Ohio Real Estate Salesperson Practice Exam

126 free Ohio Real Estate Salesperson practice questions with answers and explanations. No signup required. The Ohio Real Estate Salesperson exam is administered by the Ohio Division of Real Estate and Professional Licensing, with 120 questions and a time limit of 3 hours.

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Question 1 of 126 · Property Ownership and Land UseHard0/0

Two years after closing, a homeowner discovers a serious title defect that existed at the time the owner's title insurance policy was issued but was unknown to all parties at that time. Assuming the defect is of a type covered by the policy, which statement is correct?

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Property Ownership and Land Use

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1. Two years after closing, a homeowner discovers a serious title defect that existed at the time the owner's title insurance policy was issued but was unknown to all parties at that time. Assuming the defect is of a type covered by the policy, which statement is correct?
- A. The policy protects the owner against losses from the defect, because title insurance covers defects that existed but were unknown when the policy issued
- B. The policy provides no protection, because the defect arose before the policy was purchased
- C. The policy provides no protection, because the seller delivered marketable title at closing
- D. The policy protects the owner only for defects that first arise after the policy's issue date
Show answer & explanation
Answer: A
Title insurance protects the insured against losses from covered title defects that existed but were unknown at the time the policy issued — that is precisely this scenario. Choices B and D are tempting because most insurance covers future events, but title insurance works in the opposite direction: it covers pre-existing, unknown defects. Choice C fails because marketable title means title free from reasonable doubt or serious defects a prudent buyer would accept; a defect unknown to everyone at closing can still surface later, which is the very loss the policy addresses.
2. A buyer purchasing a home wants the deed offering the greatest protection, including warranties covering title defects that arose before the current seller ever owned the property. Which deed should the buyer request?
- A. A general warranty deed
- B. A special warranty deed
- C. A quitclaim deed
- D. Any type of deed, as long as it is promptly recorded
Show answer & explanation
Answer: A
A general warranty deed offers the greatest protection because the grantor warrants against all title defects arising at any time — even before the grantor owned the property — through covenants such as seisin, quiet enjoyment, and warranty forever. A special warranty deed is the tempting wrong answer because it sounds protective, but it warrants only against defects that arose during the grantor's own period of ownership. A quitclaim deed carries no warranties at all, and recording provides constructive notice and priority but does not add any warranties to a deed.
3. Which type of deed transfers only whatever interest the grantor may currently hold, makes no warranties of title, and is commonly used to clear a cloud on title?
- A. General warranty deed
- B. Special warranty deed
- C. Quitclaim deed
- D. Deed of trust
Show answer & explanation
Answer: C
A quitclaim deed conveys only whatever interest the grantor may have, with no warranties, and is commonly used to clear clouds on title. A special warranty deed is the tempting wrong answer, but it still contains a warranty — it warrants against defects that arose during the grantor's period of ownership. A general warranty deed provides the broadest warranties, and a deed of trust is a financing instrument that pledges property as security for a note, not a conveyance used to cure title problems.
4. Which of the following best describes marketable title?
- A. Title that has been recorded in the county land records
- B. Title free from reasonable doubt or serious defects that a prudent buyer would accept
- C. Title that is protected by an owner's title insurance policy
- D. Title that is completely free of every lien, claim, or defect of any kind in its history
Show answer & explanation
Answer: B
Marketable title is title free from reasonable doubt or serious defects that a prudent buyer would accept — the standard is a prudent buyer's acceptance, not absolute perfection, which makes choice D too strict. Title insurance is a separate product that protects against losses from covered defects that existed but were unknown when the policy issued, and recording provides constructive notice and priority; neither insurance nor recording is what defines marketability.
5. A seller conveys a parcel to Buyer 1, who never records the deed. The seller later conveys the same parcel to Buyer 2, who promptly records. Under a typical recording system, whose interest generally has priority?
- A. Buyer 1, because that deed was delivered first
- B. Buyer 2, because recording provides constructive notice to the world and priority generally goes to the first party to record
- C. Buyer 1, because a grantor cannot legally convey the same property twice
- D. Buyer 2, but only if Buyer 2 also purchased an owner's title insurance policy
Show answer & explanation
Answer: B
Recording a deed in the county land records provides constructive notice to the world of the grantee's interest and establishes priority, generally protecting the first party to record — here, Buyer 2. Choice A is the tempting misconception: delivery is what transfers title between the parties, but an unrecorded deed gives the world no constructive notice, so the earlier grantee can lose priority to a later grantee who records first. Title insurance protects against losses from unknown covered defects; it does not create recording priority.
6. An owner signs a deed naming a nephew as grantee. The deed contains words of conveyance and an adequate legal description. The owner places the deed in a home safe without telling anyone and later dies. The nephew then discovers the deed while settling the estate. Did the deed transfer title to the nephew?
- A. Yes, because the deed was signed by a competent grantor and adequately described the property
- B. Yes, because the nephew's discovery of the deed constitutes acceptance
- C. No, because the deed was never delivered to and accepted by the grantee
- D. No, because the deed was never recorded in the county land records
Show answer & explanation
Answer: C
A valid deed requires competent parties, words of conveyance, an adequate legal description, and the grantor's signature — but it must also be delivered to and accepted by the grantee to transfer title. Here the deed sat undelivered in a safe, so title never passed, making choices A and B wrong: a properly drafted, signed deed still fails without delivery and acceptance. Choice D is the tempting misconception — recording provides constructive notice and priority, but it is not among the elements required for a deed to transfer title.
7. A person occupies another's land openly, continuously and without permission for the statutory period. What claim may arise?
- A. Adverse possession, requiring open, notorious, continuous, exclusive and hostile possession for the statutory period
- B. An easement by necessity
- C. A license that ripens automatically into ownership
- D. A life estate by operation of law
Show answer & explanation
Answer: A
Adverse possession can transfer title when possession is open and notorious, continuous, exclusive, and hostile meaning without permission, for the statutory period, with some states adding a claim of right or payment of taxes. Permission defeats the claim entirely, which is why a written license protects an owner allowing use.
8. An older home may contain asbestos in pipe insulation and floor tile. What is the general recommendation regarding intact asbestos-containing material?
- A. Undisturbed material in good condition is often best managed in place, because removal can release fibers
- B. All asbestos must be removed immediately upon discovery
- C. Asbestos presents no health concern in any form
- D. Asbestos may be removed by any contractor without special procedures
Show answer & explanation
Answer: A
Asbestos is hazardous when fibers become airborne, so encapsulation or management in place is frequently preferred over disturbance of intact material. When removal is necessary it requires trained and licensed abatement contractors following containment procedures, and a licensee should refer the question to qualified specialists rather than advise on it.
9. A buyer wants to build a structure that violates a setback requirement because of an unusual lot shape. What relief should the buyer seek?
- A. A variance from the board of zoning appeals, based on hardship arising from the property's characteristics
- B. A special use permit
- C. A rezoning of the parcel
- D. A nonconforming use determination
Show answer & explanation
Answer: A
A variance grants relief from a dimensional requirement where strict application creates a hardship due to the parcel's physical characteristics rather than the owner's preference. A special use permit authorizes a use the ordinance allows conditionally, rezoning changes the classification itself, and a nonconforming use predates the current rule.
10. A parcel adjoins a wetland. What is the practical consequence for development?
- A. Federal and state permitting may restrict filling or building, so the buildable area can be far smaller than the lot area
- B. Wetlands may be filled freely by the property owner
- C. Wetland designation increases the buildable area
- D. Wetlands affect only agricultural use
Show answer & explanation
Answer: A
Wetland regulation can prohibit or heavily condition filling and construction, and buffer requirements often extend the restriction beyond the delineated wetland itself. A licensee marketing acreage should not represent developable area without a delineation, since a large parcel may support very little construction.
11. A buyer asks a licensee about radon. What is accurate?
- A. Radon is a naturally occurring radioactive gas that can accumulate indoors and is detected only by testing, with mitigation available
- B. Radon can be identified by odor during a walkthrough
- C. Radon affects only homes with basements
- D. Radon requires demolition of the affected structure
Show answer & explanation
Answer: A
Radon is colorless and odorless, migrates from soil into buildings and is identified only by measurement, so a licensee cannot assess it visually. Elevated levels are commonly reduced with sub-slab depressurization systems, and radon can occur in homes with or without basements depending on soil conditions and construction.
12. A developer records a declaration establishing a condominium. What does a unit owner own?
- A. Fee simple title to the individual unit plus an undivided interest in the common elements
- B. Shares in a corporation that owns the building
- C. A leasehold interest in the unit only
- D. An undivided interest in the entire building with no separate unit ownership
Show answer & explanation
Answer: A
Condominium ownership combines fee title to the airspace of the unit with a proportionate undivided interest in common elements such as land, roof and corridors. A cooperative differs fundamentally: the owner holds stock in a corporation plus a proprietary lease on the unit, which affects financing and transfer approval.
13. A subdivision's recorded declaration imposes restrictions on building materials and setbacks. Who enforces these?
- A. The homeowners association or affected lot owners, through private legal action
- B. The municipal zoning inspector
- C. The state real estate commission
- D. No one, since private restrictions are unenforceable
Show answer & explanation
Answer: A
Private covenants are enforced privately, by the association or by lot owners who benefit from them, through injunction or damages. Municipal officials enforce zoning and building codes but not private declarations, and a licensee should never assure a buyer that a covenant will not be enforced.
14. Under federal environmental law, who may be held responsible for cleanup costs of contamination on a property?
- A. Liability ends automatically when the property is sold
- B. Current and former owners and operators may face strict, joint and several liability regardless of fault
- C. Only the government agency with jurisdiction
- D. Only the party that actually caused the contamination
Show answer & explanation
Answer: B
The federal superfund framework imposes strict liability without regard to fault, and it can be joint and several, so an innocent purchaser may face cleanup costs. Defenses such as the innocent landowner and bona fide prospective purchaser provisions depend on having conducted appropriate inquiry before acquisition.
15. A property manager collects a security deposit from a residential tenant. What general limitation applies to how the deposit may be used?
- A. It may be applied to unpaid rent and damage beyond ordinary wear and tear, with an accounting furnished to the tenant
- B. It may be retained as additional rent in all cases
- C. It may be used for routine repainting between tenancies
- D. It becomes the landlord's property upon receipt
Show answer & explanation
Answer: A
A security deposit secures performance and remains the tenant's money subject to lawful deductions for unpaid rent and damage exceeding normal wear. Ordinary wear such as minor carpet traffic or expected repainting cycles is a landlord cost. Statutes require an itemized accounting within a prescribed period after termination.
16. A deed conveys land "to the city, so long as the land is used as a public park." If the city ever stops using the land as a park, what happens to title?
- A. Title automatically or potentially reverts to the grantor or the grantor's heirs once the park-use condition fails
- B. The city keeps fee simple absolute ownership permanently regardless of how the land is used
- C. The land becomes unowned and reverts to the state through escheat
- D. The city must simply pay damages to the grantor but keeps the land regardless
Show answer & explanation
Answer: A
Because the deed created a fee simple defeasible tied to continued park use, breaching that condition causes the estate to end and the property to revert to the grantor or the grantor's heirs, which conflicts with treating the conveyance as an unconditional, permanent fee simple absolute.
17. A seller conveys a parcel but reserves all oil, gas, and mineral rights beneath the surface for herself. The buyer receives only the surface. What best describes the resulting ownership?
- A. The reservation is invalid because mineral rights can never legally be separated from surface ownership
- B. The mineral estate has been severed from the surface estate, creating two separate ownership interests in the same land
- C. The buyer automatically receives the mineral rights within five years unless the seller renews the reservation
- D. The seller retains only a temporary license to extract minerals that expires upon her death
Show answer & explanation
Answer: B
Subsurface mineral rights can be legally severed from surface rights, creating two distinct, separately transferable estates in the same parcel, so the buyer takes only what was conveyed while the seller continues to own the reserved mineral interest indefinitely rather than merely a temporary, expiring license.
18. A tenant operating a bakery installs a large commercial oven that is bolted to the floor of the leased retail space. When the lease ends, can the tenant remove the oven?
- A. No, because anything permanently attached to real property automatically becomes part of the real estate
- B. Yes, because it qualifies as a trade fixture installed by the tenant for business purposes and may generally be removed before the lease ends
- C. No, the tenant forfeits all installed equipment to the landlord automatically upon signing a commercial lease
- D. Yes, but only if the landlord was unaware the oven had been installed
Show answer & explanation
Answer: B
Trade fixtures installed by a commercial tenant for conducting business are generally treated as the tenant's personal property and may be removed before the lease term ends even though they are physically attached, because the trade fixture exception tempers the usual rule that attached items pass with the real estate, unlike ordinary landlord-installed fixtures.
19. A church wants to operate in a residential zoning district. The zoning ordinance does not permit churches as a matter of right in that district but allows them if the local zoning authority reviews and approves the specific proposal. What is this approval process called?
- A. A variance, because it excuses the applicant from a dimensional requirement like setback or height
- B. Spot zoning, a practice that is generally disfavored and often struck down by courts
- C. A nonconforming use, which applies only to uses that existed before the ordinance was adopted
- D. A conditional use permit, sometimes called a special exception, allowing a use the ordinance recognizes as compatible under certain conditions
Show answer & explanation
Answer: D
A conditional use permit, sometimes called a special exception, allows a specific use the ordinance already contemplates as potentially compatible with a district, subject to review and conditions, which differs from a variance, which excuses a dimensional or physical requirement, and from a nonconforming use, which is a use that predates the current ordinance.
20. A state highway department needs a strip of a homeowner's land to widen a road. The homeowner does not want to sell. What power allows the government to acquire the land anyway, and what must the government provide?
- A. Eminent domain, and the government must pay just compensation for the property taken
- B. Escheat, under which the government need not pay any compensation to the homeowner
- C. Police power, exercised without any obligation to compensate the affected owner
- D. Adverse possession, allowing government acquisition after years of use without payment
Show answer & explanation
Answer: A
Eminent domain is the government's power to take private property for public use, but the taking must be accompanied by just compensation to the owner, which differs from escheat, where property reverts to the state for lack of heirs, and from police power regulations like zoning, which typically restrict use without requiring direct payment to the owner.

Contracts and Agency

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21. A buyer's purchase contract includes a financing contingency requiring loan approval by June 1 and a 'time is of the essence' clause. On May 20, the buyer's lender issues a final loan denial, and the buyer promptly cancels the contract under the contingency. What happens to the buyer's earnest money deposit?
- A. The seller keeps it as compensation for taking the home off the market
- B. It is returned to the buyer, because a financing contingency lets the buyer cancel and recover the deposit when the condition fails
- C. The seller keeps it, because the 'time is of the essence' clause makes any failure to close a breach
- D. It is divided between the seller and the broker according to the listing agreement
Show answer & explanation
Answer: B
Financing, inspection, and appraisal contingencies give the buyer the right to cancel and recover the deposit if the condition is not met — here, the loan denial triggered exactly that right. Choice C is the tempting trap: a time-is-of-the-essence clause makes stated deadlines strictly enforceable, so missing a date is a breach — but the buyer canceled under the contingency before the June 1 deadline, so no deadline was missed and no breach occurred. The earnest money, held in the broker's trust account, goes back to the buyer.
22. A salesperson's brokerage represents the seller of a condo. An unrepresented buyer — a customer — asks the salesperson what duties the salesperson owes her. Which answer is correct?
- A. Honesty, fair dealing, and disclosure of known material defects
- B. The full set of fiduciary duties, including loyalty and obedience
- C. The same duties owed to the seller, because she is a party to the transaction
- D. No duties at all until she signs a written representation agreement
Show answer & explanation
Answer: A
Customers, unlike clients, are owed only honesty, fair dealing, and disclosure of known material defects — not fiduciary duties. Choice B is the tempting error: fiduciary duties such as loyalty and obedience run only to the principal (here, the seller). Choice D is wrong because these baseline duties are owed to customers even with no representation agreement.
23. A licensee proposes to represent both the buyer and the seller in the same transaction as a dual agent. Under the general rule for dual agency, which of the following is required for this arrangement to be legal?
- A. Informed written consent from both the buyer and the seller
- B. Oral disclosure of the dual agency to both parties before closing
- C. Written consent from the seller only, since the seller pays the commission
- D. Nothing additional — dual agency is legal as long as the licensee treats both parties fairly
Show answer & explanation
Answer: A
Dual agency is legal only with the informed written consent of both parties, and even then the dual agent cannot advocate for one party against the other. Choice D is the tempting misconception: treating both sides fairly does not substitute for consent — the parties must knowingly agree in writing to the limited representation. Oral disclosure (B) and one-sided consent (C) fall short of the written, two-party requirement.
24. A seller signs an exclusive-right-to-sell listing at a 6 percent commission rate. During the listing period, the seller's neighbor — found entirely through the seller's own efforts, with no broker involvement — buys the home for $300,000. How much commission, if any, does the broker earn?
- A. $0, because the seller personally procured the buyer
- B. $9,000, because the broker is entitled to only the listing side of the commission
- C. $18,000, because under an exclusive-right-to-sell listing the commission is earned regardless of who procures the buyer
- D. $18,000, but only if the broker proves the neighbor first learned of the home through the broker's marketing
Show answer & explanation
Answer: C
Under an exclusive-right-to-sell listing, the broker earns the commission if the property sells during the listing period regardless of who procures the buyer — including the seller. The commission is sale price times rate: $300,000 × 6% = $18,000. Choice A is the tempting trap because it states the exclusive-agency rule, under which a seller who personally finds the buyer owes nothing; that rule does not apply to an exclusive-right-to-sell listing.
25. A seller signs an exclusive-agency listing with a broker. During the listing term, the seller's coworker — whom the seller told about the house directly, with no broker involvement — buys the property. Is the broker owed a commission?
- A. Yes — under any exclusive listing, the broker is paid regardless of who finds the buyer
- B. No — under an exclusive-agency listing, no commission is owed when the seller personally finds the buyer
- C. No — under any listing type, a commission is owed only to a broker who actually procures the buyer
- D. Yes — an exclusive listing prohibits the seller from finding a buyer personally, so the sale breached the agreement
Show answer & explanation
Answer: B
Under an exclusive-agency listing, the broker earns a commission unless the seller personally finds the buyer — which is exactly what happened here, so no commission is owed. Choice A is the tempting one: it states the exclusive-right-to-sell rule, where the broker is paid regardless of who procures the buyer. Choice C overgeneralizes the open-listing rule (payment only to the procuring broker) to all listing types.
26. Which of the following events creates an agency relationship between a licensee and a party to a transaction?
- A. The party authorizes the licensee to act on the party's behalf in dealings with third parties
- B. The licensee shows the party several homes and answers questions about them
- C. The party pays the licensee a fee or commission
- D. The licensee treats the party with honesty and fair dealing throughout the transaction
Show answer & explanation
Answer: A
An agency relationship is created when a principal authorizes an agent to act on the principal's behalf in dealings with third parties. Choice C is the classic trap: agency arises from authorization, not from who pays compensation. Showing homes (B) and honest, fair treatment (D) do not signal agency either — honesty and fair dealing are owed even to customers who have no agency relationship at all.
27. A broker's listing on a home expires unsold, and the sellers relist with a different brokerage. Months later, the broker takes on a buyer as a client, and the buyer becomes interested in that same home. The buyer asks the broker to share the lowest price the sellers said they would accept during the earlier listing. What should the broker do?
- A. Reveal the price — the broker's fiduciary duty of disclosure to the current buyer client requires it
- B. Refuse to reveal it — the duty of confidentiality to the former sellers survives termination of that agency
- C. Reveal it — the duty of confidentiality ended when the listing expired
- D. Reveal it, but only if the buyer agrees in writing to keep the information confidential
Show answer & explanation
Answer: B
Confidentiality survives termination of the agency and specifically prohibits revealing information that would harm the former principal's bargaining position, such as the seller's lowest acceptable price. Choice A is the hard trap: disclosure is indeed a fiduciary duty owed to the current buyer client, but it does not override the continuing confidentiality owed to the former principal. Choices C and D both wrongly assume the duty lapsed or can be passed along.
28. The core fiduciary duties a real estate agent owes a client are commonly summarized by the acronym OLD CAR. In this acronym, the letter 'A' stands for which duty?
- A. Advertising
- B. Accounting
- C. Advocacy
- D. Appraisal
Show answer & explanation
Answer: B
OLD CAR stands for Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care and diligence. The 'A' is Accounting — the duty to safeguard and account for all money and property entrusted to the agent. 'Advertising' is tempting because agents do market listings, but marketing is a service activity, not one of the fiduciary duties in the acronym.
29. A buyer submits a written offer on a house. The seller crosses out the proposed closing date, writes in a date two weeks later, signs the form, and returns it to the buyer. Which statement best describes the legal effect?
- A. The seller has accepted the offer, and the buyer is bound to the new closing date because the change is minor
- B. The seller has made a counteroffer, which rejects and terminates the buyer's original offer
- C. The buyer's original offer remains open, so the buyer may choose between the original terms and the seller's revised terms
- D. The seller's handwritten change is disregarded, and a contract is formed on the buyer's original terms
Show answer & explanation
Answer: B
Any change to the terms of an offer — even just the closing date — is a counteroffer that rejects and terminates the original offer. Choice C is the tempting one: because the original offer was terminated by the counteroffer, it no longer exists for the buyer to fall back on; the buyer can only accept or reject the seller's new terms. There is no 'minor change' exception (A).
30. A salesperson receives an earnest money check from a buyer on Friday afternoon. To keep the funds 'safe' over the weekend, the salesperson deposits the check into his personal checking account, planning to move the money to the brokerage on Monday. Which duty has the salesperson violated?
- A. Accounting, because client funds may not be commingled with the licensee's own funds
