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Principles and Practice Module 2 PowerPoint

The document discusses the requirements for obtaining and maintaining a real estate license in Ohio. It covers topics like pre-licensing education which requires 120 classroom hours across various real estate topics. It also discusses the license exam which contains national and state-specific multiple choice sections. Maintaining a license requires ongoing continuing education and adhering to rules of the Ohio Real Estate Commission which regulates the industry. Grounds for license suspension or revocation include misrepresentation, false promises, undisclosed dual agency, and mishandling of client funds.

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Real Estate Principles & Practices Module 2 February 2015
Chapter 2 - continued Getting a Real Estate License February 2015
Pre-licensing Education • Pre-licensing courses must be completed at an institute of higher learning offering at least a two- year degree program (i.e., Associate Degree) • These courses must consist of 120 hours of classroom instruction covering the following real estate topics: – Principles and practices (40 hours) – Law, civil rights, and fair housing (40 hours—waived for Ohio lawyers) – Finance (20 hours) – Appraisal (20 hours) February 2015
The License Exam • Administered at designated testing centers • An additional fee must be paid to the center when scheduling • Given on a computer • All supplies needed are provided at the test site • Test takers may bring a simple calculator with standard functions (-, +, x, ÷), the calculator may not have alphanumeric keys February 2015
The License Exam • Test takers must present two forms of I.D.: – Government-issued identification bearing a signature and photograph (e.g., driver’s license, state-approved I.D.) – Identification bearing signature and pre- printed legal name • Three hours are allotted for the test (test takers may leave when finished) • Results are provided immediately (cont.) February 2015
Test Format • The test is multiple choice with two parts: – National portion (80 questions) – State-specific portion (40 questions) • 5-10 additional questions may be included in the exam. These are pre-test questions and will not count against the allotted exam time and will not be scored • A scaled score of 70% on each part is required to pass February 2015
Test Topics • Real estate and general law • Civil rights • Fair housing • Ethics • Finance • Appraisal • Principles and practices February 2015
The Ohio Real Estate Commission • Promotes Canon of Ethics for the RE industry in Ohio • Reviews all acts of the Superintendent of the Division of Real Estate • Sets licensing standards • Suspends and revokes licenses • Sets rules of conduct for hearings • Sets licensing exam standards February 2015
The Ohio Real Estate Commission • Sets criteria for continuation in business • Places brokers’ licenses on deposit • Reviews all educational requirements for brokers/salespersons • Updates CE requirements • Published a newsletter (civil rights, fair housing) • Administers the Education and Research Fund • May levy fines up to $2,500 per license law violation, with no limit (cont.) February 2015
The Ohio Division of Real Estate • Administers license laws • Issues Commission and other orders necessary to implement license laws • Investigates written complaints against licensees • Places brokers’ licenses on deposit • Audits brokers’ records and trust accounts February 2015
The Ohio Division of Real Estate • Subpoenas witnesses for investigations • Applies to appropriate courts for injunctions to stop activities that violate real estate law • Administers the Recovery Fund • Superintendent may issue citations up to $200 for violating advertising law, certain agency requirements, and fair housing language law (cont.) February 2015
Chapter 2 Quiz 1.) When must an individual affiliate with a broker? a. after he passes the test b. before he submits his test application c. when he begins his real estate education courses d. when he gets ready to submit his first contract to list or buy February 2015
Chapter 2 Quiz 2.) A person may begin practicing real estate as soon as he a. affiliates with a broker. b. begins his real estate education courses. c. learns that he passed the test. d. learns that his real estate license was issued by the Ohio Division of Real Estate. February 2015
Chapter 2 Quiz 3.) Which statement regarding the Ohio Real Estate Commission is TRUE? a. It consists of five members appointed by the Governor. b. It investigates written complaints against licensees. c. It is run by the Superintendent who is appointed by the Governor. d. It promotes a code of ethics. February 2015
Chapter 2 Quiz 4.) Which statement regarding the Ohio Division of Real Estate is TRUE? a. It consists of five members appointed by the Governor. b. It investigates written complaints against licensees. c. It is run by the Superintendent who is appointed by the Governor. d. It promotes a code of ethics. February 2015
Chapter 2 Quiz 5.) Ohio License law a. limits an agent’s earning potential. b. permits the Commissioners to pass laws in favor of their brokerages. c. protects licensees from fraud, misrepresentation, and deceit. d. protects the public from fraud, misrepresentation, and deceit. February 2015
Chapter 2 Quiz 6.) The Commission does NOT a. audit the broker’s records. b. promote the Canons of Ethics. c. publish a newsletter. d. suspend or revoke licenses. February 2015
Chapter 2 Quiz 7.) The Division of Real Estate does NOT issue a. citations for certain agency law violations. b. fines to licensees found guilty of a fair housing violation. c. real estate licenses. d. subpoenas. February 2015
Chapter 2 Quiz 8.) A real estate salesperson may a. deposit earnest money into a personal checking account as long as it does not pay interest. b. do most things a broker can do. c. sponsor salespeople to work for him. d. write contracts. February 2015
Chapter 3 Keeping Your Real Estate License February 2015
