Owen Castellano is a salesperson with Northgate Realty Inc., which uses brokerage representation agreements. On September 2 he signs a seller representation agreement with Farid Haddad, an investor who bought a bungalow at 41 Pinecrest Road in Oshawa in January, renovated it, and now wants to list it at $829,000. During the walkthrough Farid mentions that water came through the north basement wall twice last winter, that he had new drywall and vinyl plank flooring installed over that wall in February, and that he never had the exterior dug up because it would have wrecked his budget. He also says the roof is maybe fifteen years old. Farid hands Owen a feature sheet he wrote himself that reads 'brand new dry basement, fully finished with permits, newer roof'. Owen has not seen a permit for any of the work. On September 9 Lena Moreau of Bayview Property Group, who represents Grace and Tobias Lindqvist under a buyer representation agreement, emails Owen: 'My clients love it. Any history of water in the basement?' They intend to offer $815,000 on Thursday with a home inspection condition and a $40,000 deposit. When Owen tells Farid about the email, Farid replies: 'Say no known issues. The wall is covered, nobody will ever see it, and I am not giving away fourteen thousand dollars over a bit of damp.' Why is the water entry through the north wall a material fact that Owen must deal with?

It is a fact that would affect a reasonable person's decision to buy the house, and that test does not change because new drywall now hides the wall.

It became material once Lena asked about water in her email, because a fact about a property is material only after a buyer raises it as a concern.

It is a latent defect, and only latent defects meet the definition of a material fact because a buyer can discover a patent one without help.

It is a condition that the regulations set out as one of the defects a listing salesperson has to disclose in each case, and water entry appears on that schedule.

Owen Castellano is a salesperson with Northgate Realty Inc., which uses brokerage representation agreements. On September 2 he signs a seller representation agreement with Farid Haddad, an investor who bought a bungalow at 41 Pinecrest Road in Oshawa in January, renovated it, and now wants to list it at $829,000. During the walkthrough Farid mentions that water came through the north basement wall twice last winter, that he had new drywall and vinyl plank flooring installed over that wall in February, and that he never had the exterior dug up because it would have wrecked his budget. He also says the roof is maybe fifteen years old. Farid hands Owen a feature sheet he wrote himself that reads 'brand new dry basement, fully finished with permits, newer roof'. Owen has not seen a permit for any of the work. On September 9 Lena Moreau of Bayview Property Group, who represents Grace and Tobias Lindqvist under a buyer representation agreement, emails Owen: 'My clients love it. Any history of water in the basement?' They intend to offer $815,000 on Thursday with a home inspection condition and a $40,000 deposit. When Owen tells Farid about the email, Farid replies: 'Say no known issues. The wall is covered, nobody will ever see it, and I am not giving away fourteen thousand dollars over a bit of damp.' What should Owen do in response to Farid's instruction to answer 'no known issues'?

Explain that he cannot give or pass along a false answer because a registrant must not be party to a misrepresentation, recommend that Farid get legal advice on what he must disclose, warn him that concealment exposes him to a claim, and withdraw if he insists.

Answer Lena honestly but leave the feature sheet exactly as Farid wrote it, because advertising copy supplied by the seller is the seller's own representation and the salesperson is not responsible for its accuracy.

Reply to Lena that her clients should rely on their home inspection rather than on anything the listing side says, because an answer that neither confirms nor denies the water entry can avoid making a false statement.

Follow Farid's instruction and answer 'no known issues', because what a seller tells his own salesperson in confidence during a walkthrough is confidential information that may not be shared with another brokerage's buyers.

Owen Castellano is a salesperson with Northgate Realty Inc., which uses brokerage representation agreements. On September 2 he signs a seller representation agreement with Farid Haddad, an investor who bought a bungalow at 41 Pinecrest Road in Oshawa in January, renovated it, and now wants to list it at $829,000. During the walkthrough Farid mentions that water came through the north basement wall twice last winter, that he had new drywall and vinyl plank flooring installed over that wall in February, and that he never had the exterior dug up because it would have wrecked his budget. He also says the roof is maybe fifteen years old. Farid hands Owen a feature sheet he wrote himself that reads 'brand new dry basement, fully finished with permits, newer roof'. Owen has not seen a permit for any of the work. On September 9 Lena Moreau of Bayview Property Group, who represents Grace and Tobias Lindqvist under a buyer representation agreement, emails Owen: 'My clients love it. Any history of water in the basement?' They intend to offer $815,000 on Thursday with a home inspection condition and a $40,000 deposit. When Owen tells Farid about the email, Farid replies: 'Say no known issues. The wall is covered, nobody will ever see it, and I am not giving away fourteen thousand dollars over a bit of damp.' Setting aside Farid's instruction, what does Owen owe the Lindqvists about the water entry?