- B. Loyalty, because the salesperson placed his own convenience above the client's interests
- C. No duty was violated, because the funds were safeguarded and would be transferred promptly
- D. Disclosure, because the buyer was not told where the deposit would be held
Show answer & explanation
Answer: A
The duty of accounting requires the agent to safeguard entrusted funds and prohibits commingling client money with the agent's own funds; earnest money belongs in the broker's trust account, not a personal account. Choice C is tempting because the salesperson's intent was protective and the delay short, but the act of commingling is itself the violation regardless of intent or duration.
31. A property manager's agreement with an owner establishes the manager's authority to lease, collect rent and arrange maintenance. What type of agency does this create?
- A. A general agency, because the manager is authorized to conduct a continuing series of transactions
- B. A special agency limited to a single transaction
- C. A universal agency with unlimited authority
- D. No agency relationship at all
Show answer & explanation
Answer: A
A property manager is a general agent with authority over an ongoing course of business, in contrast to a listing broker who is a special agent engaged for one transaction. A universal agent may act in all matters for the principal, which exceeds what a management agreement confers.
32. A licensee prepares a net sheet for a seller estimating proceeds. What is the primary caution?
- A. It must be presented as an estimate based on stated assumptions, not as a guarantee of the amount the seller will receive
- B. Net sheets may not be prepared by licensees
- C. A net sheet substitutes for the settlement statement
- D. Net sheets must show the highest possible proceeds
Show answer & explanation
Answer: A
A net sheet is a planning estimate resting on assumptions about closing date, payoff, taxes and costs, any of which can change, so presenting it as assured invites a claim when actual proceeds differ. Overstating proceeds to win a listing is a misrepresentation, and the settlement statement remains the authoritative figure.
33. A licensee discovers after closing that the seller misrepresented the age of the roof and the licensee had reason to doubt the statement. What is the exposure?
- A. The licensee may share liability for passing along a statement they had reason to question without verification or disclosure
- B. No exposure, since the seller made the statement
- C. No exposure once the transaction has closed
- D. Exposure only if the licensee profited from the misstatement
Show answer & explanation
Answer: A
A licensee cannot relay a representation they have reason to doubt without verifying it or disclosing the doubt, because doing so makes the licensee a conduit for the misrepresentation. Closing does not extinguish liability, and the analysis turns on what the licensee knew or should have known rather than on profit.
34. A buyer's agent learns the seller is facing foreclosure. May the agent share this with the buyer?
- A. Yes, because the buyer is the agent's client and the information is material to negotiating strategy
- B. No, because the seller's financial condition is always confidential
- C. Only with the seller's written permission
- D. Only after the offer has been accepted
Show answer & explanation
Answer: A
The buyer's agent owes loyalty to the buyer, so information about the seller's motivation obtained lawfully is disclosed to the client. Confidentiality protects the agent's own client, not the other side. The analysis reverses if the agent represents the seller, where such information would be confidential.
35. A cooperating brokerage shows a seller's listed property to a buyer and helps negotiate a sale, but under the arrangement that brokerage actually owes its fiduciary duties to the seller, not the buyer, even though it is working directly with the buyer. What is this cooperating brokerage's role called?
- A. Buyer's agent, representing the buyer's interests throughout the transaction
- B. Transaction broker, representing neither party's interests
- C. Dual agent, representing both the buyer and seller simultaneously
- D. Subagent, extending the listing broker's agency and fiduciary duties to the seller through the cooperating brokerage
Show answer & explanation
Answer: D
A subagent is a cooperating broker who, despite working hands-on with the buyer, actually owes fiduciary duties to the seller by virtue of the listing broker's offer of subagency, which is a distinct arrangement from buyer agency, where duties run to the buyer, or dual agency, where duties run to both parties at once.
36. Two different salespeople from different brokerages both show the same buyer a property on separate occasions. The buyer ultimately purchases the home, and a dispute arises over which brokerage is entitled to the buyer-side commission. What issue does this dispute typically turn on?
- A. Procuring cause, meaning which salesperson's efforts were the predominant, effective cause of bringing about the completed sale
- B. The dispute is resolved solely by which salesperson's name appears on the deed
- C. Whichever salesperson showed the property first, regardless of any later involvement
- D. Whichever brokerage has the larger market share in that area
Show answer & explanation
Answer: A
Commission disputes between cooperating brokers typically hinge on procuring cause, an analysis of whose efforts were the predominant and uninterrupted cause that led to the successful transaction, rather than simply which agent showed the property first or which brokerage is larger, and a deed identifies the parties to title, not the responsible agent.
37. A brokerage represents both the buyer and the seller in the same transaction, but assigns one licensee to represent the seller exclusively and a different licensee within the same firm to represent the buyer exclusively, with each licensee advocating only for their own client. What is this arrangement called?
- A. Designated agency, in which different licensees within the same brokerage each represent one party exclusively
- B. Dual agency, in which a single licensee represents both parties simultaneously
- C. Subagency, in which the buyer's licensee actually owes duties to the seller
- D. Open agency, in which no exclusive representation exists for either party
Show answer & explanation
Answer: A
Designated agency allows a brokerage to appoint separate licensees to exclusively represent the buyer and the seller respectively, each owing full fiduciary duties only to their own designated client, which differs from dual agency, where a single licensee or the brokerage as an undifferentiated unit represents both parties at once.
38. A seller signs a valid contract to sell a unique parcel of real estate, then simply refuses to close without any legal excuse. Besides money damages, what equitable remedy might the buyer pursue to force the sale through?
- A. Rescission, which would cancel the contract entirely rather than enforce it
- B. Novation, substituting a new party into the contract
- C. Liquidated damages, a predetermined dollar amount paid in place of performance
- D. Specific performance, a court order compelling the seller to complete the sale as agreed
Show answer & explanation
Answer: D
Because real property is considered legally unique, courts may order specific performance, compelling the breaching seller to actually convey the property as promised, rather than limiting the buyer to money damages, which distinguishes real estate contracts from many other types of contracts where damages alone are considered an adequate remedy.
39. A seller and buyer negotiate back and forth, but the final signed contract omits the closing date entirely and the parties never separately discussed or agreed on one. What problem does this create?
- A. No problem exists, because courts will simply assume the closing date is 30 days from signing
- B. The gap is automatically filled by the local board of REALTORS' standard form language in every case
- C. The missing essential term may prevent the parties from having reached the mutual assent needed for an enforceable contract
- D. The contract remains fully valid and enforceable because closing date is never considered a material term
Show answer & explanation
Answer: C
A valid contract requires mutual assent to its essential terms, and while courts sometimes fill minor gaps, an unresolved and undiscussed essential term such as the closing date can undermine the claim that the parties actually reached a true meeting of the minds, creating real enforceability risk rather than being automatically cured by assumption or treated as always immaterial.
40. A buyer submits a written offer to a seller. Before the seller signs or otherwise communicates acceptance, the buyer calls and tells the seller he is withdrawing the offer. Can the buyer do this?
- A. Yes, an offeror may generally revoke an offer at any time before the offeree communicates acceptance
- B. No, once submitted in writing an offer becomes irrevocable until its stated expiration date
- C. No, the buyer may only revoke the offer if the seller has not yet reviewed it
- D. Yes, but only if the buyer pays the seller a revocation fee
Show answer & explanation
Answer: A
Under general contract law, an offer may be revoked by the offeror at any time before it has been accepted, because no binding contract exists until acceptance is communicated, and a written offer with a stated deadline does not by itself make the offer irrevocable absent separate consideration such as a formal option contract.