Key Terms • License Inactive • License on Deposit • Real Estate Recovery Fund • Resigned • Revocation • Suspension February 2015
Post-Licensing Educational Requirements • After a license is issued, the licensee has 12 months to: – Complete an approved 10-hour post-licensing course (no more than 8 hours can be taken a day) – Provide evidence to the Division that the licensee satisfied the post-licensing course requirement (failure to do so results in license suspension) February 2015
Continuing Education • All licensees must complete 30 hours of CE on or before their fourth birthday after the initial date of licensure and on or before their birthday every three years • 30 hours are broken down as follows: – 3 hours (Core Law) – 3 hours (Civil Rights Update) – 3 hours (Canons of Ethics) – 21 hours (approved CE electives) February 2015
License Renewal • Licensees are mailed their own renewals • They must renew their own licenses by filing a Certificate of Continuation on or before their birthday. • If a broker doesn’t wish to retain a salesperson’s license, the broker should: – Return the license of that salesperson to the Division for inactivation – Send a notice of inactivation to the salesperson via certified mail within 3 days of the date the license was returned to the Division February 2015
Other License Statuses • License on deposit • Inactive license • Resigned status • Suspension • Revocation February 2015
Complaint Procedure • Resolution can be pursued when conflicts arise between real estate brokers and/or salespersons and the public or other real estate professionals • Complain can be filed with the Ohio Division of Real Estate or the local board of REALTORS® (if the licensee is a member) • A civil suit can also be filed February 2015
Complaint Procedure—Role of Superintendent • Superintendent reviews the facts/supporting documentation for jurisdiction • If within his jurisdiction, the law provides for a voluntary informal mediation • If the parties fail to agree, the complaint is researched by an investigator (assigned by the Superintendent) • Upon completion of investigation, complaint is either dismissed or placed on the docket for a formal hearing by an independent Hearing Examiner February 2015
Complaint Procedure—Role of Superintendent • The Hearing Examiner makes a finding of facts as to whether any licensing laws have been violated • Superintendent reviews the finding and makes a recommendation to the Commission • The Commission determines what course of action to take • The licensee has the right to appeal (cont.) February 2015
Role of the Real Estate Recovery Fund • Used to satisfy unpaid judgments against real estate licensees for activities in violation of the license law that caused financial loss to the claimant • The amount in the Fund determines what amount, if any, the Commission may impose as a special assessment to those renewing their licenses • The payment ceiling is $40,000 for each licensee involved in a transaction February 2015
License Suspension and Revocation • Suspension: A license is withdrawn for a specified period of time and calls for the performance of a condition prior to reactivation • Revocation: Permanently withdrawing a real estate licensee’s license. • See Ohio Revised Code §4735.18 for the reasons for suspension or revocation February 2015
Ohio Revised Code 4735.18 Reasons for Suspension or Revocation February 2015
OHIO REVISED CODE 4735.18 1.) Knowingly making any misrepresentation. Misrepresentation is defined as passing along false information. A misrepresentation need not be fraudulent, but the licensee must realize it is false at the time he/she makes the misrepresentation. February 2015
OHIO REVISED CODE 4735.18 2.) Making false promises with the intent to influence, persuade, or induce. February 2015
OHIO REVISED CODE 4735.18 3.) Making a continuous course of misrepresentations or false promises through agents, advertising, salespersons, or otherwise. Note the word knowingly is not part of this violation. February 2015
OHIO REVISED CODE 4735.18 4.) Acting for more than one party in a transaction without the knowledge and consent of all parties involved. This encompasses the problem of undisclosed dual agency, in which an agent acts on behalf of both buyer and seller without consent. February 2015
OHIO REVISED CODE 4735.18 5.) Failing to account for, or remit within a reasonable time, any money coming into the licensee’s possession that belongs to others. February 2015
OHIO REVISED CODE 4735.18 6.) Dealing dishonestly, illegally, or with gross negligence or incompetence. February 2015
OHIO REVISED CODE 4735.18 7a.) A final adjudication by a court of law of any violation of any civil rights or fair housing law or any unlawful discriminatory act. The law states that this must arise out of a bona fide purchase or lease attempt, which would exclude actions by testers or checkers. February 2015
OHIO REVISED CODE 4735.18 7b.) A second or subsequent violation of any fair housing or civil rights law, regardless of final adjudication. This violation carries a minimum two month suspension, with the real possibility of license revocation. Any subsequent violations mandate revocation. February 2015
OHIO REVISED CODE 4735.18 8.) Obtaining a license by fraud, misrepresentation, or deceit. February 2015
OHIO REVISED CODE 4735.18 9.) Willfully disregarding this section of the law. February 2015
OHIO REVISED CODE 4735.18 10.) Demanding unearned commissions from other persons who are not licensees. February 2015
OHIO REVISED CODE 4735.18 11.) Dividing commissions with non- licensees. A licensee may pay non- licensees salaries or hourly wages as telemarketers, as long as they do not enter the process of listing, selling, or leasing. However, the licensee may not pay a bonus for leads that become sales. This is referred to as commission splitting. February 2015
OHIO REVISED CODE 4735.18 12.) Misrepresenting membership in a professional association. February 2015
OHIO REVISED CODE 4735.18 13.) Accepting a secret profit on money or assets provided by the principal. February 2015
