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TREC advertising rules and font requirements

(Info is "one click away")The license holder's name or team name and the broker's name in at least 1/2 the size of the adver- tisement's largest contact information must still appear; however, they may be on a separate page of the account or the user's profile page if the separate page is: • readily accessible by a direct link from the social media or text advertisement • readily noticeable on the separate page or in the account user profile

Seller's Disclosure Notice requirements (A)

(a) A seller of residential real property comprising not more than one dwelling unit located in which is authorized by law to provide water or sewer service to the properties in the thiscestratitfeicsahteadllagrievae.tIof tyhoeurppurocphearsteyriosflothcaetepdroipneartcyeartwificriattednanroetaictehearsepmreasycrbibeesdpebcyiatlhcisostesction or aowr crhitatregnesnothtiacteysouubswtailnl tbiealrlyeqsuimireidlartotopathyebnefotrieceypouresccarnibredcebivyetwhiastesrecotriosnewehricshervcoicnet.ains,There may be a period required to construct lines or other facilities

Seller's Disclosure Notice requirements (B)

(b) The notice must be executed and must, at a minimum, read substantially similar to the be required to pay and the period, if any, that is required to provide water or sewer service following: [See TREC No. OP-H at https://www.trec.state.tx.us/pdf/contracts/OP-H-new.pdf for thedescribed in Paragraph 2 or at closing of purchase of the real property. (t7e)xtPUoBf LdIiCsclIoMsPuRrOe VnEoMtiEcNe.T]

Seller's Disclosure Notice requirements (C)

(c) A seller or seller's agent shall have no duty to make a disclosure or release information related for an improvement project undertaken by a public improvement district under Chapter 372, to whether a death by natural causes, suicide, or accident unrelated to the condition of the property occurred on the property or whether a previous occupant had, may have had, has, or may HIV.

Termination of agency relationships

-At any time by mutual agreement. -The parties are certainly free to terminate the agreement. -Death or incapacity of either party. If the broker or client dies or is determined to be insane, the agency agreement is terminated. Note that, because the parties to an agency agreement are the client and broker, the death or incapacity of a sponsored license holder has no legal effect on the agreement. -Condemnation or destruction of the property. -Condemnation or destruction of the property would make its sale impossible, resulting in termination. -Bankruptcy of either party. -Operation of law. -Revocation of the broker's license. If the broker's license is revoked, all agency agreements with buyers and sellers are terminated. -Abandonment by the agent. -Revocation of the agreement at any time by the principal. -Termination of the agreement at any time by the broker.

Requirements for Independent Contractor Status

-Commissions must compensate the sales agents. There are to be no advances against their commissions. -There may be a policies and procedures manual provided but there may not be mandatory compliance with the policies. It is only a suggested procedure manual. -The sales agent shall pay his own business expenses. -The sales agent cannot be made to attend sales meetings. -The sales agent cannot be made to attend training seminars. -The sales agent cannot be made to work set hours. A broker can require that the agent be "full time," but cannot dictate set work hours. -Sales agents should not be offered participation in the broker's insurance or retirement program.

Benefits of seller agency

-Marketing is the most obvious benefit of seller agency. -Negotiations are easier when a property is listed with an agent. -Legal and financial details of the transaction are better facilitated when using a trained real estate professional. -Time is a valuable commodity. Sellers must deal with "lookers" who are not qualified and who waste the seller's time. -Safety is another major consideration. (listing a house on craigslist)

Intermediary with - requirements/scenarios

-Notice that our in-house sale involves two agents of Broker Bob - Sue with the seller and Bill with the buyer. In this situation, Bro-ker Bob will most likely appointSue to represent the seller, and Bill to represent the buyer. This is referred to as intermediary with appointments. -The broker must make the appointments, most likely by using the Intermediary Relationship Notice. Sue and Bill do not become appointed associ- ates until the broker makes the appointments.

Team names - requirements

-The name of the license holder or brokerage team placing the advertisement -The sponsoring broker's name. TREC requires that the broker's name be at least 1/2 the size of the largest contact information on the advertisement.