State License Law and Practice

19 of 26 questions loaded

41. A licensee advertises a property on a personal website without naming the brokerage. What rule does this violate?
- A. Advertising must disclose the brokerage's name, because a licensee advertises on behalf of the brokerage
- B. Personal websites may not be used to advertise property at all
- C. There is no violation if the seller consented
- D. The violation is limited to print advertising
Show answer & explanation
Answer: A
A licensee acts for the brokerage, so advertising must identify the firm regardless of medium, and an advertisement naming only the individual is a blind advertisement. Websites, social media and text messages are all advertising for this purpose, and seller consent does not cure the omission.
42. An Ohio brokerage wishes to represent both the buyer and the seller in the same transaction. What does Ohio law require?
- A. Dual agency requires consent from the seller only
- B. Dual agency is prohibited in Ohio in all circumstances
- C. Dual agency is permitted only with the informed written consent of both parties, and the brokerage must have a written policy on it
- D. Dual agency requires only verbal notice to both parties
Show answer & explanation
Answer: C
Ohio permits dual agency with informed written consent from both parties and requires brokerages to adopt a written agency policy stating how they handle it. Undisclosed dual agency is a serious violation, and Ohio also recognizes assigning different licensees within the firm to each party.
43. Which fair housing exemption may permit an owner to limit occupancy to older persons?
- A. There is no exemption permitting age restrictions
- B. An exemption for properties listed with a licensee
- C. The housing for older persons exemption, which permits age restrictions meeting statutory criteria despite familial status protection
- D. An exemption for any owner-occupied building of any size
Show answer & explanation
Answer: C
Qualifying senior housing may restrict occupancy by age notwithstanding familial status protection, provided the statutory criteria are met. Other narrow exemptions cover certain owner-occupied buildings with a limited number of units and some religious or private club housing, but none apply where a licensee is involved in the transaction.
44. An Ohio salesperson has just been licensed. What additional education obligation applies during the first year?
- A. 120 additional hours repeating the pre-license curriculum
- B. No further education until the first renewal
- C. 30 hours of continuing education immediately
- D. 20 hours of post-license education within twelve months of the license being issued
Show answer & explanation
Answer: D
Ohio requires 20 hours of post-license education within the first twelve months, covering practical topics a new licensee encounters in actual transactions. Failing to complete it results in license suspension, so it is tracked separately from the three-year continuing education cycle that follows.
45. A candidate who completed a 60-hour pre-license course in another state applies to sit for the Ohio salesperson examination. What total pre-license education does Ohio require?
- A. 120 hours
- B. 60 hours
- C. 90 hours
- D. 40 hours
Show answer & explanation
Answer: A
Ohio requires 120 hours of approved pre-license coursework, distributed across real estate principles and practices, Ohio real estate law, appraisal and finance. Candidates should note that this is separate from the post-license education owed after the license is issued, which is a distinct obligation with its own deadline.
46. A residential landlord refuses to rent to an applicant who uses a service animal, citing a no-pets policy. What is the legal problem?
- A. A service animal is not a pet, and refusing the reasonable accommodation violates fair housing law
- B. There is no problem, since no-pets policies apply to all animals
- C. The landlord may charge an additional pet deposit instead
- D. The policy is lawful if applied uniformly to every applicant
Show answer & explanation
Answer: A
Disability is a protected class, and permitting an assistance animal is a reasonable accommodation the landlord must grant despite a no-pets policy. A pet deposit or additional fee may not be charged for an assistance animal, and uniform application of a policy does not save it where the law requires an exception.
47. Ohio requires a seller of residential property to provide a Residential Property Disclosure Form. What does the form require?
- A. The seller's disclosure of known material defects in the property, based on actual knowledge
- B. A professional inspection report paid for by the seller
- C. A warranty that all systems will function after closing
- D. An appraisal establishing the property's market value
Show answer & explanation
Answer: A
Ohio's form calls for disclosure of known conditions based on the seller's actual knowledge rather than an investigation, and it does not create a warranty. A buyer who receives the form retains the right to inspect. A seller who conceals a known defect remains exposed regardless of what the form states.
48. An Ohio broker terminates a salesperson's association with the brokerage. What must occur regarding the license?
- A. The broker must return the license to the Division and notify it, and the salesperson may not practice until associated with a new broker
- B. The salesperson may continue practicing independently
- C. The license transfers automatically to the next brokerage
- D. The salesperson must retake the licensing examination
Show answer & explanation
Answer: A
A salesperson's license is held under a broker, so termination suspends the ability to practice until a new association is properly filed. Practicing during the gap is unlicensed activity. No re-examination is required for a transfer between brokerages within the permitted period.
49. A buyer and seller dispute entitlement to earnest money after the contract terminates. What should the broker do with the disputed funds?
- A. Retain them in the trust account until the parties agree in writing or a court or other authorized process resolves the dispute
- B. Release them to the party the broker believes is correct
- C. Divide them equally between the parties
- D. Apply them to the brokerage's commission
Show answer & explanation
Answer: A
The broker is a neutral custodian, not an adjudicator, so disputed funds stay in trust pending written agreement, mediation, arbitration or a court order, with interpleader available in some jurisdictions. Deciding the dispute, splitting the funds or applying them to commission all convert client money.
50. Which Ohio agency licenses and regulates real estate salespersons and brokers?
- A. The Ohio Department of Insurance
- B. The Ohio Department of Taxation
- C. The Division of Real Estate and Professional Licensing, within the Ohio Department of Commerce
- D. The Ohio Secretary of State
Show answer & explanation
Answer: C
The Division of Real Estate and Professional Licensing administers licensing and enforcement within the Department of Commerce, and the Ohio Real Estate Commission adopts rules and hears disciplinary matters. The Secretary of State handles business entity filings, which is a separate function from occupational licensing.
51. An Ohio licensee is planning her education budget and asks how often she must renew and how much coursework each renewal consumes. What should she be told?
- A. Three years, with 30 hours of continuing education
- B. Four years, with 40 hours of continuing education
- C. Two years, with 16 hours of continuing education
- D. One year, with 10 hours of continuing education
Show answer & explanation
Answer: A
Ohio licenses renew on a three-year cycle requiring 30 hours of continuing education, including mandatory content in civil rights, canons of ethics and core law. The longer cycle means a licensee who defers coursework can face a substantial requirement compressed into the final months before the renewal date.
52. Under Ohio law, when must an agency relationship be disclosed to a prospective purchaser?
- A. Only if the purchaser asks who the licensee represents
- B. At closing, in the settlement documents
- C. After an offer has been accepted
- D. At the earliest practicable opportunity, using the state agency disclosure statement before specific property or terms are discussed
Show answer & explanation
Answer: D
Ohio requires timely written agency disclosure so a consumer knows whose interests the licensee serves before sharing confidential information or negotiating. Disclosure at closing is far too late, and waiting for the consumer to ask shifts a licensee obligation onto the party the rule protects.
53. An Ohio licensee obtains a buyer's signature on a purchase offer at the buyer's kitchen table and takes the document to present to the seller. What does Ohio license law require regarding the signed document?
- A. The licensee must furnish the buyer a copy of the signed instrument at the time of signing
- B. A copy is provided only after the seller accepts the offer
- C. A copy is provided at closing with the other transaction documents
- D. A copy is required only if the buyer requests one
Show answer & explanation
Answer: A
Ohio requires that a party signing an instrument in a real estate transaction receive a copy at the time of signing, so the party has a record of exactly what they committed to. Withholding a copy until acceptance or closing deprives the signer of the ability to review their own obligations, and the duty does not depend on the party asking. Failure to deliver copies is a recurring basis for discipline.
54. Under the federal Fair Housing Act, which of the following is recognized as a protected class in residential real estate transactions?
- A. Political party affiliation of the applicant
- B. Familial status, meaning the presence of children in the household
- C. Income level of the applicant, regardless of its source
- D. Occupation or employer of the applicant
Show answer & explanation
Answer: B
The federal Fair Housing Act recognizes race, color, national origin, religion, sex, familial status, and disability as protected classes, and familial status specifically protects households with children from discrimination in most residential transactions, whereas income level, political affiliation, and occupation are not classes protected under this federal law.
55. A brokerage receives client funds, including earnest money deposits, in the course of business. What is the broker generally required to do with these funds pending closing or disbursement?
- A. Deposit the funds into the broker's personal operating account for convenience
- B. Hold the funds as cash in the brokerage office safe rather than depositing them anywhere
- C. Deposit the funds into a separate trust or escrow account, kept apart from the broker's own operating funds
- D. Immediately forward the funds directly to the seller before closing occurs
Show answer & explanation
Answer: C
Brokers are generally required to hold client funds such as earnest money in a separate trust or escrow account kept apart from the brokerage's own operating funds, precisely to prevent commingling of client money with the broker's business funds, rather than depositing it into a personal account, holding it as cash on hand, or releasing it prematurely.
56. A brokerage regularly represents both buyers and sellers, sometimes in the same transaction. What administrative practice helps the brokerage demonstrate compliance with agency disclosure obligations across its transactions?
- A. Relying on each client's memory of a verbal explanation given at some point during the relationship
- B. Avoiding any written agency disclosure so as not to create records that could be used against the brokerage
- C. Maintaining written agency policies and signed disclosure documentation in the transaction file for each client
- D. Disclosing agency relationships only if a client specifically asks about representation
Show answer & explanation
Answer: C
Maintaining written agency policies and keeping signed disclosure documentation in each transaction file gives a brokerage a reliable, demonstrable record that agency relationships were properly disclosed to each party, which is far more defensible than relying on verbal explanations, avoiding documentation altogether, or disclosing only upon request.
57. A licensee hires an unlicensed personal assistant to help with administrative tasks. Which of the following activities would the assistant be prohibited from performing without holding a real estate license?
- A. Scheduling showing appointments on the licensee's calendar
- B. Preparing and distributing general marketing flyers under the licensee's direction
- C. Negotiating contract terms with a buyer or discussing price on behalf of a client
- D. Placing a lockbox on a property with the licensee's authorization
Show answer & explanation
Answer: C
Unlicensed assistants may generally perform clerical and administrative support tasks such as scheduling, preparing marketing materials, or placing a lockbox under supervision, but negotiating contract terms or discussing price with a party to a transaction constitutes licensed activity that only a licensed real estate professional may lawfully perform.
58. A group of salespersons within a brokerage markets themselves under a distinct team name in their advertising. What does license law generally require regarding this advertising?
- A. The advertising must still clearly disclose the name of the supervising brokerage, not just the team name
- B. The team name may be used exclusively, with no reference to the brokerage required anywhere
- C. Team advertising is prohibited outright under real estate license law
- D. Each team member must obtain a separate individual broker's license to advertise as a team
Show answer & explanation
Answer: A
Even when salespersons market themselves under a team name, advertising rules generally require that the supervising brokerage's name still be clearly disclosed, because consumers are entitled to know which brokerage is legally responsible for the transaction, rather than allowing team branding to obscure that required disclosure.
59. A licensee wants to pay a referral fee to a friend who is not a licensed real estate professional but who referred a buyer to the licensee. Is this generally permitted?
- A. Yes, referral fees may be paid to anyone regardless of licensure status
- B. Yes, but only if the friend signs a waiver releasing the brokerage from liability
- C. No, because referral fees are prohibited entirely, even between licensees
- D. No, real estate license law generally prohibits paying compensation for real estate activity to unlicensed persons
Show answer & explanation
Answer: D
Real estate license law generally prohibits brokers and licensees from paying compensation for activities requiring a license, including referral fees, to anyone who is not themselves licensed, which is why the friend could not lawfully receive such a fee even though referral fees between licensed professionals are commonly permitted.

