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93 Cards in this Set
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OREA (ONTARIO REAL ESTATE ASSOCIATION) |
Orea is school Education Legal forms |
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RECO (REAL ESTATE COUNCIL OF ONTARIO) |
Licensing REBBA 2002 administration Consumer’s complaints Real estate police |
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Local Board |
Local MLS maintenance Collecting dues on behalf of CREA and OREA Arbitration between brokerages |
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CREA (CANADIAN REAL ESTATE ASSOCIATION) |
Handles federal level issues Owns the logo of MLS and REALTOR “R”, realtor.ca Important: All salesperson or even members of RECO (registrants) are not REALTORS. |
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Independent Contractor? |
Must have stayed at least ONE year in Canada. Must be 18 years of age Is on commission split with the brokerage Must incur all the advertising expenses Cannot be paid directly. Your brokerage will pay you commission. Cannot work for more than one brokerage. Can leave a brokerage with 24 hours written notice with a reason Can carry forward his listings with the brokerage’s permission Can have multiple licensing as long as there’s no conflict. Brokerage’s major income is desk fee Broker of record maintains a brokerage 2 years experienced sales person can manage a branch office |
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REBBA: 2002 (Real Estate Business Brokers Act)/RECO |
All salespersons are controlled by the REBBA It is rule book for real estate No trading can be done until licensed No employment by the brokerage until licensed To take an action for commission, you must be a registrant. RECO administers the Real estate and Business Brokers Act (REBBA) and imposes the duties and code of ethics on the sales people RECO can impose sanctions against members RECO registrar can refuse, suspend, terminate, reinstate the license, but certain procedure to follow. The brokerage is the agent and the agency means relationship between brokerage and principle The client (buyer or seller) is the principle The agreement is always between the agent (brokerage) and the principle (seller or buyer) |
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People exempted |
Lawyers, Auctioneers, Trust Nominees, Full time employees of the builders, home owners are exempted to have a real estate license |
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Condominiums |
Common elements (elevators, parking lot, swimming pool, tennis court etc.) Your share in common elements is called Tenancy-in-common. Reserve funds are for Future developments and repairs. Unit owners are responsible for debts. By-laws of the condos can be changed by the unit owners. Declaration and Descriptions are legal documents of the condo Free Hold, Basements, and Co-op Buildings are not condos. High rise buildings, Commercial Complexes and Golf courses are examples of condos. |
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CMHC (Canadian Mortgage and Housing Corporation) |
CMHC (Canadian Mortgage and Housing Corporation) Besides insurance, also does Market Research, Statistical Reports and underwriting. CMHC also publishes reports on housing Houses completed but not sold yet... means “Housing Completed; Not Absorbed” Houses completed and Pre-sold... means “Housing Completed And Absorbed” Footing Done... Means “Housing Starts” No Work Started but Permission Granted means “Pending Start” |
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Miscellaneous |
ICI stands for industrial, commercial and investment. Canadian Economy is a MIXED ECONOMY (Govt. and private sector) You give MORTGAGE (as a security) and get Mortgage (the loan) MORTGAGEE is the lender (bank) and MORTGAGOR is the borrower. 25 years amortization means the loan will be zero up to that time. TERM means the interest rate is fixed or variable for that period. Interest rate can be fixed or variable rate. BLENDED MONTHLY PAYMENT means principal plus interest. Commission Distribution is between the two brokerages. Commission Split is between the Salesperson and the brokerage CLS stands for Commercial Listing Services. |
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PROPERTY VALUES |
Seller (objective value) -> Salesperson..Direct comparison (market value) Sold Price is MARKET PRICE Buyer (Subjective value) -> puts an offer a. Extra Price Paid B. Value in exchange (external reasons) e.g due to some relatives living there VALUE IN USE (internal reasons) (e.g. liked some house features like wheel chair access, finished basement etc.) |
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PRINCIPLES OF APPRAISAL |
1. ANTICIPATION: Expecting Future benefit like price increase 2. SUBSTITUTION: More Value of my dollars. Better house with same price. 3. CHANGE: Refers to economic change. E.g. factory lay off. 4. EXTERNAL FACTORS: E.g. Factory pollution, Crime, Noise pollution, etc. 5. Progression: Small house In Big house neighbourhood will fetch more price. 6. REGRESSION: Big house in small house neighbourhood will fetch less price. 7. CONSISTENT USE: No separate value for land and construction. 8. PRINCIPLE OF HIGHEST AND BEST USE: You change zoning and sell for more. 9. CONTRIBUTION: Renovation by the seller 10. INCREASING AND DECREASING RETURNS: Too many upgrades do not necessarily increase value. 11. BALANCE: Refers to PARKING related examples. 12. COMPETITION: 3 same businesses in one place reduce the price. 13. CONFORMITY: Odd houses (e.g. fireplace in the living room) 14. SUPPLY AND DEMAND: More sellers in the market less price; More buyers in the market high price. 15. SURPLUS PRODUCTIVITY: Net profits increase value. |
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Based on the condominium concept in Ontario. When a condominium is created.. |
The legal status of the condominium is set out in the Declaration and Description. |
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Consumers are vulnerable and real estate salespeople must make sure they are treated with fairness. What is one of the steps taken to deal with consumer vulnerabilities... |
The parties are informed that “time is of the essence” and that they must consider timeframes in any binding agreement |
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Based on the condominium concept in Ontario. When a condominium is created.. |
The owners of the units share undivided tenancy-in-common interest in the building’s common elements. |
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The three way relationship for Organized Real estate in Ontario is best described by the relationship between.. |
CREA, OREA and Real estate Boards Brokerages, Brokers and salespeople |
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What is the Gross National Product Indicator? |
