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OH Real Estate practice questions

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Question 1Agency and Fiduciary Duties

Which of the following is one of the fiduciary duties a licensee owes to a client?

  1. Promising a specific closing date in the listing agreement
  2. Guaranteeing the property will appraise at the contract price
  3. Loyalty Correct answer.
  4. Guaranteeing the client a profit on resale

Explanation

Agency is a fiduciary relationship, and a licensee owes the client duties that include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care and diligence. Loyalty means placing the client's interests ahead of the licensee's own. The remaining choices describe outcomes no licensee can lawfully promise.

Question 2Agency and Fiduciary Duties

A licensee may act as a dual agent in a transaction only when:

  1. both parties give informed written consent Correct answer.
  2. the listing broker approves the arrangement in writing
  3. the seller agrees orally at the first showing
  4. the commission is divided equally between the parties

Explanation

Dual agency exists when one brokerage represents both parties to the same transaction, and it is permitted only with the informed, written consent of both parties. Oral agreement or internal broker approval does not satisfy the requirement. Without consent, the brokerage may not act as a dual agent.

Question 3Agency and Fiduciary Duties

A buyer who works with the seller's agent but is not represented by any licensee is best described as:

  1. a customer Correct answer.
  2. a fiduciary
  3. a principal
  4. a client

Explanation

A customer is a party with whom a licensee works but whom the licensee does not represent. Customers are entitled to honesty and fair dealing, but not the fiduciary duties owed to a client. A client, also called a principal, is the party the licensee actually represents.

Question 4Agency and Fiduciary Duties

When a salesperson licensed under a broker represents a seller, the agency relationship is legally between the seller and the:

  1. brokerage Correct answer.
  2. local board of realtors
  3. salesperson alone
  4. salesperson's team leader

Explanation

The broker holds the license and is the party to the agency agreement, while salespeople act on the broker's behalf. The agency relationship and the fiduciary duties therefore run to the brokerage rather than to the individual salesperson. This is why the brokerage, not the salesperson personally, is the agent.

Question 5Agency and Fiduciary Duties

A licensee's duty to keep a client's confidential information secret:

  1. ends when the listing agreement expires
  2. continues after the agency ends Correct answer.
  3. ends if the client stops returning calls
  4. ends when the transaction closes

Explanation

Confidentiality survives the end of the agency relationship, so a licensee may not later reveal a former client's finances, motivations, or negotiating position. Neither expiration of the listing nor closing of the sale releases the licensee from that duty.

Question 6Agency and Fiduciary Duties

A licensee owes fiduciary duties to:

  1. the licensee's own client Correct answer.
  2. all parties to the transaction equally
  3. every consumer the licensee meets at an open house
  4. the cooperating broker in the transaction

Explanation

Fiduciary duties flow only to the licensee's own client. Consumers who are not represented, cooperating brokers, and the parties on the other side are owed honesty and fair dealing but not loyalty, confidentiality, or advocacy.

Question 7Agency and Fiduciary Duties

Which event ends an agency relationship by operation of law?

  1. the seller raises the asking price
  2. the principal dies Correct answer.
  3. the broker takes a vacation
  4. the buyer changes lenders

Explanation

Agency terminates by operation of law on events such as the death or incapacity of the principal, destruction of the subject property, or a change in law making the purpose unlawful. Business decisions by the parties, such as a price change, and personal events such as a broker's vacation do not end the relationship.

Question 8Agency and Fiduciary Duties

An unrepresented buyer working with a seller's agent is entitled to:

  1. honest and fair dealing Correct answer.
  2. full confidentiality of the buyer's finances
  3. advocacy in negotiations with the seller
  4. undivided loyalty from the licensee

Explanation

A customer is owed honest and fair dealing and accurate information, but the licensee does not represent the buyer. Loyalty, confidentiality, and advocacy belong to the licensee's client, who in this case is the seller.

Question 9Agency and Fiduciary Duties

A seller tells the listing agent to state in the MLS that the roof was replaced in 2022, although the agent knows it was not. The agent should:

  1. refuse to publish the false statement Correct answer.
  2. resign the listing without any discussion
  3. comply but note the year is unverified
  4. comply, because the seller is the client

Explanation

The duty of obedience covers only lawful instructions, and a licensee may not knowingly publish a false statement about a property even at the client's request. The licensee should refuse and keep the listing information accurate. Publishing an unverified claim or quietly resigning leaves buyers misled.