Disclosure of the fact to them as interested buyers where Farid is legally obliged to disclose it, because Owen knows it, with best efforts for a written acknowledgement.

Disclosure after an offer is accepted and only through the agreement of purchase and sale, because earlier disclosure would prejudice the seller's bargaining position in the negotiation.

Nothing beyond an honest answer if they happen to ask about it, because the duty to determine and disclose material facts runs only to Owen's own seller client under the listing agreement.

The same duty he owes Farid, which means reasonable steps, disclosure and advice to consider the fact, because an interested buyer becomes his client for the purpose of that disclosure.

Owen Castellano is a salesperson with Northgate Realty Inc., which uses brokerage representation agreements. On September 2 he signs a seller representation agreement with Farid Haddad, an investor who bought a bungalow at 41 Pinecrest Road in Oshawa in January, renovated it, and now wants to list it at $829,000. During the walkthrough Farid mentions that water came through the north basement wall twice last winter, that he had new drywall and vinyl plank flooring installed over that wall in February, and that he never had the exterior dug up because it would have wrecked his budget. He also says the roof is maybe fifteen years old. Farid hands Owen a feature sheet he wrote himself that reads 'brand new dry basement, fully finished with permits, newer roof'. Owen has not seen a permit for any of the work. On September 9 Lena Moreau of Bayview Property Group, who represents Grace and Tobias Lindqvist under a buyer representation agreement, emails Owen: 'My clients love it. Any history of water in the basement?' They intend to offer $815,000 on Thursday with a home inspection condition and a $40,000 deposit. When Owen tells Farid about the email, Farid replies: 'Say no known issues. The wall is covered, nobody will ever see it, and I am not giving away fourteen thousand dollars over a bit of damp.' Reviewing Farid's feature sheet, each of the following phrases is a problem Owen must fix before he uses it EXCEPT:

'Fully finished' as a description of the lower level, because the new wall board and plank floor are work that Owen has observed for himself.

'Newer roof' as a description of the exterior, because Farid himself put the roof at around fifteen years old and the phrase suggests a recent replacement to the reader.

'With permits' as a description of the renovation, because Owen has seen no permit for the drywall or the flooring and a reader would take the phrase as a confirmed fact.

'Dry basement' as a description of the lower level, because Owen knows the north wall took water twice last winter and was simply covered with drywall.

Tamsin Ellery is a salesperson with Fernbrook Realty Inc., which uses brokerage representation agreements, and she represents Kofi and Elena Marchetti, who are buying a detached house in Brantford listed by Alder Point Realty. Their offer was $642,000 with a $30,000 deposit payable within 24 hours of acceptance, a financing condition running seven business days after acceptance, completion on Friday, June 18, 2027, and a clause in Schedule A in which the sellers warrant that the included chattels and fixtures will be in good working order on completion. The Marchettis' mortgage approval is capped at $580,000, and their lender has said approval usually takes about five business days. The sellers' counter offer raises the price to $654,000 and the deposit to $35,000, deletes the Schedule A warranty, shortens the financing condition to four business days and changes nothing else. Tamsin phones the Marchettis that evening. Line 1, Tamsin: 'The sellers signed back. The price is now $654,000 and the deposit is $35,000.' Line 2, Kofi: 'So we need $12,000 more at closing?' Line 3, Tamsin: 'That's right, $12,000 more on closing day.' Line 4, Tamsin: 'They also took out the working order clause in Schedule A, but that's just boilerplate.' Line 5, Tamsin: 'And the financing condition is four business days now instead of seven.' Line 6, Elena: 'Is everything else the same?' Line 7, Tamsin: 'Yes. You can accept it, sign it back or let it go. I'll send whatever you decide.' Which line of the call misstates the money, and why?

Line 3, because the balance due on completion rises by $7,000; the other $5,000 is extra deposit paid soon after acceptance and credited against the price.