OHIO REVISED CODE 4735.18 14.) Offering anything of value not in the contract as an inducement. This includes the prohibition against using real estate or improvements thereon as prizes in games of chance. February 2015
OHIO REVISED CODE 4735.18 15.) Acting as an undisclosed principal. This means the licensee is acting on her/his own behalf rather than as an agent. While this is not a problem if disclosure is made immediately, the problem arises when an agent desires a property that he/she is listing. Without disclosure, it might appear that the broker or salesperson could under represent the property to drive the price down. February 2015
OHIO REVISED CODE 4735.18 16.) Guaranteeing future profits. February 2015
OHIO REVISED CODE 4735.18 17.) Placing a sign on any unlisted property. This is a blockbusting technique, designed to get the owner of the property to call, whereupon the owner is told of the entry of certain groups into the neighborhood as an inducement to sell. February 2015
OHIO REVISED CODE 4735.18 18.) Inducing the breaking of a contract to enter another. This can happen when a buyer has just entered into a lease extension. Should the agent invite the buyer to enter into a purchase agreement before resolving the lease problem, the agent has violated licensing law. February 2015
OHIO REVISED CODE 4735.18 19.) Negotiating with an owner who has signed an exclusive right to sell agreement with another office. February 2015
OHIO REVISED CODE 4735.18 20.) Offering real estate without the consent of the owner. This includes offering unauthorized terms of sale. February 2015
OHIO REVISED CODE 4735.18 21.) Causing publication of inaccurate or misleading advertising. All media are covered. Intent is unimportant, and is routinely disregarded. February 2015
OHIO REVISED CODE 4735.18 22.) Falsifying books of account. February 2015
OHIO REVISED CODE 4735.18 23.) Threatening competitors with unwarranted legal action. February 2015
OHIO REVISED CODE 4735.18 24.) Failing to keep complete and accurate records of all transactions for three years of the date of transaction. February 2015
OHIO REVISED CODE 4735.18 25.) Failing to provide true copies of listings and other agreements to all parties at the time the documents are signed. February 2015
OHIO REVISED CODE 4735.18 26.) Failing to maintain a trust account separate from broker funds. The account must be a non interest bearing account with a bank in the state of Ohio. The bank and account number must be provided to the Division as part of a Broker application. February 2015
OHIO REVISED CODE 4735.18 27.) Failing to maintain a separate and distinct account for the deposit and maintenance of rents, security deposits, and other money received in the course of managing real property. February 2015
OHIO REVISED CODE 4735.18 28.) Failing to put expiration dates on all written agency agreements and / or failing to obtain timely signatures on agency disclosure statements. February 2015
OHIO REVISED CODE 4735.18 29.) Having an unsatisfied judgment in any court against the licensee, arising out of conduct as a real estate licensee. February 2015
OHIO REVISED CODE 4735.18 30.) Failing to account on demand for funds placed into a licensee’s hands by a party to a transaction. February 2015
OHIO REVISED CODE 4735.18 31.) Failing to pay a salesperson any due and earned commission within a reasonable time after receipt of funds. February 2015
OHIO REVISED CODE 4735.18 32.) Practicing law without a license to do so. February 2015
OHIO REVISED CODE 4735.18 33.) Having an adjudication of incompetency. February 2015
OHIO REVISED CODE 4735.18 34.) Allowing a non licensee to act on his/her behalf. February 2015
OHIO REVISED CODE 4735.18 35.) Knowingly inserting any materially inaccurate term in a document, including naming a false consideration. February 2015
OHIO REVISED CODE 4735.18 36.) Failing to inform the licensee’s client of the existence of an offer or counteroffer in a timely manner ( unless otherwise instructed by the client, provided that the instruction does not conflict with any state or federal law). February 2015
Ethics in Real Estate • Carry out fiduciary duties • Make proper disclosures • Do not take unfair advantage of people • Be honest with everyone • Treat everyone equally • Keep good documentation February 2015
Canons of Ethics for the Real Estate Industry • The Ohio Real Estate Commission has promulgated the Canons of Ethics • All Ohio licensees are bound by the Canons of Ethics • Members of the NAR and the National Association of Real Estate Brokers are further bound by a separate Code of Ethics February 2015
Common Pitfalls • Forgetting to put an expiration date on a listing agreement • Failing to give copies of contracts to parties as soon as they are signed • Not submitted an agency disclosure form at the time an offer is presented February 2015
Career Tips • Pay attention to all procedural guidelines and rules, especially those mentioned as ones that can result in license suspension or revocation • Treat all people fairly, equally, and with respect • Always keep detailed records of contacts with the public February 2015
Chapter 3 Quiz 1.) Which is a post-licensing requirement? a. Licensees may take no more than ten hours of education per day. b. Licensees must complete a ten-hour post- licensing course within the first year of being licensed. c. Licensees must provide evidence to the Ohio Real Estate Commission that they satisfied their post-licensing requirements. d. Licensees must register their licenses with the Clerk of Courts. February 2015
Chapter 3 Quiz 2.) Which is the license expiration and/or renewal procedure? a. Licenses are automatically renewed at the end of each year. b. Licenses expire on December 31 unless the licensee files a notice of continuation with the Division of Real Estate. c. Licenses expire on the licensee’s birthday and are renewed by the licensee filing a certificate of continuation (notice of renewal) with the Division of Real Estate. d. Licenses expire unless the licensee can prove continued usage. February 2015