Question 10Agency and Fiduciary Duties

A listing agent receives three written offers on the same day. The agent must:

  1. let the managing broker choose which to present
  2. present all three promptly to the seller Correct answer.
  3. present only the highest offer to avoid confusion
  4. hold the lower offers until the top one is accepted

Explanation

The duties of care and obedience require the licensee to transmit every written offer promptly, even one the agent considers weak. The client, not the agent, decides which offers to accept or counter. Selectively presenting offers can expose the licensee to liability.

Question 11Agency and Fiduciary Duties

A dual agent learns that the seller would accept $15,000 below the list price. The agent should:

  1. keep it confidential absent the seller's consent Correct answer.
  2. report it to the broker for review
  3. put the information in the MLS remarks
  4. tell the buyer, since both parties are clients

Explanation

A dual agent may not reveal one client's confidential negotiating position to the other without permission, and the seller's willingness to accept less is exactly that kind of information. Dual agency does not eliminate confidentiality between the two clients. Material facts about the property are treated differently and must be disclosed.

Question 12Agency and Fiduciary Duties

A buyer tells her agent she would pay $25,000 above list. The agent should:

  1. share it with the listing agent to speed up the deal
  2. keep the information confidential from the seller Correct answer.
  3. include it in the offer without the buyer's permission
  4. disclose it, since material facts must be shared

Explanation

The buyer's ceiling is confidential negotiating information belonging to the buyer, and the agent may not pass it to the seller without permission. The rule requiring disclosure of material facts concerns the property and known defects, not a buyer's private negotiating limits.

Question 13Agency and Fiduciary Duties

The fiduciary duty of disclosure requires a licensee to tell the client:

  1. only what the client specifically asks about
  2. all known facts material to the transaction Correct answer.
  3. nothing that might cause the client to worry
  4. the agent's personal opinion of the client's choices

Explanation

Disclosure is an affirmative duty: the licensee must share all facts the licensee knows that are material to the transaction, not merely answer questions. Withholding unfavorable information to keep the client comfortable is a breach of that duty.

Question 14Agency and Fiduciary Duties

A licensee representing the seller knows the basement has a chronic water problem. The licensee must:

  1. keep silent, since the seller is the client
  2. let the buyer's inspector find the problem
  3. hint at it only if a buyer asks directly
  4. disclose the problem to prospective buyers Correct answer.

Explanation

A known chronic water problem is a material fact affecting the value and use of the property, and the licensee must disclose it to prospective buyers. Confidentiality toward the seller never authorizes concealing a known defect, and silence in the face of a direct question can amount to misrepresentation.

Question 15Agency and Fiduciary Duties

Agency by estoppel is created when:

  1. two brokers agree to cooperate on a single transaction and share the fee
  2. a broker and seller sign a written exclusive listing agreement
  3. conduct leads another to reasonably believe agency exists Correct answer.
  4. a buyer signs a written buyer agency agreement with a brokerage

Explanation

Agency by estoppel arises when a person's words or conduct lead another to reasonably believe an agency exists and that other person relies on the belief. Written listing and buyer agency agreements create express agency rather than estoppel.

Question 16Agency and Fiduciary Duties

Earnest money entrusted to a brokerage must be:

  1. held in a trust account Correct answer.
  2. returned to the buyer at each showing
  3. kept in the broker's general operating account
  4. used for the listing's marketing costs

Explanation

Client money such as earnest money must be held in a trust account separate from the broker's business funds, and commingling is prohibited. The funds must be accounted for and disbursed only as the contract or the parties direct.

Question 17Agency and Fiduciary Duties

A seller revokes the listing agent's authority before the listing expires. The seller:

  1. must obtain a court order to revoke
  2. cannot revoke until the listing term ends
  3. may owe damages for breaching the agreement Correct answer.
  4. must pay the full commission regardless of cause

Explanation

A principal may revoke an agent's authority at any time, but revoking before the agreed term ends may be a breach of contract that entitles the broker to damages. A full commission is generally not owed unless the broker earned it under the agreement.

Question 18Agency and Fiduciary Duties

A licensee who represents the seller is working with an unrepresented buyer. The licensee must:

  1. tell the buyer whom the licensee represents Correct answer.
  2. keep the seller's asking price secret from the buyer
  3. negotiate on the buyer's behalf as a favor
  4. treat the buyer as a client in the transaction

Explanation

The licensee must make clear whom the licensee represents so the buyer understands that the licensee works for the seller. The buyer remains a customer, and the licensee may neither negotiate for the buyer nor mislead the buyer about the asking price.

Question 19Agency and Fiduciary Duties

A court orders a licensee to reveal confidential information about a client. The licensee must:

  1. comply with the court order Correct answer.
  2. disclose only after the client sues
  3. destroy the records instead of disclosing
  4. refuse and accept a contempt citation

Explanation

Confidentiality gives way when disclosure is required by law, and a valid court order is such a requirement. The licensee should comply while disclosing no more than the order requires.

Question 20Agency and Fiduciary Duties

A fiduciary relationship in real estate is best described as one in which the agent:

  1. must act in the client's best interest Correct answer.
  2. owes duties only until the closing is complete
  3. serves both parties equally without written consent
  4. may place its own interest first if the client is told

Explanation

A fiduciary relationship is one of trust in which the agent must act in the client's best interest and put the client's interests ahead of the agent's own. The duties can outlast closing, and representing both parties requires informed written consent.

Question 21Agency and Fiduciary Duties

A buyer's agent is compensated from the seller's proceeds under a cooperative arrangement. This means the agent:

  1. becomes a dual agent once the offer is accepted
  2. represents the seller as a subagent in the transaction
  3. still owes loyalty only to the buyer Correct answer.
  4. owes fiduciary duties to both the buyer and the seller

Explanation

Who pays the commission does not determine whom the agent represents. A buyer's agent compensated through a cooperative arrangement still owes loyalty and the other fiduciary duties solely to the buyer and is not a subagent of the seller.

Question 22Agency and Fiduciary Duties

In a lawful dual agency, which duty is necessarily limited?

  1. the duty to obey lawful instructions
  2. the duty to account for funds received
  3. the duty of undivided loyalty to one party Correct answer.
  4. the duty to disclose known material defects

Explanation

Dual agency limits the duty of undivided loyalty and full advocacy because the agent cannot favor either client. The duties to account for funds, obey lawful instructions, and avoid misrepresentation remain fully in effect.

Question 23Agency and Fiduciary Duties

A licensee wants to buy a home that the licensee has listed for a seller. The licensee must:

  1. buy it as long as the licensee pays the full list price
  2. reveal the licensee's interest and obtain consent Correct answer.
  3. have another agent submit the offer without disclosure
  4. wait until the listing expires, then buy it quietly

Explanation

Buying a client's listing is self-dealing, so the licensee must disclose the licensee's interest and obtain the seller's informed consent. Delaying the purchase, using a straw offer, or paying full price does not cure the undisclosed conflict of interest.

Question 24Agency and Fiduciary Duties

Which conduct by a licensee would breach the fiduciary duty of accounting?

  1. giving the client a written statement of funds received and paid
  2. using a client's escrow funds to make the agent's car payment Correct answer.
  3. moving trust funds to a new trust account at closing
  4. depositing a buyer's earnest money into the brokerage trust account

Explanation

The duty of accounting requires the licensee to keep client funds separate and to be able to account for every dollar received and disbursed. Taking escrow money for personal expenses is conversion of client funds and a clear breach.

Question 25Agency and Fiduciary Duties

A buyer asks her licensee how title should be taken to avoid probate. The licensee should:

  1. draft a deed reflecting the buyer's chosen form of title
  2. explain the tax consequences of each form of ownership
  3. advise the buyer to consult an attorney Correct answer.
  4. recommend joint survivorship because it avoids probate

Explanation

Advising on how title should be held, explaining tax consequences of ownership forms, or drafting deed language is legal or tax advice beyond a licensee's scope. The licensee should refer the buyer to an attorney rather than opine on the question.

Question 26Agency and Fiduciary Duties

Which fiduciary duty requires a licensee to put the client's interests ahead of the licensee's own interests?