No line misstates it, since the price rises by $12,000 and the balance due on completion always rises by the same amount whatever happens to the deposit.

Line 3, because the balance due on completion rises by $17,000 once the $5,000 deposit increase is added to the $12,000 increase in the price.

Line 1, because a counter offer may not change the deposit the buyers chose, so the sellers' deposit increase has no effect on what the Marchettis owe.

Tamsin Ellery is a salesperson with Fernbrook Realty Inc., which uses brokerage representation agreements, and she represents Kofi and Elena Marchetti, who are buying a detached house in Brantford listed by Alder Point Realty. Their offer was $642,000 with a $30,000 deposit payable within 24 hours of acceptance, a financing condition running seven business days after acceptance, completion on Friday, June 18, 2027, and a clause in Schedule A in which the sellers warrant that the included chattels and fixtures will be in good working order on completion. The Marchettis' mortgage approval is capped at $580,000, and their lender has said approval usually takes about five business days. The sellers' counter offer raises the price to $654,000 and the deposit to $35,000, deletes the Schedule A warranty, shortens the financing condition to four business days and changes nothing else. Tamsin phones the Marchettis that evening. Line 1, Tamsin: 'The sellers signed back. The price is now $654,000 and the deposit is $35,000.' Line 2, Kofi: 'So we need $12,000 more at closing?' Line 3, Tamsin: 'That's right, $12,000 more on closing day.' Line 4, Tamsin: 'They also took out the working order clause in Schedule A, but that's just boilerplate.' Line 5, Tamsin: 'And the financing condition is four business days now instead of seven.' Line 6, Elena: 'Is everything else the same?' Line 7, Tamsin: 'Yes. You can accept it, sign it back or let it go. I'll send whatever you decide.' What is wrong with line 4?

Deleting the warranty removes the Marchettis' recourse if any included item is not working on completion, so it is a real change to explain, not boilerplate.

The error is raising the clause at all, since whether a schedule change is boilerplate is for the buyers' lawyer to judge after acceptance, not for the salesperson now.

Line 4 is wrong only because the sellers may not delete a schedule clause in a counter offer unless the Marchettis first agree in writing to losing the working order clause.

Nothing is wrong, since the agreement's printed terms already promise that the included chattels and fixtures will work on completion, so the Schedule A warranty only repeated them.

Tamsin Ellery is a salesperson with Fernbrook Realty Inc., which uses brokerage representation agreements, and she represents Kofi and Elena Marchetti, who are buying a detached house in Brantford listed by Alder Point Realty. Their offer was $642,000 with a $30,000 deposit payable within 24 hours of acceptance, a financing condition running seven business days after acceptance, completion on Friday, June 18, 2027, and a clause in Schedule A in which the sellers warrant that the included chattels and fixtures will be in good working order on completion. The Marchettis' mortgage approval is capped at $580,000, and their lender has said approval usually takes about five business days. The sellers' counter offer raises the price to $654,000 and the deposit to $35,000, deletes the Schedule A warranty, shortens the financing condition to four business days and changes nothing else. Tamsin phones the Marchettis that evening. Line 1, Tamsin: 'The sellers signed back. The price is now $654,000 and the deposit is $35,000.' Line 2, Kofi: 'So we need $12,000 more at closing?' Line 3, Tamsin: 'That's right, $12,000 more on closing day.' Line 4, Tamsin: 'They also took out the working order clause in Schedule A, but that's just boilerplate.' Line 5, Tamsin: 'And the financing condition is four business days now instead of seven.' Line 6, Elena: 'Is everything else the same?' Line 7, Tamsin: 'Yes. You can accept it, sign it back or let it go. I'll send whatever you decide.' Line 7 names the three choices without explaining them. Which of the following statements about those choices is NOT accurate?

If they sign back asking for seven business days and the sellers refuse, the sellers' counter is still there for them to accept until its own deadline.

If they accept, they have a binding agreement on the counter's terms, still subject to the four business day financing condition that the counter offer sets.

If they sign back, they might win better terms, but the sellers may walk away, keep negotiating or receive another buyer's offer while they are waiting for an answer.

If they let the counter lapse, negotiations end, and if they later change their minds the sellers may refuse, may have sold or may be weighing other offers.