Chapter 3 Quiz 3.) Which is NOT a license status? a. license active b. license in escrow c. license inactive d. license on deposit February 2015
Chapter 3 Quiz 4.) A complaint procedure may NOT result in a. an appeal to Common Pleas Court. b. a formal hearing. c. the investigation proceedings becoming a matter of public record. d. a license suspension or revocation and a fine of up to $2,500 per violation. February 2015
Chapter 3 Quiz 5.) The Real Estate Recovery Fund a. can cover any budget deficits. b. can result in unlimited payment of judgments for fair housing violations. c. is used to help licensees get unpaid commissions. d. is used to satisfy unpaid judgments against real estate licensees. February 2015
Chapter 3 Quiz 6.) Which statement regarding suspension of a license is TRUE? a. It can happen only after the third offense. b. It is final and may not be appealed. c. It is for a set period of time with reactivation after the suspension is lifted. d. The licensee may submit a reapplication, which may be denied by the Ohio Real Estate Commission. February 2015
Chapter 3 Quiz 7.) Which statement regarding revocation of a license is TRUE? a. It can happen only after the third offense. b. It is final and may not be appealed. c. It is for a set period of time with automatic reactivation on the day after the revocation is lifted. d. The licensee may submit a reapplication, which may be denied by the Ohio Real Estate Commission. February 2015
Chapter 3 Quiz 8.) A license can be suspended or revoked for a. advertising in the newspaper, in which case the paper was responsible for an error or omission. b. paying non-licensees salaries or wages as telemarketers. c. representing more than one party in a transaction, with the consent of only one of the parties. d. unknowingly making a misrepresentation, because the seller/client gave the licensee the wrong information. February 2015
Chapter 4 The Real Estate Industry February 2015
Key Terms • Condemnation • Cost of Money • Economic Base • Eminent Domain • Escheat • Immobility • Inflation • Land Use Controls • Police Power • Taxation February 2015
Business Aspects of Real Estate • P-E-G-S –Physical Factors –Economic Factors –Governmental Factors –Social Factors February 2015
Physical Factors • Land is immobile, indestructible, unique, and scarce • Climate, topography, proximity to highways, shopping, etc. February 2015
Economic Factors • Business and real estate cycles are influenced by: – Supply and demand – Uniqueness and scarcity – Immobility – Inflation – Cost of money – Economic Base – Market Collapse February 2015
Seller’s vs. Buyer’s Markets • Seller’s Market – A situation in the real estate market where property offerings are scarce and buyers have fewer properties from which to choose • Buyer’s Market – A situation in the real estate market in which buyers have a large selection of properties from which to choose February 2015
Governmental Factors • National and local laws (taxation, police power, zoning, environmental protection laws, eminent domain, escheat) • Fiscal policy • Monetary policy • Secondary mortgage markets • Government programs February 2015
Social Factors • Demographic changes: – Population growth – Population age – Size of families – Migrations of the population February 2015
Chapter 4 Quiz 1.) The economic base of an area a. creates buyer’s markets but not seller’s markets. b. does not influence the local housing market. c. gives stability to a region and supports real estate values. d. is responsible for government money coming in to support an area. February 2015
Chapter 4 Quiz 2.) The cost of money a. does not affect demand for real estate. b. greatly influences a homebuyer’s decision. c. has no influence on a homebuyer’s decision. d. is not the same as interest rates. February 2015
Chapter 4 Quiz 3.) Immobility in the real estate market can be defined as the inability a. of customers to readily move from city to city. b. to move a piece of real estate. c. both a and b d. neither a nor b February 2015
Chapter 4 Quiz 4.) The law of supply and demand says that a. for all products, goods, and services, when demand exceeds supply, prices will fall and when supply exceeds demand, prices will rise. b. for all products, goods, and services, when supply exceeds demand, prices will fall and when demand exceeds supply, prices will rise. c. real estate prices will always rise because real estate is unique and scarce. d. there will always be a shortage of housing due to population growth. February 2015
Chapter 4 Quiz 5.) Which is NOT one of the ways the Federal Reserve Board influences interest rates? a. buying notes b. discount rates c. open market operations d. reserve requirements February 2015
Chapter 4 Quiz 6.) Which is NOT a benefit of the secondary mortgage market? a. Banks have funds they can lend again to other potential homebuyers. b. It moderates real estate cycles by providing local banks and others with stable investments from other regions of the country. c. It standardizes loan criteria. d. Primary mortgage lenders can charge higher interest rates. February 2015
Chapter 4 Quiz 7.) Governments (local, state, or federal) can control or restrict private land use and have an influence on real estate markets through? a. adverse possession. b. guaranteeing loans to veterans. c. underwriting loans. d. zoning restrictions and building codes. February 2015
End Module 2 February 2015

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Principles and Practice Module 2 PowerPoint

  • 1.
    Real Estate Principles& Practices Module 2 February 2015
  • 2.
    Chapter 2 -continued Getting a Real Estate License February 2015
  • 3.
    Pre-licensing Education • Pre-licensingcourses must be completed at an institute of higher learning offering at least a two- year degree program (i.e., Associate Degree) • These courses must consist of 120 hours of classroom instruction covering the following real estate topics: – Principles and practices (40 hours) – Law, civil rights, and fair housing (40 hours—waived for Ohio lawyers) – Finance (20 hours) – Appraisal (20 hours) February 2015
  • 4.
