RE Midterm

A broker is NOT required to provide a broker price opinion to which of the following?

A customer

What is a fiduciary relationship?

A relationship between a principal and an agent that involves trust and confidence

Which of the following sellers is required to provide the Seller's Disclosure of Property Condition?

A relocation company

Which of the following are buyer-paid compensation?

All of these Flat fees Percentage fees Hourly rates

Broker Fitzroy of Dunoon Realty is the listing broker for seller Roni's property. One of Fitzroy's sales associates is providing customer-level service to buyer Barnie. Which comment(s) by the sales associate to Barnie might place Fitzroy in violation of TRELA?

All of these are violations of TRELA.

How can a licensee avoid creating an unintended dual agency when helping a buyer locate an appropriate home through a MLS service?

Create an expressed buyer agency agreement with the buyer

Which act could NOT lead to the suspension or revocation of a real estate license?

Deliberately withholding information from a buyer-client that the seller has AIDS

TREC Rules

Do not require licensees to be members of trade associations

Which of the following statements BEST describes the status of dual agency in Texas at the present time?

Dual agency is no longer permitted in Texas.

Which of the following statements is TRUE?

Any real estate licensee can use the Intermediary Relationship Notice form created by the Texas Association of REALTORS®.

Tom is the buyer's agent for several employees of a large corporation that is expanding its local office. Tom is meeting with Marsha, who is the listing agent for several townhomes that might be suitable for these clients. When must Tom tell Marsha of his agency relationship with the buyers?

At first contact

A sales agent, acting on behalf of her broker, procures an exclusive right to sell listing agreement from a seller. The type of agency relationship that exists between the broker and sales agent is ___________and the type of agency relationship that exists between the broker and seller is _______________?

Between broker and sales agent is a general agency, and between broker and seller is a special agency.

Which of the following situations is NOT a common way in which unintended dual representation occurs?

Bob the broker represents the seller and Sarah, also a broker, is the buyer.

In which of the following situations would having a buyer-agency relationship be necessary to the buyer?

Buyer wants to remain anonymous

Must a buyer's agent disclose his relationship with a buyer to an owner who is selling a property on her own?

Yes, at first contact

When determining whether to require a retainer fee, a broker should

establish a consistent fee policy for all clients.

A seller signed a listing agreement with Broker A, giving Broker A the authority to represent her in the sale of her home. In the listing agreement the seller promised to pay Broker A his compensation no matter who successfully sold her property at the price, terms and conditions that she agreed upon. This type of listing agreement is called

exclusive right to sell listing agreement

A sales agent is sponsored by a licensed broker. The type of agency relationship created between the sales agent and the broker is generally a

general agency.

An owner of several apartment complexes hires a broker to manage her properties. The broker approves all tenants, makes decisions regarding repairs, pays all expenses for the owner, signs all rental agreements, and hires/fires all apartment employees. The relationship between the owner and the property manager is one of

general agency.

The fiduciary duties demand that a real estate broker, acting as an intermediary in a transaction, place

his personal interest below those of his two clients.

A type of agency whereby the broker represents both buyer and seller is

intermediary agency.

Bay Realty practices exclusive seller agency. In an in-house sale, the buyer

is always Bay Realty's customer.

In Texas, when a buyer contracts with a buyer's broker, determining which broker was the procuring cause of the sale, and therefore deserving of the commission,

is generally a nonissue.

A real estate broker, when engaging in a real estate transaction on her own behalf (i.e., representing herself, not another person)

is obligated to inform any person with whom she deals that she is licensed, and shall not use her expertise to the disadvantage of a person with whom she deals.

According to TRELA, which agreement between a broker and her clients must be in writing?

The broker will act as an intermediary and make appointments.

The seller signs a listing agreement authorizing a broker to represent him with third parties in the sale of his home. This type of agreement is characterized as

a written express agency agreement.

During a listing presentation to a seller, a sales agent is

acting as an agent to her broker and must act in the best interests of the broker during the negotiations of the listing agreement, but owes no agency duties to the seller at this time.

An agent owes fiduciary duties to

all of these.

The fiduciary relationship that arises when one person (a principal) manifests assent to another person (an agent) that the agent shall act on the principal s behalf and subject to the principal s control, and the agent manifests or otherwise consents so to act is called

an agency relationship.

A broker and the broker's sales agents, acting as an agent for a seller, have an obligation to disclose all of the following to a buyer EXCEPT

an appraisal, requested and paid for by the seller, shows the seller s home to be worth $350,000.00 even though the seller s asking price for the home is $390,000.00.