Financing

19 of 22 questions loaded

60. A buyer obtains a conventional loan and makes a down payment equal to 10 percent of the purchase price. The lender informs the buyer that an additional insurance charge will be required on the loan. Which of the following most likely explains this requirement?
- A. Private mortgage insurance is required because the down payment is less than 20 percent of the purchase price.
- B. Federal insurance applies automatically because every low-down-payment loan is insured by the FHA.
- C. Private mortgage insurance is required on all conventional loans no matter how large the down payment is.
- D. The charge represents discount points, which must be paid to lower the note rate.
Show answer & explanation
Answer: A
Private mortgage insurance is generally required on conventional loans when the borrower's down payment is less than twenty percent of the purchase price, and a 10 percent down payment falls below that threshold. Choice B is wrong because a conventional loan is by definition not insured by the federal government — FHA insurance applies to FHA loans, not automatically to any low-down-payment loan. Choice C overstates the rule, since PMI is tied to the size of the down payment rather than applying to every conventional loan, and choice D confuses PMI with discount points, which are prepaid interest paid to lower the note rate rather than an insurance requirement.
61. A borrower finances a home in a state where, under the financing arrangement, legal title to the property is held by a trustee until the debt is fully repaid, even though the borrower lives in and uses the home. Which statement correctly characterizes this arrangement?
- A. The state follows lien theory, because the borrower has possession and use of the property.
- B. The state follows title theory, because legal title is held by a trustee until the debt is repaid.
- C. The arrangement is invalid, because only the borrower may hold legal title to mortgaged property.
- D. The borrower holds legal title, and the trustee merely holds a lien against the property.
Show answer & explanation
Answer: B
In title-theory states, legal title is held by the lender or a trustee until the debt is repaid, which is exactly the arrangement described. Choice A is the tempting error: possession and use by the borrower does not determine the theory — what matters is who holds legal title, and in a lien-theory state the borrower would retain title while the lender holds only a lien. Choice D restates the lien-theory arrangement, which contradicts the facts given, and choice C is wrong because the trustee arrangement is a recognized way of securing the debt, not an invalid one.
62. A homeowner's existing mortgage loan contains a due-on-sale clause. A prospective buyer proposes to purchase the home and simply take over the seller's existing loan without contacting the lender. What is the effect of the due-on-sale clause on this plan?
- A. The clause automatically transfers the loan to the buyer on the same terms once the sale closes.
- B. The clause allows the lender to demand full repayment upon the sale, so the buyer cannot assume the loan without lender approval.
- C. The clause merely requires the parties to notify the lender after closing; the assumption is otherwise unaffected.
- D. The clause requires the seller to pay discount points at closing before the loan can be assumed.
Show answer & explanation
Answer: B
A due-on-sale clause allows the lender to demand full repayment of the loan if the property is sold, which prevents a buyer from assuming the loan without the lender's approval. Choice A describes the opposite of the clause's purpose — it blocks automatic assumption rather than enabling it. Choice C is tempting because it sounds procedural, but the clause gives the lender the right to call the entire debt due, not just a right to notice. Choice D confuses the clause with discount points, which are prepaid interest and unrelated to loan assumption.
63. Which of the following correctly describes a conventional loan?
- A. It is insured by the Federal Housing Administration.
- B. It is guaranteed by the Department of Veterans Affairs for eligible veterans.
- C. It is not insured or guaranteed by the federal government.
- D. It always requires private mortgage insurance, regardless of the down payment.
Show answer & explanation
Answer: C
A conventional loan is defined by what it lacks: it is not insured or guaranteed by the federal government. Choice A describes an FHA loan, which is insured by the Federal Housing Administration, and choice B describes a VA loan, which is guaranteed by the Department of Veterans Affairs for eligible veterans. Choice D is wrong because private mortgage insurance is generally required on conventional loans only when the down payment is less than twenty percent, not in every case.
64. A buyer finances a home purchase by signing a promissory note together with a mortgage. Which statement best describes the role of the mortgage in this arrangement?
- A. The mortgage is the primary evidence of the debt, and the note pledges the property as collateral.
- B. The mortgage pledges the property as security for repayment of the promissory note.
- C. The mortgage is a good-faith deposit demonstrating the buyer's serious intent to purchase.
- D. The mortgage permanently conveys ownership of the property to the lender in every state.
Show answer & explanation
Answer: B
A mortgage or deed of trust pledges the property as security for repayment of the promissory note. Choice A reverses the roles of the two documents: the note evidences the debt, while the mortgage provides the security. Choice C confuses the mortgage with an earnest money deposit, and choice D overstates the lender's interest — the mortgage is a security arrangement, not a permanent conveyance of ownership.
65. A buyer is closing on a home with a $240,000 loan. To lower the note rate, the buyer agrees to pay the lender 2 discount points at closing. How much will the buyer pay for the points, and how are the points best characterized?
- A. $2,400, characterized as prepaid interest.
- B. $4,800, characterized as prepaid interest paid at closing to lower the note rate.
- C. $4,800, characterized as a reduction of the loan's principal balance.
- D. $2,400, characterized as a refundable good-faith deposit held in trust.
Show answer & explanation
Answer: B
One discount point equals one percent of the loan amount, so one point on a $240,000 loan is $2,400 and two points total $4,800. Discount points are prepaid interest paid at closing to lower the note rate. Choice A uses the right characterization but computes only one point instead of two. Choice C is a common misconception — points buy down the interest rate; they are not applied to reduce the principal balance. Choice D confuses points with an earnest money deposit.
66. An investor exchanges one rental property for another of like kind. What is the tax effect of a properly structured Section 1031 exchange?
- A. Recognition of gain is deferred, with basis carrying over and adjusted for any boot received
- B. Gain is permanently eliminated
- C. The transaction is taxed as ordinary income
- D. Gain is recognized in full at the exchange
Show answer & explanation
Answer: A
A like-kind exchange defers rather than forgives gain, carrying the old basis into the replacement property. Cash or non-like-kind property received, called boot, is taxable to the extent of gain. Strict identification and completion deadlines apply, and a qualified intermediary is used so the taxpayer never constructively receives proceeds.
67. A lender initiates foreclosure through a court proceeding culminating in a sheriff's sale. What type of foreclosure is this?
- A. Judicial foreclosure, which requires a court action and is the general practice in mortgage-theory states
- B. Non-judicial foreclosure by trustee's sale
- C. Strict foreclosure by immediate title transfer
- D. A deed in lieu of foreclosure
Show answer & explanation
Answer: A
Judicial foreclosure proceeds through the courts and ends in a sale conducted under court authority, typically slower but with judicial oversight. Non-judicial foreclosure uses a power of sale in a deed of trust without a lawsuit. A deed in lieu is a voluntary conveyance to the lender that avoids foreclosure entirely.
68. A seller sells their principal residence at a gain. What federal tax provision may exclude some of that gain?
- A. The principal residence exclusion, available when ownership and use tests are satisfied
- B. A like-kind exchange under Section 1031
- C. Depreciation recapture relief
- D. The installment sale election, which eliminates the gain
Show answer & explanation
Answer: A
The principal residence exclusion shelters gain when the ownership and use requirements are met over a defined lookback period, with different maximum amounts for single and joint filers. Section 1031 applies to investment and business property rather than a personal residence, and an installment sale defers rather than eliminates gain.
69. A borrower's right to reclaim the property by paying the debt before the foreclosure sale is called what?
- A. The equitable right of redemption
- B. The statutory right of redemption, exercised only after the sale