    The License Exam •Administered at designated testing centers • An additional fee must be paid to the center when scheduling • Given on a computer • All supplies needed are provided at the test site • Test takers may bring a simple calculator with standard functions (-, +, x, ÷), the calculator may not have alphanumeric keys February 2015
  • 5.
    The License Exam •Test takers must present two forms of I.D.: – Government-issued identification bearing a signature and photograph (e.g., driver’s license, state-approved I.D.) – Identification bearing signature and pre- printed legal name • Three hours are allotted for the test (test takers may leave when finished) • Results are provided immediately (cont.) February 2015
  • 6.
    Test Format • Thetest is multiple choice with two parts: – National portion (80 questions) – State-specific portion (40 questions) • 5-10 additional questions may be included in the exam. These are pre-test questions and will not count against the allotted exam time and will not be scored • A scaled score of 70% on each part is required to pass February 2015
  • 7.
    Test Topics • Realestate and general law • Civil rights • Fair housing • Ethics • Finance • Appraisal • Principles and practices February 2015
  • 8.
    The Ohio RealEstate Commission • Promotes Canon of Ethics for the RE industry in Ohio • Reviews all acts of the Superintendent of the Division of Real Estate • Sets licensing standards • Suspends and revokes licenses • Sets rules of conduct for hearings • Sets licensing exam standards February 2015
  • 9.
    The Ohio RealEstate Commission • Sets criteria for continuation in business • Places brokers’ licenses on deposit • Reviews all educational requirements for brokers/salespersons • Updates CE requirements • Published a newsletter (civil rights, fair housing) • Administers the Education and Research Fund • May levy fines up to $2,500 per license law violation, with no limit (cont.) February 2015
  • 10.
    The Ohio Divisionof Real Estate • Administers license laws • Issues Commission and other orders necessary to implement license laws • Investigates written complaints against licensees • Places brokers’ licenses on deposit • Audits brokers’ records and trust accounts February 2015
  • 11.
    The Ohio Divisionof Real Estate • Subpoenas witnesses for investigations • Applies to appropriate courts for injunctions to stop activities that violate real estate law • Administers the Recovery Fund • Superintendent may issue citations up to $200 for violating advertising law, certain agency requirements, and fair housing language law (cont.) February 2015
  • 12.
    Chapter 2 Quiz 1.)When must an individual affiliate with a broker? a. after he passes the test b. before he submits his test application c. when he begins his real estate education courses d. when he gets ready to submit his first contract to list or buy February 2015
  • 13.
    Chapter 2 Quiz 2.)A person may begin practicing real estate as soon as he a. affiliates with a broker. b. begins his real estate education courses. c. learns that he passed the test. d. learns that his real estate license was issued by the Ohio Division of Real Estate. February 2015
  • 14.
    Chapter 2 Quiz 3.)Which statement regarding the Ohio Real Estate Commission is TRUE? a. It consists of five members appointed by the Governor. b. It investigates written complaints against licensees. c. It is run by the Superintendent who is appointed by the Governor. d. It promotes a code of ethics. February 2015
  • 15.
    Chapter 2 Quiz 4.)Which statement regarding the Ohio Division of Real Estate is TRUE? a. It consists of five members appointed by the Governor. b. It investigates written complaints against licensees. c. It is run by the Superintendent who is appointed by the Governor. d. It promotes a code of ethics. February 2015
  • 16.
    Chapter 2 Quiz 5.)Ohio License law a. limits an agent’s earning potential. b. permits the Commissioners to pass laws in favor of their brokerages. c. protects licensees from fraud, misrepresentation, and deceit. d. protects the public from fraud, misrepresentation, and deceit. February 2015
  • 17.
    Chapter 2 Quiz 6.)The Commission does NOT a. audit the broker’s records. b. promote the Canons of Ethics. c. publish a newsletter. d. suspend or revoke licenses. February 2015
  • 18.
    Chapter 2 Quiz 7.)The Division of Real Estate does NOT issue a. citations for certain agency law violations. b. fines to licensees found guilty of a fair housing violation. c. real estate licenses. d. subpoenas. February 2015
  • 19.
    Chapter 2 Quiz 8.)A real estate salesperson may a. deposit earnest money into a personal checking account as long as it does not pay interest. b. do most things a broker can do. c. sponsor salespeople to work for him. d. write contracts. February 2015
  • 20.
    Chapter 3 Keeping Your RealEstate License February 2015
  • 21.
    Key Terms • LicenseInactive • License on Deposit • Real Estate Recovery Fund • Resigned • Revocation • Suspension February 2015
  • 22.
    Post-Licensing Educational Requirements • Aftera license is issued, the licensee has 12 months to: – Complete an approved 10-hour post-licensing course (no more than 8 hours can be taken a day) – Provide evidence to the Division that the licensee satisfied the post-licensing course requirement (failure to do so results in license suspension) February 2015
  • 23.
    Continuing Education • Alllicensees must complete 30 hours of CE on or before their fourth birthday after the initial date of licensure and on or before their birthday every three years • 30 hours are broken down as follows: – 3 hours (Core Law) – 3 hours (Civil Rights Update) – 3 hours (Canons of Ethics) – 21 hours (approved CE electives) February 2015
  • 24.