Tamsin Ellery is a salesperson with Fernbrook Realty Inc., which uses brokerage representation agreements, and she represents Kofi and Elena Marchetti, who are buying a detached house in Brantford listed by Alder Point Realty. Their offer was $642,000 with a $30,000 deposit payable within 24 hours of acceptance, a financing condition running seven business days after acceptance, completion on Friday, June 18, 2027, and a clause in Schedule A in which the sellers warrant that the included chattels and fixtures will be in good working order on completion. The Marchettis' mortgage approval is capped at $580,000, and their lender has said approval usually takes about five business days. The sellers' counter offer raises the price to $654,000 and the deposit to $35,000, deletes the Schedule A warranty, shortens the financing condition to four business days and changes nothing else. Tamsin phones the Marchettis that evening. Line 1, Tamsin: 'The sellers signed back. The price is now $654,000 and the deposit is $35,000.' Line 2, Kofi: 'So we need $12,000 more at closing?' Line 3, Tamsin: 'That's right, $12,000 more on closing day.' Line 4, Tamsin: 'They also took out the working order clause in Schedule A, but that's just boilerplate.' Line 5, Tamsin: 'And the financing condition is four business days now instead of seven.' Line 6, Elena: 'Is everything else the same?' Line 7, Tamsin: 'Yes. You can accept it, sign it back or let it go. I'll send whatever you decide.' After the call Elena emails Tamsin: 'Kofi wants to sign tonight before they change their minds. Honestly, just tell us what you would do.' Which reply best meets Tamsin's duty?

Check with them whether the new terms still fit their budget and their lender's timing, and advise on each option, since the choice is theirs to make.

Explain that she can only pass on the sellers' terms and their reply, since advising buyers on whether to accept a counter would put her judgment in place of theirs.

Tell them to sign tonight, since the sellers can withdraw a counter offer at any moment before it is accepted and speed matters more than the details at this stage.

Tell them to accept and then use the financing condition to reopen the price later, since a condition lets buyers renegotiate whenever they find the agreed terms too costly.

Callum Ferreira is a salesperson with Ridgeback Realty Inc. and the designated representative of Agnes Wojcik, who is selling 23 Birchwood Crescent in Oakville, listed at $1,199,000. In the listing agreement Agnes consented in writing to the property being identified in advertising, and the agreement is silent about advertising the terms of any sale. On Saturday, October 3 Agnes accepts $1,245,000 from buyers represented by Nina Oyelaran of Portside Realty Inc. under a brokerage representation agreement, with a financing condition expiring at 6:00 p.m. on Friday, October 9. Agnes tells Callum she does not want the neighbours to learn the price. On Sunday, October 4 Callum posts a photo of the house on his social media with the caption 'SOLD in 3 days, $46,000 over asking! Ridgeback Realty Inc., Brokerage'. On Friday, October 9 at 3:00 p.m. Nina delivers the buyers' signed waiver of the financing condition. Callum changes the listing status to sold, tells his office manager, and decides not to bother Agnes until Monday because she mentioned a busy weekend. Agnes, when he does reach her, asks him to keep the for sale sign up and the online listing active through October 'in case it falls through', and not to tell anyone the deal is firm. On Tuesday, October 13 a buyer who saw the listing online calls Callum asking to view the house that week. What is wrong with Callum's Sunday, October 4 post?

The post calls the house sold while the agreement is still conditional, and it reveals the price, since neither Agnes nor the buyers consented in writing to disclosing terms of the agreement.

The post's only problem is the price, which could be published once Agnes alone consents, since the seller is the owner of the property and the information.

The post is acceptable as it stands, since Agnes consented in the listing agreement to the property being advertised and the brokerage is properly identified.

The post's only problem is the word sold, which becomes accurate on Friday once the waiver arrives, so the post can stay up as it is and needs no correction after the agreement firms up on Friday.