A supply indicator that measures the total production of goods and services both within and beyond Canada by Canadian resident individuals and corporations. |
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A business cycle in the real estate market is usually made up of.. |
Peaks of prosperity with periods of decline, recession and recovery in between. |
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If you open a brokerage as a sole proprietor... |
A sole proprietorship cannot advertise in any way that implies it is a corporation |
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Role of marketing plans with the buyer.. |
Services marketed to buyers may include targeting properties based on the profile of assisting the buyer with identifying potential problems with properties. Marketing plans for the buyer exist on two main levels - marketing the services and marketing of properties to buyers. Marketing plans are used to assist the brokerage in obtaining a commitment from clients to enter into a representation agreement |
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Characteristics of a real estate market.. |
Fundamental forces of supply and demand are always at work in the real estate market. Decisions made by government can have a direct influence on the real estate market Population change is a demographic factor that can affect the demand for real estate. |
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Residential real estate sales people rely on various sources for market information. These sources normally include: |
MLS listing information, the brokerage’s files and other sources, like builders. |
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The Federal Competition Act is: |
A federal statute that promotes a fair and efficient marketplace and enforces advertising guidelines |
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Someone who is authorized by a principal to represent the principal in business transaction with a third party is: |
An Agent |
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According to the Real Estate and Business Broker Act 2002, Which of the following can be registered as a Real Estate Brokerage in Ontario? |
Corporation, Partnership or sole proprietor. |
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One of the responsibilities of the real estate council of Ontario: |
To Conduct inspections on the business activities of brokerages and their representatives |
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One of the requirements for registration as a real estate sales person is the following: |
The past conduct of the applicant must provide reasonable grounds for belief that the applicant will conduct business with honesty and integrity. |
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In the Study of Economics, the four basic elements in the factors of production are: |
Land, labour, capital and entrepreneurial skills |
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The real estate market has a number of unique characteristics. One characteristic is that the location is fixed. This means that.. |
Some products can be moved to areas where there is high consumer demand, but real estate depends on local market conditions. |
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When statistically analyzing a group of number the median is: |
The middle number within a group of numbers that are placed in order from lowest to highest |
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General recognized methods for a brokerage to research the real estate market are: |
Obtaining the participation of sellers and buyers in focus groups Surveying sellers and buyers who have used the service of the brokerage Obtaining the result of market research of professional organizations and government agencies |
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Salesperson Garcia calls buyer Jones concerning a new listing at 125 West Drive that has just appeared on the market. Garcia describes the property in which individual owners hold title to a specific unit in a multiple dwelling with tenancy-in-common ownership of portions used jointly with other owner. |
Condominium ownership |
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Which of the following is a requirement for a real estate brokerage to be registered in Ontario? |
The brokerage whether a sole proprietorship, partner or corporation must have a designated broker of record. |
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The Real estate council of Ontario is a regulatory organization involved in the enforcement of the law related to the real estate brokerage business. Such activities will include: |
Providing the applicable sanctions against RECO members |
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Real Estate boards are authorized by the Canadian Real estate association to use certification marks relating to the operation of Real estate data base service known as the Multiple Listing Service MLS, or Realtor R.. |
The real estate board regulates the day to day activities of the MLS service while the Canadian Real estate association (CREA) oversees the use of the MLS trademark. |
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For a salesperson selling residential resale which of the following statement is correct with respect to the typical listing/selling process |
When prospecting for buyer, the property itself may give a good indication of the profile of the typical buyer for the salesperson to target |
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According to the real estate and business broker act 2002, a registered real estate salesperson is authorized to.. |
Trade in real estate as a salesperson of a registered brokerage |
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You are considering employment as a salesperson with a brokerage that uses the orea recommended independent contractor agreement. Based on the wording of the independent contractor agreement. What is the correct statement regarding this agreement |
Even though the salesperson is an independent contractor, the brokerage maintains the right to approve the advertising of the salesperson. |
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Which of the following statements is true with respect to the differences in the way brokerages pay salespeople |
Desk fee salespeople usually pays all their own expenses and this helps them to qualify as independent contractors |
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Which of the following statement describe one of the actions taken by RECO to fulfill RECO’s mandate |
RECO carries out regular inspections of the business operations of brokerages to ensure that brokerages comply with REBBA 2002 |
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Which of the following is an exemption from registration under the real estate and business brokers ACT 2002 and would not have to be registered under REBBA 2002 |