Intermediary without appointments - requirements/scenarios

-Under Intermediary rules, Agent Sue can go ahead and complete the transaction, but cannot give advice and opinions to either party. This pro- cess is called intermediary without appointments. -Much like the broker, Sue cannot negotiate for one client to the det- riment of the other client. When the Intermediary process begins, the Intermediary Relationship Notice must be filled out.

net listing characteristics

A broker should only take net listings when the principal insists and when the principal appears to be familiar with the current market values of real property When a broker ac- cepts a listing, the broker enters into a fiduciary relationship with the broker's principal. A real estate license holder is obligated to advise a property owner as to the license holder's opinion of the market value of a property when negotiating a listing or offering to purchase the property for the license holder's own account as a result of contact made while acting as a real estate agent.

Stigmatized properties - conditions and disclosure requirements

A property is stigmatized when some adverse event occurs on-site, or people believe that a past event or condition affects it. A property that is either psychologically or physically stigmatized can be challenging to sell. (Ex. Haunted House)

INTEGRITY

A real estate broker or sales agent has a special obligation to exercise integrity in the discharge of his or her responsibilities, including employment of prudence and caution so as to avoid misrepresenta- tion, in any way, by acts of commission or omission.

Express authority

A written listing agreement or buyer representation agreement is evidence that the agency relation- ship exists and provides the agent with express authority. Express authority also comes from the specific oral instructions given to the agent by the principal.

express authority

A written listing agreement or buyer representation agreement is evidence that the agency relation- ship exists and provides the agent with express authority. Express authority also comes from the specific oral instructions given to the agent by the principal.

Team names - acceptable and unacceptable words

Acceptable- Team and group May use- Realty (followed by team or group) Unacceptable- Company, associates, brokerage

implied authority

Agency authority, or rights, may also be a result of "the norm," or what is considered customary in the business. For example, a homeowner can expect the listing agent to make appointments to show the property, not only during business hours but also on weekends and in the evenings.

Implied authority

Agency authority, or rights, may also be a result of "the norm," or what is considered customary in the business. For example, a homeowner can expect the listing agent to make appointments to show the property, not only during business hours but also on weekends and in the evenings. Weekend and evening showings are standard practice in residential real estate, and this authority is defined asimplied authority.

Types of authority and the definitions

Agency by actual authority Ostensible agency Agency by ratification agency by estoppel agency coupled with an interest express authority implied authority

The concept of Agency and agency relationships

An agency relationship exists when one person, the agent, acts for or on behalf of another person, the principal, also known as the client. This relationship is a fiduciary relationship, meaning that it is a relationship based on trust.

Disclosure

An agent has a duty of full disclosure of all information relating to the property and the other parties in the transaction. Full disclosure includes such things as the broker's opinion of value, negotiation strategies, or techniques to assist the client in negotiating the transaction, motivation of the other parties, and the financial condition of the other party.

Obedience

An agent is obligated to follow all of the lawful instructions of a client. Note that a license holder may refuse to do business with a prospect at will as long as he or she is not doing so for reasons prohibited by the Fair Housing Act.

Honest Dealing

An agent may not deceive, defraud, or otherwise dishonestly deal with a customer.

Confidentiality

An agent must keep any confidential information he/she learns about a client confidential forever. He/she may not disclose it without the client's written consent. The only confidential information an agent may disclose is information the law requires to be disclosed, such as information regarding the condition of the property or the title.

How most real estate agents are paid

Any payment received by Bill will be a direct result of his efforts. There is no salary, and the spon- soring broker will not deduct withholding from commission income. Agent Bill will receive a gross check, and, rather than receiving a W-2, he will receive a 1099-MISC form that will show the sum of the payments received from Broker Bob during the tax year. There is no master-servant relation- ship between a broker and an agent when the agent is an independent contractor.

General Agency

As a general agent, an individual has the right to represent his or her principal in a particular type of transaction or business. One common example of a general agent in real estate is the property manager. (Broker and Client relationship).

Universal Agency

As a universal agent, an individual has the power to act for the principal in all transactions. Universal agency is rarely used in real estate brokerage. An example of universal agency would be an adult child who is given the authority to act for elderly par- ents and carry out all of their financial and business matters.

IRS Independent Contractor Status rules

Commissions must compensate the sales agents. There are to be no advances against their commissions. There may be a policies and procedures manual provided but there may not be mandatory compliance with the policies. It is only a suggested procedure manual. The sales agent shall pay his own business expenses. The sales agent cannot be made to attend sales meetings. The sales agent cannot be made to attend training seminars. The sales agent cannot be made to work set hours. A broker can require that the agent be "full time," but cannot dictate set work hours.

