Ohio Real Estate Principles & Practice Exam #1

Front 1

Define Market

Back 1

A place where goods can be bought and sold and a price established.

Front 2

Define Supply & Demand

Back 2

When the demand for houses is high, the prices increase

When the supply is high, housing prices decrease

Front 3

Define Real Estate

Back 3

Land, and all things permanently attached to it, whether natural or man-made

Front 4

Define Land

Back 4

Earth's surface, ownership from the center, infinitely upwards into space: \/

Front 5

Define Capital Gains

Back 5

Profit earned from the sale of an asset

Front 6

Define Real Property

Back 6

Real Estate plus the interests, benefits, and rights inherent with its ownership

Front 7

Name the 5 Bundle of Rights

Back 7

Disposition, Enjoy, Exclusion, Possession, Control (DEEPC)

Front 8

Real Property vs. Personal Property

Back 8

Personal property is movable property. It's anything that can be subject to ownership, except land

Real property is immovable property - it's land and anything attached

Front 9

7 Characteristics of Real Estate

Back 9

Economic Characteristics include Scarcity, Improvements, Permanence of Investment & Area Preference. Physical Characteristics include Immobility, Indestructibility, Uniqueness

Front 10

Ratio for Qualifying Home Buyer

Back 10

PITI + other housing expenses should not exceed 28% of monthly income.

Payment of all debts should not exceed 36% of monthly income.

Front 11

PITI

Back 11

Principal, Interest, Tax, Insurance

Front 12

6 Categories of Real Property

Back 12

1. Residential

2. Commercial

3. Mixed-Use

4. Industrial

5. Agricultural

6. Special Purpose

Front 13

Different Real Estate Specialties

Back 13

Broker, Appraiser, Salesperson, Property Management

Front 14

Different Real Estate Organizations

Back 14

1. NAR National Association of Realtors

2. Women's Council of Realtors

3. CRE Counselors of Real Estate

Front 15

Classifications of Fixtures

Back 15

Permanence, adaptation and agreement

Front 16

Laws that Affect Real Estate

Back 16

Examples of Laws are Contract, General Property, Agency, Real Estate License, Zoning

Front 17

Types of Housing

Back 17

Condominium, PUD, Cooperative, Manufactured, Time-Shares

Front 18

Tax Benefits of Home Ownership

Back 18

Tax Deductions

Front 19

Homeowners Insurance Policies

Back 19

Basic Form (fire, theft, vehicle damage etc.) & Broad Form (burst pipes, snow damage, falling objects)

Front 20

Define ARELLO

Back 20

The Association of Real Estate License Law Officials (ARELLO), supports regulatory agencies in the administration and enforcement of real estate license (or registration) laws in their respective jurisdictions.

Front 21

Explain the Broker's Function

Back 21

Masters complexities of real estate transactions. Handles day-to-day details of running a business. Maintaining space and equipment, hiring employees and salespersons, determining compensation.

Front 22

Employee vs. Independent Contracter

Back 22

Contractor owes taxes, makes a commission agreement with broker, and requires a real estate license

Front 23

How are Brokers Compensated?

Back 23

Must be licensed, the procuring cause, employed by buyer or seller under contract

Front 24

Procuring Cause of Sale

Back 24

To start a chain of events which leads to a sale

Front 25

Antitrust Laws

Back 25

Price Fixing, Group Boycotting, Allocation, Tie-In Agreements

Front 26

Purpose of License Laws

Back 26

Protect the public by requiring certain requirements for licensure

Front 27

What Comprises the Real Estate Commission?

