Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following would NOT be a typical expense in a first-year real estate career budget?

1. Two-year insurance premium payable to the Real Estate Insurer of Ontario.

2. Application review fee and salesperson registration fee.

3. Marketing and advertising expense.

4. Vehicle expense and business supplies.

5. License renewal fee.

6. Office space rental.

The correct answer is: Two-year insurance premium payable to the Real Estate Insurer of Ontario.

The correct choice is that a two-year insurance premium payable to the Real Estate Insurer of Ontario would not typically be a first-year expense in a real estate career budget. In a real estate career, many expenses are incurred on an annual basis, and most licensing requirements, such as insurance premiums, will need to be renewed annually. By paying for a two-year premium upfront, an agent may not incur this expense again in their first year, which makes it an atypical first-year expense. In contrast, the other expenses listed—such as application review fees, registration fees, marketing costs, vehicle expenses, business supplies, license renewal fees, and office space rental—are all likely to be encountered within the first year of operation. These expenses are more closely aligned with the general costs that an agent would experience as they establish their business in their initial year.