Duties of the principal and the definitions of those duties

Compensation Reimbursement Indemnification Performance

Termination of agency relationships

Death or incapacity of either party, Condemnation or destruction of the property, Bankruptcy of either party, Operation of law, Revocation of the broker's license, Abandonment by the agent, Revocation of the agreement at any time by the principal, and Termination of the agreement at any time by the broker.

CONSUMER INFORMATION

Each real estate inspector or active real estate broker licensed by the Texas Real Estate Commission shall display Consumer Protection Notice CN 1-3 in a prominent location in each place of business the broker maintains. Seethe end of this section for a copy of the form.

exclusive agency listing characteristics

Exclusive agency agreements are often used with builders who list their properties with a broker, primarily to expose their properties through the multiple listing service. Builders still maintain the right to sell the property themselves without paying the broker a fee. The broker is only entitled to a fee if the buyer comes from the efforts of the broker or cooperating broker.

Types of authority for agents

Express authority implied authority

Canons of Professional Ethics

FIDELITY INTEGRITY COMPETENCY CONSUMER INFORMATION DISCRIMINATORY PRACTICES

Fiduciaries and the fiduciary relationship

Fiduciaries are held to the highest amount of good faith, are required to exclude all selfish interest, are prohibited from putting themselves in positions where personal interest and representative interest will conflict and must, in any direct dealing with the principal, make full disclosure of all relevant facts and give the latter an opportunity to obtain independent advice.

Disclosure requirements for the agent to customers and clients

Honest Dealing Reasonable Care and Skill in Performance Disclosure of all Material Facts

Trust Accounts

If a broker holds any funds for a client or a customer, the funds are held in trust, and the broker must place them in a separate account set up for this purpose

Accounting

If a broker holds any funds for a client or a customer, the funds are held in trust, and the broker must place them in a separate account set up for this purpose. Commingling is mixing clients' funds with a broker's business, operating, or personal funds, and TRELA prohibits it. A more serious offense would be conversion. When a broker spends his or her client's funds without authorization, that broker is guilty of conversion. Both commingling and conversion are serious violations of TRELA.

Special Agency

In a special agency relationship, the agent may perform only limited duties for the principal. The special agent is not able to bind (obligate) the principal because he or she is not allowed to sign or accept any terms or conditions on behalf of the principal. The special agent must only follow the instructions of the principal.

duties and requirements

In order to practice Intermediary, the broker must have the written consent of both parties. The writ- ten consent must state the source of any anticipated compensation. We most often obtain written consent from the seller when they sign a listing agreement. We most often obtain written consent from the buyer when they sign a buyer/tenant representation agreement. In that written consent, the seller is giving the broker permission to show his or her property to buyers whom the broker also represents. Likewise, the buyer is giving the broker written consent to show him or her properties listed with the firm.

Intermediary without appointments

In some instances, an agent will have the opportunity to sell his or her own listing. When this happens, it is known as Intermediary Without Appointments.

COMPETENCY

It is the obligation of a real estate agent to be knowledgeable as a real estate brokerage practitioner. He or she should: be informed on local market issues and conditions affecting real estate in the geographic area where a license holder provides services to a client; be informed on national, state, and local issues and developments in the real estate industry; exercise judgment and skill in the performance of brokerage activities; and be educated in the characteristics involved in the specific type of real estate being brokered for others.

TREC website requirements for links to the IABS form

License holders must provide a link to the IABS form in a readily noticeable place on the homepage of their business website, in at least 10-point font, and labeled "Texas Real Estate Commission Information About Brokerage Services." A sales agent or broker must also provide the form at the first substantive communication with a prospective client by one of the following four methods: (1) by personal delivery; (2) by first class mail or overnight com- mon carrier delivery service; (3) in the body of an email; or (4) as an attachment to an email, or a link within the body of an email, with a specific reference to the IABS Form in the body of the email.

loyalty

Loyalty means putting the interests of a client first. Loyalty is working to assist the client in all phases of the transaction to arrive at the best possible result for the client, exercising maximum effort for the client's benefit.