An auctioneer in the normal course of business who auctions a home as part of the sales of a deceased person’s estate. |
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Which of the following statements is true with respect to supply and demand force in the real estate market? |
The relationship between supply and demand affect the price for the product or service in the market |
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Which of the following statements correctly applies to the duties and responsibilities of a property manager |
A property manager is an administrator who assumes the executive functions necessary to meet the owner of the property |
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Registered sales persons are required to successfully complete a mandatory course as part of two-year articling period. Mark the correct statement. |
The mandatory articling program consisting of one course must be completed within the two year period in order for a sales person to qualify for renewal of registration. |
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The real estate market has a number of unique characteristics. What would be one of these unique characteristics? |
The location of a real estate is fixed and this makes real estate especially subject to local supply and demand forces |
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In a buyer’s market you would expect to see |
Supply exceeds demand |
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One of the main purposes of the personal information protection and electronic documents act (PIPEDA) is to.. |
Ensure that the personal information is used only for the purpose intended. |
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For sale signs are generally considered to be one of the very best forms of advertising, However, it has been pointed out that there can be negative factors related to the use of for sale signs. Which of the following would be an example of this? |
Sometimes the property does not sell quickly and the sign is visible for many months |
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A real estate salesperson may have employee status with the brokerage or may have independent contractor status. According to REBBA 2002, what is the relationship between the brokerage and the brokerage’s independent contractor salesperson? |
Independent contractor status does not eliminate the responsibility of the brokerage for the conduct of the sales person. |
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Which of the following individuals must be registered under the REBBA to carry out duties as described below |
A salesperson that is employed by a real estate brokerage but is selling only new real estate |
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According to Canada Mortgage and housing corporation (CMHC) defines pending starts as |
A building permit has been issued (but building has not started) |
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One of the responsibilities of RECO is to ensure that member comply with the REBBA 2002 Code of Ethics. Which of the following statements best describes the compliance process as applied by RECO? |
RECO may attempt to resolve or mediate a complaint or give the member a written caution, but will likely refer a serious complaint to the Discipline and Appeal committee |
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Which of the following statements is NOT correct with regard to supply and demand in the real estate market |
If the demand for a product increases without any corresponding increase in supply the value of the product will likely decline as a result |
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Supply and demand in the real estate market.. |
Population change in a market place is a demographic factor that can impact the demand for real estate A market bubble can occur when the real estate market becomes overheated giving rise to occasional dramatic pace swings driven by speculation zeal Government policies can affect the demand for real estate |
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Which of the following statements best describe the importance of understanding consumer needs and wants when dealing with buyers of real estate |
Salespersons who correctly evaluate a buyers needs and wants will likely have greater success in finding a property for the buyers |
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The AIDA (attention, interest, desire, action) formula is a formula; |
For creating an advertisement that will create interest and result in a call |
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Which of the following statements apply to the activities of a salesperson involved in residential resale |
In residential resale salespeople must have good communication skills and must be willing to work irregular hours |
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Which of the following statements best describe the importance of studying consumer behaviour for real estate salesperson |
If the needs and wants of the consumer can be evaluated this will assist the salesperson when selling both real estate and real estate services |
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Which of the following statements best describe the importance of marketing for a real estate brokerage |
Real estate brokerages research and analyze the real estate market and creates strategies for marketing both products and services |
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Some examples of principle of value |
Anticipation - buyers buy the present worth of future benefits Highest and best use - focus on use will produce the greatest returns Progression - the smallest house on the street may be the best buy |
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Which of the following would be an economic indicator used by economists primarily to track business (supply)? |
Statistics on retail sales |
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Which of the following statements most correctly describes the role of a lawyer in a real estate transaction? |
For a typical transaction the lawyers are for the most part involved in the closing process after a binding agreement has been signed between buyer and the seller |
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Which of the following is NOT an exemption under the REBBA 2002? |
A person who is employed as a salesperson for a builder, is paid a commission for each sale made on behalf of that builder and is only selling homes offered in a market place by that builder |
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Salesperson Ritter is employed by a brokerage and lists a property and the property is sold by another brokerage in the community. Sales person Ritter will get the commission from.. |
The employing brokerage |
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The registrar has proposed that Newman’s salesperson’s registration be revoked following a review of a consumer complaint. Newman.. |