- C. The right of first refusal
- D. The right of reinstatement, which cures only partial default
Show answer & explanation
Answer: A
The equitable right of redemption operates before the sale and requires paying the full debt with costs. Some states also grant a statutory right of redemption for a period after the sale. Reinstatement is a distinct concept where curing the arrears restores the loan without paying the entire balance.
70. A buyer assumes an existing loan with a principal balance of 184,000 dollars at 5.25 percent, and closing occurs on the 20th day of a 30-day month with the buyer owning the day of closing. Using a 360-day year, what interest accrues to the seller for that month?
- A. 510.13 dollars
- B. 805.00 dollars
- C. 295.00 dollars
- D. 268.50 dollars
Show answer & explanation
Answer: A
Annual interest is 184,000 times 0.0525, or 9,660 dollars, and daily interest is 9,660 divided by 360, which is 26.8333 dollars. The seller owns days 1 through 19, so 19 times 26.8333 equals 509.83, and using the full 30-day month figure of 805 dollars ignores the proration entirely. The precise figure depends on the day-count convention the contract specifies.
71. One buyer has only had an informal conversation with a lender about income and estimated affordability, while another buyer has submitted documentation and received a conditional written commitment for a specific loan amount pending appraisal and final underwriting. How do these two buyers' statuses differ?
- A. The first buyer's status is stronger because it required no paperwork at all
- B. The second buyer's status is not something lenders actually offer to real buyers
- C. The first buyer is only prequalified based on self-reported information, while the second buyer has the stronger preapproval based on verified documentation
- D. Both statuses carry identical weight and give sellers the same level of assurance
Show answer & explanation
Answer: C
Prequalification is a preliminary, largely informal estimate based on unverified information the borrower reports, while preapproval involves the lender actually reviewing documentation and issuing a conditional commitment for a specific loan amount, making preapproval a meaningfully stronger signal to a seller than a simple prequalification conversation.
72. A borrower's loan has monthly payments calculated as if the loan would be repaid over 30 years, but the entire remaining balance becomes due in a single lump sum after just 7 years. What is this large final payment called?
- A. A balloon payment, due at the end of a shorter loan term than the amortization schedule would otherwise require
- B. A prepayment penalty, charged for paying off the loan ahead of schedule
- C. An escrow shortage, resulting from insufficient funds collected for taxes and insurance
- D. A discount point, paid at closing to reduce the interest rate
Show answer & explanation
Answer: A
A balloon payment is the large lump sum due at the end of a loan term that is shorter than the period used to calculate the regular monthly payments, leaving a substantial unpaid balance to be paid off, refinanced, or otherwise satisfied at maturity, unlike a prepayment penalty or a discount point, which serve entirely different purposes.
73. A buyer with a modest down payment and average credit is considering loan options. A lender explains that one loan type is insured by a federal agency, which allows for a lower down payment and more flexible qualifying standards than many conventional loans. Which loan type is being described?
- A. A VA loan, available only to eligible veterans and service members
- B. A jumbo loan, exceeding conforming loan limits
- C. A home equity line of credit secured by an existing property
- D. An FHA loan, insured by the Federal Housing Administration to reduce lender risk on lower-down-payment loans
Show answer & explanation
Answer: D
FHA loans are insured by the Federal Housing Administration, which reduces the lender's risk and in turn allows for lower down payments and more flexible credit qualifying than typical conventional financing, distinguishing it from VA loans, limited to eligible veterans, and jumbo loans, which exceed conforming limits and usually require stronger qualifying.
74. A homeowner already has a first mortgage and takes out a home equity loan secured by a second mortgage on the same property. If the home is later sold in foreclosure and proceeds are insufficient to pay both loans in full, which loan is generally paid first?
- A. Whichever lender demands payment first in the foreclosure process
- B. The two loans are always paid on a strictly equal, pro-rata basis
- C. The first mortgage, because it holds priority over the later-recorded second mortgage as a senior lien
- D. The second mortgage, because home equity loans generally take priority over the original purchase loan
Show answer & explanation
Answer: C
Liens are generally paid according to priority, which is typically established by the order of recording, so the first mortgage, recorded before the second mortgage, is a senior lien entitled to be satisfied ahead of the junior second mortgage out of any foreclosure sale proceeds, rather than the two being split equally or the junior lien somehow taking precedence.
75. Instead of the buyer obtaining a loan from a bank, the seller allows the buyer to make payments directly to the seller over time, and the seller holds a note and mortgage as security for those payments. What is this financing arrangement commonly called?
- A. A wraparound insurance policy protecting the buyer against title defects
- B. Seller financing, sometimes called a purchase money mortgage, where the seller acts as the lender
- C. A blanket mortgage, covering multiple separate properties under a single loan
- D. A reverse mortgage, allowing a homeowner to convert equity into loan proceeds
Show answer & explanation
Answer: B
When a seller extends credit directly to the buyer and takes back a note and mortgage as security instead of the buyer obtaining third-party bank financing, this is seller financing, also called a purchase money mortgage, which differs from a blanket mortgage covering multiple properties or a reverse mortgage designed for homeowners drawing on existing equity.
76. An eligible veteran is purchasing a home and wants to avoid making any down payment at all while still obtaining favorable financing terms. Which loan program is specifically designed to allow this?
- A. A VA loan, which can allow qualified veterans to finance up to 100 percent of the purchase price with no down payment
- B. An FHA loan, which always requires a minimum down payment from every borrower
- C. A conventional loan, which is the loan type most likely to require no down payment for any borrower
- D. A subprime loan, targeted at borrowers with poor credit histories
Show answer & explanation
Answer: A
VA loans, guaranteed by the Department of Veterans Affairs, are specifically designed to let eligible veterans and service members finance a home with no down payment, a benefit not generally available on FHA or conventional loans, which typically require at least some minimum down payment from the borrower.
77. Two borrowers apply for similar loan amounts and terms, but one has a significantly lower credit score and history of late payments than the other. All else being equal, how does this typically affect the loan terms offered?
- A. Both borrowers will receive identical rates because lenders are required to ignore credit history for mortgage loans
- B. Credit score has no effect on mortgage pricing since rates are set solely by the Federal Reserve
- C. The borrower with the lower credit score will typically receive a lower interest rate to help offset qualifying difficulty
- D. The borrower with the lower credit score will typically be offered a higher interest rate or less favorable terms to compensate the lender for added risk
Show answer & explanation
Answer: D
Lenders price mortgage risk in part based on creditworthiness, so a borrower with a lower credit score and a history of late payments represents greater default risk and will typically be offered a higher interest rate or less favorable terms than a borrower with stronger credit, all else being equal, rather than receiving identical or more favorable pricing.
78. Early in the term of a standard fully amortizing fixed-rate mortgage, how is each monthly payment generally divided between interest and principal, compared to later in the loan term?
- A. Early payments go entirely to principal, and later payments go entirely to interest
- B. The interest and principal split is fixed at loan origination and never changes over the life of the loan
- C. Early payments are weighted heavily toward interest, with the principal portion gradually increasing as the loan matures
- D. Each payment is always split exactly 50/50 between interest and principal throughout the entire loan term
Show answer & explanation
Answer: C
In a standard amortization schedule, the interest portion of each payment is calculated on the remaining loan balance, which is largest early in the loan, so early payments are weighted heavily toward interest, and as the balance shrinks over time a growing share of each level payment goes toward principal instead of remaining fixed or split evenly.

