3rd Module test review 1

You just sold your first house in Texas! You decide to cash the commission check directly and then give the remainder to your affiliate broker. What type of violation have you just committed?

Accepting commissions other than through your broker

Marie's brokerage relationship with the Clarks has terminated. She has some paperwork she needs to send to them. When she provides this paperwork to them, what is this an example of?

Accounting

Why is it important that a brokerage firm actively enforce the policies and procedures documented in the firm's policies and procedures manual?

Active enforcement helps to ensure compliance from members of the firm and helps protect the broker against claims that there was no expectation of adherence.

What happens if a house for sale is destroyed by a flood before the representation agreement expires?

Agency terminates by operation of law.

A sales agent acts as a(n) ______ of their sponsoring broker.

Agent

Scripted dialogue can be a useful tool to assist licensees with becoming more comfortable discussing exclusive buyer agency with potential clients. Two important points which should be discussed are the benefits to the potential client of an exclusive buyer relationship, and how ________________ will be handled.

Agent compensation

What information must the intermediary disclose even if the seller doesn't want the intermediary to disclose the information?

Any disclosures required by law, such as a material defect that the seller is required to disclose

Which of the following would make the "Choose Your Neighbor" flyer an allowable strategy for finding prospective buyers?

As part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers

Loretta is an unlicensed assistant. Which of the following tasks is she permitted to perform for her broker?

Assemble closing documents.

Lisa is showing homes to Sam, her customer. Why is it important that Lisa disclose to Sam that she is a sub-agent representing the interests of the seller?

Because Sam might expect Lisa to represent his interests

A pre-closing checklist can help ensure that ____________________ has/have completed all of the required tasks prior to the closing date.

Both the seller and agent

You represent a buyer in a transaction that includes a 2% cooperating agent commission to be paid by the seller. Who's your client?

Buyer

A bank that addresses a community development need in its assessment area and donates to recovery efforts of a flooded lower-income area might be an example of the bank supporting what act?

Community Reinvestment Act

After agency terminates, which of the following fiduciary duties survives?

Confidentiality

The licensee owes the client the duty of ______, even after agency is terminated.

Confidentiality

Sometimes a broker from another firm will find a buyer for the seller's property. Which provision in the listing agreement describes the other broker's compensation?

Cooperation with Other Brokers

How may a broker enter into a sub-agency agreement when using a listing agreement that's not listed on an MLS?

Create a broker-to-broker cooperative agreement with the listing broker, requesting a sub-agency relationship

An unrepresented ______ who's a party to a transaction is known as a principal.

Customer

Gregory and Dianne are American citizens of Cuban origin, and when their home loan is denied, they suspect discrimination. Which of the following acts prohibits lender discrimination on the basis of the protected class of national origin?

Equal Credit Opportunity Act

With a few exceptions, there's usually no external punishment for violating which of the following?

Ethics

Why might you opt out of working with a buyer unless you're working under an agency agreement?

Having an agency agreement allows you to represent the buyer's interests.

Which of the following duties does a licensee owe to a buyer with whom no agency agreement exists?

Honesty

What term describes a broker with written consent to act on behalf of both the owner and the buyer in a transaction?

Intermediary

Daniel has an accepted offer. A back-up offer is accepted from Kayla. Which of the following is true?

Kayla's offer increases the chance that Daniel will close on the home.

Russell, a sales agent, has a buyer representation agreement with Keiko. When the transaction closes, the seller pays Russell's commission. Who is Russell's client?

Keiko

What provision in the listing agreement contains the instruction, "Seller instructs Broker to market the property at the following price: $_______"?

Listing Price

Putting clients' interests ahead of all others describes which fiduciary duty?

Loyalty

What duty offers an advantage to both the client and the exclusive buyer's agent?

Loyalty

In which of these situations did the licensee breach the fiduciary duty of loyalty?

Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale.

Broker Joseph tells his clients that the property they're interested in purchasing is zoned as residential, even though he knows it's zoned as commercial. This violation is an example of ______.

Misrepresenting or omitting

Eliza is an unlicensed assistant for the In It to Win It Team at Best Nest Realty. Tom is an associate broker on the team. Which of these activities must be performed by Tom and not Eliza?

Negotiating a commission with a client

Can a licensee in an undisclosed dual agency suit rely on the defense that the implied agency relationship with the buyer wasn't intended?

No, because agency relationships can be implied by the words and conduct of the licensee.

What's the name for a real estate professional who works for neither the buyer nor the seller?