  1. Disclosure
  2. Loyalty Correct answer.
  3. Accounting
  4. Obedience

Explanation

Loyalty is the fiduciary duty that requires the licensee to act solely in the client's best interest and to avoid self-dealing or secret profit. It is broader than the specific duties of accounting, obedience, and disclosure.

Question 27Agency and Fiduciary Duties

An agency relationship in Ohio may be created by an express written agreement, but it can also arise when a client accepts the benefits of a licensee's unauthorized act. This is known as agency by:

  1. Subagency
  2. Operation of law
  3. Ratification Correct answer.
  4. Estoppel

Explanation

Ratification occurs when a principal accepts the benefits of an unauthorized act, thereby affirming the act as if it had been authorized from the start. Estoppel involves a third party's reliance, operation of law includes events such as death, and subagency is a delegation of authority.

Question 28Agency and Fiduciary Duties

After a brokerage's agency relationship with a seller ends, the brokerage's duty of confidentiality regarding the seller's previously disclosed private information:

  1. Ends when the listing agreement expires
  2. Continues only if the seller pays a fee
  3. Transfers to the buyer at closing
  4. Continues after termination Correct answer.

Explanation

Confidentiality generally survives the termination of the agency relationship, so the licensee may not later reveal the former client's private information. The duty is not conditioned on payment and is not transferred to a buyer.

Question 29Agency and Fiduciary Duties

A licensee must follow a client's lawful instructions even if the licensee disagrees with them. This is the fiduciary duty of:

  1. Accounting
  2. Loyalty
  3. Obedience Correct answer.
  4. Care

Explanation

Obedience requires the licensee to follow the client's lawful instructions within the scope of the agency. Care involves diligence and skill, loyalty involves fidelity, and accounting involves funds.

Question 30Agency and Fiduciary Duties

A seller instructs the listing agent to reject every offer from buyers who are represented by a particular brokerage. The agent should:

  1. Refuse and explain why Correct answer.
  2. Follow it but disclose later
  3. Follow it because obedience is owed
  4. Ask the seller to put it in writing

Explanation

A licensee's duty of obedience extends only to lawful instructions. An instruction to discriminate against buyers based on the brokerage they use would violate fair housing law and cannot be followed, even if the seller insists.

Question 31Agency and Fiduciary Duties

A brokerage practicing designated agency within the same firm assigns Licensee A to the seller and Licensee B to the buyer in the same transaction. Which statement is correct?

  1. The firm becomes a dual agent and both licensees may share all information
  2. The seller's licensee must reveal the buyer's financial information to the seller
  3. Designated agency is prohibited in Ohio even with written consent
  4. Each licensee represents only that licensee's own client Correct answer.

Explanation

In designated agency, the brokerage assigns different licensees to represent the seller and the buyer, and each licensee owes fiduciary duties to that licensee's own client. Confidential information is not shared between the designated licensees without consent.

Question 32Agency and Fiduciary Duties

A licensee representing a buyer discovers that the seller's agent has misstated the square footage in the MLS. The buyer's agent should:

  1. Renegotiate the price without telling the buyer
  2. Notify the buyer and recommend verification Correct answer.
  3. Ignore it because the seller's agent is responsible
  4. Tell the buyer the square footage is accurate

Explanation

The buyer's agent owes the buyer reasonable care and disclosure of known material facts affecting the transaction. The agent should alert the buyer to the apparent misstatement and advise independent verification rather than ignore or repeat it.

Question 33Agency and Fiduciary Duties

A seller asks the listing agent to prepare a comparative market analysis that deliberately omits recent low sales. The agent should:

  1. Prepare it as instructed because the seller owns the data
  2. Refuse to prepare any CMA for the seller
  3. Prepare it but keep the omitted sales in a private file
  4. Refuse to omit the sales and explain the duty of care Correct answer.

Explanation

A CMA must be prepared with reasonable care and must not be intentionally misleading. Omitting recent low sales at the seller's request would compromise the licensee's duty of care and honesty, so the licensee should refuse that part of the request.

Question 34Agency and Fiduciary Duties

The fiduciary duty of accounting requires a licensee to:

  1. Use trust funds for office expenses when needed
  2. Delay accounting until closing
  3. Provide a written accounting of client funds on request Correct answer.
  4. Deposit client funds into the licensee's personal account

Explanation

The duty of accounting requires the licensee to safeguard client funds and provide an accurate written accounting of receipts and disbursements. Client funds may not be commingled with personal or operating funds.