The written listing agreement between the broker and the seller creates

an express agency.

While the Texas Real Estate License Act (TRELA) is a statute, TREC rules

are administrative regulations created by the real estate commission to further the purposes of, and clarify, TRELA, and that have the effect of law relative to licensee conduct for TREC enforcement purposes.

Delegation of authority by a client and acceptance of that authority by the agent

are the core requirements to create an express agency relationship.

A listing broker would be obligated to follow all of the following instructions from a seller EXCEPT

conceal the cracked foundation.

The TRELA mandates that all agency agreements must include a(n)

definite termination date.

Both buyer Betty and seller George gave written authorization for broker Terry to act as an intermediary but without appointments should the situation arise. Betty expresses interest in George's property. In regards to the intermediary transaction that now might arise, TRELA would require

that Terry immediately notify both parties in writing.

The Information About Brokerage Services form informs consumers

that they have a right to choose the type of representation they wish to receive, if any.

A buyer approaches a broker regarding purchasing a new home in the area. The broker presents the Information About Brokerage Services (IABS) form and circles "BUYER" at the bottom of the form. If the buyer signs the form, there is proof that

the buyer has been given notification in writing of various brokerage services available in Texas as required by law.

Is it permissible for a seller to pay a buyer's broker fee?

Yes, it should be stated in the contract.

Broker Bob has a buyer-representation contract with buyer Jay Sterling. Do the licensees who work in Bob's office have any relationship with Sterling?

Yes, they automatically represent Sterling.

Buyer Phillip entered into a buyer-representation agreement with a licensee Fred, a member of his fishing club, who works for a real estate firm that represents both buyers and sellers. After working together for two months, Phillip expressed interest in a new listing that was just acquired by Rita, another licensee working in the same firm as Fred. If Phillip chooses to make an offer on this property, he will

be treated as a customer.

A broker with an office policy of nonexclusive single agency is similar to a broker offering intermediary services in all of these examples EXCEPT

both may represent buyers and sellers in the same transaction.

A licensee holds a real estate broker license but does not wish to run her own office. She may elect to contractually obligate and subordinate herself administratively to another broker to whom she is accountable. The contractually obligated broker is generally called a

broker associate.

A broker has 15 sales agents in her firm. Sales agent #1 procures an exclusive right to sell listing agreement from a seller. The agency relationship of the parties is

broker is agent of seller; seller is principal/client of broker; sales agent #1 is agent to broker and by way of broker is agent for seller; the other 14 sales agents are agents for broker, and by way of broker, are also agents for seller.

The fee to be paid to a buyer's broker by a buyer-client is determined by agreement between

buyer's broker and the buyer.

A seller agrees to list his property with Firth of Clyde Realty. The broker's commission will be anything remaining from the proceeds of the sale once the seller's loan balance and closing costs are paid. The seller and Firth of Clyde Realty have what type of listing agreement?

Net

Which of the following statements BEST describes a benefit of buyer agency to the broker?

No liability for acts of the listing agent

Buyers may hear that the TREC-promulgated contract forms for residential sales contain some buyer compromises and want their buyer's agent to help them prepare an addendum to the contract. Which of the following guidelines should a licensee follow in this situation?

You are not an attorney and must avoid the unauthorized practice of law.

According to its licensing law, which of the following items is required in a buyer-representation contract in Texas?

Termination date

Buyer representation agreements in Texas are promulgated by which of the following entities?

The Texas Association of REALTORS®

What kind of listing agreement would obligate the seller to pay a commission to the listing broker, no matter which broker produces the buyer, but would allow the seller to pay no commission if the seller finds a buyer without any broker's participation?

Exclusive agency

Broker Sue of Dunoon Realty has an office policy of nonexclusive single agency and is representing seller Ivan in the sale of his property. Buyer John comes into the office after seeing Sue's sign on Ivan's property and asks for representation during negotiations for the purchase of the property. Given Sue's office policy, which option would be available to Sue?

Explain the office policy to John and insist that he must be treated as a customer on this in-house negotiation; if he insists on his need for representation, refer John to another broker for representation.

Under Section 5.008 of the Texas Property Code, the statute requires a written seller s disclosure notice for most single-family residential resale properties. Which of the following is true?