Unlicensed assistants and permitted activities

Manage an office 1. Answer phone calls 2. Register prospects 3. Greet prospects and give general infor- mation about the area 4. Type correspondence 5. Schedule appointments for a license holder to show property 6. Telemarket if not soliciting for listings or buyers

conditions and disclosure requirements of stigmatized property

Murder on the premises, Death on the property, Suicide, Infectious disease, Criminal activity, Property condition issues, and Paranormal activity

DISCRIMINATORY PRACTICES

No real estate license holder shall inquire about, respond to or facilitate inquiries about, or make a disclosure which indicates or is intended to indicate any preference, limitation or discrimination based on the following: race, color, religion, sex, national origin, ancestry, familial status, or handicap of an owner, previous or current occupant, potential pur- chaser, lessor, or potential lessee of real property.

OLDCAR

Obedience Loyalty Disclosure Confidentiality Accounting Reasonable Care

Who can legally earn a commission/sue for a commission/share a commission

Only a broker may earn a commission, and only a broker may sue to collect a commission. The broker may sue a seller who has defaulted on a listing agreement or a buyer who has defaulted on a buyer's representation agreement.

Types of listings and characteristics of types of listings

Open listing,

Sherman Anti-Trust Act and commission rates

Prevents any combination in restraint of trade. Commission rates must always be a matter of negotiation between the broker and the client. Any hint that there is a "stan- dard" or "going rate' for commissions in a given market area could be evidence of violation and restraint of trade.

Open listing characteristics

Real estate brokers recommend against open listings for several reasons. First, the owner may be subject to commission claims by more than one broker. It is not always possible to easily determine who was responsible for the sale, and controversy over this point may lead to expensive litigation. Secondly, brokers are concerned that because the commission is paid to the broker who first finds the buyer, an open listing does not protect the broker who diligently advertises the property. In fact, who was the procuring cause of the sale? The open listing has resulted in many lawsuits between brokers, each claiming commission. These actions are known as procuring cause lawsuits.

exclusive right to sell

Real estate brokers recommend this listing, which grants an exclusive right to sell the property dur- ing the listing term. The broker receives a commission even if the owner sells the property. It is worth noting that most brokers prefer the exclusive right to sell listing agreement because it affords the broker the greatest degree of protection in earning a commission during the listing term, and provided the broker performs as promised, executing a sales contract through to closing and funding.

Reasonable Care

Reasonable care requires that an agent exhibit competence and expertise, keep clients informed, and take proper care of clients' property. Reasonable care includes verifying all information related to a transaction and securing and locking all doors and windows after a showing.

Details in a valid listing

Seller instructs Broker to market the Property at the following price: $(Listing Price). Seller agrees to sell the Property for the Listing Price or any other price acceptable to Seller. Seller will pay all typical closing costs charged to sellers of residential real estate in Texas (seller's typical closing costs are those set forth in the residential contract forms promulgated by the Texas Real Estate Commission).

MULTIPLE LISTING SERVICES characteristics

Sharing listings increases the inventory of properties for sale among mem- ber brokers.

FIDELITY

That the primary duty of the real estate agent is to represent the interests of his or her client, and his or her position, in this respect, should be clear to all parties concerned in a real estate transaction, that however, the agent, in performing his or her duties to the client, shall treat other parties to a transaction fairly; That the real estate agent be faithful and observant to trust placed in him or her and be scru- pulous and meticulous in performing his or her functions; That the real estate agent place no personal interest above that of his or her client.

Buyer representation agreements

The 'appointment' statement affords the agent the same benefits as relayed in the listing agreement, loyalty to the broker, but one should note that the BRA is unique in the sense that a buyer can actually enter into the same type of agreement with multiple brokers, so long as the 'mar- ket areas' do not overlap.

DTPA

The DTPA lists over 30 practices that are considered unlawful under the act in order to protect the consumer from unethical and unfair sales practices. Deceptive Trade Practices Act

TREC - creation/purpose/authority

The Texas Real Estate Commission was created to enforce and administer the act in 1949. The purpose of the act is to protect the public against unscrupulous brokers and sales agents. Since it went into effect, it has been unlawful for anyone to "act in the capacity of, engage in the business of, or advertise or hold himself out as engaging in or conducting the business of a real estate broker or a real estate sales agent within this state without first obtaining a real estate license from the Texas Real Estate Commission.