Non-agent

What acronym can be used to remember an agent's fiduciary duties?

OLD CAR

Carrying out a client's instructions describes the duty of ______.

Obedience

Which fiduciary duty requires agents to follow all of their client's lawful instructions?

Obedience

When the client or the agent dies, agency terminates by ______.

Operation of law

Which of the following should you perform only for a client, and not for a customer?

Performing agency-related activities

What's the name of an employment agreement with a property owner who wants to lease out the property?

Property management agreement

Nancy wants to make sure that her brokerage's PPM is a useful risk management tool. She has it all ready to go, and she has sent all firm members a copy and required their signatures. What else should she do?

Provide training

Which fiduciary duty requires agents to provide their clients with quality, knowledgeable, and prudent service, and live up to the trust that is placed in them?

Reasonable skill and care

What determines how much a real estate independent contractor gets paid?

Sales volume

Calvin is the listing agent for Sandra's property. Calvin shows the property to several potential buyers, and Gary makes an offer. Who is Calvin's client?

Sandra

In Texas buyer representation agreements, from whom will the broker first seek to obtain payment of the commission?

Seller, landlord, or their agents

Which of the following actions would be a violation of the Texas Deceptive Trade Practices ‒ Consumer Protection Act?

Shari misrepresents the facts about the reasons for a price decrease.

Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?

She's an agent to Cintra, and the seller is her customer.

What must a broker obtain in order to act as an intermediary in a transaction?

Signed consent from both parties to the dual representation

What type of worker, defined under tax law as an independent contractor and not an employee, includes direct sellers and licensed real estate agents?

Statutory non-employee

Chester has been providing some real estate services for new buyer customer Tom. Which of these is a task that Chester may only perform if he signs an agency agreement with Tom?

Suggest negotiation terms for a listing Tom would like to buy.

Texas licensees must obey the laws, rules, and regulations which govern the practice of real estate in Texas. What entity enforces these rules and regulations?

TREC

Marla's excited about closing on a cute lakefront cottage. But when she reads the report from the home inspection, she learns that the chimney leaks and that there is water damage in several places. This wasn't on any of the seller's disclosures. Which of these is the best option for Marla?

Terminate the agreement and ask for a refund of her earnest money.

TREC is charged with passing rules to enforce, interpret, and explain the provisions of which of the following?

Texas Real Estate License Act

Rachel is a seller agent for the Mittans. The Davises present an offer to Rachel to purchase the Mittans' property. Whose interests should Rachel put first?

The Mittans'

Which entity is charged with administering the laws within TRELA?

The Texas Real Estate Commission

Which statement best describes the duty of loyalty owed to both clients in a transaction with an intermediary?

The intermediary owes loyalty to both parties, and must remain fair and impartial by not offering advice and opinions to either party.

Karen, a sales agent, just obtained her broker's license. Her role at ABC Realty, where she works under Bob, the broker, will now be _________.

A broker associate, acting as a sales agent

Which of the following provides an example of a universal agent?

A court-appointed guardian

Which of the following is true about inadvertent misrepresentation?

A false statement was made.

Barry owns a brokerage firm. His firm's policies and procedures manual hasn't been updated in three years, and several of the items in the manual are out of date. What might happen?

A lawsuit could occur, and the PPM would not be useful in Barry's defense.

When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics?

A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.

Which of the following constitutes fraud in real estate according to the Fraud in Real Estate and Stock Transactions Statute?

A listing agent purposely fails to mention the structural damage caused by a recent electrical fire in the wall.

In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

A market with high inventory and low demand

Which of the following statements is true of a material fact?

A material fact would cause a reasonable person to either act or not act, if that fact were known.

In Texas, it is legal for licensed real estate brokers to rebate commissions to ______.

A party to a transaction

How does TRELA define the term broker?

A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person

Which of the following is true about positive misrepresentation?

A principal was harmed by the misstatement.

Melissa signed a listing agreement with seller Sue after they'd discussed her commission and duties. What else should Melissa have included in the listing agreement?

A termination date

For tax purposes, employees are required to complete IRS form W-4. Which IRS form or forms are independent contractors required to complete?

W-9 form

What is an in-house sale?

When one client of the brokerage wants to buy from or sell to another client of the brokerage

What's required before a broker acting as an intermediary can appoint licensees to clients in a transaction?

Written consent from both the buyer and the seller

Robert and Alice just signed a listing agreement with their new agent, Jan. What type of agency exists between Jan and her clients?

Written express agency

Under what circumstances would dual agency exist?