Back 27

Five members appointed by the governor

Front 28

How to Become a Broker in Ohio

Back 28

1. Be a licensed salesperson for at least two years.

2. Have completed at least 20 real estate transactions.

3. Complete four broker prerequisite courses and complete 90 quarter credit hours.

4. Pass the State of Ohio Real Estate Broker's Exam with a 75.

Front 29

Post-Licensing Education for Brokers & Agents

Back 29

10 Hours of classes in current issues, practice, ethics and law within 12 months

Front 30

Ohio Division of Real Estate Duties

Back 30

Investigates complaints, audit & caretaker of records, administers licenses

Front 31

Sales License Voluntary Hold, Resignation, Inactivity & Transfer

Back 31

License can be held for up to 12 months, resigned permanently, or transferred to other brokers. Broker must file certificate of continuance every 3 years or license will be inactive

Front 32

Types of Agency in Ohio

Back 32

1. Single between licensee and seller

2. Single between licensee and buyer

3. Disclosed dual agency between licensee and both seller and buyer

4. Subagency

Front 33

Agency Relationship

Back 33

Fiduciary relationship between licensee and person they represent

Front 34

Fiduciary Relationship

Back 34

Agency relationship based in trust and honesty

Front 35

Sub-Agency

Back 35

Licensee acting for another licensee by performing duties for client (Broker for their Agent)

Front 36

Ohio's Dual Agency Disclosure Law

Back 36

Permitted in Ohio ONLY with the written consent of all parties

Front 37

Consumer Guide to Agency Relationships

Back 37

Ohio Division of Real Estate developed and maintains regulations regarding the content of each brokerage's policy on agency, which must be provided to prospective sellers and buyers

Front 38

6 Fiduciary Responsibilities

Back 38

COLDAC: Care, Obedience, Loyalty, Disclosure, Accounting, Confidentiality

Front 39

How Can a Listing Agreement be Terminated?

Back 39

Fulfilled purpose, expired term, destruction of property, death, or breach by broker or seller

Front 40

CMA vs. Appraisal

Back 40

CMA is an analysis of market activity for comparable properties. Professional appraisal is thorough, gives details estimate of property worth

Front 41

Expenses a Seller Incurs

Back 41

commission, mortgage, tax, title, closing costs

Front 42

Disclosures Required on a Residential Property Disclosure Form

Back 42

Structural condition, hazardous materials, water source, defects known by seller

Front 43

Accretion

Back 43

Increase of land due to mineral deposits from water

Front 44

Erosion

Back 44

Decrease of land due to encroaching water

Front 45

Avulsion

Back 45

Sudden removal of soil by act of nature (landslide)

Front 46

Doctrine of Prior Appropriation

Back 46

State control over water use on property (states where drought is a thing)

Front 47

Party Wall Easement

Back 47

Shared boundary wall between two separate properties

Front 48

Easement by Condemnation

Back 48

Acquired through eminent domain

Front 49

Fee Simple Defeasible

Back 49

Subject to certain conditions

Front 50

Fee Simple with aSpecial Limitation

Back 50

A Fee Simple Defeasible that may be inherited

Front 51

Restriction

Back 51

"Run with the land", affecting use of property indefinitely

Front 52

Conventional Life Estate

Back 52

Owner of life estate is called the life tenant, based on the life of them

Front 53

Estate Pur Autre Vie

Back 53

A duration of a property interest. While it is similar to a life estate, it differs in that a person's life interest will last for the life of another person instead of their own

Front 54

Legal Life Estate

Back 54

Life Estate arranged by law, such as dower

Front 55

Fee Tail Estate

Back 55

Goes to biological child, limited to "issue of the body"

Front 56

Encumbrance

Back 56

Mortgage, tax, lien, easement, land use restriction, outstanding dower right, all of which may diminish property value

Front 57

License's Effect on Real Property

Back 57

Works like easement, but is temporary and created orally usually

Front 58

Agency Disclosure Statement

Back 58

Discloses duties of agent in a dual agency relationship

Front 59

Exclusive Right to Sell Listing

Back 59

One broker appointed to list and receives commission despite who sells

Front 60

Exclusive-Agency

Back 60

Broker is paid only if they are procuring cause

Front 61

Open Listing

Back 61

Only the selling broker is paid

Front 62

Lien

Back 62

A right to keep possession of property belonging to another person until a debt owed by that person is discharged

Front 63

Exclusive Buyer Agency Agreement

Back 63

Broker entitled to payment regardless of who finds property

Front 64

Exclusive-Agency Buyer Agency Agreement

Back 64

Broker entitled to payment only if they locate property

Front 65

Open Buyer Agency Agreement

Back 65

Buyer compensates whichever broker located property