If the statutory written seller s disclosure notice is not delivered by the seller to the purchaser on or before the effective date of an executory contract binding the purchaser to purchase the property, the purchaser may terminate the contract for any reason within seven days after receiving the notice.

An amount predetermined by the parties to an agreement as the total amount of compensation an injured party should receive if the other party breaches a specified part of the contract is the definition of which of the following?

Liquidated damages

Which of these would NOT be categorized as a physical material fact?

Missing deed in the public record

Which statement is TRUE when a broker is representing the parties in an intermediary transaction?

The appointed associates of the broker may give the parties advice and opinions.

A broker owns a firm with two sponsored salespersons. The broker obtained the original listing and brought in the potential buyer. Which of the following statements BEST describes the broker s authority to act as an intermediary in the transaction?

The broker should act as the intermediary and appoint each of the sponsored salespersons to the buyer and the seller.

Broker Blake enters into a written agreement to represent seller Kelly and buyer Jenny that also authorizes Blake to act as an intermediary. The written agreement does not specifically address authority for making appointments. If Jenny now wishes to enter into negotiations for the purchase of Kelly's property, what must Blake do before making appointments for his two clients?

Obtain written consent from Kelly and Jenny to make appointments.

Broker A, representing the seller, receives an inspection report from Broker B, the buyer s broker. The report reveals that the heat exchanger is defective. Which of the following is true?

Once Broker A received the report from Broker B, the seller has imputed notice of the existence of the reported defect.

With an in-house sale, the number of brokers that can be involved is?

One

A seller listed her home with a local brokerage firm. The seller tells the broker that a recent death on the property was due to natural causes, when in fact her nephew died because he was electrocuted by faulty wiring. Who is potentially liable for a civil suit under the DTPA if the broker does not disclose the death to a potential buyer?

Only the seller

A seller's agent is permitted by law to

Present an offer from the agent's parents with full disclosure of the relationship

A broker represents a seller and has an office policy of acting as an intermediary. A sponsored salesperson brings in a buyer who wishes to purchase one of the broker's listings. The buyer wishes to remain unrepresented. What is the BEST choice available to the broker in this case?

The broker should continue to represent the seller and treat the buyer as a customer.

Which of the following is a disadvantage of exclusive buyer agency representation?

The possibility of earning commissions from both the listing side and the selling side of the business is eliminated.

A sales agent, acting as an agent for a buyer, assisted the buyer in writing an offer using a contract form designed by the seller s attorney. The attorney s sales contract form did not have any disclosure information specific to the right of the buyer to have an abstract covering the real estate examined by an attorney chosen by the buyer, or his right to be provided or to obtain a title insurance policy. The sales agent did not give that information in writing to his buyer client prior to or at the time of the signing of the offer.

The sales agent is in violation of TRELA and could have his license suspended or revoked and jeopardize any earned commission.

A salesperson sold a property to an unrepresented buyer in a cooperative sale. Which statement is TRUE?

The salesperson represents her broker, who is a subagent of the seller's broker.

A sales agent, acting as the agent for the buyer, takes his buyer client to see several homes currently on the market. While driving through one neighborhood, he finds a For Sale By Owner (FSBO) sign in the yard of one property that his buyer client wants to preview. The sales agent knocks on the door, introduces himself, asks if he can preview the seller s home, but does not give the Information About Brokerage Services form to the owner/seller.

This is a violation of Texas law because the law requires that the sales agent give the Information About Brokerage Services form to prospective buyers, tenants, sellers, and landlords at the first substantive dialogue with a party to the transaction, about a specific property, except in limited circumstances.

Why do in-house sales provide the opportunity for unintended dual agency?

Without an intermediary agreement, the firm cannot represent both parties.

To be able to appoint licensees to the buyer and the seller, the broker must have which of the following?

Written consent to act as an intermediary and written consent to make appointments

The TAR Residential Buyer/Tenant Representation Agreement is a very good example of a buyer representation contract. Standard features of the TAR contract include

a broker protection period.

If a buyer is purchasing a property that will be financed by a Department of Veterans Affairs (VA) loan,

a buyer's broker fee cannot be included in the loan amount.

A seller hires a broker to assist him in the sale of his home. The seller reveals to the broker that his father died from a fall from a second story balcony that collapsed. The broker should treat this as

a death related to the condition of the property that should be disclosed.

An agency responsibility that requires the agent to protect the client and place the client's interests above that of the agent is known as

a fiduciary duty.

The Texas Real Estate License Act is

a licensing statute.