    License Renewal • Licenseesare mailed their own renewals • They must renew their own licenses by filing a Certificate of Continuation on or before their birthday. • If a broker doesn’t wish to retain a salesperson’s license, the broker should: – Return the license of that salesperson to the Division for inactivation – Send a notice of inactivation to the salesperson via certified mail within 3 days of the date the license was returned to the Division February 2015
  • 25.
    Other License Statuses •License on deposit • Inactive license • Resigned status • Suspension • Revocation February 2015
  • 26.
    Complaint Procedure • Resolutioncan be pursued when conflicts arise between real estate brokers and/or salespersons and the public or other real estate professionals • Complain can be filed with the Ohio Division of Real Estate or the local board of REALTORS® (if the licensee is a member) • A civil suit can also be filed February 2015
  • 27.
    Complaint Procedure—Role of Superintendent •Superintendent reviews the facts/supporting documentation for jurisdiction • If within his jurisdiction, the law provides for a voluntary informal mediation • If the parties fail to agree, the complaint is researched by an investigator (assigned by the Superintendent) • Upon completion of investigation, complaint is either dismissed or placed on the docket for a formal hearing by an independent Hearing Examiner February 2015
  • 28.
    Complaint Procedure—Role of Superintendent •The Hearing Examiner makes a finding of facts as to whether any licensing laws have been violated • Superintendent reviews the finding and makes a recommendation to the Commission • The Commission determines what course of action to take • The licensee has the right to appeal (cont.) February 2015
  • 29.
    Role of theReal Estate Recovery Fund • Used to satisfy unpaid judgments against real estate licensees for activities in violation of the license law that caused financial loss to the claimant • The amount in the Fund determines what amount, if any, the Commission may impose as a special assessment to those renewing their licenses • The payment ceiling is $40,000 for each licensee involved in a transaction February 2015
  • 30.
    License Suspension andRevocation • Suspension: A license is withdrawn for a specified period of time and calls for the performance of a condition prior to reactivation • Revocation: Permanently withdrawing a real estate licensee’s license. • See Ohio Revised Code §4735.18 for the reasons for suspension or revocation February 2015
  • 31.
    Ohio Revised Code4735.18 Reasons for Suspension or Revocation February 2015
  • 32.
    OHIO REVISED CODE4735.18 1.) Knowingly making any misrepresentation. Misrepresentation is defined as passing along false information. A misrepresentation need not be fraudulent, but the licensee must realize it is false at the time he/she makes the misrepresentation. February 2015
  • 33.
    OHIO REVISED CODE4735.18 2.) Making false promises with the intent to influence, persuade, or induce. February 2015
  • 34.
    OHIO REVISED CODE4735.18 3.) Making a continuous course of misrepresentations or false promises through agents, advertising, salespersons, or otherwise. Note the word knowingly is not part of this violation. February 2015
  • 35.
    OHIO REVISED CODE4735.18 4.) Acting for more than one party in a transaction without the knowledge and consent of all parties involved. This encompasses the problem of undisclosed dual agency, in which an agent acts on behalf of both buyer and seller without consent. February 2015
  • 36.
    OHIO REVISED CODE4735.18 5.) Failing to account for, or remit within a reasonable time, any money coming into the licensee’s possession that belongs to others. February 2015
  • 37.
    OHIO REVISED CODE4735.18 6.) Dealing dishonestly, illegally, or with gross negligence or incompetence. February 2015
  • 38.
    OHIO REVISED CODE4735.18 7a.) A final adjudication by a court of law of any violation of any civil rights or fair housing law or any unlawful discriminatory act. The law states that this must arise out of a bona fide purchase or lease attempt, which would exclude actions by testers or checkers. February 2015
  • 39.
    OHIO REVISED CODE4735.18 7b.) A second or subsequent violation of any fair housing or civil rights law, regardless of final adjudication. This violation carries a minimum two month suspension, with the real possibility of license revocation. Any subsequent violations mandate revocation. February 2015
  • 40.
    OHIO REVISED CODE4735.18 8.) Obtaining a license by fraud, misrepresentation, or deceit. February 2015
  • 41.
    OHIO REVISED CODE4735.18 9.) Willfully disregarding this section of the law. February 2015
  • 42.
    OHIO REVISED CODE4735.18 10.) Demanding unearned commissions from other persons who are not licensees. February 2015
  • 43.
    OHIO REVISED CODE4735.18 11.) Dividing commissions with non- licensees. A licensee may pay non- licensees salaries or hourly wages as telemarketers, as long as they do not enter the process of listing, selling, or leasing. However, the licensee may not pay a bonus for leads that become sales. This is referred to as commission splitting. February 2015
  • 44.
    OHIO REVISED CODE4735.18 12.) Misrepresenting membership in a professional association. February 2015
  • 45.
    OHIO REVISED CODE4735.18 13.) Accepting a secret profit on money or assets provided by the principal. February 2015
  • 46.
    OHIO REVISED CODE4735.18 14.) Offering anything of value not in the contract as an inducement. This includes the prohibition against using real estate or improvements thereon as prizes in games of chance. February 2015
  • 47.
    OHIO REVISED CODE4735.18 15.) Acting as an undisclosed principal. This means the licensee is acting on her/his own behalf rather than as an agent. While this is not a problem if disclosure is made immediately, the problem arises when an agent desires a property that he/she is listing. Without disclosure, it might appear that the broker or salesperson could under represent the property to drive the price down. February 2015
  • 48.