Valuation and Market Analysis

16 questions

79. Which of the following correctly states how the gross rent multiplier (GRM) for a property is calculated?
- A. Divide the sale price by the monthly gross rent
- B. Divide the monthly gross rent by the sale price
- C. Multiply the sale price by the monthly gross rent
- D. Divide the net operating income by the capitalization rate
Show answer & explanation
Answer: A
The gross rent multiplier is found by dividing the sale price by the monthly gross rent, giving investors a quick tool for comparing income properties. Choice D is the tempting wrong answer because it is also an income-based formula, but net operating income divided by the capitalization rate estimates a property's value under the income capitalization approach — it does not produce the GRM. Choice B inverts the correct ratio, and choice C multiplies instead of divides.
80. A home sells for $300,000. The listing agreement provides for a 6 percent commission, which the listing broker and the selling broker will split per their agreement. What is the total commission generated by the sale?
- A. $18,000
- B. $9,000
- C. $1,800
- D. $30,000
Show answer & explanation
Answer: A
Commission equals the sale price multiplied by the commission rate: $300,000 at 6 percent generates an $18,000 total commission. Choice B is the tempting trap — it assumes an equal split and gives only one broker's share, but the question asks for the total commission generated before any split between the listing and selling brokers. Choice C reflects a misplaced decimal, and choice D results from applying the wrong rate.
81. Many licensing exams use a "banker's year" convention for proration problems. Under this convention, how is the daily rate of an annual expense determined?
- A. Divide the annual amount by the number of months in the year
- B. Divide the monthly amount by the actual number of days in the month of closing
- C. Divide the annual amount by the actual number of days in the calendar year
- D. Divide the annual amount by 360, treating each month as having 30 days
Show answer & explanation
Answer: D
The banker's year is a 360-day year made up of 30-day months, so the daily rate equals the annual amount divided by 360. Choice C describes an actual-calendar-day method, which is a different convention from the banker's year the question asks about. Choice A produces a monthly amount, not a daily rate, and choice B mixes a monthly figure with an actual-day count rather than applying the 30-day-month convention.
82. A seller paid the annual property taxes for the entire tax period in advance. The transaction closes partway through that period, so the buyer will own the property for the remainder of it. Under standard proration rules, how should the closing statement handle the taxes?
- A. The buyer reimburses the seller for the unused portion of the prepaid taxes
- B. The seller credits the buyer for the seller's share of the taxes
- C. No adjustment is made, because taxes are the sole responsibility of whoever owns the property on the closing date
- D. The taxes are divided equally between buyer and seller regardless of when the closing occurs
Show answer & explanation
Answer: A
Proration divides shared expenses between buyer and seller based on the portion of the period each party owns the property, using the closing date as the dividing point. Because the seller prepaid the taxes, the buyer must reimburse the seller for the unused portion. Choice B is the tempting reversal — a seller credits the buyer only when the expense is paid in arrears, the opposite of this scenario. Choices C and D ignore proration entirely: the split follows each party's ownership portion, not an all-or-nothing or equal division.
83. A buyer purchases a property for $300,000, and the appraisal comes in at the same amount. The buyer obtains a loan of $240,000. What is the loan-to-value (LTV) ratio on this purchase?
- A. 80 percent
- B. 20 percent
- C. 125 percent
- D. 8 percent
Show answer & explanation
Answer: A
LTV is the loan amount divided by the lesser of the appraised value or the purchase price — here both are $300,000, so a $240,000 loan produces an 80 percent LTV. Choice B is the classic trap: 20 percent is the down payment portion (the remainder after the loan), not the loan-to-value ratio. Choice C inverts the ratio by dividing value by the loan, and choice D is a decimal-placement error.
84. An appraiser values an income-producing property using the income capitalization approach. After the initial estimate, market conditions lead investors to apply a higher capitalization rate, while the property's net operating income remains unchanged. What happens to the estimated value?
- A. The estimated value stays the same, because value depends only on net operating income
- B. The estimated value cannot be determined without knowing the property's monthly gross rent
- C. The estimated value increases, because a higher capitalization rate reflects a stronger market
- D. The estimated value decreases, because value equals net operating income divided by the capitalization rate
Show answer & explanation
Answer: D
Under the income capitalization approach, net operating income divided by the capitalization rate yields the estimated value. With the same net operating income divided by a larger capitalization rate, the result is a smaller estimated value. Choice C is tempting because a higher rate sounds favorable, but mathematically a larger divisor shrinks the value estimate. Choice A ignores the capitalization rate's role in the formula, and choice B confuses this approach with the gross rent multiplier, which is the tool that uses monthly gross rent (sale price divided by monthly gross rent).
85. A seller's home sells for 318,000 dollars. The seller owes 214,500 dollars on the mortgage, pays a 6 percent commission, and pays 4,200 dollars in other closing costs. What are the seller's approximate net proceeds?
- A. 80,220 dollars
- B. 99,300 dollars
- C. 84,420 dollars
- D. 103,500 dollars
Show answer & explanation
Answer: A
Commission is 318,000 times 0.06, or 19,080 dollars. Subtracting the 214,500 dollar payoff, the 19,080 dollar commission and 4,200 dollars of other costs from the 318,000 dollar price leaves 80,220 dollars. Omitting the other closing costs gives 84,420 and omitting the commission gives 99,300, which are the two standard errors on a net proceeds problem.
86. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?
- A. 5 acres
- B. 2.5 acres
- C. 10 acres
- D. 1 acre
Show answer & explanation
Answer: A
Area is 330 times 660, or 217,800 square feet. Dividing by 43,560 square feet per acre gives exactly 5 acres. These dimensions appear frequently in exam problems because 660 feet is one furlong and 330 by 660 produces a clean result, so recognizing the pattern saves calculation time.
87. A buyer is unwilling to pay more for a home than the cost of acquiring an equally desirable substitute property in the same market. Which appraisal principle does this behavior illustrate?
- A. The principle of substitution, which holds that value tends to be set by the cost of acquiring an equally desirable alternative
- B. The principle of conformity, which holds that value is maximized when a property resembles its neighbors
- C. The principle of anticipation, which holds that value reflects the present worth of future benefits
- D. The principle of increasing and decreasing returns, which relates improvement costs to resulting value gains
Show answer & explanation
Answer: A
The principle of substitution holds that a rational buyer will not pay more for a property than the cost of acquiring an equally desirable and available substitute, which underlies the entire sales comparison approach, whereas conformity concerns similarity among neighboring properties and anticipation concerns the effect of expected future benefits on value.
88. An appraiser estimates the current cost to construct a replica of an existing improvement, then subtracts accumulated depreciation, and finally adds the estimated land value. What appraisal method does this describe?
- A. The cost approach, which estimates value from reproduction or replacement cost minus depreciation plus land value
- B. The income capitalization approach, which converts income into an estimate of value
- C. The gross rent multiplier method, which relates sale price to rental income
- D. The sales comparison approach, which relies primarily on recent sales of similar properties
Show answer & explanation
Answer: A
The cost approach values a property by estimating what it would cost to reproduce or replace the improvements new, subtracting accrued depreciation to reflect their current condition, and then adding the land value separately, which differs fundamentally from the sales comparison approach, based on comparable sales, and the income approach, based on capitalized income.
89. An appraiser compares a subject property without a garage to a recently sold comparable that has a garage, and the garage adds value in that market. How should the appraiser adjust the comparable's sale price to estimate the subject's value?
- A. Ignore the garage entirely, since appraisers may not adjust for individual features
- B. Multiply the comparable's sale price by the ratio of square footage between the two properties
- C. Subtract the value of the garage from the comparable's sale price, since the subject lacks that feature the comparable has
- D. Add the value of the garage to the comparable's sale price, since the subject lacks that feature
Show answer & explanation
Answer: C
In the sales comparison approach, adjustments are made to the comparable rather than the subject, and when the comparable has a feature the subject lacks, the appraiser subtracts that feature's value from the comparable's price so the adjusted figure better reflects what the subject property, without the garage, would likely sell for.
90. A modest, smaller home is located among several much larger, higher-priced homes in the same neighborhood. What effect does this typically have on the smaller home's value, and what principle explains it?
- A. The smaller home's value tends to decrease due to the principle of regression pulled downward by nearby larger homes
- B. The smaller home's value tends to be pulled upward by the larger, more valuable surrounding homes, illustrating the principle of progression
- C. The smaller home's value is entirely unaffected by the value of surrounding properties
- D. The larger surrounding homes will each lose value to match the smaller home, illustrating regression
Show answer & explanation
Answer: B
The principle of progression describes how a lesser-valued property tends to benefit and be pulled upward in value by association with more valuable surrounding properties, which is the opposite effect from regression, where a higher-valued property is instead dragged down in value by proximity to lesser-valued ones.
91. A licensee prepares an informal comparative market analysis for a seller to help set a listing price. How does a comparative market analysis differ from a formal appraisal?
- A. A comparative market analysis is prepared by a real estate licensee as an informal pricing opinion, while a formal appraisal is prepared by a licensed or certified appraiser following professional appraisal standards
- B. A comparative market analysis and a formal appraisal are legally interchangeable documents accepted equally by all mortgage lenders
- C. A comparative market analysis must include a certified opinion of value that meets the same standards as an appraisal
- D. A comparative market analysis can be prepared only by an appraiser, never by a real estate licensee
Show answer & explanation
Answer: A
A comparative market analysis is an informal pricing tool prepared by a real estate licensee, drawing on recent comparable sales and listings to help estimate a reasonable listing or offer price, whereas a formal appraisal is a more rigorous opinion of value prepared by a licensed or certified appraiser following professional appraisal standards, and lenders generally require the latter for underwriting.
92. An appraiser starts with a rental property's potential gross income, as if 100 percent occupied and all rent collected, and then subtracts an allowance for vacancy and collection losses. What figure results from this calculation?
- A. Gross rent multiplier, a ratio of sale price to gross rent
- B. Capitalization rate, expressed as a percentage return on value
- C. Net operating income, after also subtracting all operating expenses
- D. Effective gross income, the realistic income expected after accounting for vacancy and collection loss
Show answer & explanation
Answer: D
Effective gross income is calculated by taking potential gross income and subtracting an allowance for vacancy and collection losses, producing a more realistic income figure before operating expenses are deducted, while net operating income requires a further deduction of expenses, and cap rate and GRM are separate ratios rather than income figures themselves.
93. An appraiser identifies three categories of depreciation when applying the cost approach: physical deterioration, functional obsolescence, and external, or economic, obsolescence. Which of these relates to a loss in value caused by factors entirely outside the property's boundaries, such as a nearby noisy highway?
- A. Functional obsolescence, caused by an outdated or undesirable design within the structure
- B. Physical deterioration, caused by wear and tear on the structure itself
- C. External, or economic, obsolescence, caused by negative influences located off the property, such as neighboring land uses
- D. Curable depreciation, referring to any defect that can be economically repaired
Show answer & explanation
Answer: C
External or economic obsolescence refers to a loss in value caused by negative factors located outside the property's own boundaries, such as a busy highway, an undesirable nearby land use, or broader market conditions, which is distinct from physical deterioration, wear on the structure itself, and functional obsolescence, outdated design or layout within the property.
94. An appraiser is asked to identify the reasonably probable use of a vacant parcel that is legally permissible, physically possible, financially feasible, and maximally productive. What is this analysis called?
- A. Effective gross income analysis, used to estimate income-producing potential
- B. Highest and best use analysis, identifying the most profitable legally and physically viable use of the land
- C. Gross rent multiplier analysis, relating sale price to rental income
- D. Depreciation analysis, used to measure loss in value from all causes
Show answer & explanation
Answer: B
Highest and best use analysis identifies the reasonably probable use of a property that is legally permissible, physically possible, financially feasible, and maximally productive, forming the foundation for a credible appraisal, and is distinct from income-focused calculations like effective gross income or the gross rent multiplier, which serve narrower purposes.