Carson is a broker who works with four licensees. Business is good, and only two licensees are available for Carson to appoint as intermediaries in a transaction. One of these licensees has many years of experience with similar transactions. The other licensee has very little real estate experience but has an MBA. Can Carson appoint the experienced licensee for one party and the inexperienced licensee to the other?

Yes, but one party may later claim that the less-experienced appointee created a disadvantaged position.

Brokers are responsible for their salespersons'

authorized acts.

Seller Mark insisted on having an open listing for his home. As a result, he can continue to seek potential buyers on his own and

avoid paying a commission.

An agent would NOT owe fiduciary duties to a

customer

TRELA holds brokers responsible to

members of the public, TREC, and their clients.

One reason for an agent's obligation to exercise integrity in discharging his responsibilities is to avoid

misrepresentation.

Real estate sales agents

must be sponsored by a licensed real estate broker and must have received his or her license prior to acting as, or representing that, he is a real estate sales agent, even if he has received notification of having passed the sales agent exam successfully. Real estate sales agents derive their authority to act on behalf of a buyer or seller client of the broker, through the broker, and do not have a contractual relationship with either a buyer or seller through the listing agreement.

Broker Sue of Holy Loch Realty has scheduled several showings for Gus, a buyer-client. One of the showings is for a property on Loch Awe Road. Three years ago, Sue was in a buyer-agency relationship with the current owner in the purchase of that property. In regard to the property on Loch Awe Road, Sue

must disclose that all of these are true.

A licensee who represents a principal in a proposed real estate transaction must disclose that representation

orally or in writing, whenever first coming into contact with the other party to the transaction.

In a nonexclusive seller agency, brokers can offer representation services to buyers who are interested in

properties listed by other brokers.

A broker acts as an intermediary between a buyer and a seller. Once appointments are made, the broker must

remain neutral.

Fiduciary duties demand that an agent be

scrupulous and meticulous in performing the agent's functions.

Although a broker may enter into an oral listing agreement, the broker may NOT look to the courts to compel the seller to pay a commission unless the

seller signed an agreement to pay a commission to the broker for selling the property.

A broker is required by TRELA to offer certain minimum services to her seller-client. Minimum service does NOT include

telling other brokers to negotiate directly with the client.

A real estate broker hired by the buyer to locate a property must obey all of the following EXCEPT

the instructions of the seller.

Two salespersons are appointed by their brokers to represent the buyer-client and the seller-client in a transaction using the intermediary brokerage process. The salespersons may disclose

the name of the lender that the buyer has selected.

A seller will be on a business trip for three weeks and requests that his sales agent contact a roofer while he is gone, to make repairs to the roof of his home. The seller gives his sales agent specific instructions about the repairs and asks his sales agent to pass those instructions along to the roofer. The relationships of the parties in this scenario are

the sales agent is agent to the seller/principal; the roofer is the third party vendor; the seller is customer to the roofer/vendor; the agent has no relationship to the roofer except to carry out the instructions of his seller client and remain at arms-length to the roofer.

A cooperating broker acting as a subagent tells a buyer that the seller is filing for divorce and for bankruptcy. This disclosure would be improper unless

the seller authorized the release of this information.

In order to create an agency relationship in a real estate transaction, which of the following is true? To create an agency relationship,

there must be express mutual consent, either oral or written, between the parties to establish an agency relationship. However, the consent may be deemed by the court to be implied if not expressed.

Sales agent for Broker A is successful in obtaining an exclusive right to sell listing agreement from seller. Sales agent for Broker B brings his buyer client to see the listed property of seller. During the buyer s preview of the property, the buyer s agent asks the seller s agent the following question: Do you really think this property is worth the listed price? The seller s agent replies: To be honest with you, the list price is far above the current market value for homes in this area, but if your buyer will just make an offer on the property, the seller will probably take it, because he must sell as quickly as possible. The listing agent

violated his fiduciary duty to his client by revealing confidential information, both about the pricing of the property and the seller s need to sell quickly.

Roni, who has just received her broker's license, immediately opens her own brokerage office, Whiska's Realty. Numerous licensees with whom she has worked in the past approach her for sponsorship. Although Roni is anxious to get started, she has no time to set up a training program. In the past, she focused on property management rather than residential sales and feels insecure in her understanding of intermediary relationships that frequently arise in residential sales. In regard to intermediary services, Roni

would be best advised to deny intermediary services to clients until she had time to formally establish a clear office policy for her new licensees.