X Mindy, a buyer represented by Jack of Elite Realty, wants to buy a listing of Mavis's. Mavis also works at Elite Realty.

Randy is a real estate licensee selling his own property. Must he disclose to the buyer that he has a real estate license?

Yes

Can Brady, a sole proprietor broker, act as an intermediary?

Yes, Brady can act as an intermediary without appointments.

Ted is a seller working with a broker acting as an intermediary. Ted is hoping for a quick sale, because he has made an offer another property. Ted has written instructions to the intermediary not to share this information. Should Ted expect the intermediary to keep this information confidential?

Yes, because an intermediary may not disclose confidential information.

Jennifer is the listing agent for the Greens. While showing the property to potential buyers, Jennifer hears them say that they are willing to pay more than they are going to offer. Can Jennifer share this information with the Greens?

Yes, it's in the seller's best interest to know that the buyer is willing to offer more money for the property even when they offer less.

You represented Chloe a few years ago when she sold her home. Now she is a party to a transaction, and you are not representing her because she is a buyer who is making an offer on one of your listings. Do you owe Chloe the duty of confidentiality?

Yes, the duty of confidentiality survives the termination of your brokerage agreement.

You're representing Crystal in the purchase of a house. Crystal has a trust fund and can easily afford the house on which she's made an offer. Which of the following statements is true?

Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.

The way in which independent contractors and employees are compensated and how their income is reported to the IRS differ. Which of the following statements describes how independent contractors are compensated and their income reported?

The worker does not receive a salary and must pay self-employment taxes.

Stella and Josie want to buy a house that already has an accepted offer. They want to submit a back-up offer. Which of the following is true?

Their offer will become effective if the first offer falls through.

Why are net listings illegal in some states?

There's potential for a conflict of interest.

Why are written sub-agency agreements preferred?

To prevent misunderstandings or fraud

Why have most MLSs made sub-agency agreements an optional feature on their listings instead of requiring them?

To reduce liability concerns involved in sub-agency relationships

Margaret, a consumer in a DTPA lawsuit, was able to prove that the licensee in her suit knowingly failed to disclose information. What type of damages is Margaret entitled to?

Up to three times the original damages

Agents must provide the IABS form at the time of first substantive dialogue. What constitutes "first substantive dialogue"?

The first face-to-face meeting, email, call, or text in which a specific property is discussed

Which of the following acts protects Texas consumers against real estate licensees who use false, misleading, or deceptive actions or practices in the advertising, offering for sale, selling, or leasing of personal property or real property?

DTPA

Monica is a listing agent who is in the process of gathering material facts about her client's property. She has had the seller complete the disclosure/disclaimer form, she has checked the public records to verify the seller's information, and she has reviewed the survey data. What else should Monica do?

Disclose any material facts she discovers when gathering listing information.

Fidelity, integrity, competency, consumer information, and _________________ are the Canons of Professional Ethics and Conduct.

Discriminatory practices

What does it mean to say that dual agency was permitted by common law?

Dual agency was permitted because there was sufficient precedent for it in the courts.

Which of the following is one of the buyer's responsibilities, as stated in the TAR Buyer Representation Agreement?

The buyer must work exclusively with the broker during the term of the agreement.

Which of the following best describes why there's a risk of undisclosed dual agency when a licensee works with a customer who is a prior client of the licensee?

The customer may expect the licensee to continue to represent the customer, even though the licensee is representing the other party as a client.

In the TAR Buyer Representation Agreement, the term of the agreement refers to ________.

The dates during which the contract is valid

Simone can't believe that her client won't let her put a lockbox on the property. How does he expect other agents to be able to show the home? Oh well, it's not as if he's asking her to do something illegal. The client's wish is her command. What fiduciary duty is this an example of?

The duty of obedience

Which of the following is an element of positive misrepresentation?

The false statement caused harm to the person who relied upon it.

When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale?

The licensee is permitted to list other properties for sale, even if they're competing properties.

When a DTPA lawsuit is found to be groundless, the law allows for which of the following?

The person initiating the lawsuit is responsible for the defendant's attorney fees and court costs.

Who has the ultimate responsibility for the sales agent's actions in Texas?

The sales agent, and the sales agent's broker

Tavia is helping Shawn find a house. There is no agency agreement in place. Who does Tavia represent?

The seller

Who is responsible making all home repairs and meeting other terms of the sales agreement regarding the home?

The seller

Buyer's agent Brock and his client, Clark, meet the seller and her agent. To whom must Brock provide his agency disclosure?

The seller and her agent