Transfer of Title and Closing

6 questions

95. A contractor completes work on a property and is not paid. What lien may the contractor assert?
- A. A mechanic's lien, a specific involuntary lien attaching to the improved property
- B. A general judgment lien against all the owner's property
- C. A voluntary lien created by the owner's agreement
- D. No lien is available without a court judgment
Show answer & explanation
Answer: A
A mechanic's lien is specific to the property improved and involuntary because it arises without the owner's consent, subject to statutory notice and filing deadlines. A judgment lien is general, reaching the debtor's property broadly. A mortgage is the classic voluntary specific lien.
96. Several liens encumber a property. Which generally takes priority over the others regardless of recording date?
- A. Real property tax and special assessment liens
- B. The first recorded mortgage
- C. A recorded judgment lien
- D. A mechanic's lien filed most recently
Show answer & explanation
Answer: A
Property tax and special assessment liens are superior to other liens irrespective of when they arose, which is why a tax sale can extinguish a mortgage. Among most other liens, priority generally follows the order of recording, with subordination agreements able to alter that order by consent.
97. A title examiner traces the successive conveyances of a property over time. What is this record called?
- A. The chain of title, summarized in an abstract of title
- B. The title insurance commitment
- C. The plat map
- D. The deed of reconveyance
Show answer & explanation
Answer: A
The chain of title is the sequence of recorded conveyances, and an abstract summarizes the instruments affecting title along with an opinion or report on its condition. A title commitment is the insurer's offer to insure subject to stated exceptions, which is a different document serving a different purpose.
98. A buyer promptly records the deed to a newly purchased property at the county recorder's office. What is the primary legal purpose served by recording the deed?
- A. Recording provides constructive notice to the public of the buyer's ownership interest and helps establish priority against later claims
- B. Recording is what actually transfers legal title from the seller to the buyer
- C. Recording is required before a deed can be considered validly signed and delivered
- D. Recording guarantees the buyer against any future title defects, replacing the need for title insurance
Show answer & explanation
Answer: A
Recording a deed provides constructive notice to the world of the buyer's interest and generally helps establish that buyer's priority against subsequently recorded competing claims, but recording itself is not what transfers title, which happens upon valid delivery and acceptance of the deed, and it does not guarantee against title defects the way title insurance does.
99. A grantor conveys property using a deed that warrants only against title defects arising during the grantor's own period of ownership, but makes no warranty regarding defects that may have arisen before the grantor acquired title. What type of deed is this?
- A. A general warranty deed, which warrants against all defects regardless of when they arose
- B. A quitclaim deed, which makes no warranties of title at all
- C. A bargain and sale deed with no covenants whatsoever
- D. A special warranty deed, limiting the grantor's warranties to the period of the grantor's own ownership
Show answer & explanation
Answer: D
A special warranty deed limits the grantor's warranties to defects that arose only during the grantor's own period of ownership, offering less protection than a general warranty deed, which covers the entire chain of title back to its origin, but still providing more assurance to the buyer than a quitclaim deed, which makes no warranties at all.
100. Shortly before closing on a federally related mortgage loan, the lender must provide the borrower with a standardized form itemizing the final loan terms and closing costs. What is this disclosure generally called?
- A. A pre-qualification letter, summarizing the borrower's estimated borrowing capacity
- B. A Closing Disclosure, itemizing the final loan terms and settlement costs shortly before closing
- C. A title commitment, describing the conditions under which title insurance will be issued
- D. A property condition disclosure, describing the physical condition of the home
Show answer & explanation
Answer: B
On federally related mortgage loans, the lender must provide the borrower a Closing Disclosure shortly before closing, itemizing the final loan terms, projected monthly payments, and closing costs so the borrower can review them before signing, which is a distinct document from a prequalification letter, a title commitment, or a seller's property condition disclosure.

Showing 100 of 126 questions.

Key facts: Ohio Real Estate Salesperson exam

Questions: 120
Time limit: 3h
Passing score: 70% scaled on each portion
Exam fee: $63
Governing body: Ohio Division of Real Estate and…

This free Ohio Real Estate Salesperson practice test has 126 original questions written from Ohio Division of Real Estate and Professional Licensing's official sources, last checked against them on July 23, 2026, 100 of them listed on this page and the rest loaded by the drill. Every question shows a worked explanation, and nothing here requires a signup.

The questions are grouped under six outline areas: Property Ownership and Land Use, Valuation and Market Analysis, Contracts and Agency, Financing, State License Law and Practice and Transfer of Title and Closing.

As of 2026, the Ohio Real Estate Salesperson exam fee is $63 (exam fee; separate $81 application fee).

Questions by topic in the Ohio Real Estate Salesperson practice bank

Property Ownership and Land Use29 · 23%

Contracts and Agency27 · 21%

State License Law and Practice26 · 21%

Financing22 · 17%

Valuation and Market Analysis16 · 13%

Transfer of Title and Closing6 · 5%

Counts describe our practice categories, which may subdivide official domains. They are not the exam’s official topic weights.

126 practice questions across six practice categories. The largest, Property Ownership and Land Use, holds 29 questions (23%).

About these practice questions

Written by Every Exam Prep Editorial TeamSource and review policy

Verified against PSI's official sources July 23, 2026

These are original study questions written from published exam objectives—not recalled, copied, or confidential live-exam items. Always confirm current coverage with the official sources linked on this page.

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Official sources

The official documents our facts about this exam are taken from.

Ohio Real Estate Candidate Information BulletinPSI / Ohio Department of Commercetest-takers.psiexams.comeffective July 1, 2026
Ohio Revised Code Section 4735.09Ohio General Assemblycodes.ohio.goveffective September 30, 2025
Salesperson License Examination ApplicationOhio Department of Commercedam.assets.ohio.goveffective February 1, 2024

Last verified against PSI's official sources: July 23, 2026

Frequently asked questions

What exactly is on the Ohio real estate salesperson exam, and how much time do I get?

The Ohio salesperson exam is a two-portion test: an 80-question National portion and a 40-question State portion, for 120 scored questions total, with 180 minutes of testing time. You must score 70% to pass, and you must pass BOTH portions — a strong National score cannot rescue a failed State portion, and vice versa. Practically, 180 minutes for 120 questions is 1.5 minutes per question, which is generous: the real risk on exam day is not running out of time but rushing. Budget roughly 90 minutes for the National half, then use the remaining time on the State half, which is shorter but drawn from a narrower and more memorization-heavy body of Ohio law. If you take both portions in the same appointment, the exam fee is $66.

Which agency and fiduciary-duty questions should I watch for on the Ohio exam?

Watch for three patterns. First, client vs. customer: fiduciary duties run only to clients, while customers are owed just honesty, fair dealing, and disclosure of known material defects — so a question about a buyer you are not representing is testing whether you know you owe them honesty, not loyalty. Second, confidentiality after closing: confidentiality survives termination of the agency, so revealing a former seller's lowest acceptable price is still a violation months later. Third, dual agency: it is legal only with the informed written consent of both parties, and even then the dual agent cannot advocate for one side against the other — the correct answer to "can the dual agent tell the buyer the seller will take less?" is always no. Memorize OLD CAR (Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care) and map each fact pattern to a specific letter before you pick. Watch the Accounting letter too: commingling client funds with the agent's own funds is a classic wrong-answer trap.

How much math is on the exam, and which formulas should I drill?

Math is a minority of questions but a reliable source of easy points because the formulas are few and fixed. Drill five: (1) Commission = sale price × rate — a $300,000 sale at 6% is an $18,000 commission, then split per the brokers' agreement. (2) LTV = loan ÷ the lesser of appraised value or price — a $240,000 loan on a $300,000 property is 80% LTV, with the down payment making up the other 20%. (3) Proration — divide taxes, rent, or interest between buyer and seller using the closing date as the dividing point; most exams use a 360-day banker's year with 30-day months, so the daily rate is the annual amount ÷ 360. (4) GRM = sale price ÷ monthly gross rent. (5) Value = NOI ÷ cap rate. In proration, get the direction right: with a prepaid expense the buyer reimburses the seller for the unused portion, while with an expense paid in arrears the seller credits the buyer for the seller's share. Write the formula down before you compute, and note that a 20%-down question and an 80%-LTV question are the same question phrased two ways.

What education and eligibility requirements do I need before I can sit for the Ohio exam — and what comes after I pass?

You must be at least 18 years old and submit the salesperson license examination application with its $81 fee. The prelicense education is 100 hours across four courses: 40 hours of Real Estate Principles and Practices, 40 hours of Ohio Real Estate Law, 10 hours of Real Estate Appraisal, and 10 hours of Real Estate Finance. The two 40-hour requirements are also written into Ohio Revised Code 4735.09 — 40 hours in real estate practice and 40 hours covering Ohio real estate law. Note the two different ways the score is stated: PSI reports 70% on the 120-point exam, and the licensing application states a passing score of 70. Do not stop studying after you pass — Ohio requires 20 hours of post-licensure instruction completed not later than twelve months after the date the license is issued, so set a calendar reminder on your issue date rather than trusting yourself to remember in month eleven.