    OHIO REVISED CODE4735.18 16.) Guaranteeing future profits. February 2015
  • 49.
    OHIO REVISED CODE4735.18 17.) Placing a sign on any unlisted property. This is a blockbusting technique, designed to get the owner of the property to call, whereupon the owner is told of the entry of certain groups into the neighborhood as an inducement to sell. February 2015
  • 50.
    OHIO REVISED CODE4735.18 18.) Inducing the breaking of a contract to enter another. This can happen when a buyer has just entered into a lease extension. Should the agent invite the buyer to enter into a purchase agreement before resolving the lease problem, the agent has violated licensing law. February 2015
  • 51.
    OHIO REVISED CODE4735.18 19.) Negotiating with an owner who has signed an exclusive right to sell agreement with another office. February 2015
  • 52.
    OHIO REVISED CODE4735.18 20.) Offering real estate without the consent of the owner. This includes offering unauthorized terms of sale. February 2015
  • 53.
    OHIO REVISED CODE4735.18 21.) Causing publication of inaccurate or misleading advertising. All media are covered. Intent is unimportant, and is routinely disregarded. February 2015
  • 54.
    OHIO REVISED CODE4735.18 22.) Falsifying books of account. February 2015
  • 55.
    OHIO REVISED CODE4735.18 23.) Threatening competitors with unwarranted legal action. February 2015
  • 56.
    OHIO REVISED CODE4735.18 24.) Failing to keep complete and accurate records of all transactions for three years of the date of transaction. February 2015
  • 57.
    OHIO REVISED CODE4735.18 25.) Failing to provide true copies of listings and other agreements to all parties at the time the documents are signed. February 2015
  • 58.
    OHIO REVISED CODE4735.18 26.) Failing to maintain a trust account separate from broker funds. The account must be a non interest bearing account with a bank in the state of Ohio. The bank and account number must be provided to the Division as part of a Broker application. February 2015
  • 59.
    OHIO REVISED CODE4735.18 27.) Failing to maintain a separate and distinct account for the deposit and maintenance of rents, security deposits, and other money received in the course of managing real property. February 2015
  • 60.
    OHIO REVISED CODE4735.18 28.) Failing to put expiration dates on all written agency agreements and / or failing to obtain timely signatures on agency disclosure statements. February 2015
  • 61.
    OHIO REVISED CODE4735.18 29.) Having an unsatisfied judgment in any court against the licensee, arising out of conduct as a real estate licensee. February 2015
  • 62.
    OHIO REVISED CODE4735.18 30.) Failing to account on demand for funds placed into a licensee’s hands by a party to a transaction. February 2015
  • 63.
    OHIO REVISED CODE4735.18 31.) Failing to pay a salesperson any due and earned commission within a reasonable time after receipt of funds. February 2015
  • 64.
    OHIO REVISED CODE4735.18 32.) Practicing law without a license to do so. February 2015
  • 65.
    OHIO REVISED CODE4735.18 33.) Having an adjudication of incompetency. February 2015
  • 66.
    OHIO REVISED CODE4735.18 34.) Allowing a non licensee to act on his/her behalf. February 2015
  • 67.
    OHIO REVISED CODE4735.18 35.) Knowingly inserting any materially inaccurate term in a document, including naming a false consideration. February 2015
  • 68.
    OHIO REVISED CODE4735.18 36.) Failing to inform the licensee’s client of the existence of an offer or counteroffer in a timely manner ( unless otherwise instructed by the client, provided that the instruction does not conflict with any state or federal law). February 2015
  • 69.
    Ethics in RealEstate • Carry out fiduciary duties • Make proper disclosures • Do not take unfair advantage of people • Be honest with everyone • Treat everyone equally • Keep good documentation February 2015
  • 70.
    Canons of Ethicsfor the Real Estate Industry • The Ohio Real Estate Commission has promulgated the Canons of Ethics • All Ohio licensees are bound by the Canons of Ethics • Members of the NAR and the National Association of Real Estate Brokers are further bound by a separate Code of Ethics February 2015
  • 71.
    Common Pitfalls • Forgettingto put an expiration date on a listing agreement • Failing to give copies of contracts to parties as soon as they are signed • Not submitted an agency disclosure form at the time an offer is presented February 2015
  • 72.
    Career Tips • Payattention to all procedural guidelines and rules, especially those mentioned as ones that can result in license suspension or revocation • Treat all people fairly, equally, and with respect • Always keep detailed records of contacts with the public February 2015
  • 73.
    Chapter 3 Quiz 1.)Which is a post-licensing requirement? a. Licensees may take no more than ten hours of education per day. b. Licensees must complete a ten-hour post- licensing course within the first year of being licensed. c. Licensees must provide evidence to the Ohio Real Estate Commission that they satisfied their post-licensing requirements. d. Licensees must register their licenses with the Clerk of Courts. February 2015
  • 74.
    Chapter 3 Quiz 2.)Which is the license expiration and/or renewal procedure? a. Licenses are automatically renewed at the end of each year. b. Licenses expire on December 31 unless the licensee files a notice of continuation with the Division of Real Estate. c. Licenses expire on the licensee’s birthday and are renewed by the licensee filing a certificate of continuation (notice of renewal) with the Division of Real Estate. d. Licenses expire unless the licensee can prove continued usage. February 2015
  • 75.