Question 35Agency and Fiduciary Duties

Before a licensee can act as a dual agent in Ohio, the brokerage must obtain:

  1. A court order authorizing the dual agency
  2. Written informed consent from both parties Correct answer.
  3. Oral consent from either party is sufficient
  4. Approval by the local board of realtors

Explanation

Ohio permits dual agency only with the informed written consent of both parties after disclosure of the conflicts. Oral consent or board approval does not satisfy the requirement.

Question 36Agency and Fiduciary Duties

A licensee refers buyer clients to a lender owned by the licensee's spouse and receives a fee for each referral. The licensee must:

  1. Refuse to work with any lender owned by a relative
  2. Disclose only if the buyer asks about the lender
  3. Disclose the fee and obtain consent Correct answer.
  4. Keep the arrangement private because the lender is separate

Explanation

A referral fee or ownership interest in a service provider creates a conflict of interest that must be disclosed so the client can give informed consent. Secret compensation would breach the duty of loyalty and disclosure.

Question 37Agency and Fiduciary Duties

A licensee wants to acquire an option to purchase the client's property at a set price during the listing. The licensee must first:

  1. Assign the option to a third party
  2. Keep the option secret from the seller until closing
  3. Wait until the listing expires
  4. Disclose and obtain written consent Correct answer.

Explanation

A licensee may not acquire an interest in the client's property, such as an option, without full disclosure and the client's informed written consent. Secrecy or delay would amount to self-dealing.

Question 38Agency and Fiduciary Duties

Which circumstance most clearly creates an agency relationship between a buyer and a licensee?

  1. The buyer attends an open house alone
  2. The buyer's lender sends a preapproval letter to the agent
  3. The buyer asks the listing agent a question by email
  4. The buyer and licensee sign a written buyer agency agreement Correct answer.

Explanation

Agency is generally created by an express agreement, such as a signed buyer agency agreement, or by implication or ratification. Merely attending an open house, asking a question, or sending a preapproval letter does not by itself create an agency relationship.

Question 39Agency and Fiduciary Duties

A seller's agent is asked by an unrepresented buyer, "Is the seller anxious to sell?" The agent should:

  1. Tell the buyer an exaggerated urgency to create a bid
  2. Decline to reveal the seller's confidential motivation Correct answer.
  3. Advise the buyer to submit a low offer
  4. Answer honestly with the seller's motivation

Explanation

The seller's agent owes confidentiality to the seller and should not reveal the seller's motivation or negotiating position to an unrepresented buyer. The agent may answer factual questions but must not misuse confidential information.

Question 40Agency and Fiduciary Duties

A licensee represents a seller and receives a higher offer after the seller has accepted a lower offer. The licensee should:

  1. Present the higher offer and urge the seller to breach the first contract
  2. Reject the higher offer without telling the seller
  3. Hide the higher offer because the first contract is binding
  4. Present the offer and explain the existing contract obligations Correct answer.

Explanation

The listing agent must promptly present all offers and explain the seller's existing contractual obligations. The agent may not conceal an offer or urge the seller to breach a binding contract.

Question 41Contracts and Transaction Documents

Under Ohio law, which requirement must be satisfied for an agreement for the sale of real property to be enforceable?

  1. It must be acknowledged by a notary public to be valid.
  2. It must be in writing and signed by the party to be charged. Correct answer.
  3. It must be witnessed by two disinterested persons.
  4. It must be signed by both spouses of every party.

Explanation

Ohio's statute of frauds requires a contract for an interest in land to be written and signed by the party against whom enforcement is sought. Acknowledgment and witnesses may matter for recording a deed, but they are not needed for the contract itself.

Question 42Contracts and Transaction Documents

Which statement best describes the function of earnest money in an Ohio residential purchase contract?

  1. It is a penalty the buyer forfeits if the inspection reveals defects.
  2. It is a tax deposit required by the county auditor.
  3. It shows the buyer's good faith and is credited at closing. Correct answer.
  4. It is the broker's commission paid in advance.

