed in a trust account no later than three business days after acceptance of the offer unless all parties agree in writing to a different holder.

Property management trust accounts: security deposits and rents are trust funds; the broker must keep a separate ledger per owner/property and reconcile monthly, with annual reconciliation retained.

Team advertising: an unlicensed assistant may not be paid by commission or hold out as a licensee; team names must be registered with the Division and must include the brokerage name in advertising.

Supervision duty: the responsible broker must have written procedures, review advertising, and document training; failure to supervise is an independent violation even if the underlying act is by a salesperson.

Independent contractor status for tax purposes does not remove the broker's statutory supervision and trust-account obligations; the broker remains liable for Division compliance.

Ohio Real Estate Commission (Division of Real Estate & Professional Licensing) disciplines licensees; the Ohio Civil Rights Commission handles housing discrimination complaints under R.C. Chapter 4112.

License term is three years; continuing education requires 30 hours per cycle, including 9 hours of core law and 3 hours of civil rights (canonical Ohio CE breakdown).

Disclosure duties: licensees must disclose known material defects and any known agency relationship; Ohio uses a Consumer Guide to Agency Relationships given at the first substantive contact.

Fair housing protected classes under Ohio R.C. 4112 include race, color, religion, sex, military status, familial status, national origin, disability, and ancestry; the federal Fair Housing Act does not include ancestry, age, or military status.

Ohio does not require a seller's property disclosure form statewide (it is voluntary); licensees must not misrepresent and must disclose latent defects they know of.

Dual agency in Ohio requires written informed consent from both parties before the brokerage represents both; without consent, the broker must designate a different licensee to one side.

Commission/settlement statement errors, unlicensed activity, and failure to account for funds are grounds for discipline; the broker may be fined and license suspended or revoked.

Lead-based paint disclosure is federally required for pre-1978 housing; the buyer gets a 10-day opportunity to test unless waived in writing.

Ohio agency types: seller agency, buyer agency, dual agency (with written consent), and designated agency; a brokerage may act as a transaction broker with limited representation duties disclosed in writing.

Agency begins with a written agency agreement; oral agency is unenforceable for commission purposes, and exclusive buyer/seller agreements must state the term and compensation.

Statute of frauds: real estate purchase contracts, leases over one year, and agency agreements must be in writing and signed by the party to be charged.

Offer/acceptance: acceptance must be unequivocal and communicated; a counteroffer terminates the original offer, and revocation is effective on receipt before acceptance.

Earnest money is held per contract; if the contract is silent, Ohio practice places it with the listing broker's trust account, and disputes are resolved per the contract's dispute clause (often mediation/arbitration).

Contingencies: financing, inspection, appraisal, and sale-of-buyer's-home contingencies must have clear deadlines; failure to remove a contingency by the deadline can allow termination.

Closing: Ohio uses a settlement statement (ALTA/HUD-style) and title insurance; the broker must ensure the CD/ALTA is delivered and funds are disbursed only after recording and clear title.

Commission is earned per the listing agreement; procuring cause determines who is paid when multiple licensees are involved, and the broker's agreement controls payment.

Gross rent multiplier (GRM) = price / gross annual rent; used to compare income properties quickly.

Net operating income (NOI) = effective gross income − operating expenses (excludes debt service, depreciation, and capital expenditures).

Cap rate = NOI / property value; value = NOI / cap rate. Higher cap rate generally means higher risk/return.

Cash-on-cash return = annual pre-tax cash flow / total cash invested; measures leverage efficiency.

Debt service coverage ratio (DSCR) = NOI / annual debt service; lenders typically require 1.20–1.25 or higher.

Loan-to-value (LTV) = loan amount / appraised value (or purchase price, whichever is lower); Ohio conventional loans often cap at 80% to avoid PMI.

Sales comparison approach: adjust comparables to subject (not subject to comps); if comp is superior, subtract; if inferior, add.

Cost approach: value = replacement cost − depreciation + land value; most reliable for new or special-purpose properties.

Income approach: value = NOI / cap rate; most reliable for income-producing property.

Prorations at closing use a 365-day year (or 12 equal months/30-day months depending on contract); seller pays through day of closing, buyer pays from day after in Ohio practice.

Every Ohio brokerage must designate a responsible broker who holds a broker license and is accountable to the Division for all affiliated licensees.

Written agency policy and office procedures are required; the broker must document training and review of advertising and listing/selling files.

Trust funds (earnest money, security deposits, rents) must be deposited within three business days of acceptance or receipt, unless the contract specifies another holder with written consent.

Trust accounts must be reconciled monthly and annually; ledgers must be maintained per transaction and per owner/property.

Commingling personal or operating funds with trust funds is prohibited and is grounds for discipline.

Unlicensed assistants may perform administrative tasks but may not negotiate, show property for compensation, or hold out as licensees.

Transaction files (contracts, disclosures, closing statements) must be retained three years; trust records three years after disbursement.

Advertising must include the brokerage name; team names must be registered and cannot imply a separate brokerage.

Ohio license term is three years; CE requires 30 hours per cycle, including 9 hours core law and 3 hours civil rights (canonical breakdown).

Fair housing under R.C. 4112 protects race, color, religion, sex, military status, familial status, national origin, disability, and ancestry.

Federal Fair Housing Act adds no ancestry, age, or military status; do not conflate state and federal protected classes.

