Ohio Real Estate Salesperson Exam Study Guide

Ohio tests agency alongside 40 hours of prescribed Ohio real estate law, and the state portion is 40 of the 120 questions you will answer. Agency duties are where state statute and national principle overlap most closely, so this is the material that pays twice.

An agency relationship arises when a principal authorizes an agent to act on their behalf, and it brings a defined set of fiduciary duties summarized by the mnemonic OLD CAR: obedience, loyalty, disclosure, confidentiality, accounting and reasonable care. Loyalty requires the agent to place the principal's interests above their own, and accounting requires entrusted funds to be safeguarded and never commingled with the agent's own money.

Two duties survive the relationship that created them. Confidentiality continues after the agency terminates and bars revealing what was learned during it, which is why an agent cannot use a former client's motivation against them in a later transaction. Agency itself terminates by completion, expiration, mutual agreement or revocation.

The customer and client distinction is heavily tested. A client is owed the full fiduciary set; a customer is owed only honesty, fair dealing and disclosure of material defects. Dual agency, where one agent represents both sides, is legal only with the informed written consent of both parties — consent that is informed and written, not assumed from silence.

A listing agreement is an employment contract authorizing a broker to find a buyer, and the type determines when a commission is earned. Under an exclusive-right-to-sell listing the broker earns a commission regardless of who procures the buyer. Under an exclusive-agency listing the broker earns nothing if the seller finds the buyer themselves. An open listing is non-exclusive, and only the broker who actually procures the buyer is paid.

A valid real estate contract requires competent parties, mutual assent, lawful object and consideration. Any change to the terms of an offer is a counteroffer, which rejects the original — a point that decides more exam questions than any other single contract rule, because it means the original offer can no longer be accepted afterwards.

Earnest money is a good-faith deposit held in the broker's trust account, not the broker's own. Financing, inspection and appraisal contingencies let a buyer withdraw without breaching if the stated condition is not met, and a time is of the essence clause makes the stated deadlines strictly enforceable rather than approximate.

A deed is the written instrument that conveys title to real property, and it is valid only with competent parties, words of conveyance, an adequate description and delivery. Delivery is the element candidates forget: a signed deed sitting in a drawer conveys nothing.

The three deed types differ entirely in what the grantor promises. A general warranty deed gives the greatest protection, warranting against defects arising at any time in the property's history. A special warranty deed warrants only against defects that arose during the grantor's own ownership. A quitclaim deed warrants nothing at all — it conveys only whatever interest the grantor may happen to have, which may be none.

Marketable title is title free from reasonable doubt or serious defect, which is the standard a buyer is entitled to. Recording a deed provides constructive notice to the world and establishes priority against later claims, and title insurance protects the insured against losses from covered defects that recording alone does not prevent.

A mortgage or deed of trust pledges the property as security for the loan, and which instrument is used depends on whether the state follows lien theory or title theory. In a lien-theory state the borrower keeps title and the lender holds a lien; in a title-theory state title is held as security. Amortization repays principal and interest through scheduled payments, with early payments weighted heavily toward interest.

Loan types are a reliable source of questions. Conventional loans are not government-backed, FHA loans are insured by the government, and VA loans are guaranteed for eligible veterans. A fixed-rate mortgage keeps one rate for the term while an adjustable-rate mortgage moves with an index. Discount points are prepaid interest paid at closing to lower the note rate, and private mortgage insurance is generally required on conventional loans when the down payment is below the threshold.

A due-on-sale clause lets the lender demand full repayment when the property is sold, which is what prevents a buyer simply taking over a favourable existing loan without the lender's agreement.

The federal Fair Housing Act, part of the Civil Rights Act of 1968, prohibits discrimination in housing on the basis of seven protected classes: race, colour, religion, national origin, sex, disability and familial status. Familial status protects households with children under eighteen. The earlier Civil Rights Act of 1866 prohibits all racial discrimination in property transactions without exception, which matters because the exemptions that exist under the 1968 Act do not apply to it.

Three prohibited practices carry their own names and are tested by name. Steering is channelling buyers toward or away from neighbourhoods based on a protected class. Blockbusting is inducing owners to sell by suggesting that people of a particular class are moving in. Redlining is denying loans or insurance in certain areas based on the composition of those areas rather than on the individual applicant.

Advertising indicating a preference or limitation based on a protected class is prohibited regardless of intent, so wording that seems welcoming can still violate the Act. The Mrs. Murphy exemption applies narrowly to owner-occupied buildings of four or fewer units and does not reach advertising or the 1866 Act.

The arithmetic on a salesperson exam is not difficult, but it is unforgiving about setup. Commission equals sale price multiplied by the commission rate, and the split between brokerages and then between broker and agent is applied in sequence rather than all at once. Loan-to-value is the loan amount divided by the lesser of appraised value or sale price — the lesser, which is the detail that turns a correct calculation into a wrong answer.

Two valuation approaches appear repeatedly. The gross rent multiplier is the sale price divided by the monthly rent, giving a rough comparison figure. Income capitalization divides net operating income by the capitalization rate to give value, and the same relationship rearranges to find the rate when value is known.

Proration divides shared expenses such as taxes, rent or interest between buyer and seller at closing. Many exams use a 360-day banker's year with 30-day months, so read whether the question specifies a statutory or a banker's year before dividing. For prepaid expenses the buyer reimburses the seller for the unused portion; for expenses in arrears the seller credits the buyer.