Goal Setting and Forecasting Practice Questions

Question 1 of 5

Under TRESA, can a registrant pay a referral fee to an unregistered individual who referred a client?

• AYes, anyone who provides a referral can receive a fee — tresa restricts referral fee payments to registered individuals
• BNo — TRESA prohibits paying referral fees or commissions to individuals who are not registered with RECO; only registered brokerages and salespersons can receive referral fees, and such fees must flow through the respective brokerages; paying referral fees to unregistered individuals is a regulatory offence
• CReferral fees are prohibited entirely under TRESA, noting that referral fees between registered parties are permitted and common
• DReferral fees to unregistered individuals are permitted if under $500; however, there is no dollar threshold that makes referral fees to unregistered individuals permissible

Question 2 of 5

A registrant is considering hiring a transaction coordinator at $500 per transaction to handle administrative tasks from accepted offer to closing. They close 20 transactions per year. Is this a worthwhile investment?

• AThe investment analysis supports hiring a transaction coordinator: (1) annual cost: 20 × $500 = $10,000, (2) time savings: each transaction requires approximately 15-20 hours of administrative work (document preparation, deadline tracking, communication with lawyers/lenders/inspectors, condition monitoring); at 20 transactions = 300-400 hours saved annually, (3) time value: 350 hours × $100/hour = $35,000 in freed time, (4) ROI: ($35,000 - $10,000) / $10,000 = 250%, (5) additional benefits: fewer errors (the coordinator is specialized), better client experience (faster response on administrative matters), and reduced registrant stress during busy periods; the freed 350 hours could be used for prospecting (potentially generating 5-7 additional transactions worth $60,000-$84,000 in commission) or personal time (improving quality of life and preventing burnout)
• B$500 per transaction is too expensive real estate
• CThe registrant should handle all administrative tasks personally to maintain control, and real estate, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• DTransaction coordinators are only for teams with 50+ transactions, and real estate

Question 3 of 5

A registrant sets a goal to 'do more business next year.' According to SMART goal-setting principles, what is wrong with this goal and how should it be reformulated?

• ANothing is wrong — the goal is clear and motivating, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• BOnly financial goals need to follow the SMART framework real estate
• CGoals should be kept vague to allow flexibility real estate
• DThe goal fails all SMART criteria: it is not Specific (what does 'more' mean?), not Measurable (no quantifiable target), not Achievable (no context for feasibility), not Relevant (does not specify which aspect of business), and not Time-bound (no deadline beyond 'next year'); a SMART reformulation: 'Close 20 transactions by December 31, generating $240,000 in GCI, by increasing prospecting contacts to 25 per week and converting 15% of listing appointments' — this is specific, measurable, achievable (based on current performance plus improvement), relevant, and time-bound

Question 4 of 5

A registrant's income is highly seasonal — 60% of their annual income arrives between March and June. How should they budget for the remaining 8 months?

• ASpend proportionally to income each month, under standard business planning methodology for real estate professionals, which involves analyzing revenue streams, cost structures, market positioning, and growth opportunities, and based on the business performance metrics and financial analysis techniques applicable to evaluating real estate practice profitability, efficiency, and growth potential
• BOnly spend during months when income is received, under standard business planning methodology for real estate professionals, which involves analyzing revenue streams, cost structures, market positioning, and growth opportunities
• CBorrow during slow months and repay during peak months, based on the business performance metrics and financial analysis techniques applicable to evaluating real estate practice profitability, efficiency, and growth potential
• DThe registrant should implement income smoothing: (1) calculate total annual fixed expenses (business + personal) and divide by 12 to determine the monthly requirement, (2) during high-income months (March-June), set aside excess funds in a dedicated account to cover low-income months, (3) create a monthly draw: pay themselves a consistent monthly amount from the business account regardless of when commission cheques arrive, (4) maintain a buffer: keep 3 months of expenses in the business account at all times, (5) budget timeline: March-June income ($108,000 on a $180,000 annual GCI) must fund both those months' expenses AND contribute to reserves for July-February

Question 5 of 5

A registrant is setting goals for the first time and wants to determine a realistic transaction target. They are in their second year with 8 transactions completed in Year 1. What framework should they use?

• ATarget 50 transactions — dream big, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• BA realistic framework builds from the current base: (1) baseline: 8 transactions in Year 1, (2) improvement sources: what will the registrant do differently? More prospecting (quantify the increase), improved conversion (estimate the improvement), expanded SOI (how many new contacts), enhanced marketing (specific new channels), (3) each improvement should be individually estimated: if 25% more prospecting generates 2 more leads/month, and 10% better conversion generates 1 more client/quarter, the combined effect might produce 12-15 transactions, (4) a target of 12-14 transactions (50-75% growth) is ambitious but achievable for a developing registrant, (5) stretch goal: 16 transactions provides aspiration without being demotivating if missed
• C8 transactions is the maximum a second-year registrant can achieve, and
• DNew registrants should not set transaction targets, and as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate