Tingnan ang lahat ng mga set ng pag-aaral

LAW OF AGENCY

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Intermediary Disclosure -

-Whether the broker is representing them exclusively

In most cases, broker compensation, as a percentage of home price, falls somewhere between __ .

5-7%

A consumer wishing to pursue a DTPA claim must provide _________ written notice before filing suit. This is how long the agent has to respond to the complaint.

60 days

Foreign Broker:

A Broker licensed outside of Texas.

Substantive Communication:

A meeting or written communication that involves a substantive discussion relating to specific real property

Attorney Representation:

A situation in which a real estate attorney can represent the buyer in the purchase of a home (this option is only available in certain states)

Third Party:

A third party is any person involved in a real estate transaction who is not your client

Security:

A tradable financial asset of any kind

Non-agency:

A type of agency in which the buyer chooses to find and purchase a home without being represented by an agent

The buyer can use the listing agent as their agent.

TRUE

The pre-license course you're currently taking is regulated by TREC.

TRUE

Procuring Cause:

The defining actions that brought a buyer to purchase a property

General Agency:

The relationship between a broker and a principal wherein the broker has broad authority to act on behalf of the principal and can bind the principal in a transaction

Seller Agency:

The relationship between a real estate agent and the seller in the brokerage of homes

Revocation:

The termination of an agreement by the person who granted it, such as when as when a principal terminates an agency relationship

Which of the following items would Listing Broker Lisa need to disclose to the prospective Buyer Billy Jean?

a known crack in the house foundation

What is the best way to create an agency agreement with a seller?

a listing agreement

Ostensible agency -

a principal allows a license holder to act in such a way as to cause a third party believe that license holder is that principal's agent.

A substantive dialogue is one wherein the agent and buyer discuss ____.

a specific property

Ostensible agency or agency by estoppel is created when WHO is misled about the agency relationship?

a third party

Which is NOT one of the three types of agency?

abstract agency

When is agency by estoppel typically created?

after the actions of the agent have already occured

When Avery informed the prospective tenant that the rental price would be negotiable after a month, which fiduciary duty did she violate?

confidentiality

Private remedies are lawsuits brought by _____.

consumers

Which of the following is TRUE about home warranties?

coverage and exclusions may differ from one company to another.

Which of the following events would NOT invalidate a listing agreement?

death of a sales agent

By sharing listings to a private Facebook group, the agents involved are:

decreasing competition

In order to get their license, a TREC real estate license applicant MUST ___________.

demonstrate competence by passing the licensing exam

What is NOT one of the ways buyer agency can be created?

dependent authority

A buyer profile helps an agent:

determine the property needs and wants held by their client

Who can terminate the buyer-agent relationship?

the agent or the buyer

Seller Simone told her agent she received an insurance check for water damage but spent the money on a new car. The damage was never repaired. What should Simone's agent do?

the agent should disclose the information, as it is a material fact about the property.

Curb Appeal:

the attractiveness of the property, as viewed from the street (exterior)

The listing agreement usually creates an agency relationship between:

the broker and the seller

According to Section A2, which of the following is NOT a reason that a buyer might be considered an "excluded prospect?"

the broker has listed the individual by name as an "excluded prospect"

All of the following are true of intermediary relationships EXCEPT:

the broker may not appoint in-house agents to communicate with the parties

What are two things customers expect from their sales agents?

honesty and fairness

Which of the following are non-fiduciary duties?

honesty and fairness

Professional Code of Ethics:

identify the TREC Canons of Professional Ethics and Conduct and the Code of Ethics and Standards of Practice of the National Association of REALTORS®.

Because Priya included an "as is" clause in the contract, her claim is:

illegitimate because the commission of fraud supersedes any contract terms

The safest way to establish an agency relationship with a seller is to do so:

in writing

Which listing agreement allows multiple real estate brokers (and the owners themselves) the right to sell the property, with a commission being paid to whomever is the procuring cause of the sale?

open listing

"Foreign Broker" refers to any broker located:

outside the state of Texas

While filling out the contracts in a contract workshop, how can you access the story scenario?

selecting the image for each question

A Statement of Understanding:

serves as a yearly acknowledgement that the agent understands and agrees to the terms of employment as an independent contractor.

Which type of agency is legal in Texas?

single agency

All of the following can be disclosed EXCEPT:

someone infected with HIV lived at a dwelling

To a client, what is a broker considered to be?

special agent

A seller needs to bring all of the following on closing day EXCEPT:

tax records

If the seller does not provide the buyer with a completed Seller's Disclosure Notice before signing the contract, the buyer has a legal right to:

terminate the contract within 7 days of receiving the notice

All of these are causes to terminate an agency agreement EXCEPT:

the death of an agent

In a seller subagency, who does the subagent represent?

the seller

Who must fill out the Seller's Disclosure Notice?

the seller

Disclosure must be provided in a manner that is ____.

timely

The practice of ____ disclosure will often prevent misunderstandings regarding agency representation.

timely

Which of these forms satisfies the written property disclosure requirement?

ALL CHOICES ARE CORRECT (TAR's Seller Disclosure Notice, Seller's disclosure forms provided by brokerages and associations that contain all of the disclosures requires by law, & TREC's Seller's Disclosure Notice)

Direct Activities:

Activities (that usually require a license) in which a person directly helps another buy, sell or lease real property

Who can make real estate disclosures through verbal statements?

Both the seller and the agent

Which of these is one of the four D's of disclosure?

The buyer is a client of the subagent.

FALSE (Explanation: The buyer is a customer, but not client, of the subagent.)

The homebuying process is typically easier when a buyer does NOT use an agent.

FALSE (Explanation: The homebuying process is typically easier when a buyer uses an agent.)

How much do residential agents charge on commission?

It depends

All of the following statements are valid reasons to avoid agency relationships formed through oral agreements EXCEPT:

It is NOT enforceable against the broker.

Which of the following is recommended as a way to protect yourself from lawsuits?

Keeping organized client records

A buyer can compensate their agent by requiring them to get compensation from the seller first, and if unsuccessful, the agent can request that the buyer pays the commission.

TRUE

A customer's signature on the IABS Notice does NOT constitute written agency.

TRUE

A license is required if an assistant is executing a task that is considered real estate and they earn anything of value for doing it.

TRUE

An example of a good question is, "Does the agent represent both buyers and sellers?"

TRUE

Based on the facts, Karen and Marcela's broker could be held liable for their behavior in participating in the Facebook group.

TRUE

The Texas Workforce Commission is the primary resource regarding state and federal labor laws, rules, and regulations governing employment in Texas.

TRUE

In what situation(s) might TREC reprimand brokers?

ALL CHOICES ARE CORRECT

If an agent is holding an open house for their client, the BEST way for them to introduce themselves to customers would be:

"I'm here representing the seller. Can I answer any questions?"

A seller listed his property with an agent. He shared with the agent that a registered sex offender lives two doors away, and he does not want to disclose that. How should the agent respond if she plans to take the listing?

"The public can find that info online, but you are not required by Texas law to disclose that."

Which of the following potential questions may be illegal to answer?

"What is the racial makeup of this neighborhood?"

For a DTPA violation, the Consumer Protection Division may request a civil penalty to be paid to the state in an amount of up to ________ per violation.

$20,000

Operation of Law -

-A change in law affects the property involved in the agency agreement. -Rezoning of property from residential to commercial use

Puffing -

-"This is one of the finest homes in the area." -License holders are not liable for DTPA violations. -Using adjectives to describe the high quality of something as a way of generating buyer interest -Presenting opinions rather than facts -It's simply marketing.

Attempting to divide territory -

-A broker refuses clients in another brokerage's area.

Loan Fraud -

-A property is purchased and then resold at a value that is artificially inflated by false appraisals.

Gratuitous Agency -

-An agent agrees to work for no compensation

Homes constructed before _________ run the risk of containing lead-based paint.

1978

Which of the following describes a condition that must exist in order for a licensed broker to share earned commissions with a foreign broker?

A Texas license holder must conduct negotiations within Texas.

Protection Period:

A period of time after the buyer's representation term ends in which the agent can still get compensation for their role in a transaction

Which of the following is a key task that supports the overriding objective of a listing agreement?

ALL ANSWER CHOICES ARE CORRECT (Helping the principal stage their home, constant review of MLS activity, creating CMAs (Comparative market analysis))

How can buyer's agent fees be paid?

ALL ANSWER CHOICES ARE CORRECT (a credit form seller to buyer upon closing, broken retainer fees, commission from the home sale proceeds)

When does TRELA require that an IABS Notice be given?

After substantive communication about a specific, real property.

____ is a consensual relationship between a license holder and a client.

Agency

Angie has an agency relationship with a seller on behalf of their listing. Anna, a potential buyer, called Angie to see her seller's house. How could we define Angie and Anna's relationship?

Agent - Customer

Real estate disclosure statements focus on all of the following EXCEPT:

Agent compensation

TREC has the power to ____.

All of the above

TRELA Code says:

An oral agreement to represent the seller is not illegal. However, without a signed, written agreement, if the seller refuses to pay a commission based solely upon an oral agreement, the broker could not pursue court action against the seller to collect the commission. The safest way to establish an agency relationship with a seller is to do so in writing.

If two or more brokerages agree to set their commission rates, it is a(n):

Anti-trust violation

Kickback:

Any money, fees, commission, credit, gift, gratuity, thing of value, or compensation of any kind for improperly obtaining or rewarding favorable treatment

Lottery:

Any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win anything of value, whether such scheme or procedure is called a pool, lottery, raffle, gift, gift enterprise, sale, policy game, or some other name

Broker Bob is working as a subagent with Buyer Billy on the purchase of Seller Sally's home. Which of the statements below are true?

Broker Bob represents Seller Sally.

Which document allows you to discuss with your buyer-client all of the duties and parameters that make your relationship work?

Buyer Representation Agreement

Who Owes Who

Buyer's Agent — owes fiduciary duties to the Buyer Seller's Agent — owes fiduciary duties to the Seller Mortgage Broker — usually owes NO fiduciary duties to anyone Mortgage Banker — owes fiduciary duties to their investors Underwriter — only duty is to protect the lender and the investors Title Companies — NO fiduciary duties (their duty is to be neutral) Appraiser — duties are to the lender

Which of the following is NOT one of the duties a principal owes a broker in an employment agreement?

Compromise

What form does the Canons of Professional Ethics and Conduct say must be on display in a readily noticeable location in each of the real estate brokers places of business?

Consumer Protection Notice 1-2

Treble Damages:

Damages that are three times the amount

Indirect Activities:

Day-to-day activities that are influential, but more difficult to classify as to whether a license is required.

Fraud:

Deception deliberately done with the intention of gaining something of value or causing damage to another person

____________ dictate what is considered acceptable at a higher level.

Ethics

What is the difference between ethics and morals?

Ethics are determined by an external group and are standardized. Morals are held internally and vary by the individual.

Krista has agreed to pay Broker Kelly 3% in commission, no matter who purchases the home. Which of the terms below best describes this listing agreement type?

Exclusive right-to-sell listing

Which type of listing agreement gives the broker the protection and motivation to do their very best in getting top dollar for the seller?

Exclusive right-to-sell listing

Appraisers are regulated by TREC.

FALSE

Backup Offer:

Offers made on a property already under contract

Laws:

Rules that are enforced by government authority and require mandatory compliance

Section 530 of the Revenue Act of 1978 is known as:

Safe Harbor

Broker's Price Opinion (BPO):

The agent's determination of an appropriate purchase price

On whose behalf do sales agents sign written agency contracts?

Their supervising broker

In-House Sale:

When a brokerage handles both sides of a real estate transaction, that transaction is considered an in-house sale.

Operation of Law:

When a change in law affects the property at the center of the agency relationship.

Apparent or ostensible agency -

When a principal allows a license holder to act in such a way as to cause a third party to believe that the license holder is the principal's agent. (Agency by estoppel protects third parties harmed by ostensible authority.)

Disparate Treatment:

When someone is treated differently than other people who don't share the same protected characteristic

Mutual Recession:

When the license holder (agent) and the principal (client) mutually agree to end the agency relationship

Abandonment:

When the license holder ceases to perform their duties of the agency relationship.

Agency by Ratification -

When the principal accepts an agent's actions after the fact, thus affirming the actions taken and creating retroactive agency.

The Signed Sales Contract

When the sales contract is signed, the buyer needs to be informed and educated on what obligations they need to meet and when they need to meet them. They should also be reminded of how important it is that they do fulfill these obligations by the given deadlines.

A(n) ____ has to do with providing clarity and understanding regarding agency relationships in a proper and timely fashion.

disclosure policy

Including an "as is" clause:

does not release the seller from disclosing material facts

A broker who represents two parties at the same time, acts according to common law obligations and duties, and cannot act against the interests of either party is a(n) ___________.

dual agent

Which of the following fiduciary duties NEVER terminates?

duty of confidentiality

According to TRELA, a minimum license holder obligation is to ____.

present any offer to the seller

All of the following can be done by an unlicensed assistant EXCEPT:

presenting an offer to a seller

A client is also called a ______.

principal

A prospective buyer asking about the cultural makeup of a neighborhood would be considered a ___ question.

problem

Which of these is NOT one of the fiduciary duties?

reasonable caution

Client -

-A broker works for a ________. -The people you will work for as a sales agent -The people with whom you sign agency agreements and the people you represent

License Holder:

A broker or a sales agent licensed by TREC

Which of the following BEST describes what happens when Broker Bob signs a listing agreement with Seller Sally?

A fiduciary relationship is formed

REALTOR:

A licensed sales agent who is a member of the National Association of REALTORS®

TREC regulates which of the following real estate professionals?

ALL CHOICES ARE CORRECT

A mutual agreement can be made:

All choices are correct (by action, verbally & in writing)

Which of the following is true about clients and customers?

Brokers work for clients and with customers.

Brad has decided to sell his home at 1701 Seabrook Drive. His agent, Macy, posted 1701 Seabrook on the MLS and showed the home to several prospective buyers, including Tricia and Tricia's agent, Kristen. Eventually, Brad accepted Tricia's offer. Which role best defines Tricia?

Buyer

At an open house, a license holder (without an agency agreement) greets a prospective buyer and shows them the house. The license holder never discloses who they do or do not represent, and the prospective buyer assumes the license holder represents the seller. What is this an example of?

Ostensible agency

Which government agency is responsible for enforcing the Texas Real Estate License Act?

Texas Real Estate Commission

Which form does NOT need to be signed to fulfill statutory requirements?

The IABS

Ostensible Agency:

When a principal allows a license holder to act in such a way as to cause a third party to believe that license holder is the principal's agent

Express Authority:

When a principal gives an agent authority to act on their behalf by mutual consent, either by written or oral agreement

Michelle is representing her mother in the selling of her mom's house, and she knows she must legally disclose this interest to potential buyers. What is this an example of?

agency coupled with an interest

Which is NOT one of the required components to form an agency relationship?

earnest interest

An express authority agreement can be _______.

either verbal or written

When addressing a prospective buyer, a listing agent is required to only state the seller's price that is:

listed by the seller in the listing agreement

In stating a seller's desired price to a prospective buyer, the listing broker may only state the price that is:

listed in the listing agreement

When Michelle followed Tamina's advice and accepted the offer, which fiduciary duty was Michelle demonstrating?

obedience

Timothy has an agency relationship with Sarah, the purchaser of 4412 Castle Drive. Sarah has also agreed to a contract with Melissa, a licensed real estate inspector, to inspect 4412 Castle Drive. What is the relation of Melissa to Timothy?

third party

Which of the roles below BEST describes the following terms: real estate inspector, loan officer, or the "other principal."

third party

At the first substantive communication with a party relating to a proposed real property transaction, the license holder must provide the party with written notice. This notice includes:

ALL ANSWER CHOICES ARE CORRECT (the ways in which a broker can represent a party to a real estate transaction, the license holder's name, license number, and contract information, & the basic duties and obligations a broker has to a party to a real estate transaction the broker represents.)

Agency by Actual Authority:

Actions taken by an agent for which they have permission, whether given through express or implied authority by a principal

Availability -

-Be responsive to issues -Constant involvement of the principal

Mutual Recession -

-Both parties agree to mutually end the relationship

Full Disclosure -

-Discloses any knowledge that the agent has that might affect the buyer's decision to purchase -Includes things about the property, the surrounding area, things that may have stigmatized the property, personal things about the seller

Reimbursement -

-Expenses incurred on the principal's behalf -Get the principal's approval in writing before assuming the expense.

Third Party -

-If you are the listing agent, the appraiser is a _________. -All non-clients in a transaction

The 5 Buying stages:

1. Buyer Becoming Client 2. The Search for Property 3. The Offer 4. The Signed Sales Contract 5. Closing

Universal Agency:

A form of agency relationship in which agents have a very broad and general scope of power to act on behalf of the principal — agents have the general power of attorney (Child-Parent)

Arbitration:

A forum where parties and counsel present their positions before an impartial third party who renders a specific award

Principal:

A major party to a real estate transaction (buyer, seller, landlord, tenant) or an individual who authorizes an agent to represent their interests as a client in a real estate transaction

Customer:

A person on the other side of the transaction with whom the license holder does not have an agency relationship

Client:

A person who has signed an agency agreement with you as their agent (a.k.a. your principal)

Stigmatized Property:

A property on which an event has occurred that is affecting the perceived value of the property

Excluded Prospect:

A prospective buyer or tenant who is procured by the seller instead of the agent

Contingency:

A provision within a contract that makes performance conditional upon the occurrence of a stated event

Comparative Market Analysis (CMA):

A report comparing the prices of sold homes that are similar to the subject property (called comparables); created by a license holder to help the seller or buyer determine the market value

Which of the following is an approach to real estate specialization?

ALL CHOICES ARE CORRECT (by service provided, by client, by property type)

Which of the following is an example of commingling?

An agent storing a principal's title fee funds in the agent's personal bank account.

Employee:

An individual who works part- or full-time for wages or salary under contract and control of an employer

Closing:

Before closing, the agent should help the buyer feel prepared by telling them what documents they'll need to bring the day of closing. During closing, the agent should be available to assist the buyer and answer any questions they may have about signing documents or the process in general.

If a seller has had two wood infestation reports performed on their property, which report should they show to the buyer?

Both reports should be made available to the buyers

Buyer's agent

Disclosure can NEVER be provided orally.

FALSE

Asking a client to sign all the paperwork at once is considered a best practice.

FALSE (Explanation: Asking the client to sign all of the paperwork at once is inadvisable and could get an agent in trouble. Agents should wait for the appropriate times to get paperwork signed by their clients.)

When a broker acts as an intermediary, they owe full fiduciary duties to whichever client they signed first.

FALSE (Explanation: When a broker acts as an intermediary, they owe honesty and fair dealing to both parties, but should never compromise either of their clients confidence.)

As an agent, it is unethical and not advised to show the same property for sale to more than one client.

FALSE (Explanation: You are allowed to show the same property for sale to more than one client.)

A license holder can refuse a seller's decision to accept an offer that is not in their best interests.

FALSE (Explanation: A license holder cannot refuse a seller's decision to accept an offer that is not in their best interests; they should obey their client's orders (unless they are asked to do something illegal).

An agent's attendance to closing is always required.

FALSE (Explanation: An agent is not necessarily required to attend closing)

Based on the fact the jury found Priya guilty of fraud, it is possible that Priya unintentionally withheld this information.

FALSE (Explanation: Because the jury found Priya guilty of fraud, they believe she intentionally withheld the information.)

If a broker is acting as an intermediary, they do not need to provide their clients with the IABS.

FALSE (Explanation: Brokers must always provide clients with the IABS.)

Some of the 20 factors provided by the IRS can be placed into which of the following categories or buckets?

Financial control

What should a buyer NOT expect of their agent?

Frequent compromise

According to TRELA, license holders MUST advise buyers that they should:

Have the abstract examined by an attorney

Which of the following is NOT a likely punishment for failure to disclose?

Having phone privileges suspended

Which of the following are considered ministerial duties?

Honesty, accounting, fairness and reasonable skill and care

The ____ Notice is the TREC form commonly used to satisfy the statutory requirement to provide a written notice at the first substantive communication with a party regarding specific real property.

IABS

Which of the following is NOT one of the three exceptions to the written notice requirement that follows a "substantive dialogue"?

If the transaction is for foreclosed or REO property

A license holder must do the following EXCEPT:

License holders may only show a house to a third party if the third party's agent is present.

Which of the following statements is true?

License holders owe customers the duties of honesty and fairness.

Who cannot provide legal advice?

A broker

Buyer's Agent:

A broker representing a buyer in a real estate transaction, a.k.a. buyer's broker

Landlord's Agent:

A broker representing a landlord in a real estate transaction

Listing Agent:

A broker representing a seller in a real estate transaction, a.k.a. seller's agent, seller's broker, or listing broker

Tenant's Agent:

A broker representing a tenant in a real estate transaction

Which of the following is an example of an in-house sale?

A broker representing both the buyer and a seller in a real estate transaction.

In real estate, the word agent may refer to all of the following EXCEPT:

A client

Buyer Representation Agreement:

A document that outlines the duties and implications of the broker-buyer agency relationship

Material Fact:

A fact that could possibly persuade a buyer or seller to change their decision if they knew about it, as opposed to a trivial fact

Misrepresentation:

A false statement (spoken or written) that is made unintentionally

Syndicate:

A financial services group formed to handle large transactions that would be too hard or impossible for an individual person or entity to handle

What should come first in an agency policy outline for a brokerage company manual?

A general statement of agency philosophy

Tort Reform:

A judicial movement that tries to limit the amount of recourse and awards that can go to a complainant

Subagent:

A license holder who represents a principal through cooperation with or consent of the principal's broker AND is not sponsored or associated with the principal's broker

As defined in the Texas Real Estate License Act, what is a subagent?

A license holder who represents a principal through cooperation with the principal's broker

For which of the following websites does a license holder NOT need to post a link to the IABS Notice?

A license holder's personal Twitter account

Meditation:

A resolution procedure where an impartial person (the mediator) is used to facilitate communication between parties and to promote reconciliation, settlement or understanding

Fiduciary Duty:

A responsibility to act in the best interest of your client

Collusion:

A secret agreement or cooperation for an illegal or deceitful purpose

Implied Buyer Agency:

A type of agency where authority is implied or presumed based on the nature of the relationship between the agent and the buyer

Inspections:

A vital part of the homebuying process which can reveal significant defects, conditions, and issues that can affect a property's value

A seller had a roof repaired years ago. The roof shows no current problems. Does the seller still need to disclose the repairs?

Yes, the SDN needs to list any repairs in place.

The Search for Property:

You need to make sure you're using the Buyer Profile to find properties that match the buyer's wants and needs and prepare the buyer for viewings.

What did Senate Bill 489 do?

introduce intermediary practice as an option

Negligent misrepresentation violates the fiduciary duty of ______.

responsable care

____ refers to the first significant discussion a license holder has with a prospective seller or buyer about real property.

substantive dialogue

Who is held responsible for the acts of a sales agent?

the sales agent's sponsoring broker

According to TREC Rules, earnest money must be delivered to an authorized escrow agent or deposited in a trust account within a "reasonable time," which the Commission has determined to be not later than ____.

the second working day after the date the broker received the funds.

Is a seller responsible for a misrepresentation made by their broker?

the seller would not be held liable for their broker's misrepresentation unless they were aware of it.

Which of the following needs to be disclosed to potential buyers?

there is a leak in the roof

How can intermediary brokerage be created?

through writing only

An agency relationship:

"a fiduciary relationship created wherein one party (the client or principal) authorizes another party (the agent) to represent their best interests and that second party (the agent) accepts the responsibility given."

Customer -

-A broker works with a ________. -The people who have signed an agency agreement with the other license holder -The people on the other side of the transaction -If you are the buyer's agent, the seller is your ________.

Ostensible agency -

-A license holder does not immediately make clear who they represent. -A principal allows a license holder to act in such a way as to cause a third party to believe that license holder is the principal's agent. -What would a reasonable person believe?

Open Listing -

-A lot of brokerages don't allow it. -A commission will be paid to whichever agent is the procuring cause of the sale. -May be terminated at any time before performance -It could be a verbal agreement but it's only enforceable while in writing -Multiple real estate brokers and the owners themselves have the right to sell the property.

Principal -

-A major party who is a part of a real estate transaction -An individual who authorizes an agent to represent their interests as a client in a real estate transaction

Setting Listing Lengths -

-A property is purchased and then resold at a value that is artificially inflated by false appraisals.

Truth in Lending Act -

-All creditors must use the same credit terminology and expressions of rates. -Prohibits lenders from using advertising practices that are considered deceptive or misleading -Protects consumers against inaccurate and unfair credit billing and credit card practices -Consumers have a right of rescission. -Requires lenders to provide consumers with loan cost information for comparison shop

Innocent Misrepresentation -

-An agent communicates false information that the agent is not aware is false. -An agent would not be held liable unless he/she has reason to doubt the truthfulness.

Renunciation -

-An agent may leave an agency relationship at any time. -The agent could be liable for damages if an existing contract is breached. -Only the broker can officially end an agency agreement with the principal.

Negligent misrepresentation -

-An agent misrepresents some aspect of a property that the average agent would reasonably be expected to possess knowledge of. -Could be avoided by discovering relevant facts about a property -Don't answer questions for which you do not know the answer. -An agent fails to disclose significant property flaws out of ignorance. -The license holder violated the fiduciary duty of reasonable care.

Group Boycotts -

-An agreement among two or more competitors not to do business with another competitor

Net Listing -

-It should be taken only if the principal insists and is well-informed. -The broker's commission comes from the difference between the seller's established minimum price and the price that the buyer is willing to pay. -The seller establishes a minimum acceptable net price.

Real Estate Settlement Procedures Act -

-Prohibits sellers from requiring borrowers to purchase title insurance from specific companies -Limits the amount of funds held in escrow for real estate taxes and insurance -Reduces unnecessarily high settlement costs -Requires lenders to provide good faith estimates of closing and settlement costs -Outlaws kickbacks, referral fees, and unearned fees

Sherman Antitrust Act -

-Regulates anti-competitive conduct to promote fair competition on behalf of American consumers -Prohibits group boycott -Prohibits the assignment of market areas between brokerages -Prohibits the formation of monopolies in the marketplace -Commission rates must always be negotiable between the broker and their client.

Broker with Cooperating Broker -

-Represent different clients -Have competing objectives

Written Agency -

-Specifies start and expiration dates of the representation, the duties of each party, and expectations for compensation -A principal becomes a client-principal. -Takes the form of a representation agreement or listing agreement

Exclusive Listing -

-TAR Exclusive Agency Addendum to Listing -The seller agrees to list their property with only one broker but has the right to sell the property themselves without paying a commission. -"excluded prospects"

Broker with Sponsored Agent -

-The agent is usually operating as an independent contractor and not an employee. -The acts the agent can perform independently are often more restricted at the beginning of the relationship. -Requires great trust -The broker is responsible for all brokerage acts performed by the agent. -General agency

Revocation -

-The client is liable for damages caused by the breach. -A client can fire their agent at any time. -It may not be done to avoid paying a commission.

Exclusive right-to-sell listing -

-The most exclusive form of agency -A win-win for both the seller and the broker -Seller guarantees the named broker receives a commission if the property is sold no matter who brings the buyer. -The agent is the only one who can sell the home. -Prohibits the seller from listing the property with another agent

Fraudulent misrepresentation -

-The most severe type of misrepresentation -Agents will be held liable. -An agent purposely and deliberately hides a property flaw or feature to make the sale. -Intentional deception

Implied Agency -

-The principal and agent may never explicitly state the nature -or terms of the relationship. -Ostensible agency -Agency by estoppel -A party assumes consent to the relationship based solely upon inferences formed by the actions, conduct, and words of either or both parties.

Express Agency -

-The principal explicitly instructs the broker/agent to act on their behalf. -Could be expressed by instructions given via email, text, fax -Both written and oral forms are considered valid agreements in Texas.

Broker with Cooperating Broker's Sales Agent -

-The sales agent doesn't receive commission directly from the listing broker but from the cooperating broker.

Broker with Subagent -

-Unaffiliated broker -The relationship is limited to one transaction at a time. -The TAR listing agreement provides opportunity to get principal permission for this type of agency relationship. -Restricted special agency

Seller Disclosure -

-Unlawful for sellers to intentionally hide serious property defects -Honestly discloses and provides buyers with all the information about any defects, hazards, or conditions in the property

Compensation -

-Usually takes the form of a commission -The terms need to be clearly spelled out in writing -Happens with a signed sales contract

Agency Disclosure -

-Whether real estate agents and brokers are licensed or have potential conflicts of interest -If the broker or any of the broker's agents are acting on their own behalf -Everyone in the transaction is entitled to know who the agent is working for. -If the agent or the broker has relatives that have any personal interest in the transaction -The types of representation available to the buyer

Americans with Disabilities Act -

-Wider doorways, ramps, automatic door openers -Buildings must have features that provide reasonable access for people with protected disabilities.

Performance -

-Willing to take whatever task necessary to accomplish the purposes and objectives of the employment agreement

Agency by estoppel -

-an official ruling that ostensible agency was in place -holds the principal accountable to a third party for the actions of the agent -agency that is imposed by law -holds the agent accountable to the principal for their actions

3 Types of Misrepresentation:

1. Innocent 2. Negligent 3. Fraudulent

2 Dates to remember -

1. TRELA was passed in 1939. 2. TREC was created in 1949.

Three Buckets of Control:

1.Behavioral: Does the company control or have the right to control what the worker does and how the worker does their job? 2.Financial: Are the business aspects of the worker's job controlled by the payer? (These include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) 3.Type of Relationship: Are there written contracts or employee-type benefits (i.e., pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? *If yes to any of these - employee

The 6 Canons:

1.Fidelity 2.Integrity 3.Competency 4.Consumer Information 5.Discriminatory Practices 6.Information About Brokerage Services

Texas Disclosure Guidelines - Requirements:

1.Tell everyone (agents, customers, and prospects) whom you represent (if any) at first contact. This disclosure is required at open houses. This disclosure can be oral or in writing. 2.Give the written statutory statement (IABS Notice) at the first substantive discussion about a specific property.

Three Tests of Safe Harbor/TEFRA (independent contractor classification "tests") -

1.The individual is licensed as a real estate agent. 2.The individual's income is commission-based rather than hourly. 3.A written independent contractor agreement between the agent and broker is in place that states the agent will be NOT be treated as an employee for tax reporting purposes.

Two Conditions for Misrepresentation:

1.The misrepresentation is material to the transaction, meaning that the element in question was key to the buyer's decision to proceed with the transaction. 2.The buyer is actually harmed by the transaction, meaning that they suffer monetary damages as a result of the misrepresentation.

Steering:

Deliberate avoidance of showing a protected person a non-integrated area

TREC Complaints:

Describe the process by which a person may file a complaint against a license holder with the Commission.

Property Info:

Desired location, price range, desired square footage, special needs, etc

Dual Agency:

Dual agency occurs when a broker represents both a seller and a buyer in a single real estate transaction according to common law precedent.

In an ad, a logo is an acceptable substitution for the broker's name.

FALSE

Karen's Facebook group is not in violation of the Sherman Antitrust Act as it is an "open" group.

FALSE

Whether or not an agent discloses identified hazards on the property is purely optional.

FALSE

An agent owes a client different fiduciary duties when their agency relationship is formed through an oral agreement.

FALSE (Explanation: An agent owes a client the same fiduciary duties, no matter how that agency relationship is formed.)

There are no differences in the duties owed to a customer vs. a client.

FALSE (Explanation: False, duties owed to a client are different than those owed to a customer.)

In dual agency, agents owe additional fiduciary duties to their clients.

FALSE (Explanation: In dual agency, agents owe limited fiduciary duties to their clients.)

When completing the Seller's Disclosure Notice, the seller only needs to disclose malfunctions, not defects.

FALSE (Explanation:When completing the Seller's Disclosure Notice, the seller needs to disclose BOTH malfunctions and defects.)

The letter of intent is interchangeable with a contract to purchase.

FALSE Explanation: The letter of intent is not interchangeable with a contract to purchase.)

A broker may appoint themselves as the appointed license holder in an intermediary relationship.

FALSE (Explanation: A broker may NOT appoint themselves as the appointed license holder in an intermediary relationship.)

A buyer who signs a buyer rep agreement will NEVER be held liable for payment of a commission if the license holder performs all the duties to which they were obligated, but the buyer defaults on their contractual duties.

FALSE (Explanation: A buyer who signs a buyer rep agreement CAN be held liable for payment of a commission if the license holder performs all the duties to which they were obligated, but the buyer defaults on their contractual duties.)

A seller is obligated to disclose prior water penetration - even if the defect has been cured - due to possible residual damage.

FALSE (Explanation: If a property's prior water penetration has been cured and damage from the prior water penetration has been cured, the seller would not be obligated to disclose the prior water penetration.)

A claimed filed under the DTPA has no statute of limitations.

FALSE (Explanation: The statute of limitations for a claim filed under the DTPA is two years from the date that the violation occurred or two years from the date the plaintiff discovered or should have discovered the violation.)

Even if your personal assistant is not licensed, you need to get your sponsoring broker to sponsor your assistant just as they do you.

FALSE (Explanation: You only need your sponsoring broker to sponsor your assistant if they are licensed.)

Your broker does not have to be a member of the Texas Association of REALTORS® (TAR) to use the Independent Contractor Agreement for Sales Associate.

FALSE (Explanation: Your broker must be a member of the Texas Association of REALTORS® (TAR) to use the Independent Contractor Agreement for Sales Associate.)

Why might an agent attach a document as an addendum?

ALL CHOICES ARE CORRECT (to specify who is purchasing the property, to ensure the agent is compensated for their efforts, & to spell out who the agent is ethically responsible for)

The Information About Brokerage Services Form informs clients of:

ALL CHOICES ARE CORRECT (how a license holder can represent a party in a real estate transaction, a broker's minimum duties required by law, and the types of real estate license holders)

Which parties need to be told if an agent is representing anyone?

ALL CHOICES ARE CORRECT (Visitors at an open house, Sellers that are at home when the agent is showing the property, an agent they call to get information or set up an appointment)

Junk Fees:

Additional fees charged by agents and brokers on top of the sales commission

A punishable misrepresentation is made up of all the following components EXCEPT:

All choices are correct

Equitable Title:

Also known as "equitable interest;" the contractual right of the purchaser to conveyance of a property once all terms and conditions of the contract are met

Unconscionable Action:

An act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree

Undisclosed Dual Agency:

An action taken by unscrupulous agents in order to take advantage of under-informed clients where the agent treats both parties like clients, but without the proper notice

Which of the following is TRUE of a relationship created between a buyer and an agent?

An agency relationship between a buyer and an agent can be expressly stated or implied.

Employment Contract:

An agreement between a principal and a broker to buy, sell, lease, or manage a property

Exclusive Right-to-Sell Agency:

An agreement in which the seller guarantees the named broker receives a commission if the property is sold even if the seller brings the buyer themselves

Exclusive Agency:

An agreement in which the seller has an exclusive relationship with an agent but has the right to sell the property to named prospects for a lesser (or none) commission to the listing broker

Net Listing:

An agreement in which the seller names an amount they want their property to sell for, and then the broker tries to sell it for more because they receive the difference (the dollar amount above what the owner wants) as their commission

Open Listing:

An agreement that allows multiple real estate brokers (and the owners themselves) the right to sell the property; the individual considered the procuring cause of the sale of the property getting the commission

Exclusive Broker Agreement:

An agreement that binds the buyer into working only with that broker/agent for the specified duration of the contract

Non-exclusive Broker Agreement:

An agreement that leaves the buyer free to work with other agents to acquire a home under the condition that if the buyer does purchase a home because of that agent, the buyer will be required to compensate that agent based on procuring cause

Damages:

An award paid to someone to compensate them for economic or non-economic loss

Sales Agent:

An individual holding a sales agent license from TREC who is sponsored by a broker

Broker:

An individual licensed by TREC to perform brokerage duties

Consumer:

An individual, partnership, corporation, the state, or a subdivision or agency of the state who seeks or acquires by purchase or lease, any goods or services

When should agency relationships be disclosed?

At first contact

Which of the following factors has been a major contributor to the increasingly litigious environment in real estate?

Attorneys have increased their advertising to the public.

As an agent, your job is BEST described as ___________.

Be the buyer's advocate

License holders are required by law to do all of the following EXCEPT:

Fill out the Seller's Disclosure Notice on behalf of the seller

Seller's Disclosure Notice:

Form filled out by sellers and given to buyers containing disclosures about the property being sold

If Geni (a broker) is Andie's (an agent) supervising broker, who is the principal in their general agency relationship?

Geni (the broker)

The first step in being able to become an intermediary in a transaction is:

Get the written permission, including the source of compensation, signed by both the buyer and seller.

All of the following are examples of real estate professionals with whom license holders may interact on a real estate transaction EXCEPT:

Haberdasher

Which of the following expenses is most likely NOT a possible tax deduction for the real estate professional?

Hair plugs

Work info:

How close do they want to be to their place of employment?

Which of the following is NOT something that an agent should consider when making a comparative market analysis?

How much the seller thinks it is worth

Tortious Interference:

Intentionally causing damage in someone else's contractual relationship

Jane just signed a listing agreement. Who determined the commission earned by the listing brokerage?

Jane and Jane's broker

Reasonable Person Standard:

Judicial standard for determining liability in which the court would decide that if a reasonable person would have known about the defect in question, the license holder should have, too

Which is TRUE concerning requirements for new buildings?

Landlords must comply with the state and local laws even if they are more stringent than federal law

Vicarious Liability:

Liability for others by mandate of law or by express agreement

Which of the following statements is TRUE?

License holders are legally required to disclose if a murder happened on a property

Duty of Honesty:

License holders are required to always tell the truth to their clients and customers; they should also advise their clients to be truthful in their disclosures as well

Duty of Fairness:

License holders are required to proactively maintain a space of fairness in their real estate transactions and never mislead customers

Quarterly Taxes:

Quarterly estimated taxes used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax for individuals or entities who do not have taxes withheld from their income

REO:

Real estate owned; describes property that is owned by a lender as result of a failure to find a third-party buyer at a foreclosure auction

Single Agency:

The most commonly practiced agency form in which the agent represents only one side of a transaction

Broker Compensation:

The percentage fee or commission (or, in rarer instances, flat fee) that is paid for an agent's representation and services provided during real estate transactions (a.k.a., brokerage fee)

Intermediary:

The practice of intermediary brokerage occurs when a single transaction is negotiated within one brokerage and during which proper representation for both the seller and the buyer takes place in accordance with Section §1101.559 of the Texas Real Estate License Act.

Texas Deceptive Trade Practices Act (DTPA):

The primary consumer protection law in Texas, which protects against false and misleading statements, unconscionable actions, and breaches of warranty

Redlining:

The refusal for lenders to issue mortgages to a specific area; a violation of the Fair Housing Act

Renunciation:

The rejection of an agreement by the person who accepted it, such as when an agent terminates an agency relationship

Special Agency:

The relationship between a broker and a client wherein the broker has restricted authority to act on behalf of the client to achieve a one specific objective

Kimberly is engaged in the sale of real estate for other people in exchange for commission. She also sponsors licensed sales agents to represent her clients on her behalf. Which term best describes Kimberly?

broker

All real estate advertising (use of business stationary, newsletters, billboards, etc.) must be done only with the ____________ knowledge and consent.

broker's

Who are the parties in a Buyer Representation Agreement?

buyer & broker

When brokers decide their company will exclusively represent clients looking to purchase a real property, they have chosen to operate under a(n) ____ policy.

buyer agency only

An agent lists a property. After each showing, the client calls the agent with a list of unlawful restrictions they want when showing the property. The agent decides not to continue the listing. In this situation, the agent:

can terminate the listing contract without getting permission from the client

When disclosing property information to a party, you should always ____.

cite the source of the information

According to the Canons of Professional Ethics, the primary duty of a real estate agent is to represent the interest of their client and to make the agent's position _____.

clear to all parties

What is required for an agency relationship to form?

consent of an agent and the principal

Which fiduciary duty did Michelle demonstrate when she informed Tamina about the buyer's first offer?

disclosure

How would a sales agent be classified if paid strictly by salary?

employee

___________ is best defined as the contractual right of the purchaser to conveyance of a property once all terms and conditions of the contract are met.

equitable interest

Which duty does an agent owe to all parties?

fair dealing

A broker who enters into a Listing Agreement with a seller is considered a:

fiduciary

The duties owed by agents to their clients are known as:

fiduciary duties

The factors of significant investment, unreimbursed expenses, and opportunity for profit or loss are all part of what's known as:

financial control

How many categories can behavioral control factors fall into?

four: degree of instruction, training, evaluation systems, type of instructions given

The most desirable way to terminate agency is through:

fulfillment of purpose

The relationship between a broker and a sponsored sales agent is one of ____.

general agency

According to TRELA, license holders MUST advise buyers that they should:

get a title insurance policy

Which of the following practices could easily lead to misrepresentation?

guessing an answer

According to Texas law, license holders must advise all parties to:

have the abstract examined by a lawyer and to obtain a title insurance policy.

Which of the following is NOT included in sections D, E, F, and H:

holding the broker responsible for outstanding financial obligations

A(n) ____ relationship arises when a party assumes an agency relationship based upon inferences formed from a party's actions, conduct or words.

implied agency

To ensure the broker gets their commission, the commission agreement should always be ___.

in writing

Your broker must be a member of the Texas Association of REALTORS® (TAR) to use the Independent Contractor Agreement for Sales Associate.

independent contractor

If a court finds the conduct of the seller or the agent was committed ____________, a court may award no more than ___________ times the amount of damages for mental anguish AND economic damages.

intentionally, three

A(n) ____ is a broker who negotiates an in-house transaction between the parties to the transaction.

intermediary

If appointments are made, there must be a written authorization from both parties for the broker to act as a(n):

intermediary

If a listing agreement does NOT state an end date, ______ .

it is illegal

On the Seller's Disclosure Notice, sellers are only responsible for sharing all information that is:

known

Sellers are required to disclose conditions that are ____.

known

When considering if a worker is an employee or an independent contractor, it's important to:

look at the entire relationship

An agent must give the broker their full ____

loyalty

An unlicensed persons may legally do all of the following EXCEPT

make calls to determine whether persons are interested in buying or selling property

Which of these is NOT one of the three types of misrepresentation?

malicious misrepresentation

A geographic region in which similar homes compete for buyers is known as a _______.

market area

What is the term used to describe a fact that could possibly persuade a buyer or seller to change their decision about a property if they knew about it?

material fact

The Canons of Professional Ethics say that a real estate broker or agent has an obligation to exercise integrity, including employment of prudence and caution to avoid ______ by acts of commission or omission.

misrepresentation

Who does TRELA §1101.005 provide licensing exemptions for?

more than one answer choice is correct (on-sire manager of an apartment complex, licensed auctioneers, and persons operating under a court order)

Which of the following is most likely covered by an E&O insurance policy?

negligence claim

A seller's agent might be able to help a third party buyer with ___ .

obtaining financing

How can intermediary brokerage be created?

only through writing

Guidelines for handling a(n) ____ is one of several topics you would expect to find in a(n) ____.

open house, brokerage company policy

Which of the following is NOT one of the three most common types of misrepresentation?

oversharing

An agent says, "This house has major curb appeal!" This is an example of ____.

puffing

According to the FFHA, you cannot discriminate based on __________ .

race, color, national origin, religion, sex, familial status or handicap

The duty a principal has to compensate the broker for expenses incurred on the principal's behalf is called ____.

reimbursement

When an agent decides to end an agency relationship, this is called:

renunciation

When a client decides to end an agency relationship, it is called ____.

revocation

Which of the options below BEST describes "license holder"?

sales agent, client

Agents cannot wait any longer than the close of which day after the signing of a contract to deposit escrow funds:

second business day

A brokerage that exclusively represents those with real property for sale has chosen to operate under a(n) ____ policy.

seller agency only

The disclosure and agency policies of a broker are also the disclosure and agency policies of that broker's ____.

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