Callum Ferreira is a salesperson with Ridgeback Realty Inc. and the designated representative of Agnes Wojcik, who is selling 23 Birchwood Crescent in Oakville, listed at $1,199,000. In the listing agreement Agnes consented in writing to the property being identified in advertising, and the agreement is silent about advertising the terms of any sale. On Saturday, October 3 Agnes accepts $1,245,000 from buyers represented by Nina Oyelaran of Portside Realty Inc. under a brokerage representation agreement, with a financing condition expiring at 6:00 p.m. on Friday, October 9. Agnes tells Callum she does not want the neighbours to learn the price. On Sunday, October 4 Callum posts a photo of the house on his social media with the caption 'SOLD in 3 days, $46,000 over asking! Ridgeback Realty Inc., Brokerage'. On Friday, October 9 at 3:00 p.m. Nina delivers the buyers' signed waiver of the financing condition. Callum changes the listing status to sold, tells his office manager, and decides not to bother Agnes until Monday because she mentioned a busy weekend. Agnes, when he does reach her, asks him to keep the for sale sign up and the online listing active through October 'in case it falls through', and not to tell anyone the deal is firm. On Tuesday, October 13 a buyer who saw the listing online calls Callum asking to view the house that week. When the buyers' waiver arrives at 3:00 p.m. on Friday, what should Callum do with respect to Agnes?

Convey the waiver to Agnes right away, tell her the agreement is now firm and that he has changed the listing status, and leave the busy weekend to her, since the client decides what is worth interrupting.

Convey the waiver to Agnes on Monday as planned, since the office manager has been told and under a designated representation agreement the brokerage's knowledge of a document counts as the client's own knowledge of it.

Convey the waiver to Agnes on Monday as planned, since the agreement became firm on delivery to him as her representative and nothing she does over the weekend can change that.

Convey the waiver to Agnes only if she asks, since she said she was busy and a registrant should not press unwelcome news about the listing on a client who has signalled she is unavailable.

Free Simulation 1 Practice Questions (Ontario Real Estate)

Simulation 1 tests whether you can apply the residential rules to a file as it unfolds: meeting the client and explaining the RECO Information Guide, taking a listing, finding and disclosing material facts, writing and negotiating offers, and carrying a deal from acceptance to closing. These 10 questions are original scenario questions written for the Ontario program. They come from three cases, and each case has several linked parts, just as a real file builds on itself. Every option is explained, the right one and the three wrong ones. Try each question before you look at the answer.

How to use these questions

Read the case once, then answer each part before you open the explanation. Read every explanation, including the ones for questions you got right, because the wrong options are built on the mistakes students most often make. When you are done, try the same set in the app, which keeps track of your answers and shows you where you slipped.

What the full Simulation 1 practice includes

The full Simulation 1 practice has hundreds of scenario questions across every stage of a residential file, from the first conversation with a buyer or seller to closing. You also get study notes for each part, a Mock Exam, Drill Wrong Answers to bring back the questions you missed, and an AI Tutor that explains a rule in plain words when you are stuck. Access lasts two months for a one-time price of $33.99.

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Topics in Simulation 1

First Conversations: general information versus services, and giving and explaining the RECO Information Guide before you help anyone. See the self-represented party under TRESA and client versus customer.
Taking the Listing: the written listing agreement, checking every fact about the house, and access to the property. See material fact versus material latent defect and latent versus patent defects.
Offers Arrive: handling several written offers, the number of competing offers, and what the seller may direct you to share.
From Accepted to Closed: conditions, waivers and notices of fulfilment, amendments, and the run-up to closing.
The Buyers Sign On: the buyer representation agreement, representation choices and showings. See designated representation versus multiple representation.
Writing the Buyers' Offer: clauses, dates, deposits and conditions, including the condominium status certificate. See the status certificate in an Ontario condo purchase.
Negotiating to a Firm Deal: counter offers, the client's three options, competing offers and FINTRAC steps.
Leasing the Harlow Street Unit: residential leasing, the standard form of lease, deposits and the self-represented tenant.
Conduct Checkpoints: conflicts of interest, trust money, advertising and the other conduct standards under TRESA. See TRESA exam prep and how to prepare for Simulation 1.

Frequently asked questions

Are these real exam questions? No. They are original questions written for the Ontario real estate program. ExamPass is not affiliated with RECO, Meazure Learning or any course provider. The case format and the judgment style mirror what you will face, so the practice transfers.

Which provider is this for? All of them. The four approved providers teach the same program and students write the same standardized exam, so these questions fit whichever provider you study with.

How many free questions are there? The 10 on this page, which you can also answer interactively in the app.

What happens when I unlock? You get the full Simulation 1 practice, study notes, Mock Exam, Drill Wrong Answers and AI Tutor for two months. Any answers you gave to these free questions in the app stay in your progress.