CMA's

The agent uses sales information from the MLS data to show a seller the market value of the property. The agent bases this analysis on properties that have recently sold that are most similar to the seller's property. If possible, the agent should use data from sales that have closed within the last six months - the more recent the sales data, the better. The CMA will show currently listed properties similar to the subject property.

Intermediary with appointments

The appointed associates will give advice and opinions (which means negotiate) to their respec- tive parties. The broker must make the appointments, most likely by using the Intermediary Relationship Notice.

Duties of the agent and expiration of those duties

The duties of the agent do not end with the termination or expiration of an agency relationship. The duty of confidentiality extends forever into the future. The client is reasonable in expecting confi- dential information will be kept confidential.

multiple listing service

The exclusive right to sell and exclusive agency listing agreements usually call for the broker to place the listing into one or more multiple listing services (MLS). In the multiple listing service, member firms share their listings. Sharing listings increases the inventory of properties for sale among mem- ber brokers.

Termination of Agency Relationships

The expiration of the period stated in the listing contract. The License Act requires that listing agreements must have a definite termination date that is not subject to prior notice:

Disclosure of all materials

The license holder must disclose all facts that he or she knows or should reasonably be expected to know that materially affect the value of or desirability of the property. Facts include disclosure of agency, property condition, and environmental hazards.

DTPA - steps for an agent to help avoid lawsuits

The purpose of the Seller's Disclosure Notice is to have the owner of the property disclose all facts and defects concerning the property. The form is a good tool to use as a defense in a DTPA lawsuit. It should be filled out by the seller, not the seller's agent.

Elements of a valid listing agreement

The signatures of all of the owners and the listing agent, A legal description of the property, including the street address, The list price of the property as set by the seller, A definite starting (commencement) and ending (termination) date

Reasonable Care and skill in performance

This means that an agent will be held to the stan- dards of knowledge, expertise, and ethics that are spelled out in the Texas Real Estate License Act.

exclusive right to sell characteristics

Under an exclusive right to sell, brokers are more willing to spend advertising dollars and their sales efforts securing a buyer. If the property is listed at market value, this type of listing probably serves the interest of both parties. Under this plan, the broker has sufficient time to test the market, design an advertising sales campaign, and market the property under the best possible terms.

Types of agency

Universal agency General agency Special agency

agency coupled with an interest

When a broker is the owner of a propertybeing sold or is interested in buying a property, we have agency coupled with an interest. A realestate license holder is obligated to advise a property owner as to the license holder's opinion of themarket value of a property when negotiating a listing or offering to purchase the property for thelicense holder's own account as a result of contact made while acting as a real estate agent.

Conversion

When a broker spends his or her client's funds without authorization, that broker is guilty of conversion.

Results of broker death and the effect on sponsored agents

When the designated broker of a business entity dies, the licenses of agents sponsored by the business entity are placed on inactive status.

Termination of agency relationships

When the purpose of the agency is completed (i.e., the property is sold). A buyer/tenant repre- sentation agreement is generally for the purchase of a single property. When the property has been purchased, the agreement terminates. There is no presumption of an on-going agency relationship between the broker and buyer. Likewise, a listing agreement terminates when the property is sold and closed. There is no presumption of an on-going relationship with the seller after closing.

Dual Agency

a practice that allows a real estate firm to represent both sides of a transaction (buyer and seller, landlord and tenant) at the same time. In dual agency, the broker represents both parties with their written permission. While there are differences from one state to another, all dual agency laws deal with the conflict that is created when the broker has an agency duty to both sides of a transaction. In Texas, we must use Intermediary instead of Dual Agency.

Intermediary

a process that makes it possible to bring client buyers and sellers together while at the same time representing their best interests. When this type of transaction occurs, the broker becomes the Intermediary. Since the broker has a personal duty to represent both sides, it is only appropriate that the broker remain neutral and avoid negotiating for either party.

TREC rules for advertising and signs

advertisement must contain the broker's name (either the individual name or the entity's name). If the broker uses an assumed name, the use of the assumed name in the advertisement meets this requirement (provided the broker has registered the assumed name with TREC). Additionally, if the assumed name or the corporate name of the broker contains the name of a sales agent, the advertisement should also include the name of the broker or another assumed name of the broker that does not contain the sales agent's name, or name of the designated officer if the sponsoring broker is a corporation.