May appeal the proposal to the license appeal authority (LAT) following receipt of the proposal notice |
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Applicant Woznaik mails a salesperson registration application to RECO, but receives a refusal from the registrar. This issue may have been issued for several possible reasons, which of the following is NOT one of them.. |
The registrar determines that the applicant, while meeting residency requirements, only has a work permit. As such, the applicant is ineligible for registration. |
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With respect to RECO membership and the role of Organized Real estate, select the correct statement from the choices provided.. |
It is possible to be a RECO registrant and not be a member of the local real estate board |
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RCI process.. |
Provides for mediation |
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Which of the following statements best describes how Maslow’s hierarchy explains the behaviour of real estate buyers? |
All of the categories in Maslow’s hierarchy can help to explain the actions of real estate buyers in the market |
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Which of the following statements describe one of the actions taken by RECO to fulfill its mandate? |
RECO maintains the registrar’s complaints and inquiries program to address the complaints and concerns from consumers |
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Economists tend to regard the real estate market in terms of supply and demand forces. However, the market, as with many others that make up the Canadian economy is not a perfect equilibrium between such forces. Which of the following best describes a lack of balance between supply and demand forces? |
A dramatic increase in prices, sometimes described as a “market bubble” may be immediately followed by a rapid decline in price. |
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In the listing agreement who would be principal |
Seller client |
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Broker of record Jane is discussing his plans for the brokerage at a sales meeting. He stresses that the brokerage needs to make into win or place position rather than being content as an also-ran. What Jaen is talking about? |
Market position |
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Salesperson Raffi is developing a listing presentation. Which of the following is a correct statement about the use of such presentation? |
The listing presentation is used to explain to a potential seller how the brokerage will market the property |
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Reduce postage rate, offered by Canada post to mailers of promotional or advertising is called |
Bulk postage rate |
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The four P’s forming a market mix is.. |
Product,price, promotion and place |
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Self actualization is: |
Is the ultimate need when pursuing personal success |
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Subjective Value; |
Is value based on the present worth of perceived future benefits |
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Broker of record Henderson has listed three homes in a particular neighbourhood. All three homes were built by a specific builder, have identical layouts and are located within 700 meters of each other. Which of the following statements is correct? |
The usefulness of all three from a buyer’s perspective could be approximately the same, but listing price variations would probably exist giving different ages, upkeep special features and specific locations. |
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Buyer alleges that the salesperson registrant failed to disclose certain material facts about the property, but elects to close the sale. The salesperson, uneasy with this situation, reported the circumstances to the insuring company under RECO’s insurance program, even though no specific action has been taken. From the insurance perspective, this is best described as; |
A potential claim |
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Real estate council of Ontario; |
Is overseen by a 12 member board of directors |
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A salesperson registrant failed to disclose known material facts about the property to the buyer. The issue was about the quality and quantity of water. Another registrant reported the matter in writing to the registrar. At the same time buyer took legal action against the salesperson and his employing brokerage. Which of the following is correct in regard to this circumstance?1 |
The registrar would review the complaint pursuant to RCI process |
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Real estate brokerages, including employed brokers and salespersons must be; |
Registered under REBBA 2002 |
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Salesperson Singh is having difficulty focusing his efforts on working independently. Which of the following skills appear to be lacking? |
Self-discipline |
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Knowledge of well/ septic tank requirements, wharfs, shoreline, and private easements is most important when focusing on; |
Recreational property |
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Demography is the study of: |
Population changes over time |
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Which of the following statement is correct: |
Cultural values have a strong bearing on how consumers make decisions |
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Brand loyalty as a factor in consumer behaviour: |
Can go beyond basic utilitarian considerations such as functionality , design and reliability |
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Home staging, as a market strategy, is best grouped under which of the following factors impacting consumer behaviour? |
Product appeal |
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The term defining moment is closely associated with: |
Customer Service |
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In marketing terms, the competitive advantage gained by a brokerage that secures and offers a unique, valued service in the marketplace is commonly referred to as: |
A differentiation advantage |
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Various services are typically provided to buyers in the property search, offer and negotiation process. Which of the following is NOT one of them? |
Marketing the property |
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Which of the following statements is most correct regarding open house? |
Brokerage policies regarding open houses should be fully reviewed with sellers, prior to the open house |