Consumer Guide to Agency Relationships must be provided at first substantive contact; agency disclosure/acknowledgment forms retained three years.

Ohio has no mandatory statewide seller's property disclosure form; licensees must still disclose known latent defects and not misrepresent.

Lead-based paint disclosure required for pre-1978 housing; buyer gets 10-day test opportunity unless waived in writing.

Dual agency requires written informed consent from both parties; otherwise designate a different licensee for one side.

Grounds for discipline include unlicensed activity, failure to account for funds, misrepresentation, and failure to supervise.

Agency types in Ohio: seller, buyer, dual (written consent), designated, and transaction broker (limited duties disclosed in writing).

Agency agreements must be in writing to be enforceable for commission; exclusive agreements must state term and compensation.

Statute of frauds: purchase contracts, leases over one year, and agency agreements must be written and signed by the party to be charged.

Counteroffer terminates the original offer; acceptance must be unequivocal and communicated; revocation effective on receipt before acceptance.

Contingencies (financing, inspection, appraisal, home sale) must have clear deadlines; failure to remove can permit termination.

Earnest money held per contract; if silent, listing broker's trust account; disputes follow the contract's mediation/arbitration clause.

Closing requires clear title, recording, and proper settlement statement; funds disbursed only after recording and clear title.

Procuring cause determines commission entitlement when multiple licensees are involved; the broker's agreement controls payment.

GRM = price / gross annual rent; used for quick income-property comparison.

NOI = effective gross income − operating expenses; excludes debt service, depreciation, and capital expenditures.

Cap rate = NOI / value; value = NOI / cap rate.

Cash-on-cash return = annual pre-tax cash flow / total cash invested.

DSCR = NOI / annual debt service; lenders typically require 1.20–1.25 or higher.

LTV = loan amount / appraised value (or purchase price, whichever is lower); 80% LTV often avoids PMI.

Sales comparison: adjust comps to subject; superior comp → subtract; inferior comp → add.

Cost approach: value = replacement cost − depreciation + land value; best for new or special-purpose property.

Income approach: value = NOI / cap rate; best for income-producing property.

Prorations: use 365-day year or 12 equal months/30-day months per contract; seller pays through closing day, buyer from day after in Ohio practice.

Responsible broker must maintain written procedures, review advertising, and document training; failure to supervise is an independent violation.

Independent contractor tax status does not remove the broker's supervision and trust-account obligations; the broker remains liable for Division compliance.

Team names must be registered with the Division and advertising must include the brokerage name; unlicensed assistants cannot be paid by commission.

Transaction records retained three years; trust records retained three years after disbursement.

Trust account deposits within three business days of acceptance/receipt unless the contract specifies another holder with written consent.

Monthly and annual trust reconciliations required; per-transaction and per-owner ledgers required.

Commingling is prohibited; personal or operating funds may not be held in trust accounts.

Ohio Real Estate Commission (Division of Real Estate & Professional Licensing) disciplines licensees; Ohio Civil Rights Commission handles housing discrimination complaints.

License term three years; CE 30 hours per cycle including 9 hours core law and 3 hours civil rights (canonical breakdown).

Disclosure: known material defects and agency relationships must be disclosed; Consumer Guide at first substantive contact.

Fair housing protected classes (R.C. 4112): race, color, religion, sex, military status, familial status, national origin, disability, ancestry.

Lead-based paint disclosure for pre-1978 housing; 10-day test opportunity unless waived in writing.

Dual agency requires written informed consent from both parties; otherwise designate a different licensee.

Grounds for discipline: unlicensed activity, failure to account for funds, misrepresentation, failure to supervise.

Commission/settlement statement errors and trust-account violations can result in fines, suspension, or revocation.

Agency begins with a written agreement; oral agency unenforceable for commission; exclusive agreements state term and compensation.

Offer/acceptance: unequivocal acceptance communicated; counteroffer terminates original; revocation effective on receipt before acceptance.

Contingency deadlines (financing, inspection, appraisal, home sale) control termination rights; missing them can waive the contingency.

Earnest money: held per contract; if silent, listing broker's trust account; disputes follow contract mediation/arbitration clause.

Closing: settlement statement, title insurance, recording, and clear title before disbursement.

Procuring cause determines commission entitlement; the broker's agreement controls payment.

Statute of frauds requires writing for purchase contracts, leases over one year, and agency agreements.

Dual agency/designated agency requires written consent and disclosure; transaction broker has limited duties disclosed in writing.

Sales comparison approach: adjust comparables to subject; superior comp → subtract; inferior comp → add.

Cost approach: value = replacement cost − depreciation + land value; best for new or special-purpose property.

Income approach: value = NOI / cap rate; best for income-producing property.

GRM = price / gross annual rent; quick comparison tool for income property.

NOI = effective gross income − operating expenses; excludes debt service, depreciation, and capital expenditures.

Cap rate = NOI / value; higher cap rate generally indicates higher risk/return.

DSCR = NOI / annual debt service; lenders typically require 1.20–1.25 or higher.

LTV = loan amount / appraised value (or purchase price, whichever is lower); 80% LTV often avoids PMI.

Cash-on-cash return = annual pre-tax cash flow / total cash invested.

Prorations: 365-day year or 12 equal months/30-day months per contract; seller pays through closing day, buyer from day after in Ohio practice.