    Chapter 3 Quiz 3.)Which is NOT a license status? a. license active b. license in escrow c. license inactive d. license on deposit February 2015
  • 76.
    Chapter 3 Quiz 4.)A complaint procedure may NOT result in a. an appeal to Common Pleas Court. b. a formal hearing. c. the investigation proceedings becoming a matter of public record. d. a license suspension or revocation and a fine of up to $2,500 per violation. February 2015
  • 77.
    Chapter 3 Quiz 5.)The Real Estate Recovery Fund a. can cover any budget deficits. b. can result in unlimited payment of judgments for fair housing violations. c. is used to help licensees get unpaid commissions. d. is used to satisfy unpaid judgments against real estate licensees. February 2015
  • 78.
    Chapter 3 Quiz 6.)Which statement regarding suspension of a license is TRUE? a. It can happen only after the third offense. b. It is final and may not be appealed. c. It is for a set period of time with reactivation after the suspension is lifted. d. The licensee may submit a reapplication, which may be denied by the Ohio Real Estate Commission. February 2015
  • 79.
    Chapter 3 Quiz 7.)Which statement regarding revocation of a license is TRUE? a. It can happen only after the third offense. b. It is final and may not be appealed. c. It is for a set period of time with automatic reactivation on the day after the revocation is lifted. d. The licensee may submit a reapplication, which may be denied by the Ohio Real Estate Commission. February 2015
  • 80.
    Chapter 3 Quiz 8.)A license can be suspended or revoked for a. advertising in the newspaper, in which case the paper was responsible for an error or omission. b. paying non-licensees salaries or wages as telemarketers. c. representing more than one party in a transaction, with the consent of only one of the parties. d. unknowingly making a misrepresentation, because the seller/client gave the licensee the wrong information. February 2015
  • 81.
    Chapter 4 The RealEstate Industry February 2015
  • 82.
    Key Terms • Condemnation •Cost of Money • Economic Base • Eminent Domain • Escheat • Immobility • Inflation • Land Use Controls • Police Power • Taxation February 2015
  • 83.
    Business Aspects ofReal Estate • P-E-G-S –Physical Factors –Economic Factors –Governmental Factors –Social Factors February 2015
  • 84.
    Physical Factors • Landis immobile, indestructible, unique, and scarce • Climate, topography, proximity to highways, shopping, etc. February 2015
  • 85.
    Economic Factors • Businessand real estate cycles are influenced by: – Supply and demand – Uniqueness and scarcity – Immobility – Inflation – Cost of money – Economic Base – Market Collapse February 2015
  • 86.
    Seller’s vs. Buyer’sMarkets • Seller’s Market – A situation in the real estate market where property offerings are scarce and buyers have fewer properties from which to choose • Buyer’s Market – A situation in the real estate market in which buyers have a large selection of properties from which to choose February 2015
  • 87.
    Governmental Factors • Nationaland local laws (taxation, police power, zoning, environmental protection laws, eminent domain, escheat) • Fiscal policy • Monetary policy • Secondary mortgage markets • Government programs February 2015
  • 88.
    Social Factors • Demographicchanges: – Population growth – Population age – Size of families – Migrations of the population February 2015
  • 89.
    Chapter 4 Quiz 1.)The economic base of an area a. creates buyer’s markets but not seller’s markets. b. does not influence the local housing market. c. gives stability to a region and supports real estate values. d. is responsible for government money coming in to support an area. February 2015
  • 90.
    Chapter 4 Quiz 2.)The cost of money a. does not affect demand for real estate. b. greatly influences a homebuyer’s decision. c. has no influence on a homebuyer’s decision. d. is not the same as interest rates. February 2015
  • 91.
    Chapter 4 Quiz 3.)Immobility in the real estate market can be defined as the inability a. of customers to readily move from city to city. b. to move a piece of real estate. c. both a and b d. neither a nor b February 2015
  • 92.
    Chapter 4 Quiz 4.)The law of supply and demand says that a. for all products, goods, and services, when demand exceeds supply, prices will fall and when supply exceeds demand, prices will rise. b. for all products, goods, and services, when supply exceeds demand, prices will fall and when demand exceeds supply, prices will rise. c. real estate prices will always rise because real estate is unique and scarce. d. there will always be a shortage of housing due to population growth. February 2015
  • 93.
    Chapter 4 Quiz 5.)Which is NOT one of the ways the Federal Reserve Board influences interest rates? a. buying notes b. discount rates c. open market operations d. reserve requirements February 2015
  • 94.
    Chapter 4 Quiz 6.)Which is NOT a benefit of the secondary mortgage market? a. Banks have funds they can lend again to other potential homebuyers. b. It moderates real estate cycles by providing local banks and others with stable investments from other regions of the country. c. It standardizes loan criteria. d. Primary mortgage lenders can charge higher interest rates. February 2015
  • 95.
    Chapter 4 Quiz 7.)Governments (local, state, or federal) can control or restrict private land use and have an influence on real estate markets through? a. adverse possession. b. guaranteeing loans to veterans. c. underwriting loans. d. zoning restrictions and building codes. February 2015
  • 96.