Disclosure of representation - how and when

all buyers should be provided with an oral or written disclosure of representation at first contact. That disclosure is normally done orally when the buyer first calls or visits the office. Whatever the method of contact, personal visit, phone, fax, or e-mail, the notice of representation should be given.

Subagency

defined as "when a license holder is not associated with the seller's broker but is representing the seller through a cooperative agreement with the seller's broker." Ex. Jim Williams is a 'license holder not associated with the seller's broker.' Jim Williams is associated with XYZ Realty, and the seller's broker is ABC Realty. Jim Williams and XYZ are representing the Jones family, and so is ABC Realty.

appointed associates

give advice and opinions (which means negotiate) to their respec- tive parties. The broker must make the appointments, most likely by using the Intermediary Relationship Notice.

Broker roles - cooperating or cooperative brokers

license holder, agent, subagent, cooperative broker, broker license holder, sales agent license holder, broker associate, sales associate, sellers agent, buyers agent, landlord agent, tenant agent, client, customer.

Commingling

mixing clients' funds with a broker's business, operating, or personal funds, and TRELA prohibits it.

Types of listings and commissions owed under each

open listing, exclusive agency listing, exclusive right to sell, net listing, multiple listing service

Information About Brokerage Services - IABS - purpose and content

pg 149 read

Intermediary

process that makes it possible to bring client buyers and sellers together while at the same time representing their best interests. When this type of transaction occurs, the broker becomes the Intermediary. Since the broker has a personal duty to represent both sides, it is only appropriate that the broker remain neutral and avoid negotiating for either party. The broker cannot do anything that would give an advantage to one client at the expense of the other.

Defamation - definition/explanation/examples

the act of harming another person's reputation by making a false statement to a third party either by slander (spoken words) or libel (printed words). Defamation, per se, occurs when a person publishes a false statement of such a significant matter that the law does not require proof of harm. Usually, a defamation claim requires evidence of: • a false statement, • a statement made to someone other than the person who is allegedly defamed, and • the damage to the person allegedly defamed (either by intention or reckless disregard for the truth).

Defamation of character - written or spoken

the act of harming another person's reputation by making a false statement to a third party either by slander (spoken words) or libel (printed words). Usually, a defamation claim requires evidence of: • a false statement, • a statement made to someone other than the person who is allegedly defamed, and • the damage to the person allegedly defamed (either by intention or reckless disregard for the truth).

Compensation

the agent should be paid on the completion of the agency. For example, in a listing, when the property is sold, the seller (principal) owes a commission (compen- sation) to the broker (agent).

Performance

the principal is expected to perform as promised in the agency agreement. If, for example, you have listed a property, it is reasonable to expect the property to be available to be shown.

reimbursement

the principal should reimburse the agent for expenses incurred on behalf of the principal, above and beyond the expenses related to the sale itself. For example, if the agent paid for a house to be cleaned or a lawn mowed, reimbursement would be expected, assuming the client authorized the expenditure.

Indemnification

the principal will protect the agent from suffering a loss due to the agent's reliance on information received from the principal. For example, if a seller gave a broker false information, which the broker passed on to a prospective buyer, the broker would be justified in expecting indemnification from the seller.

exclusive agency listing

the seller agrees to list the property with only one broker during the listing term, with the provision that the seller can sell the property himself or herself without owing a commission.

net listing

the seller establishes a minimum net amount for his/her proceeds at closing. The real estate broker's commission is the difference between the minimum net established by the seller and the actual seller's net.

open listing

the seller has the right to list the property with multiple competing brokers and to sell the property personally without liability for payment of a commission.

agency by estoppel

when a principal inade- quately supervises an agent. The agent takes on powers that go beyond the scope of authority given by the principal.

Ostensible agency

when actions lead another person to assume that one is an agent. For example, a license holder might falsely make public statements that he or she is representing a com- mercial property owner as a leasing agent or property manager.

Agency by ratification

when an agent acts without prior authorization, and the principal accepts it upon learning of the action. For example, a seller relocating to another state has left the house vacant and listed with a local real estate agent.

Agency by actual authority

when an individual grants express authority to the agent to per- form some act. The authority granted may be in oral or written form.


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