Texas Law of Agency - Chp. 2 Basic Agency Relationships, Disclosure and Duties to Clients

Fiduciary

- A person in a position of trust and confidence, as between principal and broker; broker as a fiduciary owes certain loyalty which cannot be breached under the rules of agency.

Confidentiality

- An agent is obligated to safeguard his/her principal's lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal's bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.

Universal Agent

- An agent that can serve the principal in any capacity

General Agent

- An agent with full authority over one property of the principal, such as a property manager

Special Agent

- An agent with limited authority to act on behalf of the principal, such as created by a listing contract.

Loyalty

- An agent's duty to place the client's interest above those of all others, including the agent's own self-interest.

Material Fact

- Any fact that would influence the decision of a reasonably prudent person.

Fiduciary Duty

- That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

Reasonable Skill and Care -.

- The degree of care and skill ordinarily used by others competently engaged in the same business.

Obedience

- The fiduciary relationship that obligates the agent to act in good faith at all times, obeying the client's instructions in accordance with the contract.

Agency

- The relationship between principal and the principal's agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.

Disclosure .

- The release of relevant information about a property that may influence the final sale, especially if it represents defects of problems

This is an agent's duty to place their client's interest above those of all others, including the agent's own self-interest...? ALoyalty BAccountability CConfidentiality DObedience

ALoyalty

A listing contract is signed between a principal and a...? AReal estate broker BReal estate salesperson CAssociate licensee DAny of the above

AReal estate broker

If Agent Brandy wishes to represent Seller Jair even though he made that statement, what should Agent Brandy do in order to protect herself? AAgent Brandy should just ignore Seller Jair's statement and show the property to any individual that is interested even though Seller Jair said not to. BAgent Brandy must abide by Seller Jair's statement and only show the property to individuals that are not minorities. CAgent Brandy must explain to Seller Jair that she cannot discriminate against anyone and if she does represent him, she has to show the property to everyone and that is the only way she will represent him. DAgent Brandy must have Seller Jair sign an Exclusive Agency Agreement and then she can discriminate against the people that Seller Jair has requested.

Agent Brandy must explain to Seller Jair that she cannot discriminate against anyone and if she does represent him, she has to show the property to everyone and that is the only way she will represent him.

In order to establish an agency relationship, which of the following must agree to the terms of the agency...? The principal only The agent only Both the principal and agent Neither the agent or principal

Both the principal and agent

According to this fiduciary duty, an agent cannot disclose their principal's motives for selling their property...? Confidentiality Full disclosure Obedience Accountability

Confidentiality

According to this fiduciary duty, an agent must keep confidential any information that may weaken the principal's bargaining position...? AConfidentiality BObedience CReasonable care DLoyalty

Confidentiality

According to the fiduciary duty of obedience, the agent must obey a principal's unlawful instructions...? T (True) F (False)

F (False)

By signing a listing agreement with a principal, an agent can serve as a universal agent to the principal...? T (True) F (False)

F (False)

If Agent Brandy were to take Seller Jair's listing and agree to discriminate against any minority group, what law would Agent Brandy be breaking? AFHA BCMA CBPO DAll of the above

FHA (Fair Housing Act)

A person in a position of trust and confidence, as between a principal and broker is known as a...? Partner Fiduciary Associate Subordinate

Fiduciary

COALD- Care Obedience Accounting Loyalty Disclosure

Fiduciary Responsibilities/Duties

If an agent learns of something that is beneficial to their principal, the agent must reveal the information to the principal as per this fiduciary duty...? Obedience Reasonable care Full disclosure Accountability

Full disclosure

What fiduciary duty does a seller's broker owe to a customer...? Obedience Loyalty Full disclosure Accountability

Full disclosure

Agency can be classified in which of the following ways...? General agency Special agency Universal agency All of the above

General agency Special agency Universal agency All of the above

A property manager is an example of a...? General agent Special agent Specific agent Universal agent

General agent

Which of the following is signed between an agent and their sponsoring broker...? Listing contract Purchase contract Independent contractor agreement Sales contract

Independent contractor agreement

According to the fiduciary duty of obedience, the agent must obey which of the following instructions from the principal...? Unlawful instructions Lawful instructions Any instructions from the principal Only the instructions the agent believes is relevant to the transaction

Lawful instructions

Which of the following contracts establishes an agency relationship between the seller and broker...? Listing agreement Buyer representation agreement Purchase contract Sales contract

Listing agreement

Which of the following contracts can establish an agency relationship...? Listing agreement Buyer representation agreement Property management agreement All of the above

Listing agreement Buyer representation agreement Property management agreement All of the above

Any fact that would influence the decision of a reasonably prudent person is known as a/an...? AMaterial fact BConstructive fact CImpartial fact DImplied fact

Material fact

This is a fiduciary relationship that obligates the agent to act in good faith at all times, obeying the client's instructions in accordance with the contract? AObedience BLoyalty CAccountability DConfidentiality

Obedience

According to this fiduciary duty, an agent must meet deadlines set by the principal and/or client...? AReasonable care and diligence BLoyalty CObedience DConfidentiality

Reasonable care and diligence

An agent owes which of the following fiduciary duties to their principal...? Legal council Accounting services Reasonable care and diligence All of the above

Reasonable care and diligence

What document would Agent Brandy need to have Seller Jair sign in order to create a relationship so that Agent Brandy could sell the subject property? AOne-to-Four Family Residential Resale Contract BResidential Listing Agreement CBuyer Representation Agreement DInformation About Brokerage Services

Residential Listing Agreement

A buyer representation agreement between a buyer and broker creates what type of agency...? ASpecial agency BGeneral agency CUniversal agency DSpecific agency

Special agency

Abby signs a buyer representation agreement with a buyer. What type of agency was created by the agreement...? General agency Special agency Specific agency Universal agency

Special agency

A real estate agent is an example of a...? General agent Specific agent Special agent Universal agent

Special agent

Abby is a real estate broker who represents a seller in a transaction. Abby is serving as what type of agent...? General agent Special agent Specific agent Universal agent

Special agent

The authority of an agent is provided by which of the following...? The customer The principal The lender Anyone involved in the transaction

The principal

David is serving as a power of attorney for Sarah. David is serving as what type of agent...? AUniversal agent BGeneral agent CSpecial agent DSpecific agent

Universal agent