Explanation

Earnest money is a deposit held in trust that demonstrates the buyer's serious intent and is applied to the buyer's funds due at closing. It is not a broker fee, and it is refundable if a contract contingency allows the buyer to terminate.

Question 43Contracts and Transaction Documents

Ohio's Residential Property Disclosure Form is generally completed and delivered by whom?

  1. The county building department, after a code inspection
  2. The buyer's lender, as part of underwriting
  3. The listing broker, based on the broker's own inspection
  4. The seller, based on the seller's actual knowledge Correct answer.

Explanation

Ohio law places the disclosure duty on the transferor, who completes the form from personal knowledge of the property's condition. The licensee delivers the form but may not substitute the broker's own observations for the seller's disclosures.

Question 44Contracts and Transaction Documents

Federal lead-based paint disclosure rules apply to the sale of most residential housing built before which year?

  1. 1978 Correct answer.
  2. 1974
  3. 1968
  4. 1950

Explanation

The federal lead-based paint disclosure requirements cover target housing constructed before 1978, including delivery of the EPA pamphlet and a period to test or inspect. Homes built in 1978 or later fall outside the rule.

Question 45Contracts and Transaction Documents

A quitclaim deed in Ohio transfers what to the grantee?

  1. A life estate measured by the grantor's lifetime
  2. Title free of liens, with a covenant against encumbrances
  3. Whatever interest the grantor has, with no warranties Correct answer.
  4. Title automatically guaranteed by the county recorder

Explanation

Ohio's statutory quitclaim form releases whatever right, title, or interest the grantor holds and contains no covenants of title. Because no warranties are given, the grantee has no contractual claim against the grantor if title proves defective.

Question 46Contracts and Transaction Documents

Which deed form gives an Ohio buyer the broadest protection against title defects?

  1. General warranty deed Correct answer.
  2. Executor's deed
  3. Quitclaim deed
  4. Sheriff's deed

Explanation

A general warranty deed contains the statutory covenants of seisin, quiet enjoyment, further assurances, and warranty forever, under which the grantor defends title against claims arising even before the grantor owned the land. Quitclaim and fiduciary deeds carry limited or no warranties.

Question 47Contracts and Transaction Documents

What is the main legal effect of recording a deed with the county recorder in Ohio?

  1. It gives the public constructive notice of the deed. Correct answer.
  2. It makes the deed valid between grantor and grantee.
  3. It guarantees the grantee's title against all prior claims.
  4. It transfers the property's tax liability to the grantee.

Explanation

Recording creates a public record that gives constructive notice to later purchasers and lienholders, and Ohio priority disputes are generally resolved on that record. A deed is already effective between the parties upon delivery, and recording cures no title defects.

Question 48Contracts and Transaction Documents

A properly executed deed becomes legally effective only when it is:

  1. Approved by the buyer's mortgage lender.
  2. Delivered by the grantor and accepted by the grantee. Correct answer.
  3. Stamped with the county conveyance fee.
  4. Recorded with the recorder of the county where the property is located.

Explanation

A deed is operative when the grantor delivers it with intent to convey and the grantee accepts it. Recording and payment of the conveyance fee are later administrative steps that do not create the transfer.

Question 49Contracts and Transaction Documents

An Ohio broker wishes to represent both the buyer and the seller in the same transaction. What does Ohio law require?

  1. Approval from the local board of realtors before the showing
  2. Oral notice to both parties at the closing table
  3. A reduction of the total commission to a single side
  4. Written informed consent from both the buyer and the seller Correct answer.

Explanation

Ohio permits dual agency only when all parties give informed consent in writing. Without that consent the licensee must remain loyal to one side and refer the other party to a different licensee.

Question 50Contracts and Transaction Documents

Under Ohio law, why should a land installment contract be recorded in the county where the property is located?

  1. To give public notice of the purchaser's equitable interest Correct answer.
  2. To let the vendor raise the interest rate retroactively
  3. To end the vendor's duty to deliver a deed at the end of the term
  4. To convert the contract into a deed of conveyance

Explanation

In a land installment contract the vendor keeps legal title while the purchaser holds equitable title, so recording gives notice of that interest to later creditors and purchasers. Recording does not pass legal title, which transfers only when the deed is delivered later.